Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 28, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | COMMUNITY WEST BANCSHARES / | ||
Entity Central Index Key | 1051343 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $32,756,869 | ||
Entity Common Stock, Shares Outstanding | 8,203,658 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets: | ||
Cash and due from banks | $1,609 | $1,449 |
Federal funds sold | 22 | 23 |
Interest-earning demand in other financial institutions | 17,328 | 18,006 |
Cash and cash equivalents | 18,959 | 19,478 |
Money market investments | 99 | 99 |
Investment securities - available-for-sale, at fair value; amortized cost of $22,141 at December 31, 2014 and $18,937 at December 31, 2013 | 22,194 | 18,472 |
Investment securities - held-to-maturity, at amortized cost; fair value of $8,894 at December 31, 2014 and $10,101 at December 31, 2013 | 8,447 | 9,688 |
Federal Home Loan Bank stock, at cost | 1,716 | 1,870 |
Federal Reserve Bank stock, at cost | 1,373 | 1,373 |
Loans: | ||
Held for sale, at lower of cost or fair value | 66,759 | 64,399 |
Held for investment, net of allowance for loan losses of $7,877 at December 31, 2014 and $12,208 at December 31, 2013 | 420,497 | 397,606 |
Total loans | 487,256 | 462,005 |
Other assets acquired through foreclosure, net | 137 | 3,811 |
Premises and equipment, net | 3,053 | 2,983 |
Other assets | 14,084 | 19,221 |
Total assets | 557,318 | 539,000 |
Deposits: | ||
Non-interest-bearing demand | 57,364 | 52,461 |
Interest-bearing demand | 275,631 | 258,445 |
Savings | 15,265 | 16,158 |
Certificates of deposit | 128,824 | 109,071 |
Total deposits | 477,084 | 436,135 |
Other borrowings | 10,000 | 30,000 |
Convertible debentures | 0 | 1,442 |
Other liabilities | 3,227 | 3,867 |
Total liabilities | 490,311 | 471,444 |
Stockholders equity: | ||
Preferred stock - no par value, 10,000,000 shares authorized; 7,014 shares issued and outstanding at December 31, 2014 and 15,600 at December 31, 2013 | 7,014 | 15,600 |
Common stock - no par value, 20,000,000 shares authorized; 8,203,033 shares issued and outstanding at December 31, 2014 and 7,866,783 at December 31, 2013 | 41,957 | 40,165 |
Retained earnings | 18,005 | 12,065 |
Accumulated other comprehensive income (loss) | 31 | -274 |
Total stockholders' equity | 67,007 | 67,556 |
Total liabilities and stockholders' equity | $557,318 | $539,000 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Assets: | ||
Investment securities available-for-sale, amortized cost | $22,141 | $18,937 |
Investment securities held-to-maturity, fair value | 8,894 | 10,101 |
Loans: | ||
Held for investment, allowance for loan losses | $7,877 | $12,208 |
Stockholders equity: | ||
Preferred stock, par value (in dollars per share) | $0 | $0 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 7,014 | 15,600 |
Preferred stock, shares outstanding (in shares) | 7,014 | 15,600 |
Common stock, par value (in dollars per share) | $0 | $0 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 8,203,033 | 7,866,783 |
Common stock, shares outstanding (in shares) | 8,203,033 | 7,866,783 |
CONSOLIDATED_INCOME_STATEMENTS
CONSOLIDATED INCOME STATEMENTS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest income: | |||
Loans, including fees | $27,166 | $27,071 | $30,490 |
Investment securities and other | 838 | 795 | 878 |
Total interest income | 28,004 | 27,866 | 31,368 |
Interest expense: | |||
Deposits | 2,663 | 2,916 | 4,130 |
Other borrowings and convertible debt | 612 | 1,416 | 1,819 |
Total interest expense | 3,275 | 4,332 | 5,949 |
Net interest income (expense) | 24,729 | 23,534 | 25,419 |
(Benefit) provision for loan losses | -5,135 | -1,944 | 4,281 |
Net interest income after provision for loan losses | 29,864 | 25,478 | 21,138 |
Non-interest income: | |||
Other loan fees | 904 | 1,033 | 1,124 |
Gains from loan sales, net | 186 | 361 | 1,660 |
Document processing fees | 394 | 463 | 407 |
Service charges | 284 | 318 | 410 |
Gains from sale of securities | 0 | 0 | 121 |
Other | 429 | 656 | 559 |
Total non-interest income | 2,197 | 2,831 | 4,281 |
Non-interest expenses: | |||
Salaries and employee benefits | 12,154 | 12,783 | 11,514 |
Occupancy, net | 1,852 | 1,814 | 1,829 |
Professional services | 1,551 | 1,219 | 1,484 |
Loan servicing and collection | 845 | 1,444 | 1,492 |
Advertising and marketing | 608 | 512 | 367 |
Data processing | 570 | 549 | 533 |
Stock option | 308 | 59 | 117 |
FDIC assessment | 338 | 1,046 | 1,342 |
Depreciation | 324 | 300 | 306 |
Net (gain) loss on sales/write-downs of foreclosed real estate and repossessed assets | -435 | 388 | 1,161 |
Other | 1,966 | 2,021 | 2,101 |
Total non-interest expenses | 20,081 | 22,135 | 22,246 |
Income before provision for income taxes | 11,980 | 6,174 | 3,173 |
Income taxes | 4,934 | -2,812 | 0 |
Net income | 7,046 | 8,986 | 3,173 |
Dividends and accretion on preferred stock | 937 | 1,039 | 1,046 |
Discount on partial redemption of preferred stock | -159 | 0 | 0 |
Net income available to common stockholders | $6,268 | $7,947 | $2,127 |
Earnings per share: | |||
Basic (in dollars per share) | $0.77 | $1.13 | $0.36 |
Diluted (in dollars per share) | $0.75 | $0.98 | $0.31 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 8,141 | 7,017 | 5,990 |
Diluted (in shares) | 8,505 | 8,390 | 8,233 |
Dividends declared per common share (in dollars per share) | $0.04 | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | |||
Net income | $7,046 | $8,986 | $3,173 |
Other comprehensive income (loss), net: | |||
Unrealized income (loss) on securities available-for-sale (AFS), net (tax effect of ($212), $216, $4 for each respective period presented) | 305 | -309 | -5 |
Realized gain on sale of AFS securities included in income, net (tax effect of $0, $0, $22 for each respective period presented) | 0 | 0 | -99 |
Net other comprehensive income (loss) | 305 | -309 | -104 |
Comprehensive income | $7,351 | $8,677 | $3,069 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other comprehensive income (loss), net: | |||
Unrealized income (loss) on securities-available-for-sale (AFS), net, tax effect | ($212) | $216 | $4 |
Realized gain on sale of AFS securities included in income, net, tax effect | $0 | $0 | $22 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Preferred Stock [Member] | Common Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balances at Dec. 31, 2011 | $15,074 | $33,422 | $139 | $1,991 | $50,626 |
Balances (in shares) at Dec. 31, 2011 | 16,000 | 5,990,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 3,173 | 3,173 | |||
Exercise of stock options | 16 | 16 | |||
Exercise of stock options (in shares) | 5,000 | ||||
Stock option expense | 117 | 117 | |||
Dividends on preferred stock | -779 | -779 | |||
Accretion on preferred stock | 267 | -267 | |||
Other comprehensive income (loss), net | -104 | -104 | |||
Balances at Dec. 31, 2012 | 15,341 | 33,555 | 35 | 4,118 | 53,049 |
Balances (in shares) at Dec. 31, 2012 | 16,000 | 5,995,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 8,986 | 8,986 | |||
Exercise of stock options | 24 | 24 | |||
Exercise of stock options (in shares) | 7,000 | ||||
Conversion of debentures | 6,527 | 6,527 | |||
Conversion of debentures (in shares) | 1,865,000 | ||||
Stock option expense | 59 | 59 | |||
Dividends on preferred stock | -780 | -780 | |||
Accretion on preferred stock | 259 | -259 | |||
Other comprehensive income (loss), net | -309 | -309 | |||
Balances at Dec. 31, 2013 | 15,600 | 40,165 | -274 | 12,065 | 67,556 |
Balances (in shares) at Dec. 31, 2013 | 16,000 | 7,867,000 | 7,866,783 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 7,046 | 7,046 | |||
Exercise of stock options | 54 | 54 | |||
Exercise of stock options (in shares) | 18,000 | ||||
Conversion of debentures | 1,430 | 1,430 | |||
Conversion of debentures (in shares) | 318,000 | ||||
Stock option expense | 308 | 308 | |||
Preferred stock redemption and discount | -8,586 | 159 | -8,427 | ||
Preferred stock redemption and discount (in shares) | -9,000 | ||||
Dividends on preferred stock | -937 | -937 | |||
Dividends on common stock | -328 | -328 | |||
Other comprehensive income (loss), net | 305 | 305 | |||
Balances at Dec. 31, 2014 | $7,014 | $41,957 | $31 | $18,005 | $67,007 |
Balances (in shares) at Dec. 31, 2014 | 7,000 | 8,203,000 | 8,203,033 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $7,046 | $8,986 | $3,173 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Provision for loan losses | -5,135 | -1,944 | 4,281 |
Depreciation | 324 | 300 | 306 |
Stock-based compensation | 308 | 59 | 117 |
Deferred income taxes | 1,222 | 1,123 | -98 |
Net accretion of discounts and premiums for investment securities | 51 | -8 | -17 |
(Gains)/Losses on: | |||
Sales of investment securities, AFS | 0 | 0 | -121 |
Sale of repossessed assets, net | -435 | 388 | 1,161 |
Sale of loans, net | -186 | -361 | -1,660 |
Loans originated for sale and principal collections, net | -2,174 | 4,656 | -4,752 |
Changes in: | |||
Other assets | 4,407 | -2,588 | 8,117 |
Other liabilities | 814 | 224 | -316 |
Servicing rights, net | 197 | 163 | -106 |
Net cash provided by (used in) operating activities | 6,439 | 10,998 | 10,085 |
Cash flows from investing activities: | |||
Proceeds from sale of available-for-sale securities | 0 | 0 | 4,137 |
Principal pay downs and maturities of available-for-sale securities | 3,927 | 4,890 | 9,439 |
Purchase of available-for-sale securities | -7,132 | -11,854 | -1,998 |
Proceeds from principal pay downs and maturities of securities held-to-maturity | 1,190 | 2,327 | 3,264 |
Loan originations and principal collections, net | -19,740 | -27,454 | 78,317 |
Liquidation of restricted stock, net | 154 | 1,413 | 901 |
Net increase (decrease) in interest-bearing deposits in other financial institutions | 0 | 3,554 | -3,413 |
Proceeds from held for investment loan sales | 0 | 6,215 | 0 |
Purchase of premises and equipment, net | -394 | -215 | -284 |
Proceeds from sale of other real estate owned and repossessed assets, net | 5,213 | 3,774 | 8,985 |
Net cash (used in) provided by investing activities | -16,782 | -17,350 | 99,348 |
Cash flows from financing activities: | |||
Net increase (decrease) in deposits | 40,949 | 1,915 | -77,042 |
Net decrease in borrowings | -20,034 | -4,000 | -27,000 |
Exercise of stock options | 54 | 24 | 16 |
Cash dividends paid on common stock | -328 | 0 | 0 |
Redemption of preferred stock | -8,427 | 0 | 0 |
Cash dividends paid on preferred stock | -2,390 | 0 | -195 |
Net cash provided by (used in) financing activities | 9,824 | -2,061 | -104,221 |
Net (decrease) increase in cash and cash equivalents | -519 | -8,413 | 5,212 |
Cash and cash equivalents at beginning of year | 19,478 | 27,891 | 22,679 |
Cash and cash equivalents at end of period | 18,959 | 19,478 | 27,891 |
Cash paid during the period for: | |||
Interest | 3,323 | 4,567 | 6,103 |
Income taxes | 3,101 | 1,181 | 910 |
Non-cash investing and financing activity: | |||
Transfers to other assets acquired through foreclosure, net | 1,984 | 6,084 | 7,329 |
Preferred stock dividends declared, not paid | 0 | 780 | 584 |
Conversion of debentures | $1,408 | $6,410 | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
SUMMARY OF SIGNIFICANT OF ACCOUNTING POLICIES [Abstract] | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Nature of Operations | |||||
Community West Bancshares (“CWBC”), incorporated under the laws of the state of California, is a bank holding company providing full service banking through its wholly-owned subsidiary Community West Bank, N.A. (“CWB” or the “Bank”). These entities are collectively referred to herein as the “Company”. | |||||
Basis of Presentation | |||||
The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States (“GAAP”) and conform to practices within the financial services industry. The accounts of the Company and its consolidated subsidiary are included in these Consolidated Financial Statements. All significant intercompany balances and transactions have been eliminated. | |||||
Use of Estimates | |||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses and fair value of other real estate owned. Although Management believes these estimates to be reasonably accurate, actual amounts may differ. In the opinion of Management, all adjustments considered necessary have been reflected in the financial statements during their preparation. | |||||
Reclassifications | |||||
Certain amounts in the consolidated financial statements as of and for the years ended December 31, 2013 and 2012 have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported. | |||||
Business Segments | |||||
Reportable business segments are determined using the “management approach” and are intended to present reportable segments consistent with how the chief operating decision maker organizes segments within the company for making operating decisions and assessing performance. As of December 31, 2014 and 2013, the Company had only one reportable business segment. | |||||
Cash and Cash Equivalents | |||||
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks (including cash items in process of clearing), and federal funds sold. Cash flows from loans originated by the Company and deposits are reported net. | |||||
The Company maintains amounts due from banks, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. | |||||
Cash Reserve Requirement | |||||
Depository institutions are required by law to maintain reserves against their transaction deposits. The reserves must be held in cash or with the Federal Reserve Bank (“FRB”). The amount of the reserve varies by bank as the bank is permitted to meet this requirement by maintaining the specified amount as an average balance over a two-week period. The total of reserve balances was approximately $0.7 million as of December 31, 2014 and 2013. | |||||
Investment Securities | |||||
Investment securities may be classified as held-to-maturity (“HTM”), available-for-sale (“AFS”) or trading. The appropriate classification is initially decided at the time of purchase. Securities classified as held-to-maturity are those debt securities the Company has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or general economic conditions. These securities are carried at amortized cost. The sale of a security within three months of its maturity date or after the majority of the principal outstanding has been collected is considered a maturity for purposes of classification and disclosure. | |||||
Securities classified as AFS or trading are reported as an asset on the Consolidated Balance Sheets at their estimated fair value. As the fair value of AFS securities changes, the changes are reported net of income tax as an element of other comprehensive income (“OCI”), except for impaired securities. When AFS securities are sold, the unrealized gain or loss is reclassified from OCI to non-interest income. The changes in the fair values of trading securities are reported in non-interest income. Securities classified as AFS are debt securities the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality, and regulatory capital considerations. The Company does not currently have any investment securities classified as trading. | |||||
Interest income is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the amortization of premiums paid over the contractual life of the security using the interest method. For mortgage-backed securities, estimates of prepayments are considered in the constant yield calculations. | |||||
In estimating whether there are any other than temporary impairment losses, management considers 1) the length of time and the extent to which the fair value has been less than amortized cost, 2) the financial condition and near term prospects of the issuer, 3) the impact of changes in market interest rates, and 4) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value and it is not more likely than not the Company would be required to sell the security. | |||||
Declines in the fair value of individual debt securities available for sale that are deemed to be other than temporary are reflected in earnings when identified. The fair value of the debt security then becomes the new cost basis. For individual debt securities where the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other than temporary decline in fair value of the debt security related to 1) credit loss is recognized in earnings, and 2) market or other factors is recognized in other comprehensive income or loss. Credit loss is recorded if the present value of cash flows is less than amortized cost. | |||||
For individual debt securities where the Company intends to sell the security or more likely than not will not recover all of its amortized cost, the other than temporary impairment is recognized in earnings equal to the entire difference between the securities cost basis and its fair value at the balance sheet date. For individual debt securities for which a credit loss has been recognized in earnings, interest accruals and amortization and accretion of premiums and discounts are suspended when the credit loss is recognized. Interest received after accruals have been suspended is recognized on a cash basis. | |||||
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) Stock | |||||
The Company’s subsidiary bank is a member of the Federal Home Loan Bank (“FHLB”) system and maintains an investment in capital stock of the FHLB. The bank also maintains an investment in FRB stock. These investments are considered equity securities with no actively traded market. These investments are carried at cost, which is equal to the value at which they may be redeemed. The dividend income received from the stock is reported in interest income. We conduct a periodic review and evaluation of our FHLB stock to determine if any impairment exists. | |||||
Servicing Assets | |||||
The guaranteed portion of certain Small Business Administration (“SBA”) loans can be sold into the secondary market. Servicing assets are recognized as separate assets when loans are sold with servicing retained. Servicing assets are amortized in proportion to, and over the period of, estimated future net servicing income. The Company uses industry prepayment statistics and its own prepayment experience in estimating the expected life of the loans. Management evaluates its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Fair value is determined using discounted future cash flows calculated on a loan-by-loan basis and aggregated by predominate risk characteristics. The initial servicing asset and resulting gain on sale are calculated based on the difference between the best actual par and premium bids on an individual loan basis. | |||||
Loans Held For Sale | |||||
Loans which are originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value determined on an aggregate basis. Valuation adjustments, if any are recognized through a valuation allowance by charges to lower of cost or market provision. Loans held for sale are mostly comprised of SBA and single family residential loans. The Company did not incur any lower of cost or fair value provision in the years ended December 31, 2014, 2013 and 2012. | |||||
Loans Held for Investment and Interest and Fees from Loans | |||||
Loans are recognized at the principal amount outstanding, net of unearned income, loan participations and amounts charged off. Unearned income includes deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using the level yield method. | |||||
Interest income on loans is accrued daily using the effective interest method and recognized over the terms of the loans. Loan fees collected for the origination of loans less direct loan origination costs (net deferred loan fees) are amortized over the contractual life of the loan through interest income. If the loan has scheduled payments, the amortization of the net deferred loan fee is calculated using the interest method over the contractual life of the loan. If the loan does not have scheduled payments, such as a line of credit, the net deferred loan fee is recognized as interest income on a straight-line basis over the contractual life of the loan commitment. Commitment fees based on a percentage of a customer’s unused line of credit and fees related to standby letters of credit are recognized over the commitment period. | |||||
When loans are repaid, any remaining unamortized balances of unearned fees, deferred fees and costs and premiums and discounts paid on purchased loans are accounted for though interest income. | |||||
Nonaccrual loans: For all loan types, when a borrower discontinues making payments as contractually required by the note, the Company must determine whether it is appropriate to continue to accrue interest. Generally, the Company places loans in a nonaccrual status and ceases recognizing interest income when the loan has become delinquent by more than 90 days or when Management determines that the full repayment of principal and collection of interest is unlikely. The Company may decide to continue to accrue interest on certain loans more than 90 days delinquent if they are well secured by collateral and in the process of collection. Other personal loans are typically charged off no later than 180 days delinquent. | |||||
For all loan types, when a loan is placed on nonaccrual status, all interest accrued but uncollected is reversed against interest income in the period in which the status is changed. Subsequent payments received from the customer are applied to principal and no further interest income is recognized until the principal has been paid in full or until circumstances have changed such that payments are again consistently received as contractually required. The Company occasionally recognizes income on a cash basis for non-accrual loans in which the collection of the remaining principal balance is not in doubt. | |||||
Impaired loans: A loan is considered impaired when, based on current information; it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under 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/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays or payment shortfalls on a case-by-case basis. When determining the possibility of impairment, management considers the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. For collateral-dependent loans, the Company uses the fair value of collateral method to measure impairment. The collateral-dependent loans that recognize impairment are charged down to the fair value less costs to sell. All other loans are measured for impairment either based on the present value of future cash flows or the loan’s observable market price. | |||||
Troubled debt restructured loan (“TDR”): A TDR is a loan on which the Company, for reasons related to the borrower’s financial difficulties, grants a concession to the borrower that the Company would not otherwise consider. These concessions included but are not limited to term extensions, rate reductions and principal reductions. Forgiveness of principal is rarely granted and modifications for all classes of loans are predominately term extensions. A TDR loan is also considered impaired. Generally, a loan that is modified at an effective market rate of interest may no longer be disclosed as a troubled debt restructuring in years subsequent to the restructuring if it is not impaired based on the terms specified by the restructuring agreement. | |||||
Allowance for Loan Losses and Provision for Credit Losses | |||||
The Company maintains a detailed, systematic analysis and procedural discipline to determine the amount of the allowance for loan losses (“ALL”). The ALL is based on estimates and is intended to be appropriate to provide for probable losses inherent in the loan portfolio. This process involves deriving probable loss estimates that are based on migration analysis and historical loss rates, in addition to qualitative factors that are based on management’s judgment. The migration analysis and historical loss rate calculations are based on the annualized loss rates utilizing a twelve-quarter loss history. Migration analysis is utilized for the Commercial Real Estate (“CRE”), Commercial, Commercial Agriculture, Small Business Administration (“SBA”), Home Equity Line of Credit (“HELOC”), Single Family Residential, and Consumer portfolios. The historical loss rate method is utilized primarily for the Manufactured Housing portfolio. The migration analysis takes into account the risk rating of loans that are charged off in each loan category. Loans that are considered Doubtful are typically charged off. The following is a description of the characteristics of loan ratings. Loan ratings are reviewed as part of our normal loan monitoring process, but, at a minimum, updated on an annual basis. | |||||
Outstanding – This is the highest quality rating that is assigned to any loan in the portfolio. These loans are made to the highest quality borrowers with strong financial statements and unquestionable repayment sources. Collateral securing these types of credits are generally cash deposits in the bank or marketable securities held in custody. | |||||
Good – Loans rated in this category are strong loans, underwritten well, that bear little risk of loss to the Company. Loans in this category are loans to quality borrowers with very good financial statements that present an identifiable strong primary source and good secondary source of repayment. Generally, these credits are well collateralized by good quality and liquid assets or low loan to value market real estate. | |||||
Pass - Loans rated in this category are acceptable loans, appropriately underwritten, bearing an ordinary risk of loss to the Company. Loans in this category are loans to quality borrowers with financial statements presenting a good primary source as well as an adequate secondary source of repayment. In the case of individuals, borrowers with this rating are quality borrowers demonstrating a reasonable level of secure income, a net worth adequate to support the loan and presenting a good primary source as well as an adequate secondary source of repayment. | |||||
Watch – Acceptable credit that requires a temporary increase in attention by management. This can be caused by declines in sales, margins, liquidity or working capital. Generally the primary weakness is lack of current financial statements and industry issues. | |||||
Special Mention - A Special Mention loan has potential weaknesses that require management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution's credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. | |||||
Substandard - A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize full collection of amounts due. They are characterized by the distinct possibility that the Company will sustain some loss if the borrower’s deficiencies are not corrected. | |||||
Doubtful - A loan classified Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. | |||||
Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable loans is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future. Losses are taken in the period in which they are considered uncollectible. | |||||
The Company’s ALL is maintained at a level believed appropriate by management to absorb known and inherent probable losses on existing loans. The allowance is charged for losses when management believes that full recovery on the loan is unlikely. The following is the Company’s policy regarding charging off loans. | |||||
Commercial, CRE and SBA Loans | |||||
Charge-offs on these loan categories are taken as soon as all or a portion of any loan balance is deemed to be uncollectible. A loan is considered impaired when, based on current information, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under 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/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Generally, loan balances are charged-down to the fair value of the collateral, if, based on a current assessment of the value, an apparent deficiency exists. In the event there is no perceived equity, the loan is charged-off in full. Unsecured loans which are delinquent over 90 days are also charged-off in full. | |||||
Single Family Real Estate, HELOC’s and Manufactured Housing Loans | |||||
Consumer loans and residential mortgages secured by one-to-four family residential properties, HELOC and manufactured housing loans in which principal or interest is due and unpaid for 90 days, are evaluated for impairment. Loan balances are charged-off to the fair value of the property, less estimated selling costs, if, based on a current appraisal, an apparent deficiency exists. In the event there is no perceived equity, the loan is generally fully charged-off. Other consumer loans which are not secured and unpaid over 90-120 days are charged-off in full. | |||||
Consumer Loans | |||||
All consumer loans (excluding real estate mortgages, HELOCs and savings secured loans) are charged-off or charged-down to net recoverable value before becoming 120 days or five payments delinquent. | |||||
The ALL calculation for the different loan portfolios is as follows: | |||||
· | Commercial Real Estate, Commercial, Commercial Agriculture, SBA, HELOC, Single Family Residential, and Consumer – Migration analysis combined with risk rating is used to determine the required ALL for all non-impaired loans. In addition, the migration results are adjusted based upon qualitative factors that affect this specific portfolio category. Reserves on impaired loans are determined based upon the individual characteristics of the loan. | ||||
· | Manufactured Housing – The ALL is calculated on the basis of loss history and risk rating, which is primarily a function of delinquency. In addition, the loss results are adjusted based upon qualitative factors that affect this specific portfolio. | ||||
The Company evaluates and individually assesses for impairment loans generally greater than $500,000, classified as substandard or doubtful in addition to loans either on nonaccrual, considered a TDR or when other conditions exist which lead management to review for possible impairment. Measurement of impairment on impaired loans is determined on a loan-by-loan basis and in total establishes a specific reserve for impaired loans. The amount of impairment is determined by comparing the recorded investment in each loan with its value measured by one of three methods: | |||||
· | The expected future cash flows are estimated and then discounted at the effective interest rate. | ||||
· | The value of the underlying collateral net of selling costs. Selling costs are estimated based on industry standards, the Company’s actual experience or actual costs incurred as appropriate. When evaluating real estate collateral, the Company typically uses appraisals or valuations, no more than twelve months old at time of evaluation. When evaluating non-real estate collateral securing the loan, the Company will use audited financial statements or appraisals no more than twelve months old at time of evaluation. Additionally, for both real estate and non-real estate collateral, the Company may use other sources to determine value as deemed appropriate. | ||||
· | The loan’s observable market price. | ||||
Interest income is not recognized on impaired loans except for limited circumstances in which a loan, although impaired, continues to perform in accordance with the loan contract and the borrower provides financial information to support maintaining the loan on accrual. | |||||
The Company determines the appropriate ALL on a monthly basis. Any differences between estimated and actual observed losses from the prior month are reflected in the current period in determining the appropriate ALL determination and adjusted as deemed necessary. The review of the appropriateness of the allowance takes into consideration such factors as concentrations of credit, changes in the growth, size and composition of the loan portfolio, overall and individual portfolio quality, review of specific problem loans, collateral, guarantees and economic and environmental conditions that may affect the borrowers' ability to pay and/or the value of the underlying collateral. Additional factors considered include: geographic location of borrowers, changes in the Company’s product-specific credit policy and lending staff experience. These estimates depend on the outcome of future events and, therefore, contain inherent uncertainties. | |||||
Another component of the ALL considers qualitative factors related to non-impaired loans. The qualitative portion of the allowance on each of the loan pools is based on the following factors: | |||||
· | Concentrations of credit | ||||
· | International risk | ||||
· | Trends in volume, maturity, and composition | ||||
· | Volume and trend in delinquency | ||||
· | Economic conditions | ||||
· | Outside exams | ||||
· | Geographic distance | ||||
· | Policy and changes | ||||
· | Staff experience and ability | ||||
Off Balance Sheet and Credit Exposure | |||||
In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheets. Losses would be experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from the borrower, which may not be as financially sound in the current period as they were when the commitment was originally made. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral. | |||||
As with outstanding loans, the Company applies qualitative factors and utilization rates to its off-balance sheet obligations in determining an estimate of losses inherent in these contractual obligations. The estimate for loan losses on off-balance sheet instruments is included within other liabilities and the charge to income that establishes this liability is include in non-interest expense. | |||||
Premises and Equipment | |||||
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter. Generally, the estimated useful lives of other items of premises and equipment are as follows: | |||||
Years | |||||
Building and improvements | 31.5 | ||||
Furniture and equipment | 5 – 10 | ||||
Electronic equipment and software | 3 – 5 | ||||
Foreclosed Real Estate and Repossessed Assets | |||||
Foreclosed real estate and other repossessed assets are recorded at fair value at the time of foreclosure less estimated costs to sell. Any excess of loan balance over the fair value less estimated costs to sell of the other assets is charged-off against the allowance for loan losses. Any excess of the fair value less estimated costs to sell over the loan balance is recorded as a loan loss recovery to the extent of the loan loss previously charged-off against the allowance for loan losses; and, if greater, recorded as a gain on foreclosed assets. Subsequent to the legal ownership date, management periodically performs a new valuation and the asset is carried at the lower of carrying amount or fair value less estimated costs to sell. Operating expenses or income, and gains or losses on disposition of such repossessed assets, are recorded in current operations. | |||||
Income Taxes | |||||
The Company uses the asset and liability method, which recognizes an asset or liability representing the tax effects of future deductible or taxable amounts that have been recognized in the consolidated financial statements. Due to tax regulations, certain items of income and expense are recognized in different periods for tax return purposes than for financial statement reporting. These items represent “temporary differences.” Deferred income taxes are recognized for the tax effect of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if, based on weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets may not be realized. Any interest or penalties assessed by the taxing authorities is classified in the financial statements as income tax expense. Deferred tax assets are included in other assets on the consolidated balance sheets. | |||||
Management evaluates the Company’s deferred tax asset for recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized. | |||||
The Company is subject to the provisions of ASC 740, Income Taxes (“ASC 740”). ASC 740 prescribes a more-likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company evaluates income tax accruals in accordance with ASC 740 guidance on uncertain tax positions. | |||||
Bank Owned Life Insurance | |||||
Bank owned life insurance is stated at its cash surrender value with changes recorded in other non-interest income in the consolidated statements of operations. The cash surrender value of the underlying policies was $3.2 million and $3.1 million as of December 31, 2014 and 2013, respectively. There are no loans offset against cash surrender values, and there are no restrictions as to the use of proceeds. | |||||
Preferred Stock | |||||
The Company’s Series A Preferred Stock paid cumulative dividends at a rate of 5% per year until February 15, 2014 then increased to a rate of 9% per year thereafter. The Series A Preferred Stock has no maturity date and ranks senior to the Common Stock with respect to the payment of dividends and distributions and amounts payable upon liquidation, dissolution and winding up of the Company. | |||||
Fair Value of Financial Instruments | |||||
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities. FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) established a framework for measuring fair value establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The Company uses various valuation approaches, including market, income and/or cost approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would consider in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs, as follows: | |||||
· | Level 1— Observable quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||
· | Level 2— Observable quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, matrix pricing or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly in the market. | ||||
· | Level 3— Model-based techniques where all significant assumptions are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques may include use of discounted cash flow models and similar techniques. | ||||
The availability of observable inputs varies based on the nature of the specific financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. | |||||
Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. When market assumptions are available, ASC 820 requires the Company to make assumptions regarding the assumptions that market participants would use to estimate the fair value of the financial instrument at the measurement date. | |||||
FASB ASC 825, Financial Instruments (“ASC 825”) requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. | |||||
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2014 or 2013. The estimated fair value amounts for December 31, 2014 and 2013 have been measured as of period-end, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those dates. As such, the estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at the period-end. | |||||
The information presented in Note 15, “Fair Value Measurement,” should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. | |||||
Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimate, comparisons between the Company’s disclosures and those of other companies or banks may not be meaningful. | |||||
The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: | |||||
Cash and cash equivalents | |||||
The carrying amounts reported in the consolidated balance sheets for cash and due from banks approximate their fair value. | |||||
Money market investments | |||||
The carrying amounts reported in the consolidated balance sheets for money market investments approximate their fair value. | |||||
Investment securities | |||||
The fair value of Farmer Mac class A stock is based on quoted market prices and are categorized as Level 1 of the fair value hierarchy. | |||||
The fair value of other investment securities were determined based on matrix pricing. Matrix pricing is a mathematical technique that utilizes observable market inputs including, for example, yield curves, credit ratings and prepayment speeds. Fair values determined using matrix pricing are generally categorized as Level 2 in the fair value hierarchy. | |||||
FRB and FHLB stock | |||||
CWB is a member of the FHLB system and maintains an investment in capital stock of the FHLB. CWB also maintain an investment in FRB stock. These investments are carried at cost since no ready market exists for them, and they have no quoted market value. The Company conducts a periodic review and evaluation of our FHLB stock to determine if any impairment exists. The fair values have been categorized as Level 2 in the fair value hierarchy. | |||||
Loans | |||||
Fair value for loans is estimated based on discounted cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality with adjustments that the Company believes a market participant would consider in determining fair value based on a third party independent valuation. As a result, the fair value for loans is categorized as Level 2 in the fair value hierarchy. | |||||
Deposit liabilities | |||||
The fair value disclosed for demand and savings deposits is by definition equal to the amount payable on demand at their reporting date (that is, their carrying amount) which the Company believes a market participant would consider in determining fair value. The carrying amount for variable-rate deposit accounts approximates their fair value. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on these deposits. The fair value measurement of the deposit liabilities is categorized as Level 2 in the fair value hierarchy. | |||||
Federal Home Loan Bank advances and other borrowings | |||||
The fair values of the Company’s borrowings are estimated using discounted cash flow analyses, based on the market rates for similar types of borrowing arrangements. The other borrowings have been categorized as Level 3 in the fair value hierarchy. The FHLB advances have been categorized as Level 2 in the fair value hierarchy. | |||||
Off-balance sheet instruments | |||||
Fair values for the Company’s off-balance sheet instruments (lending commitments and standby letters of credit) are based on quoted fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. | |||||
Earnings Per Share | |||||
Basic earnings per common share is computed using the weighted average number of common shares outstanding for the period divided into the net income (loss) available to common shareholders. Diluted earnings per share include the effect of all dilutive potential common shares for the period. Potentially dilutive common shares include stock options, warrants and shares that could result from the conversion of debenture bonds. | |||||
Recent Accounting Pronouncements | |||||
In July 2013, the FASB issued guidance within ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” The amendments in ASU 2013-11 to Topic 740, Income Taxes, updates the presentation of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. | |||||
In January 2014, the FASB issued guidance within ASU 2014-04, “Receivables - Troubled Debt Restructurings by Creditors: Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” The amendments in ASU 2014-04, Subtopic 310-40, Receivables -Troubled Debt Restructurings by Creditors, clarify that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure, or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASC 2014-04 are effective for the Company using either a modified retrospective transition method or a prospective transition method for reporting periods beginning after December 15, 2014. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |||||
In May 2014, the FASB issued guidance codified within ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers,” which amends the guidance in former Topic 605, Revenue Recognition. The new revenue recognition standard will supersede virtually all revenue guidance in U.S. GAAP, including industry specific guidance. The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. ASU 2014-09 is effective for the Company for annual reporting periods beginning after December 15, 2016. The Company may elect to apply the amendments of this Update using one of the following two methods: 1) retrospectively to each prior reporting period presented or 2) retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. The Company is currently evaluating the impact of the provisions in this standard on the Company’s consolidated financial statements. |
INVESTMENT_SECURITIES
INVESTMENT SECURITIES | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES | 2. INVESTMENT SECURITIES | ||||||||||||||||||||||||||||||||||||||||
The amortized cost and estimated fair value of investment securities are as follows: | |||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||||
Cost | Gains | (Losses) | Value | ||||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,846 | $ | 65 | $ | (49 | ) | $ | 7,862 | ||||||||||||||||||||||||||||||||
U.S. government agency collateralized mortgage obligations ("CMO") | 14,229 | 73 | (31 | ) | 14,271 | ||||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | 66 | - | (5 | ) | 61 | ||||||||||||||||||||||||||||||||||||
Total | $ | 22,141 | $ | 138 | $ | (85 | ) | $ | 22,194 | ||||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | 8,447 | $ | 447 | $ | - | $ | 8,894 | |||||||||||||||||||||||||||||||||
Total | $ | 8,447 | $ | 447 | $ | - | $ | 8,894 | |||||||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||||
Cost | Gains | (Losses) | Value | ||||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,867 | $ | - | $ | (389 | ) | $ | 7,478 | ||||||||||||||||||||||||||||||||
U.S. government agency MBS | 61 | 3 | - | 64 | |||||||||||||||||||||||||||||||||||||
U.S. government agency CMO | 10,943 | 11 | (93 | ) | 10,861 | ||||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | 66 | 3 | - | 69 | |||||||||||||||||||||||||||||||||||||
Total | $ | 18,937 | $ | 17 | $ | (482 | ) | $ | 18,472 | ||||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | 9,688 | $ | 442 | $ | (29 | ) | $ | 10,101 | ||||||||||||||||||||||||||||||||
Total | $ | 9,688 | $ | 442 | $ | (29 | ) | $ | 10,101 | ||||||||||||||||||||||||||||||||
At December 31, 2014 and 2013, $30.6 million and $28.0 million of securities at carrying value, respectively, were pledged to the Federal Home Loan Bank (“FHLB”), as collateral for current and future advances. | |||||||||||||||||||||||||||||||||||||||||
The Company had no investment security sales in 2014 or 2013. | |||||||||||||||||||||||||||||||||||||||||
The maturity periods and weighted average yields of investment securities at December 31, 2014 and 2013 were as follows: | |||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||||||||||
Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | |||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||||
Securities available-for-sale | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,862 | 2.5 | % | $ | - | - | $ | - | - | $ | - | - | $ | 7,862 | 2.5 | % | ||||||||||||||||||||||||
U.S. government agency CMO | - | - | 7,826 | 1 | % | 2,801 | 0.6 | % | 3,644 | 1.1 | % | 14,271 | 1.1 | % | |||||||||||||||||||||||||||
Farmer Mac class A stock | - | - | - | - | - | - | - | - | 61 | - | |||||||||||||||||||||||||||||||
Total | $ | 7,862 | 2.5 | % | $ | 7,826 | 1 | % | $ | 2,801 | 0.6 | % | $ | 3,644 | 1.1 | % | $ | 22,194 | 1.3 | % | |||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | - | - | $ | 3,235 | 4 | % | $ | 5,212 | 2.4 | % | $ | - | - | $ | 8,447 | 2.9 | % | |||||||||||||||||||||||
Total | $ | - | - | $ | 3,235 | 4 | % | $ | 5,212 | 2.4 | % | $ | - | - | $ | 8,447 | 2.9 | % | |||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||||||
Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | |||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||||
Securities available-for-sale | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,478 | 1.9 | % | $ | - | - | $ | - | - | $ | - | - | $ | 7,478 | 1.9 | % | ||||||||||||||||||||||||
U.S. government agency MBS | - | - | - | - | 64 | 2.2 | % | - | - | 64 | 2.2 | % | |||||||||||||||||||||||||||||
U.S. government agency CMO | - | - | 5,075 | 0.6 | % | 3,854 | 0.6 | % | 1,932 | 0.9 | % | 10,861 | 0.7 | % | |||||||||||||||||||||||||||
Farmer Mac class A stock | - | - | - | - | - | - | - | - | 69 | - | |||||||||||||||||||||||||||||||
Total | $ | 7,478 | 1.9 | % | $ | 5,075 | 0.6 | % | $ | 3,918 | 0.6 | % | $ | 1,932 | 0.9 | % | $ | 18,472 | 1.2 | % | |||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | - | - | $ | 2,641 | 4.4 | % | $ | 7,047 | 2.7 | % | $ | - | - | $ | 9,688 | 3.1 | % | |||||||||||||||||||||||
Total | $ | - | - | $ | 2,641 | 4.4 | % | $ | 7,047 | 2.7 | % | $ | - | - | $ | 9,688 | 3.1 | % | |||||||||||||||||||||||
The amortized cost and fair value of investment securities by contractual maturities as of the periods presented were as shown below: | |||||||||||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Amortized | Estimated | Amortized | Estimated | ||||||||||||||||||||||||||||||||||||||
Cost | Fair Value | Cost | Fair Value | ||||||||||||||||||||||||||||||||||||||
Securities available for sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 7,846 | $ | 7,862 | $ | 7,867 | $ | 7,478 | |||||||||||||||||||||||||||||||||
After one year through five years | 7,798 | 7,826 | 5,070 | 5,075 | |||||||||||||||||||||||||||||||||||||
After five years through ten years | 2,792 | 2,801 | 3,945 | 3,918 | |||||||||||||||||||||||||||||||||||||
After ten years | 3,639 | 3,644 | 1,989 | 1,932 | |||||||||||||||||||||||||||||||||||||
Farmer Mac class A stock | 66 | 61 | 66 | 69 | |||||||||||||||||||||||||||||||||||||
$ | 22,141 | $ | 22,194 | $ | 18,937 | $ | 18,472 | ||||||||||||||||||||||||||||||||||
Securities held to maturity | |||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||||||
After one year through five years | 3,235 | 3,479 | 2,641 | 2,815 | |||||||||||||||||||||||||||||||||||||
After five years through ten years | 5,212 | 5,415 | 7,047 | 7,286 | |||||||||||||||||||||||||||||||||||||
After ten years | - | - | - | - | |||||||||||||||||||||||||||||||||||||
$ | 8,447 | $ | 8,894 | $ | 9,688 | $ | 10,101 | ||||||||||||||||||||||||||||||||||
Actual maturities may differ from contractual maturities as borrowers or issuers have the right to prepay or call the investment securities. Changes in interest rates may also impact prepayments. | |||||||||||||||||||||||||||||||||||||||||
The following tables show all securities that are in an unrealized loss position: | |||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||||||||||
Less Than Twelve Months | More Than Twelve Months | Total | |||||||||||||||||||||||||||||||||||||||
Gross | Gross | Gross | |||||||||||||||||||||||||||||||||||||||
Unrealized | Fair | Unrealized | Fair | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||
Losses | Value | Losses | Value | Losses | Value | ||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 23 | $ | 1,918 | $ | 26 | $ | 3,971 | $ | 49 | $ | 5,889 | |||||||||||||||||||||||||||||
U.S. government agency CMO | - | - | 31 | 4,090 | 31 | 4,090 | |||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | 5 | 61 | - | - | 5 | 61 | |||||||||||||||||||||||||||||||||||
$ | 28 | $ | 1,979 | $ | 57 | $ | 8,061 | $ | 85 | $ | 10,040 | ||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. Government-agency MBS | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||||||
Less Than Twelve Months | More Than Twelve Months | Total | |||||||||||||||||||||||||||||||||||||||
Gross | Gross | Gross | |||||||||||||||||||||||||||||||||||||||
Unrealized | Fair | Unrealized | Fair | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||
Losses | Value | Losses | Value | Losses | Value | ||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 389 | $ | 7,478 | $ | - | $ | - | $ | 389 | $ | 7,478 | |||||||||||||||||||||||||||||
U.S. government agency CMO | 93 | 6,958 | - | - | 93 | 6,958 | |||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
$ | 482 | $ | 14,436 | $ | - | $ | - | $ | 482 | $ | 14,436 | ||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. Government-agency MBS | $ | 29 | $ | 1,063 | $ | - | $ | - | $ | 29 | $ | 1,063 | |||||||||||||||||||||||||||||
Total | $ | 29 | $ | 1,063 | $ | - | $ | - | $ | 29 | $ | 1,063 | |||||||||||||||||||||||||||||
As of December 31, 2014 and 2013, there were six and nine securities, respectively, in an unrealized loss position. | |||||||||||||||||||||||||||||||||||||||||
Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers, among other things (i) the length of time and the extent to which the fair value has been less than cost (ii) the financial condition and near-term prospects of the issuer and (iii) the Company’s intent to sell an impaired security and if it is not more likely than not it will be required to sell the security before the recovery of its amortized basis. | |||||||||||||||||||||||||||||||||||||||||
The unrealized losses are primarily due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date, repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of December 31, 2014 and 2013, management believes the impairments detailed in the table above are temporary and no other-than-temporary impairment loss has been realized in the Company’s consolidated income statements. |
LOAN_SALES_AND_SERVICING
LOAN SALES AND SERVICING | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
LOAN SALES AND SERVICING [Abstract] | |||||||||||||
LOAN SALES AND SERVICING | 3. LOAN SALES AND SERVICING | ||||||||||||
SBA and Agriculture Loans | |||||||||||||
The Company periodically sells the guaranteed portion of selected SBA loans into the secondary market, on a servicing-retained basis. The Company retains the unguaranteed portion of these loans and services the loans as required under the SBA programs to retain specified yield amounts. | |||||||||||||
On certain SBA loan sales that occurred prior to 2003, the Company retained interest only strips (“I/O strips”), which represent the present value of excess net cash flows generated by the difference between (a) interest at the stated rate paid by borrowers and (b) the sum of (i) pass-through interest paid to third-party investors and (ii) contractual servicing fees. The fair value is determined on a quarterly basis through a discounted cash flow analysis prepared by an independent third party using industry prepayment speeds. | |||||||||||||
Historically, the Company elected to use the amortizing method for the treatment of servicing assets and measured for impairment on a quarterly basis through a discounted cash flow analysis prepared by an independent third party using industry prepayment speeds. In connection with the sale of a group of SBA loans in 2012, the Company recorded a servicing asset and elected to measure this asset at fair value in accordance with ASC 825-10 – Fair Value Option to better reflect the impact of subsequent changes in interest rates. | |||||||||||||
The SBA program stipulates that the Company retains a minimum of 5% of the loan balance, which is unguaranteed. The percentage of each unguaranteed loan in excess of 5% may be periodically sold to a third party, typically for a cash premium. The Company records servicing liabilities for the sold unguaranteed loans. These servicing liabilities are calculated based on the present value of the estimated future servicing costs associated with each loan. The balance of the remaining servicing liabilities at December 31, 2014 and 2013 were not material to the Company’s financial position or results of operations. | |||||||||||||
The Company may also periodically sell certain SBA loans into the secondary market, on a servicing-released basis, typically for a cash premium. As of December 31, 2014 and 2013, the Company had approximately $40.8 million and $47.6 million, respectively, of SBA loans included in loans held for sale. As of December 31, 2014 and 2013, the principal balance of SBA loans serviced for others was $24.6 million and $30.7 million, respectively. | |||||||||||||
The Company’s agricultural lending program includes loans for agricultural land, agricultural operational lines, and agricultural term loans for crops, equipment and livestock. The primary products are supported by guarantees issued from the USDA, FSA, and the USDA Business and Industry loan program. | |||||||||||||
As of December 31, 2014 and 2013, the Company had $25.1 million and $16.8 million of USDA loans included in loans held for sale, respectively. As of December 31, 2014 and 2013, the principal balance of USDA loans serviced for others was $1.4 million and $2.5 million, respectively. | |||||||||||||
The following table presents the I/O strips activity as of the periods presented: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 334 | $ | 426 | $ | 419 | |||||||
Adjustment to fair value | (41 | ) | (92 | ) | 7 | ||||||||
Ending balance | $ | 293 | $ | 334 | $ | 426 | |||||||
The fair value adjustments on the I/O strips are recorded in non-interest income. | |||||||||||||
The key data assumptions used in estimating the fair value of the I/O strips as of the periods presented were as follows: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Weighted-average constant prepayment rate | 5.63 | % | 5.24 | % | |||||||||
Weighted-average life (in years) | 6 | 6 | |||||||||||
Weighted-average discount rate | 11.52 | % | 12.89 | % | |||||||||
A sensitivity analysis of the fair value of the I/O strips to changes in certain key assumptions is presented in the following table: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
( in thousands) | |||||||||||||
Discount Rate | |||||||||||||
Increase in fair value from 100 basis point decrease | $ | 8 | $ | 9 | |||||||||
Decrease in fair value from 100 basis point increase | (8 | ) | (9 | ) | |||||||||
Constant Prepayment Rate | |||||||||||||
Increase in fair value from 10 percent decrease | 4 | 5 | |||||||||||
Decrease in fair value from 10 percent increase | (4 | ) | (5 | ) | |||||||||
The following is a summary of the activity for servicing rights accounted for under the amortization method: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 268 | $ | 383 | $ | 625 | |||||||
Amortization | (101 | ) | (115 | ) | (242 | ) | |||||||
Ending balance | $ | 167 | $ | 268 | $ | 383 | |||||||
The amortization on the servicing rights has been recorded in non-interest income. | |||||||||||||
The following is a summary of the activity for servicing rights accounted for under the fair value method: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 300 | $ | 348 | $ | - | |||||||
Additions through loan sales | - | - | 349 | ||||||||||
Adjustment to fair value | (97 | ) | (48 | ) | (1 | ) | |||||||
Ending balance | $ | 203 | $ | 300 | $ | 348 | |||||||
The fair value adjustments on the servicing rights have been recorded in non-interest income. | |||||||||||||
The key data and assumptions used in estimating the fair value of servicing rights as of the periods presented were as follows: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Weighted-average constant prepayment rate | 6.03 | % | 5.04 | % | |||||||||
Weighted-average life (in years) | 8 | 9 | |||||||||||
Weighted-average discount rate | 11.78 | % | 12.93 | % | |||||||||
A sensitivity analysis of the fair value of servicing rights to change in certain key assumptions is presented in the following table: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Discount Rate | |||||||||||||
Increase in fair value from 100 basis points decrease | $ | 9 | $ | 12 | |||||||||
Decrease in fair value from 100 basis points increase | (8 | ) | (12 | ) | |||||||||
Constant Prepayment Rate | |||||||||||||
Increase in fair value from 10 percent decrease | 5 | 6 | |||||||||||
Decrease in fair value from 10 percent increase | (5 | ) | (6 | ) | |||||||||
This sensitivity analysis generally cannot be extrapolated because the relationship of a change in one key assumption to the change in the fair value of the Company’s servicing rights usually is not linear. In addition, the effect of changing one key assumption without changing other assumptions is not a viable option. | |||||||||||||
Mortgage Loans | |||||||||||||
From time to time, the Company enters into mortgage loan rate lock commitments (normally for 30 days) with potential borrowers. In conjunction therewith, the Company enters into a forward sale commitment to sell the locked loan to a third party investor. This forward sale agreement requires delivery of the loan on a “best efforts” basis but does not obligate the Company to deliver if the mortgage loan does not fund. | |||||||||||||
The mortgage rate lock agreement and the forward sale agreement qualify as derivatives. The value of these derivatives is generally equal to the fee, if any, charged to the borrower at inception but may fluctuate in the event of changes in interest rates. These derivative financial instruments are recorded at fair value if material. Although the Company does not attempt to qualify these transactions for the special hedge accounting, management believes that changes in the fair value of the two commitments generally offset and create an economic hedge. At December 31, 2014, the Company had $1.9 million in outstanding mortgage loan interest rate lock and forward sale commitments. The value of related derivative instruments was not material to the Company’s financial position or results of operations. The Company had no commitments of this nature at December 31, 2013. At December 31, 2014 the Company had $0.8 million of mortgage loans held for sale. |
LOANS_HELD_FOR_INVESTMENT
LOANS HELD FOR INVESTMENT | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
LOANS HELD FOR INVESTMENT [Abstract] | |||||||||||||||||||||||||||||||||
LOANS HELD FOR INVESTMENT | 4. LOANS HELD FOR INVESTMENT | ||||||||||||||||||||||||||||||||
The composition of the Company’s loans held for investment loan portfolio follows: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 169,662 | $ | 172,055 | |||||||||||||||||||||||||||||
Commercial real estate | 159,432 | 142,678 | |||||||||||||||||||||||||||||||
Commercial | 49,683 | 45,647 | |||||||||||||||||||||||||||||||
SBA | 21,336 | 24,066 | |||||||||||||||||||||||||||||||
HELOC | 13,481 | 15,418 | |||||||||||||||||||||||||||||||
Single family real estate | 14,957 | 10,150 | |||||||||||||||||||||||||||||||
Consumer | 178 | 184 | |||||||||||||||||||||||||||||||
428,729 | 410,198 | ||||||||||||||||||||||||||||||||
Allowance for loan losses | 7,877 | 12,208 | |||||||||||||||||||||||||||||||
Deferred fees, net | 118 | 45 | |||||||||||||||||||||||||||||||
Discount on SBA loans | 237 | 339 | |||||||||||||||||||||||||||||||
Total loans held for investment, net | $ | 420,497 | $ | 397,606 | |||||||||||||||||||||||||||||
The following tables present the contractual aging of the recorded investment in past due held for investment loans by class of loans: | |||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||
Recorded | |||||||||||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | Over 90 Days | Total | Over 90 Days | |||||||||||||||||||||||||||||
Current | Past Due | Past Due | Past Due | Past Due | Total | and Accruing | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 169,233 | $ | 239 | $ | - | $ | 190 | $ | 429 | $ | 169,662 | $ | - | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 119,090 | 632 | - | 186 | 818 | 119,908 | - | ||||||||||||||||||||||||||
SBA 504 1st trust deed | 27,297 | - | - | - | - | 27,297 | - | ||||||||||||||||||||||||||
Land | 1,569 | - | - | - | - | 1,569 | - | ||||||||||||||||||||||||||
Construction | 10,658 | - | - | - | - | 10,658 | - | ||||||||||||||||||||||||||
Commercial | 49,683 | - | - | - | - | 49,683 | - | ||||||||||||||||||||||||||
SBA | 21,333 | 3 | - | - | 3 | 21,336 | - | ||||||||||||||||||||||||||
HELOC | 13,459 | - | - | 22 | 22 | 13,481 | - | ||||||||||||||||||||||||||
Single family real estate | 14,821 | - | 136 | 136 | 14,957 | - | |||||||||||||||||||||||||||
Consumer | 178 | - | - | - | - | 178 | - | ||||||||||||||||||||||||||
Total | $ | 427,321 | $ | 874 | $ | - | $ | 534 | $ | 1,408 | $ | 428,729 | $ | - | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Recorded | |||||||||||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | Over 90 Days | Total | Over 90 Days | |||||||||||||||||||||||||||||
Current | Past Due | Past Due | Past Due | Past Due | Total | and Accruing | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 170,647 | $ | 1,076 | $ | 135 | $ | 197 | $ | 1,408 | $ | 172,055 | $ | - | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 96,393 | - | - | - | - | 96,393 | - | ||||||||||||||||||||||||||
SBA 504 1st trust deed | 33,798 | - | - | 467 | 467 | 34,265 | - | ||||||||||||||||||||||||||
Land | 1,817 | 140 | - | - | 140 | 1,957 | - | ||||||||||||||||||||||||||
Construction | 10,063 | - | - | - | - | 10,063 | - | ||||||||||||||||||||||||||
Commercial | 45,605 | 42 | - | - | 42 | 45,647 | - | ||||||||||||||||||||||||||
SBA (1) | 23,613 | 149 | - | 304 | 453 | 24,066 | - | ||||||||||||||||||||||||||
HELOC | 15,393 | 25 | - | - | 25 | 15,418 | - | ||||||||||||||||||||||||||
Single family real estate | 10,084 | - | - | 66 | 66 | 10,150 | 66 | ||||||||||||||||||||||||||
Consumer | 184 | - | - | - | - | 184 | - | ||||||||||||||||||||||||||
Total | $ | 407,597 | $ | 1,432 | $ | 135 | $ | 1,034 | $ | 2,601 | $ | 410,198 | $ | 66 | |||||||||||||||||||
-1 | $0.4 million of the $0.5 million SBA loans past due are guaranteed by the SBA. | ||||||||||||||||||||||||||||||||
Allowance for Loan Losses | |||||||||||||||||||||||||||||||||
The following table summarizes the changes in the allowance for loan losses: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 12,208 | $ | 14,464 | $ | 15,270 | |||||||||||||||||||||||||||
Charge-offs | (766 | ) | (2,594 | ) | (7,016 | ) | |||||||||||||||||||||||||||
Recoveries | 1,570 | 2,282 | 1,929 | ||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | 804 | (312 | ) | (5,087 | ) | ||||||||||||||||||||||||||||
Provision | (5,135 | ) | (1,944 | ) | 4,281 | ||||||||||||||||||||||||||||
Ending balance | $ | 7,877 | $ | 12,208 | $ | 14,464 | |||||||||||||||||||||||||||
As of December 31, 2014 and 2013, the Company had reserves for credit losses on undisbursed loans of $39,000 and $0.1 million which were included in Other liabilities. | |||||||||||||||||||||||||||||||||
The following tables summarize the changes in the allowance for loan losses by portfolio type: | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||||||||
Manufactured | Commercial | Single Family | |||||||||||||||||||||||||||||||
Housing | Real Estate | Commercial | SBA | HELOC | Real Estate | Consumer | Total | ||||||||||||||||||||||||||
2014 | (in thousands) | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,114 | $ | 2,552 | $ | 2,064 | $ | 1,951 | $ | 280 | $ | 245 | $ | 2 | $ | 12,208 | |||||||||||||||||
Charge-offs | (543 | ) | (16 | ) | - | (171 | ) | - | (36 | ) | - | (766 | ) | ||||||||||||||||||||
Recoveries | 143 | 857 | 149 | 393 | 24 | 4 | - | 1,570 | |||||||||||||||||||||||||
Net charge-offs | (400 | ) | 841 | 149 | 222 | 24 | (32 | ) | - | 804 | |||||||||||||||||||||||
Provision | (682 | ) | (1,934 | ) | (1,227 | ) | (1,107 | ) | (164 | ) | (21 | ) | - | (5,135 | ) | ||||||||||||||||||
Ending balance | $ | 4,032 | $ | 1,459 | $ | 986 | $ | 1,066 | $ | 140 | $ | 192 | $ | 2 | $ | 7,877 | |||||||||||||||||
2013 | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,945 | $ | 2,627 | $ | 2,325 | $ | 2,733 | $ | 634 | $ | 198 | $ | 2 | $ | 14,464 | |||||||||||||||||
Charge-offs | (1,294 | ) | (349 | ) | (149 | ) | (547 | ) | (39 | ) | (179 | ) | (37 | ) | (2,594 | ) | |||||||||||||||||
Recoveries | 257 | 1,243 | 212 | 559 | 3 | 8 | - | 2,282 | |||||||||||||||||||||||||
Net charge-offs | (1,037 | ) | 894 | 63 | 12 | (36 | ) | (171 | ) | (37 | ) | (312 | ) | ||||||||||||||||||||
Provision | 206 | (969 | ) | (324 | ) | (794 | ) | (318 | ) | 218 | 37 | (1,944 | ) | ||||||||||||||||||||
Ending balance | $ | 5,114 | $ | 2,552 | $ | 2,064 | $ | 1,951 | $ | 280 | $ | 245 | $ | 2 | $ | 12,208 | |||||||||||||||||
2012 | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 4,629 | $ | 3,528 | $ | 2,734 | $ | 3,877 | $ | 349 | $ | 150 | $ | 3 | $ | 15,270 | |||||||||||||||||
Charge-offs | (3,652 | ) | (1,687 | ) | (656 | ) | (623 | ) | (76 | ) | (314 | ) | (8 | ) | (7,016 | ) | |||||||||||||||||
Recoveries | 144 | 756 | 131 | 837 | 50 | 6 | 5 | 1,929 | |||||||||||||||||||||||||
Net charge-offs | (3,508 | ) | (931 | ) | (525 | ) | 214 | (26 | ) | (308 | ) | (3 | ) | (5,087 | ) | ||||||||||||||||||
Provision | 4,824 | 30 | 116 | (1,358 | ) | 311 | 356 | 2 | 4,281 | ||||||||||||||||||||||||
Ending balance | $ | 5,945 | $ | 2,627 | $ | 2,325 | $ | 2,733 | $ | 634 | $ | 198 | $ | 2 | $ | 14,464 | |||||||||||||||||
The following tables present impairment method information related to loans and allowance for loan losses by loan portfolio segment: | |||||||||||||||||||||||||||||||||
Manufactured | Commercial | Single Family | Total | ||||||||||||||||||||||||||||||
Housing | Real Estate | Commercial | SBA | HELOC | Real Estate | Consumer | Loans | ||||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2014: | (in thousands) | ||||||||||||||||||||||||||||||||
Recorded Investment: | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 4,717 | $ | 2,783 | $ | 3,122 | $ | 1,837 | $ | 86 | $ | 591 | $ | - | $ | 13,136 | |||||||||||||||||
Impaired loans with no allowance recorded | 2,734 | 831 | 44 | 4 | - | 90 | - | 3,703 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 7,451 | 3,614 | 3,166 | 1,841 | 86 | 681 | - | 16,839 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,211 | 155,818 | 46,517 | 19,495 | 13,395 | 14,276 | 178 | 411,890 | |||||||||||||||||||||||||
Total loans held for investment | $ | 169,662 | $ | 159,432 | $ | 49,683 | $ | 21,336 | $ | 13,481 | $ | 14,957 | $ | 178 | $ | 428,729 | |||||||||||||||||
Unpaid Principal Balance | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 5,172 | $ | 2,979 | $ | 4,914 | $ | 9,512 | $ | 91 | $ | 644 | $ | - | $ | 23,312 | |||||||||||||||||
Impaired loans with no allowance recorded | 4,243 | 2,895 | 50 | 225 | - | 191 | - | 7,604 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 9,415 | 5,874 | 4,964 | 9,737 | 91 | 835 | - | 30,916 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,211 | 155,818 | 46,517 | 19,495 | 13,395 | 14,276 | 178 | 411,890 | |||||||||||||||||||||||||
Total loans held for investment | $ | 171,626 | $ | 161,692 | $ | 51,481 | $ | 29,232 | $ | 13,486 | $ | 15,111 | $ | 178 | $ | 442,806 | |||||||||||||||||
Related Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 399 | $ | 77 | $ | 241 | $ | 104 | $ | 1 | $ | 32 | $ | - | $ | 854 | |||||||||||||||||
Impaired loans with no allowance recorded | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 399 | 77 | 241 | 104 | 1 | 32 | - | 854 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 3,633 | 1,382 | 745 | 962 | 139 | 160 | 2 | 7,023 | |||||||||||||||||||||||||
Total loans held for investment | $ | 4,032 | $ | 1,459 | $ | 986 | $ | 1,066 | $ | 140 | $ | 192 | $ | 2 | $ | 7,877 | |||||||||||||||||
Manufactured | Commercial | Single Family | Total | ||||||||||||||||||||||||||||||
Housing | Real Estate | Commercial | SBA | HELOC | Real Estate | Consumer | Loans | ||||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2013: | (in thousands) | ||||||||||||||||||||||||||||||||
Recorded Investment: | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 6,368 | $ | 2,322 | $ | 3,583 | $ | 1,607 | $ | 615 | $ | 645 | $ | - | $ | 15,140 | |||||||||||||||||
Impaired loans with no allowance recorded | 2,782 | 1,628 | 254 | 210 | - | 106 | - | 4,980 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 9,150 | 3,950 | 3,837 | 1,817 | 615 | 751 | - | 20,120 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,905 | 138,728 | 41,810 | 22,249 | 14,803 | 9,399 | 184 | 390,078 | |||||||||||||||||||||||||
Total loans held for investment | $ | 172,055 | $ | 142,678 | $ | 45,647 | $ | 24,066 | $ | 15,418 | $ | 10,150 | $ | 184 | $ | 410,198 | |||||||||||||||||
Unpaid Principal Balance | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 6,962 | $ | 2,367 | $ | 3,956 | $ | 8,045 | $ | 630 | $ | 664 | $ | - | $ | 22,624 | |||||||||||||||||
Impaired loans with no allowance recorded | 4,536 | 3,834 | 235 | 1,610 | - | 244 | - | 10,459 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 11,498 | 6,201 | 4,191 | 9,655 | 630 | 908 | - | 33,083 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,905 | 138,728 | 41,810 | 22,249 | 14,803 | 9,399 | 184 | 390,078 | |||||||||||||||||||||||||
Total loans held for investment | $ | 174,403 | $ | 144,929 | $ | 46,001 | $ | 31,904 | $ | 15,433 | $ | 10,307 | $ | 184 | $ | 423,161 | |||||||||||||||||
Related Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 618 | $ | 159 | $ | 437 | $ | 139 | $ | 29 | $ | 57 | $ | - | $ | 1,439 | |||||||||||||||||
Impaired loans with no allowance recorded | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 618 | 159 | 437 | 139 | 29 | 57 | - | 1,439 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 4,496 | 2,393 | 1,627 | 1,812 | 251 | 188 | 2 | 10,769 | |||||||||||||||||||||||||
Total loans held for investment | $ | 5,114 | $ | 2,552 | $ | 2,064 | $ | 1,951 | $ | 280 | $ | 245 | $ | 2 | $ | 12,208 | |||||||||||||||||
A valuation allowance is established for an impaired loan when the fair value of the loan is less than the recorded investment. In certain cases, portions of impaired loans are charged-off to realizable value instead of establishing a valuation allowance and are included, when applicable in the table above as “Impaired loans without specific valuation allowance under ASC 310.” The valuation allowance disclosed above is included in the allowance for loan losses reported in the consolidated balance sheets as of December 31, 2014 and 2013. | |||||||||||||||||||||||||||||||||
The table below reflects recorded investment in loans classified as impaired: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Impaired loans with a specific valuation allowance under ASC 310 | $ | 13,136 | $ | 15,140 | |||||||||||||||||||||||||||||
Impaired loans without a specific valuation allowance under ASC 310 | 3,703 | 4,980 | |||||||||||||||||||||||||||||||
Total impaired loans | $ | 16,839 | $ | 20,120 | |||||||||||||||||||||||||||||
Valuation allowance related to impaired loans | $ | 854 | $ | 1,439 | |||||||||||||||||||||||||||||
The following tables summarize impaired loans by class of loans: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 7,451 | $ | 9,150 | |||||||||||||||||||||||||||||
Commercial real estate : | |||||||||||||||||||||||||||||||||
Commercial real estate | 2,320 | 2,805 | |||||||||||||||||||||||||||||||
SBA 504 1st trust deed | 1,294 | 1,005 | |||||||||||||||||||||||||||||||
Land | - | 140 | |||||||||||||||||||||||||||||||
Construction | - | - | |||||||||||||||||||||||||||||||
Commercial | 3,166 | 3,837 | |||||||||||||||||||||||||||||||
SBA | 1,841 | 1,817 | |||||||||||||||||||||||||||||||
HELOC | 86 | 615 | |||||||||||||||||||||||||||||||
Single family real estate | 681 | 751 | |||||||||||||||||||||||||||||||
Consumer | - | - | |||||||||||||||||||||||||||||||
Total | $ | 16,839 | $ | 20,120 | |||||||||||||||||||||||||||||
The following table summarizes the average investment in impaired loans by class and the related interest income recognized: | |||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||
Average Investment | Interest | Average Investment | Interest | Average Investment | Interest | ||||||||||||||||||||||||||||
in Impaired Loans | Income | in Impaired Loans | Income | in Impaired Loans | Income | ||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 7,915 | $ | 564 | $ | 9,429 | $ | 323 | $ | 8,374 | $ | 333 | |||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 2,485 | - | 7,638 | 146 | 17,552 | 315 | |||||||||||||||||||||||||||
SBA 504 1st | 1,076 | 63 | 1,128 | 7 | 3,897 | 159 | |||||||||||||||||||||||||||
Land | 55 | - | 28 | 7 | - | - | |||||||||||||||||||||||||||
Construction | - | - | - | - | 4,808 | 108 | |||||||||||||||||||||||||||
Commercial | 3,377 | 90 | 3,823 | 179 | 5,540 | 292 | |||||||||||||||||||||||||||
SBA | 1,697 | 97 | 1,506 | 198 | 1,800 | 176 | |||||||||||||||||||||||||||
HELOC | 437 | 8 | 372 | 5 | 255 | 13 | |||||||||||||||||||||||||||
Single family real estate | 699 | 3 | 511 | 11 | 324 | 10 | |||||||||||||||||||||||||||
Consumer | - | - | - | - | 5 | - | |||||||||||||||||||||||||||
Total | $ | 17,741 | $ | 825 | $ | 24,435 | $ | 876 | $ | 42,555 | $ | 1,406 | |||||||||||||||||||||
The Company is not committed to lend significant additional funds on these impaired loans. | |||||||||||||||||||||||||||||||||
The following table summarizes nonperforming assets: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Nonaccrual loans, net | $ | 11,027 | $ | 16,837 | |||||||||||||||||||||||||||||
Loans past due 90 days or more on accrual status | - | 66 | |||||||||||||||||||||||||||||||
Troubled debt restructured loans on accrual | 5,048 | 3,283 | |||||||||||||||||||||||||||||||
Total nonperforming loans | 16,075 | 20,186 | |||||||||||||||||||||||||||||||
Other assets acquired through foreclosure, net | 137 | 3,811 | |||||||||||||||||||||||||||||||
Total nonperforming assets | $ | 16,212 | $ | 23,997 | |||||||||||||||||||||||||||||
The following table reflects the recorded investment in certain types of loans at the periods indicated: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Nonaccrual loans | $ | 17,883 | $ | 23,263 | $ | 29,643 | |||||||||||||||||||||||||||
SBA guaranteed portion of loans included above | (6,856 | ) | (6,426 | ) | (7,218 | ) | |||||||||||||||||||||||||||
Total nonaccrual loans, net | $ | 11,027 | $ | 16,837 | $ | 22,425 | |||||||||||||||||||||||||||
Troubled debt restructured loans, gross | $ | 9,685 | $ | 12,308 | $ | 19,931 | |||||||||||||||||||||||||||
Loans 30 through 89 days past due with interest accruing | $ | - | $ | 161 | $ | 521 | |||||||||||||||||||||||||||
Interest income recognized on impaired loans | $ | 825 | $ | 876 | $ | 1,406 | |||||||||||||||||||||||||||
Foregone interest on nonaccrual and troubled debt restructured loans | $ | 1,276 | $ | 1,754 | $ | 2,692 | |||||||||||||||||||||||||||
Allowance for loan losses to gross loans held for investment | 1.84 | % | 2.98 | % | 3.66 | % | |||||||||||||||||||||||||||
The accrual of interest is discontinued when substantial doubt exists as to collectability of the loan; generally at the time the loan is 90 days delinquent. Any unpaid but accrued interest is reversed at that time. Thereafter, interest income is no longer recognized on the loan. Interest income may be recognized on impaired loans to the extent they are not past due by 90 days. Interest on nonaccrual loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. | |||||||||||||||||||||||||||||||||
The following table presents the composition of nonaccrual loans, net of government guarantees, by class of loans: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 1,480 | $ | 6,235 | |||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 2,951 | 2,806 | |||||||||||||||||||||||||||||||
SBA 504 1st trust deed | 1,021 | 726 | |||||||||||||||||||||||||||||||
Land | - | 140 | |||||||||||||||||||||||||||||||
Construction | - | - | |||||||||||||||||||||||||||||||
Commercial | 3,167 | 3,837 | |||||||||||||||||||||||||||||||
SBA | 1,713 | 1,803 | |||||||||||||||||||||||||||||||
HELOC | 86 | 615 | |||||||||||||||||||||||||||||||
Single family real estate | 609 | 675 | |||||||||||||||||||||||||||||||
Consumer | - | - | |||||||||||||||||||||||||||||||
Total | $ | 11,027 | $ | 16,837 | |||||||||||||||||||||||||||||
The guaranteed portion of each SBA loan is repurchased from investors when those loans become past due 120 days by either CWB or the SBA directly. After the foreclosure and collection process is complete, the principal balance of loans repurchased by CWB are reimbursed by the SBA. Although these balances do not earn interest during this period, they generally do not result in a loss of principal to CWB; therefore a repurchase reserve has not been established related to these loans. | |||||||||||||||||||||||||||||||||
The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans. Under the Company’s risk rating system, the Company classifies problem and potential problem loans as “Special Mention,” “Substandard,” “Doubtful” and “Loss”. Substandard loans are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful, have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable loans is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be affected in the future. Losses are taken in the period in which they surface as uncollectible. Loans that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses that deserve management’s close attention are deemed to be Special Mention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution's credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Risk ratings are updated as part of our normal loan monitoring process, at a minimum, annually. | |||||||||||||||||||||||||||||||||
The following tables present gross loans by risk rating: | |||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||
Special | |||||||||||||||||||||||||||||||||
Pass | Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 162,638 | $ | - | $ | 7,024 | $ | - | $ | 169,662 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 106,909 | 6,544 | 6,455 | - | 119,908 | ||||||||||||||||||||||||||||
SBA 504 1st trust deed | 23,038 | 1,085 | 3,174 | - | 27,297 | ||||||||||||||||||||||||||||
Land | 1,569 | - | - | - | 1,569 | ||||||||||||||||||||||||||||
Construction | 10,658 | - | - | - | 10,658 | ||||||||||||||||||||||||||||
Commercial | 46,275 | 158 | 3,250 | - | 49,683 | ||||||||||||||||||||||||||||
SBA | 12,803 | 173 | 1,891 | 97 | 14,964 | ||||||||||||||||||||||||||||
HELOC | 12,888 | - | 593 | - | 13,481 | ||||||||||||||||||||||||||||
Single family real estate | 14,105 | - | 852 | - | 14,957 | ||||||||||||||||||||||||||||
Consumer | 178 | - | - | - | 178 | ||||||||||||||||||||||||||||
Total, net | $ | 391,061 | $ | 7,960 | $ | 23,239 | $ | 97 | $ | 422,357 | |||||||||||||||||||||||
SBA guarantee | - | - | 6,372 | - | 6,372 | ||||||||||||||||||||||||||||
Total | $ | 391,061 | $ | 7,960 | $ | 29,611 | $ | 97 | $ | 428,729 | |||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Special | |||||||||||||||||||||||||||||||||
Pass | Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 158,533 | $ | - | $ | 13,522 | $ | - | $ | 172,055 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 89,319 | 3,600 | 3,474 | - | 96,393 | ||||||||||||||||||||||||||||
SBA 504 1st trust deed | 33,012 | 248 | 1,005 | - | 34,265 | ||||||||||||||||||||||||||||
Land | 1,817 | - | 140 | - | 1,957 | ||||||||||||||||||||||||||||
Construction | 10,063 | - | - | - | 10,063 | ||||||||||||||||||||||||||||
Commercial | 41,147 | 327 | 4,150 | 23 | 45,647 | ||||||||||||||||||||||||||||
SBA | 14,773 | 136 | 2,053 | - | 16,962 | ||||||||||||||||||||||||||||
HELOC | 13,806 | 491 | 1,121 | - | 15,418 | ||||||||||||||||||||||||||||
Single family real estate | 9,226 | - | 924 | - | 10,150 | ||||||||||||||||||||||||||||
Consumer | 184 | - | - | - | 184 | ||||||||||||||||||||||||||||
Total, net | $ | 371,880 | $ | 4,802 | $ | 26,389 | $ | 23 | $ | 403,094 | |||||||||||||||||||||||
SBA guarantee | - | - | 6,719 | 385 | 7,104 | ||||||||||||||||||||||||||||
Total | $ | 371,880 | $ | 4,802 | $ | 33,108 | $ | 408 | $ | 410,198 | |||||||||||||||||||||||
Troubled Debt Restructured Loan (TDR) | |||||||||||||||||||||||||||||||||
A TDR is a loan on which the bank, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that the bank would not otherwise consider. The loan terms that have been modified or restructured due to a borrower’s financial situation include, but are not limited to, a reduction in the stated interest rate, an extension of the maturity or renewal of the loan at an interest rate below current market, a reduction in the face amount of the debt, a reduction in the accrued interest, extensions, deferrals, renewals and rewrites. The majority of the bank’s modifications are extensions in terms or deferral of payments which result in no lost principal or interest followed by reductions in interest rates or accrued interest. A TDR is also considered impaired. Generally, a loan that is modified at an effective market rate of interest may no longer be disclosed as a troubled debt restructuring in years subsequent to the restructuring if it is not impaired based on the terms specified by the restructuring agreement. | |||||||||||||||||||||||||||||||||
The following tables present information on the financial effects of TDR loans by class for the periods presented: | |||||||||||||||||||||||||||||||||
` | For the Year Ended December 31, 2014 | ||||||||||||||||||||||||||||||||
Pre- | Post | Balance of | Balance of | Effect on | |||||||||||||||||||||||||||||
Number | Modification | Modification | Loans with | Loans with | Allowance for | ||||||||||||||||||||||||||||
of Loans | Recorded Investment | Recorded Investment | Rate Reduction | Term Extension | Loan Losses | ||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | 5 | $ | 272 | $ | 272 | $ | 272 | $ | 272 | $ | 10 | ||||||||||||||||||||||
Total | 5 | $ | 272 | $ | 272 | $ | 272 | $ | 272 | $ | 10 | ||||||||||||||||||||||
` | For the Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Pre- | Post | Balance of | Balance of | Effect on | |||||||||||||||||||||||||||||
Number | Modification | Modification | Loans with | Loans with | Allowance for | ||||||||||||||||||||||||||||
of Loans | Recorded Investment | Recorded Investment | Rate Reduction | Term Extension | Loan Losses | ||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | 25 | $ | 2,008 | $ | 1,982 | $ | 1,021 | $ | 1,982 | $ | 197 | ||||||||||||||||||||||
Commercial real estate | 2 | 655 | 655 | - | 655 | 45 | |||||||||||||||||||||||||||
Commercial | 6 | 4,011 | 4,011 | - | 4,011 | 256 | |||||||||||||||||||||||||||
SBA | 1 | 87 | 87 | - | 87 | 16 | |||||||||||||||||||||||||||
Single family real estate | 2 | 385 | 385 | 385 | 147 | 32 | |||||||||||||||||||||||||||
Total | 36 | $ | 7,146 | $ | 7,120 | $ | 1,406 | $ | 6,882 | $ | 546 | ||||||||||||||||||||||
The average rate concession was 70 basis points and 152 basis points for the twelve months ended December 31, 2014 and 2013, respectively. The average term extension in months was 180 and 110 for the twelve months ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||||||||||||||||
The following table presents TDR's by class that occurred in the past twelve months for which there was a payment default during the period: | |||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Effect on | Effect on | ||||||||||||||||||||||||||||||||
Number | Recorded | Allowance for | Number | Recorded | Allowance for | ||||||||||||||||||||||||||||
of Loans | Investment | Loan Losses | of Loans | Investment | Loan Losses | ||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | 1 | $ | 18 | $ | 1 | 7 | $ | 456 | $ | 11 | |||||||||||||||||||||||
Total | 1 | $ | 18 | $ | 1 | 7 | $ | 456 | $ | 11 | |||||||||||||||||||||||
A TDR loan is deemed to have a payment default when the borrower fails to make two consecutive payments or the collateral is transferred to repossessed assets. | |||||||||||||||||||||||||||||||||
At December 31, 2014, there were no material loan commitments outstanding on TDR loans. | |||||||||||||||||||||||||||||||||
Related Parties | |||||||||||||||||||||||||||||||||
Principal stockholders, directors, and executive officers of the Company, together with companies they control, are considered to be related parties. In the ordinary course of business, the Company has extended credit to these related parties. Federal banking regulations require that any such extensions of credit not be offered on terms more favorable than would be offered to non-related party borrowers of similar creditworthiness. | |||||||||||||||||||||||||||||||||
The following table summarizes the aggregate activity in such loans: | |||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Balance, beginning | $ | 4,816 | $ | 4,560 | |||||||||||||||||||||||||||||
New loans | 434 | 1,046 | |||||||||||||||||||||||||||||||
Repayments and other | (771 | ) | (790 | ) | |||||||||||||||||||||||||||||
Balance, ending | $ | 4,479 | $ | 4,816 | |||||||||||||||||||||||||||||
None of these loans are past due, on nonaccrual status or have been restructured to provide a reduction or deferral of interest or principal because of deterioration in the financial position of the borrower. There were no loans to a related party that were considered classified loans at December 31, 2014 or 2013. | |||||||||||||||||||||||||||||||||
Unfunded loan commitments outstanding with related parties total approximately $0.6 million and $0.8 million at December 31, 2014 and 2013, respectively. |
PREMISES_AND_EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PREMISES AND EQUIPMENT [Abstract] | |||||||||
PREMISES AND EQUIPMENT | 5. PREMISES AND EQUIPMENT | ||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Bank premises and land | $ | 1,411 | $ | 1,400 | |||||
Furniture, fixtures and equipment | 8,748 | 8,526 | |||||||
Leasehold improvements | 2,602 | 2,591 | |||||||
Construction in progress | 150 | - | |||||||
12,911 | 12,517 | ||||||||
Accumulated depreciation | (9,858 | ) | (9,534 | ) | |||||
Premises and equipment, net | $ | 3,053 | $ | 2,983 | |||||
Lease Obligations | |||||||||
The Company leases certain premises under non-cancelable operating leases expiring through 2017. The following is a schedule of future minimum rental payments under these leases at December 31, 2014: | |||||||||
(in thousands) | |||||||||
2015 | $ | 821 | |||||||
2016 | 751 | ||||||||
2017 | 234 | ||||||||
2018 | - | ||||||||
2019 | - | ||||||||
Thereafter | - | ||||||||
$ | 1,806 | ||||||||
The Company leases the majority of its office locations and many of these leases contain multiple renewal options and provisions for increased rents. Total rent expense of $0.8 million, $0.9 million and $1.0 million is included in occupancy expenses for the years ended December 31, 2014, 2013 and 2012, respectively. Total depreciation expense of $0.3 million is included in occupancy expenses for the each of the years ended December 31, 2014, 2013 and 2012, respectively. |
OTHER_ASSETS_ACQUIRED_THROUGH_
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||||||||||||
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE | 6. OTHER ASSETS ACQUIRED THROUGH FORECLOSURE | ||||||||||||
The following table summarizes the changes in other assets acquired through foreclosure: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Balance, beginning of period | $ | 3,811 | $ | 1,889 | $ | 6,701 | |||||||
Additions | 1,879 | 6,084 | 7,329 | ||||||||||
Proceeds from dispositions and receivables from participants | (5,988 | ) | (3,774 | ) | (10,980 | ) | |||||||
Gains (losses) on sales, net | 435 | (388 | ) | (1,161 | ) | ||||||||
Balance, end of period | $ | 137 | $ | 3,811 | $ | 1,889 |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
INCOME TAXES | 7. INCOME TAXES | ||||||||||||
The provision for income taxes consisted of the following: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | (in thousands) | ||||||||||||
Federal | $ | 2,880 | $ | 1,430 | $ | (98 | ) | ||||||
State | 832 | - | - | ||||||||||
3,712 | 1,430 | (98 | ) | ||||||||||
Deferred: | |||||||||||||
Federal | 754 | 453 | 1,072 | ||||||||||
State | 468 | 670 | 347 | ||||||||||
1,222 | 1,123 | 1,419 | |||||||||||
Decrease in deferred tax asset valuation allowance | - | (5,365 | ) | (1,321 | ) | ||||||||
Total (benefit) provision for income taxes | $ | 4,934 | $ | (2,812 | ) | $ | - | ||||||
The reconciliation between the statutory income tax rate and the Company’s effective tax rate follows: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal income tax at statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State franchise tax, net of federal benefit | 7.2 | 7.2 | 7.2 | ||||||||||
Other | - | - | - | ||||||||||
Benefit related to deferred tax asset valuation allowance | - | (86.7 | ) | (41.2 | ) | ||||||||
Total (benefit) provision for income taxes | 41.2 | % | (45.5 | )% | - | % | |||||||
The cumulative tax effects of the primary temporary differences are as shown in the following table: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred Tax Assets: | (in thousands) | ||||||||||||
Allowance for loan losses | $ | 3,149 | $ | 4,829 | |||||||||
Unrealized loss on AFS securities | - | $ | 191 | ||||||||||
State net operating loss | - | 80 | |||||||||||
Other | 867 | 483 | |||||||||||
Total gross deferred tax assets | 4,016 | 5,583 | |||||||||||
Deferred tax asset valuation allowance | - | - | |||||||||||
Total deferred tax assets | 4,016 | 5,583 | |||||||||||
Deferred Tax Liabilities: | |||||||||||||
Deferred state taxes | (288 | ) | (447 | ) | |||||||||
Depreciation | (167 | ) | (139 | ) | |||||||||
Unrealized gain on AFS securities | (22 | ) | - | ||||||||||
Other | (272 | ) | (296 | ) | |||||||||
Total deferred tax liabilities | (749 | ) | (882 | ) | |||||||||
Net deferred tax asset | $ | 3,267 | $ | 4,701 | |||||||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and their respective tax basis including operating losses and tax credit carryforwards. Net deferred tax assets are reported in the consolidated balance sheet as a component of total assets. | |||||||||||||
Accounting standards Codification Topic 740, Income Taxes, requires that companies assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. The determination of whether a valuation allowance for deferred tax assets is appropriate is subject to considerable judgment and requires an evaluation of all positive and negative evidence with more weight given to evidence that can be objectively verified. Each period, management considers both positive and negative evidence and analyzes changes in near-term market conditions as well as other factors which may impact future operating results. | |||||||||||||
The Company evaluated the need for a valuation allowance at December 31, 2014. Based on the assessment of all the positive and negative evidence, management concluded that it is more likely than not that all of the $3.3 million net deferred tax asset will be realized based upon future taxable income. The positive evidence considered by management in arriving at the conclusion that a valuation allowance is not necessary included more than six consecutive profitable quarters, the Company is not in a three-year cumulative loss position, the Company’s strong pre-crisis earnings history and growth in pre-tax earnings and significant improvement in credit measures, which improve both the sustainability of profitability and management’s ability to forecast future credit losses. The regulatory agreements have also been terminated. All these factors were given the appropriate weighting in our analysis and management concluded that such positive evidence was sufficient to overcome the weight of negative evidence related to operating losses in prior years. At December 31, 2013, the Company reversed $2.8 million of valuation allowance on its net deferred tax asset. There was no valuation allowance on deferred tax assets at December 31, 2013. The Company’s deferred tax asset was $4.7 million. | |||||||||||||
The Company is subject to the provisions of ASC 740, Income Taxes (ASC 740). ASC 740 prescribes a more-likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. | |||||||||||||
The Company is subject to income taxation in the United States and certain state jurisdictions. The Company’s federal and state income tax returns are filed on a consolidated basis. The Company is generally open to examination by tax authorities for the years 2010 and later. Although the Company is unable to determine the outcome under examination, it has evaluated whether there are any uncertain tax positions in accordance with ASC 740-10 and concluded that there are no significant uncertain tax positions requiring recognition in the financial statements. |
DEPOSITS
DEPOSITS | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
DEPOSIT [Abstract] | |||||||||||||||||||||||||
DEPOSITS | 8. DEPOSITS | ||||||||||||||||||||||||
The table below summarizes deposits and their related interest expense by type: | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Interest | Interest | Interest | |||||||||||||||||||||||
Balance | Expense | Balance | Expense | Balance | Expense | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Non-interest bearing demand deposits | $ | 57,364 | $ | - | $ | 52,461 | $ | - | $ | 53,605 | $ | - | |||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||
NOW accounts | 18,152 | 29 | 20,367 | 35 | 20,120 | 73 | |||||||||||||||||||
Money market deposit account | 257,479 | 1,035 | 238,078 | 1,150 | 249,346 | 1,766 | |||||||||||||||||||
Savings accounts | 15,265 | 202 | 16,158 | 290 | 16,351 | 325 | |||||||||||||||||||
Time deposits of $100,000 or more | 115,588 | 1,167 | 95,979 | 1,166 | 80,710 | 1,609 | |||||||||||||||||||
Other time deposits | 13,236 | 230 | 13,092 | 275 | 14,088 | 357 | |||||||||||||||||||
Total deposits | $ | 477,084 | $ | 2,663 | $ | 436,135 | $ | 2,916 | $ | 434,220 | $ | 4,130 | |||||||||||||
Of the total deposits at December 31, 2014, $348.3 million may be immediately withdrawn. Time certificates of deposit are the only deposits which have a specified maturity. | |||||||||||||||||||||||||
The summary of the contractual maturities for all time deposits is as follows: | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
2015 | $ | 54,678 | |||||||||||||||||||||||
2016 | 23,282 | ||||||||||||||||||||||||
2017 | 9,201 | ||||||||||||||||||||||||
2018 | 27,055 | ||||||||||||||||||||||||
2019 | 14,508 | ||||||||||||||||||||||||
Thereafter | 100 | ||||||||||||||||||||||||
$ | 128,824 | ||||||||||||||||||||||||
The Company through the bank is a member of the Certificate of Deposit Account Registry Service (“CDARS”), which provides Federal Deposit Insurance Corporation (“FDIC”) insurance for large deposits. Federal banking law and regulation place restrictions on depository institutions regarding brokered deposits as they pose increased liquidity risk for institutions that gather significant amounts of brokered deposits. At December 31, 2014 and 2013, the Company had $14.5 million and $1.7 million, respectively, of reciprocal CDARS deposits. |
OTHER_BORROWINGS_AND_CONVERTIB
OTHER BORROWINGS AND CONVERTIBLE DEBENTURES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
OTHER BORROWINGS AND CONVERTIBLE DEBENTURES [Abstract] | |||||||||||||||||
OTHER BORROWINGS AND CONVERTIBLE DEBENTURES | 9. OTHER BORROWINGS AND CONVERTIBLE DEBENTURES | ||||||||||||||||
The following table summarizes the Company’s FHLB advances by maturity date: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Contractual Maturity Date | Amount | Rate | Amount | Rate | |||||||||||||
(dollars in thousands) | |||||||||||||||||
5-May-14 | $ | - | - | $ | 4,000 | 2.88 | % | ||||||||||
7-May-14 | - | - | 4,000 | 2.76 | % | ||||||||||||
19-May-14 | - | - | 4,000 | 2.79 | % | ||||||||||||
9-Oct-14 | - | - | 4,000 | 2.68 | % | ||||||||||||
17-Nov-14 | - | - | 4,000 | 2.78 | % | ||||||||||||
9-Mar-15 | 5,000 | 2.745 | % | 5,000 | 2.745 | % | |||||||||||
4-May-15 | 5,000 | 2.735 | % | 5,000 | 2.735 | % | |||||||||||
Total FHLB advances | $ | 10,000 | $ | 30,000 | |||||||||||||
Weighted average rate | 2.74 | % | 2.77 | % | |||||||||||||
The Company through the bank has a blanket lien credit line with the FHLB. FHLB advances are collateralized in the aggregate by the Company’s eligible loans and securities. Total FHLB advances were $10.0 million and $30.0 million at December 31, 2014 and 2013, respectively, borrowed at fixed rates. At December 31, 2014, CWB had pledged to the FHLB, $30.6 million of securities and $67.3 million of loans. At December 31, 2014, the Company had $106.2 million available for additional borrowing. At December 31, 2013, the Company had pledged to the FHLB, $28.0 million of securities and $27.3 million of loans. At December 31, 2013, CWB had $61.4 million available for additional borrowing. Total FHLB interest expense for the years ended December 31, 2014, 2013 and 2012 was $0.6 million, $1.0 million and $1.1 million, respectively. | |||||||||||||||||
Federal Reserve Bank – The Company has established a credit line with the FRB. Advances are collateralized in the aggregate by eligible loans for up to 28 days. There were no outstanding FRB advances as of December 31, 2014 and 2013. Available borrowing capacity was $88.0 million and $123.9 million as of December 31, 2014 and 2013, respectively. | |||||||||||||||||
Convertible Debentures - In 2010, the Company completed an offering of $8.1 million convertible subordinated debentures. The debentures were a general unsecured obligation and were subordinated in right of payment to all present and future senior indebtedness. The debentures paid interest at 9% until conversion, redemption or maturity. Effective March 10, 2014, the Company exercised its early redemption rights and called the outstanding debentures. During 2014, $1.4 million debentures were converted to 317,550 shares of common stock and $34,000 to cash. | |||||||||||||||||
Federal Funds Purchased Lines – The Company has federal funds borrowing lines at correspondent banks totaling $30.0 million. There was no amount outstanding as of December 31, 2014 and 2013. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES | ||||||||
Unfunded Commitments and Letters of Credit | |||||||||
The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheets. | |||||||||
Lines of credit are obligations to lend money to a borrower. Credit risk arises when the borrowers’ current financial condition may indicate less ability to pay than when the commitment was originally made. In the case of standby letters of credit, the risk arises from the possibility of the failure of the customer to perform according to the terms of a contract. In such a situation, the third party might draw on the standby letter of credit to pay for completion of the contract and the Company would look to its customer to repay these funds with interest. To minimize the risk, the Company uses the same credit policies in making commitments and conditional obligations as it would for a loan to that customer. | |||||||||
Standby letters of credit are commitments issued by the Company to guarantee the performance of a customer to a third party in borrowing arrangements. Typically, letters of credit issued have expiration dates within one year. | |||||||||
A summary of the contractual amounts for unfunded commitments and letters of credit are as follows: | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Commitments to extend credit | $ | 28,239 | $ | 19,573 | |||||
Standby letters of credit | 59 | 75 | |||||||
Total | $ | 28,298 | $ | 19,648 | |||||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral. | |||||||||
The Company has exposure to credit losses from unfunded commitments and letters of credit. As funds have not been disbursed on these commitments, they are not reported as loans outstanding. Credit losses related to these commitments are not included in the allowance for credit losses reported in Note 4, “Loans Held For Investment” of these Consolidated Financial Statements and are accounted for as a separate loss contingency as a liability. This loss contingency for unfunded loan commitments and letters of credit was $39,000 and $0.1 million as of December 31, 2014 and 2013, respectively. Changes to this liability are adjusted through other non-interest expense. | |||||||||
Concentrations of Lending Activities | |||||||||
The Company’s lending activities are primarily driven by the customers served in the market areas where the Company has branch offices in the Central Coast of California. The Company monitors concentrations within five broad categories: geography, industry, product, call code, and collateral. The Company makes manufactured housing, commercial, SBA, construction, real estate and consumer loans to customers through branch offices located in the Company’s primary markets. The Company’s business is concentrated in these areas and the loan portfolio includes significant credit exposure to the manufactured housing and commercial real estate markets of these areas. As of December 31, 2014 and 2013, manufactured housing loans comprised 34.3% and 36.3%, respectively of total loans. The Company performs a monthly analysis of the manufactured housing loan portfolio which includes weighted average and stratification of various components of credit quality, including loan-to-value, borrower FICO score, loan maturity, debt-to-income ratio, loan amount, mobile home age, mobile home park and location. This concentration is somewhat mitigated by the fact that the portfolio consists of 1,702 individual borrowers as of December 31, 2014 in over 50 mobile home parks. The Bank analyzes these concentrations on a quarterly basis and reports the risk related to concentrations to the Board of Directors. Management believes the systems in place coupled with the diversity of the portfolios are adequate to mitigate concentration risk. As of December 31, 2014 and 2013, commercial real estate loans accounted for approximately 32.2% and 30.1% of total loans, respectively. Approximately 48.3% and 62.2% of these commercial real estate loans were owner occupied at December 31, 2014 and 2013, respectively. Substantially all of these loans are secured by first liens with an average loan to value ratios of 48.9% and 48.5% at December 31, 2014 and 2013, respectively. The Company was within established policy limits at December 31, 2014 and 2013. | |||||||||
Loan Sales and Servicing | |||||||||
The Company retains a certain level of risk relating to the servicing activities and retained interest in sold loans. In addition, during the period of time that the loans are held for sale, the Company is subject to various business risks associated with the lending business, including borrower default, foreclosure and the risk that a rapid increase in interest rates would result in a decline of the value of loans held for sale to potential purchasers. | |||||||||
In connection with certain loan sales, the Company enters agreements which generally require the company to repurchase or substitute loans in the event of a breach of a representation or warranty made by the Company to the loan purchaser, any misrepresentation during the loan origination process or, in some cases, upon any fraud or early default on such loans. | |||||||||
The Company has sold loans that are guaranteed or insured by government agencies for which the Company retained all servicing rights and responsibilities. The Company is required to perform certain monitoring functions in connection with these loans to preserve the guarantee by the government agency and prevent loss to the Company in the event of nonperformance by the borrower. Management believes that the Company is in compliance with these requirements. The outstanding balance of the loans serviced for others was approximately $26.0 million and $33.2 million at December 31, 2014 and 2013, respectively. | |||||||||
Salary Continuation | |||||||||
The Company entered into an agreement with an executive, which provides for a monthly cash payment to the executive or beneficiaries in the event of death, disability or retirement, beginning in the month after the retirement date or death and extending for a period of fifteen years subject to vesting. The Company purchased a life insurance policy of $2.0 million as an investment. The income from the policy investment will help fund this liability. The present value of the Company’s liability under the new agreement was calculated using a discount rate of 3.84% and is included in accrued interest payable and other liabilities in the accompanying consolidated balance sheets. | |||||||||
Additionally, the Company has an agreement with a former officer which provides for $50,000 per year in monthly cash payments. The remaining contractual obligation at December 31, 2014 is four years. At December 31, 2014 and 2013, the Company had accrued salary continuation liability for both agreements of $0.3 million and $0.2 million, respectively. The cash surrender value of the life insurance policies was $3.2 million at December 31, 2014, and is included in other assets. | |||||||||
Contingencies | |||||||||
On or about December 16, 2013, CWB was served with the Summons and Complaint in the action entitled Residential Funding Company, LLC v. Community West Bank, N.A., United States District Court for the District of Minnesota, Case No. 0:13-CV-03468-JRT-JJK. The Summons was issued and Complaint filed on December 13, 2013 (the "Complaint"). Generally, Residential Funding Company, LLC (“RFC”) seeks damages in excess of $75,000 for breach of contract and indemnification for certain unspecified residential mortgage loans originated by CWB and sold to RFC in accordance with an agreement. RFC alleges that some $22 million in loans were sold over the course of the agreement. RFC further alleges that CWB made certain representations and warranties with respect to the loans and that CWB failed to comply with such representations and warranties. | |||||||||
RFC alleges it placed the loans from CWB into residential mortgage backed securitizations trusts (“Trusts”) and issued certificates in the Trusts to outside investors. The loans CWB sold to RFC were eventually included along with numerous other third party lender loans in 30 different Trusts. RFC alleges that, over time, the loans defaulted or became delinquent and, from 2008 until May 14, 2012, RFC faced numerous claims and lawsuits stemming from the loans. RFC alleges that it had to file for bankruptcy protection to defend the claims. RFC claims all the lawsuits against RFC filed by investors in the Trusts allege that the securitizations were defective in a variety of ways, including borrower fraud, missing or inaccurate documentation, fraudulent appraisals and misrepresentations concerning occupancy. RFC alleges that CWB was responsible for the problems with the loans in this action and that numerous other lenders were responsible in the other actions RFC has filed. RFC also alleges that it was forced to settle many of the claims in the bankruptcy court but continues to litigate other claims. RFC alleges that under its agreement with CWB, CWB agreed to indemnify RFC for losses or repurchase the loans at RFC’s option. | |||||||||
Since the Complaint was so vague and ambiguous concerning the “agreement”, the specific loans in question and the circumstances surrounding the approval of such loans, CWB filed a Motion to Dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure or, in the alternative, a Motion for More Definite Statement under Rule 12(e). In response, RFC filed a First Amended Complaint seeking over $25 million in damages for breach of contract and indemnification (“FAC”). The FAC contains the same deficiencies as the original Complaint and, as such, on May 5, 2014, CWB filed a Motion to Dismiss under Rule 12(b)(6) and a Motion for More Definite Statement. On October 14, 2014, the Judge granted the motion in part and denied the motion in part. The Judge granted CWB’s motion to dismiss on the contract claim as to all loans CWB sold to RFC before May 14, 2006 on the grounds that they were time barred. The Court denied CWB’s motion claiming that the statute of limitations barred RFC’s claim for indemnity as well, ruling that the indemnity claim does not begin until the plaintiff suffers a loss, and therefore may not be time barred. | |||||||||
On October 28, 2014, CWB served and filed its answer to the FAC, denying the material allegations of the FAC and asserting numerous defenses thereto. On March 18, 2015, defense counsel will meet with the magistrate judge to discuss the yet to be defined mediation process. | |||||||||
No firm trial date has been set and discovery has just begun. | |||||||||
It is CWB’s position to vigorously defend this action and CWB knows of no evidence that would support RFC’s allegations of wrongdoing by CWB. Due to the preliminary stage of the pleadings and without the benefit of discovery, it is not possible to predict the probable outcome. This action is just one of many filed by RFC against various banks pending in courts in New York and Minnesota, among others. | |||||||||
The Company is involved in various other lawsuits of a routine nature that are being handled and defended in the ordinary course of the Company’s business. Expenses are being incurred in connection with defending the Company, but in the opinion of Management, based in part on consultation with legal counsel, the resolution of these lawsuits and associated defense costs will not have a material impact on the Company’s financial position, results of operations, or cash flows. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||
STOCKHOLDERS' EQUITY | 11. STOCKHOLDERS’ EQUITY | ||||||||||||||||
Preferred Stock | |||||||||||||||||
The Company’s Series A Preferred Stock paid cumulative dividends at a rate of 5% per year until February 15, 2014 then increased to a rate of 9% per year. The Series A Preferred Stock has no maturity date and ranks senior to the common stock with respect to the payment of dividends and distributions and amounts payable upon liquidation, dissolution and winding up of the Company. | |||||||||||||||||
In 2012, the United States Department of the Treasury sold all of the Series A Preferred Stock to third party purchasers unaffiliated with the Company. The Company did not receive any proceeds from this auction, nor were any of the terms modified in connection with the sales. | |||||||||||||||||
On June 4, 2013, four members of the Board of Directors purchased 1,100 shares of the Company’s Series A Cumulative Perpetual Preferred stock from private investors. | |||||||||||||||||
On June 20, 2014, the Company completed the redemption of 50% of the Company’s Series A Preferred Stock. The Company redeemed 7,804 shares of stock for $7.7 million and recognized a discount on the partial redemption of $144,000. | |||||||||||||||||
On October 6, 2014 the Company redeemed an additional $0.8 million of Series A Preferred Stock. | |||||||||||||||||
During the years ended December 31, 2014 and 2013, the Company recorded $0.9 million and $1.0 million, respectively of dividends and accretion of the discount on preferred stock. | |||||||||||||||||
Common Stock Warrant | |||||||||||||||||
The Warrant issued as part of the TARP provides for the purchase of up to 521,158 shares of the common stock, at an exercise price of $4.49 per share (“Warrant Shares”). The Warrant is immediately exercisable and has a 10-year term. The exercise price and the ultimate number of shares of common stock that may be issued under the Warrant are subject to certain anti-dilution adjustments, such as upon stock splits or distributions of securities or other assets to holders of the common stock, and upon certain issuances of the common stock at or below a specified price relative to the then current market price of the common stock. In the second quarter of 2013, the Treasury sold its warrant position to a private investor. Pursuant to the Securities Purchase Agreement, the private investor has agreed not to exercise voting power with respect to any Warrant Shares. | |||||||||||||||||
Common Stock | |||||||||||||||||
During 2014 and 2013, the Company issued 316,872 and 1,864,748 shares of common stock respectively, in conjunction with debenture conversions. | |||||||||||||||||
During the year ended December 31, 2014 the Company reinstated the payment of a quarterly common stock dividend and recorded $0.3 million of dividends on common stock. | |||||||||||||||||
Stock Option Plans | |||||||||||||||||
The Company has two stock option plans available for option grants. As of December 31, 2014, 520,475 options were available for future grant. | |||||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. The expected volatility is based on the historical volatility of the stock of the Company over the expected life of the options. The risk-free rate for the periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend rate assumption was zero. A summary of the assumptions used in calculating the fair value of option awards during the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected life in years | 6 | 6.3 | 5.8 | ||||||||||||||
Risk-free interest rate | 1.8 | % | 1.42 | % | 1.05 | % | |||||||||||
Expected volatility | 73.4 | % | 69.2 | % | 69 | % | |||||||||||
Annual dividend rate | - | % | - | % | - | % | |||||||||||
Stock options granted in 2014 generally have a vesting period of 5 years and a contractual life of 10 years. The Company recognizes compensation cost for options ratably over the requisite service period for all awards. | |||||||||||||||||
A summary of option activity under the plan is presented below: | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Option | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Shares | Exercise Price | Remaining Term | Intrinsic Value | ||||||||||||||
(in thousands, except exercise price and contractual terms) | |||||||||||||||||
Outstanding options, beginning of period | 376 | $ | 5.25 | ||||||||||||||
Granted | 190 | 7.02 | |||||||||||||||
Exercised | (19 | ) | 2.9 | ||||||||||||||
Forefeited or expired | (90 | ) | 7.65 | ||||||||||||||
Outstanding options, end of period | 457 | $ | 5.61 | 7.2 | $ | 815 | |||||||||||
Options exerciseable, end of period | 244 | $ | 5.77 | 5.9 | $ | 521 | |||||||||||
Options expected to vest, end of period | 150 | $ | 4.84 | 6.9 | $ | 288 | |||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Option | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Shares | Exercise Price | Remaining Term | Intrinsic Value | ||||||||||||||
(in thousands, except exercise price and contractual terms) | |||||||||||||||||
Outstanding options, beginning of period | 447 | $ | 5.38 | ||||||||||||||
Granted | 21 | 4.91 | |||||||||||||||
Exercised | (7 | ) | 3.24 | ||||||||||||||
Forefeited or expired | (85 | ) | 6.07 | ||||||||||||||
Outstanding options, end of period | 376 | $ | 5.25 | 6.1 | $ | 937 | |||||||||||
Options exerciseable, end of period | 241 | $ | 6.56 | 4.8 | $ | 443 | |||||||||||
Options expected to vest, end of period | 135 | $ | 2.9 | 8.4 | $ | 494 | |||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Option | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Shares | Exercise Price | Remaining Term | Intrinsic Value | ||||||||||||||
(in thousands, except exercise price and contractual terms) | |||||||||||||||||
Outstanding options, beginning of period | 377 | $ | 6.76 | ||||||||||||||
Granted | 147 | 2.92 | |||||||||||||||
Exercised | (5 | ) | 3.25 | ||||||||||||||
Forefeited or expired | (72 | ) | 7.68 | ||||||||||||||
Outstanding options, end of period | 447 | $ | 5.38 | 6.1 | $ | 160 | |||||||||||
Options exerciseable, end of period | 278 | $ | 7 | 4.4 | $ | 29 | |||||||||||
Options expected to vest, end of period | 169 | $ | 2.72 | 9.1 | $ | 131 | |||||||||||
As of December 31, 2014, 2013 and 2012, there was $0.4 million, $0.1 million and $0.2 million, respectively, of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s plan. That cost is expected to be recognized over a weighted average period of 3.9 years, 2.5 years, and 4.3 years, respectively. The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012, was $54,200, $13,800, and $0, respectively. | |||||||||||||||||
The following table summarizes the change in unvested stock option shares during the year ended December 31, 2014: | |||||||||||||||||
Weighted Average | |||||||||||||||||
Number of | Grant-Date | ||||||||||||||||
Option Shares | Fair Value | ||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Unvested options, beginning of period | 135 | $ | 1.77 | ||||||||||||||
Granted | 190 | 4.57 | |||||||||||||||
Vested | (79 | ) | 3.21 | ||||||||||||||
Forefeited | (33 | ) | 3.43 | ||||||||||||||
Unvested options, end of period | 213 | $ | 3.47 |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
EARNINGS PER SHARE [Abstract] | |||||||||||||
EARNINGS PER SHARE | 12. EARNINGS PER SHARE | ||||||||||||
The following table presents a reconciliation of basic earnings per share and diluted earnings per share: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands, except per share amounts) | |||||||||||||
Net income | $ | 7,046 | $ | 8,986 | $ | 3,173 | |||||||
Less: dividends and accretion on preferred stock and discount on partial redemption | 778 | 1,039 | 1,046 | ||||||||||
Net income available to common stockholders | $ | 6,268 | $ | 7,947 | $ | 2,127 | |||||||
Add: debenture interest expense and costs, net of income taxes | 103 | 244 | 430 | ||||||||||
Net income for diluted calculation of earnings per common share | $ | 6,371 | $ | 8,191 | $ | 2,557 | |||||||
Weighted average number of common shares outstanding - basic | 8,141 | 7,017 | 5,990 | ||||||||||
Weighted average number of common shares outstanding - diluted | 8,505 | 8,390 | 8,233 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 0.77 | $ | 1.13 | $ | 0.36 | |||||||
Diluted | $ | 0.75 | $ | 0.98 | $ | 0.31 |
CAPITAL_REQUIREMENTS
CAPITAL REQUIREMENTS | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS [Abstract] | |||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS | 13. CAPITAL REQUIREMENTS | ||||||||||||||||||||||||||||
The Company and CWB are subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on the Company’s business and financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and CWB must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies. | |||||||||||||||||||||||||||||
The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) contains rules as to the legal and regulatory environment for insured depository institutions, including increased supervision by the federal regulatory agencies, increased reporting requirements for insured institutions and regulations concerning internal controls, accounting and operations. The prompt corrective action regulations of FDICIA define specific capital categories based on the institutions’ capital ratios. The capital categories, in declining order, are “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized” and “critically undercapitalized”. To be considered “well capitalized”, an institution must have a core or leverage capital ratio of at least 5%, a Tier I risk-based capital ratio of at least 6%, and a total risk-based capital ratio of at least 10%. Tier I risk-based capital is, primarily, common stock and retained earnings, net of goodwill and other intangible assets. | |||||||||||||||||||||||||||||
Quantitative measures established by regulation to ensure capital adequacy require the Company and CWB to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 leverage capital (as defined) to adjusted average assets (as defined). | |||||||||||||||||||||||||||||
The Company’s and CWB’s capital amounts and ratios as of December 31, 2014 and 2013 are presented in the table below: | |||||||||||||||||||||||||||||
Risk- | Adjusted | Total Risk- | Tier 1 | Tier 1 | |||||||||||||||||||||||||
Total | Tier 1 | Weighted | Average | Based Capital | Risk-Based | Leverage | |||||||||||||||||||||||
Capital | Capital | Assets | Assets | Ratio | Capital Ratio | Ratio | |||||||||||||||||||||||
31-Dec-14 | (dollars in thousands) | ||||||||||||||||||||||||||||
CWBC (Consolidated) | $ | 72,569 | $ | 66,939 | $ | 448,199 | $ | 564,630 | 16.19 | % | 14.94 | % | 11.86 | % | |||||||||||||||
CWB | $ | 71,303 | $ | 65,673 | $ | 448,118 | $ | 564,331 | 15.91 | % | 14.66 | % | 11.64 | % | |||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
CWBC (Consolidated) | $ | 74,712 | $ | 67,773 | $ | 432,958 | $ | 534,408 | 17.26 | % | 15.65 | % | 12.68 | % | |||||||||||||||
CWB | $ | 72,886 | $ | 67,391 | $ | 432,802 | $ | 531,503 | 16.84 | % | 15.57 | % | 12.68 | % | |||||||||||||||
Well-capitalized ratios | 10 | % | 6 | % | 5 | % | |||||||||||||||||||||||
Minimum capital ratios | 8 | % | 4 | % | 4 | % | |||||||||||||||||||||||
During 2013, the OCC Agreement specified that the Bank maintain certain minimum capital ratios, Tier 1 capital at least equal to 9.00% of adjusted total assets and total risk-based capital at least equal to 12.00% of risk weighted assets. CWB maintained the capital requirements to be deemed “well capitalized” and the capital requirements of the OCC Agreement at December 31, 2013, however, the Bank was deemed to be “adequately capitalized” as a result of the OCC Agreement. As of January 27, 2014, the OCC Agreement had been terminated and CWB is no longer subject to these capital requirements. |
EMPLOYEE_BENEFIT_PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2014 | |
EMPLOYEE BENEFIT PLAN [Abstract] | |
EMPLOYEE BENEFIT PLAN | 14. EMPLOYEE BENEFIT PLAN |
The Company has a qualified 401(k) employee benefit plan for all eligible employees. Participants are able to defer up to a maximum of $17,500 (for those under 50 years of age in 2014) of their annual compensation. The Company may elect to match a discretionary amount each year, which was 50% of the first 6% of the participant’s compensation deferred into the plan. The Company’s total contribution was $0.2 million, for the years ended December 31, 2014, 2013 and 2012, respectively. |
FAIR_VALUE_MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
FAIR VALUE MEASUREMENT [Abstract] | |||||||||||||||||||||
FAIR VALUE MEASUREMENT | 15. FAIR VALUE MEASUREMENT | ||||||||||||||||||||
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities. FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) established a framework for measuring fair value using a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset as of the measurement date. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would consider in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs, as follows: | |||||||||||||||||||||
· | Level 1— Observable quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||||||||||||||
· | Level 2— Observable quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, matrix pricing or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly in the market. | ||||||||||||||||||||
· | Level 3— Model-based techniques where all significant assumptions are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques may include use of discounted cash flow models and similar techniques. | ||||||||||||||||||||
The availability of observable inputs varies based on the nature of the specific financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. | |||||||||||||||||||||
Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. When market assumptions are available, ASC 820 requires the Company to make assumptions regarding the assumptions that market participants would use to estimate the fair value of the financial instrument at the measurement date. | |||||||||||||||||||||
FASB ASC 825, Financial Instruments (“ASC 825”) requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. | |||||||||||||||||||||
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2014 or 2013. The estimated fair value amounts for December 31, 2014 and 2013 have been measured as of period-end, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those dates. As such, the estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at the period-end. | |||||||||||||||||||||
This information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. | |||||||||||||||||||||
Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimate, comparisons between the Company’s disclosures and those of other companies or banks may not be meaningful. | |||||||||||||||||||||
The following tables summarize the fair value of assets measured on a recurring basis: | |||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||
Quoted Prices | |||||||||||||||||||||
in Active | Significant | ||||||||||||||||||||
Markets for | Other | Significant | |||||||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | Fair | ||||||||||||||||||
31-Dec-14 | (Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||||||
Assets: | (in thousands) | ||||||||||||||||||||
Investment securities available-for-sale | $ | 61 | $ | 22,133 | $ | - | $ | 22,194 | |||||||||||||
Interest only strips | - | - | 293 | 293 | |||||||||||||||||
Servicing assets | - | - | 203 | 203 | |||||||||||||||||
$ | 61 | $ | 22,133 | $ | 496 | $ | 22,690 | ||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||
Quoted Prices | |||||||||||||||||||||
in Active | Significant | ||||||||||||||||||||
Markets for | Other | Significant | |||||||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | Fair | ||||||||||||||||||
31-Dec-13 | (Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||||||
Assets: | (in thousands) | ||||||||||||||||||||
Investment securities available-for-sale | $ | 69 | $ | 18,403 | $ | - | $ | 18,472 | |||||||||||||
Interest only strips | - | - | 334 | 334 | |||||||||||||||||
Servicing assets | - | - | 300 | 300 | |||||||||||||||||
$ | 69 | $ | 18,403 | $ | 634 | $ | 19,106 | ||||||||||||||
Market valuations of our investment securities which are classified as level 2 are provided by an independent third party. The fair values are determined by using several sources for valuing fixed income securities. Their techniques include pricing models that vary based on the type of asset being valued and incorporate available trade, bid and other market information. In accordance with the fair value hierarchy, the market valuation sources include observable market inputs and are therefore considered Level 2 inputs for purposes of determining the fair values. | |||||||||||||||||||||
On certain SBA loan sales that occurred prior to 2003, the Company retained interest only strips (“I/O strips”), which represent the present value of excess net cash flows generated by the difference between (a) interest at the stated rate paid by borrowers and (b) the sum of (i) pass-through interest paid to third-party investors and (ii) contractual servicing fees. I/O strips are classified as level 3 in the fair value hierarchy. The fair value is determined on a quarterly basis through a discounted cash flow analysis prepared by an independent third party using industry prepayment speeds. I/O strip valuation adjustments are recorded as additions or offsets to loan servicing income. For additional information see Note 3 “Loan Sales and Servicing” beginning on page 69. | |||||||||||||||||||||
Historically, the Company has elected to use the amortizing method for the treatment of servicing assets and has measured for impairment on a quarterly basis through a discounted cash flow analysis prepared by an independent third party using industry prepayment speeds. In connection with the sale of certain SBA and USDA loans the Company recorded servicing assets and elected to measure those assets at fair value in accordance with ASC 825-10. Significant assumptions in the valuation of servicing assets include estimated loan repayment rates, the discount rate, and servicing costs, among others. Servicing assets are classified as Level 3 measurements due to the use of significant unobservable inputs, as well as significant management judgment and estimation. | |||||||||||||||||||||
The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets include loans held for sale, foreclosed real estate and repossessed assets and loans that are considered impaired per generally accepted accounting principles. | |||||||||||||||||||||
The following summarizes the fair value measurements of assets measured on a non-recurring basis: | |||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||
Quoted Prices | |||||||||||||||||||||
in Active | Active | ||||||||||||||||||||
Markets for | Markets for | Unobservable | |||||||||||||||||||
Identical Assets | Similar Assets | Inputs | |||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
As of December 31, 2014: | |||||||||||||||||||||
Impaired loans | $ | 5,580 | $ | - | $ | 5,580 | $ | - | |||||||||||||
Loans held for sale | 71,475 | - | 71,475 | - | |||||||||||||||||
Foreclosed real estate and repossessed assets | 137 | - | 137 | - | |||||||||||||||||
$ | 77,192 | $ | - | $ | 77,192 | $ | - | ||||||||||||||
As of December 31, 2013: | |||||||||||||||||||||
Impaired loans | $ | 7,105 | $ | - | $ | 7,105 | $ | - | |||||||||||||
Loans held for sale | 68,766 | - | 68,766 | - | |||||||||||||||||
Foreclosed real estate and repossessed assets | 3,811 | - | 3,811 | - | |||||||||||||||||
$ | 79,682 | $ | - | $ | 79,682 | $ | - | ||||||||||||||
The Company records certain loans at fair value on a non-recurring basis. When a loan is considered impaired an allowance for a loan loss is established. The fair value measurement and disclosure requirement applies to loans measured for impairment using the practical expedients method permitted by accounting guidance for impaired loans. Impaired loans are measured at an observable market price, if available or at the fair value of the loan’s collateral, if the loan is collateral dependent. The fair value of the loan’s collateral is determined by appraisals or independent valuation. When the fair value of the loan’s collateral is based on an observable market price or current appraised value, given the current real estate markets, the appraisals may contain a wide range of values and accordingly, the Company classifies the fair value of the impaired loans as a non-recurring valuation within Level 2 of the valuation hierarchy. For loans in which impairment is determined based on the net present value of cash flows, the Company classifies these as a non-recurring valuation within Level 3 of the valuation hierarchy. | |||||||||||||||||||||
Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics or based on the agreed-upon sale price. As such, the Company classifies the fair value of loans held for sale as a non-recurring valuation within Level 2 of the fair value hierarchy. At December 31, 2014 and 2013, the Company had loans held for sale with an aggregate carrying value of $66.8 million and $64.4 million respectively. | |||||||||||||||||||||
Foreclosed real estate and repossessed assets are carried at the lower of book value or fair value less estimated costs to sell. Fair value is based upon independent market prices obtained from certified appraisers or the current listing price, if lower. When the fair value of the collateral is based on a current appraised value, the Company reports the fair value of the foreclosed collateral as non-recurring Level 2. When a current appraised value is not available or if management determines the fair value of the collateral is further impaired, the Company reports the foreclosed collateral as non-recurring Level 3. | |||||||||||||||||||||
FAIR VALUES OF FINANCIAL INSTRUMENTS | |||||||||||||||||||||
The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. | |||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||
Carrying | Fair Value | ||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Financial assets: | (in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 18,959 | $ | 18,959 | $ | - | $ | - | $ | 18,959 | |||||||||||
Interest-bearing deposits in other financial institutions | 99 | 99 | - | - | 99 | ||||||||||||||||
FRB and FHLB stock | 3,089 | - | 3,089 | - | 3,089 | ||||||||||||||||
Investment securities | 30,641 | 61 | 31,027 | - | 31,088 | ||||||||||||||||
Loans, net | 487,256 | - | 490,193 | 10,405 | 500,598 | ||||||||||||||||
Financial liabilities: | |||||||||||||||||||||
Deposits | 477,084 | - | 477,204 | - | 477,204 | ||||||||||||||||
Other borrowings | 10,000 | - | 10,070 | - | 10,070 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Carrying | Fair Value | ||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Financial assets: | (in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 19,478 | $ | 19,478 | $ | - | $ | - | $ | 19,478 | |||||||||||
Interest-bearing deposits in other financial institutions | 99 | 99 | - | - | 99 | ||||||||||||||||
FRB and FHLB stock | 3,243 | - | 3,243 | - | 3,243 | ||||||||||||||||
Investment securities | 28,160 | 69 | 28,504 | - | 28,573 | ||||||||||||||||
Loans, net | 462,005 | - | 457,890 | 11,576 | 469,466 | ||||||||||||||||
Financial liabilities: | |||||||||||||||||||||
Deposits | 436,135 | - | 436,094 | - | 436,094 | ||||||||||||||||
Other borrowings | 31,442 | - | 32,017 | - | 32,017 | ||||||||||||||||
Interest rate risk | |||||||||||||||||||||
The Company assumes interest rate risk (the risk to the Company’s earnings and capital from changes in interest rate levels) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments as well as its future net interest income will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. | |||||||||||||||||||||
Interest rate risk exposure is measured using interest rate sensitivity analysis to determine our change in net portfolio value and net interest income resulting from hypothetical changes in interest rates. If potential changes to net portfolio value and net interest income resulting from hypothetical interest rate changes are not within the limits established by the Board of Directors, the Board of Directors may direct management to adjust the asset and liability mix to bring interest rate risk within board-approved limits. As of December 31, 2014, the Company’s interest rate risk profile was within Board-approved limits. | |||||||||||||||||||||
The Company’s subsidiary bank has an Asset and Liability Management Committee charged with managing interest rate risk within Board approved limits. Such limits are structured to prohibit an interest rate risk profile that is significantly asset or liability sensitive. | |||||||||||||||||||||
Fair value of commitments | |||||||||||||||||||||
The estimated fair value of standby letters of credit outstanding at December 31, 2014 and 2013 was insignificant. Loan commitments on which the committed interest rates were less than the current market rate are also insignificant at December 31, 2014 and 2013. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | 16. ACCUMULATED OTHER COMPREHENSIVE INCOME | |||||||||||||
The following table summarizes the changes in other comprehensive income by component, net of tax for the period indicated: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Unrealized holding gains (losses ) on AFS | ||||||||||||||
(in thousands) | ||||||||||||||
Beginning balance | $ | (274 | ) | $ | 35 | $ | 139 | |||||||
Other comprehensive income (loss) before reclassifications | 305 | (309 | ) | (5 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | - | - | (99 | ) | ||||||||||
Net current-period other comprehensive income | 305 | (309 | ) | (104 | ) | |||||||||
Ending Balance | $ | 31 | $ | (274 | ) | $ | 35 | |||||||
The following table presents reclassifications out of accumulated other comprehensive income: | ||||||||||||||
Accumulated other comprehensive | Year Ended December 31, | |||||||||||||
income components details | 2014 | 2013 | 2012 | |||||||||||
(in thousands) | ||||||||||||||
Unrealized gains and losses on AFS | ||||||||||||||
$ | - | $ | - | $ | 121 | Realized gain on sale of investment securities | ||||||||
- | - | (22 | ) | Income tax expense | ||||||||||
$ | - | $ | - | $ | 99 | Net of tax |
PARENT_COMPANY_FINANCIAL_INFOR
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
PARENT COMPANY FINANCIAL INFORMATION [Abstract] | |||||||||||||
PARENT COMPANY FINANCIAL INFORMATION | 17. PARENT COMPANY FINANCIAL INFORMATION | ||||||||||||
The condensed financial statements of the holding company are presented in the following tables: | |||||||||||||
COMMUNITY WEST BANCSHARES | |||||||||||||
Condensed Balance Sheets | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents (including interest-bearing deposits in other financial institutions) | $ | 1,122 | $ | 3,227 | |||||||||
Investment in subsidiary | 65,710 | 67,448 | |||||||||||
Other assets | 222 | 154 | |||||||||||
Total assets | $ | 67,054 | $ | 70,829 | |||||||||
Liabilities and Stockholders' Equity: | |||||||||||||
Convertible debentures | $ | - | $ | 1,442 | |||||||||
Other liabilities | 78 | 1,557 | |||||||||||
Total liabilities | 78 | 2,999 | |||||||||||
Preferred stock | 7,014 | 15,600 | |||||||||||
Common stock | 41,957 | 40,165 | |||||||||||
Retained earnings | 18,005 | 12,065 | |||||||||||
Total stockholders' equity | 66,976 | 67,830 | |||||||||||
Total liabilities and stockholders' equity | $ | 67,054 | $ | 70,829 | |||||||||
COMMUNITY WEST BANCSHARES | |||||||||||||
Condensed Income Statements | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Interest income | $ | 8 | $ | 5 | $ | 15 | |||||||
Interest expense | 30 | 442 | 717 | ||||||||||
Net interest expense | (22 | ) | (437 | ) | (702 | ) | |||||||
Income from consolidated subsidiary | 7,446 | 9,567 | 4,168 | ||||||||||
Other income | - | 71 | - | ||||||||||
Total income | 7,424 | 9,201 | 3,466 | ||||||||||
Total non-interest expenses | 599 | 215 | 293 | ||||||||||
Income before income tax benefit | 6,825 | 8,986 | 3,173 | ||||||||||
Income tax benefit | (221 | ) | - | - | |||||||||
Net income | 7,046 | 8,986 | 3,173 | ||||||||||
Preferred stock dividends and accretion on preferred stock | 937 | 1,039 | 1,046 | ||||||||||
Discount on partial redemption of preferred stock | (159 | ) | - | - | |||||||||
Net income available to common stockholders' | $ | 6,268 | $ | 7,947 | $ | 2,127 | |||||||
COMMUNITY WEST BANCSHARES | |||||||||||||
Condensed Statements of Cash Flows | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Cash Flows from Operating Activities: | |||||||||||||
Net income | $ | 7,046 | $ | 8,986 | $ | 3,173 | |||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||
Equity in undistributed income from subsidiary | (7,446 | ) | (9,567 | ) | (4,168 | ) | |||||||
Stock-based compensation | 308 | 59 | 117 | ||||||||||
Changes in: | |||||||||||||
Other assets | (68 | ) | 23 | 315 | |||||||||
Other liabilities | (4 | ) | (2 | ) | 35 | ||||||||
Net cash used in operating activities | (164 | ) | (501 | ) | (528 | ) | |||||||
Cash Flows from Investing Activities: | |||||||||||||
Net dividends from and investment in subsidiary | 9,184 | - | (1,000 | ) | |||||||||
Net cash provided by (used in) investing activities | 9,184 | - | (1,000 | ) | |||||||||
Cash Flows from Financing Activities: | |||||||||||||
Redemption of convertible debentures | (34 | ) | - | - | |||||||||
Preferred stock dividends paid | (2,390 | ) | - | (195 | ) | ||||||||
Redemption of preferred stock | (8,427 | ) | - | - | |||||||||
Common stock dividends paid | (328 | ) | - | - | |||||||||
Proceeds from issuance of common stock | 54 | 24 | 16 | ||||||||||
Net cash (used in) provided by financing activities | (11,125 | ) | 24 | (179 | ) | ||||||||
Net decrease in cash and cash equivalents | (2,105 | ) | (477 | ) | (1,707 | ) | |||||||
Cash and cash equivalents at beginning of year | 3,227 | 3,704 | 5,411 | ||||||||||
Cash and cash equivalents at end of year | $ | 1,122 | $ | 3,227 | $ | 3,704 |
QUARTERLY_FINANCIAL_DATA_UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract] | |||||||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | 18. QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | |||||||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | |||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
Interest income | $ | 6,961 | $ | 7,122 | $ | 6,903 | $ | 7,018 | $ | 28,004 | |||||||||||
Interest expense | 879 | 849 | 835 | 712 | 3,275 | ||||||||||||||||
Net interest income | 6,082 | 6,273 | 6,068 | 6,306 | 24,729 | ||||||||||||||||
Provision for loan losses | (1,371 | ) | (1,011 | ) | (1,178 | ) | (1,575 | ) | (5,135 | ) | |||||||||||
Net interest income after provision for loan losses | 7,453 | 7,284 | 7,246 | 7,881 | 29,864 | ||||||||||||||||
Non-interest income | 518 | 656 | 552 | 471 | 2,197 | ||||||||||||||||
Non-interest expenses | 5,525 | 5,031 | 4,879 | 4,646 | 20,081 | ||||||||||||||||
Income before income taxes | 2,446 | 2,909 | 2,919 | 3,706 | 11,980 | ||||||||||||||||
Provision for income taxes | 1,004 | 1,203 | 1,207 | 1,520 | 4,934 | ||||||||||||||||
Net income | 1,442 | 1,706 | 1,712 | 2,186 | 7,046 | ||||||||||||||||
Dividends and accretion on preferred stock | 273 | 329 | 176 | 159 | 937 | ||||||||||||||||
Discount on partial redemption of preferred stock | - | (144 | ) | - | (15 | ) | (159 | ) | |||||||||||||
Net income available to common stockholders | $ | 1,169 | $ | 1,521 | $ | 1,536 | $ | 2,042 | $ | 6,268 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Income per common share - basic | $ | 0.15 | $ | 0.19 | $ | 0.19 | $ | 0.25 | $ | 0.77 | |||||||||||
Income per common share - diluted | $ | 0.15 | $ | 0.18 | $ | 0.18 | $ | 0.24 | $ | 0.75 | |||||||||||
December 31, | |||||||||||||||||||||
2013 | |||||||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | |||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
Interest income | $ | 6,976 | $ | 7,044 | $ | 7,081 | $ | 6,765 | $ | 27,866 | |||||||||||
Interest expense | 1,166 | 1,161 | 1,047 | 958 | 4,332 | ||||||||||||||||
Net interest income | 5,810 | 5,883 | 6,034 | 5,807 | 23,534 | ||||||||||||||||
Provision for loan losses | (196 | ) | (1,084 | ) | (1,563 | ) | 899 | (1,944 | ) | ||||||||||||
Net interest income after provision for loan losses | 6,006 | 6,967 | 7,597 | 4,908 | 25,478 | ||||||||||||||||
Non-interest income | 772 | 836 | 677 | 546 | 2,831 | ||||||||||||||||
Non-interest expenses | 5,689 | 5,677 | 5,639 | 5,130 | 22,135 | ||||||||||||||||
Income before income taxes | 1,089 | 2,126 | 2,635 | 324 | 6,174 | ||||||||||||||||
Provision (benefit) for income taxes | - | - | - | (2,812 | ) | (2,812 | ) | ||||||||||||||
Net income | 1,089 | 2,126 | 2,635 | 3,136 | 8,986 | ||||||||||||||||
Dividends and accretion on preferred stock | 262 | 262 | 262 | 253 | 1,039 | ||||||||||||||||
Net income available to common stockholders | $ | 827 | $ | 1,864 | $ | 2,373 | $ | 2,883 | $ | 7,947 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Income per common share - basic | $ | 0.14 | $ | 0.3 | $ | 0.3 | $ | 0.37 | $ | 1.11 | |||||||||||
Income per common share - diluted | $ | 0.11 | $ | 0.23 | $ | 0.29 | $ | 0.34 | $ | 0.97 | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
SUMMARY OF SIGNIFICANT OF ACCOUNTING POLICIES [Abstract] | |||||
Nature of Operations | Nature of Operations | ||||
Community West Bancshares (“CWBC”), incorporated under the laws of the state of California, is a bank holding company providing full service banking through its wholly-owned subsidiary Community West Bank, N.A. (“CWB” or the “Bank”). These entities are collectively referred to herein as the “Company”. | |||||
Basis of Presentation | Basis of Presentation | ||||
The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States (“GAAP”) and conform to practices within the financial services industry. The accounts of the Company and its consolidated subsidiary are included in these Consolidated Financial Statements. All significant intercompany balances and transactions have been eliminated. | |||||
Use of Estimates | Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses and fair value of other real estate owned. Although Management believes these estimates to be reasonably accurate, actual amounts may differ. In the opinion of Management, all adjustments considered necessary have been reflected in the financial statements during their preparation. | |||||
Reclassifications | Reclassifications | ||||
Certain amounts in the consolidated financial statements as of and for the years ended December 31, 2013 and 2012 have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported. | |||||
Business Segments | Business Segments | ||||
Reportable business segments are determined using the “management approach” and are intended to present reportable segments consistent with how the chief operating decision maker organizes segments within the company for making operating decisions and assessing performance. As of December 31, 2014 and 2013, the Company had only one reportable business segment. | |||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks (including cash items in process of clearing), and federal funds sold. Cash flows from loans originated by the Company and deposits are reported net. | |||||
The Company maintains amounts due from banks, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. | |||||
Cash Reserve Requirements | Cash Reserve Requirement | ||||
Depository institutions are required by law to maintain reserves against their transaction deposits. The reserves must be held in cash or with the Federal Reserve Bank (“FRB”). The amount of the reserve varies by bank as the bank is permitted to meet this requirement by maintaining the specified amount as an average balance over a two-week period. The total of reserve balances was approximately $0.7 million as of December 31, 2014 and 2013. | |||||
Investment Securities | Investment Securities | ||||
Investment securities may be classified as held-to-maturity (“HTM”), available-for-sale (“AFS”) or trading. The appropriate classification is initially decided at the time of purchase. Securities classified as held-to-maturity are those debt securities the Company has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or general economic conditions. These securities are carried at amortized cost. The sale of a security within three months of its maturity date or after the majority of the principal outstanding has been collected is considered a maturity for purposes of classification and disclosure. | |||||
Securities classified as AFS or trading are reported as an asset on the Consolidated Balance Sheets at their estimated fair value. As the fair value of AFS securities changes, the changes are reported net of income tax as an element of other comprehensive income (“OCI”), except for impaired securities. When AFS securities are sold, the unrealized gain or loss is reclassified from OCI to non-interest income. The changes in the fair values of trading securities are reported in non-interest income. Securities classified as AFS are debt securities the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality, and regulatory capital considerations. The Company does not currently have any investment securities classified as trading. | |||||
Interest income is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the amortization of premiums paid over the contractual life of the security using the interest method. For mortgage-backed securities, estimates of prepayments are considered in the constant yield calculations. | |||||
In estimating whether there are any other than temporary impairment losses, management considers 1) the length of time and the extent to which the fair value has been less than amortized cost, 2) the financial condition and near term prospects of the issuer, 3) the impact of changes in market interest rates, and 4) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value and it is not more likely than not the Company would be required to sell the security. | |||||
Declines in the fair value of individual debt securities available for sale that are deemed to be other than temporary are reflected in earnings when identified. The fair value of the debt security then becomes the new cost basis. For individual debt securities where the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other than temporary decline in fair value of the debt security related to 1) credit loss is recognized in earnings, and 2) market or other factors is recognized in other comprehensive income or loss. Credit loss is recorded if the present value of cash flows is less than amortized cost. | |||||
For individual debt securities where the Company intends to sell the security or more likely than not will not recover all of its amortized cost, the other than temporary impairment is recognized in earnings equal to the entire difference between the securities cost basis and its fair value at the balance sheet date. For individual debt securities for which a credit loss has been recognized in earnings, interest accruals and amortization and accretion of premiums and discounts are suspended when the credit loss is recognized. Interest received after accruals have been suspended is recognized on a cash basis. | |||||
Federal Home Loan Bank and Federal Reserve Bank Stock | Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) Stock | ||||
The Company’s subsidiary bank is a member of the Federal Home Loan Bank (“FHLB”) system and maintains an investment in capital stock of the FHLB. The bank also maintains an investment in FRB stock. These investments are considered equity securities with no actively traded market. These investments are carried at cost, which is equal to the value at which they may be redeemed. The dividend income received from the stock is reported in interest income. We conduct a periodic review and evaluation of our FHLB stock to determine if any impairment exists. | |||||
Servicing Rights | Servicing Assets | ||||
The guaranteed portion of certain Small Business Administration (“SBA”) loans can be sold into the secondary market. Servicing assets are recognized as separate assets when loans are sold with servicing retained. Servicing assets are amortized in proportion to, and over the period of, estimated future net servicing income. The Company uses industry prepayment statistics and its own prepayment experience in estimating the expected life of the loans. Management evaluates its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Fair value is determined using discounted future cash flows calculated on a loan-by-loan basis and aggregated by predominate risk characteristics. The initial servicing asset and resulting gain on sale are calculated based on the difference between the best actual par and premium bids on an individual loan basis. | |||||
Loans Held for Sale | Loans Held For Sale | ||||
Loans which are originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value determined on an aggregate basis. Valuation adjustments, if any are recognized through a valuation allowance by charges to lower of cost or market provision. Loans held for sale are mostly comprised of SBA and single family residential loans. The Company did not incur any lower of cost or fair value provision in the years ended December 31, 2014, 2013 and 2012. | |||||
Loans Held for Investment and Interest and Fees From Loans | Loans Held for Investment and Interest and Fees from Loans | ||||
Loans are recognized at the principal amount outstanding, net of unearned income, loan participations and amounts charged off. Unearned income includes deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using the level yield method. | |||||
Interest income on loans is accrued daily using the effective interest method and recognized over the terms of the loans. Loan fees collected for the origination of loans less direct loan origination costs (net deferred loan fees) are amortized over the contractual life of the loan through interest income. If the loan has scheduled payments, the amortization of the net deferred loan fee is calculated using the interest method over the contractual life of the loan. If the loan does not have scheduled payments, such as a line of credit, the net deferred loan fee is recognized as interest income on a straight-line basis over the contractual life of the loan commitment. Commitment fees based on a percentage of a customer’s unused line of credit and fees related to standby letters of credit are recognized over the commitment period. | |||||
When loans are repaid, any remaining unamortized balances of unearned fees, deferred fees and costs and premiums and discounts paid on purchased loans are accounted for though interest income. | |||||
Nonaccrual loans: For all loan types, when a borrower discontinues making payments as contractually required by the note, the Company must determine whether it is appropriate to continue to accrue interest. Generally, the Company places loans in a nonaccrual status and ceases recognizing interest income when the loan has become delinquent by more than 90 days or when Management determines that the full repayment of principal and collection of interest is unlikely. The Company may decide to continue to accrue interest on certain loans more than 90 days delinquent if they are well secured by collateral and in the process of collection. Other personal loans are typically charged off no later than 180 days delinquent. | |||||
For all loan types, when a loan is placed on nonaccrual status, all interest accrued but uncollected is reversed against interest income in the period in which the status is changed. Subsequent payments received from the customer are applied to principal and no further interest income is recognized until the principal has been paid in full or until circumstances have changed such that payments are again consistently received as contractually required. The Company occasionally recognizes income on a cash basis for non-accrual loans in which the collection of the remaining principal balance is not in doubt. | |||||
Impaired loans: A loan is considered impaired when, based on current information; it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under 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/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays or payment shortfalls on a case-by-case basis. When determining the possibility of impairment, management considers the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. For collateral-dependent loans, the Company uses the fair value of collateral method to measure impairment. The collateral-dependent loans that recognize impairment are charged down to the fair value less costs to sell. All other loans are measured for impairment either based on the present value of future cash flows or the loan’s observable market price. | |||||
Troubled debt restructured loan (“TDR”): A TDR is a loan on which the Company, for reasons related to the borrower’s financial difficulties, grants a concession to the borrower that the Company would not otherwise consider. These concessions included but are not limited to term extensions, rate reductions and principal reductions. Forgiveness of principal is rarely granted and modifications for all classes of loans are predominately term extensions. A TDR loan is also considered impaired. Generally, a loan that is modified at an effective market rate of interest may no longer be disclosed as a troubled debt restructuring in years subsequent to the restructuring if it is not impaired based on the terms specified by the restructuring agreement. | |||||
Allowance for Loan Losses and Provision for Credit Losses | Allowance for Loan Losses and Provision for Credit Losses | ||||
The Company maintains a detailed, systematic analysis and procedural discipline to determine the amount of the allowance for loan losses (“ALL”). The ALL is based on estimates and is intended to be appropriate to provide for probable losses inherent in the loan portfolio. This process involves deriving probable loss estimates that are based on migration analysis and historical loss rates, in addition to qualitative factors that are based on management’s judgment. The migration analysis and historical loss rate calculations are based on the annualized loss rates utilizing a twelve-quarter loss history. Migration analysis is utilized for the Commercial Real Estate (“CRE”), Commercial, Commercial Agriculture, Small Business Administration (“SBA”), Home Equity Line of Credit (“HELOC”), Single Family Residential, and Consumer portfolios. The historical loss rate method is utilized primarily for the Manufactured Housing portfolio. The migration analysis takes into account the risk rating of loans that are charged off in each loan category. Loans that are considered Doubtful are typically charged off. The following is a description of the characteristics of loan ratings. Loan ratings are reviewed as part of our normal loan monitoring process, but, at a minimum, updated on an annual basis. | |||||
Outstanding – This is the highest quality rating that is assigned to any loan in the portfolio. These loans are made to the highest quality borrowers with strong financial statements and unquestionable repayment sources. Collateral securing these types of credits are generally cash deposits in the bank or marketable securities held in custody. | |||||
Good – Loans rated in this category are strong loans, underwritten well, that bear little risk of loss to the Company. Loans in this category are loans to quality borrowers with very good financial statements that present an identifiable strong primary source and good secondary source of repayment. Generally, these credits are well collateralized by good quality and liquid assets or low loan to value market real estate. | |||||
Pass - Loans rated in this category are acceptable loans, appropriately underwritten, bearing an ordinary risk of loss to the Company. Loans in this category are loans to quality borrowers with financial statements presenting a good primary source as well as an adequate secondary source of repayment. In the case of individuals, borrowers with this rating are quality borrowers demonstrating a reasonable level of secure income, a net worth adequate to support the loan and presenting a good primary source as well as an adequate secondary source of repayment. | |||||
Watch – Acceptable credit that requires a temporary increase in attention by management. This can be caused by declines in sales, margins, liquidity or working capital. Generally the primary weakness is lack of current financial statements and industry issues. | |||||
Special Mention - A Special Mention loan has potential weaknesses that require management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution's credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. | |||||
Substandard - A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize full collection of amounts due. They are characterized by the distinct possibility that the Company will sustain some loss if the borrower’s deficiencies are not corrected. | |||||
Doubtful - A loan classified Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. | |||||
Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable loans is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future. Losses are taken in the period in which they are considered uncollectible. | |||||
The Company’s ALL is maintained at a level believed appropriate by management to absorb known and inherent probable losses on existing loans. The allowance is charged for losses when management believes that full recovery on the loan is unlikely. The following is the Company’s policy regarding charging off loans. | |||||
Commercial, CRE and SBA Loans | |||||
Charge-offs on these loan categories are taken as soon as all or a portion of any loan balance is deemed to be uncollectible. A loan is considered impaired when, based on current information, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under 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/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Generally, loan balances are charged-down to the fair value of the collateral, if, based on a current assessment of the value, an apparent deficiency exists. In the event there is no perceived equity, the loan is charged-off in full. Unsecured loans which are delinquent over 90 days are also charged-off in full. | |||||
Single Family Real Estate, HELOC’s and Manufactured Housing Loans | |||||
Consumer loans and residential mortgages secured by one-to-four family residential properties, HELOC and manufactured housing loans in which principal or interest is due and unpaid for 90 days, are evaluated for impairment. Loan balances are charged-off to the fair value of the property, less estimated selling costs, if, based on a current appraisal, an apparent deficiency exists. In the event there is no perceived equity, the loan is generally fully charged-off. Other consumer loans which are not secured and unpaid over 90-120 days are charged-off in full. | |||||
Consumer Loans | |||||
All consumer loans (excluding real estate mortgages, HELOCs and savings secured loans) are charged-off or charged-down to net recoverable value before becoming 120 days or five payments delinquent. | |||||
The ALL calculation for the different loan portfolios is as follows: | |||||
· | Commercial Real Estate, Commercial, Commercial Agriculture, SBA, HELOC, Single Family Residential, and Consumer – Migration analysis combined with risk rating is used to determine the required ALL for all non-impaired loans. In addition, the migration results are adjusted based upon qualitative factors that affect this specific portfolio category. Reserves on impaired loans are determined based upon the individual characteristics of the loan. | ||||
· | Manufactured Housing – The ALL is calculated on the basis of loss history and risk rating, which is primarily a function of delinquency. In addition, the loss results are adjusted based upon qualitative factors that affect this specific portfolio. | ||||
The Company evaluates and individually assesses for impairment loans generally greater than $500,000, classified as substandard or doubtful in addition to loans either on nonaccrual, considered a TDR or when other conditions exist which lead management to review for possible impairment. Measurement of impairment on impaired loans is determined on a loan-by-loan basis and in total establishes a specific reserve for impaired loans. The amount of impairment is determined by comparing the recorded investment in each loan with its value measured by one of three methods: | |||||
· | The expected future cash flows are estimated and then discounted at the effective interest rate. | ||||
· | The value of the underlying collateral net of selling costs. Selling costs are estimated based on industry standards, the Company’s actual experience or actual costs incurred as appropriate. When evaluating real estate collateral, the Company typically uses appraisals or valuations, no more than twelve months old at time of evaluation. When evaluating non-real estate collateral securing the loan, the Company will use audited financial statements or appraisals no more than twelve months old at time of evaluation. Additionally, for both real estate and non-real estate collateral, the Company may use other sources to determine value as deemed appropriate. | ||||
· | The loan’s observable market price. | ||||
Interest income is not recognized on impaired loans except for limited circumstances in which a loan, although impaired, continues to perform in accordance with the loan contract and the borrower provides financial information to support maintaining the loan on accrual. | |||||
The Company determines the appropriate ALL on a monthly basis. Any differences between estimated and actual observed losses from the prior month are reflected in the current period in determining the appropriate ALL determination and adjusted as deemed necessary. The review of the appropriateness of the allowance takes into consideration such factors as concentrations of credit, changes in the growth, size and composition of the loan portfolio, overall and individual portfolio quality, review of specific problem loans, collateral, guarantees and economic and environmental conditions that may affect the borrowers' ability to pay and/or the value of the underlying collateral. Additional factors considered include: geographic location of borrowers, changes in the Company’s product-specific credit policy and lending staff experience. These estimates depend on the outcome of future events and, therefore, contain inherent uncertainties. | |||||
Another component of the ALL considers qualitative factors related to non-impaired loans. The qualitative portion of the allowance on each of the loan pools is based on the following factors: | |||||
· | Concentrations of credit | ||||
· | International risk | ||||
· | Trends in volume, maturity, and composition | ||||
· | Volume and trend in delinquency | ||||
· | Economic conditions | ||||
· | Outside exams | ||||
· | Geographic distance | ||||
· | Policy and changes | ||||
· | Staff experience and ability | ||||
Off-Balance-Sheet Credit Exposure | Off Balance Sheet and Credit Exposure | ||||
In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheets. Losses would be experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from the borrower, which may not be as financially sound in the current period as they were when the commitment was originally made. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral. | |||||
As with outstanding loans, the Company applies qualitative factors and utilization rates to its off-balance sheet obligations in determining an estimate of losses inherent in these contractual obligations. The estimate for loan losses on off-balance sheet instruments is included within other liabilities and the charge to income that establishes this liability is include in non-interest expense. | |||||
Premises and Equipment | Premises and Equipment | ||||
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter. Generally, the estimated useful lives of other items of premises and equipment are as follows: | |||||
Years | |||||
Building and improvements | 31.5 | ||||
Furniture and equipment | 5 – 10 | ||||
Electronic equipment and software | 3 – 5 | ||||
Foreclosed Real Estate and Repossessed Assets | Foreclosed Real Estate and Repossessed Assets | ||||
Foreclosed real estate and other repossessed assets are recorded at fair value at the time of foreclosure less estimated costs to sell. Any excess of loan balance over the fair value less estimated costs to sell of the other assets is charged-off against the allowance for loan losses. Any excess of the fair value less estimated costs to sell over the loan balance is recorded as a loan loss recovery to the extent of the loan loss previously charged-off against the allowance for loan losses; and, if greater, recorded as a gain on foreclosed assets. Subsequent to the legal ownership date, management periodically performs a new valuation and the asset is carried at the lower of carrying amount or fair value less estimated costs to sell. Operating expenses or income, and gains or losses on disposition of such repossessed assets, are recorded in current operations. | |||||
Income Taxes | Income Taxes | ||||
The Company uses the asset and liability method, which recognizes an asset or liability representing the tax effects of future deductible or taxable amounts that have been recognized in the consolidated financial statements. Due to tax regulations, certain items of income and expense are recognized in different periods for tax return purposes than for financial statement reporting. These items represent “temporary differences.” Deferred income taxes are recognized for the tax effect of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if, based on weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets may not be realized. Any interest or penalties assessed by the taxing authorities is classified in the financial statements as income tax expense. Deferred tax assets are included in other assets on the consolidated balance sheets. | |||||
Management evaluates the Company’s deferred tax asset for recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized. | |||||
The Company is subject to the provisions of ASC 740, Income Taxes (“ASC 740”). ASC 740 prescribes a more-likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company evaluates income tax accruals in accordance with ASC 740 guidance on uncertain tax positions. | |||||
Bank Owned Life Insurance | Bank Owned Life Insurance | ||||
Bank owned life insurance is stated at its cash surrender value with changes recorded in other non-interest income in the consolidated statements of operations. The cash surrender value of the underlying policies was $3.2 million and $3.1 million as of December 31, 2014 and 2013, respectively. There are no loans offset against cash surrender values, and there are no restrictions as to the use of proceeds. | |||||
Preferred Stock | Preferred Stock | ||||
The Company’s Series A Preferred Stock paid cumulative dividends at a rate of 5% per year until February 15, 2014 then increased to a rate of 9% per year thereafter. The Series A Preferred Stock has no maturity date and ranks senior to the Common Stock with respect to the payment of dividends and distributions and amounts payable upon liquidation, dissolution and winding up of the Company. | |||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities. FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) established a framework for measuring fair value establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The Company uses various valuation approaches, including market, income and/or cost approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would consider in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs, as follows: | |||||
· | Level 1— Observable quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||
· | Level 2— Observable quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, matrix pricing or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly in the market. | ||||
· | Level 3— Model-based techniques where all significant assumptions are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques may include use of discounted cash flow models and similar techniques. | ||||
The availability of observable inputs varies based on the nature of the specific financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. | |||||
Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. When market assumptions are available, ASC 820 requires the Company to make assumptions regarding the assumptions that market participants would use to estimate the fair value of the financial instrument at the measurement date. | |||||
FASB ASC 825, Financial Instruments (“ASC 825”) requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. | |||||
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2014 or 2013. The estimated fair value amounts for December 31, 2014 and 2013 have been measured as of period-end, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those dates. As such, the estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at the period-end. | |||||
The information presented in Note 15, “Fair Value Measurement,” should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. | |||||
Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimate, comparisons between the Company’s disclosures and those of other companies or banks may not be meaningful. | |||||
The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: | |||||
Cash and cash equivalents | |||||
The carrying amounts reported in the consolidated balance sheets for cash and due from banks approximate their fair value. | |||||
Money market investments | |||||
The carrying amounts reported in the consolidated balance sheets for money market investments approximate their fair value. | |||||
Investment securities | |||||
The fair value of Farmer Mac class A stock is based on quoted market prices and are categorized as Level 1 of the fair value hierarchy. | |||||
The fair value of other investment securities were determined based on matrix pricing. Matrix pricing is a mathematical technique that utilizes observable market inputs including, for example, yield curves, credit ratings and prepayment speeds. Fair values determined using matrix pricing are generally categorized as Level 2 in the fair value hierarchy. | |||||
FRB and FHLB stock | |||||
CWB is a member of the FHLB system and maintains an investment in capital stock of the FHLB. CWB also maintain an investment in FRB stock. These investments are carried at cost since no ready market exists for them, and they have no quoted market value. The Company conducts a periodic review and evaluation of our FHLB stock to determine if any impairment exists. The fair values have been categorized as Level 2 in the fair value hierarchy. | |||||
Loans | |||||
Fair value for loans is estimated based on discounted cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality with adjustments that the Company believes a market participant would consider in determining fair value based on a third party independent valuation. As a result, the fair value for loans is categorized as Level 2 in the fair value hierarchy. | |||||
Deposit liabilities | |||||
The fair value disclosed for demand and savings deposits is by definition equal to the amount payable on demand at their reporting date (that is, their carrying amount) which the Company believes a market participant would consider in determining fair value. The carrying amount for variable-rate deposit accounts approximates their fair value. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on these deposits. The fair value measurement of the deposit liabilities is categorized as Level 2 in the fair value hierarchy. | |||||
Federal Home Loan Bank advances and other borrowings | |||||
The fair values of the Company’s borrowings are estimated using discounted cash flow analyses, based on the market rates for similar types of borrowing arrangements. The other borrowings have been categorized as Level 3 in the fair value hierarchy. The FHLB advances have been categorized as Level 2 in the fair value hierarchy. | |||||
Off-balance sheet instruments | |||||
Fair values for the Company’s off-balance sheet instruments (lending commitments and standby letters of credit) are based on quoted fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. | |||||
Earnings Per Share | Earnings Per Share | ||||
Basic earnings per common share is computed using the weighted average number of common shares outstanding for the period divided into the net income (loss) available to common shareholders. Diluted earnings per share include the effect of all dilutive potential common shares for the period. Potentially dilutive common shares include stock options, warrants and shares that could result from the conversion of debenture bonds. | |||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||
In July 2013, the FASB issued guidance within ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” The amendments in ASU 2013-11 to Topic 740, Income Taxes, updates the presentation of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. | |||||
In January 2014, the FASB issued guidance within ASU 2014-04, “Receivables - Troubled Debt Restructurings by Creditors: Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” The amendments in ASU 2014-04, Subtopic 310-40, Receivables -Troubled Debt Restructurings by Creditors, clarify that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure, or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASC 2014-04 are effective for the Company using either a modified retrospective transition method or a prospective transition method for reporting periods beginning after December 15, 2014. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. | |||||
In May 2014, the FASB issued guidance codified within ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers,” which amends the guidance in former Topic 605, Revenue Recognition. The new revenue recognition standard will supersede virtually all revenue guidance in U.S. GAAP, including industry specific guidance. The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. ASU 2014-09 is effective for the Company for annual reporting periods beginning after December 15, 2016. The Company may elect to apply the amendments of this Update using one of the following two methods: 1) retrospectively to each prior reporting period presented or 2) retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. The Company is currently evaluating the impact of the provisions in this standard on the Company’s consolidated financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
SUMMARY OF SIGNIFICANT OF ACCOUNTING POLICIES [Abstract] | |||||
Estimated Useful Lives of Other Items of Premises and Equipment | Generally, the estimated useful lives of other items of premises and equipment are as follows: | ||||
Years | |||||
Building and improvements | 31.5 | ||||
Furniture and equipment | 5 – 10 | ||||
Electronic equipment and software | 3 – 5 |
INVESTMENT_SECURITIES_Tables
INVESTMENT SECURITIES (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Estimated Fair Value of Investment Securities | The amortized cost and estimated fair value of investment securities are as follows: | ||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||||
Cost | Gains | (Losses) | Value | ||||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,846 | $ | 65 | $ | (49 | ) | $ | 7,862 | ||||||||||||||||||||||||||||||||
U.S. government agency collateralized mortgage obligations ("CMO") | 14,229 | 73 | (31 | ) | 14,271 | ||||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | 66 | - | (5 | ) | 61 | ||||||||||||||||||||||||||||||||||||
Total | $ | 22,141 | $ | 138 | $ | (85 | ) | $ | 22,194 | ||||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | 8,447 | $ | 447 | $ | - | $ | 8,894 | |||||||||||||||||||||||||||||||||
Total | $ | 8,447 | $ | 447 | $ | - | $ | 8,894 | |||||||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||||
Cost | Gains | (Losses) | Value | ||||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,867 | $ | - | $ | (389 | ) | $ | 7,478 | ||||||||||||||||||||||||||||||||
U.S. government agency MBS | 61 | 3 | - | 64 | |||||||||||||||||||||||||||||||||||||
U.S. government agency CMO | 10,943 | 11 | (93 | ) | 10,861 | ||||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | 66 | 3 | - | 69 | |||||||||||||||||||||||||||||||||||||
Total | $ | 18,937 | $ | 17 | $ | (482 | ) | $ | 18,472 | ||||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | 9,688 | $ | 442 | $ | (29 | ) | $ | 10,101 | ||||||||||||||||||||||||||||||||
Total | $ | 9,688 | $ | 442 | $ | (29 | ) | $ | 10,101 | ||||||||||||||||||||||||||||||||
Maturity Periods and Weighted Average Yields of Investment Securities | The maturity periods and weighted average yields of investment securities at December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||||||||||
Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | |||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||||
Securities available-for-sale | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,862 | 2.5 | % | $ | - | - | $ | - | - | $ | - | - | $ | 7,862 | 2.5 | % | ||||||||||||||||||||||||
U.S. government agency CMO | - | - | 7,826 | 1 | % | 2,801 | 0.6 | % | 3,644 | 1.1 | % | 14,271 | 1.1 | % | |||||||||||||||||||||||||||
Farmer Mac class A stock | - | - | - | - | - | - | - | - | 61 | - | |||||||||||||||||||||||||||||||
Total | $ | 7,862 | 2.5 | % | $ | 7,826 | 1 | % | $ | 2,801 | 0.6 | % | $ | 3,644 | 1.1 | % | $ | 22,194 | 1.3 | % | |||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | - | - | $ | 3,235 | 4 | % | $ | 5,212 | 2.4 | % | $ | - | - | $ | 8,447 | 2.9 | % | |||||||||||||||||||||||
Total | $ | - | - | $ | 3,235 | 4 | % | $ | 5,212 | 2.4 | % | $ | - | - | $ | 8,447 | 2.9 | % | |||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||||||
Less than One Year | One to Five Years | Five to Ten Years | Over Ten Years | Total | |||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||||||
Securities available-for-sale | (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 7,478 | 1.9 | % | $ | - | - | $ | - | - | $ | - | - | $ | 7,478 | 1.9 | % | ||||||||||||||||||||||||
U.S. government agency MBS | - | - | - | - | 64 | 2.2 | % | - | - | 64 | 2.2 | % | |||||||||||||||||||||||||||||
U.S. government agency CMO | - | - | 5,075 | 0.6 | % | 3,854 | 0.6 | % | 1,932 | 0.9 | % | 10,861 | 0.7 | % | |||||||||||||||||||||||||||
Farmer Mac class A stock | - | - | - | - | - | - | - | - | 69 | - | |||||||||||||||||||||||||||||||
Total | $ | 7,478 | 1.9 | % | $ | 5,075 | 0.6 | % | $ | 3,918 | 0.6 | % | $ | 1,932 | 0.9 | % | $ | 18,472 | 1.2 | % | |||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS | $ | - | - | $ | 2,641 | 4.4 | % | $ | 7,047 | 2.7 | % | $ | - | - | $ | 9,688 | 3.1 | % | |||||||||||||||||||||||
Total | $ | - | - | $ | 2,641 | 4.4 | % | $ | 7,047 | 2.7 | % | $ | - | - | $ | 9,688 | 3.1 | % | |||||||||||||||||||||||
Amortized Cost and Fair Value of Investment Securities by Contractual Maturities | The amortized cost and fair value of investment securities by contractual maturities as of the periods presented were as shown below: | ||||||||||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Amortized | Estimated | Amortized | Estimated | ||||||||||||||||||||||||||||||||||||||
Cost | Fair Value | Cost | Fair Value | ||||||||||||||||||||||||||||||||||||||
Securities available for sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | 7,846 | $ | 7,862 | $ | 7,867 | $ | 7,478 | |||||||||||||||||||||||||||||||||
After one year through five years | 7,798 | 7,826 | 5,070 | 5,075 | |||||||||||||||||||||||||||||||||||||
After five years through ten years | 2,792 | 2,801 | 3,945 | 3,918 | |||||||||||||||||||||||||||||||||||||
After ten years | 3,639 | 3,644 | 1,989 | 1,932 | |||||||||||||||||||||||||||||||||||||
Farmer Mac class A stock | 66 | 61 | 66 | 69 | |||||||||||||||||||||||||||||||||||||
$ | 22,141 | $ | 22,194 | $ | 18,937 | $ | 18,472 | ||||||||||||||||||||||||||||||||||
Securities held to maturity | |||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||||||
After one year through five years | 3,235 | 3,479 | 2,641 | 2,815 | |||||||||||||||||||||||||||||||||||||
After five years through ten years | 5,212 | 5,415 | 7,047 | 7,286 | |||||||||||||||||||||||||||||||||||||
After ten years | - | - | - | - | |||||||||||||||||||||||||||||||||||||
$ | 8,447 | $ | 8,894 | $ | 9,688 | $ | 10,101 | ||||||||||||||||||||||||||||||||||
Fair Value and Unrealized Losses of Securities in Unrealized Loss Position | The following tables show all securities that are in an unrealized loss position: | ||||||||||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||||||||||
Less Than Twelve Months | More Than Twelve Months | Total | |||||||||||||||||||||||||||||||||||||||
Gross | Gross | Gross | |||||||||||||||||||||||||||||||||||||||
Unrealized | Fair | Unrealized | Fair | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||
Losses | Value | Losses | Value | Losses | Value | ||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 23 | $ | 1,918 | $ | 26 | $ | 3,971 | $ | 49 | $ | 5,889 | |||||||||||||||||||||||||||||
U.S. government agency CMO | - | - | 31 | 4,090 | 31 | 4,090 | |||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | 5 | 61 | - | - | 5 | 61 | |||||||||||||||||||||||||||||||||||
$ | 28 | $ | 1,979 | $ | 57 | $ | 8,061 | $ | 85 | $ | 10,040 | ||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. Government-agency MBS | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||||||||||
Less Than Twelve Months | More Than Twelve Months | Total | |||||||||||||||||||||||||||||||||||||||
Gross | Gross | Gross | |||||||||||||||||||||||||||||||||||||||
Unrealized | Fair | Unrealized | Fair | Unrealized | Fair | ||||||||||||||||||||||||||||||||||||
Losses | Value | Losses | Value | Losses | Value | ||||||||||||||||||||||||||||||||||||
Securities available-for-sale | (in thousands) | ||||||||||||||||||||||||||||||||||||||||
U.S. government agency notes | $ | 389 | $ | 7,478 | $ | - | $ | - | $ | 389 | $ | 7,478 | |||||||||||||||||||||||||||||
U.S. government agency CMO | 93 | 6,958 | - | - | 93 | 6,958 | |||||||||||||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
$ | 482 | $ | 14,436 | $ | - | $ | - | $ | 482 | $ | 14,436 | ||||||||||||||||||||||||||||||
Securities held-to-maturity | |||||||||||||||||||||||||||||||||||||||||
U.S. Government-agency MBS | $ | 29 | $ | 1,063 | $ | - | $ | - | $ | 29 | $ | 1,063 | |||||||||||||||||||||||||||||
Total | $ | 29 | $ | 1,063 | $ | - | $ | - | $ | 29 | $ | 1,063 |
LOAN_SALES_AND_SERVICING_Table
LOAN SALES AND SERVICING (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Interest Only Strips [Member] | |||||||||||||
Schedule of Interest Only Strips and Servicing Rights [Line Items] | |||||||||||||
Summary of Activity for Interest Only Strips and Servicing Rights at Fair Value | The following table presents the I/O strips activity as of the periods presented: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 334 | $ | 426 | $ | 419 | |||||||
Adjustment to fair value | (41 | ) | (92 | ) | 7 | ||||||||
Ending balance | $ | 293 | $ | 334 | $ | 426 | |||||||
Assumptions Used in Estimating the Fair Value | The key data assumptions used in estimating the fair value of the I/O strips as of the periods presented were as follows: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Weighted-average constant prepayment rate | 5.63 | % | 5.24 | % | |||||||||
Weighted-average life (in years) | 6 | 6 | |||||||||||
Weighted-average discount rate | 11.52 | % | 12.89 | % | |||||||||
Sensitivity Analysis of Fair Value | A sensitivity analysis of the fair value of the I/O strips to changes in certain key assumptions is presented in the following table: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
( in thousands) | |||||||||||||
Discount Rate | |||||||||||||
Increase in fair value from 100 basis point decrease | $ | 8 | $ | 9 | |||||||||
Decrease in fair value from 100 basis point increase | (8 | ) | (9 | ) | |||||||||
Constant Prepayment Rate | |||||||||||||
Increase in fair value from 10 percent decrease | 4 | 5 | |||||||||||
Decrease in fair value from 10 percent increase | (4 | ) | (5 | ) | |||||||||
Servicing Rights [Member] | |||||||||||||
Schedule of Interest Only Strips and Servicing Rights [Line Items] | |||||||||||||
Summary of Activity for Servicing Assets Accounted for under Amortization Method | The following is a summary of the activity for servicing rights accounted for under the amortization method: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 268 | $ | 383 | $ | 625 | |||||||
Amortization | (101 | ) | (115 | ) | (242 | ) | |||||||
Ending balance | $ | 167 | $ | 268 | $ | 383 | |||||||
Summary of Activity for Interest Only Strips and Servicing Rights at Fair Value | The following is a summary of the activity for servicing rights accounted for under the fair value method: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Beginning balance | $ | 300 | $ | 348 | $ | - | |||||||
Additions through loan sales | - | - | 349 | ||||||||||
Adjustment to fair value | (97 | ) | (48 | ) | (1 | ) | |||||||
Ending balance | $ | 203 | $ | 300 | $ | 348 | |||||||
Assumptions Used in Estimating the Fair Value | The key data and assumptions used in estimating the fair value of servicing rights as of the periods presented were as follows: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Weighted-average constant prepayment rate | 6.03 | % | 5.04 | % | |||||||||
Weighted-average life (in years) | 8 | 9 | |||||||||||
Weighted-average discount rate | 11.78 | % | 12.93 | % | |||||||||
Sensitivity Analysis of Fair Value | A sensitivity analysis of the fair value of servicing rights to change in certain key assumptions is presented in the following table: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Discount Rate | |||||||||||||
Increase in fair value from 100 basis points decrease | $ | 9 | $ | 12 | |||||||||
Decrease in fair value from 100 basis points increase | (8 | ) | (12 | ) | |||||||||
Constant Prepayment Rate | |||||||||||||
Increase in fair value from 10 percent decrease | 5 | 6 | |||||||||||
Decrease in fair value from 10 percent increase | (5 | ) | (6 | ) |
LOANS_HELD_FOR_INVESTMENT_Tabl
LOANS HELD FOR INVESTMENT (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
LOANS HELD FOR INVESTMENT [Abstract] | |||||||||||||||||||||||||||||||||
Portfolio of Loans Held for Investment | The composition of the Company’s loans held for investment loan portfolio follows: | ||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 169,662 | $ | 172,055 | |||||||||||||||||||||||||||||
Commercial real estate | 159,432 | 142,678 | |||||||||||||||||||||||||||||||
Commercial | 49,683 | 45,647 | |||||||||||||||||||||||||||||||
SBA | 21,336 | 24,066 | |||||||||||||||||||||||||||||||
HELOC | 13,481 | 15,418 | |||||||||||||||||||||||||||||||
Single family real estate | 14,957 | 10,150 | |||||||||||||||||||||||||||||||
Consumer | 178 | 184 | |||||||||||||||||||||||||||||||
428,729 | 410,198 | ||||||||||||||||||||||||||||||||
Allowance for loan losses | 7,877 | 12,208 | |||||||||||||||||||||||||||||||
Deferred fees, net | 118 | 45 | |||||||||||||||||||||||||||||||
Discount on SBA loans | 237 | 339 | |||||||||||||||||||||||||||||||
Total loans held for investment, net | $ | 420,497 | $ | 397,606 | |||||||||||||||||||||||||||||
Current and Past Due Financing Receivable | The following tables present the contractual aging of the recorded investment in past due held for investment loans by class of loans: | ||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||
Recorded | |||||||||||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | Over 90 Days | Total | Over 90 Days | |||||||||||||||||||||||||||||
Current | Past Due | Past Due | Past Due | Past Due | Total | and Accruing | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 169,233 | $ | 239 | $ | - | $ | 190 | $ | 429 | $ | 169,662 | $ | - | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 119,090 | 632 | - | 186 | 818 | 119,908 | - | ||||||||||||||||||||||||||
SBA 504 1st trust deed | 27,297 | - | - | - | - | 27,297 | - | ||||||||||||||||||||||||||
Land | 1,569 | - | - | - | - | 1,569 | - | ||||||||||||||||||||||||||
Construction | 10,658 | - | - | - | - | 10,658 | - | ||||||||||||||||||||||||||
Commercial | 49,683 | - | - | - | - | 49,683 | - | ||||||||||||||||||||||||||
SBA | 21,333 | 3 | - | - | 3 | 21,336 | - | ||||||||||||||||||||||||||
HELOC | 13,459 | - | - | 22 | 22 | 13,481 | - | ||||||||||||||||||||||||||
Single family real estate | 14,821 | - | 136 | 136 | 14,957 | - | |||||||||||||||||||||||||||
Consumer | 178 | - | - | - | - | 178 | - | ||||||||||||||||||||||||||
Total | $ | 427,321 | $ | 874 | $ | - | $ | 534 | $ | 1,408 | $ | 428,729 | $ | - | |||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Recorded | |||||||||||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||||||||||
30-59 Days | 60-89 Days | Over 90 Days | Total | Over 90 Days | |||||||||||||||||||||||||||||
Current | Past Due | Past Due | Past Due | Past Due | Total | and Accruing | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 170,647 | $ | 1,076 | $ | 135 | $ | 197 | $ | 1,408 | $ | 172,055 | $ | - | |||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 96,393 | - | - | - | - | 96,393 | - | ||||||||||||||||||||||||||
SBA 504 1st trust deed | 33,798 | - | - | 467 | 467 | 34,265 | - | ||||||||||||||||||||||||||
Land | 1,817 | 140 | - | - | 140 | 1,957 | - | ||||||||||||||||||||||||||
Construction | 10,063 | - | - | - | - | 10,063 | - | ||||||||||||||||||||||||||
Commercial | 45,605 | 42 | - | - | 42 | 45,647 | - | ||||||||||||||||||||||||||
SBA (1) | 23,613 | 149 | - | 304 | 453 | 24,066 | - | ||||||||||||||||||||||||||
HELOC | 15,393 | 25 | - | - | 25 | 15,418 | - | ||||||||||||||||||||||||||
Single family real estate | 10,084 | - | - | 66 | 66 | 10,150 | 66 | ||||||||||||||||||||||||||
Consumer | 184 | - | - | - | - | 184 | - | ||||||||||||||||||||||||||
Total | $ | 407,597 | $ | 1,432 | $ | 135 | $ | 1,034 | $ | 2,601 | $ | 410,198 | $ | 66 | |||||||||||||||||||
-1 | $0.4 million of the $0.5 million SBA loans past due are guaranteed by the SBA. | ||||||||||||||||||||||||||||||||
Analysis of Allowance for Loan Losses for Loans Held for Investment | The following table summarizes the changes in the allowance for loan losses: | ||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 12,208 | $ | 14,464 | $ | 15,270 | |||||||||||||||||||||||||||
Charge-offs | (766 | ) | (2,594 | ) | (7,016 | ) | |||||||||||||||||||||||||||
Recoveries | 1,570 | 2,282 | 1,929 | ||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | 804 | (312 | ) | (5,087 | ) | ||||||||||||||||||||||||||||
Provision | (5,135 | ) | (1,944 | ) | 4,281 | ||||||||||||||||||||||||||||
Ending balance | $ | 7,877 | $ | 12,208 | $ | 14,464 | |||||||||||||||||||||||||||
As of December 31, 2014 and 2013, the Company had reserves for credit losses on undisbursed loans of $39,000 and $0.1 million which were included in Other liabilities. | |||||||||||||||||||||||||||||||||
The following tables summarize the changes in the allowance for loan losses by portfolio type: | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||||||||
Manufactured | Commercial | Single Family | |||||||||||||||||||||||||||||||
Housing | Real Estate | Commercial | SBA | HELOC | Real Estate | Consumer | Total | ||||||||||||||||||||||||||
2014 | (in thousands) | ||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,114 | $ | 2,552 | $ | 2,064 | $ | 1,951 | $ | 280 | $ | 245 | $ | 2 | $ | 12,208 | |||||||||||||||||
Charge-offs | (543 | ) | (16 | ) | - | (171 | ) | - | (36 | ) | - | (766 | ) | ||||||||||||||||||||
Recoveries | 143 | 857 | 149 | 393 | 24 | 4 | - | 1,570 | |||||||||||||||||||||||||
Net charge-offs | (400 | ) | 841 | 149 | 222 | 24 | (32 | ) | - | 804 | |||||||||||||||||||||||
Provision | (682 | ) | (1,934 | ) | (1,227 | ) | (1,107 | ) | (164 | ) | (21 | ) | - | (5,135 | ) | ||||||||||||||||||
Ending balance | $ | 4,032 | $ | 1,459 | $ | 986 | $ | 1,066 | $ | 140 | $ | 192 | $ | 2 | $ | 7,877 | |||||||||||||||||
2013 | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 5,945 | $ | 2,627 | $ | 2,325 | $ | 2,733 | $ | 634 | $ | 198 | $ | 2 | $ | 14,464 | |||||||||||||||||
Charge-offs | (1,294 | ) | (349 | ) | (149 | ) | (547 | ) | (39 | ) | (179 | ) | (37 | ) | (2,594 | ) | |||||||||||||||||
Recoveries | 257 | 1,243 | 212 | 559 | 3 | 8 | - | 2,282 | |||||||||||||||||||||||||
Net charge-offs | (1,037 | ) | 894 | 63 | 12 | (36 | ) | (171 | ) | (37 | ) | (312 | ) | ||||||||||||||||||||
Provision | 206 | (969 | ) | (324 | ) | (794 | ) | (318 | ) | 218 | 37 | (1,944 | ) | ||||||||||||||||||||
Ending balance | $ | 5,114 | $ | 2,552 | $ | 2,064 | $ | 1,951 | $ | 280 | $ | 245 | $ | 2 | $ | 12,208 | |||||||||||||||||
2012 | |||||||||||||||||||||||||||||||||
Beginning balance | $ | 4,629 | $ | 3,528 | $ | 2,734 | $ | 3,877 | $ | 349 | $ | 150 | $ | 3 | $ | 15,270 | |||||||||||||||||
Charge-offs | (3,652 | ) | (1,687 | ) | (656 | ) | (623 | ) | (76 | ) | (314 | ) | (8 | ) | (7,016 | ) | |||||||||||||||||
Recoveries | 144 | 756 | 131 | 837 | 50 | 6 | 5 | 1,929 | |||||||||||||||||||||||||
Net charge-offs | (3,508 | ) | (931 | ) | (525 | ) | 214 | (26 | ) | (308 | ) | (3 | ) | (5,087 | ) | ||||||||||||||||||
Provision | 4,824 | 30 | 116 | (1,358 | ) | 311 | 356 | 2 | 4,281 | ||||||||||||||||||||||||
Ending balance | $ | 5,945 | $ | 2,627 | $ | 2,325 | $ | 2,733 | $ | 634 | $ | 198 | $ | 2 | $ | 14,464 | |||||||||||||||||
Schedule of Impaired Loans by Loan Class | The following tables present impairment method information related to loans and allowance for loan losses by loan portfolio segment: | ||||||||||||||||||||||||||||||||
Manufactured | Commercial | Single Family | Total | ||||||||||||||||||||||||||||||
Housing | Real Estate | Commercial | SBA | HELOC | Real Estate | Consumer | Loans | ||||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2014: | (in thousands) | ||||||||||||||||||||||||||||||||
Recorded Investment: | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 4,717 | $ | 2,783 | $ | 3,122 | $ | 1,837 | $ | 86 | $ | 591 | $ | - | $ | 13,136 | |||||||||||||||||
Impaired loans with no allowance recorded | 2,734 | 831 | 44 | 4 | - | 90 | - | 3,703 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 7,451 | 3,614 | 3,166 | 1,841 | 86 | 681 | - | 16,839 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,211 | 155,818 | 46,517 | 19,495 | 13,395 | 14,276 | 178 | 411,890 | |||||||||||||||||||||||||
Total loans held for investment | $ | 169,662 | $ | 159,432 | $ | 49,683 | $ | 21,336 | $ | 13,481 | $ | 14,957 | $ | 178 | $ | 428,729 | |||||||||||||||||
Unpaid Principal Balance | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 5,172 | $ | 2,979 | $ | 4,914 | $ | 9,512 | $ | 91 | $ | 644 | $ | - | $ | 23,312 | |||||||||||||||||
Impaired loans with no allowance recorded | 4,243 | 2,895 | 50 | 225 | - | 191 | - | 7,604 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 9,415 | 5,874 | 4,964 | 9,737 | 91 | 835 | - | 30,916 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,211 | 155,818 | 46,517 | 19,495 | 13,395 | 14,276 | 178 | 411,890 | |||||||||||||||||||||||||
Total loans held for investment | $ | 171,626 | $ | 161,692 | $ | 51,481 | $ | 29,232 | $ | 13,486 | $ | 15,111 | $ | 178 | $ | 442,806 | |||||||||||||||||
Related Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 399 | $ | 77 | $ | 241 | $ | 104 | $ | 1 | $ | 32 | $ | - | $ | 854 | |||||||||||||||||
Impaired loans with no allowance recorded | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 399 | 77 | 241 | 104 | 1 | 32 | - | 854 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 3,633 | 1,382 | 745 | 962 | 139 | 160 | 2 | 7,023 | |||||||||||||||||||||||||
Total loans held for investment | $ | 4,032 | $ | 1,459 | $ | 986 | $ | 1,066 | $ | 140 | $ | 192 | $ | 2 | $ | 7,877 | |||||||||||||||||
Manufactured | Commercial | Single Family | Total | ||||||||||||||||||||||||||||||
Housing | Real Estate | Commercial | SBA | HELOC | Real Estate | Consumer | Loans | ||||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2013: | (in thousands) | ||||||||||||||||||||||||||||||||
Recorded Investment: | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 6,368 | $ | 2,322 | $ | 3,583 | $ | 1,607 | $ | 615 | $ | 645 | $ | - | $ | 15,140 | |||||||||||||||||
Impaired loans with no allowance recorded | 2,782 | 1,628 | 254 | 210 | - | 106 | - | 4,980 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 9,150 | 3,950 | 3,837 | 1,817 | 615 | 751 | - | 20,120 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,905 | 138,728 | 41,810 | 22,249 | 14,803 | 9,399 | 184 | 390,078 | |||||||||||||||||||||||||
Total loans held for investment | $ | 172,055 | $ | 142,678 | $ | 45,647 | $ | 24,066 | $ | 15,418 | $ | 10,150 | $ | 184 | $ | 410,198 | |||||||||||||||||
Unpaid Principal Balance | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 6,962 | $ | 2,367 | $ | 3,956 | $ | 8,045 | $ | 630 | $ | 664 | $ | - | $ | 22,624 | |||||||||||||||||
Impaired loans with no allowance recorded | 4,536 | 3,834 | 235 | 1,610 | - | 244 | - | 10,459 | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 11,498 | 6,201 | 4,191 | 9,655 | 630 | 908 | - | 33,083 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 162,905 | 138,728 | 41,810 | 22,249 | 14,803 | 9,399 | 184 | 390,078 | |||||||||||||||||||||||||
Total loans held for investment | $ | 174,403 | $ | 144,929 | $ | 46,001 | $ | 31,904 | $ | 15,433 | $ | 10,307 | $ | 184 | $ | 423,161 | |||||||||||||||||
Related Allowance for Credit Losses | |||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded | $ | 618 | $ | 159 | $ | 437 | $ | 139 | $ | 29 | $ | 57 | $ | - | $ | 1,439 | |||||||||||||||||
Impaired loans with no allowance recorded | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
Total loans individually evaluated for impairment | 618 | 159 | 437 | 139 | 29 | 57 | - | 1,439 | |||||||||||||||||||||||||
Loans collectively evaluated for impairment | 4,496 | 2,393 | 1,627 | 1,812 | 251 | 188 | 2 | 10,769 | |||||||||||||||||||||||||
Total loans held for investment | $ | 5,114 | $ | 2,552 | $ | 2,064 | $ | 1,951 | $ | 280 | $ | 245 | $ | 2 | $ | 12,208 | |||||||||||||||||
Recorded Investment in Certain Loans | The table below reflects recorded investment in loans classified as impaired: | ||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Impaired loans with a specific valuation allowance under ASC 310 | $ | 13,136 | $ | 15,140 | |||||||||||||||||||||||||||||
Impaired loans without a specific valuation allowance under ASC 310 | 3,703 | 4,980 | |||||||||||||||||||||||||||||||
Total impaired loans | $ | 16,839 | $ | 20,120 | |||||||||||||||||||||||||||||
Valuation allowance related to impaired loans | $ | 854 | $ | 1,439 | |||||||||||||||||||||||||||||
The following tables summarize impaired loans by class of loans: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 7,451 | $ | 9,150 | |||||||||||||||||||||||||||||
Commercial real estate : | |||||||||||||||||||||||||||||||||
Commercial real estate | 2,320 | 2,805 | |||||||||||||||||||||||||||||||
SBA 504 1st trust deed | 1,294 | 1,005 | |||||||||||||||||||||||||||||||
Land | - | 140 | |||||||||||||||||||||||||||||||
Construction | - | - | |||||||||||||||||||||||||||||||
Commercial | 3,166 | 3,837 | |||||||||||||||||||||||||||||||
SBA | 1,841 | 1,817 | |||||||||||||||||||||||||||||||
HELOC | 86 | 615 | |||||||||||||||||||||||||||||||
Single family real estate | 681 | 751 | |||||||||||||||||||||||||||||||
Consumer | - | - | |||||||||||||||||||||||||||||||
Total | $ | 16,839 | $ | 20,120 | |||||||||||||||||||||||||||||
The following table summarizes the average investment in impaired loans by class and the related interest income recognized: | |||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||
Average Investment | Interest | Average Investment | Interest | Average Investment | Interest | ||||||||||||||||||||||||||||
in Impaired Loans | Income | in Impaired Loans | Income | in Impaired Loans | Income | ||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 7,915 | $ | 564 | $ | 9,429 | $ | 323 | $ | 8,374 | $ | 333 | |||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 2,485 | - | 7,638 | 146 | 17,552 | 315 | |||||||||||||||||||||||||||
SBA 504 1st | 1,076 | 63 | 1,128 | 7 | 3,897 | 159 | |||||||||||||||||||||||||||
Land | 55 | - | 28 | 7 | - | - | |||||||||||||||||||||||||||
Construction | - | - | - | - | 4,808 | 108 | |||||||||||||||||||||||||||
Commercial | 3,377 | 90 | 3,823 | 179 | 5,540 | 292 | |||||||||||||||||||||||||||
SBA | 1,697 | 97 | 1,506 | 198 | 1,800 | 176 | |||||||||||||||||||||||||||
HELOC | 437 | 8 | 372 | 5 | 255 | 13 | |||||||||||||||||||||||||||
Single family real estate | 699 | 3 | 511 | 11 | 324 | 10 | |||||||||||||||||||||||||||
Consumer | - | - | - | - | 5 | - | |||||||||||||||||||||||||||
Total | $ | 17,741 | $ | 825 | $ | 24,435 | $ | 876 | $ | 42,555 | $ | 1,406 | |||||||||||||||||||||
The Company is not committed to lend significant additional funds on these impaired loans. | |||||||||||||||||||||||||||||||||
The following table summarizes nonperforming assets: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Nonaccrual loans, net | $ | 11,027 | $ | 16,837 | |||||||||||||||||||||||||||||
Loans past due 90 days or more on accrual status | - | 66 | |||||||||||||||||||||||||||||||
Troubled debt restructured loans on accrual | 5,048 | 3,283 | |||||||||||||||||||||||||||||||
Total nonperforming loans | 16,075 | 20,186 | |||||||||||||||||||||||||||||||
Other assets acquired through foreclosure, net | 137 | 3,811 | |||||||||||||||||||||||||||||||
Total nonperforming assets | $ | 16,212 | $ | 23,997 | |||||||||||||||||||||||||||||
The following table reflects the recorded investment in certain types of loans at the periods indicated: | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Nonaccrual loans | $ | 17,883 | $ | 23,263 | $ | 29,643 | |||||||||||||||||||||||||||
SBA guaranteed portion of loans included above | (6,856 | ) | (6,426 | ) | (7,218 | ) | |||||||||||||||||||||||||||
Total nonaccrual loans, net | $ | 11,027 | $ | 16,837 | $ | 22,425 | |||||||||||||||||||||||||||
Troubled debt restructured loans, gross | $ | 9,685 | $ | 12,308 | $ | 19,931 | |||||||||||||||||||||||||||
Loans 30 through 89 days past due with interest accruing | $ | - | $ | 161 | $ | 521 | |||||||||||||||||||||||||||
Interest income recognized on impaired loans | $ | 825 | $ | 876 | $ | 1,406 | |||||||||||||||||||||||||||
Foregone interest on nonaccrual and troubled debt restructured loans | $ | 1,276 | $ | 1,754 | $ | 2,692 | |||||||||||||||||||||||||||
Allowance for loan losses to gross loans held for investment | 1.84 | % | 2.98 | % | 3.66 | % | |||||||||||||||||||||||||||
Composition of Net Nonaccrual Loans | The following table presents the composition of nonaccrual loans, net of government guarantees, by class of loans: | ||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 1,480 | $ | 6,235 | |||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 2,951 | 2,806 | |||||||||||||||||||||||||||||||
SBA 504 1st trust deed | 1,021 | 726 | |||||||||||||||||||||||||||||||
Land | - | 140 | |||||||||||||||||||||||||||||||
Construction | - | - | |||||||||||||||||||||||||||||||
Commercial | 3,167 | 3,837 | |||||||||||||||||||||||||||||||
SBA | 1,713 | 1,803 | |||||||||||||||||||||||||||||||
HELOC | 86 | 615 | |||||||||||||||||||||||||||||||
Single family real estate | 609 | 675 | |||||||||||||||||||||||||||||||
Consumer | - | - | |||||||||||||||||||||||||||||||
Total | $ | 11,027 | $ | 16,837 | |||||||||||||||||||||||||||||
Schedule of Loans by Rating | The following tables present gross loans by risk rating: | ||||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||||
Special | |||||||||||||||||||||||||||||||||
Pass | Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 162,638 | $ | - | $ | 7,024 | $ | - | $ | 169,662 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 106,909 | 6,544 | 6,455 | - | 119,908 | ||||||||||||||||||||||||||||
SBA 504 1st trust deed | 23,038 | 1,085 | 3,174 | - | 27,297 | ||||||||||||||||||||||||||||
Land | 1,569 | - | - | - | 1,569 | ||||||||||||||||||||||||||||
Construction | 10,658 | - | - | - | 10,658 | ||||||||||||||||||||||||||||
Commercial | 46,275 | 158 | 3,250 | - | 49,683 | ||||||||||||||||||||||||||||
SBA | 12,803 | 173 | 1,891 | 97 | 14,964 | ||||||||||||||||||||||||||||
HELOC | 12,888 | - | 593 | - | 13,481 | ||||||||||||||||||||||||||||
Single family real estate | 14,105 | - | 852 | - | 14,957 | ||||||||||||||||||||||||||||
Consumer | 178 | - | - | - | 178 | ||||||||||||||||||||||||||||
Total, net | $ | 391,061 | $ | 7,960 | $ | 23,239 | $ | 97 | $ | 422,357 | |||||||||||||||||||||||
SBA guarantee | - | - | 6,372 | - | 6,372 | ||||||||||||||||||||||||||||
Total | $ | 391,061 | $ | 7,960 | $ | 29,611 | $ | 97 | $ | 428,729 | |||||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||||||
Special | |||||||||||||||||||||||||||||||||
Pass | Mention | Substandard | Doubtful | Total | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | $ | 158,533 | $ | - | $ | 13,522 | $ | - | $ | 172,055 | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||
Commercial real estate | 89,319 | 3,600 | 3,474 | - | 96,393 | ||||||||||||||||||||||||||||
SBA 504 1st trust deed | 33,012 | 248 | 1,005 | - | 34,265 | ||||||||||||||||||||||||||||
Land | 1,817 | - | 140 | - | 1,957 | ||||||||||||||||||||||||||||
Construction | 10,063 | - | - | - | 10,063 | ||||||||||||||||||||||||||||
Commercial | 41,147 | 327 | 4,150 | 23 | 45,647 | ||||||||||||||||||||||||||||
SBA | 14,773 | 136 | 2,053 | - | 16,962 | ||||||||||||||||||||||||||||
HELOC | 13,806 | 491 | 1,121 | - | 15,418 | ||||||||||||||||||||||||||||
Single family real estate | 9,226 | - | 924 | - | 10,150 | ||||||||||||||||||||||||||||
Consumer | 184 | - | - | - | 184 | ||||||||||||||||||||||||||||
Total, net | $ | 371,880 | $ | 4,802 | $ | 26,389 | $ | 23 | $ | 403,094 | |||||||||||||||||||||||
SBA guarantee | - | - | 6,719 | 385 | 7,104 | ||||||||||||||||||||||||||||
Total | $ | 371,880 | $ | 4,802 | $ | 33,108 | $ | 408 | $ | 410,198 | |||||||||||||||||||||||
Troubled Debt Restructurings | The following tables present information on the financial effects of TDR loans by class for the periods presented: | ||||||||||||||||||||||||||||||||
` | For the Year Ended December 31, 2014 | ||||||||||||||||||||||||||||||||
Pre- | Post | Balance of | Balance of | Effect on | |||||||||||||||||||||||||||||
Number | Modification | Modification | Loans with | Loans with | Allowance for | ||||||||||||||||||||||||||||
of Loans | Recorded Investment | Recorded Investment | Rate Reduction | Term Extension | Loan Losses | ||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | 5 | $ | 272 | $ | 272 | $ | 272 | $ | 272 | $ | 10 | ||||||||||||||||||||||
Total | 5 | $ | 272 | $ | 272 | $ | 272 | $ | 272 | $ | 10 | ||||||||||||||||||||||
` | For the Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Pre- | Post | Balance of | Balance of | Effect on | |||||||||||||||||||||||||||||
Number | Modification | Modification | Loans with | Loans with | Allowance for | ||||||||||||||||||||||||||||
of Loans | Recorded Investment | Recorded Investment | Rate Reduction | Term Extension | Loan Losses | ||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | 25 | $ | 2,008 | $ | 1,982 | $ | 1,021 | $ | 1,982 | $ | 197 | ||||||||||||||||||||||
Commercial real estate | 2 | 655 | 655 | - | 655 | 45 | |||||||||||||||||||||||||||
Commercial | 6 | 4,011 | 4,011 | - | 4,011 | 256 | |||||||||||||||||||||||||||
SBA | 1 | 87 | 87 | - | 87 | 16 | |||||||||||||||||||||||||||
Single family real estate | 2 | 385 | 385 | 385 | 147 | 32 | |||||||||||||||||||||||||||
Total | 36 | $ | 7,146 | $ | 7,120 | $ | 1,406 | $ | 6,882 | $ | 546 | ||||||||||||||||||||||
The average rate concession was 70 basis points and 152 basis points for the twelve months ended December 31, 2014 and 2013, respectively. The average term extension in months was 180 and 110 for the twelve months ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||||||||||||||||
The following table presents TDR's by class that occurred in the past twelve months for which there was a payment default during the period: | |||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
Effect on | Effect on | ||||||||||||||||||||||||||||||||
Number | Recorded | Allowance for | Number | Recorded | Allowance for | ||||||||||||||||||||||||||||
of Loans | Investment | Loan Losses | of Loans | Investment | Loan Losses | ||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
Manufactured housing | 1 | $ | 18 | $ | 1 | 7 | $ | 456 | $ | 11 | |||||||||||||||||||||||
Total | 1 | $ | 18 | $ | 1 | 7 | $ | 456 | $ | 11 | |||||||||||||||||||||||
Aggregate Activity with Related Parties | The following table summarizes the aggregate activity in such loans: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||
Balance, beginning | $ | 4,816 | $ | 4,560 | |||||||||||||||||||||||||||||
New loans | 434 | 1,046 | |||||||||||||||||||||||||||||||
Repayments and other | (771 | ) | (790 | ) | |||||||||||||||||||||||||||||
Balance, ending | $ | 4,479 | $ | 4,816 |
PREMISES_AND_EQUIPMENT_Tables
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PREMISES AND EQUIPMENT [Abstract] | |||||||||
Premises and Equipment | Year Ended December 31, | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Bank premises and land | $ | 1,411 | $ | 1,400 | |||||
Furniture, fixtures and equipment | 8,748 | 8,526 | |||||||
Leasehold improvements | 2,602 | 2,591 | |||||||
Construction in progress | 150 | - | |||||||
12,911 | 12,517 | ||||||||
Accumulated depreciation | (9,858 | ) | (9,534 | ) | |||||
Premises and equipment, net | $ | 3,053 | $ | 2,983 | |||||
Schedule of Future Minimum Rental Payments under Non-Cancelable Leases | The following is a schedule of future minimum rental payments under these leases at December 31, 2014: | ||||||||
(in thousands) | |||||||||
2015 | $ | 821 | |||||||
2016 | 751 | ||||||||
2017 | 234 | ||||||||
2018 | - | ||||||||
2019 | - | ||||||||
Thereafter | - | ||||||||
$ | 1,806 |
OTHER_ASSETS_ACQUIRED_THROUGH_1
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||||||||||||
Other Assets Acquired through Foreclosure | The following table summarizes the changes in other assets acquired through foreclosure: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Balance, beginning of period | $ | 3,811 | $ | 1,889 | $ | 6,701 | |||||||
Additions | 1,879 | 6,084 | 7,329 | ||||||||||
Proceeds from dispositions and receivables from participants | (5,988 | ) | (3,774 | ) | (10,980 | ) | |||||||
Gains (losses) on sales, net | 435 | (388 | ) | (1,161 | ) | ||||||||
Balance, end of period | $ | 137 | $ | 3,811 | $ | 1,889 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
INCOME TAXES [Abstract] | |||||||||||||
Provision for Income Taxes | The provision for income taxes consisted of the following: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | (in thousands) | ||||||||||||
Federal | $ | 2,880 | $ | 1,430 | $ | (98 | ) | ||||||
State | 832 | - | - | ||||||||||
3,712 | 1,430 | (98 | ) | ||||||||||
Deferred: | |||||||||||||
Federal | 754 | 453 | 1,072 | ||||||||||
State | 468 | 670 | 347 | ||||||||||
1,222 | 1,123 | 1,419 | |||||||||||
Decrease in deferred tax asset valuation allowance | - | (5,365 | ) | (1,321 | ) | ||||||||
Total (benefit) provision for income taxes | $ | 4,934 | $ | (2,812 | ) | $ | - | ||||||
Reconciliation between Statutory Income Tax Rate and Effective Tax Rate | The reconciliation between the statutory income tax rate and the Company’s effective tax rate follows: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal income tax at statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State franchise tax, net of federal benefit | 7.2 | 7.2 | 7.2 | ||||||||||
Other | - | - | - | ||||||||||
Benefit related to deferred tax asset valuation allowance | - | (86.7 | ) | (41.2 | ) | ||||||||
Total (benefit) provision for income taxes | 41.2 | % | (45.5 | )% | - | % | |||||||
Cumulative Tax Effects of Primary Temporary Differences | The cumulative tax effects of the primary temporary differences are as shown in the following table: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred Tax Assets: | (in thousands) | ||||||||||||
Allowance for loan losses | $ | 3,149 | $ | 4,829 | |||||||||
Unrealized loss on AFS securities | - | $ | 191 | ||||||||||
State net operating loss | - | 80 | |||||||||||
Other | 867 | 483 | |||||||||||
Total gross deferred tax assets | 4,016 | 5,583 | |||||||||||
Deferred tax asset valuation allowance | - | - | |||||||||||
Total deferred tax assets | 4,016 | 5,583 | |||||||||||
Deferred Tax Liabilities: | |||||||||||||
Deferred state taxes | (288 | ) | (447 | ) | |||||||||
Depreciation | (167 | ) | (139 | ) | |||||||||
Unrealized gain on AFS securities | (22 | ) | - | ||||||||||
Other | (272 | ) | (296 | ) | |||||||||
Total deferred tax liabilities | (749 | ) | (882 | ) | |||||||||
Net deferred tax asset | $ | 3,267 | $ | 4,701 |
DEPOSITS_Tables
DEPOSITS (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
DEPOSIT [Abstract] | |||||||||||||||||||||||||
Summary of Deposits and Related Interest Expense by Type | The table below summarizes deposits and their related interest expense by type: | ||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
Interest | Interest | Interest | |||||||||||||||||||||||
Balance | Expense | Balance | Expense | Balance | Expense | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Non-interest bearing demand deposits | $ | 57,364 | $ | - | $ | 52,461 | $ | - | $ | 53,605 | $ | - | |||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||
NOW accounts | 18,152 | 29 | 20,367 | 35 | 20,120 | 73 | |||||||||||||||||||
Money market deposit account | 257,479 | 1,035 | 238,078 | 1,150 | 249,346 | 1,766 | |||||||||||||||||||
Savings accounts | 15,265 | 202 | 16,158 | 290 | 16,351 | 325 | |||||||||||||||||||
Time deposits of $100,000 or more | 115,588 | 1,167 | 95,979 | 1,166 | 80,710 | 1,609 | |||||||||||||||||||
Other time deposits | 13,236 | 230 | 13,092 | 275 | 14,088 | 357 | |||||||||||||||||||
Total deposits | $ | 477,084 | $ | 2,663 | $ | 436,135 | $ | 2,916 | $ | 434,220 | $ | 4,130 | |||||||||||||
Summary of Contractual Maturities for All Time Deposits | The summary of the contractual maturities for all time deposits is as follows: | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
2015 | $ | 54,678 | |||||||||||||||||||||||
2016 | 23,282 | ||||||||||||||||||||||||
2017 | 9,201 | ||||||||||||||||||||||||
2018 | 27,055 | ||||||||||||||||||||||||
2019 | 14,508 | ||||||||||||||||||||||||
Thereafter | 100 | ||||||||||||||||||||||||
$ | 128,824 |
OTHER_BORROWINGS_AND_CONVERTIB1
OTHER BORROWINGS AND CONVERTIBLE DEBENTURES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
OTHER BORROWINGS AND CONVERTIBLE DEBENTURES [Abstract] | |||||||||||||||||
Summary of FHLB Advances by Maturity Date | The following table summarizes the Company’s FHLB advances by maturity date: | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Contractual Maturity Date | Amount | Rate | Amount | Rate | |||||||||||||
(dollars in thousands) | |||||||||||||||||
5-May-14 | $ | - | - | $ | 4,000 | 2.88 | % | ||||||||||
7-May-14 | - | - | 4,000 | 2.76 | % | ||||||||||||
19-May-14 | - | - | 4,000 | 2.79 | % | ||||||||||||
9-Oct-14 | - | - | 4,000 | 2.68 | % | ||||||||||||
17-Nov-14 | - | - | 4,000 | 2.78 | % | ||||||||||||
9-Mar-15 | 5,000 | 2.745 | % | 5,000 | 2.745 | % | |||||||||||
4-May-15 | 5,000 | 2.735 | % | 5,000 | 2.735 | % | |||||||||||
Total FHLB advances | $ | 10,000 | $ | 30,000 | |||||||||||||
Weighted average rate | 2.74 | % | 2.77 | % |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||
Summary of Contractual Amounts for Unfunded Commitments and Letters of Credit | A summary of the contractual amounts for unfunded commitments and letters of credit are as follows: | ||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Commitments to extend credit | $ | 28,239 | $ | 19,573 | |||||
Standby letters of credit | 59 | 75 | |||||||
Total | $ | 28,298 | $ | 19,648 |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||
Summary of Assumptions Used in Calculating Fair Value of Option Awards | A summary of the assumptions used in calculating the fair value of option awards during the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected life in years | 6 | 6.3 | 5.8 | ||||||||||||||
Risk-free interest rate | 1.8 | % | 1.42 | % | 1.05 | % | |||||||||||
Expected volatility | 73.4 | % | 69.2 | % | 69 | % | |||||||||||
Annual dividend rate | - | % | - | % | - | % | |||||||||||
Summary of Option Activity | A summary of option activity under the plan is presented below: | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Option | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Shares | Exercise Price | Remaining Term | Intrinsic Value | ||||||||||||||
(in thousands, except exercise price and contractual terms) | |||||||||||||||||
Outstanding options, beginning of period | 376 | $ | 5.25 | ||||||||||||||
Granted | 190 | 7.02 | |||||||||||||||
Exercised | (19 | ) | 2.9 | ||||||||||||||
Forefeited or expired | (90 | ) | 7.65 | ||||||||||||||
Outstanding options, end of period | 457 | $ | 5.61 | 7.2 | $ | 815 | |||||||||||
Options exerciseable, end of period | 244 | $ | 5.77 | 5.9 | $ | 521 | |||||||||||
Options expected to vest, end of period | 150 | $ | 4.84 | 6.9 | $ | 288 | |||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Option | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Shares | Exercise Price | Remaining Term | Intrinsic Value | ||||||||||||||
(in thousands, except exercise price and contractual terms) | |||||||||||||||||
Outstanding options, beginning of period | 447 | $ | 5.38 | ||||||||||||||
Granted | 21 | 4.91 | |||||||||||||||
Exercised | (7 | ) | 3.24 | ||||||||||||||
Forefeited or expired | (85 | ) | 6.07 | ||||||||||||||
Outstanding options, end of period | 376 | $ | 5.25 | 6.1 | $ | 937 | |||||||||||
Options exerciseable, end of period | 241 | $ | 6.56 | 4.8 | $ | 443 | |||||||||||
Options expected to vest, end of period | 135 | $ | 2.9 | 8.4 | $ | 494 | |||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Option | Weighted Average | Weighted Average | Aggregate | ||||||||||||||
Shares | Exercise Price | Remaining Term | Intrinsic Value | ||||||||||||||
(in thousands, except exercise price and contractual terms) | |||||||||||||||||
Outstanding options, beginning of period | 377 | $ | 6.76 | ||||||||||||||
Granted | 147 | 2.92 | |||||||||||||||
Exercised | (5 | ) | 3.25 | ||||||||||||||
Forefeited or expired | (72 | ) | 7.68 | ||||||||||||||
Outstanding options, end of period | 447 | $ | 5.38 | 6.1 | $ | 160 | |||||||||||
Options exerciseable, end of period | 278 | $ | 7 | 4.4 | $ | 29 | |||||||||||
Options expected to vest, end of period | 169 | $ | 2.72 | 9.1 | $ | 131 | |||||||||||
Summary of Change in Unvested Stock Option Share | The following table summarizes the change in unvested stock option shares during the year ended December 31, 2014: | ||||||||||||||||
Weighted Average | |||||||||||||||||
Number of | Grant-Date | ||||||||||||||||
Option Shares | Fair Value | ||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Unvested options, beginning of period | 135 | $ | 1.77 | ||||||||||||||
Granted | 190 | 4.57 | |||||||||||||||
Vested | (79 | ) | 3.21 | ||||||||||||||
Forefeited | (33 | ) | 3.43 | ||||||||||||||
Unvested options, end of period | 213 | $ | 3.47 |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
EARNINGS PER SHARE [Abstract] | |||||||||||||
Reconciliation of Basic and Diluted Earnings per Share | The following table presents a reconciliation of basic earnings per share and diluted earnings per share: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands, except per share amounts) | |||||||||||||
Net income | $ | 7,046 | $ | 8,986 | $ | 3,173 | |||||||
Less: dividends and accretion on preferred stock and discount on partial redemption | 778 | 1,039 | 1,046 | ||||||||||
Net income available to common stockholders | $ | 6,268 | $ | 7,947 | $ | 2,127 | |||||||
Add: debenture interest expense and costs, net of income taxes | 103 | 244 | 430 | ||||||||||
Net income for diluted calculation of earnings per common share | $ | 6,371 | $ | 8,191 | $ | 2,557 | |||||||
Weighted average number of common shares outstanding - basic | 8,141 | 7,017 | 5,990 | ||||||||||
Weighted average number of common shares outstanding - diluted | 8,505 | 8,390 | 8,233 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 0.77 | $ | 1.13 | $ | 0.36 | |||||||
Diluted | $ | 0.75 | $ | 0.98 | $ | 0.31 |
CAPITAL_REQUIREMENTS_Tables
CAPITAL REQUIREMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS [Abstract] | |||||||||||||||||||||||||||||
Company's and CWB's Capital Amounts and Ratios | The Company’s and CWB’s capital amounts and ratios as of December 31, 2014 and 2013 are presented in the table below: | ||||||||||||||||||||||||||||
Risk- | Adjusted | Total Risk- | Tier 1 | Tier 1 | |||||||||||||||||||||||||
Total | Tier 1 | Weighted | Average | Based Capital | Risk-Based | Leverage | |||||||||||||||||||||||
Capital | Capital | Assets | Assets | Ratio | Capital Ratio | Ratio | |||||||||||||||||||||||
31-Dec-14 | (dollars in thousands) | ||||||||||||||||||||||||||||
CWBC (Consolidated) | $ | 72,569 | $ | 66,939 | $ | 448,199 | $ | 564,630 | 16.19 | % | 14.94 | % | 11.86 | % | |||||||||||||||
CWB | $ | 71,303 | $ | 65,673 | $ | 448,118 | $ | 564,331 | 15.91 | % | 14.66 | % | 11.64 | % | |||||||||||||||
31-Dec-13 | |||||||||||||||||||||||||||||
CWBC (Consolidated) | $ | 74,712 | $ | 67,773 | $ | 432,958 | $ | 534,408 | 17.26 | % | 15.65 | % | 12.68 | % | |||||||||||||||
CWB | $ | 72,886 | $ | 67,391 | $ | 432,802 | $ | 531,503 | 16.84 | % | 15.57 | % | 12.68 | % | |||||||||||||||
Well-capitalized ratios | 10 | % | 6 | % | 5 | % | |||||||||||||||||||||||
Minimum capital ratios | 8 | % | 4 | % | 4 | % |
FAIR_VALUE_MEASUREMENT_Tables
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
FAIR VALUE MEASUREMENT [Abstract] | |||||||||||||||||||||
Summary of Fair Value Measurements of Assets Measured on a Recurring Basis | The following tables summarize the fair value of assets measured on a recurring basis: | ||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||
Quoted Prices | |||||||||||||||||||||
in Active | Significant | ||||||||||||||||||||
Markets for | Other | Significant | |||||||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | Fair | ||||||||||||||||||
31-Dec-14 | (Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||||||
Assets: | (in thousands) | ||||||||||||||||||||
Investment securities available-for-sale | $ | 61 | $ | 22,133 | $ | - | $ | 22,194 | |||||||||||||
Interest only strips | - | - | 293 | 293 | |||||||||||||||||
Servicing assets | - | - | 203 | 203 | |||||||||||||||||
$ | 61 | $ | 22,133 | $ | 496 | $ | 22,690 | ||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using: | |||||||||||||||||||||
Quoted Prices | |||||||||||||||||||||
in Active | Significant | ||||||||||||||||||||
Markets for | Other | Significant | |||||||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||||||
Assets | Inputs | Inputs | Fair | ||||||||||||||||||
31-Dec-13 | (Level 1) | (Level 2) | (Level 3) | Value | |||||||||||||||||
Assets: | (in thousands) | ||||||||||||||||||||
Investment securities available-for-sale | $ | 69 | $ | 18,403 | $ | - | $ | 18,472 | |||||||||||||
Interest only strips | - | - | 334 | 334 | |||||||||||||||||
Servicing assets | - | - | 300 | 300 | |||||||||||||||||
$ | 69 | $ | 18,403 | $ | 634 | $ | 19,106 | ||||||||||||||
Summary of Fair Value Measurements of Assets Measured on a Non-recurring Basis | The following summarizes the fair value measurements of assets measured on a non-recurring basis: | ||||||||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||||||||
Quoted Prices | |||||||||||||||||||||
in Active | Active | ||||||||||||||||||||
Markets for | Markets for | Unobservable | |||||||||||||||||||
Identical Assets | Similar Assets | Inputs | |||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
As of December 31, 2014: | |||||||||||||||||||||
Impaired loans | $ | 5,580 | $ | - | $ | 5,580 | $ | - | |||||||||||||
Loans held for sale | 71,475 | - | 71,475 | - | |||||||||||||||||
Foreclosed real estate and repossessed assets | 137 | - | 137 | - | |||||||||||||||||
$ | 77,192 | $ | - | $ | 77,192 | $ | - | ||||||||||||||
As of December 31, 2013: | |||||||||||||||||||||
Impaired loans | $ | 7,105 | $ | - | $ | 7,105 | $ | - | |||||||||||||
Loans held for sale | 68,766 | - | 68,766 | - | |||||||||||||||||
Foreclosed real estate and repossessed assets | 3,811 | - | 3,811 | - | |||||||||||||||||
$ | 79,682 | $ | - | $ | 79,682 | $ | - | ||||||||||||||
Estimated Fair Values and Carrying Values of Financial Instruments | The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. | ||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||
Carrying | Fair Value | ||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Financial assets: | (in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 18,959 | $ | 18,959 | $ | - | $ | - | $ | 18,959 | |||||||||||
Interest-bearing deposits in other financial institutions | 99 | 99 | - | - | 99 | ||||||||||||||||
FRB and FHLB stock | 3,089 | - | 3,089 | - | 3,089 | ||||||||||||||||
Investment securities | 30,641 | 61 | 31,027 | - | 31,088 | ||||||||||||||||
Loans, net | 487,256 | - | 490,193 | 10,405 | 500,598 | ||||||||||||||||
Financial liabilities: | |||||||||||||||||||||
Deposits | 477,084 | - | 477,204 | - | 477,204 | ||||||||||||||||
Other borrowings | 10,000 | - | 10,070 | - | 10,070 | ||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Carrying | Fair Value | ||||||||||||||||||||
Amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Financial assets: | (in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 19,478 | $ | 19,478 | $ | - | $ | - | $ | 19,478 | |||||||||||
Interest-bearing deposits in other financial institutions | 99 | 99 | - | - | 99 | ||||||||||||||||
FRB and FHLB stock | 3,243 | - | 3,243 | - | 3,243 | ||||||||||||||||
Investment securities | 28,160 | 69 | 28,504 | - | 28,573 | ||||||||||||||||
Loans, net | 462,005 | - | 457,890 | 11,576 | 469,466 | ||||||||||||||||
Financial liabilities: | |||||||||||||||||||||
Deposits | 436,135 | - | 436,094 | - | 436,094 | ||||||||||||||||
Other borrowings | 31,442 | - | 32,017 | - | 32,017 |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | ||||||||||||||
Summary of Changes in Other Comprehensive Income by Component, Net of Tax | The following table summarizes the changes in other comprehensive income by component, net of tax for the period indicated: | |||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Unrealized holding gains (losses ) on AFS | ||||||||||||||
(in thousands) | ||||||||||||||
Beginning balance | $ | (274 | ) | $ | 35 | $ | 139 | |||||||
Other comprehensive income (loss) before reclassifications | 305 | (309 | ) | (5 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | - | - | (99 | ) | ||||||||||
Net current-period other comprehensive income | 305 | (309 | ) | (104 | ) | |||||||||
Ending Balance | $ | 31 | $ | (274 | ) | $ | 35 | |||||||
Reclassification out of Accumulated Other Comprehensive Income | The following table presents reclassifications out of accumulated other comprehensive income: | |||||||||||||
Accumulated other comprehensive | Year Ended December 31, | |||||||||||||
income components details | 2014 | 2013 | 2012 | |||||||||||
(in thousands) | ||||||||||||||
Unrealized gains and losses on AFS | ||||||||||||||
$ | - | $ | - | $ | 121 | Realized gain on sale of investment securities | ||||||||
- | - | (22 | ) | Income tax expense | ||||||||||
$ | - | $ | - | $ | 99 | Net of tax |
PARENT_COMPANY_FINANCIAL_INFOR1
PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
PARENT COMPANY FINANCIAL INFORMATION [Abstract] | |||||||||||||
Condensed Balance Sheets | COMMUNITY WEST BANCSHARES | ||||||||||||
Condensed Balance Sheets | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
Assets: | |||||||||||||
Cash and cash equivalents (including interest-bearing deposits in other financial institutions) | $ | 1,122 | $ | 3,227 | |||||||||
Investment in subsidiary | 65,710 | 67,448 | |||||||||||
Other assets | 222 | 154 | |||||||||||
Total assets | $ | 67,054 | $ | 70,829 | |||||||||
Liabilities and Stockholders' Equity: | |||||||||||||
Convertible debentures | $ | - | $ | 1,442 | |||||||||
Other liabilities | 78 | 1,557 | |||||||||||
Total liabilities | 78 | 2,999 | |||||||||||
Preferred stock | 7,014 | 15,600 | |||||||||||
Common stock | 41,957 | 40,165 | |||||||||||
Retained earnings | 18,005 | 12,065 | |||||||||||
Total stockholders' equity | 66,976 | 67,830 | |||||||||||
Total liabilities and stockholders' equity | $ | 67,054 | $ | 70,829 | |||||||||
Condensed Income Statements | COMMUNITY WEST BANCSHARES | ||||||||||||
Condensed Income Statements | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Interest income | $ | 8 | $ | 5 | $ | 15 | |||||||
Interest expense | 30 | 442 | 717 | ||||||||||
Net interest expense | (22 | ) | (437 | ) | (702 | ) | |||||||
Income from consolidated subsidiary | 7,446 | 9,567 | 4,168 | ||||||||||
Other income | - | 71 | - | ||||||||||
Total income | 7,424 | 9,201 | 3,466 | ||||||||||
Total non-interest expenses | 599 | 215 | 293 | ||||||||||
Income before income tax benefit | 6,825 | 8,986 | 3,173 | ||||||||||
Income tax benefit | (221 | ) | - | - | |||||||||
Net income | 7,046 | 8,986 | 3,173 | ||||||||||
Preferred stock dividends and accretion on preferred stock | 937 | 1,039 | 1,046 | ||||||||||
Discount on partial redemption of preferred stock | (159 | ) | - | - | |||||||||
Net income available to common stockholders' | $ | 6,268 | $ | 7,947 | $ | 2,127 | |||||||
Condensed Statements of Cash Flows | COMMUNITY WEST BANCSHARES | ||||||||||||
Condensed Statements of Cash Flows | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(in thousands) | |||||||||||||
Cash Flows from Operating Activities: | |||||||||||||
Net income | $ | 7,046 | $ | 8,986 | $ | 3,173 | |||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||
Equity in undistributed income from subsidiary | (7,446 | ) | (9,567 | ) | (4,168 | ) | |||||||
Stock-based compensation | 308 | 59 | 117 | ||||||||||
Changes in: | |||||||||||||
Other assets | (68 | ) | 23 | 315 | |||||||||
Other liabilities | (4 | ) | (2 | ) | 35 | ||||||||
Net cash used in operating activities | (164 | ) | (501 | ) | (528 | ) | |||||||
Cash Flows from Investing Activities: | |||||||||||||
Net dividends from and investment in subsidiary | 9,184 | - | (1,000 | ) | |||||||||
Net cash provided by (used in) investing activities | 9,184 | - | (1,000 | ) | |||||||||
Cash Flows from Financing Activities: | |||||||||||||
Redemption of convertible debentures | (34 | ) | - | - | |||||||||
Preferred stock dividends paid | (2,390 | ) | - | (195 | ) | ||||||||
Redemption of preferred stock | (8,427 | ) | - | - | |||||||||
Common stock dividends paid | (328 | ) | - | - | |||||||||
Proceeds from issuance of common stock | 54 | 24 | 16 | ||||||||||
Net cash (used in) provided by financing activities | (11,125 | ) | 24 | (179 | ) | ||||||||
Net decrease in cash and cash equivalents | (2,105 | ) | (477 | ) | (1,707 | ) | |||||||
Cash and cash equivalents at beginning of year | 3,227 | 3,704 | 5,411 | ||||||||||
Cash and cash equivalents at end of year | $ | 1,122 | $ | 3,227 | $ | 3,704 |
QUARTERLY_FINANCIAL_DATA_UNAUD1
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract] | |||||||||||||||||||||
Quarterly Statement of Operations | December 31, | ||||||||||||||||||||
2014 | |||||||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | |||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
Interest income | $ | 6,961 | $ | 7,122 | $ | 6,903 | $ | 7,018 | $ | 28,004 | |||||||||||
Interest expense | 879 | 849 | 835 | 712 | 3,275 | ||||||||||||||||
Net interest income | 6,082 | 6,273 | 6,068 | 6,306 | 24,729 | ||||||||||||||||
Provision for loan losses | (1,371 | ) | (1,011 | ) | (1,178 | ) | (1,575 | ) | (5,135 | ) | |||||||||||
Net interest income after provision for loan losses | 7,453 | 7,284 | 7,246 | 7,881 | 29,864 | ||||||||||||||||
Non-interest income | 518 | 656 | 552 | 471 | 2,197 | ||||||||||||||||
Non-interest expenses | 5,525 | 5,031 | 4,879 | 4,646 | 20,081 | ||||||||||||||||
Income before income taxes | 2,446 | 2,909 | 2,919 | 3,706 | 11,980 | ||||||||||||||||
Provision for income taxes | 1,004 | 1,203 | 1,207 | 1,520 | 4,934 | ||||||||||||||||
Net income | 1,442 | 1,706 | 1,712 | 2,186 | 7,046 | ||||||||||||||||
Dividends and accretion on preferred stock | 273 | 329 | 176 | 159 | 937 | ||||||||||||||||
Discount on partial redemption of preferred stock | - | (144 | ) | - | (15 | ) | (159 | ) | |||||||||||||
Net income available to common stockholders | $ | 1,169 | $ | 1,521 | $ | 1,536 | $ | 2,042 | $ | 6,268 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Income per common share - basic | $ | 0.15 | $ | 0.19 | $ | 0.19 | $ | 0.25 | $ | 0.77 | |||||||||||
Income per common share - diluted | $ | 0.15 | $ | 0.18 | $ | 0.18 | $ | 0.24 | $ | 0.75 | |||||||||||
December 31, | |||||||||||||||||||||
2013 | |||||||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | |||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
Interest income | $ | 6,976 | $ | 7,044 | $ | 7,081 | $ | 6,765 | $ | 27,866 | |||||||||||
Interest expense | 1,166 | 1,161 | 1,047 | 958 | 4,332 | ||||||||||||||||
Net interest income | 5,810 | 5,883 | 6,034 | 5,807 | 23,534 | ||||||||||||||||
Provision for loan losses | (196 | ) | (1,084 | ) | (1,563 | ) | 899 | (1,944 | ) | ||||||||||||
Net interest income after provision for loan losses | 6,006 | 6,967 | 7,597 | 4,908 | 25,478 | ||||||||||||||||
Non-interest income | 772 | 836 | 677 | 546 | 2,831 | ||||||||||||||||
Non-interest expenses | 5,689 | 5,677 | 5,639 | 5,130 | 22,135 | ||||||||||||||||
Income before income taxes | 1,089 | 2,126 | 2,635 | 324 | 6,174 | ||||||||||||||||
Provision (benefit) for income taxes | - | - | - | (2,812 | ) | (2,812 | ) | ||||||||||||||
Net income | 1,089 | 2,126 | 2,635 | 3,136 | 8,986 | ||||||||||||||||
Dividends and accretion on preferred stock | 262 | 262 | 262 | 253 | 1,039 | ||||||||||||||||
Net income available to common stockholders | $ | 827 | $ | 1,864 | $ | 2,373 | $ | 2,883 | $ | 7,947 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Income per common share - basic | $ | 0.14 | $ | 0.3 | $ | 0.3 | $ | 0.37 | $ | 1.11 | |||||||||||
Income per common share - diluted | $ | 0.11 | $ | 0.23 | $ | 0.29 | $ | 0.34 | $ | 0.97 | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Segment | Segment | |
Business Segments [Abstract] | ||
Number of reportable segments | 1 | 1 |
Cash Reserve Requirement [Abstract] | ||
Total reserve balance | $700,000 | $700,000 |
Nonaccrual Loans [Abstract] | ||
Period after which loans in accrual status | 90 days | |
Period before which credit card loans and other personal loans typically charged off | 180 days | |
Provision and Allowance for Loan Losses [Abstract] | ||
Threshold amount of loans for evaluation of impairment | 500,000 | |
Bank Owned Life Insurance [Abstract] | ||
Cash surrender value of life insurance | $3,200,000 | $3,100,000 |
Preferred Stock [Abstract] | ||
Preferred stock, dividend rate (in hundredths) | 5.00% | |
Preferred stock, increased dividend rate, percentage thereafter (in hundredths) | 9.00% | |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 31 years 6 months | |
Minimum [Member] | Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 5 years | |
Minimum [Member] | Electronic Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 3 years | |
Maximum [Member] | Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 10 years | |
Maximum [Member] | Electronic Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life of assets | 5 years | |
Commercial, Commercial Real Estate and SBA Loans [Member] | ||
Provision and Allowance for Loan Losses [Abstract] | ||
Number of days for unsecured loans to be charged off | 90 days | |
Single Family Real Estate, HELOC's and Manufactured Loans [Member] | ||
Provision and Allowance for Loan Losses [Abstract] | ||
Period of past due after which loan is considered as uncollectible | 90 days | |
Single Family Real Estate, HELOC's and Manufactured Loans [Member] | Minimum [Member] | ||
Provision and Allowance for Loan Losses [Abstract] | ||
Number of days for unsecured loans to be charged off | 90 days | |
Single Family Real Estate, HELOC's and Manufactured Loans [Member] | Maximum [Member] | ||
Provision and Allowance for Loan Losses [Abstract] | ||
Number of days for unsecured loans to be charged off | 120 days | |
Consumer [Member] | ||
Provision and Allowance for Loan Losses [Abstract] | ||
Period of past due after which loan is considered as uncollectible | 120 days |
INVESTMENT_SECURITIES_Details
INVESTMENT SECURITIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Amortized Cost | $22,141,000 | $18,937,000 |
Gross Unrealized Gains | 138,000 | 17,000 |
Gross Unrealized (Losses) | -85,000 | -482,000 |
Fair Value | 22,194,000 | 18,472,000 |
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||
Amortized Cost | 22,141,000 | 18,937,000 |
Fair Value | 22,194,000 | 18,472,000 |
Securities held-to-maturity [Abstract] | ||
Amortized Cost | 8,447,000 | 9,688,000 |
Gross Unrealized Gains | 447,000 | 442,000 |
Gross Unrealized (Losses) | 0 | -29,000 |
Fair Value | 8,894,000 | 10,101,000 |
Available-for-sale and held to maturity securities disclosure [Abstract] | ||
Securities pledged as collateral | 30,600,000 | 28,000,000 |
U.S. Government Agency [Member] | Mortgage Backed Securities ("MBS") [Member] | ||
Securities held-to-maturity [Abstract] | ||
Amortized Cost | 8,447,000 | 9,688,000 |
Gross Unrealized Gains | 447,000 | 442,000 |
Gross Unrealized (Losses) | 0 | -29,000 |
Fair Value | 8,894,000 | 10,101,000 |
U.S. Government Agency [Member] | Notes [Member] | ||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||
Amortized Cost | 7,846,000 | 7,867,000 |
Gross Unrealized Gains | 65,000 | 0 |
Gross Unrealized (Losses) | -49,000 | -389,000 |
Fair Value | 7,862,000 | 7,478,000 |
U.S. Government Agency [Member] | Mortgage Backed Securities ("MBS") [Member] | ||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||
Amortized Cost | 61,000 | |
Gross Unrealized Gains | 3,000 | |
Gross Unrealized (Losses) | 0 | |
Fair Value | 64,000 | |
U.S. Government Agency [Member] | Collateralized Mortgage Obligations ("CMO") [Member] | ||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||
Amortized Cost | 14,229,000 | 10,943,000 |
Gross Unrealized Gains | 73,000 | 11,000 |
Gross Unrealized (Losses) | -31,000 | -93,000 |
Fair Value | 14,271,000 | 10,861,000 |
Equity Securities: Farmer Mac Class A Stock [Member] | ||
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract] | ||
Fair Value | 61,000 | 69,000 |
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | ||
Amortized Cost | 66,000 | 66,000 |
Gross Unrealized Gains | 0 | 3,000 |
Gross Unrealized (Losses) | -5,000 | 0 |
Fair Value | $61,000 | $69,000 |
INVESTMENT_SECURITIES_Maturity
INVESTMENT SECURITIES, Maturity Periods and Weighted Average Yields (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than One Year, Amount | $7,862 | $7,478 |
Less than One Year, Yield (in hundredths) | 2.50% | 1.90% |
One to Five Years, Amount | 7,826 | 5,075 |
One to Five Years, Yield (in hundredths) | 1.00% | 0.60% |
Five to Ten Years, Amount | 2,801 | 3,918 |
Five to Ten Years, Yield (in hundredths) | 0.60% | 0.60% |
Over Ten Years, Amount | 3,644 | 1,932 |
Over Ten Years, Yield (in hundredths) | 1.10% | 0.90% |
Total Amount | 22,194 | 18,472 |
Total Yield (in hundredths) | 1.30% | 1.20% |
Maturity periods and weighted average yields of investment securities held-to-maturity [Abstract] | ||
Less than One Year, Amount | 0 | 0 |
Less than One Year, Yield (in hundredths) | 0.00% | 0.00% |
One to Five Years, Amount | 3,235 | 2,641 |
One to Five Years, Yield (in hundredths) | 4.00% | 4.40% |
Five to Ten Years, Amount | 5,212 | 7,047 |
Five to Ten Years, Yield (in hundredths) | 2.40% | 2.70% |
Over Ten Years, Amount | 0 | 0 |
Over Ten Years, Yield (in hundredths) | 0.00% | 0.00% |
Total Amount | 8,447 | 9,688 |
Total Yield (in hundredths) | 2.90% | 3.10% |
U.S. Government Agency [Member] | Mortgage Backed Securities ("MBS") [Member] | ||
Maturity periods and weighted average yields of investment securities held-to-maturity [Abstract] | ||
Less than One Year, Amount | 0 | 0 |
Less than One Year, Yield (in hundredths) | 0.00% | 0.00% |
One to Five Years, Amount | 3,235 | 2,641 |
One to Five Years, Yield (in hundredths) | 4.00% | 4.40% |
Five to Ten Years, Amount | 5,212 | 7,047 |
Five to Ten Years, Yield (in hundredths) | 2.40% | 2.70% |
Over Ten Years, Amount | 0 | 0 |
Over Ten Years, Yield (in hundredths) | 0.00% | 0.00% |
Total Amount | 8,447 | 9,688 |
Total Yield (in hundredths) | 2.90% | 3.10% |
U.S. Government Agency [Member] | Notes [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than One Year, Amount | 7,862 | 7,478 |
Less than One Year, Yield (in hundredths) | 2.50% | 1.90% |
One to Five Years, Amount | 0 | 0 |
One to Five Years, Yield (in hundredths) | 0.00% | 0.00% |
Five to Ten Years, Amount | 0 | 0 |
Five to Ten Years, Yield (in hundredths) | 0.00% | 0.00% |
Over Ten Years, Amount | 0 | 0 |
Over Ten Years, Yield (in hundredths) | 0.00% | 0.00% |
Total Amount | 7,862 | 7,478 |
Total Yield (in hundredths) | 2.50% | 1.90% |
U.S. Government Agency [Member] | Mortgage Backed Securities ("MBS") [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than One Year, Amount | 0 | |
Less than One Year, Yield (in hundredths) | 0.00% | |
One to Five Years, Amount | 0 | |
One to Five Years, Yield (in hundredths) | 0.00% | |
Five to Ten Years, Amount | 64 | |
Five to Ten Years, Yield (in hundredths) | 2.20% | |
Over Ten Years, Amount | 0 | |
Over Ten Years, Yield (in hundredths) | 0.00% | |
Total Amount | 64 | |
Total Yield (in hundredths) | 2.20% | |
U.S. Government Agency [Member] | Collateralized Mortgage Obligations ("CMO") [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than One Year, Amount | 0 | 0 |
Less than One Year, Yield (in hundredths) | 0.00% | 0.00% |
One to Five Years, Amount | 7,826 | 5,075 |
One to Five Years, Yield (in hundredths) | 1.00% | 0.60% |
Five to Ten Years, Amount | 2,801 | 3,854 |
Five to Ten Years, Yield (in hundredths) | 0.60% | 0.60% |
Over Ten Years, Amount | 3,644 | 1,932 |
Over Ten Years, Yield (in hundredths) | 1.10% | 0.90% |
Total Amount | 14,271 | 10,861 |
Total Yield (in hundredths) | 1.10% | 0.70% |
Equity Securities: Farmer Mac Class A Stock [Member] | ||
Maturity periods and weighted average yields of investment securities available-for-sale [Abstract] | ||
Less than One Year, Amount | 0 | 0 |
Less than One Year, Yield (in hundredths) | 0.00% | 0.00% |
One to Five Years, Amount | 0 | 0 |
One to Five Years, Yield (in hundredths) | 0.00% | 0.00% |
Five to Ten Years, Amount | 0 | 0 |
Five to Ten Years, Yield (in hundredths) | 0.00% | 0.00% |
Over Ten Years, Amount | 0 | 0 |
Over Ten Years, Yield (in hundredths) | 0.00% | 0.00% |
Total Amount | $61 | $69 |
Total Yield (in hundredths) | 0.00% | 0.00% |
INVESTMENT_SECURITIES_Amortize
INVESTMENT SECURITIES, Amortized Cost and Fair Value of Securities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Securities available-for-sale, Amortized Cost [Abstract] | ||
Due in one year or less | $7,846 | $7,867 |
After one year through five years | 7,798 | 5,070 |
After five years through ten years | 2,792 | 3,945 |
After ten years | 3,639 | 1,989 |
Farmer Mac class A stock | 66 | 66 |
Amortized Cost | 22,141 | 18,937 |
Securities available for sale, Estimated Fair Value [Abstract] | ||
Due in one year or less | 7,862 | 7,478 |
After one year through five years | 7,826 | 5,075 |
After five years through ten years | 2,801 | 3,918 |
After ten years | 3,644 | 1,932 |
Farmer Mac class A stock | 61 | 69 |
Estimated Fair Value | 22,194 | 18,472 |
Securities held to maturity, Amortized Cost [Abstract] | ||
Due in one year or less | 0 | 0 |
After one year through five years | 3,235 | 2,641 |
After five years through ten years | 5,212 | 7,047 |
After ten years | 0 | 0 |
Amortized Cost | 8,447 | 9,688 |
Securities held to maturity, Estimated Fair Value [Abstract] | ||
Due in one year or less | 0 | 0 |
After one year through five years | 3,479 | 2,815 |
After five years through ten years | 5,415 | 7,286 |
After ten years | 0 | 0 |
Estimated Fair Value | $8,894 | $10,101 |
INVESTMENT_SECURITIES_Unrealiz
INVESTMENT SECURITIES, Unrealized Loss Positions (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Security | Security |
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less Than Twelve Months, Gross Unrealized Losses | $28 | $482 |
Less Than Twelve Months, Fair Value | 1,979 | 14,436 |
More Than Twelve Months, Gross Unrealized Losses | 57 | 0 |
More Than Twelve Months, Fair Value | 8,061 | 0 |
Total, Gross Unrealized Losses | 85 | 482 |
Total, Fair Value | 10,040 | 14,436 |
Securities held-to-maturity, continuous unrealized loss position [Abstract] | ||
Less Than Twelve Months, Gross Unrealized Losses | 0 | 29 |
Less Than Twelve Months, Fair Value | 0 | 1,063 |
More Than Twelve Months, Gross Unrealized Losses | 0 | 0 |
More Than Twelve Months, Fair Value | 0 | 0 |
Total, Gross Unrealized Losses | 0 | 29 |
Total, Fair Value | 0 | 1,063 |
Securities in unrealized loss positions | 6 | 9 |
U.S. Government Agency [Member] | Mortgage Backed Securities ("MBS") [Member] | ||
Securities held-to-maturity, continuous unrealized loss position [Abstract] | ||
Less Than Twelve Months, Gross Unrealized Losses | 0 | 29 |
Less Than Twelve Months, Fair Value | 0 | 1,063 |
More Than Twelve Months, Gross Unrealized Losses | 0 | 0 |
More Than Twelve Months, Fair Value | 0 | 0 |
Total, Gross Unrealized Losses | 0 | 29 |
Total, Fair Value | 0 | 1,063 |
U.S. Government Agency [Member] | Notes [Member] | ||
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less Than Twelve Months, Gross Unrealized Losses | 23 | 389 |
Less Than Twelve Months, Fair Value | 1,918 | 7,478 |
More Than Twelve Months, Gross Unrealized Losses | 26 | 0 |
More Than Twelve Months, Fair Value | 3,971 | 0 |
Total, Gross Unrealized Losses | 49 | 389 |
Total, Fair Value | 5,889 | 7,478 |
U.S. Government Agency [Member] | Collateralized Mortgage Obligations ("CMO") [Member] | ||
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less Than Twelve Months, Gross Unrealized Losses | 0 | 93 |
Less Than Twelve Months, Fair Value | 0 | 6,958 |
More Than Twelve Months, Gross Unrealized Losses | 31 | 0 |
More Than Twelve Months, Fair Value | 4,090 | 0 |
Total, Gross Unrealized Losses | 31 | 93 |
Total, Fair Value | 4,090 | 6,958 |
Equity Securities: Farmer Mac Class A Stock [Member] | ||
Securities available-for-sale, continuous unrealized loss position [Abstract] | ||
Less Than Twelve Months, Gross Unrealized Losses | 5 | 0 |
Less Than Twelve Months, Fair Value | 61 | 0 |
More Than Twelve Months, Gross Unrealized Losses | 0 | 0 |
More Than Twelve Months, Fair Value | 0 | 0 |
Total, Gross Unrealized Losses | 5 | 0 |
Total, Fair Value | $61 | $0 |
LOAN_SALES_AND_SERVICING_SBA_a
LOAN SALES AND SERVICING, SBA and Agriculture Loans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Servicing Assets at Fair Value [Line Items] | |||
Loans included in loans held for sale | $66,759,000 | $64,399,000 | |
SBA [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Percentage as required principal balance of each loan, minimum (in hundredths) | 5.00% | ||
Percentage of loan amount unguaranteed to be periodically sold to third part for cash premium, minimum (in hundredths) | 5.00% | ||
Loans included in loans held for sale | 40,800,000 | 47,600,000 | |
Principal balance of loan serviced | 24,600,000 | 30,700,000 | |
US Department of Agriculture [Member] | |||
Servicing Assets at Fair Value [Line Items] | |||
Loans included in loans held for sale | 25,100,000 | 16,800,000 | |
Principal balance of loan serviced | 1,400,000 | 2,500,000 | |
Interest Only Strips [Member] | |||
Servicing assets accounted for under the fair value method [Roll Forward] | |||
Beginning balance | 334,000 | 426,000 | 419,000 |
Adjustment to fair value | -41,000 | -92,000 | 7,000 |
Ending balance | 293,000 | 334,000 | 426,000 |
Servicing Rights [Member] | |||
Servicing assets accounted for under the fair value method [Roll Forward] | |||
Beginning balance | 300,000 | 348,000 | 0 |
Additions through loan sales | 0 | 0 | 349,000 |
Adjustment to fair value | -97,000 | -48,000 | -1,000 |
Ending balance | $203,000 | $300,000 | $348,000 |
LOAN_SALES_AND_SERVICING_Fair_
LOAN SALES AND SERVICING, Fair Value Assumptions Used (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Interest Only Strips [Member] | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Weighted-average constant prepayment rate (in hundredths) | 5.63% | 5.24% |
Weighted-average life | 6 years | 6 years |
Weighted-average discount rate (in hundredths) | 11.52% | 12.89% |
Servicing Rights [Member] | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Weighted-average constant prepayment rate (in hundredths) | 6.03% | 5.04% |
Weighted-average life | 8 years | 9 years |
Weighted-average discount rate (in hundredths) | 11.78% | 12.93% |
LOAN_SALES_AND_SERVICING_Sensi
LOAN SALES AND SERVICING, Sensitivity Analysis of Fair Value (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Interest Only Strips [Member] | ||
Discount Rate [Abstract] | ||
Increase in fair value from 100 basis point decrease | $8 | $9 |
Decrease in fair value from 100 basis point increase | -8 | -9 |
Constant Prepayment Rate [Abstract] | ||
Increase in fair value from 10 percent decrease | 4 | 5 |
Decrease in fair value from 10 percent increase | -4 | -5 |
Servicing Rights [Member] | ||
Discount Rate [Abstract] | ||
Increase in fair value from 100 basis point decrease | 9 | 12 |
Decrease in fair value from 100 basis point increase | -8 | -12 |
Constant Prepayment Rate [Abstract] | ||
Increase in fair value from 10 percent decrease | 5 | 6 |
Decrease in fair value from 10 percent increase | ($5) | ($6) |
LOAN_SALES_AND_SERVICING_Servi
LOAN SALES AND SERVICING, Servicing Assets at Amortization Cost (Details) (Servicing Rights [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Servicing Rights [Member] | |||
Servicing rights accounted for under the amortization method [Roll Forward] | |||
Beginning balance | $268 | $383 | $625 |
Amortization | -101 | -115 | -242 |
Ending balance | $167 | $268 | $383 |
LOAN_SALES_AND_SERVICING_Mortg
LOAN SALES AND SERVICING, Mortgage Loans (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Commitment | ||
Mortgage Loan Sales [Abstract] | ||
Period for entity entered into mortgage loan rate lock commitments | 30 days | |
Number of commitments which create an economic hedge | 2 | |
Mortgage loan interest rate lock and forward sale commitments amount | $1.90 | $0 |
Mortgage loans held for sale | $0.80 |
LOANS_HELD_FOR_INVESTMENT_Deta
LOANS HELD FOR INVESTMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | $428,729 | $410,198 | |
Allowance for loan losses | 7,877 | 12,208 | |
Deferred fees, net | 118 | 45 | |
Discount on SBA loans | 237 | 339 | |
Total loans held for investment, net | 420,497 | 397,606 | |
Manufactured Housing [Member] | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | 169,662 | 172,055 | |
Commercial Real Estate [Member] | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | 159,432 | 142,678 | |
Commercial [Member] | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | 49,683 | 45,647 | |
SBA [Member] | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | 21,336 | 24,066 | [1] |
HELOC [Member] | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | 13,481 | 15,418 | |
Single Family Real Estate [Member] | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | 14,957 | 10,150 | |
Consumer [Member] | |||
Loans held for investment [Abstract] | |||
Loan held for investment, gross | $178 | $184 | |
[1] | $0.4 million of the $0.5 million SBA loans past due are guaranteed by the SBA. |
LOANS_HELD_FOR_INVESTMENT_Fina
LOANS HELD FOR INVESTMENT, Financing Receivables Past Due (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
Aging of loans held for investment [Abstract] | |||
Current | $427,321,000 | $407,597,000 | |
30-59 days past due | 874,000 | 1,432,000 | |
60-89 days past due | 0 | 135,000 | |
Over 90 days past due | 534,000 | 1,034,000 | |
Total past due | 1,408,000 | 2,601,000 | |
Total loans held for investment | 428,729,000 | 410,198,000 | |
Recorded investment over 90 days and accruing | 0 | 66,000 | |
SBA Guaranteed Loans [Member] | |||
Aging of loans held for investment [Abstract] | |||
Total loans held for investment | 6,372,000 | 7,104,000 | |
Manufactured Housing [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 169,233,000 | 170,647,000 | |
30-59 days past due | 239,000 | 1,076,000 | |
60-89 days past due | 0 | 135,000 | |
Over 90 days past due | 190,000 | 197,000 | |
Total past due | 429,000 | 1,408,000 | |
Total loans held for investment | 169,662,000 | 172,055,000 | |
Recorded investment over 90 days and accruing | 0 | 0 | |
Commercial Real Estate [Member] | |||
Aging of loans held for investment [Abstract] | |||
Total loans held for investment | 159,432,000 | 142,678,000 | |
Commercial Real Estate [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 119,090,000 | 96,393,000 | |
30-59 days past due | 632,000 | 0 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 186,000 | 0 | |
Total past due | 818,000 | 0 | |
Total loans held for investment | 119,908,000 | 96,393,000 | |
Recorded investment over 90 days and accruing | 0 | 0 | |
SBA 504 1st Trust Deed [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 27,297,000 | 33,798,000 | |
30-59 days past due | 0 | 0 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 0 | 467,000 | |
Total past due | 0 | 467,000 | |
Total loans held for investment | 27,297,000 | 34,265,000 | |
Recorded investment over 90 days and accruing | 0 | 0 | |
Land [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 1,569,000 | 1,817,000 | |
30-59 days past due | 0 | 140,000 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 0 | 0 | |
Total past due | 0 | 140,000 | |
Total loans held for investment | 1,569,000 | 1,957,000 | |
Recorded investment over 90 days and accruing | 0 | 0 | |
Construction [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 10,658,000 | 10,063,000 | |
30-59 days past due | 0 | 0 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 0 | 0 | |
Total past due | 0 | 0 | |
Total loans held for investment | 10,658,000 | 10,063,000 | |
Recorded investment over 90 days and accruing | 0 | 0 | |
Commercial [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 49,683,000 | 45,605,000 | |
30-59 days past due | 0 | 42,000 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 0 | 0 | |
Total past due | 0 | 42,000 | |
Total loans held for investment | 49,683,000 | 45,647,000 | |
Recorded investment over 90 days and accruing | 0 | 0 | |
SBA [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 21,333,000 | 23,613,000 | [1] |
30-59 days past due | 3,000 | 149,000 | [1] |
60-89 days past due | 0 | 0 | [1] |
Over 90 days past due | 0 | 304,000 | [1] |
Total past due | 3,000 | 453,000 | [1] |
Total loans held for investment | 21,336,000 | 24,066,000 | [1] |
Recorded investment over 90 days and accruing | 0 | 0 | [1] |
SBA [Member] | SBA Guaranteed Loans [Member] | |||
Aging of loans held for investment [Abstract] | |||
Guaranteed past due loans | 400,000 | 500,000 | |
HELOC [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 13,459,000 | 15,393,000 | |
30-59 days past due | 0 | 25,000 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 22,000 | 0 | |
Total past due | 22,000 | 25,000 | |
Total loans held for investment | 13,481,000 | 15,418,000 | |
Recorded investment over 90 days and accruing | 0 | 0 | |
Single Family Real Estate [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 14,821,000 | 10,084,000 | |
30-59 days past due | 0 | 0 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 136,000 | 66,000 | |
Total past due | 136,000 | 66,000 | |
Total loans held for investment | 14,957,000 | 10,150,000 | |
Recorded investment over 90 days and accruing | 0 | 66,000 | |
Consumer [Member] | |||
Aging of loans held for investment [Abstract] | |||
Current | 178,000 | 184,000 | |
30-59 days past due | 0 | 0 | |
60-89 days past due | 0 | 0 | |
Over 90 days past due | 0 | 0 | |
Total past due | 0 | 0 | |
Total loans held for investment | 178,000 | 184,000 | |
Recorded investment over 90 days and accruing | $0 | $0 | |
[1] | $0.4 million of the $0.5 million SBA loans past due are guaranteed by the SBA. |
LOANS_HELD_FOR_INVESTMENT_Allo
LOANS HELD FOR INVESTMENT, Allowance for Credit Losses by Portfolio Type (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | $12,208,000 | $14,464,000 | $12,208,000 | $14,464,000 | $15,270,000 | ||||||
Charge-offs | -766,000 | -2,594,000 | -7,016,000 | ||||||||
Recoveries | 1,570,000 | 2,282,000 | 1,929,000 | ||||||||
Net charge-offs | 804,000 | -312,000 | -5,087,000 | ||||||||
Provision | -1,575,000 | -1,178,000 | -1,011,000 | -1,371,000 | 899,000 | -1,563,000 | -1,084,000 | -196,000 | -5,135,000 | -1,944,000 | 4,281,000 |
Ending balance | 7,877,000 | 12,208,000 | 7,877,000 | 12,208,000 | 14,464,000 | ||||||
Reserve for credit losses on undisbursed loans | 39,000 | 100,000 | 39,000 | 100,000 | |||||||
Manufactured Housing [Member] | |||||||||||
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | 5,114,000 | 5,945,000 | 5,114,000 | 5,945,000 | 4,629,000 | ||||||
Charge-offs | -543,000 | -1,294,000 | -3,652,000 | ||||||||
Recoveries | 143,000 | 257,000 | 144,000 | ||||||||
Net charge-offs | -400,000 | -1,037,000 | -3,508,000 | ||||||||
Provision | -682,000 | 206,000 | 4,824,000 | ||||||||
Ending balance | 4,032,000 | 5,114,000 | 4,032,000 | 5,114,000 | 5,945,000 | ||||||
Commercial Real Estate [Member] | |||||||||||
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | 2,552,000 | 2,627,000 | 2,552,000 | 2,627,000 | 3,528,000 | ||||||
Charge-offs | -16,000 | -349,000 | -1,687,000 | ||||||||
Recoveries | 857,000 | 1,243,000 | 756,000 | ||||||||
Net charge-offs | 841,000 | 894,000 | -931,000 | ||||||||
Provision | -1,934,000 | -969,000 | 30,000 | ||||||||
Ending balance | 1,459,000 | 2,552,000 | 1,459,000 | 2,552,000 | 2,627,000 | ||||||
Commercial [Member] | |||||||||||
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | 2,064,000 | 2,325,000 | 2,064,000 | 2,325,000 | 2,734,000 | ||||||
Charge-offs | 0 | -149,000 | -656,000 | ||||||||
Recoveries | 149,000 | 212,000 | 131,000 | ||||||||
Net charge-offs | 149,000 | 63,000 | -525,000 | ||||||||
Provision | -1,227,000 | -324,000 | 116,000 | ||||||||
Ending balance | 986,000 | 2,064,000 | 986,000 | 2,064,000 | 2,325,000 | ||||||
SBA [Member] | |||||||||||
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | 1,951,000 | 2,733,000 | 1,951,000 | 2,733,000 | 3,877,000 | ||||||
Charge-offs | -171,000 | -547,000 | -623,000 | ||||||||
Recoveries | 393,000 | 559,000 | 837,000 | ||||||||
Net charge-offs | 222,000 | 12,000 | 214,000 | ||||||||
Provision | -1,107,000 | -794,000 | -1,358,000 | ||||||||
Ending balance | 1,066,000 | 1,951,000 | 1,066,000 | 1,951,000 | 2,733,000 | ||||||
HELOC [Member] | |||||||||||
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | 280,000 | 634,000 | 280,000 | 634,000 | 349,000 | ||||||
Charge-offs | 0 | -39,000 | -76,000 | ||||||||
Recoveries | 24,000 | 3,000 | 50,000 | ||||||||
Net charge-offs | 24,000 | -36,000 | -26,000 | ||||||||
Provision | -164,000 | -318,000 | 311,000 | ||||||||
Ending balance | 140,000 | 280,000 | 140,000 | 280,000 | 634,000 | ||||||
Single Family Real Estate [Member] | |||||||||||
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | 245,000 | 198,000 | 245,000 | 198,000 | 150,000 | ||||||
Charge-offs | -36,000 | -179,000 | -314,000 | ||||||||
Recoveries | 4,000 | 8,000 | 6,000 | ||||||||
Net charge-offs | -32,000 | -171,000 | -308,000 | ||||||||
Provision | -21,000 | 218,000 | 356,000 | ||||||||
Ending balance | 192,000 | 245,000 | 192,000 | 245,000 | 198,000 | ||||||
Consumer [Member] | |||||||||||
Summary of provision, charge-offs and recoveries by loan category [Abstract] | |||||||||||
Beginning balance | 2,000 | 2,000 | 2,000 | 2,000 | 3,000 | ||||||
Charge-offs | 0 | -37,000 | -8,000 | ||||||||
Recoveries | 0 | 0 | 5,000 | ||||||||
Net charge-offs | 0 | -37,000 | -3,000 | ||||||||
Provision | 0 | 37,000 | 2,000 | ||||||||
Ending balance | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 |
LOANS_HELD_FOR_INVESTMENT_Impa
LOANS HELD FOR INVESTMENT, Impaired Financing Receivables (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
In Thousands, unless otherwise specified | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | $13,136 | $15,140 | |||
Impaired loans with no allowance recorded | 3,703 | 4,980 | |||
Total loans individually evaluated for impairment | 16,839 | 20,120 | |||
Loans collectively evaluated for impairment | 411,890 | 390,078 | |||
Total loans held for investment | 428,729 | 410,198 | |||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 23,312 | 22,624 | |||
Impaired loans with no allowance recorded | 7,604 | 10,459 | |||
Total loans individually evaluated for impairment | 30,916 | 33,083 | |||
Loans collectively evaluated for impairment | 411,890 | 390,078 | |||
Total loans held for investment | 442,806 | 423,161 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 854 | 1,439 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 854 | 1,439 | |||
Loans collectively evaluated for impairment | 7,023 | 10,769 | |||
Total loans held for investment | 7,877 | 12,208 | 14,464 | 15,270 | |
Impaired loans with a specific valuation allowance under ASC 310 | 13,136 | 15,140 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 3,703 | 4,980 | |||
Impaired loans | 16,839 | 20,120 | |||
Valuation allowance related to impaired loans | 854 | 1,439 | |||
Manufactured Housing [Member] | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | 4,717 | 6,368 | |||
Impaired loans with no allowance recorded | 2,734 | 2,782 | |||
Total loans individually evaluated for impairment | 7,451 | 9,150 | |||
Loans collectively evaluated for impairment | 162,211 | 162,905 | |||
Total loans held for investment | 169,662 | 172,055 | |||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 5,172 | 6,962 | |||
Impaired loans with no allowance recorded | 4,243 | 4,536 | |||
Total loans individually evaluated for impairment | 9,415 | 11,498 | |||
Loans collectively evaluated for impairment | 162,211 | 162,905 | |||
Total loans held for investment | 171,626 | 174,403 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 399 | 618 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 399 | 618 | |||
Loans collectively evaluated for impairment | 3,633 | 4,496 | |||
Total loans held for investment | 4,032 | 5,114 | 5,945 | 4,629 | |
Impaired loans with a specific valuation allowance under ASC 310 | 4,717 | 6,368 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 2,734 | 2,782 | |||
Impaired loans | 7,451 | 9,150 | |||
Commercial Real Estate [Member] | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | 2,783 | 2,322 | |||
Impaired loans with no allowance recorded | 831 | 1,628 | |||
Total loans individually evaluated for impairment | 3,614 | 3,950 | |||
Loans collectively evaluated for impairment | 155,818 | 138,728 | |||
Total loans held for investment | 159,432 | 142,678 | |||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 2,979 | 2,367 | |||
Impaired loans with no allowance recorded | 2,895 | 3,834 | |||
Total loans individually evaluated for impairment | 5,874 | 6,201 | |||
Loans collectively evaluated for impairment | 155,818 | 138,728 | |||
Total loans held for investment | 161,692 | 144,929 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 77 | 159 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 77 | 159 | |||
Loans collectively evaluated for impairment | 1,382 | 2,393 | |||
Total loans held for investment | 1,459 | 2,552 | 2,627 | 3,528 | |
Impaired loans with a specific valuation allowance under ASC 310 | 2,783 | 2,322 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 831 | 1,628 | |||
Commercial [Member] | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | 3,122 | 3,583 | |||
Impaired loans with no allowance recorded | 44 | 254 | |||
Total loans individually evaluated for impairment | 3,166 | 3,837 | |||
Loans collectively evaluated for impairment | 46,517 | 41,810 | |||
Total loans held for investment | 49,683 | 45,647 | |||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 4,914 | 3,956 | |||
Impaired loans with no allowance recorded | 50 | 235 | |||
Total loans individually evaluated for impairment | 4,964 | 4,191 | |||
Loans collectively evaluated for impairment | 46,517 | 41,810 | |||
Total loans held for investment | 51,481 | 46,001 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 241 | 437 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 241 | 437 | |||
Loans collectively evaluated for impairment | 745 | 1,627 | |||
Total loans held for investment | 986 | 2,064 | 2,325 | 2,734 | |
Impaired loans with a specific valuation allowance under ASC 310 | 3,122 | 3,583 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 44 | 254 | |||
Impaired loans | 3,166 | 3,837 | |||
SBA [Member] | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | 1,837 | 1,607 | |||
Impaired loans with no allowance recorded | 4 | 210 | |||
Total loans individually evaluated for impairment | 1,841 | 1,817 | |||
Loans collectively evaluated for impairment | 19,495 | 22,249 | |||
Total loans held for investment | 21,336 | 24,066 | [1] | ||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 9,512 | 8,045 | |||
Impaired loans with no allowance recorded | 225 | 1,610 | |||
Total loans individually evaluated for impairment | 9,737 | 9,655 | |||
Loans collectively evaluated for impairment | 19,495 | 22,249 | |||
Total loans held for investment | 29,232 | 31,904 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 104 | 139 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 104 | 139 | |||
Loans collectively evaluated for impairment | 962 | 1,812 | |||
Total loans held for investment | 1,066 | 1,951 | 2,733 | 3,877 | |
Impaired loans with a specific valuation allowance under ASC 310 | 1,837 | 1,607 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 4 | 210 | |||
Impaired loans | 1,841 | 1,817 | |||
HELOC [Member] | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | 86 | 615 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 86 | 615 | |||
Loans collectively evaluated for impairment | 13,395 | 14,803 | |||
Total loans held for investment | 13,481 | 15,418 | |||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 91 | 630 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 91 | 630 | |||
Loans collectively evaluated for impairment | 13,395 | 14,803 | |||
Total loans held for investment | 13,486 | 15,433 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 1 | 29 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 1 | 29 | |||
Loans collectively evaluated for impairment | 139 | 251 | |||
Total loans held for investment | 140 | 280 | 634 | 349 | |
Impaired loans with a specific valuation allowance under ASC 310 | 86 | 615 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 0 | 0 | |||
Impaired loans | 86 | 615 | |||
Single Family Real Estate [Member] | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | 591 | 645 | |||
Impaired loans with no allowance recorded | 90 | 106 | |||
Total loans individually evaluated for impairment | 681 | 751 | |||
Loans collectively evaluated for impairment | 14,276 | 9,399 | |||
Total loans held for investment | 14,957 | 10,150 | |||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 644 | 664 | |||
Impaired loans with no allowance recorded | 191 | 244 | |||
Total loans individually evaluated for impairment | 835 | 908 | |||
Loans collectively evaluated for impairment | 14,276 | 9,399 | |||
Total loans held for investment | 15,111 | 10,307 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 32 | 57 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 32 | 57 | |||
Loans collectively evaluated for impairment | 160 | 188 | |||
Total loans held for investment | 192 | 245 | 198 | 150 | |
Impaired loans with a specific valuation allowance under ASC 310 | 591 | 645 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 90 | 106 | |||
Impaired loans | 681 | 751 | |||
Consumer [Member] | |||||
Recorded Investment [Abstract] | |||||
Impaired loans with an allowance recorded | 0 | 0 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 0 | 0 | |||
Loans collectively evaluated for impairment | 178 | 184 | |||
Total loans held for investment | 178 | 184 | |||
Unpaid Principal Balance [Abstract] | |||||
Impaired loans with an allowance recorded | 0 | 0 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 0 | 0 | |||
Loans collectively evaluated for impairment | 178 | 184 | |||
Total loans held for investment | 178 | 184 | |||
Related Allowance for Credit Losses [Abstract] | |||||
Impaired loans with an allowance recorded | 0 | 0 | |||
Impaired loans with no allowance recorded | 0 | 0 | |||
Total loans individually evaluated for impairment | 0 | 0 | |||
Loans collectively evaluated for impairment | 2 | 2 | |||
Total loans held for investment | 2 | 2 | 2 | 3 | |
Impaired loans with a specific valuation allowance under ASC 310 | 0 | 0 | |||
Impaired loans without a specific valuation allowance under ASC 310 | 0 | 0 | |||
Impaired loans | $0 | $0 | |||
[1] | $0.4 million of the $0.5 million SBA loans past due are guaranteed by the SBA. |
LOANS_HELD_FOR_INVESTMENT_Impa1
LOANS HELD FOR INVESTMENT, Impaired Loans by Class of Loans (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | $16,839 | $20,120 |
Manufactured Housing [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 7,451 | 9,150 |
Commercial Real Estate [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 2,320 | 2,805 |
SBA 504 1st Trust Deed [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 1,294 | 1,005 |
Land [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 0 | 140 |
Construction [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 0 | 0 |
Commercial [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 3,166 | 3,837 |
SBA [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 1,841 | 1,817 |
HELOC [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 86 | 615 |
Single Family Real Estate [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | 681 | 751 |
Consumer [Member] | ||
Impaired financing receivable recorded investment net [Abstract] | ||
Impaired loans | $0 | $0 |
LOANS_HELD_FOR_INVESTMENT_Aver
LOANS HELD FOR INVESTMENT, Average Investment in Impaired Loans by Class (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | $17,741 | $24,435 | $42,555 |
Interest income | 825 | 876 | 1,406 |
Manufactured Housing [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 7,915 | 9,429 | 8,374 |
Interest income | 564 | 323 | 333 |
Commercial Real Estate [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 2,485 | 7,638 | 17,552 |
Interest income | 0 | 146 | 315 |
SBA 504 1st [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 1,076 | 1,128 | 3,897 |
Interest income | 63 | 7 | 159 |
Land [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 55 | 28 | 0 |
Interest income | 0 | 7 | 0 |
Construction [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 0 | 0 | 4,808 |
Interest income | 0 | 0 | 108 |
Commercial [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 3,377 | 3,823 | 5,540 |
Interest income | 90 | 179 | 292 |
SBA [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 1,697 | 1,506 | 1,800 |
Interest income | 97 | 198 | 176 |
HELOC [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 437 | 372 | 255 |
Interest income | 8 | 5 | 13 |
Single Family Real Estate [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 699 | 511 | 324 |
Interest income | 3 | 11 | 10 |
Consumer [Member] | |||
Average recorded investment and interest income recognized [Abstract] | |||
Average investment in impaired loans | 0 | 0 | 5 |
Interest income | $0 | $0 | $0 |
LOANS_HELD_FOR_INVESTMENT_Reco
LOANS HELD FOR INVESTMENT, Recorded Investment in Certain Types of Loans (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Nonperforming Assets [Abstract] | ||||
Nonaccrual loans, net | $11,027 | $16,837 | $22,425 | |
Loans past due 90 days or more on accrual status | 0 | 66 | ||
Troubled debt restructured loans on accruals | 5,048 | 3,283 | ||
Total nonperforming loans | 16,075 | 20,186 | ||
Other assets acquired through foreclosure, net | 137 | 3,811 | 1,889 | 6,701 |
Total nonperforming assets | 16,212 | 23,997 | ||
Financing receivable recorded investment [Abstract] | ||||
Nonaccrual loans | 17,883 | 23,263 | 29,643 | |
SBA guaranteed portion of loans included above | -6,856 | -6,426 | -7,218 | |
Total nonaccrual loans, net | 11,027 | 16,837 | 22,425 | |
Troubled debt restructured loans, gross | 9,685 | 12,308 | 19,931 | |
Loans 30 through 89 days past due with interest accruing | 0 | 161 | 521 | |
Interest income recognized on impaired loans | 825 | 876 | 1,406 | |
Foregone interest on nonaccrual and troubled debt restructured loans | $1,276 | $1,754 | $2,692 | |
Allowance for loan losses to gross loans held for investment (in hundredths) | 1.84% | 2.98% | 3.66% |
LOANS_HELD_FOR_INVESTMENT_Nona
LOANS HELD FOR INVESTMENT, Nonaccrual Loans, Net of SBA Guarantee (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Number of days a loan is past due after which accrual of interest is discontinued | 90 days | ||
Nonaccrual loans, net | $11,027 | $16,837 | $22,425 |
Number of days a loan is past due after which guaranteed portion of SBA loan is repurchased from investors | 120 days | ||
Manufactured Housing [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 1,480 | 6,235 | |
Commercial Real Estate [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 2,951 | 2,806 | |
SBA 504 1st Trust Deed [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 1,021 | 726 | |
Land [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 0 | 140 | |
Construction [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 0 | 0 | |
Commercial [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 3,167 | 3,837 | |
SBA [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 1,713 | 1,803 | |
HELOC [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 86 | 615 | |
Single Family Real Estate [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | 609 | 675 | |
Consumer [Member] | |||
Composition of Nonaccrual Loans, net of SBA guarantee [Abstract] | |||
Nonaccrual loans, net | $0 | $0 |
LOANS_HELD_FOR_INVESTMENT_Cred
LOANS HELD FOR INVESTMENT, Credit Quality Indicators (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment, net | $422,357 | $403,094 | |
Total loans held for investment | 428,729 | 410,198 | |
Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment, net | 391,061 | 371,880 | |
Total loans held for investment | 391,061 | 371,880 | |
Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment, net | 7,960 | 4,802 | |
Total loans held for investment | 7,960 | 4,802 | |
Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment, net | 23,239 | 26,389 | |
Total loans held for investment | 29,611 | 33,108 | |
Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment, net | 97 | 23 | |
Total loans held for investment | 97 | 408 | |
SBA Guaranteed Loans [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 6,372 | 7,104 | |
SBA Guaranteed Loans [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
SBA Guaranteed Loans [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
SBA Guaranteed Loans [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 6,372 | 6,719 | |
SBA Guaranteed Loans [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 385 | |
Manufactured Housing [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 169,662 | 172,055 | |
Manufactured Housing [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 162,638 | 158,533 | |
Manufactured Housing [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Manufactured Housing [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 7,024 | 13,522 | |
Manufactured Housing [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Commercial Real Estate [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 159,432 | 142,678 | |
Commercial real estate [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 119,908 | 96,393 | |
Commercial real estate [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 106,909 | 89,319 | |
Commercial real estate [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 6,544 | 3,600 | |
Commercial real estate [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 6,455 | 3,474 | |
Commercial real estate [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
SBA 504 1st Trust Deed [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 27,297 | 34,265 | |
SBA 504 1st Trust Deed [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 23,038 | 33,012 | |
SBA 504 1st Trust Deed [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 1,085 | 248 | |
SBA 504 1st Trust Deed [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 3,174 | 1,005 | |
SBA 504 1st Trust Deed [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Land [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 1,569 | 1,957 | |
Land [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 1,569 | 1,817 | |
Land [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Land [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 140 | |
Land [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Construction [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 10,658 | 10,063 | |
Construction [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 10,658 | 10,063 | |
Construction [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Construction [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Construction [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Commercial [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 49,683 | 45,647 | |
Commercial [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 46,275 | 41,147 | |
Commercial [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 158 | 327 | |
Commercial [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 3,250 | 4,150 | |
Commercial [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 23 | |
SBA [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 21,336 | 24,066 | [1] |
SBA [Member] | Non-guaranteed [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 14,964 | 16,962 | |
SBA [Member] | Non-guaranteed [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 12,803 | 14,773 | |
SBA [Member] | Non-guaranteed [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 173 | 136 | |
SBA [Member] | Non-guaranteed [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 1,891 | 2,053 | |
SBA [Member] | Non-guaranteed [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 97 | 0 | |
HELOC [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 13,481 | 15,418 | |
HELOC [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 12,888 | 13,806 | |
HELOC [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 491 | |
HELOC [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 593 | 1,121 | |
HELOC [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Single Family Real Estate [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 14,957 | 10,150 | |
Single Family Real Estate [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 14,105 | 9,226 | |
Single Family Real Estate [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Single Family Real Estate [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 852 | 924 | |
Single Family Real Estate [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Consumer [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 178 | 184 | |
Consumer [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 178 | 184 | |
Consumer [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Consumer [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | 0 | 0 | |
Consumer [Member] | Doubtful [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans held for investment | $0 | $0 | |
[1] | $0.4 million of the $0.5 million SBA loans past due are guaranteed by the SBA. |
LOANS_HELD_FOR_INVESTMENT_Trou
LOANS HELD FOR INVESTMENT, Troubled Debt Restructuring (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Loan | Loan | |
Payment | ||
Troubled debt restructurings (TDR) [Abstract] | ||
Number of Loans | 5 | 36 |
Pre-Modification Recorded Investment | $272 | $7,146 |
Post Modification Recorded Investment | 272 | 7,120 |
Balance of Loans with Rate Reduction | 272 | 1,406 |
Balance of Loan with Term Extension | 272 | 6,882 |
Effect on Allowance for Loan Losses | 10 | 546 |
Average rate concessions (in hundredths) | 0.70% | 1.52% |
Average extension | 180 months | 110 months |
Number of consecutive nonpayments for a TDR loan to be deemed default | 2 | |
Manufactured Housing [Member] | ||
Troubled debt restructurings (TDR) [Abstract] | ||
Number of Loans | 5 | 25 |
Pre-Modification Recorded Investment | 272 | 2,008 |
Post Modification Recorded Investment | 272 | 1,982 |
Balance of Loans with Rate Reduction | 272 | 1,021 |
Balance of Loan with Term Extension | 272 | 1,982 |
Effect on Allowance for Loan Losses | 10 | 197 |
Commercial Real Estate [Member] | ||
Troubled debt restructurings (TDR) [Abstract] | ||
Number of Loans | 2 | |
Pre-Modification Recorded Investment | 655 | |
Post Modification Recorded Investment | 655 | |
Balance of Loans with Rate Reduction | 0 | |
Balance of Loan with Term Extension | 655 | |
Effect on Allowance for Loan Losses | 45 | |
Commercial [Member] | ||
Troubled debt restructurings (TDR) [Abstract] | ||
Number of Loans | 6 | |
Pre-Modification Recorded Investment | 4,011 | |
Post Modification Recorded Investment | 4,011 | |
Balance of Loans with Rate Reduction | 0 | |
Balance of Loan with Term Extension | 4,011 | |
Effect on Allowance for Loan Losses | 256 | |
SBA [Member] | ||
Troubled debt restructurings (TDR) [Abstract] | ||
Number of Loans | 1 | |
Pre-Modification Recorded Investment | 87 | |
Post Modification Recorded Investment | 87 | |
Balance of Loans with Rate Reduction | 0 | |
Balance of Loan with Term Extension | 87 | |
Effect on Allowance for Loan Losses | 16 | |
Single Family Real Estate [Member] | ||
Troubled debt restructurings (TDR) [Abstract] | ||
Number of Loans | 2 | |
Pre-Modification Recorded Investment | 385 | |
Post Modification Recorded Investment | 385 | |
Balance of Loans with Rate Reduction | 385 | |
Balance of Loan with Term Extension | 147 | |
Effect on Allowance for Loan Losses | $32 |
LOANS_HELD_FOR_INVESTMENT_Trou1
LOANS HELD FOR INVESTMENT, Troubled Debt Restructured Loans With Payment Defaults (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Loan | Loan | |
Troubled debt restructured loans with payment defaults | ||
Number of Loans | 1 | 7 |
Recorded Investment | $18 | $456 |
Effect on Allowance for Loan Loss | 1 | 11 |
Manufactured Housing [Member] | ||
Troubled debt restructured loans with payment defaults | ||
Number of Loans | 1 | 7 |
Recorded Investment | 18 | 456 |
Effect on Allowance for Loan Loss | $1 | $11 |
LOANS_HELD_FOR_INVESTMENT_Rela
LOANS HELD FOR INVESTMENT, Related Parties (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Balance, beginning | $4,816,000 | $4,560,000 |
New loans | 434,000 | 1,046,000 |
Repayments and other | -771,000 | -790,000 |
Balance, ending | 4,479,000 | 4,816,000 |
Loan commitments outstanding with related parties | $600,000 | $800,000 |
PREMISES_AND_EQUIPMENT_Details
PREMISES AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Premises and equipment [Abstract] | |||
Premises and equipment, gross | $12,911,000 | $12,517,000 | |
Less: accumulated depreciation and amortization | -9,858,000 | -9,534,000 | |
Premises and equipment, net | 3,053,000 | 2,983,000 | |
Minimum lease commitments [Abstract] | |||
2015 | 821,000 | ||
2016 | 751,000 | ||
2017 | 234,000 | ||
2018 | 0 | ||
2019 | 0 | ||
Thereafter | 0 | ||
Total | 1,806,000 | ||
Rent expense included in occupancy expense | 800,000 | 900,000 | 1,000,000 |
Depreciation expense included in occupancy expense | 324,000 | 300,000 | 306,000 |
Bank Premises and Land [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 1,411,000 | 1,400,000 | |
Furniture, Fixtures and Equipment [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 8,748,000 | 8,526,000 | |
Leasehold Improvements [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 2,602,000 | 2,591,000 | |
Construction in Progress [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | $150,000 | $0 |
OTHER_ASSETS_ACQUIRED_THROUGH_2
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||
Balance, beginning of period | $3,811 | $1,889 | $6,701 |
Additions | 1,879 | 6,084 | 7,329 |
Proceeds from dispositions and receivables from participants | -5,988 | -3,774 | -10,980 |
Gains (losses) on sales, net | 435 | -388 | -1,161 |
Balance, ending of period | $137 | $3,811 | $1,889 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current [Abstract] | |||||||||||
Federal | $2,880,000 | $1,430,000 | ($98,000) | ||||||||
State | 832,000 | 0 | 0 | ||||||||
Current income tax expense (benefit) | 3,712,000 | 1,430,000 | -98,000 | ||||||||
Deferred [Abstract] | |||||||||||
Federal | 754,000 | 453,000 | 1,072,000 | ||||||||
State | 468,000 | 670,000 | 347,000 | ||||||||
Deferred income tax expense (benefit) | 1,222,000 | 1,123,000 | 1,419,000 | ||||||||
Decrease in deferred tax asset valuation allowance | 0 | -5,365,000 | -1,321,000 | ||||||||
Total (benefit) provision for income taxes | 1,520,000 | 1,207,000 | 1,203,000 | 1,004,000 | -2,812,000 | 0 | 0 | 0 | 4,934,000 | -2,812,000 | 0 |
Reconciliation between statutory income tax rate and effective tax rate [Abstract] | |||||||||||
Federal income tax at statutory rate (in hundredths) | 34.00% | 34.00% | 34.00% | ||||||||
State franchise tax, net of federal benefit (in hundredths) | 7.20% | 7.20% | 7.20% | ||||||||
Other (in hundredths) | 0.00% | 0.00% | 0.00% | ||||||||
Benefit related to deferred tax asset valuation allowance (in hundredths) | 0.00% | -86.70% | -41.20% | ||||||||
Total (benefit) provision for income taxes (in hundredths) | 41.20% | -45.50% | 0.00% | ||||||||
Deferred Tax Assets [Abstract] | |||||||||||
Allowance for loan losses | 3,149,000 | 4,829,000 | 3,149,000 | 4,829,000 | |||||||
Unrealized loss of AFS securities | 0 | 191,000 | 0 | 191,000 | |||||||
State net operating loss | 0 | 80,000 | 0 | 80,000 | |||||||
Other | 867,000 | 483,000 | 867,000 | 483,000 | |||||||
Total gross deferred tax assets | 4,016,000 | 5,583,000 | 4,016,000 | 5,583,000 | |||||||
Deferred tax asset valuation allowance | 0 | 0 | 0 | 0 | |||||||
Total deferred tax assets | 4,016,000 | 5,583,000 | 4,016,000 | 5,583,000 | |||||||
Deferred Tax Liabilities [Abstract] | |||||||||||
Deferred state taxes | -288,000 | -447,000 | -288,000 | -447,000 | |||||||
Depreciation | -167,000 | -139,000 | -167,000 | -139,000 | |||||||
Unrealized gain on AFS securities | -22,000 | 0 | -22,000 | 0 | |||||||
Other | -272,000 | -296,000 | -272,000 | -296,000 | |||||||
Total deferred tax liabilities | -749,000 | -882,000 | -749,000 | -882,000 | |||||||
Net deferred tax asset | 3,267,000 | 4,701,000 | 3,267,000 | 4,701,000 | |||||||
Valuation allowances amount reserved | 2,800,000 | ||||||||||
Net operating losses to expire beginning in 2032 | $500,000 | $500,000 |
DEPOSITS_Details
DEPOSITS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Balance [Abstract] | |||
Non-interest bearing demand deposits | $57,364,000 | $52,461,000 | $53,605,000 |
Interest-bearing deposits [Abstract] | |||
NOW accounts | 18,152,000 | 20,367,000 | 20,120,000 |
Money market deposit account | 257,479,000 | 238,078,000 | 249,346,000 |
Savings deposits | 15,265,000 | 16,158,000 | 16,351,000 |
Time deposits of $100,000 or more | 115,588,000 | 95,979,000 | 80,710,000 |
Other time deposits | 13,236,000 | 13,092,000 | 14,088,000 |
Total deposits | 477,084,000 | 436,135,000 | 434,220,000 |
Interest Expense [Abstract] | |||
Non-interest bearing demand deposits | 0 | 0 | 0 |
Interest-bearing deposits [Abstract] | |||
NOW accounts | 29,000 | 35,000 | 73,000 |
Money market deposit account | 1,035,000 | 1,150,000 | 1,766,000 |
Savings deposits | 202,000 | 290,000 | 325,000 |
Time deposits of $100,000 or more | 1,167,000 | 1,166,000 | 1,609,000 |
Other time deposits | 230,000 | 275,000 | 357,000 |
Total deposits | 2,663,000 | 2,916,000 | 4,130,000 |
Deposit liabilities that may be immediately withdrawn | 348,300,000 | ||
Maturities of time certificates [Abstract] | |||
2015 | 54,678,000 | ||
2016 | 23,282,000 | ||
2017 | 9,201,000 | ||
2018 | 27,055,000 | ||
2019 | 14,508,000 | ||
Thereafter | 100,000 | ||
Total | 128,824,000 | 109,071,000 | |
Deposits with CDARS | $14,500,000 | $1,700,000 |
OTHER_BORROWINGS_AND_CONVERTIB2
OTHER BORROWINGS AND CONVERTIBLE DEBENTURES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
FHLB advances by maturity date [Abstract] | |||
FHLB advances | $10,000,000 | $30,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 2.74% | 2.77% | |
Weighted average interest rate during the year (in hundredths) | 2.74% | 2.77% | |
Financial Home Loan Bank Advances [Abstract] | |||
Securities pledged to FHLB with carrying value | 30,600,000 | 28,000,000 | |
Available for additional borrowing | 106,200,000 | 61,400,000 | |
Total FHLB interest expense | 600,000 | 1,000,000 | 1,100,000 |
Securities Pledged as Collateral [Member] | |||
Financial Home Loan Bank Advances [Abstract] | |||
Securities pledged to FHLB with carrying value | 30,600,000 | 28,000,000 | |
Loan Pledge as Collateral [Member] | |||
Financial Home Loan Bank Advances [Abstract] | |||
Securities pledged to FHLB with carrying value | 67,300,000 | 27,300,000 | |
FHLB Advance May 5, 2014 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
FHLB advances | 0 | 4,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 0.00% | 2.88% | |
Weighted average interest rate during the year (in hundredths) | 0.00% | 2.88% | |
Maturity date | 5-May-14 | ||
FHLB Advance May 7, 2014 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
FHLB advances | 0 | 4,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 0.00% | 2.76% | |
Weighted average interest rate during the year (in hundredths) | 0.00% | 2.76% | |
Maturity date | 7-May-14 | ||
FHLB Advance May 19, 2014 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
FHLB advances | 0 | 4,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 0.00% | 2.79% | |
Weighted average interest rate during the year (in hundredths) | 0.00% | 2.79% | |
Maturity date | 19-May-14 | ||
FHLB Advance October 9, 2014 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
FHLB advances | 0 | 4,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 0.00% | 2.68% | |
Weighted average interest rate during the year (in hundredths) | 0.00% | 2.68% | |
Maturity date | 9-Oct-14 | ||
FHLB Advance November 17, 2014 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
FHLB advances | 0 | 4,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 0.00% | 2.78% | |
Weighted average interest rate during the year (in hundredths) | 0.00% | 2.78% | |
Maturity date | 17-Nov-14 | ||
FHLB Advance March 9, 2015 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
FHLB advances | 5,000,000 | 5,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 2.75% | 2.75% | |
Weighted average interest rate during the year (in hundredths) | 2.75% | 2.75% | |
Maturity date | 9-Mar-15 | ||
FHLB Advance May 4, 2015 [Member] | |||
FHLB advances by maturity date [Abstract] | |||
FHLB advances | 5,000,000 | 5,000,000 | |
Weighted average interest rate, end of the year (in hundredths) | 2.74% | 2.74% | |
Weighted average interest rate during the year (in hundredths) | 2.74% | 2.74% | |
Maturity date | 4-May-15 | ||
Federal Reserve Bank Advances [Member] | |||
Federal Reserve Bank [Abstract] | |||
Length of time advances are collateralized | 28 days | ||
Outstanding FRB advances | 0 | 0 | |
Borrowing capacity | $88,000,000 | $123,900,000 |
OTHER_BORROWINGS_AND_CONVERTIB3
OTHER BORROWINGS AND CONVERTIBLE DEBENTURES, Long and Short Term Debt (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Debt Instrument [Line Items] | |||
Principle converted to equity | $1,408,000 | $6,410,000 | $0 |
Federal Funds Purchased [Member] | |||
Line of Credit Borrowing Capacity [Abstract] | |||
Federal funds borrowing lines at correspondent banks | 30,000,000 | ||
Federal funds amount outstanding | 0 | 0 | |
Convertible Subordinated Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Principle amount | 8,100,000 | ||
Interest rate on convertible debenture (in hundredths) | 9.00% | ||
Principle converted to equity | 1,400,000 | ||
Debentures converted to shares of common stock (in shares) | 317,550 | ||
Debentures converted in cash | $34,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 16, 2013 | |
Borrower | Trust | ||
HomePark | |||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Contractual amounts for unfunded commitments and letters of credit | $28,298,000 | $19,648,000 | |
Unfunded Commitments and Letters of Credit [Abstract] | |||
Loss contingency for unfunded loan commitments and letters of credit | 39,000 | 100,000 | |
Concentrations of Lending Activities [Abstract] | |||
Number of individual borrowers in the portfolio | 1,702 | ||
Number of mobile home parks represented in the portfolio, minimum | 50 | ||
Salary Continuation [Abstract] | |||
Maximum period of monthly cash payment to the officer or beneficiaries in the event of death, disability or retirement | 15 years | ||
Insurance policy purchased | 2,000,000 | ||
Discount rate (in hundredths) | 3.84% | ||
Annual payment to former officer | 50,000 | ||
Remaining period of contractual obligation | 4 years | ||
Salary continuation liability accrual | 300,000 | 200,000 | |
Cash surrender value of life insurance | 3,200,000 | 3,100,000 | |
Minimum damages sought for breach of contract | 75,000 | ||
Outstanding balance of the sold portion loans | 26,000,000 | 33,200,000 | |
Loans sold over the course of agreement | 22,000,000 | ||
Number of Trusts included | 30 | ||
FAC [Member] | |||
Salary Continuation [Abstract] | |||
Minimum damages sought for breach of contract | 25,000,000 | ||
Manufactured Housing [Member] | |||
Concentrations of Lending Activities [Abstract] | |||
Percentage of loans to total loans (in hundredths) | 34.30% | 36.30% | |
Commercial Real Estate [Member] | |||
Concentrations of Lending Activities [Abstract] | |||
Percentage of loans to total loans (in hundredths) | 32.20% | 30.10% | |
Loans secured by first liens, average loan to value ratio (in hundredths) | 48.90% | 48.50% | |
Commercial Real Estate [Member] | Owner Occupied [Member] | |||
Concentrations of Lending Activities [Abstract] | |||
Percentage of Commercial Real Estate loans (in hundredths) | 48.30% | 62.20% | |
Commitments to Extend Credit [Member] | |||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Contractual amounts for unfunded commitments and letters of credit | 28,239,000 | 19,573,000 | |
Standby Letters of Credit [Member] | |||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Contractual amounts for unfunded commitments and letters of credit | $59,000 | $75,000 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 20, 2014 | Jun. 04, 2013 | Oct. 06, 2014 | |
Director | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unvested stock option expense | $400,000 | $400,000 | $100,000 | $200,000 | ||||||
Period for recognition of stock option expense | 3 years 10 months 24 days | 2 years 6 months | 4 years 3 months 18 days | |||||||
Intrinsic value of options exercised | 54,200 | 13,800 | 0 | |||||||
Option-pricing model assumptions [Abstract] | ||||||||||
Expected life in years | 6 years | 6 years 3 months 18 days | 5 years 9 months 18 days | |||||||
Risk-free interest rate (in hundredths) | 1.80% | 1.42% | 1.05% | |||||||
Expected volatility (in hundredths) | 73.40% | 69.20% | 69.00% | |||||||
Annual dividend rate (in hundredths) | 0.00% | 0.00% | 0.00% | |||||||
Class of Stock [Line Items] | ||||||||||
Dividends declared | 937,000 | 780,000 | 779,000 | |||||||
Discount on partial redemption of preferred stock | 15,000 | 0 | 144,000 | 0 | 159,000 | 0 | 0 | |||
Series A Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock dividend rate for first five years (in hundredths) | 5.00% | |||||||||
Preferred stock dividend rate after first five years (in hundredths) | 9.00% | |||||||||
Number of members of the Board of Directors who purchased stock from private investors | 4 | |||||||||
Number of shares purchased by directors (in shares) | 1,100 | |||||||||
Preferred stock redemption amount (in hundredths) | 50.00% | |||||||||
Number of preferred stock redemption (in shares) | 7,804 | |||||||||
Preferred stock, redemption amount | 7,700,000 | 800,000 | ||||||||
Discount on partial redemption of preferred stock | 144,000 | |||||||||
Dividends and accretion of the discount on preferred stock | 900,000 | 1,000,000 | ||||||||
Common Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividends declared | 300,000 | |||||||||
Number of shares can be issued against warrants (in shares) | 521,158 | 521,158 | ||||||||
Exercise price of warrants (in dollars per shares) | $4.49 | $4.49 | ||||||||
Term of warrants | 10 years | |||||||||
Issuance of common stock in conjunction with debenture conversions (in shares) | 316,872 | 1,864,748 | ||||||||
Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares available for grant (in shares) | 520,475 | 520,475 | ||||||||
Vesting period | 5 years | |||||||||
Contractual life | 10 years | |||||||||
Option Shares [Roll Forward] | ||||||||||
Outstanding options, beginning of period (in shares) | 376,000 | 376,000 | 447,000 | 377,000 | ||||||
Granted (in shares) | 190,000 | 21,000 | 147,000 | |||||||
Exercised (in shares) | -19,000 | -7,000 | -5,000 | |||||||
Forefeited or expired (in shares) | -90,000 | -85,000 | -72,000 | |||||||
Outstanding options, end of period (in shares) | 457,000 | 457,000 | 376,000 | 447,000 | ||||||
Options exerciseable, end of period (in shares) | 244,000 | 244,000 | 241,000 | 278,000 | ||||||
Options expected to vest, end of period (in shares) | 150,000 | 150,000 | 135,000 | 169,000 | ||||||
Weighted Average Exercise Price [Abstract] | ||||||||||
Outstanding options, beginning of period (in dollars per share) | $5.25 | $5.25 | $5.38 | $6.76 | ||||||
Granted (in dollars per share) | $7.02 | $4.91 | $2.92 | |||||||
Exercised (in dollars per share) | $2.90 | $3.24 | $3.25 | |||||||
Forefeited or expired (in dollars per share) | $7.65 | $6.07 | $7.68 | |||||||
Outstanding options, end of period (in dollars per share) | $5.61 | $5.61 | $5.25 | $5.38 | ||||||
Options exerciseable, end of period (in dollars per share) | $5.77 | $5.77 | $6.56 | $7 | ||||||
Options expected to vest, end of period (in dollars per share) | $4.84 | $4.84 | $2.90 | $2.72 | ||||||
Weighted Average Remaining Term [Abstract] | ||||||||||
Outstanding options, end of period | 7 years 2 months 12 days | 6 years 1 month 6 days | 6 years 1 month 6 days | |||||||
Options exerciseable, end of period | 5 years 10 months 24 days | 4 years 9 months 18 days | 4 years 4 months 24 days | |||||||
Options expected to vest, end of period | 6 years 10 months 24 days | 8 years 4 months 24 days | 9 years 1 month 6 days | |||||||
Aggregate Intrinsic Value [Abstract] | ||||||||||
Outstanding options, end of period | 815,000 | 815,000 | 937,000 | 160,000 | ||||||
Options exerciseable, end of period | 521,000 | 521,000 | 443,000 | 29,000 | ||||||
Options expected to vest, end of period | $288,000 | $288,000 | $494,000 | $131,000 | ||||||
Number of Option Shares [Roll Forward] | ||||||||||
Granted (in shares) | 190,000 | 21,000 | 147,000 | |||||||
Unvested Options [Member] | ||||||||||
Option Shares [Roll Forward] | ||||||||||
Granted (in shares) | 190,000 | |||||||||
Number of Option Shares [Roll Forward] | ||||||||||
Unvested options, beginning of period (in shares) | 135,000 | 135,000 | ||||||||
Granted (in shares) | 190,000 | |||||||||
Vested (in shares) | -79,000 | |||||||||
Forfeited (in shares) | -33,000 | |||||||||
Unvested options, end of period (in shares) | 213,000 | 213,000 | ||||||||
Weighted-Average Grant-Date Fair Value [Roll Forward] | ||||||||||
Unvested options, beginning of period (in dollars per share) | $1.77 | $1.77 | ||||||||
Granted (in dollars per share) | $4.57 | |||||||||
Vested (in dollars per share) | $3.21 | |||||||||
Forfeited (in dollars per share) | $3.43 | |||||||||
Unvested options, end of period (in dollars per share) | $3.47 | $3.47 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of basic and diluted earnings per share [Abstract] | |||||||||||
Net income | $2,186 | $1,712 | $1,706 | $1,442 | $3,136 | $2,635 | $2,126 | $1,089 | $7,046 | $8,986 | $3,173 |
Less: dividends and accretion on preferred stock and discount on partial redemption | 778 | 1,039 | 1,046 | ||||||||
Net income available to common stockholders | 2,042 | 1,536 | 1,521 | 1,169 | 2,883 | 2,373 | 1,864 | 827 | 6,268 | 7,947 | 2,127 |
Add: debenture interest expense and costs, net of income taxes | 103 | 244 | 430 | ||||||||
Net income for diluted calculation of earnings per common share | $6,371 | $8,191 | $2,557 | ||||||||
Weighted average number of common shares outstanding - basic (in shares) | 8,141 | 7,017 | 5,990 | ||||||||
Weighted average number of common shares outstanding - diluted (in shares) | 8,505 | 8,390 | 8,233 | ||||||||
Earnings per share [Abstract] | |||||||||||
Basic (in dollars per share) | $0.25 | $0.19 | $0.19 | $0.15 | $0.37 | $0.30 | $0.30 | $0.14 | $0.77 | $1.13 | $0.36 |
Diluted (in dollars per share) | $0.24 | $0.18 | $0.18 | $0.15 | $0.34 | $0.29 | $0.23 | $0.11 | $0.75 | $0.98 | $0.31 |
CAPITAL_REQUIREMENTS_Details
CAPITAL REQUIREMENTS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total Capital | $72,569 | $74,712 |
Tier 1 Capital | 66,939 | 67,773 |
Risk-Weighted Assets | 448,199 | 432,958 |
Adjusted Average Assets | 564,630 | 534,408 |
Total Risk-Based Capital Ratio (in hundredths) | 16.19% | 17.26% |
Tier 1 Risk-Based Capital Ratio (in hundredths) | 14.94% | 15.65% |
Tier 1 Leverage Ratio (in hundredths) | 11.86% | 12.68% |
Minimum capital ratios required by the OCC, Total Capital (in hundredths) | 8.00% | |
Minimum capital ratios required by the OCC, Tier 1 Capital (in hundredths) | 4.00% | |
Minimum capital ratios required by the OCC, Tier 1 Leverage Capital (in hundredths) | 4.00% | |
Well capitalized ratios, Total Capital (in hundredths) | 10.00% | |
Well capitalized ratios, Tier 1 Capital (in hundredths) | 6.00% | |
Well capitalized ratios, Tier 1 Leverage Capital (in hundredths) | 5.00% | |
Minimum tier one capital in terms of adjusted total assets (in hundredths) | 9.00% | |
Minimum risk-based capital in terms of risk weighted assets (in hundredths) | 12.00% | |
CWB [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total Capital | 71,303 | 72,886 |
Tier 1 Capital | 65,673 | 67,391 |
Risk-Weighted Assets | 448,118 | 432,802 |
Adjusted Average Assets | $564,331 | $531,503 |
Total Risk-Based Capital Ratio (in hundredths) | 15.91% | 16.84% |
Tier 1 Risk-Based Capital Ratio (in hundredths) | 14.66% | 15.57% |
Tier 1 Leverage Ratio (in hundredths) | 11.64% | 12.68% |
EMPLOYEE_BENEFIT_PLAN_Details
EMPLOYEE BENEFIT PLAN (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
EMPLOYEE BENEFIT PLAN [Abstract] | |||
Employer contribution | $200,000 | $200,000 | $200,000 |
Annual compensation under benefit plan, maximum amount | $17,500 | ||
Percentage to match discretionary amount each year (in hundredths) | 50.00% | ||
Percentage of participants compensation deferred (in hundredths) | 6.00% |
FAIR_VALUE_MEASUREMENT_Details
FAIR VALUE MEASUREMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets [Abstract] | ||
Investment securities available-for-sale | $22,194 | $18,472 |
Recurring [Member] | ||
Assets [Abstract] | ||
Investment securities available-for-sale | 22,194 | 18,472 |
Interest only strips | 293 | 334 |
Servicing assets | 203 | 300 |
Total | 22,690 | 19,106 |
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Assets [Abstract] | ||
Investment securities available-for-sale | 61 | 69 |
Interest only strips | 0 | 0 |
Servicing assets | 0 | 0 |
Total | 61 | 69 |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | ||
Assets [Abstract] | ||
Investment securities available-for-sale | 22,133 | 18,403 |
Interest only strips | 0 | 0 |
Servicing assets | 0 | 0 |
Total | 22,133 | 18,403 |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | ||
Assets [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Interest only strips | 293 | 334 |
Servicing assets | 203 | 300 |
Total | 496 | 634 |
Non-recurring [Member] | ||
Assets [Abstract] | ||
Total | 77,192 | 79,682 |
Non-recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Assets [Abstract] | ||
Total | 0 | 0 |
Non-recurring [Member] | Significant other observable inputs (Level 2) [Member] | ||
Assets [Abstract] | ||
Total | 77,192 | 79,682 |
Non-recurring [Member] | Significant unobservable inputs (Level 3) [Member] | ||
Assets [Abstract] | ||
Total | $0 | $0 |
FAIR_VALUE_MEASUREMENT_Assets_
FAIR VALUE MEASUREMENT, Assets Measured on Non-recurring Basis (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Impaired loans | $16,839 | $20,120 | ||
Foreclosed real estate and repossessed assets | 137 | 3,811 | 1,889 | 6,701 |
Loans held-for-sale at carrying value | 66,759 | 64,399 | ||
Recurring [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Total | 22,690 | 19,106 | ||
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Total | 61 | 69 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Total | 22,133 | 18,403 | ||
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Total | 496 | 634 | ||
Non-recurring [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Impaired loans | 5,580 | 7,105 | ||
Loans held for sale | 71,475 | 68,766 | ||
Foreclosed real estate and repossessed assets | 137 | 3,811 | ||
Total | 77,192 | 79,682 | ||
Non-recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Impaired loans | 0 | 0 | ||
Loans held for sale | 0 | 0 | ||
Foreclosed real estate and repossessed assets | 0 | 0 | ||
Total | 0 | 0 | ||
Non-recurring [Member] | Significant other observable inputs (Level 2) [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Impaired loans | 5,580 | 7,105 | ||
Loans held for sale | 71,475 | 68,766 | ||
Foreclosed real estate and repossessed assets | 137 | 3,811 | ||
Total | 77,192 | 79,682 | ||
Non-recurring [Member] | Significant unobservable inputs (Level 3) [Member] | ||||
Summary of fair value measurements of assets measured on a non-recurring basis [Abstract] | ||||
Impaired loans | 0 | 0 | ||
Loans held for sale | 0 | 0 | ||
Foreclosed real estate and repossessed assets | 0 | 0 | ||
Total | $0 | $0 |
FAIR_VALUE_MEASUREMENT_Fair_Va
FAIR VALUE MEASUREMENT, Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financial assets [Abstract] | ||
Cash and cash equivalents | $18,959 | $19,478 |
Interest-bearing deposits in other financial institutions | 99 | 99 |
FRB and FHLB stock | 3,089 | 3,243 |
Investment securities | 31,088 | 28,573 |
Loans, net | 500,598 | 469,466 |
Financial liabilities [Abstract] | ||
Deposits | 477,204 | 436,094 |
Other borrowings | 10,070 | 32,017 |
Carrying Amount [Member] | ||
Financial assets [Abstract] | ||
Cash and cash equivalents | 18,959 | 19,478 |
Interest-bearing deposits in other financial institutions | 99 | 99 |
FRB and FHLB stock | 3,089 | 3,243 |
Investment securities | 30,641 | 28,160 |
Loans, net | 487,256 | 462,005 |
Financial liabilities [Abstract] | ||
Deposits | 477,084 | 436,135 |
Other borrowings | 10,000 | 31,442 |
Fair Value [Member] | Level 1 [Member] | ||
Financial assets [Abstract] | ||
Cash and cash equivalents | 18,959 | 19,478 |
Interest-bearing deposits in other financial institutions | 99 | 99 |
FRB and FHLB stock | 0 | 0 |
Investment securities | 61 | 69 |
Loans, net | 0 | 0 |
Financial liabilities [Abstract] | ||
Deposits | 0 | 0 |
Other borrowings | 0 | 0 |
Fair Value [Member] | Level 2 [Member] | ||
Financial assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Interest-bearing deposits in other financial institutions | 0 | 0 |
FRB and FHLB stock | 3,089 | 3,243 |
Investment securities | 31,027 | 28,504 |
Loans, net | 490,193 | 457,890 |
Financial liabilities [Abstract] | ||
Deposits | 477,204 | 436,094 |
Other borrowings | 10,070 | 32,017 |
Fair Value [Member] | Level 3 [Member] | ||
Financial assets [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Interest-bearing deposits in other financial institutions | 0 | 0 |
FRB and FHLB stock | 0 | 0 |
Investment securities | 0 | 0 |
Loans, net | 10,405 | 11,576 |
Financial liabilities [Abstract] | ||
Deposits | 0 | 0 |
Other borrowings | $0 | $0 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Beginning balance | ($274) | ($274) | |||||||||
Net current-period other comprehensive income | 305 | -309 | -104 | ||||||||
Ending Balance | 31 | -274 | 31 | -274 | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Realized gain on sale of investment securities | 0 | 0 | 121 | ||||||||
Income tax expense | -1,520 | -1,207 | -1,203 | -1,004 | 2,812 | 0 | 0 | 0 | -4,934 | 2,812 | 0 |
Unrealized Holding Gains (Losses) on AFS [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Beginning balance | -274 | 35 | -274 | 35 | 139 | ||||||
Other comprehensive income (loss) before reclassifications | 305 | -309 | -5 | ||||||||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | -99 | ||||||||
Net current-period other comprehensive income | 305 | -309 | -104 | ||||||||
Ending Balance | 31 | -274 | 31 | -274 | 35 | ||||||
Unrealized Holding Gains (Losses) on AFS [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Realized gain on sale of investment securities | 0 | 0 | 121 | ||||||||
Income tax expense | 0 | 0 | -22 | ||||||||
Net of tax | $0 | $0 | $99 |
PARENT_COMPANY_FINANCIAL_INFOR2
PARENT COMPANY FINANCIAL INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Assets [Abstract] | ||||||||||||
Cash and cash equivalents (including interest-bearing deposits in other financial institutions) | $18,959,000 | $19,478,000 | $18,959,000 | $19,478,000 | $27,891,000 | |||||||
Other assets | 14,084,000 | 19,221,000 | 14,084,000 | 19,221,000 | ||||||||
Total assets | 557,318,000 | 539,000,000 | 557,318,000 | 539,000,000 | ||||||||
Liabilities and Stockholders' Equity [Abstract] | ||||||||||||
Convertible debentures | 0 | 1,442,000 | 0 | 1,442,000 | ||||||||
Other liabilities | 3,227,000 | 3,867,000 | 3,227,000 | 3,867,000 | ||||||||
Total liabilities | 490,311,000 | 471,444,000 | 490,311,000 | 471,444,000 | ||||||||
Preferred stock | 7,014,000 | 15,600,000 | 7,014,000 | 15,600,000 | ||||||||
Common stock | 41,957,000 | 40,165,000 | 41,957,000 | 40,165,000 | ||||||||
Retained earnings | 18,005,000 | 12,065,000 | 18,005,000 | 12,065,000 | ||||||||
Total stockholders' equity | 67,007,000 | 67,556,000 | 67,007,000 | 67,556,000 | 53,049,000 | 50,626,000 | ||||||
Total liabilities and stockholders' equity | 557,318,000 | 539,000,000 | 557,318,000 | 539,000,000 | ||||||||
Condensed Income Statements [Abstract] | ||||||||||||
Interest income | 7,018,000 | 6,903,000 | 7,122,000 | 6,961,000 | 6,765,000 | 7,081,000 | 7,044,000 | 6,976,000 | 28,004,000 | 27,866,000 | 31,368,000 | |
Interest expense | 712,000 | 835,000 | 849,000 | 879,000 | 958,000 | 1,047,000 | 1,161,000 | 1,166,000 | 3,275,000 | 4,332,000 | 5,949,000 | |
Net interest income (expense) | 6,306,000 | 6,068,000 | 6,273,000 | 6,082,000 | 5,807,000 | 6,034,000 | 5,883,000 | 5,810,000 | 24,729,000 | 23,534,000 | 25,419,000 | |
Other income | 429,000 | 656,000 | 559,000 | |||||||||
Total non-interest expenses | 4,646,000 | 4,879,000 | 5,031,000 | 5,525,000 | 5,130,000 | 5,639,000 | 5,677,000 | 5,689,000 | 20,081,000 | 22,135,000 | 22,246,000 | |
Income before provision for income taxes | 3,706,000 | 2,919,000 | 2,909,000 | 2,446,000 | 324,000 | 2,635,000 | 2,126,000 | 1,089,000 | 11,980,000 | 6,174,000 | 3,173,000 | |
Income tax benefit | 1,520,000 | 1,207,000 | 1,203,000 | 1,004,000 | -2,812,000 | 0 | 0 | 0 | 4,934,000 | -2,812,000 | 0 | |
Net income | 2,186,000 | 1,712,000 | 1,706,000 | 1,442,000 | 3,136,000 | 2,635,000 | 2,126,000 | 1,089,000 | 7,046,000 | 8,986,000 | 3,173,000 | |
Discount on partial redemption of preferred stock | -15,000 | 0 | -144,000 | 0 | -159,000 | 0 | 0 | |||||
Net income available to common stockholders | 2,042,000 | 1,536,000 | 1,521,000 | 1,169,000 | 2,883,000 | 2,373,000 | 1,864,000 | 827,000 | 6,268,000 | 7,947,000 | 2,127,000 | |
Cash flows from operating activities [Abstract] | ||||||||||||
Net income | 2,186,000 | 1,712,000 | 1,706,000 | 1,442,000 | 3,136,000 | 2,635,000 | 2,126,000 | 1,089,000 | 7,046,000 | 8,986,000 | 3,173,000 | |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||||||||||
Stock-based compensation | 308,000 | 59,000 | 117,000 | |||||||||
Change in other assets | 4,407,000 | -2,588,000 | 8,117,000 | |||||||||
Change in other liabilities | 814,000 | 224,000 | -316,000 | |||||||||
Net cash provided by (used in) operating activities | 6,439,000 | 10,998,000 | 10,085,000 | |||||||||
Cash flows from investing activities [Abstract] | ||||||||||||
Net cash (used in) provided by investing activities | -16,782,000 | -17,350,000 | 99,348,000 | |||||||||
Cash flows from financing activities [Abstract] | ||||||||||||
Preferred stock dividends paid | -2,390,000 | 0 | -195,000 | |||||||||
Common stock dividends paid | 328,000 | |||||||||||
Net cash provided by (used in) financing activities | 9,824,000 | -2,061,000 | -104,221,000 | |||||||||
Net (decrease) increase in cash and cash equivalents | -519,000 | -8,413,000 | 5,212,000 | |||||||||
Cash and cash equivalents at beginning of year | 19,478,000 | 27,891,000 | 19,478,000 | 27,891,000 | 22,679,000 | |||||||
Cash and cash equivalents at end of period | 18,959,000 | 19,478,000 | 18,959,000 | 19,478,000 | 27,891,000 | |||||||
Parent Company [Member] | ||||||||||||
Assets [Abstract] | ||||||||||||
Cash and cash equivalents (including interest-bearing deposits in other financial institutions) | 1,122,000 | 3,227,000 | 1,122,000 | 3,227,000 | 3,704,000 | |||||||
Investment in subsidiary | 65,710,000 | 67,448,000 | 65,710,000 | 67,448,000 | ||||||||
Other assets | 222,000 | 154,000 | 222,000 | 154,000 | ||||||||
Total assets | 67,054,000 | 70,829,000 | 67,054,000 | 70,829,000 | ||||||||
Liabilities and Stockholders' Equity [Abstract] | ||||||||||||
Convertible debentures | 0 | 1,442,000 | 0 | 1,442,000 | ||||||||
Other liabilities | 78,000 | 1,557,000 | 78,000 | 1,557,000 | ||||||||
Total liabilities | 78,000 | 2,999,000 | 78,000 | 2,999,000 | ||||||||
Preferred stock | 7,014,000 | 15,600,000 | 7,014,000 | 15,600,000 | ||||||||
Common stock | 41,957,000 | 40,165,000 | 41,957,000 | 40,165,000 | ||||||||
Retained earnings | 18,005,000 | 12,065,000 | 18,005,000 | 12,065,000 | ||||||||
Total stockholders' equity | 66,976,000 | 67,830,000 | 66,976,000 | 67,830,000 | ||||||||
Total liabilities and stockholders' equity | 67,054,000 | 70,829,000 | 67,054,000 | 70,829,000 | ||||||||
Condensed Income Statements [Abstract] | ||||||||||||
Interest income | 8,000 | 5,000 | 15,000 | |||||||||
Interest expense | 30,000 | 442,000 | 717,000 | |||||||||
Net interest income (expense) | -22,000 | -437,000 | -702,000 | |||||||||
Income from consolidated subsidiary | 7,446,000 | 9,567,000 | 4,168,000 | |||||||||
Other income | 0 | 71,000 | 0 | |||||||||
Total income | 7,424,000 | 9,201,000 | 3,466,000 | |||||||||
Total non-interest expenses | 599,000 | 215,000 | 293,000 | |||||||||
Income before provision for income taxes | 6,825,000 | 8,986,000 | 3,173,000 | |||||||||
Income tax benefit | -221,000 | 0 | 0 | |||||||||
Net income | 7,046,000 | 8,986,000 | 3,173,000 | |||||||||
Preferred stock dividends and accretion on preferred stock | 937,000 | 1,039,000 | 1,046,000 | |||||||||
Discount on partial redemption of preferred stock | -159,000 | 0 | 0 | |||||||||
Net income available to common stockholders | 6,268,000 | 7,947,000 | 2,127,000 | |||||||||
Cash flows from operating activities [Abstract] | ||||||||||||
Net income | 7,046,000 | 8,986,000 | 3,173,000 | |||||||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||||||||||
Equity in undistributed income from subsidiary | -7,446,000 | -9,567,000 | -4,168,000 | |||||||||
Stock-based compensation | 308,000 | 59,000 | 117,000 | |||||||||
Change in other assets | -68,000 | 23,000 | 315,000 | |||||||||
Change in other liabilities | -4,000 | -2,000 | 35,000 | |||||||||
Net cash provided by (used in) operating activities | -164,000 | -501,000 | -528,000 | |||||||||
Cash flows from investing activities [Abstract] | ||||||||||||
Net dividends from and investment in subsidiary | 9,184,000 | 0 | -1,000,000 | |||||||||
Net cash (used in) provided by investing activities | 9,184,000 | 0 | -1,000,000 | |||||||||
Cash flows from financing activities [Abstract] | ||||||||||||
Redemption of convertible debentures | -34,000 | 0 | 0 | |||||||||
Preferred stock dividends paid | -2,390,000 | 0 | -195,000 | |||||||||
Redemption of preferred stock | -8,427,000 | 0 | 0 | |||||||||
Common stock dividends paid | -328,000 | 0 | 0 | |||||||||
Proceeds from issuance of common stock | 54,000 | 24,000 | 16,000 | |||||||||
Net cash provided by (used in) financing activities | -11,125,000 | 24,000 | -179,000 | |||||||||
Net (decrease) increase in cash and cash equivalents | -2,105,000 | -477,000 | -1,707,000 | |||||||||
Cash and cash equivalents at beginning of year | 3,227,000 | 3,704,000 | 3,227,000 | 3,704,000 | 5,411,000 | |||||||
Cash and cash equivalents at end of period | $1,122,000 | $3,227,000 | $1,122,000 | $3,227,000 | $3,704,000 |
QUARTERLY_FINANCIAL_DATA_UNAUD2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Results of Operations [Abstract] | |||||||||||
Interest income | $7,018 | $6,903 | $7,122 | $6,961 | $6,765 | $7,081 | $7,044 | $6,976 | $28,004 | $27,866 | $31,368 |
Interest expense | 712 | 835 | 849 | 879 | 958 | 1,047 | 1,161 | 1,166 | 3,275 | 4,332 | 5,949 |
Net interest income (expense) | 6,306 | 6,068 | 6,273 | 6,082 | 5,807 | 6,034 | 5,883 | 5,810 | 24,729 | 23,534 | 25,419 |
Provision for loan losses | -1,575 | -1,178 | -1,011 | -1,371 | 899 | -1,563 | -1,084 | -196 | -5,135 | -1,944 | 4,281 |
Net interest income after provision for loan losses | 7,881 | 7,246 | 7,284 | 7,453 | 4,908 | 7,597 | 6,967 | 6,006 | 29,864 | 25,478 | 21,138 |
Non-interest income | 471 | 552 | 656 | 518 | 546 | 677 | 836 | 772 | 2,197 | 2,831 | 4,281 |
Non-interest expenses | 4,646 | 4,879 | 5,031 | 5,525 | 5,130 | 5,639 | 5,677 | 5,689 | 20,081 | 22,135 | 22,246 |
Income before provision for income taxes | 3,706 | 2,919 | 2,909 | 2,446 | 324 | 2,635 | 2,126 | 1,089 | 11,980 | 6,174 | 3,173 |
Provision for income taxes | 1,520 | 1,207 | 1,203 | 1,004 | -2,812 | 0 | 0 | 0 | 4,934 | -2,812 | 0 |
Net income | 2,186 | 1,712 | 1,706 | 1,442 | 3,136 | 2,635 | 2,126 | 1,089 | 7,046 | 8,986 | 3,173 |
Dividends and accretion on preferred stock | 159 | 176 | 329 | 273 | 253 | 262 | 262 | 262 | 937 | 1,039 | |
Discount on partial redemption of preferred stock | -15 | 0 | -144 | 0 | -159 | 0 | 0 | ||||
Net income available to common stockholders | $2,042 | $1,536 | $1,521 | $1,169 | $2,883 | $2,373 | $1,864 | $827 | $6,268 | $7,947 | $2,127 |
Earnings per share: | |||||||||||
Income per common share - basic | $0.25 | $0.19 | $0.19 | $0.15 | $0.37 | $0.30 | $0.30 | $0.14 | $0.77 | $1.13 | $0.36 |
Income per common share - diluted | $0.24 | $0.18 | $0.18 | $0.15 | $0.34 | $0.29 | $0.23 | $0.11 | $0.75 | $0.98 | $0.31 |