Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | BAYK | |
Entity Registrant Name | BAY BANKS OF VIRGINIA INC | |
Entity Central Index Key | 1,034,594 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 13,193,983 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | [1] |
ASSETS | |||
Cash and due from banks | $ 5,806 | $ 4,851 | |
Interest-bearing deposits | 46,060 | 7,945 | |
Certificates of deposit | 3,224 | 4,216 | |
Federal funds sold | 23,357 | 1,906 | |
Securities available-for-sale, at fair value | 71,893 | 51,173 | |
Restricted securities | 6,000 | 2,649 | |
Loans receivable, net of allowance for loan losses of $4,920 and $3,863 | 739,708 | 381,537 | |
Loans held for sale | 162 | 276 | |
Premises and equipment, net | 17,472 | 10,844 | |
Accrued interest receivable | 2,905 | 1,372 | |
Other real estate owned, net | 5,159 | 2,494 | |
Bank owned life insurance | 18,641 | 9,869 | |
Goodwill | 8,968 | 2,808 | |
Mortgage servicing rights | 978 | 671 | |
Core deposit intangible | 3,209 | ||
Other assets | 6,394 | 4,099 | |
Total assets | 959,936 | 486,710 | |
LIABILITIES | |||
Noninterest-bearing deposits | 99,531 | 74,799 | |
Savings and interest-bearing demand deposits | 297,150 | 178,869 | |
Time deposits | 338,732 | 128,050 | |
Total deposits | 735,413 | 381,718 | |
Securities sold under repurchase agreements | 17,091 | 18,310 | |
Federal Home Loan Bank advances | 75,000 | 35,000 | |
Subordinated debt, net of issuance costs | 6,873 | 6,860 | |
Other liabilities | 7,771 | 3,117 | |
Total liabilities | 842,148 | 445,005 | |
SHAREHOLDERS' EQUITY | |||
Common stock ($5 par value; authorized - 30,000,000 shares; outstanding - 13,193,983 and 4,774,856 shares, respectively) | 65,970 | 23,874 | |
Additional paid-in capital | 37,099 | 2,872 | |
Unearned employee stock ownership plan shares | (817) | ||
Retained earnings | 16,412 | 16,194 | |
Accumulated other comprehensive loss, net | (876) | (1,235) | |
Total shareholders' equity | 117,788 | 41,705 | |
Total liabilities and shareholders' equity | $ 959,936 | $ 486,710 | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | [1] |
Loans, allowance for loan losses | $ 4,920 | $ 3,863 | |
Common stock, par value | $ 5 | $ 5 | |
Common stock, authorized shares | 30,000,000 | 30,000,000 | |
Common stock, outstanding shares | 13,193,983 | 4,774,856 | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
INTEREST INCOME | ||||
Loans, including fees | $ 8,874 | $ 4,153 | $ 21,588 | $ 12,140 |
Securities: | ||||
Taxable | 329 | 233 | 946 | 651 |
Tax-exempt | 116 | 123 | 344 | 394 |
Federal funds sold | 43 | 1 | 77 | 2 |
Interest-bearing deposit accounts | 116 | 25 | 176 | 52 |
Certificates of deposit | 18 | 20 | 55 | 62 |
Total interest income | 9,496 | 4,555 | 23,186 | 13,301 |
INTEREST EXPENSE | ||||
Deposits | 1,292 | 648 | 2,999 | 1,934 |
Federal funds purchased | 1 | 10 | 2 | |
Securities sold under repurchase agreements | 5 | 4 | 12 | 10 |
Subordinated debt | 118 | 118 | 354 | 354 |
FHLB advances | 279 | 118 | 681 | 360 |
Total interest expense | 1,694 | 889 | 4,056 | 2,660 |
Net interest income | 7,802 | 3,666 | 19,130 | 10,641 |
Provision for loan losses | 1,075 | 259 | 1,833 | 407 |
Net interest income after provision for loan losses | 6,727 | 3,407 | 17,297 | 10,234 |
NON-INTEREST INCOME | ||||
Income from fiduciary activities | 217 | 253 | 691 | 696 |
Service charges and fees on deposit accounts | 238 | 212 | 696 | 667 |
VISA-related fees | 11 | 48 | 59 | 153 |
Non-deposit product income | 105 | 83 | 300 | 263 |
Other service charges and fees | 201 | 152 | 556 | 449 |
Secondary market lending income | 157 | 165 | 358 | 465 |
Increase in cash surrender value of life insurance | 133 | 73 | 341 | 197 |
Net gains on sale of securities available for sale | 0 | 180 | 2 | 290 |
Other real estate gains (losses) | (9) | (6) | (102) | (94) |
Other income | 17 | 178 | 169 | 194 |
Total non-interest income | 1,070 | 1,338 | 3,070 | 3,280 |
NON-INTEREST EXPENSES | ||||
Salaries and employee benefits | 3,687 | 1,881 | 9,832 | 5,751 |
Occupancy expense | 811 | 445 | 1,943 | 1,344 |
Software maintenance | 299 | 152 | 897 | 494 |
Bank franchise tax | 141 | 82 | 359 | 203 |
VISA expense | 20 | 35 | 81 | |
Telecommunications expense | 111 | 42 | 215 | 130 |
FDIC assessments | 119 | 96 | 315 | 280 |
Foreclosure property expense | 45 | 11 | 114 | 40 |
Consulting expense | 58 | 87 | 209 | 216 |
Advertising and marketing | 100 | 59 | 227 | 160 |
Directors' fees | 135 | 74 | 466 | 218 |
Audit and accounting fees | 121 | 68 | 366 | 225 |
Merger expense | 141 | 1,126 | ||
Intangible amortization | 227 | 461 | ||
Other expense | 787 | 548 | 2,274 | 1,739 |
Total non-interest expenses | 6,782 | 3,565 | 18,839 | 10,881 |
Income before income taxes | 1,015 | 1,180 | 1,528 | 2,633 |
Income tax expense | 273 | 326 | 406 | 669 |
Net income | $ 742 | $ 854 | $ 1,122 | $ 1,964 |
Basic Earnings Per Share | ||||
Average basic shares outstanding | 10,488,227 | 4,774,856 | 8,175,431 | 4,774,856 |
Earnings per share, basic | $ 0.07 | $ 0.18 | $ 0.14 | $ 0.41 |
Diluted Earnings Per Share | ||||
Average diluted shares outstanding | 10,557,623 | 4,797,521 | 8,242,700 | 4,793,147 |
Earnings per share, diluted | $ 0.07 | $ 0.18 | $ 0.14 | $ 0.41 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 742 | $ 854 | $ 1,122 | $ 1,964 |
Unrealized gains on securities: | ||||
Unrealized holding gains arising during the period | 59 | 545 | 895 | |
Deferred tax expense | (20) | (185) | (305) | |
Reclassification of net securities gains recognized in net income | (180) | (2) | (290) | |
Deferred tax expense | 62 | 1 | 99 | |
Unrealized gains adjustment, net of tax | 39 | (118) | 359 | 399 |
Total other comprehensive income | 39 | (118) | 359 | 399 |
Comprehensive income | $ 781 | $ 736 | $ 1,481 | $ 2,363 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Private Placement | Unearned Employee Stock Ownership Plan Shares | Common Stock | Common StockPrivate Placement | Additional Paid-in Capital | Additional Paid-in CapitalPrivate Placement | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | |
Balance at beginning of period at Dec. 31, 2015 | $ (776) | |||||||||
Net income | $ 1,964 | |||||||||
Other comprehensive income | 399 | |||||||||
Balance at end of period at Sep. 30, 2016 | (377) | |||||||||
Balance at beginning of period at Jun. 30, 2016 | (259) | |||||||||
Net income | 854 | |||||||||
Other comprehensive income | (118) | |||||||||
Balance at end of period at Sep. 30, 2016 | (377) | |||||||||
Balance at beginning of period at Dec. 31, 2016 | $ 41,705 | [1] | $ 23,874 | $ 2,872 | $ 16,194 | (1,235) | ||||
Balance at beginning of period, Shares at Dec. 31, 2016 | 4,774,856 | [1] | 4,774,856 | |||||||
Net income | $ 1,122 | 1,122 | ||||||||
Other comprehensive income | 359 | 359 | ||||||||
Dividends declared | (904) | (904) | ||||||||
Issuance of common stock in connection with Virginia BanCorp acquisition | 42,245 | $ (911) | $ 22,931 | 20,225 | ||||||
Issuance of common stock in connection with Virginia BanCorp acquisition, Shares | 4,586,221 | |||||||||
Shares issued via private placement net of $2.1 million of issuance costs | $ 32,888 | $ 18,919 | $ 13,969 | |||||||
Shares issued via private placement net of $2.1 million of issuance costs, Shares | 3,783,784 | |||||||||
Stock options exercised | $ 195 | $ 169 | 26 | |||||||
Stock options exercised, Shares | 33,622 | 33,622 | ||||||||
Restricted shares granted | $ 77 | (77) | ||||||||
Restricted shares granted, Shares | 15,500 | |||||||||
Stock-based compensation expense | $ 178 | 94 | 84 | |||||||
Balance at end of period at Sep. 30, 2017 | $ 117,788 | (817) | $ 65,970 | 37,099 | 16,412 | (876) | ||||
Balance at end of period, Shares at Sep. 30, 2017 | 13,193,983 | 13,193,983 | ||||||||
Balance at beginning of period at Jun. 30, 2017 | (915) | |||||||||
Net income | $ 742 | |||||||||
Other comprehensive income | 39 | |||||||||
Balance at end of period at Sep. 30, 2017 | $ 117,788 | $ (817) | $ 65,970 | $ 37,099 | $ 16,412 | $ (876) | ||||
Balance at end of period, Shares at Sep. 30, 2017 | 13,193,983 | 13,193,983 | ||||||||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | |
Dividends declared per share | $ 0.04 | $ 0.04 | |
Private Placement | |||
Shares issued via private placement, net of issuance costs | $ 2.1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 1,122 | $ 1,964 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,041 | 791 |
Net premium amortization and discount accretion of securities | 271 | 320 |
Amortization of core deposit intangible | 461 | |
Accretion of time deposits | (219) | |
Amortization of subordinated debt issuance costs | 13 | 12 |
Accretion of loan discount | (860) | |
Provision for loan losses | 1,833 | 407 |
Stock compensation expense | 178 | 16 |
Deferred tax benefit | (8) | (6) |
(Gains) on securities available-for-sale | 2 | (290) |
Increase in OREO valuation allowance | 145 | 53 |
(Gain) loss on sale of other real estate | (44) | 41 |
Decrease in mortgage servicing rights | 16 | 68 |
Loan originations for sale | (10,204) | (14,232) |
Loan sales | 10,438 | 14,378 |
Gain on sold loans | (120) | (357) |
Gain on sale of VISA loan portfolio | (150) | |
Increase in cash surrender value of life insurance | (342) | (197) |
Decrease in accrued income and other assets | (137) | 123 |
Increase in other liabilities | 1,160 | 643 |
Net cash provided by operating activities | 4,370 | 3,584 |
Cash Flows From Investing Activities | ||
Proceeds from maturities and principal paydowns of available-for-sale securities | 3,093 | 2,907 |
Proceeds from sales and calls of available-for-sale securities | 17,662 | 14,582 |
Maturities of certificates of deposit | 992 | 1,240 |
Purchases of available-for-sale securities and certificates of deposit | (19,121) | (15,356) |
Purchase of Life Insurance | (2,000) | |
(Purchases) sales of restricted securities | (1,807) | 522 |
Increase in Federal Funds Sold | (21,451) | (189) |
Proceeds from the sale of VISA loan portfolio | 1,301 | |
Loan (originations) and principal collections, net | (57,147) | (20,277) |
Loan purchases | (34,037) | (4,006) |
Cash acquired in the merger with Virginia Commonwealth | 14,698 | |
Proceeds from sale of other real estate | 603 | 244 |
Proceeds from sale of equipment | 9 | |
Purchases of premises and equipment | (1,643) | (168) |
Net cash used in investing activities | (97,705) | (21,200) |
Cash Flows From Financing Activities | ||
Net (decrease) increase in demand, savings, and other interest-bearing deposits | (2,527) | 17,593 |
Net increase in time deposits | 88,512 | 524 |
Stock options exercised | 195 | |
Net (decrease) increase in securities sold under repurchase agreements | (1,219) | 5,823 |
Issuance of stock | 32,888 | |
Dividend paid | (376) | |
Increase (decrease) in Federal Home Loan Bank advances | 15,000 | (15,000) |
Net cash provided by financing activities | 132,849 | 8,940 |
Net increase in cash and due from banks | 39,514 | (8,676) |
Cash and cash equivalents (including interest-earning deposits) at beginning of period | 12,796 | 20,299 |
Cash and cash equivalents (including interest-earning deposits) at end of period | 51,866 | 11,623 |
Cash paid for: | ||
Interest | 4,303 | 2,549 |
Income taxes | 690 | 70 |
Non-cash investing and financing: | ||
Unrealized gain on investment securities | 545 | 605 |
Loans transferred to other real estate owned | 259 | 1,348 |
Loans originated to facilitate sale of OREO | 164 | 116 |
Changes in deferred taxes resulting from OCI transactions | 184 | 206 |
Transfer of loans to held for sale | $ 1,173 | |
Business combination: | ||
Assets acquired, net of cash acquired | 315,845 | |
Liabilities assumed | 294,454 | |
Net assets acquired, net of cash acquired | 21,391 | |
Unpaid dividends declared | $ 527 |
General
General | 9 Months Ended |
Sep. 30, 2017 | |
General | Note 1: General Bay Banks of Virginia, Inc. (the “Company”) owns 100% of Virginia Commonwealth Bank, formerly named Bank of Lancaster (refer to Note 2) (the “Bank”), 100% of VCB Financial Group, Inc., formerly known as Bay Trust Company (“VCBFG”) and 100% of Steptoes Holdings, LLC (“Steptoes Holdings”). The consolidated financial statements include the accounts of the Bank, VCBFG, Steptoes Holdings and Bay Banks of Virginia, Inc. The September 30, 2017 consolidated financial statements presented herein reflect combined operations of the business combination of the Company and Virginia BanCorp Inc. effective April 1, 2017, and described further in Note 2. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and to the general practices within the banking industry. In management’s opinion, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the consolidated financial statements, have been included. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year or for any other interim periods. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K Certain amounts presented in the consolidated financial statements of prior periods have been reclassified to conform to current year presentations. The reclassifications had no effect on net income, net income per share or shareholders’ equity as previously reported. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2017 | |
Business Combination | Note 2: Business Combination On April 1, 2017, the Company and Virginia BanCorp Inc. (“Virginia BanCorp”), a bank holding company conducting substantially all of its operations through its subsidiary Virginia Commonwealth Bank, completed a merger pursuant to the Agreement and Plan of Merger, dated as of November 2, 2016, by and between the Company and Virginia BanCorp. The Company is the surviving corporation in the merger and the former shareholders of Virginia BanCorp received 1.178 shares of the Company’s common stock for each share of Virginia BanCorp common stock they owned immediately prior to the merger, for a total issuance of 4,586,221 shares of the Company’s common stock valued at approximately $42.2 million at the time of closing. As of the completion of the merger, the Company’s legacy shareholders owned approximately 51% of the outstanding common stock of the Company and Virginia BanCorp’s former shareholders owned approximately 49% of the outstanding common stock of the Company. After the merger of Virginia BanCorp with and into the Company, Virginia BanCorp’s subsidiary bank was merged with and into Bank of Lancaster, and immediately thereafter Bank of Lancaster changed its name to Virginia Commonwealth Bank. Bank operating systems are being consolidated and are expected to be completed during the fourth quarter of 2017. The acquisition was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations The following table details the total consideration paid by the Company on April 1, 2017 in connection with the acquisition of Virginia BanCorp, the fair value of the assets acquired and liabilities assumed, and the resulting goodwill. As Recorded As Recorded Fair Value by the (Dollars in thousands) by VCB Adjustments Company Consideration paid: Bay Banks of Virginia, Inc. common stock $ 42,247 Identifiable assets acquired: Cash and due from banks $ 2,356 $ — $ 2,356 Interest-bearing deposits 12,342 — 12,342 Securities available-for-sale 22,088 — 22,088 Restricted securities 1,543 — 1,543 Loans receivable 272,479 (59,907 ) 212,572 Loans held for sale — 55,648 55,648 Deferred income taxes 1,325 (500 ) 825 Premises and equipment 3,333 2,703 6,036 Accrued interest receivable 1,253 (24 ) 1,229 Other real estate owned 3,113 — 3,113 Core deposit intangible — 3,670 3,670 Bank owned life insurance 8,430 — 8,430 Mortgage servicing rights 324 — 324 Other assets 367 — 367 Total identified assets acquired 328,953 1,590 330,543 Identifiable liabilities assumed: Noninterest-bearing deposits 21,119 — 21,119 Savings and interest-bearing demand deposits 124,640 — 124,640 Time deposits 121,437 733 122,170 Federal Home Loan Bank advances 25,000 — 25,000 Other liabilities 1,525 — 1,525 Total identifiable liabilities assumed 293,721 733 294,454 Total identifiable assets assumed $ 35,232 $ 857 $ 36,089 Goodwill resulting from acquisition $ 6,158 Fair value of the major categories of assets acquired and liabilities assumed were determined as follows: Loans The acquired loans were recorded at fair value at the acquisition date of $268.2 million without carryover of Virginia BanCorp’s allowance for loan losses. Where loans exhibited characteristics of performance, fair value was determined based on a discounted cash flow analysis which included default estimates; loans without such characteristics, fair value was determined based on the estimated values of the underlying collateral. While estimating the amount and timing of both principal and interest cash flows expected to be collected, a market-based discount rate was applied. In this regard, the acquired loans were segregated into pools based on loan type and credit risk. Loan type was determined based on collateral type and purpose, industry segment and loan structure. Credit risk characteristics included risk rating groups pass, special mention, substandard, and doubtful and lien position. For valuation purposes, these pools were further disaggregated by maturity and pricing characteristics (e.g., fixed-rate, adjustable-rate, balloon maturities). At April 1, 2017, the gross contractual amounts of receivable and the fair value for the purchased credit impaired loans (“PCI”) were $8.3 million, while the estimated cash flows not expected to be collected were approximately $7.4 million. Information about the PCI loan portfolio at April 1, 2017 is as follows: (Dollars in thousands) April 1, 2017 Contractual principal and interest due $ 8,303 Nonaccretable difference 869 Expected cash flows 7,434 Accretable yield 1,354 Purchased credit impaired loans - estimated fair value $ 6,080 Loans which totaled approximately $55.4 million which were acquired were held for sale as of June 30, 2017. Management decided to withdraw these loans from held for sale status and classify them back as held to maturity loans in the 3 rd Premises and Equipment The fair value of Virginia BanCorp premises, including land, buildings and improvements, was determined based upon appraisal by licensed appraisers. These appraisals were based upon the best and highest use of the property with final values determined based upon an analysis of the cost, sales comparison and income capitalization approaches for each property appraised. The fair value of premises and equipment resulted in a $2.7 million fair value adjustment. Land is not depreciated. Core Deposit Intangible The fair value of the core deposit intangible (“CDI”) was determined based on a combined discounted economic benefit and market approach. The economic benefit was calculated as the cost savings between maintaining the core deposit base and using an alternate funding source, such as Federal Home Loan Bank of Atlanta (“FHLB”) advances. The life of the deposit base and projected deposit attrition rates was determined using Virginia BanCorp’s historical deposit data. The CDI fair value was estimated at $3.7 million or 2.52% of acquired deposits, excluding time deposits. The CDI is being amortized over a weighted average life of 92 months using a sum-of-the-months Time Deposits The fair value adjustment of time deposits represents a premium over the value of the contractual repayments of fixed-maturity deposits using prevailing market interest rates for similar term certificates of deposit. The resulting estimated fair value adjustment of certificates of deposit ranging in maturity from one month to five years is a $733 thousand premium and is being amortized into income on a level-yield basis over the weighted average remaining life. FHLB Advances The fair value of FHLB advances was considered to be equivalent to Virginia BanCorp’s recorded book balance as the advances matured in April 30, 2017. Deferred Tax Assets and Liabilities Certain deferred tax assets and liabilities were carried over to the Company from Virginia BanCorp based on the Company’s ability to utilize them in the future. Additionally, deferred tax assets and liabilities were established for acquisition accounting fair value adjustments as the future amortization/accretion of these adjustments represent temporary differences between book income and taxable income. Pro Forma Financial Information The table below illustrates the unaudited pro forma revenue and net income of the combined entities had the acquisition taken place on January 1, 2016. The unaudited combined pro forma revenue and net income combines the historical results of Virginia BanCorp with the Company’s consolidated statements of income for the period listed below, and while certain adjustments were made for the estimated effect of certain fair value adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition actually taken place on January 1, 2016. Acquisition related expenses of $141 thousand and $1.1 million were included in the Company’s actual consolidated statements of income for the three and nine months ended September 30, 2017, respectively, but were excluded from the unaudited pro forma information listed below. Legacy Virginia BanCorp incurred $174 thousand of merger related expenses during the first three months of 2017 which was also excluded from the unaudited pro forma information below. Additionally, the Company expects to achieve further operational cost savings and other efficiencies as a result of the acquisition which are not reflected in the unaudited pro forma amounts below: For the Three Months Ended For the Nine Months Ended (Dollars in thousand) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Net interest income $ 7,707 $ 6,872 $ 22,014 $ 20,443 Net income 906 1,653 2,752 4,443 Impact of Certain Acquisition Accounting Adjustments The net effect of the amortization and accretion of premiums and discounts associated with the Company’s acquisition accounting adjustments to assets acquired and liabilities assumed from Virginia BanCorp had the following impact on the consolidated statements of income for the three and nine months ended September 30, 2017. Three Months Nine Months Ended Ended (Dollars in thousands) September 30, 2017 September 30, 2017 Loans (1) $ 411 $ 860 Core deposit intangible (2) (226 ) (461 ) Time deposits (3) 103 219 Depreciation (4) (10 ) (20 ) Net impact to income before income taxes $ 278 $ 598 (1) Loan discount accretion is included in the “Loans, including fees” section of “Interest Income” in the consolidated statements of income. (2) Core deposit intangible premium amortization is included in “Other expense” section of “Non-Interest (3) Time deposit premium amortization is included in the “Deposits” section of “Interest Expense” in the consolidated statements of income. (4) Depreciation on the fair value mark up of fixed assets is included in “Occupancy expense” section of “Non-Interest |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Significant Accounting Policies | Note 3: Significant Accounting Policies Loans The Company grants mortgage loans on real estate, commercial and industrial loans, and consumer and other loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans on real estate. The ability of the Company’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in the Company’s market areas. Loans are reported at their recorded investment, which is the outstanding principal balance net of any unearned income, such as deferred fees and costs, charge-offs and discounts on acquired loans. Interest on loans is recognized over the term of the loan and is calculated using the interest method on principal amounts outstanding. Loan origination fees and certain direct origination costs are deferred and recognized as an adjustment of the related loan yield over the contractual term of the loan, adjusted for early pay-offs, The accrual of interest is generally discontinued at the time a loan is 90 days or more past due, or earlier, if collection is uncertain based on an evaluation of the net realizable value of the collateral and the financial strength of the borrower. Payments received for loans no longer accruing interest are applied to the unpaid principal balance. Loans greater than 90 days past due may remain on accrual status if the credit is well-secured and in process of collection. Personal loans are typically charged off no later than 180 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are charged off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual and past due policies are materially the same for all types of loans with the exception of PCI loans whose discount is being accreted to interest income. All interest accrued but not collected for loans that are placed on non-accrual Charge-off As soon as any loan becomes uncollectible, the loan will be charged down or charged off as follows: • If unsecured, the loan must be charged off in full. • If secured, the outstanding principal balance of the loan should be charged down to the net realizable value of the collateral. Loans should be considered uncollectible when: • No regularly scheduled payment has been made within four months, or • The loan is unsecured, the borrower files for bankruptcy protection and there is no other (guarantor, etc.) support from an entity outside of the bankruptcy proceedings. Allowance for loan losses (“ALL”) The ALL reflects management’s judgment of probable loan losses inherent in the portfolio at the balance sheet date. Management uses a disciplined process and methodology to establish the ALL each quarter. To determine the total ALL, the Company estimates the reserves needed for each homogenous segment and class of the portfolio, plus any loans analyzed individually for impairment. Depending on the nature of each segment and class, considerations include historical loss experience, adverse situations that may affect a borrower’s ability to repay, credit scores, past due history, estimated value of any underlying collateral, prevailing local and national economic conditions, and internal policies and procedures including credit risk management and underwriting. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as conditions change. Management employs a risk rating system to evaluate and consistently categorize loan portfolio credit risk. All loans acquired in the merger and all loans originated since the merger are risk rated. Legacy loans originated prior to the merger that were assigned risk rating grades include all commercial loans not secured by real estate, commercial mortgages, residential mortgages greater than $1 million, smaller residential mortgages which are impaired, loans to real estate developers and contractors, consumer loans greater than $250 thousand with chronic delinquency, and troubled debt restructures (“TDRs”). The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Risk grades are evaluated as new information becomes available for each borrowing relationship or at least quarterly. All other loans not specifically assigned a risk rating grade are monitored as a discrete pool of loans generally based on delinquency status. Risk rating categories are as follows: Pass Watch Special Mention Substandard Doubtful Loss The ALL consists of specific and general components. The specific component is determined by identifying impaired loans (as described below) then evaluating each one to calculate the amount of impairment. Impaired loans measured for impairment generally include (1) all loans risk rated Special Mention or worse with balances of $400 thousand or more or where the borrower has filed for bankruptcy; and (2) all loans classified as a TDR . A specific allowance arises when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component collectively evaluates any loans not identified as impaired, which are typically smaller commercial loans, residential mortgages and consumer loans, grouped into segments and classes. Historical loss experience is calculated and applied to each segment or class, then adjusted for qualitative factors. Qualitative factors include changes in local and national economic indicators, such as unemployment rates, interest rates, gross domestic product growth and real estate market trends; the level of past due and nonaccrual loans; risk ratings on individual loans; strength of credit policies and procedures; loan officer experience; borrower credit scores; and other intrinsic risks related to the types and geographic locations of loans. These qualitative adjustments reflect management’s judgment of risks inherent in the segments. An unallocated component is maintained if needed to cover uncertainties that could affect management’s estimate of probable losses. Changes in the allowance for loan losses and the related provision expense can materially affect net income. The specific component of the ALL calculation accounts for the loan loss reserve necessary on impaired loans. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case The general component of the ALL calculation collectively evaluates groups of loans in segments and classes, as noted above. The segments are: (1) Mortgage loans on real estate; (2) Commercial and industrial loans; and (3) Consumer and other loans. The segment for Mortgage loans on real estate is disaggregated into the following classes: (1) Construction, land and land development; (2) Farmland; (3) Residential first mortgages; (4) Residential revolving and junior mortgages; (5) Commercial mortgages (non-owner-occupied); Construction and development loans carry risks that the project will not be finished according to schedule or according to budget and the value of the collateral, at any point in time, may be less than the principal amount of the loan. These loans also bear the risk that the general contractor may face financial pressure unrelated to the project. Loans secured by land, farmland and residential mortgages carry the risk of continued credit-worthiness of the borrower and changes in value of the underlying real estate collateral. Commercial mortgages and commercial and industrial loans carry risks associated with the profitable operation of a business and its related cash flows. Additionally, commercial and industrial loans carry risks associated with the value of collateral other than real estate which may depreciate over time. Consumer loans carry risks associated with the continuing credit-worthiness of the borrower and are more likely than real estate loans to be adversely affected by divorce, unemployment, personal illness or bankruptcy of an individual. Consumer loans secured by automobiles carry risks associated with rapidly depreciating collateral. Consumer loans have historically included credit cards, which are unsecured. The credit card portfolio was sold to an unaffiliated third party in the third quarter of 2016. The summation of the specific and general components results in the total estimated ALL. This estimate is inherently subjective and actual losses could be greater or less than the estimates. An ALL calculation is also performed on purchased performing loans. A comparison is then made to the remaining unaccreted discount associated with the purchase of those loans. If the ALL related to these loans exceeds the remaining unaccreted discount, that difference is added to the ALL that applies to non-purchased Additions to the ALL are made by charges to earnings through the provision for loan losses. Charge-offs result from credit exposures deemed to be uncollectible and the ALL is reduced by these. Recoveries of previously charged off amounts are credited back to the ALL. Charge-off Loans Acquired in a Business Combination The Company accounts for loans acquired in a business combination in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations.” Accordingly, acquired loans are segregated between PCI loans and purchased performing loans (“PPL”) and are recorded at fair value on the date of acquisition without the carryover of the related allowance for loan losses. PCI loans are those for which there is evidence of credit deterioration since origination and for which it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. When determining fair market value, PCI loans were aggregated into pools of loans based on common characteristics as of the date of acquisition such as loan type, date of origination, and evidence of credit quality deterioration such as internal risk grades and past due and nonaccrual status. The Company estimates the amount and timing of expected cash flows for each loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). These estimates include certain prepayment assumptions based on the nature of each loan pool. The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded as a provision for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. Loans not designated PCI loans as of the acquisition date are designated purchased performing loans. The Company accounts for purchased performing loans using the contractual cash flows method of recognizing discount accretion based on the acquired loans’ contractual cash flows. Purchased performing loans are recorded at fair value, including a credit discount. The fair value discount is accreted as an adjustment to yield over the estimated lives of the loans. There is no allowance for loan losses established at the acquisition date for purchased performing or PCI loans. A provision for loan losses is recorded for any deterioration in these loans subsequent to the acquisition. Employee Stock Ownership Plan (“ESOP”) The Company currently has two ESOPs for the benefit of all eligible employees. Shares held by the legacy ESOP of the former Bank of Lancaster employees are considered outstanding for purposes of computing earnings per share as they are fully allocated. Unearned ESOP shares in the ESOP acquired in the merger (“new ESOP”), are shown as a reduction of shareholders’ equity. The unearned ESOP shares are not included in basic or diluted earnings per share calculation as discussed in Note 9. The use of dividends paid on allocated ESOP shares are at the discretion of the Company. Dividends on unallocated ESOP shares, if paid, are considered to be compensation expense. The Company recognizes compensation cost equal to the fair value of the ESOP shares during the periods in which they are committed to be released. The Company recognizes a tax deduction equal to the cost of shares released. The unearned ESOP shares are pledged to a third party to collateralize a direct loan to the ESOP. The loan is guaranteed by the Company and is recorded on the Company’s consolidated balance sheets. It is anticipated that the Company will make contributions to the new ESOP in amounts necessary to amortize the third-party loans over a nine year period. See note 12. |
Amendments to the Accounting St
Amendments to the Accounting Standards Codification | 9 Months Ended |
Sep. 30, 2017 | |
Amendments to the Accounting Standards Codification | Note 4: Amendments to the Accounting Standards Codification In March 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation – Stock Compensation (Topic 718).” 2017-09 2017-09 In March 2017, the FASB issued Accounting Standards Update No. 2017-08, “Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20), 2017-08 In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” 2017-07 2017-07 In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings 2017-03 In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), off-balance held-to-maturity 2016-13 available-for-sale available-for-sale available-for-sale 2016-13 non-accrual In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting.” 2016-09 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) 2016-02 2016-02 In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall 825-10) available-for-sale available-for 2016-01. 2016-01 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 2014-09 2014-09 2014-09. 2014-09. The 2014-09 |
Securities
Securities | 9 Months Ended |
Sep. 30, 2017 | |
Securities | Note 5: Securities The aggregate amortized costs and fair values of the available-for-sale (Dollars in thousands) Gross Gross Available-for-sale Amortized Unrealized Unrealized Fair September 30, 2017 Cost Gains (Losses) Value Corporate bonds $ 6,696 $ 22 $ (1 ) $ 6,717 U.S. Government agencies 44,194 77 (298 ) 43,973 State and municipal obligations 21,211 186 (194 ) 21,203 $ 72,101 $ 285 $ (493 ) $ 71,893 Gross Gross Available-for-sale Amortized Unrealized Unrealized Fair December 31, 2016 Cost Gains (Losses) Value Corporate bonds $ 7,695 $ 14 $ (5 ) $ 7,704 U.S. Government agencies 25,668 53 (408 ) 25,313 State and municipal obligations 18,566 49 (459 ) 18,156 $ 51,929 $ 116 $ (872 ) $ 51,173 Gross realized gains and gross realized losses on sales and calls of securities were as follows: For the three months ended For the nine months ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Gross realized gains $ — $ 180 $ 7 $ 300 Gross realized losses — — (5 ) (10 ) Net realized gains $ 0 $ 180 $ 2 $ 290 Aggregate proceeds $ 0 $ 4,984 $ 17,662 $ 14,582 Average yields (taxable equivalent) on securities were 2.58% and 3.10% for the three months ended September 30, 2017 and 2016, respectively, and 3.26% and 3.07% for the nine months ended September 30, 2017 and 2016, respectively. Securities with a market value of $19.5 million and $19.1 million were pledged as collateral for repurchase agreements and for other purposes as required by law as of September 30, 2017 and December 31, 2016, respectively. As of September 30, 2017 and December 31, 2016, all the securities pledged to repurchase agreements were state and municipal obligations. All the repurchase agreements had remaining contractual maturities that were overnight and continuous. Securities sold under repurchase agreements were $17.1 million and $18.3 million as of September 30, 2017 and December 31, 2016, respectively, and included in liabilities on the consolidated balance sheets. The securities pledged to each agreement are reviewed daily and can be changed at the option of the Bank with minimal risk of loss due to fair value. Securities in an unrealized loss position at September 30, 2017 and December 31, 2016, by duration of the unrealized loss, are shown below. The unrealized loss positions were directly related to interest rate movements as there is minimal credit risk exposure in these investments. All agency securities, and states and municipal securities, are investment grade or better and their losses are considered temporary. Management does not intend to sell the securities and does not expect to be required to sell the securities. Furthermore, all amortized cost bases are expected to be recovered. Bonds with unrealized loss positions at September 30, 2017 included 40 federal agencies, one corporate bond and 21 municipals. Bonds with unrealized loss positions at December 31, 2016 included 37 federal agencies, one corporate bond and 39 municipals. The tables are shown below. (Dollars in thousands) Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized September 30, 2017 Value Loss Value Loss Value Loss Corporate bonds $ 499 $ (1 ) $ — $ — $ 499 $ (1 ) U.S. Government agencies 23,120 (134 ) 7,296 (164 ) 30,416 (298 ) States and municipal obligations 4,613 (70 ) 3,448 (124 ) 8,061 (194 ) Total temporarily impaired securities $ 28,232 $ (205 ) $ 10,744 $ (288 ) $ 38,976 $ (493 ) Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2016 Value Loss Value Loss Value Loss Corporate bonds $ 995 $ (5 ) $ — $ — $ 995 $ (5 ) U.S. Government agencies 20,933 (396 ) 1,308 (12 ) 22,241 (408 ) States and municipal obligations 12,888 (459 ) — — 12,888 (459 ) Total temporarily impaired securities $ 34,816 $ (860 ) $ 1,308 $ (12 ) $ 36,124 $ (872 ) The Company’s investment in FHLB stock totaled $3.9 million and $1.9 million at September 30, 2017 and December 31, 2016, respectively. The Company also had an investment in Federal Reserve Bank of Richmond (“FRB”) stock which totaled $1.9 million and $580 thousand at September 30, 2017 and December 31, 2016, respectively. The investments in both FHLB and FRB stock are required investments related to the Bank’s membership with the FHLB and FRB. These securities do not have a readily determinable fair value as their ownership is restricted, and they lack an active market for trading. Additionally, per charter provisions related to the FHLB and FRB stock, all repurchase transactions of such stock must occur at par. Accordingly, these securities are carried at cost, and are periodically evaluated for impairment. The Company’s determination as to whether its investment in FHLB and FRB stock is impaired is based on management’s assessment of the ultimate recoverability of its par value rather than recognizing temporary declines in its value. The determination of whether the decline affects the ultimate recoverability of the investments is influenced by available information regarding various factors. These factors include, among others, the significance of the decline in net assets of the issuing banks as compared to the capital stock amount reported by these banks, and the length of time a decline has persisted; commitments by such banks to make payments required by law or regulation and the level of such payments in relation to the operating performance of the issuing bank; and the overall liquidity position of the issuing bank. Based on its most recent analysis of publicly available information regarding the financial condition of the issuing banks, management concluded that no impairment existed in the carrying value of FHLB and FRB stock. |
Low Income Housing Tax Credits
Low Income Housing Tax Credits | 9 Months Ended |
Sep. 30, 2017 | |
Low Income Housing Tax Credits | Note 6: Low Income Housing Tax Credits The Company had investments in three separate housing equity funds at September 30, 2017. The general purpose of these funds is to encourage and assist participants in investing in low-income low-income |
Loans
Loans | 9 Months Ended |
Sep. 30, 2017 | |
Loans | Note 7: Loans The following is a summary of the balances of loans: (Dollars in thousands) September 30, 2017 December 31, 2016 Mortgage loans on real estate: Construction, Land and Land Development $ 63,046 $ 39,818 Farmland 936 1,023 Commercial Mortgages (Non-Owner 141,954 35,343 Commercial Mortgages (Owner Occupied) 73,615 41,825 Residential First Mortgages 269,017 194,007 Residential Revolving and Junior Mortgages 46,193 26,425 Commercial and Industrial loans 99,637 43,024 Consumer loans 48,640 3,544 Total loans 743,038 385,009 Net unamortized deferred loan costs and purchased discounts 1,590 391 Allowance for loan losses (4,920 ) (3,863 ) Loans, net $ 739,708 $ 381,537 The recorded investment in past due and non-accruing 90 Days or 30-89 More Past Total Past Days Due and Due and Total (Dollars in thousands) Past Due Still Accruing Nonaccruals Nonaccruals Current Loans September 30, 2017 Mortgage Loans on Real Estate: Construction, Land and Land Development $ 267 $ — $ 632 $ 899 $ 62,147 $ 63,046 Farmland — — — — 936 936 Commercial Mortgages (Non-Owner 452 — — 452 141,502 141,954 Commercial Mortgages (Owner Occupied) 243 — 1,717 1,960 71,655 73,615 Residential First Mortgages 1,621 — 1,318 2,939 266,078 269,017 Residential Revolving and Junior Mortgages 1,173 — 885 2,058 44,135 46,193 Commercial and Industrial 15 — 110 125 99,512 99,637 Consumer loans 449 3 137 589 48,051 48,640 Total $ 4,220 $ 3 $ 4,799 $ 9,022 $ 734,016 $ 743,038 90 Days or 30-89 More Past Total Past Days Due and Due and Total Past Due Still Accruing Nonaccruals Nonaccruals Current Loans December 31, 2016 Mortgage Loans on Real Estate: Construction, Land and Land Development $ — $ — $ 623 $ 623 $ 39,195 $ 39,818 Farmland 57 — — 57 966 1,023 Commercial Mortgages (Non-Owner — — — — 35,343 35,343 Commercial Mortgages (Owner Occupied) 188 — 2,270 2,458 39,367 41,825 Residential First Mortgages 1,546 — 2,155 3,701 190,306 194,007 Residential Revolving and Junior Mortgages 480 — 160 640 25,785 26,425 Commercial and Industrial 408 — 92 500 42,524 43,024 Consumer loans — — — — 3,544 3,544 Total $ 2,679 $ — $ 5,300 $ 7,979 $ 377,030 $ 385,009 The following table includes an aging analysis, based upon contractual terms, of the recorded investment of PCI loans as of September 30, 2017, included in the table above. 90 Days or 30-89 More Past Total Past Days Due and Due and Total (Dollars in thousands) Past Due Still Accruing Nonaccruals Nonaccruals Current Loans September 30, 2017 Mortgage Loans on Real Estate: Construction, Land and Land Development $ 0 $ — $ 0 $ 0 $ 1,413 $ 1,413 Commercial Mortgages (Non-Owner — — — — 182 182 Commercial Mortgages (Owner Occupied) 133 37 — 170 168 338 Residential First Mortgages — 144 — 144 3,697 3,841 Residential Revolving and Junior Mortgages — 19 — 19 31 50 Consumer loans 5 — — 5 69 74 Total $ 138 $ 200 $ 0 $ 338 $ 5,560 $ 5,898 The total outstanding balance of PCI loans as September 30, 2017 was $6.7 million |
Allowance for Loan Losses
Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2017 | |
Allowance for Loan Losses | Note 8: Allowance for Loan Losses Loans Evaluated for Impairment Loan receivables evaluated for impairment individually and collectively by segment as of September 30, 2017 and December 31, 2016 are as follows: Mortgage Commercial Consumer Loans and and Other (Dollars in thousands) on Real Estate Industrial Loans Total As of September 30, 2017 Loans individually evaluated for impairment $ 9,592 $ 92 $ — $ 9,684 Loans collectively evaluated for impairment 579,344 99,545 48,567 727,456 Loans acquired with deteriorated credit quality 5,825 — 73 5,898 Total Gross Loans $ 594,761 $ 99,637 $ 48,640 $ 743,038 As of December 31, 2016 Loans individually evaluated for impairment $ 10,323 $ 92 $ — $ 10,415 Loans collectively evaluated for impairment 328,118 42,932 3,544 374,594 Total Gross Loans $ 338,441 $ 43,024 $ 3,544 $ 385,009 Allowance for Loan Losses The allowance for loan losses disaggregated based on loan receivables evaluated for impairment individually and collectively by segment as of September 30, 2017 and December 31, 2016 are as follows: Mortgage Commercial Loans and Consumer (Dollars in thousands) on Real Estate Industrial Loans Total As of September 30, 2017 Loans individually evaluated for impairment $ 982 $ 92 $ — $ 1,074 Loans collectively evaluated for impairment 2,855 421 570 3,846 Loans acquired with deteriorated credit quality — — — — Total allowance for loan losses $ 3,837 $ 513 $ 570 $ 4,920 Mortgage Commercial Loans and Consumer on Real Estate Industrial Loans Total As of December 31, 2016 Loans individually evaluated for impairment $ 803 $ 92 $ — $ 895 Loans collectively evaluated for impairment 2,515 401 52 2,968 Total allowance for loan losses $ 3,318 $ 493 $ 52 $ 3,863 A disaggregation and an analysis of the change in the allowance for loan losses by segment is shown below. Mortgage Commercial Loans on and Consumer (Dollars in thousands) Real Estate Industrial Loans Total For the Three Months Ended September 30, 2017 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 3,686 $ 456 $ 99 $ 4,241 (Charge-offs) (75 ) — (366 ) (441 ) Recoveries 10 1 34 45 Provision (recovery) 216 56 803 1,075 Ending Balance $ 3,837 $ 513 $ 570 $ 4,920 Mortgage Commercial Loans on and Consumer Real Estate Industrial Loans Total For the Three Months Ended September 30, 2016 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 2,995 $ 435 $ 117 $ 3,547 Reclassification of allowance related to sold loans $ (27 ) $ (27 ) (Charge-offs) (46 ) — (10 ) (56 ) Recoveries 15 — 3 18 Provision (recovery) 244 45 (30 ) 259 Ending Balance $ 3,208 $ 480 $ 53 $ 3,741 Mortgage Commercial Loans on and Consumer (Dollars in thousands) Real Estate Industrial Loans Total For the Nine Months Ended September 30, 2017 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 3,318 $ 493 $ 52 $ 3,863 (Charge-offs) (348 ) — (567 ) (915 ) Recoveries 98 2 39 139 Provision (recovery) 769 18 1,046 1,833 Ending Balance $ 3,837 $ 513 $ 570 $ 4,920 Mortgage Commercial Loans on and Consumer Real Estate Industrial Loans Total For the Nine Months Ended September 30, 2016 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 3,502 $ 599 $ 122 $ 4,223 Reclassification of allowance related to sold loans $ — $ — $ (27 ) $ (27 ) (Charge-offs) (702 ) (158 ) (41 ) (901 ) Recoveries 25 5 9 39 Provision (recovery) 383 34 (10 ) 407 Ending Balance $ 3,208 $ 480 $ 53 $ 3,741 Purchased Impaired Loans The following table presents the changes in the accretable yield for purchased impaired loans (refer to Note 3) since acquisition on April 1, 2017 through September 30, 2017 (in thousands): September 30, 2017 Balance at acquisition, April 1, 2017 $ 1,354 Accretion (179 ) Reclassifications from nonaccretable balance, net — Other changes, net — Balance as of September 30, 2017 $ 1,175 As of September 30, 2017 there was no allowance on PCI loans. Internal Risk Rating Grades Internal risk rating grades are generally assigned to commercial loans not secured by real estate, commercial mortgages, residential mortgages greater than $1 million, smaller residential mortgages which are impaired, loans to real estate developers and contractors, consumer loans greater than $250,000 with chronic delinquency, and TDRs, as shown in the following table. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Risk grades (refer to Note 3) are evaluated as new information becomes available for each borrowing relationship or at least quarterly. All loan portfolios acquired in the merger are risk graded using loan risk grading software that employs a variety of algorithms based on detailed account characteristics to include borrower’s payment history on a total relationship basis as well as loan to value exposure. For non-homogenous Construction, Residential Commercial Commercial Land and Residential Revolving Mortgages Mortgages Commercial Land First and Junior (Non-Owner (Owner and (Dollars in thousands) Development Farmland Mortgage Mortgage Occupied) Occupied) Industrial Consumer Total As of September 30, 2017 Grade: Pass $ 52,108 $ 936 $ 43,370 $ 20,276 $ 137,028 $ 58,894 $ 95,599 $ 45,154 $ 453,365 Watch 7,290 — 1,252 33 4,472 12,106 3,927 77 29,157 Special mention 175 — — — — 249 — — 424 Substandard 3,473 — 1,482 50 454 2,366 111 165 8,101 Doubtful — — — — — — — — — Total $ 63,046 $ 936 $ 46,104 $ 20,359 $ 141,954 $ 73,615 $ 99,637 $ 45,396 $ 491,047 Construction, Commercial Commercial Land and Mortgages Mortgages Commercial Land (Non-Owner (Owner and Development Farmland Occupied) Occupied) Industrial Total As of December 31, 2016 Grade: Pass $ 32,009 $ 1,023 $ 30,639 $ 31,191 $ 40,841 $ 135,703 Watch 5,795 — 4,184 6,652 1,891 18,522 Special mention 180 — 272 1,453 125 2,030 Substandard 1,834 — 248 2,529 167 4,778 Doubtful — — — — — — Total $ 39,818 $ 1,023 $ 35,343 $ 41,825 $ 43,024 $ 161,033 Loans not assigned internal risk rating grades are comprised of smaller residential mortgages and smaller consumer loans in the surviving bank’s legacy portfolios. Payment activity of these loans is reviewed monthly by management. However, some of these loans are graded when the borrower’s total exposure to the Bank exceeds the limits noted above. Loans are considered to be nonperforming when they are delinquent by 90 days or more or non-accruing Residential Residential Revolving First and Junior Consumer (Dollars in thousands) Mortgages (1) Mortgages (2) Loans (3) Total As of September 30, 2017 PAYMENT ACTIVITY STATUS Performing $ 221,629 $ 24,949 $ 3,244 $ 249,822 Nonperforming 1,284 885 — 2,169 Total $ 222,913 $ 25,834 $ 3,244 $ 251,991 Residential Residential Revolving First and Junior Consumer Mortgages (4) Mortgages (5) Loans (6) Total As of December 31, 2016 PAYMENT ACTIVITY STATUS Performing $ 191,852 $ 26,265 $ 3,544 $ 221,661 Nonperforming 2,155 160 — 2,315 Total $ 194,007 $ 26,425 $ 3,544 $ 223,976 (1) Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $2.2 million as of September 30, 2017. (2) Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $927 thousand as of September 30, 2017. (3) No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2017. (4) Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $3.3 million as of December 31, 2016. (5) Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $1.1 million as of December 31, 2016. (6) No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2016. Impaired Loans The following tables show the Company’s recorded investment and the customers’ unpaid principal balances for impaired loans, excluding purchased impaired loans, with the associated allowance amount, if applicable, as of September 30, 2017 and December 31, 2016, along with the average recorded investment and interest income recognized for the three and nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017 As of December 31, 2016 Recorded Customers’ Unpaid Related Recorded Customers’ Unpaid Related (Dollars in thousands) Investment Principal Balance Allowance Investment Principal Balance Allowance IMPAIRED LOANS With no related allowance: Construction, Land and Land Development $ 367 $ 449 $ — $ 1,531 $ 1,539 $ — Residential First Mortgages 1,407 1,502 — 2,112 2,176 — Residential Revolving and Junior Mortgages (1) 481 491 — 995 999 — Commercial Mortgages (Non-owner 248 248 — 248 248 — Commercial Mortgages (Owner occupied) 1,027 985 — 1,860 2,178 — Commercial and Industrial — — — — — — 3,530 3,675 — 6,746 7,140 — With an allowance recorded: Construction, Land and Land Development 1,312 1,365 142 243 286 145 Residential First Mortgages 1,922 1,922 367 1,951 1,951 367 Residential Revolving and Junior Mortgages (1) 1,479 1,491 334 544 546 199 Commercial Mortgages (Non-owner — — — — — — Commercial Mortgages (Owner occupied) 1,355 1,399 139 839 854 92 Commercial and Industrial 92 101 92 92 101 92 6,160 6,278 1,074 3,669 3,738 895 Total Impaired Loans: Construction, Land and Land Development 1,679 1,814 142 1,774 1,825 145 Residential First Mortgages 3,329 3,424 367 4,063 4,127 367 Residential Revolving and Junior Mortgages (1) 1,960 1,982 334 1,539 1,545 199 Commercial Mortgages (Non-owner 248 248 — 248 248 — Commercial Mortgages (Owner occupied) 2,382 2,384 139 2,699 3,032 92 Commercial and Industrial 92 101 92 92 101 92 $ 9,690 $ 9,953 $ 1,074 $ 10,415 $ 10,878 $ 895 Notes: (1) Junior mortgages include equity lines. For the three months ended For the nine months ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Average Interest Average Interest Average Interest Average Interest Recorded Income Recorded Income Recorded Income Recorded Income (Dollars in thousands) Investment Recognized Investment Recognized Investment Recognized Investment Recognized With no related allowance: Construction, land and land development $ 367 $ — $ 1,533 $ 14 $ 385 $ — $ 1,262 $ 41 Residential First Mortgages 1,425 4 2,618 4 1,439 15 2,432 9 Residential Revolving and Junior Mortgages (1) 482 5 951 9 485 7 739 30 Commercial Mortgages (Non-owner 248 4 248 4 248 11 252 11 Commercial Mortgages (Owner occupied) 1,030 5 2,104 9 1,102 16 1,982 26 Commercial and Industrial — — — — — — — — 3,552 18 7,454 40 3,659 49 6,667 117 With an allowance recorded: Construction, land and land development 1,315 15 250 1 1,323 44 255 3 Residential First Mortgages 1,928 23 1,965 24 1,937 71 1,956 66 Residential Revolving and Junior Mortgages (1) 1,389 11 234 — 1,345 38 209 4 Commercial Mortgages (Non-owner — — — — — — — — Commercial Mortgages (Owner occupied) 1,372 4 686 5 1,381 19 691 17 Commercial and Industrial 92 — 92 — 92 — 105 1 6,096 53 3,227 30 6,078 172 3,216 91 Total Construction, land and land development 1,682 15 1,783 15 1,708 44 1,517 44 Residential First Mortgages 3,353 27 4,583 28 3,376 86 4,388 75 Residential Revolving and Junior Mortgages (1) 1,871 16 1,185 9 1,830 45 948 34 Commercial Mortgages (Non-owner 248 4 248 4 248 11 252 11 Commercial Mortgages (Owner occupied) 2,402 9 2,790 14 2,483 35 2,673 43 Commercial and Industrial 92 — 92 — 92 — 105 1 $ 9,648 $ 71 $ 10,681 $ 70 $ 9,737 $ 221 $ 9,883 $ 208 (1) Junior mortgages include equity lines. Smaller non-accruing non-accruing non-accruing non-accruing Loan Modifications Loans modified as TDRs are considered impaired and are individually evaluated for the amount of impairment in the ALL. No TDRs subsequently defaulted in the first nine months 2017 and one loan subsequently defaulted in the first nine months of 2016. The following table presents, by segments of loans, information related to loans modified as TDRs. For the three months ended For the three months ended September 30, 2017 September 30, 2016 Pre-Modification Post-Modification Pre-Modification Post-Modification (Dollars in thousands) Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded TROUBLED DEBT RESTRUCTURINGS Loans Investment Investment Loans Investment Investment Residential first mortgages (1) — $ — $ — 0 $ 0 $ 0 (1) Modification was a capitalization of interest. For the nine months ended For the nine months ended September 30, 2017 September 30, 2016 Pre-Modification Post-Modification Pre-Modification Post-Modification (Dollars in thousands) Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded TROUBLED DEBT RESTRUCTURINGS Loans Investment Investment Loans Investment Investment Residential first mortgages (1) — $ — $ — 1 $ 244 $ 244 (1) Modification was a capitalization of interest. Other Real Estate Owned The table below details the properties included in other real estate owned (“OREO”) as of September 30, 2017 and December 31, 2016. There was one collateralized consumer land loan from one borrower valued at $93 thousand in the process of foreclosure as of September 30, 2017. As of September 30, 2017 As of December 31, 2016 No. of Carrying No. of Carrying (Dollars in thousands) Properties Value Properties Value Residential 4 $ 889 2 $ 891 Land lots 17 3,089 7 547 Convenience store 1 55 1 59 Restaurant 1 55 1 55 Commerical properties 5 1,071 3 942 Total 28 $ 5,159 14 $ 2,494 Included in other assets as of September 30, 2017 and December 31, 2016, is one residential property purchased in 2013 from a related party with a value of $708 thousand and a former branch, which was closed April 30, 2015, with a value of $403 thousand. |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings per share | Note 9: Earnings per share The following table shows the weighted average number of shares used in computing earnings per share and the effect on the weighted average number of shares of dilutive potential common stock. Basic earnings per share amounts are computed by dividing the net income (the numerator) by the weighted average number of common shares outstanding (the denominator). Diluted earnings per share amounts assume the conversion, exercise or issuance of all potential common stock instruments unless the effect is to reduce the loss or increase the income per common share from continuing operations. For both computations, the weighted average number of unearned ESOP shares purchased by the ESOP, which have not been allocated to participant accounts, as well as unearned restricted shares, are not assumed to be outstanding. The weighted average unearned ESOP shares which were excluded from the computation were 136,376 and 104,510 for the three and nine months ended September 30, 2017, respectively. Capital Raise At the end of August 2017, the Company announced the completion of a $35 million capital raise offered to certain existing shareholders, institutional investors and other accredited investors, raising $32.9 million in common equity net of offering expenses. In the capital raise the Company sold 3,783,784 shares of its common stock at an offering price of $9.25 per share. September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Average Per share Average Per share Average Per share Average Per share Shares Amount Shares Amount Shares Amount Shares Amount Basic earnings per share 10,488,227 $ 0.07 4,774,856 $ 0.18 8,175,431 $ 0.14 4,774,856 $ 0.41 Effect of dilutive securities: Stock options 69,396 22,665 67,269 18,291 Diluted earnings per share 10,557,623 $ 0.07 4,797,521 $ 0.18 8,242,700 $ 0.14 4,793,147 $ 0.41 For the three months ended September 30, 2017 and 2016, options on 11,258 and 33,451 shares, respectively, were not included in computing diluted earnings per share because their effects were anti-dilutive. For the nine months ended September 30, 2017 and 2016, options on 21,258 and 47,041 shares, respectively, were not included in computing diluted earnings per share because their effects were anti-dilutive. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation | Note 10: Stock-Based Compensation On June 28, 2013, the Company registered with the SEC a stock-based compensation plan, which superseded all other plans. There are 309,709 shares available for grant under this plan at September 30, 2017. There was no stock-based compensation expense related to stock option awards for the three months ended September 30, 2017 and 2016. For the nine months ended September 30, 2017 and 2016, stock-based compensation expense related to stock option awards was $24 thousand and $16 thousand, respectively. Compensation expense for stock options is the estimated fair value of options on the date granted using the Black-Scholes Model amortized on a straight-line basis over the vesting period of the award. There was no unrecognized compensation expense related to stock options as of September 30, 2017. The variables used in these calculations of the fair value of the options are as follows: For the nine months ended September 30, 2017 2016 Risk free interest rate (5 year Treasury) 1.78% - 1.93% 1.49% Expected dividend yield 0% 0% Expected term (years) 5 5 Expected volatility 17.2% - 21.7% 40.1% Stock option activity for the nine months ended September 30, 2017 is summarized below: Weighted Average Weighted Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Life (in years) Value (1) Options outstanding, January 1, 2017 218,300 $ 6.35 5.9 Granted 13,000 8.54 Forfeited (1,195 ) 8.43 Exercised (33,622 ) 5.75 Expired (9,625 ) 13.76 Options outstanding and exercisable, September 30, 2017 186,858 $ 6.22 5.7 $ 635,628 (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax In the first nine months of 2017, 15,500 shares of restricted stock were granted to four executives. Total unvested restricted shares were 10,500 as of September 30, 2017 and zero as of December 31, 2016. Stock based compensation related to restricted stock awards was $60 thousand and zero as of the nine months ended September 30, 2017 and 2016, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Employee Benefit Plans | Note 11: Employee Benefit Plans The Company has a non-contributory, The Company sponsors a post-retirement benefit plan covering current and future retirees who acquire age 55 and 10 years of service or age 65 and five years of service. The post-retirement benefit plan provides coverage toward a retiree’s eligible medical and life insurance benefits expenses. The plan is unfunded and funded as benefits are due. Components of Net Periodic (Benefit) Cost (Dollars in thousands) Pension Benefits Post-Retirement Benefits Nine months ended September 30, 2017 2016 2017 2016 Service cost $ — $ — $ 15 $ 17 Interest cost 93 101 15 21 Expected return on plan assets (135 ) (142 ) — — Settlement loss 39 21 — — Amortization of net gain — — (6 ) — Recognized net actuarial loss 57 58 — — Net periodic cost $ 54 $ 38 $ 24 $ 38 The Company expects to make no contribution to its pension plan and $1 thousand to its post-retirement benefit plan during the remainder of 2017. The Company has contributed $5 thousand towards the post-retirement plan during the first nine months of 2017. |
Long Term Debt
Long Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long Term Debt | Note 12: Long Term Debt FHLB Debt As of September 30, 2017, the Bank had $75 million of outstanding FHLB debt, consisting of six advances. As of December 31, 2016, five advances totaling $35.0 million were outstanding. The $50.0 million advance that matured on October 2, 2017, 2017 and the $5.0 million daily rate advance were combined together and replaced with a $55.0 million fixed rate advance with an interest rate of 1.16% maturing on November 1, 2017. The $5.0 million fixed rate credit that was to mature on October 17, 2017 was replaced with a daily rate advance with an interest rate of 1.16% maturing on November 1, 2017. The six advances are shown in the following table. Current Maturity Description Balance (000’s) Originated Interest Rate Date Adjustable Rate Hybrid $ 10,000 4/12/2013 3.68350 4/13/2020 Fixed Rate Credit 5,000 1/17/2017 0.91000 10/17/2017 Fixed Rate Credit 5,000 1/20/2017 0.99500 12/20/2017 Daily Rate Credit 5,000 5/30/2017 1.32000 5/30/2018 Fixed Rate Credit 50,000 9/1/2017 1.15000 10/2/2017 $ 75,000 Advances on the FHLB lines are secured by a blanket lien on qualified 1 to 4 family residential real estate loans. Immediate available credit, as of September 30, 2017, was $134.8 million against a total line of credit of $215.8 million. As of September 30, 2017 and December 31, 2016, the Company had $75.0 million and $35.0 million, respectively, in FHLB debt outstanding with a weighted average interest rate of 1.47% and 1.49%, respectively. Subordinated Debt On May 28, 2015, the Company issued an aggregate of $7,000,000 of subordinated notes (the “Notes”). The Notes have a maturity date of May 28, 2025. The Notes bear interest, payable on the 1st of March and September of each year, commencing September 1, 2015, at a fixed interest rate of 6.50% per year. The Notes are not convertible into common stock or preferred stock, and are not callable by the holders. The Company has the right to redeem the Notes, in whole or in part, without premium or penalty, at any interest payment date on or after May 28, 2020 and prior to the maturity date, but in all cases in a principal amount with integral multiples of $1,000, plus interest accrued and unpaid through the date of redemption. If an event of default occurs, such as the bankruptcy of the Company, the holder of a Note may declare the principal amount of the Note to be due and immediately payable. The Notes are unsecured, subordinated obligations of the Company and will rank junior in right of payment to the Company’s existing and future senior indebtedness. The Notes qualify as Tier 2 capital for regulatory reporting. (Dollars in thousands) Balance as of September 30, 2017 6.5% Subordinated Debt $ 7,000 Less: Issuance costs (127 ) $ 6,873 ESOP Debt Acquired in the merger was $911 thousand of debt secured by unissued shares of stock in the Company’s ESOP plan. The four fixed rate amortizing notes each carry an interest rate of 3.25% with maturity dates ranging from March 1, 2019 to November 1, 2026. The unearned ESOP shares are pledged to a third party to collateralize a direct loan to the ESOP. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | Note 13: Fair Value Measurements The Company uses fair value to record certain assets and liabilities and to determine fair value disclosures. Authoritative accounting guidance clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Authoritative accounting guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy based on these two types of inputs are as follows: Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 – Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. Level 3 – Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements: Securities available-for-sale available-for-sale Defined benefit plan assets Mortgage servicing rights “(MSR”) The MSR for the portfolio serviced for FNMA is recorded at fair value on a recurring basis, with changes in fair value recorded in the results of operations. A model is used to determine fair value, which establishes pools of performing loans, calculates cash flows for each pool and applies a discount rate to each pool. Loans are segregated into 14 pools based on each loan’s term and seasoning (age). All loans have fixed interest rates. Cash flows are then estimated by utilizing assumed service costs and prepayment speeds. Monthly service costs were assumed to be $6.33 per loan as of September 30, 2017 and $6.00 per loan as of December 31, 2016. Prepayment speeds are determined primarily based on the average interest rate of the loans in each pool. The prepayment scale used is the Public Securities Association (“PSA”) model, where “100% PSA” means prepayments are zero in the first month, then increase by 0.2% of the loan balance each month until reaching 6.0% in month 30. Thereafter, the 100% PSA model assumes an annual prepayment of 6.0% of the remaining loan balance. The average PSA speed assumption in the fair value model is 153% and 150% as of September 30, 2017 and December 31, 2016, respectively. A discount rate of 14.0% was then applied to each pool both as of September 30, 2017 and December 31, 2016. This discount rate is intended to represent the estimated market yield for the highest quality grade of comparable servicing. This MSR is classified as Level 3. Similarly, the MSR for the portfolio serviced for FHLMC is recorded at fair value on a recurring basis, with changes in fair value recorded in the results of operations. This MSR was acquired by the Bank as part of the merger with Virginia BanCorp effective April 1, 2017. A model is used to determine fair value, which establishes pools of performing loans, calculates cash flows for each pool and applies a discount rate to each. Loans are segregated into five pools based on each loan’s term and coupon strata. All loans have fixed interest rates. Cash flows are then estimated by utilizing assumed service costs and prepayment speeds. Monthly service costs were assumed to be $7.95 per loan as of September 30, 2017. Prepayment speeds are determined primarily based on the average interest rate and seasoning of the loans in each pool. The prepayment scale used is the PSA model as described above. The average PSA speed assumption in the fair value model is 202.19% as of September 30, 2017. The PSA speeds are converted to a constant prepayment rate (“CPR”) and then adjusted by applying betas in order to reflect the prepayment speeds of the portfolio based on historical payment behavior. As of September 30, 2017, an average CPR of 7.51% was applied based on the prior three years of history. Utilizing observed market prices in the secondary market, an average price of 103.59% was effectively applied in determining the market discount rate to be applied to the portfolio’s servicing cash flows. This rate is intended to represent the estimated market yield for the highest quality grade of comparable servicing. This MSR is classified as Level 3. The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016: (Dollars in thousands) Fair Value Measurements at September 30, 2017 Using Description Balance Level 1 Level 2 Level 3 Securities available-for-sale: Corporate bonds $ 6,717 $ — $ — $ 6,717 U. S. Government agencies 43,973 — 43,973 — State and municipal obligations 21,203 — 21,203 — Total securities available-for-sale: $ 71,893 $ — $ 65,176 $ 6,717 Mortgage servicing rights $ 978 $ — $ — $ 978 Defined benefit plan assets: Cash and cash equivalents $ 2 $ 2 $ — $ — Mutual funds - fixed income 987 987 — — Mutual funds - equity 1,543 1,543 — — Total defined benefit plan assets $ 2,532 $ 2,532 $ — $ — Fair Value Measurements at December 31, 2016 Using Description Balance Level 1 Level 2 Level 3 Securities available-for-sale: Corporate bonds $ 7,704 $ — $ — $ 7,704 U. S. Government agencies 25,313 — 25,313 — State and municipal obligations 18,156 — 18,156 — Total securities available-for-sale: $ 51,173 $ — $ 43,469 $ 7,704 Mortgage servicing rights $ 671 $ — $ — $ 671 Defined benefit plan assets: Mutual funds - fixed income $ 1,041 $ 1,041 $ — $ — Mutual funds - equity 1,649 1,649 — — Total defined benefit plan assets $ 2,690 $ 2,690 $ — $ — The reconciliation of items using Level 3 inputs is as follows: Corporate (Dollars in thousands) MSRs Bonds Balance, January 1, 2017 $ 671 $ 7,704 Purchases — — Acquired in merger 324 — Impairments — — Fair value adjustments (17 ) 13 Sales — (1,000 ) Balance, September 30, 2017 $ 978 $ 6,717 Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements: Impaired Loans: Other Real Estate Owned: The following table summarizes the Company’s assets that were measured at fair value on a nonrecurring basis at the end of the respective period. Fair Value Measurements at (Dollars in thousands) Balance as of Description September 30, 2017 Level 1 Level 2 Level 3 Impaired Loans, net $ 5,086 $ — $ — $ 5,086 Other real estate owned, net 5,159 — — 5,159 Fair Value Measurements at Balance as of Description December 31, 2016 Level 1 Level 2 Level 3 Impaired Loans, net $ 2,774 $ — $ — $ 2,774 Other real estate owned, net 2,494 — — 2,494 The following table displays quantitative information about Level 3 Fair Value Measurements as of September 30, 2017: Range Balance as of Valuation Unobservable (Weighted (Dollars in thousands) September 30, 2017 Technique Input Average) Impaired Loans, net $ 5,086 Discounted appraised value Selling Cost 10% - 100% (20%) Lack of Marketability 50% - 75% (55%) Other real estate owned, net 5,159 Discounted appraised value Selling Cost 3% - 13% (7%) Lack of Marketability 10% - 20% (11%) The following table displays quantitative information about Level 3 Fair Value Measurements as of December 31, 2016: Range Balance as of Valuation Unobservable (Weighted (Dollars in thousands) December 31, 2016 Technique Input Average) Impaired Loans, net $ 2,774 Discounted appraised value Selling Cost 10% - 20% (16%) Lack of Marketability 50% (50%) Other real estate owned, net 2,494 Discounted appraised value Selling Cost 3% - 13% (5%) Lack of Marketability 10% - 20% (11%) The estimated fair values of financial instruments are shown in the following table. The carrying amounts in the table are included in the balance sheet under the applicable captions. Fair Value Measurements at September 30, 2017 Using (Dollars in thousands) Balance as of Fair Value as of Description September 30, 2017 September 30, 2017 Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 5,806 $ 5,806 $ 5,806 $ — $ — Interest-bearing deposits 46,060 46,060 46,060 — — Certificates of deposit 3,224 3,224 — 3,224 — Federal funds sold 23,357 23,357 23,357 — — Securities available-for-sale 71,893 71,893 — 65,176 6,717 Restricted securities 6,000 6,000 — — 6,000 Loans, net 739,708 745,665 — — 745,665 Loans held for sale 162 162 — — 162 Accrued interest receivable 2,905 2,905 — 2,905 — Bank owned life insurance 18,641 18,641 18,641 — — Mortgage servicing rights 978 978 — — 978 Financial Liabilities: Non-interest-bearing $ 99,531 $ 99,531 $ 99,531 $ — $ — Savings and other interest-bearing deposits 297,150 297,150 297,150 — — Time deposits 338,732 337,586 — — 337,586 Securities sold under repurchase agreements 17,091 17,091 — 17,091 — FHLB advances 75,000 75,520 — 75,520 — Subordinated debt 6,873 7,000 — — 7,000 Accrued interest payable 302 302 — 302 — Fair Value Measurements at December 31, 2016 Using (Dollars in thousands) Balance as of Fair Value as of Description December 31, 2016 December 31, 2016 Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 4,851 $ 4,851 $ 4,851 $ — $ — Interest-bearing deposits 7,945 7,945 7,945 — — Certificates of deposit 4,216 4,216 — 4,216 — Federal funds sold 1,906 1,906 1,906 — — Securities available-for-sale 51,173 51,173 — 43,469 7,704 Restricted securities 2,649 2,649 — — 2,649 Loans, net 381,537 384,468 — — 384,468 Loans held for sale 276 276 — — 276 Accrued interest receivable 1,372 1,372 — 1,372 — Bank owned life insurance 9,869 9,869 9,869 — — Mortgage servicing rights 671 671 — — 671 Financial Liabilities: Non-interest-bearing $ 74,799 $ 74,799 $ 74,799 $ — $ — Savings and other interest-bearing deposits 178,869 178,869 — 178,869 — Time deposits 128,050 127,497 — — 127,497 Securities sold under repurchase agreements 18,310 18,310 — 18,310 — FHLB advances 35,000 35,668 — 35,668 — Subordinated debt 6,860 7,000 — — 7,000 Accrued interest payable 331 331 — 331 — The carrying amounts of cash and due from banks, interest-bearing deposits, federal funds sold or purchased, accrued interest receivable, loans held for sale and non-interest-bearing Securities available-for-sale The carrying value of restricted securities approximates fair value based on the redemption provisions of the issuer. Bank owned life insurance is carried at its cash surrender value. MSRs are carried at fair value. As described above, a valuation model is used to determine fair value. This model utilizes a discounted cash flow analysis with servicing costs and prepayment assumptions based on comparable instruments and a discount rate. The fair value of performing loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar remaining maturities. This calculation ignores loan fees and certain factors affecting the interest rates charged on various loans such as the borrower’s creditworthiness and compensating balances and dissimilar types of real estate held as collateral. The fair value of impaired loans is measured as described within the Impaired Loans section of this note. The fair value of loans does not consider the lack of liquidity and uncertainty in the market that would affect the valuation. Time deposits are presented at estimated fair value by discounting the future cash flows using interest rates offered for deposits of similar remaining maturities. The fair value of the Company’s subordinated debt is estimated by utilizing observable market prices for comparable securities. Qualitative factors like asset quality, market factors and liquidity are also considered. The fair value of the FHLB advances is estimated by discounting the future cash flows using the current interest rates offered for similar advances. The fair value of commitments to extend credit is estimated using the fees currently charged to enter similar agreements, taking into account the remaining terms of the agreements and the present credit worthiness of the counter parties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of standby letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counter parties at the reporting date. At September 30, 2017 and December 31, 2016, the fair value of loan commitments and standby letters of credit was immaterial and therefore, they are not included in the table above. The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair value of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2017 | |
Changes in Accumulated Other Comprehensive Income (Loss) | Note 14: Changes in Accumulated Other Comprehensive Income (Loss) The balances in accumulated other comprehensive income (loss) are shown in the following tables: For the Three Months Ended September 30, 2017 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance July 1, 2017 $ (200 ) $ (715 ) $ (915 ) Change in net unrealized holding gains on securities, before reclassification, net of tax expense of $20 39 — 39 Reclassification for previously unrealized net losses recognized in income, net of tax expense of $0 — — — Balance September 30, 2017 $ (161 ) $ (715 ) $ (876 ) For the Three Months Ended September 30, 2016 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance July 1, 2016 $ 624 $ (883 ) $ (259 ) Change in net unrealized holding gains on securities, before reclassification — — — Reclassification for previously unrealized net gains recognized in income, net of tax expense of $62 (118 ) — (118 ) Balance September 30, 2016 $ 506 $ (883 ) $ (377 ) For the Nine Months Ended September 30, 2017 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance January 1, 2017 $ (520 ) $ (715 ) $ (1,235 ) Change in net unrealized holding gains on securities, before reclassification, net of tax expense of $185 360 — 360 Reclassification for previously unrealized net losses recognized in income, net of tax expense of $1 (1 ) — (1 ) Balance September 30, 2017 $ (161 ) $ (715 ) $ (876 ) For the Nine Months Ended September 30, 2016 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance January 1, 2016 $ 107 $ (883 ) $ (776 ) Change in net unrealized holding gains on securities, before reclassification, net of tax expense of $305 590 — 590 Reclassification for previously unrealized net gains recognized in income, net of tax expense of $99 (191 ) — (191 ) Balance September 30, 2016 $ 506 $ (883 ) $ (377 ) Reclassification for previously unrealized gains (losses) and impairments on securities are reported in the Consolidated Statements of Income as follows. No unrealized gains (losses) on pension and post-employment related costs were reclassified to the Consolidated Statements of Income in the three and nine months ended September 30, 2017 and 2016. Accumulated Other Comprehensive Income (Loss) Reclassification for the Three Months Ended Holding (Losses) Gains on Securities (Dollars in thousands) September 30, 2017 September 30, 2016 Net gains on sale of securities available-for-securities $ — $ 180 Tax expense — (62 ) Impact on net income $ — $ 118 Accumulated Other Comprehensive Income (Loss) Reclassification for the Nine Months Ended Holding (Losses) Gains on Securities (Dollars in thousands) September 30, 2017 September 30, 2016 Net gains on sale of securities available-for-securities $ 2 $ 290 Tax expense (1 ) (99 ) Impact on net income $ 1 $ 191 |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Loans | Loans The Company grants mortgage loans on real estate, commercial and industrial loans, and consumer and other loans to customers. A substantial portion of the loan portfolio is represented by mortgage loans on real estate. The ability of the Company’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in the Company’s market areas. Loans are reported at their recorded investment, which is the outstanding principal balance net of any unearned income, such as deferred fees and costs, charge-offs and discounts on acquired loans. Interest on loans is recognized over the term of the loan and is calculated using the interest method on principal amounts outstanding. Loan origination fees and certain direct origination costs are deferred and recognized as an adjustment of the related loan yield over the contractual term of the loan, adjusted for early pay-offs, The accrual of interest is generally discontinued at the time a loan is 90 days or more past due, or earlier, if collection is uncertain based on an evaluation of the net realizable value of the collateral and the financial strength of the borrower. Payments received for loans no longer accruing interest are applied to the unpaid principal balance. Loans greater than 90 days past due may remain on accrual status if the credit is well-secured and in process of collection. Personal loans are typically charged off no later than 180 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are charged off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual and past due policies are materially the same for all types of loans with the exception of PCI loans whose discount is being accreted to interest income. All interest accrued but not collected for loans that are placed on non-accrual |
Charge-off of Uncollectible Loans | Charge-off As soon as any loan becomes uncollectible, the loan will be charged down or charged off as follows: • If unsecured, the loan must be charged off in full. • If secured, the outstanding principal balance of the loan should be charged down to the net realizable value of the collateral. Loans should be considered uncollectible when: • No regularly scheduled payment has been made within four months, or • The loan is unsecured, the borrower files for bankruptcy protection and there is no other (guarantor, etc.) support from an entity outside of the bankruptcy proceedings. |
Allowance for loan losses ("ALL") | Allowance for loan losses (“ALL”) The ALL reflects management’s judgment of probable loan losses inherent in the portfolio at the balance sheet date. Management uses a disciplined process and methodology to establish the ALL each quarter. To determine the total ALL, the Company estimates the reserves needed for each homogenous segment and class of the portfolio, plus any loans analyzed individually for impairment. Depending on the nature of each segment and class, considerations include historical loss experience, adverse situations that may affect a borrower’s ability to repay, credit scores, past due history, estimated value of any underlying collateral, prevailing local and national economic conditions, and internal policies and procedures including credit risk management and underwriting. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as conditions change. Management employs a risk rating system to evaluate and consistently categorize loan portfolio credit risk. All loans acquired in the merger and all loans originated since the merger are risk rated. Legacy loans originated prior to the merger that were assigned risk rating grades include all commercial loans not secured by real estate, commercial mortgages, residential mortgages greater than $1 million, smaller residential mortgages which are impaired, loans to real estate developers and contractors, consumer loans greater than $250 thousand with chronic delinquency, and troubled debt restructures (“TDRs”). The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Risk grades are evaluated as new information becomes available for each borrowing relationship or at least quarterly. All other loans not specifically assigned a risk rating grade are monitored as a discrete pool of loans generally based on delinquency status. Risk rating categories are as follows: Pass Watch Special Mention Substandard Doubtful Loss The ALL consists of specific and general components. The specific component is determined by identifying impaired loans (as described below) then evaluating each one to calculate the amount of impairment. Impaired loans measured for impairment generally include (1) all loans risk rated Special Mention or worse with balances of $400 thousand or more or where the borrower has filed for bankruptcy; and (2) all loans classified as a TDR . A specific allowance arises when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component collectively evaluates any loans not identified as impaired, which are typically smaller commercial loans, residential mortgages and consumer loans, grouped into segments and classes. Historical loss experience is calculated and applied to each segment or class, then adjusted for qualitative factors. Qualitative factors include changes in local and national economic indicators, such as unemployment rates, interest rates, gross domestic product growth and real estate market trends; the level of past due and nonaccrual loans; risk ratings on individual loans; strength of credit policies and procedures; loan officer experience; borrower credit scores; and other intrinsic risks related to the types and geographic locations of loans. These qualitative adjustments reflect management’s judgment of risks inherent in the segments. An unallocated component is maintained if needed to cover uncertainties that could affect management’s estimate of probable losses. Changes in the allowance for loan losses and the related provision expense can materially affect net income. The specific component of the ALL calculation accounts for the loan loss reserve necessary on impaired loans. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case The general component of the ALL calculation collectively evaluates groups of loans in segments and classes, as noted above. The segments are: (1) Mortgage loans on real estate; (2) Commercial and industrial loans; and (3) Consumer and other loans. The segment for Mortgage loans on real estate is disaggregated into the following classes: (1) Construction, land and land development; (2) Farmland; (3) Residential first mortgages; (4) Residential revolving and junior mortgages; (5) Commercial mortgages (non-owner-occupied); Construction and development loans carry risks that the project will not be finished according to schedule or according to budget and the value of the collateral, at any point in time, may be less than the principal amount of the loan. These loans also bear the risk that the general contractor may face financial pressure unrelated to the project. Loans secured by land, farmland and residential mortgages carry the risk of continued credit-worthiness of the borrower and changes in value of the underlying real estate collateral. Commercial mortgages and commercial and industrial loans carry risks associated with the profitable operation of a business and its related cash flows. Additionally, commercial and industrial loans carry risks associated with the value of collateral other than real estate which may depreciate over time. Consumer loans carry risks associated with the continuing credit-worthiness of the borrower and are more likely than real estate loans to be adversely affected by divorce, unemployment, personal illness or bankruptcy of an individual. Consumer loans secured by automobiles carry risks associated with rapidly depreciating collateral. Consumer loans have historically included credit cards, which are unsecured. The credit card portfolio was sold to an unaffiliated third party in the third quarter of 2016. The summation of the specific and general components results in the total estimated ALL. This estimate is inherently subjective and actual losses could be greater or less than the estimates. An ALL calculation is also performed on purchased performing loans. A comparison is then made to the remaining unaccreted discount associated with the purchase of those loans. If the ALL related to these loans exceeds the remaining unaccreted discount, that difference is added to the ALL that applies to non-purchased Additions to the ALL are made by charges to earnings through the provision for loan losses. Charge-offs result from credit exposures deemed to be uncollectible and the ALL is reduced by these. Recoveries of previously charged off amounts are credited back to the ALL. Charge-off |
Loans Acquired in a Business Combination | Loans Acquired in a Business Combination The Company accounts for loans acquired in a business combination in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations.” Accordingly, acquired loans are segregated between PCI loans and purchased performing loans (“PPL”) and are recorded at fair value on the date of acquisition without the carryover of the related allowance for loan losses. PCI loans are those for which there is evidence of credit deterioration since origination and for which it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. When determining fair market value, PCI loans were aggregated into pools of loans based on common characteristics as of the date of acquisition such as loan type, date of origination, and evidence of credit quality deterioration such as internal risk grades and past due and nonaccrual status. The Company estimates the amount and timing of expected cash flows for each loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool (accretable yield). These estimates include certain prepayment assumptions based on the nature of each loan pool. The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded as a provision for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. Loans not designated PCI loans as of the acquisition date are designated purchased performing loans. The Company accounts for purchased performing loans using the contractual cash flows method of recognizing discount accretion based on the acquired loans’ contractual cash flows. Purchased performing loans are recorded at fair value, including a credit discount. The fair value discount is accreted as an adjustment to yield over the estimated lives of the loans. There is no allowance for loan losses established at the acquisition date for purchased performing or PCI loans. A provision for loan losses is recorded for any deterioration in these loans subsequent to the acquisition. |
Employee Stock Ownership Plan ("ESOP") | Employee Stock Ownership Plan (“ESOP”) The Company currently has two ESOPs for the benefit of all eligible employees. Shares held by the legacy ESOP of the former Bank of Lancaster employees are considered outstanding for purposes of computing earnings per share as they are fully allocated. Unearned ESOP shares in the ESOP acquired in the merger (“new ESOP”), are shown as a reduction of shareholders’ equity. The unearned ESOP shares are not included in basic or diluted earnings per share calculation as discussed in Note 9. The use of dividends paid on allocated ESOP shares are at the discretion of the Company. Dividends on unallocated ESOP shares, if paid, are considered to be compensation expense. The Company recognizes compensation cost equal to the fair value of the ESOP shares during the periods in which they are committed to be released. The Company recognizes a tax deduction equal to the cost of shares released. The unearned ESOP shares are pledged to a third party to collateralize a direct loan to the ESOP. The loan is guaranteed by the Company and is recorded on the Company’s consolidated balance sheets. It is anticipated that the Company will make contributions to the new ESOP in amounts necessary to amortize the third-party loans over a nine year period. See note 12. |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The following table details the total consideration paid by the Company on April 1, 2017 in connection with the acquisition of Virginia BanCorp, the fair value of the assets acquired and liabilities assumed, and the resulting goodwill. As Recorded As Recorded Fair Value by the (Dollars in thousands) by VCB Adjustments Company Consideration paid: Bay Banks of Virginia, Inc. common stock $ 42,247 Identifiable assets acquired: Cash and due from banks $ 2,356 $ — $ 2,356 Interest-bearing deposits 12,342 — 12,342 Securities available-for-sale 22,088 — 22,088 Restricted securities 1,543 — 1,543 Loans receivable 272,479 (59,907 ) 212,572 Loans held for sale — 55,648 55,648 Deferred income taxes 1,325 (500 ) 825 Premises and equipment 3,333 2,703 6,036 Accrued interest receivable 1,253 (24 ) 1,229 Other real estate owned 3,113 — 3,113 Core deposit intangible — 3,670 3,670 Bank owned life insurance 8,430 — 8,430 Mortgage servicing rights 324 — 324 Other assets 367 — 367 Total identified assets acquired 328,953 1,590 330,543 Identifiable liabilities assumed: Noninterest-bearing deposits 21,119 — 21,119 Savings and interest-bearing demand deposits 124,640 — 124,640 Time deposits 121,437 733 122,170 Federal Home Loan Bank advances 25,000 — 25,000 Other liabilities 1,525 — 1,525 Total identifiable liabilities assumed 293,721 733 294,454 Total identifiable assets assumed $ 35,232 $ 857 $ 36,089 Goodwill resulting from acquisition $ 6,158 |
Schedule of Information about the PCI Impaired Loan | Information about the PCI loan portfolio at April 1, 2017 is as follows: (Dollars in thousands) April 1, 2017 Contractual principal and interest due $ 8,303 Nonaccretable difference 869 Expected cash flows 7,434 Accretable yield 1,354 Purchased credit impaired loans - estimated fair value $ 6,080 |
Schedule of Unaudited Pro Forma Financial Information | Additionally, the Company expects to achieve further operational cost savings and other efficiencies as a result of the acquisition which are not reflected in the unaudited pro forma amounts below: For the Three Months Ended For the Nine Months Ended (Dollars in thousand) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Net interest income $ 7,707 $ 6,872 $ 22,014 $ 20,443 Net income 906 1,653 2,752 4,443 |
Schedule of Impact of Certain Acquisition Accounting Adjustments | The net effect of the amortization and accretion of premiums and discounts associated with the Company’s acquisition accounting adjustments to assets acquired and liabilities assumed from Virginia BanCorp had the following impact on the consolidated statements of income for the three and nine months ended September 30, 2017. Three Months Nine Months Ended Ended (Dollars in thousands) September 30, 2017 September 30, 2017 Loans (1) $ 411 $ 860 Core deposit intangible (2) (226 ) (461 ) Time deposits (3) 103 219 Depreciation (4) (10 ) (20 ) Net impact to income before income taxes $ 278 $ 598 (1) Loan discount accretion is included in the “Loans, including fees” section of “Interest Income” in the consolidated statements of income. (2) Core deposit intangible premium amortization is included in “Other expense” section of “Non-Interest (3) Time deposit premium amortization is included in the “Deposits” section of “Interest Expense” in the consolidated statements of income. (4) Depreciation on the fair value mark up of fixed assets is included in “Occupancy expense” section of “Non-Interest |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Aggregate Amortized Cost and Fair Values of Available-for-Sale Securities Portfolio | The aggregate amortized costs and fair values of the available-for-sale (Dollars in thousands) Gross Gross Available-for-sale Amortized Unrealized Unrealized Fair September 30, 2017 Cost Gains (Losses) Value Corporate bonds $ 6,696 $ 22 $ (1 ) $ 6,717 U.S. Government agencies 44,194 77 (298 ) 43,973 State and municipal obligations 21,211 186 (194 ) 21,203 $ 72,101 $ 285 $ (493 ) $ 71,893 Gross Gross Available-for-sale Amortized Unrealized Unrealized Fair December 31, 2016 Cost Gains (Losses) Value Corporate bonds $ 7,695 $ 14 $ (5 ) $ 7,704 U.S. Government agencies 25,668 53 (408 ) 25,313 State and municipal obligations 18,566 49 (459 ) 18,156 $ 51,929 $ 116 $ (872 ) $ 51,173 |
Gross Realized Gains and Gross Realized Losses on Sales of Securities | Gross realized gains and gross realized losses on sales and calls of securities were as follows: For the three months ended For the nine months ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Gross realized gains $ — $ 180 $ 7 $ 300 Gross realized losses — — (5 ) (10 ) Net realized gains $ 0 $ 180 $ 2 $ 290 Aggregate proceeds $ 0 $ 4,984 $ 17,662 $ 14,582 |
Unrealized Loss Positions | Bonds with unrealized loss positions at December 31, 2016 included 37 federal agencies, one corporate bond and 39 municipals. The tables are shown below. (Dollars in thousands) Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized September 30, 2017 Value Loss Value Loss Value Loss Corporate bonds $ 499 $ (1 ) $ — $ — $ 499 $ (1 ) U.S. Government agencies 23,120 (134 ) 7,296 (164 ) 30,416 (298 ) States and municipal obligations 4,613 (70 ) 3,448 (124 ) 8,061 (194 ) Total temporarily impaired securities $ 28,232 $ (205 ) $ 10,744 $ (288 ) $ 38,976 $ (493 ) Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2016 Value Loss Value Loss Value Loss Corporate bonds $ 995 $ (5 ) $ — $ — $ 995 $ (5 ) U.S. Government agencies 20,933 (396 ) 1,308 (12 ) 22,241 (408 ) States and municipal obligations 12,888 (459 ) — — 12,888 (459 ) Total temporarily impaired securities $ 34,816 $ (860 ) $ 1,308 $ (12 ) $ 36,124 $ (872 ) |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Balances of Loans | The following is a summary of the balances of loans: (Dollars in thousands) September 30, 2017 December 31, 2016 Mortgage loans on real estate: Construction, Land and Land Development $ 63,046 $ 39,818 Farmland 936 1,023 Commercial Mortgages (Non-Owner 141,954 35,343 Commercial Mortgages (Owner Occupied) 73,615 41,825 Residential First Mortgages 269,017 194,007 Residential Revolving and Junior Mortgages 46,193 26,425 Commercial and Industrial loans 99,637 43,024 Consumer loans 48,640 3,544 Total loans 743,038 385,009 Net unamortized deferred loan costs and purchased discounts 1,590 391 Allowance for loan losses (4,920 ) (3,863 ) Loans, net $ 739,708 $ 381,537 |
Recorded Investment in Past Due and Non-accruing Loans | The recorded investment in past due and non-accruing 90 Days or 30-89 More Past Total Past Days Due and Due and Total (Dollars in thousands) Past Due Still Accruing Nonaccruals Nonaccruals Current Loans September 30, 2017 Mortgage Loans on Real Estate: Construction, Land and Land Development $ 267 $ — $ 632 $ 899 $ 62,147 $ 63,046 Farmland — — — — 936 936 Commercial Mortgages (Non-Owner 452 — — 452 141,502 141,954 Commercial Mortgages (Owner Occupied) 243 — 1,717 1,960 71,655 73,615 Residential First Mortgages 1,621 — 1,318 2,939 266,078 269,017 Residential Revolving and Junior Mortgages 1,173 — 885 2,058 44,135 46,193 Commercial and Industrial 15 — 110 125 99,512 99,637 Consumer loans 449 3 137 589 48,051 48,640 Total $ 4,220 $ 3 $ 4,799 $ 9,022 $ 734,016 $ 743,038 90 Days or 30-89 More Past Total Past Days Due and Due and Total Past Due Still Accruing Nonaccruals Nonaccruals Current Loans December 31, 2016 Mortgage Loans on Real Estate: Construction, Land and Land Development $ — $ — $ 623 $ 623 $ 39,195 $ 39,818 Farmland 57 — — 57 966 1,023 Commercial Mortgages (Non-Owner — — — — 35,343 35,343 Commercial Mortgages (Owner Occupied) 188 — 2,270 2,458 39,367 41,825 Residential First Mortgages 1,546 — 2,155 3,701 190,306 194,007 Residential Revolving and Junior Mortgages 480 — 160 640 25,785 26,425 Commercial and Industrial 408 — 92 500 42,524 43,024 Consumer loans — — — — 3,544 3,544 Total $ 2,679 $ — $ 5,300 $ 7,979 $ 377,030 $ 385,009 |
Purchased Credit Impaired Loans | |
Recorded Investment in Past Due and Non-accruing Loans | The following table includes an aging analysis, based upon contractual terms, of the recorded investment of PCI loans as of September 30, 2017, included in the table above. 90 Days or 30-89 More Past Total Past Days Due and Due and Total (Dollars in thousands) Past Due Still Accruing Nonaccruals Nonaccruals Current Loans September 30, 2017 Mortgage Loans on Real Estate: Construction, Land and Land Development $ 0 $ — $ 0 $ 0 $ 1,413 $ 1,413 Commercial Mortgages (Non-Owner — — — — 182 182 Commercial Mortgages (Owner Occupied) 133 37 — 170 168 338 Residential First Mortgages — 144 — 144 3,697 3,841 Residential Revolving and Junior Mortgages — 19 — 19 31 50 Consumer loans 5 — — 5 69 74 Total $ 138 $ 200 $ 0 $ 338 $ 5,560 $ 5,898 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Loan Receivables Evaluated for Impairment Individually and Collectively by Segment | Loan receivables evaluated for impairment individually and collectively by segment as of September 30, 2017 and December 31, 2016 are as follows: Mortgage Commercial Consumer Loans and and Other (Dollars in thousands) on Real Estate Industrial Loans Total As of September 30, 2017 Loans individually evaluated for impairment $ 9,592 $ 92 $ — $ 9,684 Loans collectively evaluated for impairment 579,344 99,545 48,567 727,456 Loans acquired with deteriorated credit quality 5,825 — 73 5,898 Total Gross Loans $ 594,761 $ 99,637 $ 48,640 $ 743,038 As of December 31, 2016 Loans individually evaluated for impairment $ 10,323 $ 92 $ — $ 10,415 Loans collectively evaluated for impairment 328,118 42,932 3,544 374,594 Total Gross Loans $ 338,441 $ 43,024 $ 3,544 $ 385,009 |
Allowance for Loan Losses by Portfolio Segment | Allowance for Loan Losses The allowance for loan losses disaggregated based on loan receivables evaluated for impairment individually and collectively by segment as of September 30, 2017 and December 31, 2016 are as follows: Mortgage Commercial Loans and Consumer (Dollars in thousands) on Real Estate Industrial Loans Total As of September 30, 2017 Loans individually evaluated for impairment $ 982 $ 92 $ — $ 1,074 Loans collectively evaluated for impairment 2,855 421 570 3,846 Loans acquired with deteriorated credit quality — — — — Total allowance for loan losses $ 3,837 $ 513 $ 570 $ 4,920 Mortgage Commercial Loans and Consumer on Real Estate Industrial Loans Total As of December 31, 2016 Loans individually evaluated for impairment $ 803 $ 92 $ — $ 895 Loans collectively evaluated for impairment 2,515 401 52 2,968 Total allowance for loan losses $ 3,318 $ 493 $ 52 $ 3,863 A disaggregation and an analysis of the change in the allowance for loan losses by segment is shown below. Mortgage Commercial Loans on and Consumer (Dollars in thousands) Real Estate Industrial Loans Total For the Three Months Ended September 30, 2017 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 3,686 $ 456 $ 99 $ 4,241 (Charge-offs) (75 ) — (366 ) (441 ) Recoveries 10 1 34 45 Provision (recovery) 216 56 803 1,075 Ending Balance $ 3,837 $ 513 $ 570 $ 4,920 Mortgage Commercial Loans on and Consumer Real Estate Industrial Loans Total For the Three Months Ended September 30, 2016 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 2,995 $ 435 $ 117 $ 3,547 Reclassification of allowance related to sold loans $ (27 ) $ (27 ) (Charge-offs) (46 ) — (10 ) (56 ) Recoveries 15 — 3 18 Provision (recovery) 244 45 (30 ) 259 Ending Balance $ 3,208 $ 480 $ 53 $ 3,741 Mortgage Commercial Loans on and Consumer (Dollars in thousands) Real Estate Industrial Loans Total For the Nine Months Ended September 30, 2017 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 3,318 $ 493 $ 52 $ 3,863 (Charge-offs) (348 ) — (567 ) (915 ) Recoveries 98 2 39 139 Provision (recovery) 769 18 1,046 1,833 Ending Balance $ 3,837 $ 513 $ 570 $ 4,920 Mortgage Commercial Loans on and Consumer Real Estate Industrial Loans Total For the Nine Months Ended September 30, 2016 ALLOWANCE FOR LOAN LOSSES: Beginning Balance $ 3,502 $ 599 $ 122 $ 4,223 Reclassification of allowance related to sold loans $ — $ — $ (27 ) $ (27 ) (Charge-offs) (702 ) (158 ) (41 ) (901 ) Recoveries 25 5 9 39 Provision (recovery) 383 34 (10 ) 407 Ending Balance $ 3,208 $ 480 $ 53 $ 3,741 |
Schedule of Changes in Accretable Yield for Purchased Impaired Loans | The following table presents the changes in the accretable yield for purchased impaired loans (refer to Note 3) since acquisition on April 1, 2017 through September 30, 2017 (in thousands): September 30, 2017 Balance at acquisition, April 1, 2017 $ 1,354 Accretion (179 ) Reclassifications from nonaccretable balance, net — Other changes, net — Balance as of September 30, 2017 $ 1,175 |
Internal Risk Rating Grades | Internal Risk Rating Grades Internal risk rating grades are generally assigned to commercial loans not secured by real estate, commercial mortgages, residential mortgages greater than $1 million, smaller residential mortgages which are impaired, loans to real estate developers and contractors, consumer loans greater than $250,000 with chronic delinquency, and TDRs, as shown in the following table. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Risk grades (refer to Note 3) are evaluated as new information becomes available for each borrowing relationship or at least quarterly. All loan portfolios acquired in the merger are risk graded using loan risk grading software that employs a variety of algorithms based on detailed account characteristics to include borrower’s payment history on a total relationship basis as well as loan to value exposure. For non-homogenous Construction, Residential Commercial Commercial Land and Residential Revolving Mortgages Mortgages Commercial Land First and Junior (Non-Owner (Owner and (Dollars in thousands) Development Farmland Mortgage Mortgage Occupied) Occupied) Industrial Consumer Total As of September 30, 2017 Grade: Pass $ 52,108 $ 936 $ 43,370 $ 20,276 $ 137,028 $ 58,894 $ 95,599 $ 45,154 $ 453,365 Watch 7,290 — 1,252 33 4,472 12,106 3,927 77 29,157 Special mention 175 — — — — 249 — — 424 Substandard 3,473 — 1,482 50 454 2,366 111 165 8,101 Doubtful — — — — — — — — — Total $ 63,046 $ 936 $ 46,104 $ 20,359 $ 141,954 $ 73,615 $ 99,637 $ 45,396 $ 491,047 Construction, Commercial Commercial Land and Mortgages Mortgages Commercial Land (Non-Owner (Owner and Development Farmland Occupied) Occupied) Industrial Total As of December 31, 2016 Grade: Pass $ 32,009 $ 1,023 $ 30,639 $ 31,191 $ 40,841 $ 135,703 Watch 5,795 — 4,184 6,652 1,891 18,522 Special mention 180 — 272 1,453 125 2,030 Substandard 1,834 — 248 2,529 167 4,778 Doubtful — — — — — — Total $ 39,818 $ 1,023 $ 35,343 $ 41,825 $ 43,024 $ 161,033 |
Performing and Non Performing Loans | Loans are considered to be nonperforming when they are delinquent by 90 days or more or non-accruing Residential Residential Revolving First and Junior Consumer (Dollars in thousands) Mortgages (1) Mortgages (2) Loans (3) Total As of September 30, 2017 PAYMENT ACTIVITY STATUS Performing $ 221,629 $ 24,949 $ 3,244 $ 249,822 Nonperforming 1,284 885 — 2,169 Total $ 222,913 $ 25,834 $ 3,244 $ 251,991 Residential Residential Revolving First and Junior Consumer Mortgages (4) Mortgages (5) Loans (6) Total As of December 31, 2016 PAYMENT ACTIVITY STATUS Performing $ 191,852 $ 26,265 $ 3,544 $ 221,661 Nonperforming 2,155 160 — 2,315 Total $ 194,007 $ 26,425 $ 3,544 $ 223,976 (1) Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $2.2 million as of September 30, 2017. (2) Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $927 thousand as of September 30, 2017. (3) No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2017. (4) Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $3.3 million as of December 31, 2016. (5) Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $1.1 million as of December 31, 2016. (6) No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2016. |
Company's Recorded Investment and Customers Unpaid Principal Balances for Impaired Loans, with Associated Allowance Amount | The following tables show the Company’s recorded investment and the customers’ unpaid principal balances for impaired loans, excluding purchased impaired loans, with the associated allowance amount, if applicable, as of September 30, 2017 and December 31, 2016, along with the average recorded investment and interest income recognized for the three and nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017 As of December 31, 2016 Recorded Customers’ Unpaid Related Recorded Customers’ Unpaid Related (Dollars in thousands) Investment Principal Balance Allowance Investment Principal Balance Allowance IMPAIRED LOANS With no related allowance: Construction, Land and Land Development $ 367 $ 449 $ — $ 1,531 $ 1,539 $ — Residential First Mortgages 1,407 1,502 — 2,112 2,176 — Residential Revolving and Junior Mortgages (1) 481 491 — 995 999 — Commercial Mortgages (Non-owner 248 248 — 248 248 — Commercial Mortgages (Owner occupied) 1,027 985 — 1,860 2,178 — Commercial and Industrial — — — — — — 3,530 3,675 — 6,746 7,140 — With an allowance recorded: Construction, Land and Land Development 1,312 1,365 142 243 286 145 Residential First Mortgages 1,922 1,922 367 1,951 1,951 367 Residential Revolving and Junior Mortgages (1) 1,479 1,491 334 544 546 199 Commercial Mortgages (Non-owner — — — — — — Commercial Mortgages (Owner occupied) 1,355 1,399 139 839 854 92 Commercial and Industrial 92 101 92 92 101 92 6,160 6,278 1,074 3,669 3,738 895 Total Impaired Loans: Construction, Land and Land Development 1,679 1,814 142 1,774 1,825 145 Residential First Mortgages 3,329 3,424 367 4,063 4,127 367 Residential Revolving and Junior Mortgages (1) 1,960 1,982 334 1,539 1,545 199 Commercial Mortgages (Non-owner 248 248 — 248 248 — Commercial Mortgages (Owner occupied) 2,382 2,384 139 2,699 3,032 92 Commercial and Industrial 92 101 92 92 101 92 $ 9,690 $ 9,953 $ 1,074 $ 10,415 $ 10,878 $ 895 Notes: (1) Junior mortgages include equity lines. For the three months ended For the nine months ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Average Interest Average Interest Average Interest Average Interest Recorded Income Recorded Income Recorded Income Recorded Income (Dollars in thousands) Investment Recognized Investment Recognized Investment Recognized Investment Recognized With no related allowance: Construction, land and land development $ 367 $ — $ 1,533 $ 14 $ 385 $ — $ 1,262 $ 41 Residential First Mortgages 1,425 4 2,618 4 1,439 15 2,432 9 Residential Revolving and Junior Mortgages (1) 482 5 951 9 485 7 739 30 Commercial Mortgages (Non-owner 248 4 248 4 248 11 252 11 Commercial Mortgages (Owner occupied) 1,030 5 2,104 9 1,102 16 1,982 26 Commercial and Industrial — — — — — — — — 3,552 18 7,454 40 3,659 49 6,667 117 With an allowance recorded: Construction, land and land development 1,315 15 250 1 1,323 44 255 3 Residential First Mortgages 1,928 23 1,965 24 1,937 71 1,956 66 Residential Revolving and Junior Mortgages (1) 1,389 11 234 — 1,345 38 209 4 Commercial Mortgages (Non-owner — — — — — — — — Commercial Mortgages (Owner occupied) 1,372 4 686 5 1,381 19 691 17 Commercial and Industrial 92 — 92 — 92 — 105 1 6,096 53 3,227 30 6,078 172 3,216 91 Total Construction, land and land development 1,682 15 1,783 15 1,708 44 1,517 44 Residential First Mortgages 3,353 27 4,583 28 3,376 86 4,388 75 Residential Revolving and Junior Mortgages (1) 1,871 16 1,185 9 1,830 45 948 34 Commercial Mortgages (Non-owner 248 4 248 4 248 11 252 11 Commercial Mortgages (Owner occupied) 2,402 9 2,790 14 2,483 35 2,673 43 Commercial and Industrial 92 — 92 — 92 — 105 1 $ 9,648 $ 71 $ 10,681 $ 70 $ 9,737 $ 221 $ 9,883 $ 208 (1) Junior mortgages include equity lines. |
Summary of Troubled Debt Restructurings | The following table presents, by segments of loans, information related to loans modified as TDRs. For the three months ended For the three months ended September 30, 2017 September 30, 2016 Pre-Modification Post-Modification Pre-Modification Post-Modification (Dollars in thousands) Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded TROUBLED DEBT RESTRUCTURINGS Loans Investment Investment Loans Investment Investment Residential first mortgages (1) — $ — $ — 0 $ 0 $ 0 (1) Modification was a capitalization of interest. For the nine months ended For the nine months ended September 30, 2017 September 30, 2016 Pre-Modification Post-Modification Pre-Modification Post-Modification (Dollars in thousands) Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded TROUBLED DEBT RESTRUCTURINGS Loans Investment Investment Loans Investment Investment Residential first mortgages (1) — $ — $ — 1 $ 244 $ 244 (1) Modification was a capitalization of interest. |
Summary of Properties Included in Other Real Estate Owned (OREO) | The table below details the properties included in other real estate owned (“OREO”) as of September 30, 2017 and December 31, 2016. There was one collateralized consumer land loan from one borrower valued at $93 thousand in the process of foreclosure as of September 30, 2017. As of September 30, 2017 As of December 31, 2016 No. of Carrying No. of Carrying (Dollars in thousands) Properties Value Properties Value Residential 4 $ 889 2 $ 891 Land lots 17 3,089 7 547 Convenience store 1 55 1 59 Restaurant 1 55 1 55 Commerical properties 5 1,071 3 942 Total 28 $ 5,159 14 $ 2,494 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Weighted Average Number of Shares Used in Computing Earnings per Share | The weighted average unearned ESOP shares which were excluded from the computation were 136,376 and 104,510 for the three and nine months ended September 30, 2017, respectively. September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Average Per share Average Per share Average Per share Average Per share Shares Amount Shares Amount Shares Amount Shares Amount Basic earnings per share 10,488,227 $ 0.07 4,774,856 $ 0.18 8,175,431 $ 0.14 4,774,856 $ 0.41 Effect of dilutive securities: Stock options 69,396 22,665 67,269 18,291 Diluted earnings per share 10,557,623 $ 0.07 4,797,521 $ 0.18 8,242,700 $ 0.14 4,793,147 $ 0.41 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value of Options | The variables used in these calculations of the fair value of the options are as follows: For the nine months ended September 30, 2017 2016 Risk free interest rate (5 year Treasury) 1.78% - 1.93% 1.49% Expected dividend yield 0% 0% Expected term (years) 5 5 Expected volatility 17.2% - 21.7% 40.1% |
Summary of Stock Option Activity | Stock option activity for the nine months ended September 30, 2017 is summarized below: Weighted Average Weighted Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Life (in years) Value (1) Options outstanding, January 1, 2017 218,300 $ 6.35 5.9 Granted 13,000 8.54 Forfeited (1,195 ) 8.43 Exercised (33,622 ) 5.75 Expired (9,625 ) 13.76 Options outstanding and exercisable, September 30, 2017 186,858 $ 6.22 5.7 $ 635,628 (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Components of Net Periodic (Benefit) Cost | Components of Net Periodic (Benefit) Cost (Dollars in thousands) Pension Benefits Post-Retirement Benefits Nine months ended September 30, 2017 2016 2017 2016 Service cost $ — $ — $ 15 $ 17 Interest cost 93 101 15 21 Expected return on plan assets (135 ) (142 ) — — Settlement loss 39 21 — — Amortization of net gain — — (6 ) — Recognized net actuarial loss 57 58 — — Net periodic cost $ 54 $ 38 $ 24 $ 38 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Advances of Long Term Debt | The six advances are shown in the following table. Current Maturity Description Balance (000’s) Originated Interest Rate Date Adjustable Rate Hybrid $ 10,000 4/12/2013 3.68350 4/13/2020 Fixed Rate Credit 5,000 1/17/2017 0.91000 10/17/2017 Fixed Rate Credit 5,000 1/20/2017 0.99500 12/20/2017 Daily Rate Credit 5,000 5/30/2017 1.32000 5/30/2018 Fixed Rate Credit 50,000 9/1/2017 1.15000 10/2/2017 $ 75,000 |
Subordinated Debt | (Dollars in thousands) Balance as of September 30, 2017 6.5% Subordinated Debt $ 7,000 Less: Issuance costs (127 ) $ 6,873 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of Balances of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016: (Dollars in thousands) Fair Value Measurements at September 30, 2017 Using Description Balance Level 1 Level 2 Level 3 Securities available-for-sale: Corporate bonds $ 6,717 $ — $ — $ 6,717 U. S. Government agencies 43,973 — 43,973 — State and municipal obligations 21,203 — 21,203 — Total securities available-for-sale: $ 71,893 $ — $ 65,176 $ 6,717 Mortgage servicing rights $ 978 $ — $ — $ 978 Defined benefit plan assets: Cash and cash equivalents $ 2 $ 2 $ — $ — Mutual funds - fixed income 987 987 — — Mutual funds - equity 1,543 1,543 — — Total defined benefit plan assets $ 2,532 $ 2,532 $ — $ — Fair Value Measurements at December 31, 2016 Using Description Balance Level 1 Level 2 Level 3 Securities available-for-sale: Corporate bonds $ 7,704 $ — $ — $ 7,704 U. S. Government agencies 25,313 — 25,313 — State and municipal obligations 18,156 — 18,156 — Total securities available-for-sale: $ 51,173 $ — $ 43,469 $ 7,704 Mortgage servicing rights $ 671 $ — $ — $ 671 Defined benefit plan assets: Mutual funds - fixed income $ 1,041 $ 1,041 $ — $ — Mutual funds - equity 1,649 1,649 — — Total defined benefit plan assets $ 2,690 $ 2,690 $ — $ — |
Reconciliation of Items Using Level Three Inputs | The reconciliation of items using Level 3 inputs is as follows: Corporate (Dollars in thousands) MSRs Bonds Balance, January 1, 2017 $ 671 $ 7,704 Purchases — — Acquired in merger 324 — Impairments — — Fair value adjustments (17 ) 13 Sales — (1,000 ) Balance, September 30, 2017 $ 978 $ 6,717 |
Summary of Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes the Company’s assets that were measured at fair value on a nonrecurring basis at the end of the respective period. Fair Value Measurements at (Dollars in thousands) Balance as of Description September 30, 2017 Level 1 Level 2 Level 3 Impaired Loans, net $ 5,086 $ — $ — $ 5,086 Other real estate owned, net 5,159 — — 5,159 Fair Value Measurements at Balance as of Description December 31, 2016 Level 1 Level 2 Level 3 Impaired Loans, net $ 2,774 $ — $ — $ 2,774 Other real estate owned, net 2,494 — — 2,494 |
Summary of Quantitative Fair Value Measurements for Level 3 | The following table displays quantitative information about Level 3 Fair Value Measurements as of September 30, 2017: Range Balance as of Valuation Unobservable (Weighted (Dollars in thousands) September 30, 2017 Technique Input Average) Impaired Loans, net $ 5,086 Discounted appraised value Selling Cost 10% - 100% (20%) Lack of Marketability 50% - 75% (55%) Other real estate owned, net 5,159 Discounted appraised value Selling Cost 3% - 13% (7%) Lack of Marketability 10% - 20% (11%) The following table displays quantitative information about Level 3 Fair Value Measurements as of December 31, 2016: Range Balance as of Valuation Unobservable (Weighted (Dollars in thousands) December 31, 2016 Technique Input Average) Impaired Loans, net $ 2,774 Discounted appraised value Selling Cost 10% - 20% (16%) Lack of Marketability 50% (50%) Other real estate owned, net 2,494 Discounted appraised value Selling Cost 3% - 13% (5%) Lack of Marketability 10% - 20% (11%) |
Estimated Fair Values of Financial Instruments | The estimated fair values of financial instruments are shown in the following table. The carrying amounts in the table are included in the balance sheet under the applicable captions. Fair Value Measurements at September 30, 2017 Using (Dollars in thousands) Balance as of Fair Value as of Description September 30, 2017 September 30, 2017 Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 5,806 $ 5,806 $ 5,806 $ — $ — Interest-bearing deposits 46,060 46,060 46,060 — — Certificates of deposit 3,224 3,224 — 3,224 — Federal funds sold 23,357 23,357 23,357 — — Securities available-for-sale 71,893 71,893 — 65,176 6,717 Restricted securities 6,000 6,000 — — 6,000 Loans, net 739,708 745,665 — — 745,665 Loans held for sale 162 162 — — 162 Accrued interest receivable 2,905 2,905 — 2,905 — Bank owned life insurance 18,641 18,641 18,641 — — Mortgage servicing rights 978 978 — — 978 Financial Liabilities: Non-interest-bearing $ 99,531 $ 99,531 $ 99,531 $ — $ — Savings and other interest-bearing deposits 297,150 297,150 297,150 — — Time deposits 338,732 337,586 — — 337,586 Securities sold under repurchase agreements 17,091 17,091 — 17,091 — FHLB advances 75,000 75,520 — 75,520 — Subordinated debt 6,873 7,000 — — 7,000 Accrued interest payable 302 302 — 302 — Fair Value Measurements at December 31, 2016 Using (Dollars in thousands) Balance as of Fair Value as of Description December 31, 2016 December 31, 2016 Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 4,851 $ 4,851 $ 4,851 $ — $ — Interest-bearing deposits 7,945 7,945 7,945 — — Certificates of deposit 4,216 4,216 — 4,216 — Federal funds sold 1,906 1,906 1,906 — — Securities available-for-sale 51,173 51,173 — 43,469 7,704 Restricted securities 2,649 2,649 — — 2,649 Loans, net 381,537 384,468 — — 384,468 Loans held for sale 276 276 — — 276 Accrued interest receivable 1,372 1,372 — 1,372 — Bank owned life insurance 9,869 9,869 9,869 — — Mortgage servicing rights 671 671 — — 671 Financial Liabilities: Non-interest-bearing $ 74,799 $ 74,799 $ 74,799 $ — $ — Savings and other interest-bearing deposits 178,869 178,869 — 178,869 — Time deposits 128,050 127,497 — — 127,497 Securities sold under repurchase agreements 18,310 18,310 — 18,310 — FHLB advances 35,000 35,668 — 35,668 — Subordinated debt 6,860 7,000 — — 7,000 Accrued interest payable 331 331 — 331 — |
Changes in Accumulated Other 33
Changes in Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Balances in Accumulated Other Comprehensive Income (Loss) | The balances in accumulated other comprehensive income (loss) are shown in the following tables: For the Three Months Ended September 30, 2017 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance July 1, 2017 $ (200 ) $ (715 ) $ (915 ) Change in net unrealized holding gains on securities, before reclassification, net of tax expense of $20 39 — 39 Reclassification for previously unrealized net losses recognized in income, net of tax expense of $0 — — — Balance September 30, 2017 $ (161 ) $ (715 ) $ (876 ) For the Three Months Ended September 30, 2016 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance July 1, 2016 $ 624 $ (883 ) $ (259 ) Change in net unrealized holding gains on securities, before reclassification — — — Reclassification for previously unrealized net gains recognized in income, net of tax expense of $62 (118 ) — (118 ) Balance September 30, 2016 $ 506 $ (883 ) $ (377 ) For the Nine Months Ended September 30, 2017 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance January 1, 2017 $ (520 ) $ (715 ) $ (1,235 ) Change in net unrealized holding gains on securities, before reclassification, net of tax expense of $185 360 — 360 Reclassification for previously unrealized net losses recognized in income, net of tax expense of $1 (1 ) — (1 ) Balance September 30, 2017 $ (161 ) $ (715 ) $ (876 ) For the Nine Months Ended September 30, 2016 Net Unrealized Pension and Accumulated Other Gains (Losses) Post-retirement Comprehensive (Dollars in thousands) on Securities Benefit Plans Income (Loss) Balance January 1, 2016 $ 107 $ (883 ) $ (776 ) Change in net unrealized holding gains on securities, before reclassification, net of tax expense of $305 590 — 590 Reclassification for previously unrealized net gains recognized in income, net of tax expense of $99 (191 ) — (191 ) Balance September 30, 2016 $ 506 $ (883 ) $ (377 ) |
Reclassification of Unrealized Gains (Losses) and Impairments on Securities | Reclassification for previously unrealized gains (losses) and impairments on securities are reported in the Consolidated Statements of Income as follows. No unrealized gains (losses) on pension and post-employment related costs were reclassified to the Consolidated Statements of Income in the three and nine months ended September 30, 2017 and 2016. Accumulated Other Comprehensive Income (Loss) Reclassification for the Three Months Ended Holding (Losses) Gains on Securities (Dollars in thousands) September 30, 2017 September 30, 2016 Net gains on sale of securities available-for-securities $ — $ 180 Tax expense — (62 ) Impact on net income $ — $ 118 Accumulated Other Comprehensive Income (Loss) Reclassification for the Nine Months Ended Holding (Losses) Gains on Securities (Dollars in thousands) September 30, 2017 September 30, 2016 Net gains on sale of securities available-for-securities $ 2 $ 290 Tax expense (1 ) (99 ) Impact on net income $ 1 $ 191 |
General - Additional Informatio
General - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Presentation And General [Line Items] | |
Business combination effective date | Apr. 1, 2017 |
Virginia Commonwealth Bank | |
Organization Presentation And General [Line Items] | |
Percent of ownership | 100.00% |
VCB Financial Group, Inc. | |
Organization Presentation And General [Line Items] | |
Percent of ownership | 100.00% |
Steptoes Holdings | |
Organization Presentation And General [Line Items] | |
Percent of ownership | 100.00% |
Business Combination - Addition
Business Combination - Additional Information (Detail) - USD ($) $ in Thousands | Apr. 01, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | [1] |
Business Acquisition [Line Items] | |||||||
Goodwill during acquisition | $ 8,968 | $ 8,968 | $ 2,808 | ||||
Loans acquired held for sale | 162 | 162 | $ 276 | ||||
Acquisition related expenses | 141 | 1,126 | |||||
Virginia BanCorp | |||||||
Business Acquisition [Line Items] | |||||||
Ownership percentage by shareholders of acquiring entity | 51.00% | ||||||
Ownership percentage by shareholders of acquired entity | 49.00% | ||||||
Common stock exchange ratio | 1.178 | ||||||
Business combination, number of shares exchanged | 4,586,221 | ||||||
Business combination, value of shares exchanged | $ 42,200 | ||||||
Goodwill during acquisition | $ 6,200 | ||||||
Fair value maximum refinement period post acquisition | 1 year | ||||||
Fair value of acquired loans not accounted for as debt securities | $ 268,200 | ||||||
Loans acquired held for sale | $ 55,400 | ||||||
Adjustment on Fair value of premises and equipment | $ 2,700 | ||||||
Percentage of acquired deposit, excluding time deposit | 2.52% | ||||||
Acquisition related expenses | $ 141 | $ 174 | $ 1,100 | ||||
Virginia BanCorp | Purchased Credit Impaired Loans | |||||||
Business Acquisition [Line Items] | |||||||
Gross Contractual amount | $ 8,300 | ||||||
Uncollectible receivables | $ 7,400 | ||||||
Virginia BanCorp | Federal Home Loan Bank of Atlanta | |||||||
Business Acquisition [Line Items] | |||||||
Maturity Date | Apr. 30, 2017 | ||||||
Virginia BanCorp | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Certificate of deposit maximum maturity period | 1 month | ||||||
Virginia BanCorp | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Certificate of deposit maximum maturity period | 5 years | ||||||
Virginia BanCorp | Certificates of Deposit | |||||||
Business Acquisition [Line Items] | |||||||
Adjustment on Fair value of premises and equipment | $ 733 | ||||||
Virginia BanCorp | Core Deposits | |||||||
Business Acquisition [Line Items] | |||||||
Core deposit intangible, fair value | $ 3,700 | ||||||
Weighted average life of core deposit intangible | 92 months | ||||||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Business Combination - Schedule
Business Combination - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Apr. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | [1] |
Identifiable liabilities assumed: | ||||
Goodwill resulting from acquisition | $ 8,968 | $ 2,808 | ||
As Recorded by the Company | ||||
Consideration paid: | ||||
Bay Banks of Virginia, Inc. common stock | $ 42,247 | |||
Identifiable assets acquired: | ||||
Cash and due from banks | 2,356 | |||
Interest-bearing deposits | 12,342 | |||
Securities available-for-sale | 22,088 | |||
Restricted securities | 1,543 | |||
Loans receivable | 212,572 | |||
Loans held for sale | 55,648 | |||
Deferred income taxes | 825 | |||
Premises and equipment | 6,036 | |||
Accrued interest receivable | 1,229 | |||
Other real estate owned | 3,113 | |||
Core deposit intangible | 3,670 | |||
Bank owned life insurance | 8,430 | |||
Mortgage servicing rights | 324 | |||
Other assets | 367 | |||
Total identified assets acquired | 330,543 | |||
Identifiable liabilities assumed: | ||||
Noninterest-bearing deposits | 21,119 | |||
Savings and interest-bearing demand deposits | 124,640 | |||
Time deposits | 122,170 | |||
Federal Home Loan Bank advances | 25,000 | |||
Other liabilities | 1,525 | |||
Total identifiable liabilities assumed | 294,454 | |||
Total identifiable assets assumed | 36,089 | |||
Goodwill resulting from acquisition | 6,158 | |||
Fair Value Adjustment | ||||
Identifiable assets acquired: | ||||
Loans receivable | (59,907) | |||
Loans held for sale | 55,648 | |||
Deferred income taxes | (500) | |||
Premises and equipment | 2,703 | |||
Accrued interest receivable | (24) | |||
Core deposit intangible | 3,670 | |||
Total identified assets acquired | 1,590 | |||
Identifiable liabilities assumed: | ||||
Time deposits | 733 | |||
Total identifiable liabilities assumed | 733 | |||
Total identifiable assets assumed | 857 | |||
Virginia Commonwealth Bank | ||||
Identifiable assets acquired: | ||||
Cash and due from banks | 2,356 | |||
Interest-bearing deposits | 12,342 | |||
Securities available-for-sale | 22,088 | |||
Restricted securities | 1,543 | |||
Loans receivable | 272,479 | |||
Deferred income taxes | 1,325 | |||
Premises and equipment | 3,333 | |||
Accrued interest receivable | 1,253 | |||
Other real estate owned | 3,113 | |||
Bank owned life insurance | 8,430 | |||
Mortgage servicing rights | 324 | |||
Other assets | 367 | |||
Total identified assets acquired | 328,953 | |||
Identifiable liabilities assumed: | ||||
Noninterest-bearing deposits | 21,119 | |||
Savings and interest-bearing demand deposits | 124,640 | |||
Time deposits | 121,437 | |||
Federal Home Loan Bank advances | 25,000 | |||
Other liabilities | 1,525 | |||
Total identifiable liabilities assumed | 293,721 | |||
Total identifiable assets assumed | $ 35,232 | |||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Business Combination - Summary
Business Combination - Summary of Information about the PCI loan portfolio (Detail) - Virginia BanCorp $ in Thousands | Apr. 01, 2017USD ($) |
Certain Loans Acquired in Transfer Accounted for as Debt Securities Pci Loan Schedule [Line Items] | |
Purchased credit impaired loans - estimated fair value | $ 268,200 |
Purchased Credit Impaired Loans | |
Certain Loans Acquired in Transfer Accounted for as Debt Securities Pci Loan Schedule [Line Items] | |
Contractual principal and interest due | 8,303 |
Nonaccretable difference | 869 |
Expected cash flows | 7,434 |
Accretable yield | 1,354 |
Purchased credit impaired loans - estimated fair value | $ 6,080 |
Business Combination - Schedu38
Business Combination - Schedule of Pro Forma Financial Information (Detail) - Virginia Commonwealth Bank - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net interest income | $ 7,707 | $ 6,872 | $ 22,014 | $ 20,443 |
Net income | $ 906 | $ 1,653 | $ 2,752 | $ 4,443 |
Business Combination - Summar39
Business Combination - Summary of impact of Certain Acquisition Accounting Adjustments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Business Acquisition, Pro Forma Information [Line Items] | |||||
Income before income taxes | $ 1,015 | $ 1,180 | $ 1,528 | $ 2,633 | |
Virginia Commonwealth Bank | |||||
Business Acquisition, Pro Forma Information [Line Items] | |||||
Loans | [1] | 411 | 860 | ||
Core deposit intangible | [2] | (226) | (461) | ||
Time deposits | [3] | 103 | 219 | ||
Depreciation | [4] | (10) | (20) | ||
Income before income taxes | $ 278 | $ 598 | |||
[1] | Loan discount accretion is included in the "Loans, including fees" section of "Interest Income" in the consolidated statements of income. | ||||
[2] | Core deposit intangible premium amortization is included in "Other expense" section of "Non-Interest Expenses in the consolidated statements of income. | ||||
[3] | Time deposit premium amortization is included in the "Deposits" section of "Interest Expense" in the consolidated statements of income. | ||||
[4] | Depreciation on the fair value mark up of fixed assets is included in "Occupancy expense" section of "Non-Interest Expense" in the consolidated statements of income. |
Significant Accounting Polici40
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | ||
Personal loans charged off period no later than period | 180 days | |
Percentage of excess loan balance for watch category | 90.00% | |
Impaired loans measurement | Impaired loans measured for impairment generally include (1) all loans risk rated Special Mention or worse with balances of $400 thousand or more or where the borrower has filed for bankruptcy; and (2) all loans classified as a TDR . | |
Loan Receivables | $ 491,047,000 | $ 161,033,000 |
Number of ESOP unit | 2 | |
Amortize of ESOP | 9 years | |
Special Mention | ||
Significant Accounting Policies [Line Items] | ||
Loan Receivables | $ 424,000 | $ 2,030,000 |
Residential First Mortgages | ||
Significant Accounting Policies [Line Items] | ||
Minimum balance in order to assign a risk rating grade | 1,000,000 | |
Consumer and Other Loans | ||
Significant Accounting Policies [Line Items] | ||
Minimum balance in order to assign a risk rating grade | $ 250,000 | |
Minimum | ||
Significant Accounting Policies [Line Items] | ||
Number of days past due for a loan to remain on accrual status | 90 days | |
Minimum | Special Mention | ||
Significant Accounting Policies [Line Items] | ||
Loan Receivables | $ 400,000 |
Securities - Aggregate Amortize
Securities - Aggregate Amortized Costs and Fair Values of Available-for-Sale Securities Portfolio (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 72,101 | $ 51,929 | |
Gross Unrealized Gains | 285 | 116 | |
Gross Unrealized (Losses) | (493) | (872) | |
Fair Value | 71,893 | 51,173 | [1] |
Corporate Bonds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 6,696 | 7,695 | |
Gross Unrealized Gains | 22 | 14 | |
Gross Unrealized (Losses) | (1) | (5) | |
Fair Value | 6,717 | 7,704 | |
US Government Agencies | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 44,194 | 25,668 | |
Gross Unrealized Gains | 77 | 53 | |
Gross Unrealized (Losses) | (298) | (408) | |
Fair Value | 43,973 | 25,313 | |
State and Municipal Obligations | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 21,211 | 18,566 | |
Gross Unrealized Gains | 186 | 49 | |
Gross Unrealized (Losses) | (194) | (459) | |
Fair Value | $ 21,203 | $ 18,156 | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Securities - Gross Realized Gai
Securities - Gross Realized Gains and Gross Realized Losses on Sales of Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Gross realized gains | $ 180 | $ 7 | $ 300 | |
Gross realized losses | (5) | (10) | ||
Net realized gains | $ 0 | 180 | 2 | 290 |
Aggregate proceeds | $ 0 | $ 4,984 | $ 17,662 | $ 14,582 |
Securities - Additional Informa
Securities - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($)Bond | Sep. 30, 2016 | Sep. 30, 2017USD ($)Bond | Sep. 30, 2016 | Dec. 31, 2016USD ($)Bond | ||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Average yields (taxable equivalent) on securities | 2.58% | 3.10% | 3.26% | 3.07% | ||
Market value of securities | $ 19,500 | $ 19,500 | $ 19,100 | |||
Securities sold under repurchase agreements | 17,091 | 17,091 | 18,310 | [1] | ||
Company's investment in Federal Home Loan Bank stock | 3,900 | 3,900 | 1,900 | |||
Company's investment in Federal Reserve Bank stock | $ 1,900 | $ 1,900 | $ 580 | |||
Municipal Securities | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Bonds with unrealized loss positions | Bond | 21 | 21 | 39 | |||
US Government Agencies | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Bonds with unrealized loss positions | Bond | 40 | 40 | 37 | |||
Corporate Bonds | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Bonds with unrealized loss positions | Bond | 1 | 1 | 1 | |||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Securities - Unrealized Loss Po
Securities - Unrealized Loss Positions (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair Value | $ 28,232 | $ 34,816 |
Less than 12 months, Unrealized Loss | (205) | (860) |
12 months or more, Fair Value | 10,744 | 1,308 |
12 months or more, Unrealized Loss | (288) | (12) |
Fair Value, Total | 38,976 | 36,124 |
Total Unrealized Loss | (493) | (872) |
Corporate Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair Value | 499 | 995 |
Less than 12 months, Unrealized Loss | (1) | (5) |
Fair Value, Total | 499 | 995 |
Total Unrealized Loss | (1) | (5) |
US Government Agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair Value | 23,120 | 20,933 |
Less than 12 months, Unrealized Loss | (134) | (396) |
12 months or more, Fair Value | 7,296 | 1,308 |
12 months or more, Unrealized Loss | (164) | (12) |
Fair Value, Total | 30,416 | 22,241 |
Total Unrealized Loss | (298) | (408) |
State and Municipal Obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair Value | 4,613 | 12,888 |
Less than 12 months, Unrealized Loss | (70) | (459) |
12 months or more, Fair Value | 3,448 | |
12 months or more, Unrealized Loss | (124) | |
Fair Value, Total | 8,061 | 12,888 |
Total Unrealized Loss | $ (194) | $ (459) |
Low Income Housing Tax Credits
Low Income Housing Tax Credits - Additional Information (Detail) - Housing Equity Funds $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($)Investment | |
Schedule of Equity Method Investments [Line Items] | ||
Number of investments in housing equity funds | Investment | 3 | |
Affordable housing investments and related tax benefits term | 2,030 | |
Tax credits and other tax benefits recognized related to investments | $ 17 | $ 51 |
Total projected tax benefits | 81 | 81 |
Other assets | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in housing equity funds | 1,400 | 1,400 |
Other Liabilities | ||
Schedule of Equity Method Investments [Line Items] | ||
Additional capital calls expected for the fund | $ 1,500 | $ 1,500 |
Loans - Summary of Balances of
Loans - Summary of Balances of Loans (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Summary of balances of loans | |||
Total loans | $ 743,038 | $ 385,009 | |
Net unamortized deferred loan costs and purchased discounts | 1,590 | 391 | |
Allowance for loan losses | (4,920) | (3,863) | [1] |
Loans, net | 739,708 | 381,537 | [1] |
Construction, Land and Land Development | |||
Summary of balances of loans | |||
Total loans | 63,046 | 39,818 | |
Farmland | |||
Summary of balances of loans | |||
Total loans | 936 | 1,023 | |
Commercial Mortgages (Non-Owner Occupied) | |||
Summary of balances of loans | |||
Total loans | 141,954 | 35,343 | |
Commercial Mortgages (Owner Occupied) | |||
Summary of balances of loans | |||
Total loans | 73,615 | 41,825 | |
Residential First Mortgages | |||
Summary of balances of loans | |||
Total loans | 269,017 | 194,007 | |
Residential Revolving and Junior Mortgages | |||
Summary of balances of loans | |||
Total loans | 46,193 | 26,425 | |
Commercial and Industrial | |||
Summary of balances of loans | |||
Total loans | 99,637 | 43,024 | |
Allowance for loan losses | (513) | (493) | |
Consumer and Other Loans | |||
Summary of balances of loans | |||
Total loans | 48,640 | 3,544 | |
Allowance for loan losses | $ (570) | $ (52) | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Loans - Additional Information
Loans - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Outstanding Purchased Impaired gross balance of loans | $ 743,038 | $ 385,009 |
Purchased Credit Impaired Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Outstanding Purchased Impaired gross balance of loans | $ 6,700 | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of days past due for a loan to remain on accrual status | 90 days |
Loans - Recorded Investment in
Loans - Recorded Investment in Past Due and Non-accruing Loans (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | $ 4,220 | $ 2,679 |
90 Days or More Past Due and Still Accruing | 3 | |
Nonaccruals | 4,799 | 5,300 |
Total Past Due and Nonaccruals | 9,022 | 7,979 |
Current | 734,016 | 377,030 |
Total Gross Loans | 743,038 | 385,009 |
Construction, Land and Land Development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 267 | |
Nonaccruals | 632 | 623 |
Total Past Due and Nonaccruals | 899 | 623 |
Current | 62,147 | 39,195 |
Total Gross Loans | 63,046 | 39,818 |
Farmland | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 57 | |
Total Past Due and Nonaccruals | 57 | |
Current | 936 | 966 |
Total Gross Loans | 936 | 1,023 |
Commercial Mortgages (Non-Owner Occupied) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 452 | |
Total Past Due and Nonaccruals | 452 | |
Current | 141,502 | 35,343 |
Total Gross Loans | 141,954 | 35,343 |
Commercial Mortgages (Owner Occupied) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 243 | 188 |
Nonaccruals | 1,717 | 2,270 |
Total Past Due and Nonaccruals | 1,960 | 2,458 |
Current | 71,655 | 39,367 |
Total Gross Loans | 73,615 | 41,825 |
Residential First Mortgages | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 1,621 | 1,546 |
Nonaccruals | 1,318 | 2,155 |
Total Past Due and Nonaccruals | 2,939 | 3,701 |
Current | 266,078 | 190,306 |
Total Gross Loans | 269,017 | 194,007 |
Residential Revolving and Junior Mortgages | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 1,173 | 480 |
Nonaccruals | 885 | 160 |
Total Past Due and Nonaccruals | 2,058 | 640 |
Current | 44,135 | 25,785 |
Total Gross Loans | 46,193 | 26,425 |
Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 15 | 408 |
Nonaccruals | 110 | 92 |
Total Past Due and Nonaccruals | 125 | 500 |
Current | 99,512 | 42,524 |
Total Gross Loans | 99,637 | 43,024 |
Consumer and Other Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
30-89 Days Past Due | 449 | |
90 Days or More Past Due and Still Accruing | 3 | |
Nonaccruals | 137 | |
Total Past Due and Nonaccruals | 589 | |
Current | 48,051 | 3,544 |
Total Gross Loans | $ 48,640 | $ 3,544 |
Loans - Summary of Recorded inv
Loans - Summary of Recorded investment of purchased impaired loans (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | $ 4,220 | $ 2,679 |
90 Days or More Past Due and Still Accruing | 3 | |
Nonaccruals | 4,799 | 5,300 |
Total Past Due and Nonaccruals | 9,022 | 7,979 |
Current | 734,016 | 377,030 |
Total loans | 743,038 | 385,009 |
Construction, Land and Land Development | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 267 | |
Nonaccruals | 632 | 623 |
Total Past Due and Nonaccruals | 899 | 623 |
Current | 62,147 | 39,195 |
Total loans | 63,046 | 39,818 |
Commercial Mortgages (Non-Owner Occupied) | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 452 | |
Total Past Due and Nonaccruals | 452 | |
Current | 141,502 | 35,343 |
Total loans | 141,954 | 35,343 |
Commercial Mortgages (Owner Occupied) | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 243 | 188 |
Nonaccruals | 1,717 | 2,270 |
Total Past Due and Nonaccruals | 1,960 | 2,458 |
Current | 71,655 | 39,367 |
Total loans | 73,615 | 41,825 |
Residential First Mortgages | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 1,621 | 1,546 |
Nonaccruals | 1,318 | 2,155 |
Total Past Due and Nonaccruals | 2,939 | 3,701 |
Current | 266,078 | 190,306 |
Total loans | 269,017 | 194,007 |
Residential Revolving and Junior Mortgages | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 1,173 | 480 |
Nonaccruals | 885 | 160 |
Total Past Due and Nonaccruals | 2,058 | 640 |
Current | 44,135 | 25,785 |
Total loans | 46,193 | 26,425 |
Consumer and Other Loans | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 449 | |
90 Days or More Past Due and Still Accruing | 3 | |
Nonaccruals | 137 | |
Total Past Due and Nonaccruals | 589 | |
Current | 48,051 | 3,544 |
Total loans | 48,640 | $ 3,544 |
Impaired Financing Receivable | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 138 | |
90 Days or More Past Due and Still Accruing | 200 | |
Nonaccruals | 0 | |
Total Past Due and Nonaccruals | 338 | |
Current | 5,560 | |
Total loans | 5,898 | |
Impaired Financing Receivable | Construction, Land and Land Development | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 0 | |
Nonaccruals | 0 | |
Total Past Due and Nonaccruals | 0 | |
Current | 1,413 | |
Total loans | 1,413 | |
Impaired Financing Receivable | Commercial Mortgages (Non-Owner Occupied) | ||
Financing Receivable, Impaired [Line Items] | ||
Current | 182 | |
Total loans | 182 | |
Impaired Financing Receivable | Commercial Mortgages (Owner Occupied) | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 133 | |
90 Days or More Past Due and Still Accruing | 37 | |
Total Past Due and Nonaccruals | 170 | |
Current | 168 | |
Total loans | 338 | |
Impaired Financing Receivable | Residential First Mortgages | ||
Financing Receivable, Impaired [Line Items] | ||
90 Days or More Past Due and Still Accruing | 144 | |
Total Past Due and Nonaccruals | 144 | |
Current | 3,697 | |
Total loans | 3,841 | |
Impaired Financing Receivable | Residential Revolving and Junior Mortgages | ||
Financing Receivable, Impaired [Line Items] | ||
90 Days or More Past Due and Still Accruing | 19 | |
Total Past Due and Nonaccruals | 19 | |
Current | 31 | |
Total loans | 50 | |
Impaired Financing Receivable | Consumer and Other Loans | ||
Financing Receivable, Impaired [Line Items] | ||
30-89 Days Past Due | 5 | |
Total Past Due and Nonaccruals | 5 | |
Current | 69 | |
Total loans | $ 74 |
Allowance for Loan Losses - Loa
Allowance for Loan Losses - Loan Receivables Evaluated for Impairment Individually and Collectively by Segment (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans individually evaluated for impairment | $ 9,684 | $ 10,415 |
Loans collectively evaluated for impairment | 727,456 | 374,594 |
Total Gross Loans | 743,038 | 385,009 |
Loans acquired with deteriorated credit quality | 491,047 | 161,033 |
Receivables Acquired with Deteriorated Credit Quality | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired with deteriorated credit quality | 5,898 | |
Mortgage Loans on Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans individually evaluated for impairment | 9,592 | 10,323 |
Loans collectively evaluated for impairment | 579,344 | 328,118 |
Total Gross Loans | 594,761 | 338,441 |
Mortgage Loans on Real Estate | Receivables Acquired with Deteriorated Credit Quality | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired with deteriorated credit quality | 5,825 | |
Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans individually evaluated for impairment | 92 | 92 |
Loans collectively evaluated for impairment | 99,545 | 42,932 |
Total Gross Loans | 99,637 | 43,024 |
Consumer and Other Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans collectively evaluated for impairment | 48,567 | 3,544 |
Total Gross Loans | 48,640 | $ 3,544 |
Consumer and Other Loans | Receivables Acquired with Deteriorated Credit Quality | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans acquired with deteriorated credit quality | $ 73 |
Allowance for Loan Losses - All
Allowance for Loan Losses - Allowance for Loan Losses Disaggregated Based on Loan Receivables Evaluated for Impairment Individually and Collectively by Segment (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans individually evaluated for impairment | $ 1,074 | $ 895 | |||||
Loans collectively evaluated for impairment | 3,846 | 2,968 | |||||
Total allowance for loan losses | 4,920 | 3,863 | [1] | ||||
Loans acquired with deteriorated credit quality | 4,920 | $ 4,241 | 3,863 | $ 3,741 | $ 3,547 | $ 4,223 | |
Receivables Acquired with Deteriorated Credit Quality | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans acquired with deteriorated credit quality | 0 | ||||||
Mortgage Loans on Real Estate | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans individually evaluated for impairment | 982 | 803 | |||||
Loans collectively evaluated for impairment | 2,855 | 2,515 | |||||
Total allowance for loan losses | 3,837 | 3,318 | |||||
Loans acquired with deteriorated credit quality | 3,837 | 3,686 | 3,318 | 3,208 | 2,995 | 3,502 | |
Mortgage Loans on Real Estate | Receivables Acquired with Deteriorated Credit Quality | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans acquired with deteriorated credit quality | 0 | ||||||
Commercial and Industrial | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans individually evaluated for impairment | 92 | 92 | |||||
Loans collectively evaluated for impairment | 421 | 401 | |||||
Total allowance for loan losses | 513 | 493 | |||||
Loans acquired with deteriorated credit quality | 513 | 456 | 493 | 480 | 435 | 599 | |
Commercial and Industrial | Receivables Acquired with Deteriorated Credit Quality | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans acquired with deteriorated credit quality | 0 | ||||||
Consumer and Other Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans collectively evaluated for impairment | 570 | 52 | |||||
Total allowance for loan losses | 570 | 52 | |||||
Loans acquired with deteriorated credit quality | 570 | $ 99 | $ 52 | $ 53 | $ 117 | $ 122 | |
Consumer and Other Loans | Receivables Acquired with Deteriorated Credit Quality | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans acquired with deteriorated credit quality | $ 0 | ||||||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Allowance for Loan Losses - A52
Allowance for Loan Losses - Allowance for Loan Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
ALLOWANCE FOR LOAN LOSSES: | ||||
Beginning Balance | $ 4,241 | $ 3,547 | $ 3,863 | $ 4,223 |
Reclassification of allowance related to sold loans | (27) | (27) | ||
(Charge-offs) | (441) | (56) | (915) | (901) |
Recoveries | 45 | 18 | 139 | 39 |
Provision (recovery) | 1,075 | 259 | 1,833 | 407 |
Ending Balance | 4,920 | 3,741 | 4,920 | 3,741 |
Mortgage Loans on Real Estate | ||||
ALLOWANCE FOR LOAN LOSSES: | ||||
Beginning Balance | 3,686 | 2,995 | 3,318 | 3,502 |
(Charge-offs) | (75) | (46) | (348) | (702) |
Recoveries | 10 | 15 | 98 | 25 |
Provision (recovery) | 216 | 244 | 769 | 383 |
Ending Balance | 3,837 | 3,208 | 3,837 | 3,208 |
Commercial and Industrial | ||||
ALLOWANCE FOR LOAN LOSSES: | ||||
Beginning Balance | 456 | 435 | 493 | 599 |
(Charge-offs) | (158) | |||
Recoveries | 1 | 2 | 5 | |
Provision (recovery) | 56 | 45 | 18 | 34 |
Ending Balance | 513 | 480 | 513 | 480 |
Consumer and Other Loans | ||||
ALLOWANCE FOR LOAN LOSSES: | ||||
Beginning Balance | 99 | 117 | 52 | 122 |
Reclassification of allowance related to sold loans | (27) | (27) | ||
(Charge-offs) | (366) | (10) | (567) | (41) |
Recoveries | 34 | 3 | 39 | 9 |
Provision (recovery) | 803 | (30) | 1,046 | (10) |
Ending Balance | $ 570 | $ 53 | $ 570 | $ 53 |
Allowance for Loan Losses - Cha
Allowance for Loan Losses - Changes in Accretable Yield for Purchased Impaired Loans (Detail) - Purchased Credit Impaired Loans $ in Thousands | 6 Months Ended |
Sep. 30, 2017USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Balance Beginning | $ 1,354 |
Accretion | (179) |
Reclassifications from nonaccretable balance, net | 0 |
Other changes, net | 0 |
Balance Ending | $ 1,175 |
Allowance for Loan Losses - Add
Allowance for Loan Losses - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($)Property | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)PropertyPerson | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)Property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for loan losses | $ 4,920,000 | $ 4,920,000 | $ 3,863,000 | [1] | ||
Period of nonperforming loans | 90 days | |||||
Non-accruing loans excluded from impaired loan | 726,000 | $ 726,000 | $ 465,000 | |||
Non-accruing loans accrued interest | 4,000 | $ 1,000 | 9,000 | $ 3,000 | ||
Loans modified as TDRs | $ 0 | $ 1,000 | $ 0 | $ 1,000 | ||
No. of Properties | Property | 28 | 28 | 14 | |||
Residential | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Land properties collateralized with loan | Property | 1 | |||||
Residential mortgage loan amount | $ 93,000 | $ 93,000 | ||||
No. of Borrowers | Person | 1 | |||||
No. of Properties | Property | 4 | 4 | 2 | |||
Residential | Other assets | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Properties marketed for sale, value | $ 708,000 | $ 708,000 | ||||
No. of Properties | Property | 1 | 1 | ||||
Branch Office | Other assets | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Properties marketed for sale, value | $ 403,000 | |||||
No. of Properties | Property | 1 | |||||
Residential First Mortgages | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Minimum balance in order to assign a risk rating grade | $ 1,000,000 | $ 1,000,000 | ||||
Consumer and Other Loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for loan losses | 570,000 | 570,000 | $ 52,000 | |||
Minimum balance in order to assign a risk rating grade | 250,000 | 250,000 | ||||
Purchased Credit Impaired Loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for loan losses | $ 0 | $ 0 | ||||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Allowance for Loan Losses - Int
Allowance for Loan Losses - Internal Risk Rating Grades (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
INTERNAL RISK RATING GRADES | ||
Loan Receivables | $ 491,047 | $ 161,033 |
Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 453,365 | 135,703 |
Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 29,157 | 18,522 |
Special Mention | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 424 | 2,030 |
Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 8,101 | 4,778 |
Construction, Land and Land Development | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 63,046 | 39,818 |
Construction, Land and Land Development | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 52,108 | 32,009 |
Construction, Land and Land Development | Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 7,290 | 5,795 |
Construction, Land and Land Development | Special Mention | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 175 | 180 |
Construction, Land and Land Development | Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 3,473 | 1,834 |
Farmland | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 936 | 1,023 |
Farmland | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 936 | 1,023 |
Commercial Mortgages (Non-Owner Occupied) | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 141,954 | 35,343 |
Commercial Mortgages (Non-Owner Occupied) | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 137,028 | 30,639 |
Commercial Mortgages (Non-Owner Occupied) | Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 4,472 | 4,184 |
Commercial Mortgages (Non-Owner Occupied) | Special Mention | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 272 | |
Commercial Mortgages (Non-Owner Occupied) | Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 454 | 248 |
Commercial Mortgages (Owner Occupied) | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 73,615 | 41,825 |
Commercial Mortgages (Owner Occupied) | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 58,894 | 31,191 |
Commercial Mortgages (Owner Occupied) | Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 12,106 | 6,652 |
Commercial Mortgages (Owner Occupied) | Special Mention | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 249 | 1,453 |
Commercial Mortgages (Owner Occupied) | Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 2,366 | 2,529 |
Commercial and Industrial | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 99,637 | 43,024 |
Commercial and Industrial | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 95,599 | 40,841 |
Commercial and Industrial | Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 3,927 | 1,891 |
Commercial and Industrial | Special Mention | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 125 | |
Commercial and Industrial | Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 111 | $ 167 |
Residential First Mortgages | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 46,104 | |
Residential First Mortgages | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 43,370 | |
Residential First Mortgages | Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 1,252 | |
Residential First Mortgages | Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 1,482 | |
Residential Revolving and Junior Mortgages | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 20,359 | |
Residential Revolving and Junior Mortgages | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 20,276 | |
Residential Revolving and Junior Mortgages | Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 33 | |
Residential Revolving and Junior Mortgages | Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 50 | |
Consumer and Other Loans | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 45,396 | |
Consumer and Other Loans | Pass | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 45,154 | |
Consumer and Other Loans | Watch | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | 77 | |
Consumer and Other Loans | Substandard | ||
INTERNAL RISK RATING GRADES | ||
Loan Receivables | $ 165 |
Allowance for Loan Losses - Per
Allowance for Loan Losses - Performing and Non Performing Loans (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | ||
Performing and non performing loans | ||||
Loan receivables | $ 251,991 | $ 223,976 | ||
Performing | ||||
Performing and non performing loans | ||||
Loan receivables | 249,822 | 221,661 | ||
Nonperforming | ||||
Performing and non performing loans | ||||
Loan receivables | 2,169 | 2,315 | ||
Residential First Mortgages | ||||
Performing and non performing loans | ||||
Loan receivables | 222,913 | [1] | 194,007 | [2] |
Residential First Mortgages | Performing | ||||
Performing and non performing loans | ||||
Loan receivables | 221,629 | [1] | 191,852 | [2] |
Residential First Mortgages | Nonperforming | ||||
Performing and non performing loans | ||||
Loan receivables | 1,284 | [1] | 2,155 | [2] |
Residential Revolving and Junior Mortgages | ||||
Performing and non performing loans | ||||
Loan receivables | 25,834 | [3] | 26,425 | [4] |
Residential Revolving and Junior Mortgages | Performing | ||||
Performing and non performing loans | ||||
Loan receivables | 24,949 | [3] | 26,265 | [4] |
Residential Revolving and Junior Mortgages | Nonperforming | ||||
Performing and non performing loans | ||||
Loan receivables | 885 | [3] | 160 | [4] |
Consumer and Other Loans | ||||
Performing and non performing loans | ||||
Loan receivables | 3,244 | [5] | 3,544 | [6] |
Consumer and Other Loans | Performing | ||||
Performing and non performing loans | ||||
Loan receivables | $ 3,244 | [5] | $ 3,544 | [6] |
[1] | Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $2.2 million as of September 30, 2017. | |||
[2] | Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $3.3 million as of December 31, 2016. | |||
[3] | Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $927 thousand as of September 30, 2017. | |||
[4] | Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $1.1 million as of December 31, 2016. | |||
[5] | No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2017. | |||
[6] | No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2016 |
Allowance for Loan Losses - P57
Allowance for Loan Losses - Performing and Non Performing Loans (Parenthetical) (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Risk rating grade totaled | $ 251,991 | $ 223,976 | ||
Residential First Mortgages | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Risk rating grade totaled | 222,913 | [1] | 194,007 | [2] |
Residential First Mortgages | Substandard | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Risk rating grade totaled | 2,200 | 3,300 | ||
Residential Revolving and Junior Mortgages | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Risk rating grade totaled | 25,834 | [3] | 26,425 | [4] |
Residential Revolving and Junior Mortgages | Substandard | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Risk rating grade totaled | 927 | 1,100 | ||
Consumer and Other Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Risk rating grade totaled | 3,244 | [5] | 3,544 | [6] |
Consumer and Other Loans | Substandard | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Risk rating grade totaled | $ 0 | $ 0 | ||
[1] | Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $2.2 million as of September 30, 2017. | |||
[2] | Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $3.3 million as of December 31, 2016. | |||
[3] | Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $927 thousand as of September 30, 2017. | |||
[4] | Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $1.1 million as of December 31, 2016. | |||
[5] | No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2017. | |||
[6] | No Consumer Loans had been assigned a risk rating grade of Substandard as of December 31, 2016 |
Allowance for Loan Losses - Com
Allowance for Loan Losses - Company's Recorded Investment and Customers' Unpaid Principal Balances for Impaired Loans, with Associated Allowance Amount (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
With no related allowance, Recorded Investment | $ 3,530 | $ 3,530 | $ 6,746 | |||
With no related allowance, Customers' Unpaid Principal Balance | 3,675 | 3,675 | 7,140 | |||
With an allowance recorded, Recorded Investment | 6,160 | 6,160 | 3,669 | |||
With an allowance recorded, Customers' Unpaid Principal Balance | 6,278 | 6,278 | 3,738 | |||
With an allowance recorded, Related Allowance | 1,074 | 1,074 | 895 | |||
Total Impaired Loans, Recorded Investment | 9,690 | 9,690 | 10,415 | |||
Total Impaired Loans, Customers' Unpaid Principal Balance | 9,953 | 9,953 | 10,878 | |||
Total Impaired Loans, Related Allowance | 1,074 | 1,074 | 895 | |||
With no related allowance, Average Recorded Investment | 3,552 | $ 7,454 | 3,659 | $ 6,667 | ||
With no related allowance, Interest Income Recognized | 18 | 40 | 49 | 117 | ||
With an allowance recorded, Average Recorded Investment | 6,096 | 3,227 | 6,078 | 3,216 | ||
With an allowance recorded, Interest Income Recognized | 53 | 30 | 172 | 91 | ||
Total, Average Recorded Investment | 9,648 | 10,681 | 9,737 | 9,883 | ||
Total, Interest Income Recognized | 71 | 70 | 221 | 208 | ||
Construction, Land and Land Development | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
With no related allowance, Recorded Investment | 367 | 367 | 1,531 | |||
With no related allowance, Customers' Unpaid Principal Balance | 449 | 449 | 1,539 | |||
With an allowance recorded, Recorded Investment | 1,312 | 1,312 | 243 | |||
With an allowance recorded, Customers' Unpaid Principal Balance | 1,365 | 1,365 | 286 | |||
With an allowance recorded, Related Allowance | 142 | 142 | 145 | |||
Total Impaired Loans, Recorded Investment | 1,679 | 1,679 | 1,774 | |||
Total Impaired Loans, Customers' Unpaid Principal Balance | 1,814 | 1,814 | 1,825 | |||
Total Impaired Loans, Related Allowance | 142 | 142 | 145 | |||
With no related allowance, Average Recorded Investment | 367 | 1,533 | 385 | 1,262 | ||
With no related allowance, Interest Income Recognized | 14 | 41 | ||||
With an allowance recorded, Average Recorded Investment | 1,315 | 250 | 1,323 | 255 | ||
With an allowance recorded, Interest Income Recognized | 15 | 1 | 44 | 3 | ||
Total, Average Recorded Investment | 1,682 | 1,783 | 1,708 | 1,517 | ||
Total, Interest Income Recognized | 15 | 15 | 44 | 44 | ||
Residential First Mortgages | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
With no related allowance, Recorded Investment | 1,407 | 1,407 | 2,112 | |||
With no related allowance, Customers' Unpaid Principal Balance | 1,502 | 1,502 | 2,176 | |||
With an allowance recorded, Recorded Investment | 1,922 | 1,922 | 1,951 | |||
With an allowance recorded, Customers' Unpaid Principal Balance | 1,922 | 1,922 | 1,951 | |||
With an allowance recorded, Related Allowance | 367 | 367 | 367 | |||
Total Impaired Loans, Recorded Investment | 3,329 | 3,329 | 4,063 | |||
Total Impaired Loans, Customers' Unpaid Principal Balance | 3,424 | 3,424 | 4,127 | |||
Total Impaired Loans, Related Allowance | 367 | 367 | 367 | |||
With no related allowance, Average Recorded Investment | 1,425 | 2,618 | 1,439 | 2,432 | ||
With no related allowance, Interest Income Recognized | 4 | 4 | 15 | 9 | ||
With an allowance recorded, Average Recorded Investment | 1,928 | 1,965 | 1,937 | 1,956 | ||
With an allowance recorded, Interest Income Recognized | 23 | 24 | 71 | 66 | ||
Total, Average Recorded Investment | 3,353 | 4,583 | 3,376 | 4,388 | ||
Total, Interest Income Recognized | 27 | 28 | 86 | 75 | ||
Residential Revolving and Junior Mortgages | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
With no related allowance, Recorded Investment | [1] | 481 | 481 | 995 | ||
With no related allowance, Customers' Unpaid Principal Balance | [1] | 491 | 491 | 999 | ||
With an allowance recorded, Recorded Investment | [1] | 1,479 | 1,479 | 544 | ||
With an allowance recorded, Customers' Unpaid Principal Balance | [1] | 1,491 | 1,491 | 546 | ||
With an allowance recorded, Related Allowance | [1] | 334 | 334 | 199 | ||
Total Impaired Loans, Recorded Investment | [1] | 1,960 | 1,960 | 1,539 | ||
Total Impaired Loans, Customers' Unpaid Principal Balance | [1] | 1,982 | 1,982 | 1,545 | ||
Total Impaired Loans, Related Allowance | [1] | 334 | 334 | 199 | ||
With no related allowance, Average Recorded Investment | [1] | 482 | 951 | 485 | 739 | |
With no related allowance, Interest Income Recognized | [1] | 5 | 9 | 7 | 30 | |
With an allowance recorded, Average Recorded Investment | [1] | 1,389 | 234 | 1,345 | 209 | |
With an allowance recorded, Interest Income Recognized | [1] | 11 | 38 | 4 | ||
Total, Average Recorded Investment | [1] | 1,871 | 1,185 | 1,830 | 948 | |
Total, Interest Income Recognized | [1] | 16 | 9 | 45 | 34 | |
Commercial Mortgages (Non-Owner Occupied) | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
With no related allowance, Recorded Investment | 248 | 248 | 248 | |||
With no related allowance, Customers' Unpaid Principal Balance | 248 | 248 | 248 | |||
Total Impaired Loans, Recorded Investment | 248 | 248 | 248 | |||
Total Impaired Loans, Customers' Unpaid Principal Balance | 248 | 248 | 248 | |||
With no related allowance, Average Recorded Investment | 248 | 248 | 248 | 252 | ||
With no related allowance, Interest Income Recognized | 4 | 4 | 11 | 11 | ||
Total, Average Recorded Investment | 248 | 248 | 248 | 252 | ||
Total, Interest Income Recognized | 4 | 4 | 11 | 11 | ||
Commercial Mortgages (Owner Occupied) | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
With no related allowance, Recorded Investment | 1,027 | 1,027 | 1,860 | |||
With no related allowance, Customers' Unpaid Principal Balance | 985 | 985 | 2,178 | |||
With an allowance recorded, Recorded Investment | 1,355 | 1,355 | 839 | |||
With an allowance recorded, Customers' Unpaid Principal Balance | 1,399 | 1,399 | 854 | |||
With an allowance recorded, Related Allowance | 139 | 139 | 92 | |||
Total Impaired Loans, Recorded Investment | 2,382 | 2,382 | 2,699 | |||
Total Impaired Loans, Customers' Unpaid Principal Balance | 2,384 | 2,384 | 3,032 | |||
Total Impaired Loans, Related Allowance | 139 | 139 | 92 | |||
With no related allowance, Average Recorded Investment | 1,030 | 2,104 | 1,102 | 1,982 | ||
With no related allowance, Interest Income Recognized | 5 | 9 | 16 | 26 | ||
With an allowance recorded, Average Recorded Investment | 1,372 | 686 | 1,381 | 691 | ||
With an allowance recorded, Interest Income Recognized | 4 | 5 | 19 | 17 | ||
Total, Average Recorded Investment | 2,402 | 2,790 | 2,483 | 2,673 | ||
Total, Interest Income Recognized | 9 | 14 | 35 | 43 | ||
Commercial and Industrial | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
With an allowance recorded, Recorded Investment | 92 | 92 | 92 | |||
With an allowance recorded, Customers' Unpaid Principal Balance | 101 | 101 | 101 | |||
With an allowance recorded, Related Allowance | 92 | 92 | 92 | |||
Total Impaired Loans, Recorded Investment | 92 | 92 | 92 | |||
Total Impaired Loans, Customers' Unpaid Principal Balance | 101 | 101 | 101 | |||
Total Impaired Loans, Related Allowance | 92 | 92 | $ 92 | |||
With an allowance recorded, Average Recorded Investment | 92 | 92 | 92 | 105 | ||
With an allowance recorded, Interest Income Recognized | 1 | |||||
Total, Average Recorded Investment | $ 92 | $ 92 | $ 92 | 105 | ||
Total, Interest Income Recognized | $ 1 | |||||
[1] | Junior mortgages include equity lines. |
Allowance for Loan Losses - Sum
Allowance for Loan Losses - Summary of Troubled Debt Restructurings (Detail) - Residential First Mortgages $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of Loans | [1] | 0 | 0 | 0 | 1 |
Pre-Modification Outstanding Recorded Investment | [1] | $ 0 | $ 0 | $ 0 | $ 244 |
Post-Modification Outstanding Recorded Investment | [1] | $ 0 | $ 0 | $ 0 | $ 244 |
[1] | Modification was a capitalization of interest. |
Other Real Estate Owned Net - S
Other Real Estate Owned Net - Summary of Properties Included in Other Real Estate Owned (OREO) (Detail) $ in Thousands | Sep. 30, 2017USD ($)Property | Dec. 31, 2016USD ($)Property | |
Real Estate Properties [Line Items] | |||
No. of Properties | Property | 28 | 14 | |
Carrying Value | $ | $ 5,159 | $ 2,494 | [1] |
Land lots | |||
Real Estate Properties [Line Items] | |||
No. of Properties | Property | 17 | 7 | |
Carrying Value | $ | $ 3,089 | $ 547 | |
Convenience Stores | |||
Real Estate Properties [Line Items] | |||
No. of Properties | Property | 1 | 1 | |
Carrying Value | $ | $ 55 | $ 59 | |
Restaurant | |||
Real Estate Properties [Line Items] | |||
No. of Properties | Property | 1 | 1 | |
Carrying Value | $ | $ 55 | $ 55 | |
Commercial properties | |||
Real Estate Properties [Line Items] | |||
No. of Properties | Property | 5 | 3 | |
Carrying Value | $ | $ 1,071 | $ 942 | |
Residential | |||
Real Estate Properties [Line Items] | |||
No. of Properties | Property | 4 | 2 | |
Carrying Value | $ | $ 889 | $ 891 | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Computation Of Earnings Per Share Line Items | |||||
Stock Issued During Period, Value, New Issues | $ 35,000 | ||||
Proceeds from net of offering expenses | $ 32,900 | $ 32,888 | |||
Stock Issued During Period, Shares, New Issues | 3,783,784 | ||||
Common stock offering price | $ 9.25 | ||||
Unearned Employee Stock Ownership Plan Shares | |||||
Computation Of Earnings Per Share Line Items | |||||
Shares not included in computing diluted earnings per share because effects were anti-dilutive | 11,258 | 33,451 | 21,258 | 47,041 | |
Employee Stock Ownership Plan (ESOP), Plan | |||||
Computation Of Earnings Per Share Line Items | |||||
Shares not included in computing diluted earnings per share because effects were anti-dilutive | 136,376 | 104,510 |
Earnings per share - Weighted A
Earnings per share - Weighted Average Number of Shares Used in Computing Earnings Per Share (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Basic earnings per share | 10,488,227 | 4,774,856 | 8,175,431 | 4,774,856 |
Effect of dilutive securities: | ||||
Stock options | 69,396 | 22,665 | 67,269 | 18,291 |
Diluted earnings per share | 10,557,623 | 4,797,521 | 8,242,700 | 4,793,147 |
Basic earnings per share | $ 0.07 | $ 0.18 | $ 0.14 | $ 0.41 |
Diluted earnings per share | $ 0.07 | $ 0.18 | $ 0.14 | $ 0.41 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)ExecutiveOfficersshares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)ExecutiveOfficersshares | Sep. 30, 2016USD ($) | Dec. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant | shares | 309,709 | 309,709 | |||
Stock-based compensation expense | $ 178,000 | $ 16,000 | |||
Unrecognized compensation expenses related to stock award | $ 0 | 0 | |||
Unearned Employee Stock Ownership Plan Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 0 | $ 0 | 24,000 | 16,000 | |
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 60,000 | $ 0 | |||
Number of executives | ExecutiveOfficers | 4 | 4 | |||
Share based compensation, unvested restricted stock granted | shares | 10,500 | 10,500 | 0 | ||
Restricted Stock | Executive | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation, restricted stock granted | shares | 15,500 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Options (Detail) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate (5 year Treasury) | 1.49% | |
Risk free interest rate minimum(5 year Treasury) | 1.78% | |
Risk free interest rate maximum (5 year Treasury) | 1.93% | |
Expected dividend yield | 0.00% | 0.00% |
Expected term (years) | 5 years | 5 years |
Expected volatility | 40.10% | |
Expected volatility minimum | 17.20% | |
Expected volatility maximum | 21.70% |
Stock-Based Compensation - Fa65
Stock-Based Compensation - Fair Value of Options (Parenthetical) (Detail) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock price volatility, risk free interest period | 5 years | 5 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding, beginning | 218,300 | ||
Granted, shares | 13,000 | ||
Forfeited, shares | (1,195) | ||
Exercised, shares | (33,622) | ||
Expired, shares | (9,625) | ||
Options outstanding and exercisable, ending | 186,858 | 218,300 | |
Options outstanding, beginning, Weighted Average Exercise Price | $ 6.35 | ||
Granted, Weighted Average Exercise Price | 8.54 | ||
Forfeited, Weighted Average Exercise Price | 8.43 | ||
Exercised, Weighted Average Exercise Price | 5.75 | ||
Expired, Weighted Average Exercise Price | 13.76 | ||
Options outstanding and exercisable, ending, Weighted Average Exercise Price | $ 6.22 | $ 6.35 | |
Options outstanding and exercisable, ending, Weighted Average Remaining Contractual Life | 5 years 8 months 12 days | 5 years 10 months 25 days | |
Options outstanding, ending, Aggregate Intrinsic Value | [1] | $ 635,628 | |
[1] | The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on September 30, 2017. This amount changes based on changes in the market value of the Company's common stock. |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Defined Contribution Plan Disclosure [Line Items] | |
Minimum age of full-time employees | 21 years |
Conditional age-1 for availing plan | 55 years |
Conditional age-2 for availing plan | 65 years |
Conditional years of service -1 for availing plan | 10 years |
Conditional years of service-2 for availing plan | 5 years |
Pension Plan, Defined Benefit | |
Defined Contribution Plan Disclosure [Line Items] | |
Expected employer contribution | $ 0 |
Other Postretirement Benefit Plan, Defined Benefit | |
Defined Contribution Plan Disclosure [Line Items] | |
Expected employer contribution | 1,000 |
Employer contribution | $ 5,000 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Gain) (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Plan, Defined Benefit | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Interest cost | $ 93 | $ 101 |
Expected return on plan assets | (135) | (142) |
Settlement loss | 39 | 21 |
Recognized net actuarial loss | 57 | 58 |
Net periodic cost | 54 | 38 |
Other Postretirement Benefit Plan, Defined Benefit | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 15 | 17 |
Interest cost | 15 | 21 |
Amortization of net gain | (6) | |
Net periodic cost | $ 24 | $ 38 |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) | May 28, 2015USD ($) | Sep. 30, 2017USD ($)Loan | Dec. 31, 2016USD ($)Loan | |
Debt Instrument [Line Items] | ||||
Federal Home Loan Bank advances | $ 75,000,000 | $ 35,000,000 | [1] | |
Number of FHLB debt advances | Loan | 6 | 5 | ||
Immediate available credit | $ 134,800,000 | |||
Total line of credit | $ 215,800,000 | |||
Weighted average interest rate | 1.47% | 1.49% | ||
Virginia BanCorp | ||||
Debt Instrument [Line Items] | ||||
Current Interest Rate | 3.25% | |||
Debt acquired in merger | $ 911,000 | |||
Debt instrument, maturity date range, start | Mar. 1, 2019 | |||
Debt instrument, maturity date range, end | Nov. 1, 2026 | |||
Subordinated Debt Due May 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, maturity date | May 28, 2025 | |||
Current Interest Rate | 6.50% | 6.50% | ||
Debt instrument, face amount | $ 7,000,000 | $ 7,000,000 | ||
Debt instrument, frequency of payment | 1st of March and September of each year, commencing September 1, 2015 | |||
Debt instrument integral multiple principal amount | $ 1,000 | |||
Debt instrument redemption period start date | May 28, 2020 | |||
FHLB | ||||
Debt Instrument [Line Items] | ||||
Federal Home Loan Bank advances | $ 50,000,000 | |||
Debt instrument, maturity date | Oct. 2, 2017 | |||
FHLB | Fixed Rate Advance | ||||
Debt Instrument [Line Items] | ||||
Federal Home Loan Bank advances | $ 55,000,000 | |||
Debt instrument, maturity date | Nov. 1, 2017 | |||
Current Interest Rate | 1.16% | |||
FHLB | Fixed Rate Credit | ||||
Debt Instrument [Line Items] | ||||
Federal Home Loan Bank advances | $ 5,000,000 | |||
Debt instrument, maturity date | Oct. 17, 2017 | |||
FHLB | Daily Rate Credit | ||||
Debt Instrument [Line Items] | ||||
Federal Home Loan Bank advances | $ 5,000,000 | |||
Debt instrument, maturity date | Nov. 1, 2017 | |||
Current Interest Rate | 1.16% | |||
FHLB | Daily Rate Advance | ||||
Debt Instrument [Line Items] | ||||
Federal Home Loan Bank advances | $ 5,000,000 | |||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Long Term Debt - Advances of De
Long Term Debt - Advances of Debt (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | [1] | |
Debt Instrument [Line Items] | |||
Federal Home Loan Bank advances | $ 75,000 | $ 35,000 | |
Adjustable Rate Hybrid | Federal Home Loan Bank Advances One | |||
Debt Instrument [Line Items] | |||
Federal Home Loan Bank advances | $ 10,000 | ||
Originated | Apr. 12, 2013 | ||
Current Interest Rate | 3.6835% | ||
Maturity Date | Apr. 13, 2020 | ||
Daily Rate Credit | Federal Home Loan Bank Advances Four | |||
Debt Instrument [Line Items] | |||
Federal Home Loan Bank advances | $ 5,000 | ||
Originated | May 30, 2017 | ||
Current Interest Rate | 1.32% | ||
Maturity Date | May 30, 2018 | ||
Fixed Rate Credit | Federal Home Loan Bank Advances Two | |||
Debt Instrument [Line Items] | |||
Federal Home Loan Bank advances | $ 5,000 | ||
Originated | Jan. 17, 2017 | ||
Current Interest Rate | 0.91% | ||
Maturity Date | Oct. 17, 2017 | ||
Fixed Rate Credit | Federal Home Loan Bank Advances Three | |||
Debt Instrument [Line Items] | |||
Federal Home Loan Bank advances | $ 5,000 | ||
Originated | Jan. 20, 2017 | ||
Current Interest Rate | 0.995% | ||
Maturity Date | Dec. 20, 2017 | ||
Fixed Rate Credit | Federal Home Loan Bank Advances Five | |||
Debt Instrument [Line Items] | |||
Federal Home Loan Bank advances | $ 50,000 | ||
Originated | Sep. 1, 2017 | ||
Current Interest Rate | 1.15% | ||
Maturity Date | Oct. 2, 2017 | ||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Subordinated Debt (Detail)
Subordinated Debt (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | [1] | May 28, 2015 |
Debt and Financial Instruments [Line Items] | ||||
Subordinated debt | $ 6,873,000 | $ 6,860,000 | ||
Subordinated Debt Due May 2025 | ||||
Debt and Financial Instruments [Line Items] | ||||
Debt instrument, face amount | 7,000,000 | $ 7,000,000 | ||
Less: Issuance costs | (127,000) | |||
Subordinated debt | $ 6,873,000 | |||
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Subordinated Debt (Parenthetica
Subordinated Debt (Parenthetical) (Detail) | Sep. 30, 2017 | May 28, 2015 |
Subordinated Debt Due May 2025 | ||
Debt and Financial Instruments [Line Items] | ||
Debt instrument, coupon percentage | 6.50% | 6.50% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - Fair Value, Measurements, Recurring - Fair Value, Inputs, Level 3 - Mortgage Servicing Rights | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017Loan$ / Loan | Dec. 31, 2016Loan$ / Loan | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of portfolio | 2 | |
Fannie Mae | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loan segregated, number of pools | Loan | 14 | |
Service costs assumed, per loan | $ / Loan | 6.33 | 6 |
Average PSA assumed rate | 153.00% | 150.00% |
Discount rate | 14.00% | 14.00% |
Freddie Mac | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loan segregated, number of pools | Loan | 5 | |
Service costs assumed, per loan | $ / Loan | 7.95 | |
Average PSA assumed rate | 202.19% | |
Discount rate | 7.51% | |
Constant prepayment rate | 103.59% | |
100% PSA | Fannie Mae | First Month | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepayment rate | 0.00% | |
100% PSA | Fannie Mae | Between First Month and Month 30 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepayment rate increase, each month | 0.20% | |
100% PSA | Fannie Mae | Month 30 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepayment rate | 6.00% | |
100% PSA | Fannie Mae | Thereafter | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepayment rate | 6.00% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Balances of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Securities available for sale: | |||
Securities available-for-sale | $ 71,893 | $ 51,173 | [1] |
Mortgage servicing rights | 978 | 671 | [1] |
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 2,532 | 2,690 | |
Corporate Bonds | |||
Securities available for sale: | |||
Securities available-for-sale | 6,717 | 7,704 | |
US Government Agencies | |||
Securities available for sale: | |||
Securities available-for-sale | 43,973 | 25,313 | |
State and Municipal Obligations | |||
Securities available for sale: | |||
Securities available-for-sale | 21,203 | 18,156 | |
Cash and Cash Equivalents | |||
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 2 | ||
Fixed Income Funds | |||
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 987 | 1,041 | |
Equity Funds | |||
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 1,543 | 1,649 | |
Fair Value, Inputs, Level 1 | |||
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 2,532 | 2,690 | |
Fair Value, Inputs, Level 1 | Cash and Cash Equivalents | |||
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 2 | ||
Fair Value, Inputs, Level 1 | Fixed Income Funds | |||
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 987 | 1,041 | |
Fair Value, Inputs, Level 1 | Equity Funds | |||
Defined benefit plan assets: | |||
Defined Benefit Plan Fair Value Of Plan Assets | 1,543 | 1,649 | |
Fair Value, Inputs, Level 2 | |||
Securities available for sale: | |||
Securities available-for-sale | 65,176 | 43,469 | |
Fair Value, Inputs, Level 2 | US Government Agencies | |||
Securities available for sale: | |||
Securities available-for-sale | 43,973 | 25,313 | |
Fair Value, Inputs, Level 2 | State and Municipal Obligations | |||
Securities available for sale: | |||
Securities available-for-sale | 21,203 | 18,156 | |
Fair Value, Inputs, Level 3 | |||
Securities available for sale: | |||
Securities available-for-sale | 6,717 | 7,704 | |
Mortgage servicing rights | 978 | 671 | |
Fair Value, Inputs, Level 3 | Corporate Bonds | |||
Securities available for sale: | |||
Securities available-for-sale | $ 6,717 | $ 7,704 | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Items Using Level Three Inputs (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Mortgage Servicing Rights | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 671 |
Purchases | 0 |
Acquired in merger | 324 |
Impairments | 0 |
Fair value adjustments | (17) |
Ending balance | 978 |
Corporate Bonds | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 7,704 |
Purchases | 0 |
Impairments | 0 |
Fair value adjustments | 13 |
Sales | (1,000) |
Ending balance | $ 6,717 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets Measured at Fair Value on Nonrecurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired Loans, net | $ 5,086 | $ 2,774 |
Other real estate owned, net | 5,159 | 2,494 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired Loans, net | 5,086 | 2,774 |
Other real estate owned, net | $ 5,159 | $ 2,494 |
Fair Value Measurements - Sum77
Fair Value Measurements - Summary of Quantitative Fair Value Measurements for Level 3 (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Impaired Loans, net | $ 5,086 | $ 2,774 |
Other real estate owned, net | $ 5,159 | $ 2,494 |
Impaired Loans | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Unobservable Input, Lack of Marketability | 50.00% | |
Weighted Average | Impaired Loans | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Unobservable Input, Selling Cost | 20.00% | 16.00% |
Unobservable Input, Lack of Marketability | 55.00% | 50.00% |
Weighted Average | Other Real Estate Owned | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Unobservable Input, Selling Cost | 7.00% | 5.00% |
Unobservable Input, Lack of Marketability | 11.00% | 11.00% |
Minimum | Impaired Loans | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Unobservable Input, Selling Cost | 10.00% | 10.00% |
Unobservable Input, Lack of Marketability | 50.00% | |
Minimum | Other Real Estate Owned | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Unobservable Input, Selling Cost | 3.00% | 3.00% |
Unobservable Input, Lack of Marketability | 10.00% | 10.00% |
Maximum | Impaired Loans | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Unobservable Input, Selling Cost | 100.00% | 20.00% |
Unobservable Input, Lack of Marketability | 75.00% | |
Maximum | Other Real Estate Owned | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Unobservable Input, Selling Cost | 13.00% | 13.00% |
Unobservable Input, Lack of Marketability | 20.00% | 20.00% |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Financial Assets: | |||
Cash and due from banks | $ 5,806 | $ 4,851 | [1] |
Interest-bearing deposits | 46,060 | 7,945 | [1] |
Certificates of deposit | 3,224 | 4,216 | [1] |
Federal funds sold | 23,357 | 1,906 | [1] |
Securities available-for-sale | 71,893 | 51,173 | [1] |
Restricted securities | 6,000 | 2,649 | [1] |
Loans, net | 739,708 | 381,537 | [1] |
Loans held for sale | 162 | 276 | [1] |
Accrued interest receivable | 2,905 | 1,372 | [1] |
Bank owned life insurance | 18,641 | 9,869 | [1] |
Mortgage servicing rights | 978 | 671 | |
Financial Liabilities: | |||
Non-interest-bearing liabilities | 99,531 | 74,799 | [1] |
Savings and other interest-bearing deposits | 297,150 | 178,869 | [1] |
Time deposits | 338,732 | 128,050 | [1] |
Securities sold under repurchase agreements | 17,091 | 18,310 | [1] |
FHLB advances | 75,000 | 35,000 | [1] |
Subordinated debt | 6,873 | 6,860 | [1] |
Accrued interest payable | 302 | 331 | |
Financial Assets: | |||
Cash and due from banks | 5,806 | 4,851 | |
Interest-bearing deposits | 46,060 | 7,945 | |
Certificates of deposit | 3,224 | 4,216 | |
Federal funds sold | 23,357 | 1,906 | |
Securities available-for-sale | 71,893 | 51,173 | [1] |
Restricted securities | 6,000 | 2,649 | |
Loans, net | 745,665 | 384,468 | |
Loans held for sale | 162 | 276 | |
Accrued interest receivable | 2,905 | 1,372 | |
Bank owned life insurance | 18,641 | 9,869 | |
Mortgage servicing rights | 978 | 671 | [1] |
Financial Liabilities: | |||
Non-interest-bearing liabilities | 99,531 | 74,799 | |
Savings and other interest-bearing deposits | 297,150 | 178,869 | |
Time deposits | 337,586 | 127,497 | |
Securities sold under repurchase agreements | 17,091 | 18,310 | |
FHLB advances | 75,520 | 35,668 | |
Subordinated debt | 7,000 | 7,000 | |
Accrued interest payable | 302 | 331 | |
Fair Value, Inputs, Level 1 | |||
Financial Assets: | |||
Cash and due from banks | 5,806 | 4,851 | |
Interest-bearing deposits | 46,060 | 7,945 | |
Federal funds sold | 23,357 | 1,906 | |
Bank owned life insurance | 18,641 | 9,869 | |
Financial Liabilities: | |||
Non-interest-bearing liabilities | 99,531 | 74,799 | |
Savings and other interest-bearing deposits | 297,150 | ||
Fair Value, Inputs, Level 2 | |||
Financial Assets: | |||
Securities available-for-sale | 65,176 | 43,469 | |
Financial Assets: | |||
Certificates of deposit | 3,224 | 4,216 | |
Securities available-for-sale | 65,176 | 43,469 | |
Accrued interest receivable | 2,905 | 1,372 | |
Financial Liabilities: | |||
Savings and other interest-bearing deposits | 178,869 | ||
Securities sold under repurchase agreements | 17,091 | 18,310 | |
FHLB advances | 75,520 | 35,668 | |
Accrued interest payable | 302 | 331 | |
Fair Value, Inputs, Level 3 | |||
Financial Assets: | |||
Securities available-for-sale | 6,717 | 7,704 | |
Financial Assets: | |||
Securities available-for-sale | 6,717 | 7,704 | |
Restricted securities | 6,000 | 2,649 | |
Loans, net | 745,665 | 384,468 | |
Loans held for sale | 162 | 276 | |
Mortgage servicing rights | 978 | 671 | |
Financial Liabilities: | |||
Time deposits | 337,586 | 127,497 | |
Subordinated debt | $ 7,000 | $ 7,000 | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Changes in Accumulated Other 79
Changes in Accumulated Other Comprehensive Income (Loss) - Balances in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance at beginning of period | [1] | $ 41,705 | |||
Balance at end of period | $ 117,788 | 117,788 | |||
Net Unrealized Gains (Losses) on Securities | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance at beginning of period | (200) | $ 624 | (520) | $ 107 | |
Change in net unrealized holding gains on securities, before reclassification, net of tax expense | 39 | 360 | 590 | ||
Reclassification for previously unrealized net (gains) losses recognized in income, net of tax expense (benefit) | (118) | (1) | (191) | ||
Balance at end of period | (161) | 506 | (161) | 506 | |
Pension and Post employment costs | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance at beginning of period | (715) | (883) | (715) | (883) | |
Balance at end of period | (715) | (883) | (715) | (883) | |
Accumulated Other Comprehensive Income (Loss) | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance at beginning of period | (915) | (259) | (1,235) | (776) | |
Change in net unrealized holding gains on securities, before reclassification, net of tax expense | 39 | 360 | 590 | ||
Reclassification for previously unrealized net (gains) losses recognized in income, net of tax expense (benefit) | (118) | (1) | (191) | ||
Balance at end of period | $ (876) | $ (377) | $ (876) | $ (377) | |
[1] | Derived from the audited December 31, 2016 Consolidated Financial Statements |
Changes in Accumulated Other 80
Changes in Accumulated Other Comprehensive Income (Loss) - Balances in Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Change in net unrealized holding gains on securities, before reclassification, tax expense | $ 20 | $ 185 | $ 305 | |
Reclassification for previously unrealized net (gains) losses recognized in income, tax expense (benefit) | $ 0 | $ 62 | $ 1 | $ 99 |
Changes in Accumulated Other 81
Changes in Accumulated Other Comprehensive Income (Loss) - Reclassification of Unrealized Gains (Losses) and Impairments on Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Tax expense | $ (273) | $ (326) | $ (406) | $ (669) |
Net Unrealized Gains (Losses) on Securities | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net gains on sale of securities available-for-securities | 180 | 2 | 290 | |
Tax expense | (62) | (1) | (99) | |
Impact on net income | $ 118 | $ 1 | $ 191 |