Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SOUTHERN FIRST BANCSHARES INC | ||
Entity Central Index Key | 0001090009 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 272,689,353 | ||
Entity Common Stock, Shares Outstanding | 7,697,454 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | SC | ||
Entity File Number | 000-27719 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and cash equivalents: | ||
Cash and due from banks | $ 19,196 | $ 17,434 |
Federal funds sold | 89,256 | 35,882 |
Interest-bearing deposits with banks | 19,364 | 19,557 |
Total cash and cash equivalents | 127,816 | 72,873 |
Investment securities: | ||
Investment securities available for sale | 67,694 | 74,905 |
Other investments | 6,948 | 4,121 |
Total investment securities | 74,642 | 79,026 |
Mortgage loans held for sale | 27,046 | 9,241 |
Loans | 1,943,525 | 1,677,332 |
Less allowance for loan losses | (16,642) | (15,762) |
Loans, net | 1,926,883 | 1,661,570 |
Bank owned life insurance | 40,011 | 34,010 |
Property and equipment, net | 58,478 | 32,430 |
Deferred income taxes, net | 4,275 | 4,020 |
Other assets | 8,044 | 7,444 |
Total assets | 2,267,195 | 1,900,614 |
LIABILITIES | ||
Deposits | 1,876,124 | 1,648,136 |
Federal Home Loan Bank advances and other borrowings | 110,000 | 50,000 |
Subordinated debentures | 35,890 | 13,403 |
Other liabilities | 39,321 | 15,159 |
Total liabilities | 2,061,335 | 1,726,698 |
SHAREHOLDERS' EQUITY | ||
Preferred stock, par value $.01 per share, 10,000,000 shares authorized | ||
Common stock, par value $.01 per share, 10,000,000 shares authorized, 7,672,678 and 7,466,481 shares issued and outstanding at December 31, 2019 and 2018, respectively | 77 | 75 |
Nonvested restricted stock | (803) | (741) |
Additional paid-in capital | 106,152 | 102,625 |
Accumulated other comprehensive loss | (298) | (917) |
Retained earnings | 100,732 | 72,874 |
Total shareholders' equity | 205,860 | 173,916 |
Total liabilities and shareholders' equity | $ 2,267,195 | $ 1,900,614 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 7,672,678 | 7,466,481 |
Common stock, shares outstanding | 7,672,678 | 7,466,481 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income | |||
Loans | $ 88,929 | $ 73,718 | $ 58,808 |
Investment securities | 2,101 | 1,801 | 1,617 |
Federal funds sold and interest-bearing deposits with banks | 1,622 | 1,138 | 784 |
Total interest income | 92,652 | 76,657 | 61,209 |
Interest expense | |||
Deposits | 23,730 | 14,836 | 7,373 |
Borrowings | 1,653 | 1,669 | 2,960 |
Total interest expense | 25,383 | 16,505 | 10,333 |
Net interest income | 67,269 | 60,152 | 50,876 |
Provision for loan losses | 2,300 | 1,900 | 2,000 |
Net interest income after provision for loan losses | 64,969 | 58,252 | 48,876 |
Noninterest income | |||
Mortgage banking income | 9,923 | 5,544 | 5,152 |
Service fees on deposit accounts | 1,061 | 1,040 | 1,168 |
ATM and debit card income | 1,728 | 1,490 | 1,172 |
Income from bank owned life insurance | 1,001 | 878 | 811 |
Gain on sale of investment securities, net | 727 | 7 | 4 |
Loss on extinguishment of debt | (1,496) | ||
Other income | 2,039 | 1,242 | 1,030 |
Total noninterest income | 14,983 | 10,201 | 9,337 |
Noninterest expenses | |||
Compensation and benefits | 29,025 | 25,561 | 21,791 |
Occupancy | 5,527 | 5,049 | 4,121 |
Outside service and data processing costs | 4,187 | 3,302 | 3,158 |
Insurance | 813 | 1,284 | 1,146 |
Professional fees | 1,699 | 1,574 | 1,362 |
Marketing | 941 | 856 | 737 |
Other | 2,281 | 2,137 | 2,237 |
Total noninterest expenses | 44,473 | 39,763 | 34,552 |
Income before income tax expense | 35,479 | 28,690 | 23,661 |
Income tax expense | 7,621 | 6,401 | 10,616 |
Net income available to common shareholders | $ 27,858 | $ 22,289 | $ 13,045 |
Earnings per common share | |||
Basic | $ 3.70 | $ 3.02 | $ 1.86 |
Diluted | $ 3.58 | $ 2.88 | $ 1.76 |
Weighted average common shares outstanding | |||
Basic | 7,528,283 | 7,384,200 | 7,005,703 |
Diluted | 7,772,544 | 7,737,495 | 7,393,377 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 27,858 | $ 22,289 | $ 13,045 |
Unrealized gain (loss) on securities available for sale: | |||
Unrealized holding gain (loss) arising during the period, pretax | 1,510 | (575) | 191 |
Tax (expense) benefit | (317) | 120 | (140) |
Reclassification of realized gain | (727) | (7) | (4) |
Tax expense | 153 | 1 | 1 |
Other comprehensive income (loss) | 619 | (461) | 48 |
Comprehensive income | $ 28,477 | $ 21,828 | $ 13,093 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Nonvested restricted stock [Member] | Common stock [Member] | Preferred stock [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive income (loss) [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2016 | $ (600) | $ 65 | $ 73,371 | $ (504) | $ 37,540 | $ 109,872 | |
Balance, shares at Dec. 31, 2016 | 6,463,789 | ||||||
Net income | 13,045 | 13,045 | |||||
Net issuance of common stock | $ 8 | 24,750 | 24,758 | ||||
Net issuance of common stock, shares | 805,000 | ||||||
Proceeds from exercise of stock options | 705 | 705 | |||||
Proceeds from exercise of stock options, shares | 74,437 | ||||||
Issuance of restricted stock | (201) | 201 | |||||
Issuance of restricted stock, shares | 4,625 | ||||||
Compensation expense related to restricted stock, net of tax | 299 | 299 | |||||
Compensation expense related to stock options, net of tax | 959 | 959 | |||||
Other comprehensive income | 48 | 48 | |||||
Balance at Dec. 31, 2017 | (502) | $ 73 | 99,986 | (456) | 50,585 | 149,686 | |
Balance, shares at Dec. 31, 2017 | 7,347,851 | ||||||
Net income | 22,289 | 22,289 | |||||
Proceeds from exercise of stock options | $ 2 | 898 | 900 | ||||
Proceeds from exercise of stock options, shares | 105,630 | ||||||
Issuance of restricted stock | (558) | 558 | |||||
Issuance of restricted stock, shares | 13,000 | ||||||
Compensation expense related to restricted stock, net of tax | 319 | 319 | |||||
Compensation expense related to stock options, net of tax | 1,183 | 1,183 | |||||
Other comprehensive income | (461) | (461) | |||||
Balance at Dec. 31, 2018 | (741) | $ 75 | 102,625 | (917) | 72,874 | 173,916 | |
Balance, shares at Dec. 31, 2018 | 7,466,481 | ||||||
Net income | 27,858 | 27,858 | |||||
Proceeds from exercise of stock options | $ 2 | 1,767 | 1,769 | ||||
Proceeds from exercise of stock options, shares | 191,497 | ||||||
Issuance of restricted stock | (490) | 490 | |||||
Issuance of restricted stock, shares | 14,700 | ||||||
Compensation expense related to restricted stock, net of tax | 428 | 428 | |||||
Compensation expense related to stock options, net of tax | 1,270 | 1,270 | |||||
Other comprehensive income | 619 | 619 | |||||
Balance at Dec. 31, 2019 | $ (803) | $ 77 | $ 106,152 | $ (298) | $ 100,732 | $ 205,860 | |
Balance, shares at Dec. 31, 2019 | 7,672,678 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net income | $ 27,858 | $ 22,289 | $ 13,045 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Provision for loan losses | 2,300 | 1,900 | 2,000 |
Depreciation and other amortization | 1,888 | 1,755 | 1,460 |
Accretion and amortization of securities discounts and premiums, net | 432 | 437 | 582 |
Gain on sale of investment securities available for sale | (727) | (7) | (4) |
Net change in operating leases | 585 | ||
Compensation expense related to stock options and restricted stock grants | 1,698 | 1,502 | 1,258 |
Gain on sale of loans held for sale | (10,219) | (5,144) | (5,752) |
Loans originated and held for sale | (380,632) | (204,429) | (192,347) |
Proceeds from sale of loans held for sale | 373,046 | 212,122 | 194,110 |
Increase in cash surrender value of bank owned life insurance | (1,001) | (878) | (811) |
(Increase) decrease in deferred tax asset | (420) | (115) | 2,904 |
(Increase) decrease in other assets, net | (600) | 325 | (1,183) |
Increase in other liabilities, net | 4,074 | 1,946 | 1,931 |
Net cash provided by operating activities | 18,282 | 31,703 | 17,193 |
Increase (decrease) in cash realized from: | |||
Increase in loans, net | (267,613) | (291,923) | (225,047) |
Purchase of property and equipment | (8,431) | (1,943) | (5,381) |
Purchase of investment securities: | |||
Available for sale | (39,930) | (23,181) | (21,972) |
Other investments | (4,675) | (46) | (3,086) |
Available for sale | 19,212 | 9,025 | 9,644 |
Other investments | 1,848 | 387 | 4,366 |
Proceeds from sale of investment securities: | |||
Proceeds from sale of investment securities available for sale | 29,006 | 5,841 | 8,813 |
Purchase of life insurance policies | (5,000) | (6,850) | |
Proceeds from sale of other real estate owned | 132 | 498 | |
Net cash used for investing activities | (275,583) | (301,708) | (239,015) |
Increase (decrease) in cash realized from: | |||
Increase in deposits, net | 227,988 | 267,013 | 289,972 |
Increase (decrease) in Federal Home Loan Bank advances and other borrowings | 60,000 | (17,200) | (48,000) |
Increase of subordinated debt | 22,487 | ||
Issuance of common stock | 24,758 | ||
Proceeds from the exercise of stock options | 1,769 | 900 | 705 |
Net cash provided by financing activities | 312,244 | 250,713 | 267,435 |
Net increase (decrease) in cash and cash equivalents | 54,943 | (19,292) | 45,613 |
Cash and cash equivalents, beginning of year | 72,873 | 92,165 | 46,552 |
Cash and cash equivalents, end of year | 127,816 | 72,873 | 92,165 |
Cash paid for | |||
Interest | 25,156 | 15,410 | 9,987 |
Income taxes | 7,883 | 5,451 | 8,390 |
Schedule of non-cash transactions | |||
Foreclosure of other real estate | 288 | ||
Unrealized (gain) loss on securities, net of income taxes | (1,193) | 455 | (51) |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | $ 21,459 |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Activities | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Activities | NOTE 1 – Summary of Significant Accounting Policies and Activities Southern First Bancshares, Inc. (the "Company") is a South Carolina corporation that owns all of the capital stock of Southern First Bank (the "Bank") and all of the stock of Greenville First Statutory Trust I and II (collectively, the "Trusts"). The Trusts are special purpose non-consolidated entities organized for the sole purpose of issuing trust preferred securities. The Bank's primary federal regulator is the Federal Deposit Insurance Corporation (the "FDIC"). The Bank is also regulated and examined by the South Carolina Board of Financial Institutions. The Bank is primarily engaged in the business of accepting demand deposits and savings deposits insured by the FDIC, and providing commercial, consumer and mortgage loans to the general public. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Southern First Bank. In consolidation, all significant intercompany transactions have been eliminated. The accounting and reporting policies conform to accounting principles generally accepted in the United States of America. In accordance with guidance issued by the Financial Accounting Standards Board (“FASB”), the operations of the Trusts have not been consolidated in these financial statements. Business Segments ASC Topic 280-10, “Segment Reporting,” requires selected segment information of operating segments based on a management approach. The Company’s three reportable segments represent the distinct product lines the Company offers and are viewed separately for strategic planning by management. Please refer to “Note 24 – Reportable Segments” for further information on the reporting for the Company’s three business segments. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of income and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, derivatives, real estate acquired in settlement of loans, fair value of financial instruments, evaluating other-than-temporary-impairment of investment securities and valuation of deferred tax assets. Risks and Uncertainties In the normal course of its business, the Company encounters two significant types of risks: economic and regulatory. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on different bases, than its interest-earning assets. Credit risk is the risk of default within the Company’s loan portfolio that results from borrowers’ inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the valuation of real estate held by the Company. The Company is subject to the regulations of various governmental agencies. These regulations can and do change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to changes with respect to valuation of assets, amount of required loan loss allowance and operating restrictions resulting from the regulators’ judgments based on information available to them at the time of their examinations. The Bank makes loans to individuals and businesses in the Upstate, Midlands, and Lowcountry regions of South Carolina as well as the Triangle and Triad regions of North Carolina and Atlanta, Georgia for various personal and commercial purposes. The Bank’s loan portfolio has a concentration of real estate loans. As of December 31, 2019 and 2018, real estate loans represented 82.8% and 82.3%, respectively, of total loans. However, borrowers’ ability to repay their loans is not dependent upon any specific economic sector. Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management performed an evaluation to determine whether there have been any subsequent events since the balance sheet date and determined that no subsequent events occurred requiring accrual or disclosure. Reclassifications Certain amounts, previously reported, have been reclassified to state all periods on a comparable basis and had no effect on shareholders’ equity or net income. Cash and Cash Equivalents Cash and cash equivalents include cash and due from banks, interest bearing deposits and federal funds sold. Cash and cash equivalents have original maturities of three months or less, and federal funds sold are generally purchased and sold for one-day periods. Accordingly, the carrying value of these instruments is deemed to be a reasonable estimate of fair value. At December 31, 2019 and 2018, included in cash and cash equivalents was $6.0 million and $4.9 million, respectively, on deposit with the Federal Reserve Bank. Investment Securities We classify our investment securities as held to maturity securities, trading securities and available for sale securities as applicable. Investment securities are designated as held to maturity if we have the intent and the ability to hold the securities to maturity. Held to maturity securities are carried at amortized cost, adjusted for the amortization of any related premiums or the accretion of any related discounts into interest income using a methodology which approximates a level yield of interest over the estimated remaining period until maturity. Unrealized losses on held to maturity securities, reflecting a decline in value judged by us to be other than temporary, are charged to income in the Consolidated Statements of Income. Investment securities that are purchased and held principally for the purpose of selling in the near term are reported as trading securities. Trading securities are carried at fair value with unrealized holding gains and losses included in earnings. We classify investment securities as available for sale when at the time of purchase we determine that such securities may be sold at a future date or if we do not have the intent or ability to hold such securities to maturity. Securities designated as available for sale are recorded at fair value. Changes in the fair value of available for sale debt securities are included in shareholders’ equity as unrealized gains or losses, net of the related tax effect. Unrealized losses on available for sale securities, reflecting a decline in value judged to be other than temporary, are charged to income in the Consolidated Statements of Income. Realized gains or losses on available for sale securities are computed on the specific identification basis. Other Investments The Bank, as a member institution, is required to own a stock investment in the Federal Home Loan Bank of Atlanta (“FHLB”). This stock is generally pledged against any borrowings from the FHLB and cash dividends on our FHLB stock are recorded in investment income. No ready market exists for these stocks and they have no quoted market value. However, redemption of this stock has historically been at par value. Other investments also include a $403,000 investment in the Trusts. Loans Loans are stated at the principal balance outstanding. Unamortized net loan fees and the allowance for possible loan losses are deducted from total loans on the balance sheets. Interest income is recognized over the term of the loan based on the principal amount outstanding. The net of loan origination fees received and direct costs incurred in the origination of loans is deferred and amortized to interest income over the contractual life of the loans adjusted for actual principal prepayments using a method approximating the interest method. Nonaccrual and Past Due Loans Loans are generally placed on nonaccrual status when principal or interest becomes 90 days past due, or when payment in full is not anticipated. When a loan is placed on nonaccrual status, interest accrued but not received is generally reversed against interest income. Cash receipts on nonaccrual loans are not recorded as interest income, but are used to reduce the loan’s principal balance. A nonaccrual loan is generally returned to accrual status and accrual of interest is resumed when payments have been made according to the terms and conditions of the loan for a continuous six month period. Our loans are considered past due when contractually required principal or interest payments have not been made on the due dates. Nonperforming Assets Nonperforming assets include real estate acquired through foreclosure or deed taken in lieu of foreclosure, loans on nonaccrual status and loans past due 90 days or more and still accruing interest. Loans are placed on nonaccrual status when, in the opinion of management, the collection of additional interest is uncertain. Thereafter no interest is taken into income until such time as the borrower demonstrates the ability to pay both principal and interest. Impaired Loans Our impaired loans include loans on nonaccrual status and loans modified in a troubled debt restructuring (“TDR”), whether on accrual or nonaccrual status. For loans that are classified as impaired, an allowance is established when the fair value (discounted cash flows, collateral value, or observable market price) of the impaired loan less costs to sell, are lower than the carrying value of that loan. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due, among other factors. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including, without limitation, 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. Impairment is measured on a loan by loan basis for commercial and consumer loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Loan Charge-off Policy For commercial loans, we generally fully charge off or charge collateralized loans down to net realizable value when management determines the loan to be uncollectible; repayment is deemed to be projected beyond reasonable time frames; the loan has been classified as a loss by either our internal loan review process or our banking regulatory agencies; the client has filed bankruptcy and the loss becomes evident owing to a lack of assets; or the loan is 120 days past due unless both well-secured and in the process of collection. For consumer loans, we generally charge down to net realizable value when the loan is 180 days past due. Troubled Debt Restructuring (TDRs) The Company considers a loan to be a TDR when the debtor experiences financial difficulties and the Company provides concessions such that we will not collect all principal and interest in accordance with the original terms of the loan agreement. Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note. As part of our workout plan for individual loan relationships, we may restructure loan terms to assist borrowers facing challenges in the current economic environment. Our policy with respect to accrual of interest on loans restructured in a TDR follows relevant supervisory guidance. That is, if a borrower has demonstrated performance under the previous loan terms and shows capacity to perform under the restructured loan terms; continued accrual of interest at the restructured interest rate is likely. If a borrower was materially delinquent on payments prior to the restructuring, but shows capacity to meet the restructured loan terms, the loan will likely continue as nonaccrual going forward. Lastly, if the borrower does not perform under the restructured terms, the loan is placed on nonaccrual status. We will continue to closely monitor these loans and will cease accruing interest on them if management believes that the borrowers may not continue performing based on the restructured note terms. If, after previously being classified as a TDR, a loan is restructured a second time and the borrower continues to experience financial difficulties, then that loan is automatically placed on nonaccrual status. Our policy with respect to nonperforming loans requires the borrower to make a minimum of six consecutive payments of principal and interest in accordance with the loan terms before that loan can be placed back on accrual status. Further, the borrower must show capacity to continue performing into the future prior to restoration of accrual status. In addition, our policy, in accordance with supervisory guidance, also provides for a loan to be removed from TDR status if the loan is modified or renewed at terms consistent with current market rates and the loan has been performing under modified terms for an extended period of time or under certain circumstances. In the determination of the allowance for loan losses, management considers TDRs on commercial and consumer loans and subsequent defaults in these restructurings by measuring impairment, on a loan by loan basis, based on either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral, less costs to sell, if the loan is collateral dependent. Allowance for Loan Losses The allowance for loan losses is management’s estimate of credit losses inherent in the loan portfolio. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. We have an established process to determine the adequacy of the allowance for loan losses that assesses the losses inherent in our portfolio. While we attribute portions of the allowance to specific portfolio segments, the entire allowance is available to absorb credit losses inherent in the total loan portfolio. Our process involves procedures to appropriately consider the unique risk characteristics of our commercial and consumer loan portfolio segments. For each portfolio segment, impairment is measured individually for each impaired loan. Our allowance levels are influenced by loan volume, loan grade or delinquency status, historic loss experience and other economic conditions. See Note 4 to the Consolidated Financial Statements for additional information on the allowance for loan losses. Other Real Estate Owned Real estate acquired through foreclosure is initially recorded at the lower of cost or estimated fair value less selling costs. Subsequent to the date of acquisition, it is carried at the lower of cost or fair value, adjusted for net selling costs. Fair values of real estate owned are reviewed regularly and write-downs are recorded when it is determined that the carrying value of real estate exceeds the fair value less estimated costs to sell. Costs relating to the development and improvement of such property are capitalized, whereas those costs relating to holding the property are expensed. Property and Equipment Property and equipment are stated at cost. Major repairs are charged to operations, while major improvements are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Upon retirement, sale, or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts, and gain or loss is included in income from operations. Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. Bank Owned Life Insurance Policies Bank owned life insurance policies represent the cash value of policies on certain officers of the Company. Comprehensive Income Comprehensive income (loss) consists of net income and net unrealized gains (losses) on securities and is presented in the statements of shareholders’ equity and comprehensive income. The statement requires only additional disclosures in the consolidated financial statements; it does not affect our results of operations. Revenue from Contracts with Customers The Company records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“Topic 606”). Under Topic 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods. The Company’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of Topic 606. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Our accounting policies did not change materially since the principles of revenue recognition from Topic 606 are largely consistent with existing guidance and current practices applied by our business. The following is a discussion of revenues within the scope of the guidance: ● Service fees on deposit accounts - The Company earns fees from its deposit clients for various transaction-based, account maintenance, and overdraft or non-sufficient funds (“NSF”) services. Transaction-based fees, which include services such as stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the client's request. Account maintenance fees, which relate primarily to monthly maintenance and account management, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft and NSF fees are recognized at the point in time that the overdraft occurs or the NSF item is presented. Service charges on deposits are withdrawn from the client's account balance. ● ATM and debit card income - The Company earns interchange fees from debit cardholder transactions conducted through the payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Income Taxes The financial statements have been prepared on the accrual basis. When income and expenses are recognized in different periods for financial reporting purposes versus for the purposes of computing income taxes currently payable, deferred taxes are provided on such temporary differences. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The Company believes that its income tax filing positions taken or expected to be taken on its tax returns will more likely than not be sustained upon audit by the taxing authorities and does not anticipate any adjustments that will result in a material adverse impact on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded. The Company’s federal and state income tax returns are open and subject to examination from the 2016 tax return year and forward. On December 22, 2017, the Tax Act was signed into law and includes numerous provisions that impact the Company, most notably a reduction in the corporate tax rate from the maximum rate of 35% to a flat rate of 21%. As a result, the Company recorded an incremental income tax expense of $2.4 million in the fourth quarter of 2017. Stock-Based Compensation The Company has a stock-based employee compensation plan. Compensation cost is recognized for all stock options granted and for any outstanding unvested awards as if the fair value method had been applied to those awards as of the date of grant. Adoption of New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” . The guidance in the update supersedes the requirements in ASC Topic 840, Leases. The guidance is intended to increase transparency and comparability among organizations by recognizing right-of-use (“ROU”) assets and lease liabilities on the balance sheet. For public companies, this update was effective for interim and annual periods beginning after December 15, 2018. The Company adopted this guidance in the first quarter of 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. The Company has also elected to not recognize right-of-use assets and lease liabilities arising from short-term leases. Implementation of the guidance resulted in the recording of a right-of-use asset and lease liability on the balance sheet; however it does not have a material impact on the Company's other consolidated financial statements. See additional disclosures in Note 7. Newly Issued, But Not yet Effective Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” . Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. ASU 2016-13 was originally effective for all annual and interim periods beginning after December 31, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. Adoption will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company has established a team of individuals from credit, finance and risk management to evaluate the requirements of the new standard and the impact it will have on its processes. In November 2019, the FASB issued guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” . The amendments affect a variety of Topics in the Accounting Standards Codification. For public business entities that meet the definition of a smaller reporting company, such as the Company, the amendments are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as the Company has adopted to amendments in ASU 2016-13. Currently, the Company does not expect to adopt the ASU before the effective period. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | NOTE 2 – Investment Securities The amortized costs and fair value of investment securities are as follows: December 31, 2019 Amortized Gross Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available for sale US government agencies $ 500 - 1 499 SBA securities 550 - 19 531 State and political subdivisions 4,205 3 24 4,184 Asset-backed securities 13,351 - 184 13,167 Mortgage-backed securities FHLMC 10,609 14 15 10,608 FNMA 35,275 34 169 35,140 GNMA 3,581 5 21 3,565 Total mortgage-backed securities 49,465 53 205 49,313 Total $ 68,071 56 433 67,694 December 31, 2018 Amortized Gross Unrealized Fair Cost Gains Losses Value Available for sale US government agencies $ 8,975 1 194 8,782 SBA securities 3,628 - 103 3,525 State and political subdivisions 8,371 48 63 8,356 Asset-backed securities 9,595 12 49 9,558 Mortgage-backed securities FHLMC 12,258 87 242 12,103 FNMA 29,068 25 551 28,542 GNMA 4,170 1 132 4,039 Total mortgage-backed securities 45,496 113 925 44,684 Total $ 76,065 174 1,334 74,905 During 2019, approximately $34.9 million of investment securities were either sold or called, subsequently resulting in a gain on sale of investment securities of $727,000. The amortized costs and fair values of investment securities available for sale at December 31, 2019 and 2018, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers have the right to prepay the obligations. December 31, 2019 2018 Amortized Fair Amortized Fair (dollars in thousands) Cost Value Cost Value Available for sale Due within one year $ - - - - Due after one through five years 4,699 4,675 8,681 8,578 Due after five through ten years 10,454 10,414 22,796 22,379 Due after ten years 52,918 52,605 44,588 43,948 $ 68,071 67,694 76,065 74,905 The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2019 and 2018. Less than 12 months 12 months or longer Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) # value losses # value losses # value losses As of December 31, 2019 Available for sale US government agencies 1 $ 499 $ 1 - $ - $ - 1 $ 499 $ 1 SBA securities - - - 1 531 19 1 531 19 State and political subdivisions 2 2,093 24 - - - 2 2,093 24 Asset-backed 5 5,921 68 5 7,246 116 10 13,167 184 Mortgage-backed FHLMC 4 3,842 2 4 2,323 13 8 6,165 15 FNMA 14 15,500 67 11 9,462 102 25 24,962 169 GNMA 2 2,240 6 1 734 15 3 2,974 21 28 $ 30,095 $ 168 22 $ 20,296 $ 265 50 $ 50,391 $ 433 Less than 12 months 12 months or longer Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) # value losses # value losses # value losses As of December 31, 2018 Available for sale US government agencies 1 $ 1,246 $ 3 8 $ 7,035 $ 191 9 $ 8,281 $ 194 SBA securities - - - 2 3,525 103 2 3,525 103 State and political subdivisions - - - 7 2,829 63 7 2,829 63 Asset-backed 4 6,707 49 - - - 4 6,707 49 Mortgage-backed FHLMC - - - 10 7,402 242 10 7,402 242 FNMA 2 2,689 6 23 22,814 545 25 25,503 551 GNMA 1 1,104 6 3 2,919 126 4 4,023 132 8 $ 11,746 $ 64 53 $ 46,524 $ 1,270 61 $ 58,270 $ 1,334 At December 31, 2019, the Company had 28 individual investments with a fair market value of $30.1 million that were in an unrealized loss position for less than 12 months and 22 individual investments with a fair market value of $20.3 million that were in an unrealized loss position for 12 months or longer. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers the length of time and extent to which the fair value of available-for-sale debt securities have been less than cost to conclude that such securities were not other-than-temporarily impaired. We also consider other factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. As the Company has no intent to sell securities with unrealized losses and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of amortized cost, we have concluded that the securities are not impaired on an other-than-temporary basis. Other investments are comprised of the following and are recorded at cost which approximates fair value: December 31, (dollars in thousands) 2019 2018 Federal Home Loan Bank stock $ 6,386 3,587 Other investments 159 131 Investment in Trust Preferred subsidiaries 403 403 $ 6,948 4,121 The Company has evaluated the FHLB stock for impairment and determined that the investment in FHLB stock is not other than temporarily impaired as of December 31, 2019 and ultimate recoverability of the par value of this investment is probable. All of the FHLB stock is used to collateralize advances with the FHLB. At December 31, 2019 and 2018, there were no securities pledged as collateral for repurchase agreements from brokers. |
Mortgage Loans Held for Sale
Mortgage Loans Held for Sale | 12 Months Ended |
Dec. 31, 2019 | |
Mortgage Loans Held for Sale [Abstract] | |
Mortgage Loans Held for Sale | NOTE 3 – Mortgage Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are reported as loans held for sale and carried at fair value under the fair value option with changes in fair value recognized in current period earnings. Loans held for sale include mortgage loans which are saleable into the secondary mortgage markets and their fair values are estimated using observable quoted market or contracted prices or market price equivalents, which would be used by other market participants. At the date of funding of the mortgage loan held for sale, the funded amount of the loan, the related derivative asset or liability of the associated interest rate lock commitment, less direct loan costs becomes the initial recorded investment in the loan held for sale. Such amount approximates the fair value of the loan. At December 31, 2019, mortgage loans held for sale totaled $27.0 million compared to $9.2 million at December 31, 2018. Mortgage loans held for sale are considered de-recognized, or sold, when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or the ability to unilaterally cause the holder to return specific assets. Gains and losses from the sale of mortgage loans are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale and are recorded in mortgage banking income in the statement of income. Mortgage banking income also includes the unrealized gains and losses associated with the loans held for sale and the realized and unrealized gains and losses from derivatives. Mortgage loans sold to investors by the Company, and which were believed to have met investor and agency underwriting guidelines at the time of sale, may be subject to repurchase or indemnification in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company may, upon mutual agreement, agree to repurchase the loans or indemnify the investor against future losses on such loans. In such cases, the Company bears any subsequent credit loss on the loans. As appropriate, the Company establishes mortgage repurchase reserves related to various representations and warranties that reflect management’s estimate of losses. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Loans and Allowance for Loan Losses | NOTE 4 – Loans and Allowance for Loan Losses The Company makes loans to individuals and small businesses for various personal and commercial purposes primarily in the Upstate, Midlands, and Lowcountry regions of South Carolina, the Triangle and Triad regions of North Carolina as well as Atlanta, Georgia. The Company’s loan portfolio is not concentrated in loans to any single borrower or a relatively small number of borrowers. The Company focuses its lending activities primarily on the professional markets in these regions including doctors, dentists, and small business owners. The principal component of the loan portfolio is loans secured by real estate mortgages which account for 82.8% of total loans at December 31, 2019. Commercial loans comprise 61.5% of total real estate loans and consumer loans account for 38.5%. Commercial real estate loans are further categorized into owner occupied which represents 21.0% of total loans and non-owner occupied loans represent 25.8%. Commercial construction loans represent only 4.1% of the total loan portfolio. In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries and geographic regions, management monitors exposure to credit risk from concentrations of lending products and practices such as loans that subject borrowers to substantial payment increases (e.g. principal deferral periods, loans with initial interest-only periods, etc.), and loans with high loan-to-value ratios. Additionally, there are industry practices that could subject the Company to increased credit risk should economic conditions change over the course of a loan’s life. For example, the Company makes variable rate loans and fixed rate principal-amortizing loans with maturities prior to the loan being fully paid (i.e. balloon payment loans). The various types of loans are individually underwritten and monitored to manage the associated risks. The allowance for loan losses is management's estimate of credit losses inherent in the loan portfolio at the balance sheet date. We have an established process to determine the adequacy of the allowance for loan losses that assesses the losses inherent in our portfolio. While we attribute portions of the allowance to specific portfolio segments, the entire allowance is available to absorb credit losses inherent in the total loan portfolio. Our process involves procedures to appropriately consider the unique risk characteristics of our commercial and consumer loan portfolio segments. For each portfolio segment, impairment is measured individually for each impaired loan. Our allowance levels are influenced by loan volume, loan grade or delinquency status, historic loss experience and other economic conditions. Portfolio Segment Methodology Commercial Commercial loans are assessed for estimated losses by grading each loan using various risk factors identified through periodic reviews. The Company applies historic grade-specific loss factors to each loan class. In the development of statistically derived loan grade loss factors, the Company observes historical losses over 20 quarters for each loan grade. These loss estimates are adjusted as appropriate based on additional analysis of external loss data or other risks identified from current economic conditions and credit quality trends. The allowance also includes an amount for the estimated impairment on nonaccrual commercial loans and commercial loans modified in a TDR, whether on accrual or nonaccrual status. Consumer The following table summarizes the composition of our loan portfolio. Total gross loans are recorded net of deferred loan fees and costs, which totaled $3.3 million and $2.8 million as of December 31, 2019 and December 31, 2018, respectively. December 31, (dollars in thousands) 2019 2018 Commercial Owner occupied RE $ 407,851 21.0% 367,018 21.9% Non-owner occupied RE 501,878 25.8% 404,296 24.1% Construction 80,486 4.1% 84,411 5.0% Business 308,123 15.9% 272,980 16.3% Total commercial loans 1,298,338 66.8% 1,128,705 67.3% Consumer Real estate 398,245 20.5% 320,943 19.1% Home equity 179,738 9.3% 165,937 9.9% Construction 41,471 2.1% 37,925 2.3% Other 25,733 1.3% 23,822 1.4% Total consumer loans 645,187 33.2% 548,627 32.7% Total gross loans, net of deferred fees 1,943,525 100.0% 1,677,332 100.0% Less – allowance for loan losses (16,642 ) (15,762 ) Total loans, net $ 1,926,883 1,661,570 The composition of gross loans by rate type is as follows: December 31, (dollars in thousands) 2019 2018 Variable rate loans $ 432,540 402,148 Fixed rate loans 1,510,985 1,275,184 $ 1,943,525 1,677,332 At December 31, 2019, approximately $716.0 million of the Company’s mortgage loans were pledged as collateral for advances from the FHLB, as set forth in Note 10. Credit Quality Indicators Commercial We manage a consistent process for assessing commercial loan credit quality by monitoring our loan grading trends and past due statistics. All loans are subject to individual risk assessment. Our risk categories include Pass, Special Mention, Substandard, and Doubtful, each of which is defined by banking regulatory agencies. Delinquency statistics are also an important indicator of credit quality in the establishment of our allowance for credit losses. We categorize our loans into risk categories based on relevant information about the ability of the borrower to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. A description of the general characteristics of the risk grades is as follows: ● Pass—These loans range from minimal credit risk to average however still acceptable credit risk. ● Special mention—A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date. ● Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. ● Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable. The following tables provide past due information for outstanding commercial loans and include loans on nonaccrual status. December 31, 2019 Owner Non-owner (dollars in thousands) occupied RE occupied RE Construction Business Total Current $ 406,594 501,676 80,486 307,710 1,296,466 30-59 days past due 706 151 - 178 1,035 60-89 days past due - - - - - Greater than 90 days 551 51 - 235 837 $ 407,851 501,878 80,486 308,123 1,298,338 December 31, 2018 Owner Non-owner occupied RE occupied RE Construction Business Total Current $ 367,018 404,179 84,411 272,864 1,128,472 30-59 days past due - 117 - 36 153 60-89 days past due - - - - - Greater than 90 days - - - 80 80 $ 367,018 404,296 84,411 272,980 1,128,705 As of December 31, 2019 and 2018, loans 30 days or more past due represented 0.23% and 0.26% of our total loan portfolio, respectively. Commercial loans 30 days or more past due were 0.10% and 0.01% as of December 31, 2019 and 2018, respectively. The tables below provide a breakdown of outstanding commercial loans by risk category. December 31, 2019 Owner Non-owner (dollars in thousands) occupied RE occupied RE Construction Business Total Pass $ 404,237 492,941 80,486 301,504 1,279,168 Special Mention 1,312 744 - 3,108 5,164 Substandard 2,302 8,193 - 3,511 14,006 Doubtful - - - - - $ 407,851 501,878 80,486 308,123 1,298,338 December 31, 2018 Owner Non-owner occupied RE occupied RE Construction Business Total Pass $ 363,621 400,266 84,411 266,898 1,115,196 Special Mention 296 118 - 2,971 3,385 Substandard 3,101 3,912 - 3,111 10,124 Doubtful - - - - - $ 367,018 404,296 84,411 272,980 1,128,705 Consumer The following tables provide past due information for outstanding consumer loans and include loans on nonaccrual status. December 31, 2019 (dollars in thousands) Real estate Home equity Construction Other Total Current $ 396,445 179,051 41,471 25,650 642,617 30-59 days past due 799 369 - 83 1,251 60-89 days past due - 118 - - 118 Greater than 90 days 1,001 200 - - 1,201 $ 398,245 179,738 41,471 25,733 645,187 December 31, 2018 Real estate Home equity Construction Other Total Current $ 317,267 165,727 37,925 23,603 544,522 30-59 days past due 2,555 30 - 106 2,691 60-89 days past due 923 - - 113 1,036 Greater than 90 days 198 180 - - 378 $ 320,943 165,937 37,925 23,822 548,627 Consumer loans 30 days or more past due were 0.13% and 0.25% as of December 31, 2019 and 2018, respectively. The tables below provide a breakdown of outstanding consumer loans by risk category. December 31, 2019 (dollars in thousands) Real estate Home equity Construction Other Total Pass $ 392,572 176,532 41,471 25,421 635,996 Special Mention 2,267 775 - 261 3,303 Substandard 3,406 2,431 - 51 5,888 Doubtful - - - - - Loss - - - - - $ 398,245 179,738 41,471 25,733 645,187 December 31, 2018 (dollars in thousands) Real estate Home equity Construction Other Total Pass $ 314,586 162,626 37,925 23,586 538,723 Special Mention 1,792 864 - 139 2,795 Substandard 4,565 2,447 - 97 7,109 Doubtful - - - - - Loss - - - - - $ 320,943 165,937 37,925 23,822 548,627 Nonperforming assets The following table shows the nonperforming assets and the related percentage of nonperforming assets to total assets and gross loans. Generally, a loan is placed on nonaccrual status when it becomes 90 days past due as to principal or interest, or when we believe, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of the contractual principal or interest on the loan is doubtful. A payment of interest on a loan that is classified as nonaccrual is recognized as a reduction in principal when received. December 31, (dollars in thousands) 2019 2018 Commercial Owner occupied RE $ - - Non-owner occupied RE 188 210 Construction - - Business 235 81 Consumer Real estate 1,829 1,980 Home equity 431 1,006 Construction - - Other - 12 Nonaccruing troubled debt restructurings 4,111 2,541 Total nonaccrual loans, including nonaccruing TDRs 6,794 5,830 Other real estate owned - - Total nonperforming assets $ 6,794 5,830 Nonperforming assets as a percentage of: Total assets 0.30% 0.31% Gross loans 0.35% 0.35% Total loans over 90 days past due $ 2,038 458 Loans over 90 days past due and still accruing - - Accruing TDRs 5,219 6,742 Foregone interest income on the nonaccrual loans for the year ended December 31, 2019 was approximately $23,000 and approximately $53,000 for the same period in 2018. Impaired Loans The table below summarizes key information for impaired loans. Our impaired loans include loans on nonaccrual status and loans modified in a TDR, whether on accrual or nonaccrual status. These impaired loans may have estimated impairment which is included in the allowance for loan losses. Our commercial and consumer impaired loans are evaluated individually to determine the related allowance for loan losses. December 31, 2019 Recorded investment Impaired loans Impaired loans Unpaid with no related with related Related Principal Impaired allowance for allowance for allowance for (dollars in thousands) Balance loans loan losses loan losses loan losses Commercial Owner occupied RE $ 2,791 2,726 2,270 456 75 Non-owner occupied RE 4,512 4,051 2,419 1,632 465 Construction - - - - - Business 1,620 1,531 558 973 452 Total commercial 8,923 8,308 5,247 3,061 992 Consumer Real estate 2,727 2,720 1,638 1,082 364 Home equity 885 838 459 379 66 Construction - - - - - Other 147 147 - 147 16 Total consumer 3,759 3,705 2,097 1,608 446 Total $ 12,682 12,013 7,344 4,669 1,438 December 31, 2018 Recorded investment Impaired loans Impaired loans Unpaid with no related with related Related Principal Impaired allowance for allowance for allowance for (dollars in thousands) Balance loans loan losses loan losses loan losses Commercial Owner occupied RE $ 2,827 2,762 2,311 451 75 Non-owner occupied RE 3,321 2,807 603 2,204 558 Construction - - - - - Business 3,745 2,520 515 2,005 895 Total commercial 9,893 8,089 3,429 4,660 1,528 Consumer Real estate 2,993 2,892 1,494 1,398 456 Home equity 1,935 1,421 1,421 - - Construction - - - - - Other 170 170 - 170 30 Total consumer 5,098 4,483 2,915 1,568 486 Total $ 14,991 12,572 6,344 6,228 2,014 The following table provides the average recorded investment in impaired loans and the amount of interest income recognized on impaired loans after impairment by portfolio segment and class. Year ended December 31, 2019 2018 2017 Average Recognized Average Recognized Average Recognized recorded interest recorded interest recorded interest (dollars in thousands) investment income investment income investment income Commercial Owner occupied RE $ 2,739 128 2,784 142 2,255 104 Non-owner occupied RE 4,161 255 2,860 174 4,144 199 Construction - - - - - - Business 1,582 79 2,883 162 2,823 162 Total commercial 8,482 462 8,527 478 9,222 465 Consumer Real estate 2,771 131 2,930 151 2,047 69 Home equity 853 42 1,453 99 1,576 97 Construction - - - - - - Other 153 5 174 5 174 6 Total consumer 3,777 178 4,557 255 3,797 172 Total $ 12,259 640 13,084 733 13,019 637 Allowance for Loan Losses The following table summarizes the activity related to our allowance for loan losses: Year ended December 31, (dollars in thousands) 2019 2018 2017 Balance, beginning of period $ 15,762 15,523 14,855 Provision for loan losses 2,300 1,900 2,000 Loan charge-offs: Commercial Owner occupied RE (110 ) - - Non-owner occupied RE (239 ) (432 ) (589 ) Construction - - - Business (910 ) (695 ) (638 ) Total commercial (1,259 ) (1,127 ) (1,227 ) Consumer Real estate - (749 ) - Home equity (174 ) (217 ) (400 ) Construction - - - Other (82 ) (53 ) (11 ) Total consumer (256 ) (1,019 ) (411 ) Total loan charge-offs (1,515 ) (2,146 ) (1,638 ) Loan recoveries: Commercial Owner occupied RE - - - Non-owner occupied RE 2 132 119 Construction - - - Business 43 229 86 Total commercial 45 361 205 Consumer Real estate 37 5 86 Home equity 2 115 13 Construction - - - Other 11 4 2 Total consumer 50 124 101 Total recoveries 95 485 306 Net loan charge-offs (1,420 ) (1,661 ) (1,332 ) Balance, end of period $ 16,642 15,762 15,523 The following tables summarize the activity in the allowance for loan losses by our commercial and consumer portfolio segments. Year ended December 31, 2019 (dollars in thousands) Commercial Consumer Total Balance, beginning of period $ 10,768 4,994 15,762 Provision 1,818 482 2,300 Loan charge-offs (1,259 ) (256 ) (1,515 ) Loan recoveries 45 50 95 Net loan charge-offs (1,214 ) (206 ) (1,420 ) Balance, end of period $ 11,372 5,270 16,642 Year ended December 31, 2018 Commercial Consumer Total Balance, beginning of period $ 9,937 5,586 15,523 Provision 1,597 303 1,900 Loan charge-offs (1,127 ) (1,019 ) (2,146 ) Loan recoveries 361 124 485 Net loan charge-offs (766 ) (895 ) (1,661 ) Balance, end of period $ 10,768 4,994 15,762 The following table disaggregates our allowance for loan losses and recorded investment in loans by method of impairment evaluation. December 31, 2019 Allowance for loan losses Recorded investment in loans (dollars in thousands) Commercial Consumer Total Commercial Consumer Total Individually evaluated $ 992 446 1,438 8,308 3,705 12,013 Collectively evaluated 10,380 4,824 15,204 1,290,030 641,482 1,931,512 Total $ 11,372 5,270 16,642 1,298,338 645,187 1,943,525 December 31, 2018 Allowance for loan losses Recorded investment in loans Commercial Consumer Total Commercial Consumer Total Individually evaluated $ 1,528 486 2,014 8,089 4,483 12,572 Collectively evaluated 9,240 4,508 13,748 1,120,616 544,144 1,664,760 Total $ 10,768 4,994 15,762 1,128,705 548,627 1,677,332 |
Troubled Debt Restructurings
Troubled Debt Restructurings | 12 Months Ended |
Dec. 31, 2019 | |
Troubled Debt Restructurings [Abstract] | |
Troubled Debt Restructurings | NOTE 5 – Troubled Debt Restructurings At December 31, 2019, we had 19 loans totaling $9.3 million and at December 31, 2018 we had 26 loans totaling $9.3 million, which we considered as TDRs. The Company considers a loan to be a TDR when the debtor experiences financial difficulties and the Company grants a concession to the debtor that it would not normally consider. Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note. As part of our workout plan for individual loan relationships, we may restructure loan terms to assist borrowers facing challenges in the current economic environment. During 2019, we have added one commercial loan totaling $1.8 million as TDRs and removed nine loans from TDR status due to pay-offs or in accordance with our nonperforming loans and TDR policies. To date, we have restored five nonaccrual commercial loans previously classified as TDRs to accrual status. The following table summarizes the concession at the time of modification and the recorded investment in our TDRs before and after their modification. For the year ended December 31, 2019 Pre- Post- modification modification Renewals Reduced Converted Maturity Total outstanding outstanding deemed a or deferred to interest date number recorded recorded (dollars in thousands) concession payments only extensions of loans investment Investment Commercial Business 1 - - - 1 $ 1,823 $ 1,823 Total loans 1 1 - - 1 $ 1,823 $ 1,823 For the year ended December 31, 2018 Pre- Post- modification modification Renewals Reduced Converted Maturity Total outstanding outstanding deemed a or deferred to interest date number recorded recorded concession payments only extensions of loans investment Investment Commercial Owner occupied RE 1 - - - 1 $ 506 $ 592 Non-owner occupied RE - 1 - - 1 1,287 1,287 Business 4 - - - 4 1,207 1,532 Consumer Real estate 2 - - - 2 549 669 Total loans 7 1 - - 8 $ 3,549 $ 4,080 As of December 31, 2019 and 2018 there were no loans modified as TDRs for which there was a payment default (60 days past due) within 12 months of the restructuring date. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 6 – Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Components of property and equipment included in the consolidated balance sheets are as follows: December 31, (dollars in thousands) 2019 2018 Land $ 11,531 6,827 Buildings 24,136 24,064 Leasehold improvements 4,486 2,899 Furniture and equipment 10,219 8,890 Software 367 329 Construction in process 939 281 Accumulated depreciation and amortization (12,705 ) (10,860 ) Property and equipment, excluding ROU assets 38,973 32,430 ROU assets 19,505 - Total property and equipment $ 58,478 32,430 During 2019, the Company purchased property for the construction of a new bank headquarters in Greenville, South Carolina which resulted in a $4.7 million increase in land. Construction in process at December 31, 2019 included costs associated with the new bank headquarters, while the balance at December 31, 2018 included costs associated with the upfit of leased office space in Greensboro, North Carolina. Depreciation and amortization expense for the years ended December 31, 2019 and 2018 was $1.9 million and $1.8 million, respectively. Depreciation and amortization are charged to operations utilizing a straight-line method over the estimated useful lives of the assets. The estimated useful lives for the principal items follow: Type of Asset Life in Years Software 3 Furniture and equipment 5 to 7 Leasehold improvements 5 to 15 Buildings 40 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | NOTE 7 – Leases Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”. As of December 31, 2019, we lease seven of our offices under various operating lease agreements. The lease agreements have maturity dates ranging from February 2022 to October 2029, some of which include options for multiple five-year extensions. The weighted average remaining life of the lease term for these leases was 7.97 years as of December 31, 2019. The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term as of January 1, 2019 for leases that existed at adoption and as of the lease commencement date for leases subsequently entered in to. The weighted average discount rate for leases was 2.86% as of December 31, 2019. Total operating lease costs were $2.2 million and $1.8 million for the years ended December 31, 2019 and 2018, respectively. The right-of-use asset, included in property and equipment, and lease liabilities, included in other liabilities, were $19.5 million and $20.1 million as of December 31, 2019, respectively. The right-of-use asset and lease liability are recognized at lease commencement by calculating the present value of lease payments over the lease term. Maturities of lease liabilities as of December 31, 2019 were as follows: (dollars in thousands) Operating 2020 $ 2,103 2021 2,152 2022 1,400 2023 1,273 2024 1,305 Thereafter 17,404 Total undiscounted lease payments 25,637 Discount effect of cash flows 5,549 Total lease liability $ 20,088 |
Other Real Estate Owned
Other Real Estate Owned | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
Other Real Estate Owned | NOTE 8 – Other Real Estate Owned Other real estate owned is comprised of real estate acquired in settlement of loans and is included in other assets on the balance sheet. At December 31, 2019 and 2018, there was no other real estate owned. The following summarizes the activity in the real estate acquired in settlement of loans portion of other real estate owned: For the year ended December 31, (dollars in thousands) 2019 2018 Balance, beginning of year $ - $ 242 Additions - - Sales - (125 ) Write-downs, net - (117 ) Balance, end of year $ - $ - |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Deposits | NOTE 9 – Deposits The following is a detail of the deposit accounts: December 31, (dollars in thousands) 2019 2018 Noninterest bearing $ 397,331 346,570 Interest bearing: NOW accounts 228,680 186,795 Money market accounts 898,923 730,765 Savings 16,258 15,486 Time, less than $100,000 47,941 63,073 Time, $100,000 and over 286,991 305,447 Total deposits $ 1,876,124 1,648,136 At December 31, 2019 and 2018, time deposits greater than $250,000 were $220.1 million and $214.0 million, respectively. Also, at December 31, 2019 and 2018, the Company had approximately $67.4 million and $79.3 million, respectively, of time deposits that were obtained outside of the Company’s primary market. Interest expense on time deposits greater than $100,000 was $6.9 million for the year ended December 31, 2019, $4.7 million for the year ended December 31, 2018, and $2.7 million for the year ended December 31, 2017. At December 31, 2019 the scheduled maturities of certificates of deposit are as follows: (dollars in thousands) 2020 $ 277,342 2021 38,528 2022 10,783 2023 6,133 2024 and after 2,146 $ 334,932 |
Federal Home Loan Bank Advances
Federal Home Loan Bank Advances and Other Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Federal Home Loan Bank Advances and Other Borrowings [Abstract] | |
Federal Home Loan Bank Advances and Other Borrowings | NOTE 10 – Federal Home Loan Bank Advances and Other Borrowings At December 31, 2019 and 2018, the Company had $110.0 million and $50.0 million in FHLB Advances, respectively. The FHLB advances are secured with approximately $716.0 million of mortgage loans and $6.4 million of stock in the FHLB. During the fourth quarter of 2019, the Company paid off $25.0 million of fixed rate FHLB advances with an average cost of 3.36% and incurred a loss on extinguishment of debt of $1.5 million. Listed below is a summary of the terms and maturities of the advances outstanding at December 31, 2019 and 2018. The $110.0 million outstanding at December 31, 2019 was at a variable rate. December 31, (dollars in thousands) 2019 2018 Maturity Amount Rate Amount Rate December 31, 2019 $ - -% $ 25,000 2.65 % July 7, 2022 - -% 10,000 3.11 % July 7, 2023 - -% 15,000 3.53 % December 31, 2020 110,000 1.78 % - -% $ 110,000 1.78 % $ 50,000 3.01 % The Company also has an unsecured, interest only line of credit for $15 million with another financial institution which was unused at December 31, 2019. The line of credit bears interest at LIBOR plus 2.50% and matures on June 30, 2020. The loan agreement contains various financial covenants related to capital, earnings and asset quality. |
Subordinated Debentures
Subordinated Debentures | 12 Months Ended |
Dec. 31, 2019 | |
Junior Subordinated Debentures [Abstract] | |
Subordinated Debentures | NOTE 11 – Subordinated Debentures On June 26, 2003, Greenville First Statutory Trust I (a non-consolidated subsidiary) issued $6.0 million floating rate trust preferred securities with a maturity of June 26, 2033. At December 31, 2019, the interest rate was 5.05% and is indexed to the 3-month LIBOR rate plus 3.10% and adjusted quarterly. The Company received from the Trust the $6.0 million proceeds from the issuance of the securities and the $186,000 initial proceeds from the capital investment in the Trust, and accordingly has shown the funds due to the Trust as $6.2 million junior subordinated debentures. On December 22, 2005, Greenville First Statutory Trust II (a non-consolidated subsidiary) issued $7.0 million floating rate trust preferred securities with a maturity of December 22, 2035. At December 31, 2019, the interest rate was 3.40% and is indexed to the 3-month LIBOR rate plus 1.44% and adjusted quarterly. The Company received from the Trust the $7.0 million proceeds from the issuance of the securities and the $217,000 initial proceeds from the capital investment in the Trust, and accordingly has shown the funds due to the Trust as $7.2 million junior subordinated debentures. The current regulatory rules allow certain amounts of junior subordinated debentures to be included in the calculation of regulatory capital. However, provisions within the Dodd-Frank Act prohibit institutions that had more than $15 billion in assets on December 31, 2009 from including trust preferred securities as Tier 1 capital beginning in 2013, with one-third phased out over the two years ending in 2015. Financial institutions with less than $15 billion in total assets, such as the Bank, may continue to include their trust preferred securities issued prior to May 19, 2010 in Tier 1 capital, but cannot include in Tier 1 capital trust preferred securities issued after such date. On September 30, 2019, the Company entered into Subordinated Note Purchase Agreements (collectively, the “Purchase Agreement”) with certain qualified institutional buyers and accredited investors (the “Purchasers”) pursuant to which the Company sold and issued $23.0 million in aggregate principal amount of its 4.75% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”). The Notes were offered and sold by the Company to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and the provisions of Regulation D promulgated thereunder (the “Private Placement”). The Company intends to use the proceeds from the offering, which were approximately $22.5 million, for general corporate purposes, including providing capital to the Bank and supporting organic growth. The Notes have a ten-year term and, from and including the date of issuance to but excluding September 30, 2024, will bear interest at a fixed annual rate of 4.75%, payable semi-annually in arrears, for the first five years of the term. From and including September 30, 2024 to but excluding the maturity date or early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to a benchmark rate (which is expected to be Three-Month Term SOFR) plus 340.8 basis points, payable quarterly in arrears. As provided in the Notes, the interest rate on the Notes during the applicable floating rate period may be determined based on a rate other than Three-Month Term SOFR. The Notes are redeemable, in whole or in part, on September 30, 2024, on any interest payment date thereafter, and at any time upon the occurrence of certain events. The Purchase Agreement contains certain customary representations, warranties and covenants made by the Company, on the one hand, and the Purchasers, severally and not jointly, on the other hand. On September 30, 2019, in connection with the sale and issuance of the Notes, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchasers. Under the terms of the Registration Rights Agreement, the Company has agreed to take certain actions to provide for the exchange of the Notes for subordinated notes that are registered under the Securities Act and have substantially the same terms as the Notes (the “Exchange Notes”). Under certain circumstances, if the Company fails to meet its obligations under the Registration Rights Agreement, it would be required to pay additional interest to the holders of the Notes. The Notes were issued under an Indenture, dated September 30, 2019 (the “Indenture”), by and between the Company and UMB Bank, National Association, as trustee. The Notes are not subject to any sinking fund and are not convertible into or, other than with respect to the Exchange Notes, exchangeable for any other securities or assets of the Company or any of its subsidiaries. The Notes are not subject to redemption at the option of the holder. The Notes are unsecured, subordinated obligations of the Company only and are not obligations of, and are not guaranteed by, any subsidiary of the Company. The Notes rank junior in right to payment to the Company’s current and future senior indebtedness. The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes for the Company. |
Unused Lines of Credit
Unused Lines of Credit | 12 Months Ended |
Dec. 31, 2019 | |
Unused Lines of Credit [Abstract] | |
Unused Lines of Credit | NOTE 12 – Unused Lines of Credit At December 31, 2019, the Company had four lines of credit to purchase federal funds that totaled $72.0 million which were unused at December 31, 2019. The lines of credit are available on a one to 14 day basis for general corporate purposes of the Company. The lender has reserved the right to withdraw the line at their option. The Company has an additional line of credit with the FHLB to borrow funds, subject to a pledge of qualified collateral. The Company has collateral that would support approximately $312.4 million in additional borrowings with the FHLB at December 31, 2019. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | NOTE 13 – Derivative Financial Instruments The Company utilizes derivative financial instruments primarily to hedge its exposure to changes in interest rates. All derivative financial instruments are recognized as either assets or liabilities and measured at fair value. The Company accounts for all of its derivatives as free-standing derivatives and does not designate any of these instruments for hedge accounting. Therefore, the gain or loss resulting from the change in the fair value of the derivative is recognized in the Company’s statement of income during the period of change. The Company enters into commitments to originate residential mortgage loans held for sale, at specified interest rates and within a specified period of time, with clients who have applied for a loan and meet certain credit and underwriting criteria (interest rate lock commitments). These interest rate lock commitments (“IRLCs”) meet the definition of a derivative financial instrument and are reflected in the balance sheet at fair value with changes in fair value recognized in current period earnings. Unrealized gains and losses on the IRLCs are recorded as derivative assets and derivative liabilities, respectively, and are measured based on the value of the underlying mortgage loan, quoted mortgage-backed securities (“MBS”) prices and an estimate of the probability that the mortgage loan will fund within the terms of the interest rate lock commitment, net of estimated commission expenses. The Company manages the interest rate and price risk associated with its outstanding IRLCs and mortgage loans held for sale by entering into derivative instruments such as forward sales of MBS. Management expects these derivatives will experience changes in fair value opposite to changes in fair value of the IRLCs and mortgage loans held for sale, thereby reducing earnings volatility. The Company takes into account various factors and strategies in determining the portion of the mortgage pipeline (IRLCs and mortgage loans held for sale) it wants to economically hedge. The following table summarizes the Company’s outstanding financial derivative instruments at December 31, 2019 and December 31, 2018. December 31, 2019 Fair Value (dollars in thousands) Notional Balance Sheet Location Asset/(Liability) Mortgage loan interest rate lock commitments $ 26,446 Other assets $ 344 MBS forward sales commitments 20,500 Other liabilities (39 ) Total derivative financial instruments $ 46,946 $ 305 December 31, 2018 Fair Value Notional Balance Sheet Location Asset/(Liability) Mortgage loan interest rate lock commitments $ 20,552 Other assets $ 345 MBS forward sales commitments 11,750 Other liabilities (121 ) Total derivative financial instruments $ 32,302 $ 224 |
Fair Value Accounting
Fair Value Accounting | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Accounting | NOTE 14 – Fair Value Accounting FASB ASC 820, “Fair Value Measurement and Disclosures Topic,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 – Quoted market price in active markets Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include certain debt and equity securities that are traded in an active exchange market. Level 2 – Significant other observable inputs Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include fixed income securities and mortgage-backed securities that are held in the Company’s available-for-sale portfolio and valued by a third-party pricing service, as well as certain impaired loans. Level 3 – Significant unobservable inputs Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. These methodologies may result in a significant portion of the fair value being derived from unobservable data. Fair Value of Financial Instruments Financial instruments require disclosure of fair value information, whether or not recognized in the consolidated balance sheets, when it is practical to estimate the fair value. A financial instrument is defined as cash, evidence of an ownership interest in an entity or a contractual obligation which requires the exchange of cash. Certain items are specifically excluded from the disclosure requirements, including the Company’s common stock, premises and equipment and other assets and liabilities. The following is a description of valuation methodologies used to estimate fair value for assets recorded at fair value. Fair value approximates carrying value for the following financial instruments due to the short-term nature of the instrument: cash and due from banks, federal funds sold, other investments, federal funds purchased, and securities sold under agreement to repurchase. Investment Securities Securities available for sale are valued on a recurring basis at quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange or U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities and debentures issued by government sponsored entities, municipal bonds and corporate debt securities. In certain cases where there is limited activity or less transparency around inputs to valuations, securities are classified as Level 3 within the valuation hierarchy. Securities held to maturity are valued at quoted market prices or dealer quotes similar to securities available for sale. The carrying value of Other Investments, such as Federal Reserve Bank and FHLB stock, approximates fair value based on their redemption provisions. Mortgage Loans Held for Sale Loans held for sale include mortgage loans which are saleable into the secondary mortgage markets and their fair values are estimated using observable quoted market or contracted prices or market price equivalents, which would be used by other market participants. These saleable loans are considered Level 2. Impaired Loans The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan may be considered impaired and an allowance for loan losses may be established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures the impairment in accordance with FASB ASC 310, “Receivables.” The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. In accordance with FASB ASC 820, “Fair Value Measurement and Disclosures,” impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company considers the impaired loan as nonrecurring Level 2. The Company’s current loan and appraisal policies require the Company to obtain updated appraisals on an “as is” basis at renewal, or in the case of an impaired loan, on an annual basis, either through a new external appraisal or an appraisal evaluation. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company considers the impaired loan as nonrecurring Level 3. The fair value of impaired loans may also be estimated using the present value of expected future cash flows to be realized on the loan, which is also considered a Level 3 valuation. These fair value estimates are subject to fluctuations in assumptions about the amount and timing of expected cash flows as well as the choice of discount rate used in the present value calculation. Other Real Estate Owned OREO, consisting of properties obtained through foreclosure or in satisfaction of loans, is reported at the lower of cost or fair value, determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources, adjusted for estimated selling costs (Level 2). At the time of foreclosure, any excess of the loan balance over the fair value of the real estate held as collateral is treated as a charge against the allowance for loan losses. Gains or losses on sale and generally any subsequent adjustments to the value are recorded as a component of real estate owned activity. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company considers the OREO as nonrecurring Level 3. Derivative Financial Instruments The Company estimates the fair value of IRLCs based on the value of the underlying mortgage loan, quoted MBS prices and an estimate of the probability that the mortgage loan will fund within the terms of the IRLC, net of commission expenses (Level 2). The Company estimates the fair value of forward sales commitments based on quoted MBS prices (Level 2). Assets and Liabilities Recorded at Fair Value on a Recurring Basis The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis. December 31, 2019 (dollars in thousands) Level 1 Level 2 Level 3 Total Assets Securities available for sale: US government agencies $ - 499 - 499 SBA securities - 531 - 531 State and political subdivisions - 4,184 - 4,184 Asset-backed securities - 13,167 - 13,167 Mortgage-backed securities - 49,313 - 49,313 Mortgage loans held for sale - 27,046 - 27,046 Mortgage loan interest rate lock commitments - 344 - 344 Total assets measured at fair value on a recurring basis $ - 95,084 - 95,084 Liabilities MBS forward sales commitments $ - 39 - 39 Total liabilities measured at fair value on a recurring basis $ - 39 - 39 December 31, 2018 (dollars in thousands) Level 1 Level 2 Level 3 Total Assets Securities available for sale: US government agencies $ - 8,782 - 8,782 SBA securities - 3,525 - 3,525 State and political subdivisions - 8,356 - 8,356 Asset-backed securities - 9,558 - 9,558 Mortgage-backed securities - 44,684 - 44,684 Mortgage loans held for sale - 9,241 - 9,241 Mortgage loan interest rate lock commitments - 345 - 345 Total assets measured at fair value on a recurring basis $ - 84,491 - 84,491 Liabilities MBS forward sales commitments $ - 121 - 121 Total liabilities measured at fair value on a recurring basis $ - 121 - 121 Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company is predominantly an asset based lender with real estate serving as collateral on more than 83% of loans as of December 31, 2019. Loans which are deemed to be impaired are valued net of the allowance for loan losses, and other real estate owned is valued at the lower of cost or net realizable value of the underlying real estate collateral. Such market values are generally obtained using independent appraisals, which the Company considers to be level 2 inputs. The tables below present the recorded amount of assets and liabilities measured at fair value on a nonrecurring basis. December 31, 2019 (dollars in thousands) Level 1 Level 2 Level 3 Total Assets Impaired loans $ - 5,634 4,941 10,575 Total assets measured at fair value on a nonrecurring basis $ - 5,634 4,941 10,575 December 31, 2018 Level 1 Level 2 Level 3 Total Assets Impaired loans $ - 2,190 8,368 10,558 Total assets measured at fair value on a nonrecurring basis $ - 2,190 8,368 10,558 The Company had no liabilities carried at fair value or measured at fair value on a nonrecurring basis. For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows: Valuation Technique Significant Unobservable Inputs Range of Inputs Impaired loans Appraised Value/ Discounts to appraisals or cash flows for estimated holding and/or selling costs or age of appraisal 0-25% Other real estate owned Appraised Value/ Discounts to appraisals for estimated holding or selling costs 0-25% Fair Value of Financial Instruments Financial instruments require disclosure of fair value information, whether or not recognized in the consolidated balance sheets, when it is practical to estimate the fair value. A financial instrument is defined as cash, evidence of an ownership interest in an entity or a contractual obligation which requires the exchange of cash. Certain items are specifically excluded from the disclosure requirements, including the Company’s common stock, premises and equipment and other assets and liabilities. The following is a description of valuation methodologies used to estimate fair value for certain other financial instruments. Fair value approximates carrying value for the following financial instruments due to the short-term nature of the instrument: cash and due from banks, federal funds sold, other investments, federal funds purchased, and securities sold under agreement to repurchase. Loans – The valuation of loans held for investment is estimated using the exit price notion which incorporates factors, such as enhanced credit risk, illiquidity risk and market factors that sometimes exist in exit prices in dislocated markets. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company’s loan portfolio is initially fair valued using a segmented approach, using the eight categories as disclosed in Note 4 – Loans and Allowance for Loan Losses. Loans are considered a Level 3 classification. Deposits – Fair value for demand deposit accounts and interest-bearing accounts with no fixed maturity date is equal to the carrying value. The fair value of certificate of deposit accounts are estimated by discounting cash flows from expected maturities using current interest rates on similar instruments. FHLB Advances and Other Borrowings – Fair value for FHLB advances and other borrowings are estimated by discounting cash flows from expected maturities using current interest rates on similar instruments. Subordinated debentures – Fair value for subordinated debentures are estimated by discounting cash flows from expected maturities using current interest rates on similar instruments. The Company has used management’s best estimate of fair value based on the above assumptions. Thus, the fair values presented may not be the amounts that could be realized in an immediate sale or settlement of the instrument. In addition, any income taxes or other expenses, which would be incurred in an actual sale or settlement, are not taken into consideration in the fair value presented. The estimated fair values of the Company’s financial instruments at December 31, 2019 and 2018 are as follows: December 31, 2019 (dollars in thousands) Carrying Fair Level 1 Level 2 Level 3 Financial Assets: Other investments, at cost $ 6,948 6,948 - - 6,948 Loans (1) 1,914,870 1,900,216 - - 1,900,216 Financial Liabilities: Deposits 1,876,124 1,772,121 - 1,772,121 - FHLB and other borrowings 110,000 109,737 - 109,737 - Subordinated debentures 35,890 33,250 - 33,250 - December 31, 2018 (dollars in thousands) Carrying Fair Level 1 Level 2 Level 3 Financial Assets: Other investments, at cost $ 4,121 4,121 - - 4,121 Loans (1) 1,648,998 1,618,618 - - 1,618,618 Financial Liabilities: Deposits 1,648,136 1,515,123 - 1,515,123 - FHLB and other borrowings 50,000 50,147 - 50,147 - Subordinated debentures 13,403 14,807 - 14,807 - (1) Carrying amount is net of the allowance for loan losses and previously presented impaired loans. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per common share | |
Earnings Per Common Share | NOTE 15 – Earnings Per Common Share The following schedule reconciles the numerators and denominators of the basic and diluted earnings per share computations for the years ended December 31, 2019, 2018 and 2017. Dilutive common shares arise from the potentially dilutive effect of the Company’s stock options and warrants that are outstanding. The assumed conversion of stock options and warrants can create a difference between basic and dilutive net income per common share. At December 31, 2019, 2018 and 2017, options totaling 94,885, 195,425, and 107,015, respectively, were anti-dilutive in the calculation of earnings per share as their exercise price exceeded the fair market value. These options were therefore excluded from the diluted earnings per share calculation. December 31, (dollars in thousands, except share data) 2019 2018 2017 Numerator: Net income $ 27,858 $ 22,289 13,045 Net income available to common shareholders $ 27,858 $ 22,289 13,045 Denominator: Weighted-average common shares outstanding - basic 7,528,283 7,384,200 7,005,703 Common stock equivalents 244,261 353,295 387,674 Weighted-average common shares outstanding - diluted 7,772,544 7,737,495 7,393,377 Earnings per common share: Basic $ 3.70 $ 3.02 1.86 Diluted $ 3.58 $ 2.88 1.76 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16 – Commitments and Contingencies The Company has entered into a three year employment agreement with its chief executive officer and a two year employment agreement with its president and with 12 executive vice presidents. These agreements also include a) an incentive program, b) a stock option plan, c) a one-year non-compete agreement upon termination and a severance payment equal to one year of compensation. The total estimated aggregate salary commitment is approximately $3.3 million. The Company has an agreement with a data processor which expires in 2023 to provide certain item processing, electronic banking, and general ledger processing services. Components of this contract vary based on transaction and account volume, monthly charges and certain termination fees. The Company may be subject to litigation and claims in the normal course of business. As of December 31, 2019, management believes there is no material litigation pending. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 17 – Income Taxes The components of income tax expense were as follows: For the years ended December 31, (dollars in thousands) 2019 2018 2017 Current income taxes: Federal $ 6,791 5,536 7,139 State 1,250 990 573 Total current tax expense 8,041 6,526 7,712 Deferred income tax expense (benefit) (420 ) (125 ) 2,904 Income tax expense $ 7,621 6,401 10,616 The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory tax rate: For the years ended December 31, (dollars in thousands) 2019 2018 2017 Tax expense at statutory rate $ 7,451 6,025 8,281 Effect of state income taxes, net of federal benefit 987 782 372 Exempt income (26 ) (34 ) (146 ) Effect of change in federal tax rate - - 2,441 Effect of stock-based compensation (693 ) (248 ) (2 ) Other (98 ) (124 ) (330 ) Income tax expense $ 7,621 6,401 10,616 Income tax expense for the year ended December 31, 2017 was impacted by the adjustment of our deferred tax assets and liabilities related to the reduction in the U.S. federal statutory income tax rate to 21% under the Tax Act, which was enacted on December 22, 2017. As a result of the new law, we recognized a provisional net tax expense totaling $2.4 million, as noted in the table above. The components of the deferred tax assets and liabilities are as follows: December 31, (dollars in thousands) 2019 2018 Deferred tax assets: Allowance for loan losses $ 3,495 3,310 Unrealized loss on securities available for sale 79 244 Net deferred loan fees 697 592 Deferred compensation 1,404 1,280 Sale of real estate owned - 128 Lease liabilities 4,219 - Other 234 130 10,128 5,684 Deferred tax liabilities: Property and equipment 1,398 1,433 Hedging transactions 227 112 Prepaid expenses 132 107 Right-of-use assets 4,096 - Other - 12 5,853 1,664 Net deferred tax asset $ 4,275 4,020 The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 18 – Related Party Transactions Certain directors, executive officers, and companies with which they are affiliated, are clients of and have banking transactions with the Company in the ordinary course of business. These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the lender. A summary of loan transactions with directors and executive officers, including their affiliates is as follows: For the years ended December 31, (dollars in thousands) 2019 2018 Balance, beginning of year $ 13,969 15,276 New loans 6,709 5,686 Less loan payments (9,787 ) (6,993 ) Balance, end of year $ 10,891 13,969 Deposits by executive officers and directors and their related interests at December 31, 2019 and 2018, were $2.5 million and $2.7 million, respectively. The Company has a land lease with a director on the property for a branch office, with monthly payments of $8,256. In addition, the Company periodically enters into various consulting agreements with the director for development, administration and advisory services related to the purchase of property and construction of current and future branch office sites, including the development of the new bank headquarters in Greenville, South Carolina. Payments totaling $600,000 were made to the director for these services during the year ended December 31, 2019. Also, the Company has previously contracted with the director to provide property management services for its four offices in the Greenville market. The Company paid the director approximately $21,000, and $38,000 for these services during 2018 and 2017, respectively. The Company also utilizes employment recruiting services from a vendor for which one of the Company’s directors is an owner and serves as the chairman of the board. The Company paid approximately $38,000 to the vendor for the year ended December 31, 2018. The Company is of the opinion that the lease payments, consulting fees, and recruiting costs represent market costs that could have been obtained in similar “arms length” transactions. |
Financial Instruments With Off-
Financial Instruments With Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2019 | |
Financial Instruments With Off-Balance Sheet Risk [Abstract] | |
Financial Instruments With Off-Balance Sheet Risk | NOTE 19 – Financial Instruments With Off-Balance Sheet Risk In the ordinary course of business, and to meet the financing needs of its clients, the Company is a party to various financial instruments with off-balance sheet risk. These financial instruments, which include commitments to extend credit and standby letters of credit, involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheets. The contract amount of those instruments reflects the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amounts of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a client as long as there is no violation of any material condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. At December 31, 2019, unfunded commitments to extend credit were approximately $426.6 million, of which $105.0 million is at fixed rates and $321.6 million is at variable rates. At December 31, 2018, unfunded commitments to extend credit were approximately $399.4 million, of which $130.5 million is at fixed rates and $269.0 million is at variable rates. The Company evaluates each client’s credit-worthiness 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 borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, and commercial and residential real estate. At December 31, 2019 and 2018, there was a $9.9 million and $10.0 million commitment, respectively, under letters of credit. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients. Collateral varies but may include accounts receivable, inventory, equipment, marketable securities and property. Since most of the letters of credit are expected to expire without being drawn upon, they do not necessarily represent future cash requirements. The fair value of off balance sheet lending commitments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties credit standing. The total fair value of such instruments is not material. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plan [Abstract] | |
Employee Benefit Plan | NOTE 20 – Employee Benefit Plan On January 1, 2000, the Company adopted the Southern First Bancshares, Inc. Profit Sharing and 401(k) Plan for the benefit of all eligible employees. The Company contributes to the Plan annually upon approval by the Board of Directors. Contributions made to the Plan for the years ended December 31, 2019, 2018, and 2017 amounted to $693,000, $587,000, and $476,000, respectively. The Company also provides a nonqualified deferred compensation plan for 24 executive officers in the form of a Supplemental Executive Retirement Plan (“SERP”). The SERP provides retirement income for these officers. As of December 31, 2019 and 2018, the Company had an accrued benefit obligation of $6.7 million and $6.1 million, respectively. The Company incurred expenses related to this plan of $657,000, $940,000, and $792,000 in 2019, 2018, and 2017, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | NOTE 21 – Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee directors. Compensation cost is measured as the fair value of these awards on their date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used as the fair value of restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period for stock option and restricted stock awards. The Company’s stock incentive programs are long-term retention programs intended to attract, retain, and provide incentives for key employees and non-employee directors in the form of incentive and non-qualified stock options and restricted stock. Stock-based compensation expense was recorded as follows: For the years ended December 31, (dollars in thousands) 2019 2018 2017 Stock option expense $ 1,270 1,183 959 Restricted stock grant expense 428 319 299 Total stock-based compensation expense $ 1,698 1,502 1,258 Stock Options On May 18, 2010, the Company adopted the 2010 Incentive Plan, making available for issuance 366,025 stock options (adjusted for the 10% stock dividends in 2013, 2012, and 2011). The options may be exercised at an exercise price per share based on the fair market value and determined on the date of grant and expire 10 years from the grant date. On May 20, 2014, the Company amended the 2010 Incentive Plan to add an additional 200,000 shares of common stock to be issuable as stock options, for a total of 566,025 shares. As of December 31, 2019, there were 9,275 options available for grant under the 2010 Incentive Plan. On May 17, 2016, the Company adopted the 2016 Equity Incentive Plan, making available for issuance 400,000 stock options. The options may be exercised at an exercise price per share based on the fair market value and determined on the date of grant and expire 10 years from the grant date. As of December 31, 2019, there were 174,715 options available for grant under the 2016 Equity Incentive Plan. A summary of the status of the stock option plan and changes for the period is presented below: For the years ended December 31, 2019 2018 2017 Weighted Weighted Weighted Weighted Average Weighted Average Weighted Average average Remaining average Remaining average Remaining exercise Contractual exercise Contractual exercise Contractual Shares price Life Shares price Life Shares price Life Outstanding at beginning of year 648,311 $ 20.74 662,841 $ 15.70 642,203 $ 11.77 Granted 101,350 32.81 94,700 43.13 110,950 35.34 Exercised (191,497 ) 9.24 (105,630 ) 8.51 (74,437 ) 9.48 Forfeited or expired (16,750 ) 34.01 (3,600 ) 40.03 (15,875 ) 23.49 Outstanding at end of year 541,414 $ 26.65 6.3 years 648,311 $ 20.74 5.6 years 662,841 $ 15.70 5.6 years Options exercisable at year-end 305,991 $ 20.00 4.9 years 404,851 $ 12.58 4.0 years 419,766 $ 9.20 4.1 years Weighted average fair value of options granted during the year $ 11.81 $ 16.76 $ 14.14 Shares available for grant 183,990 270,090 359,690 The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options) of 541,414 and 648,311 stock options outstanding at December 31, 2019 and 2018 was $8.6 million and $8.7 million, respectively. The aggregate intrinsic value of 305,991 and 404,851 stock options exercisable at December 31, 2019 and 2018 was $6.9 million and $8.0 million, respectively. The fair value of the option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for grants: 2019 2018 2017 Dividend yield - - - Expected life 7 years 7 years 7 years Expected volatility 28.21% 32.07% 34.63% Risk-free interest rate 2.59% 2.50% 2.04% At December 31, 2019, there was $2.0 million of total unrecognized compensation cost related to nonvested stock option grants. The cost is expected to be recognized over a weighted-average period of 2.4 years. The fair value of stock option grants that vested during 2019, 2018, and 2017 was $1.2 million, $973,000 and $775,000, respectively. Restricted Stock Grants On May 17, 2016, the Company adopted the 2016 Equity Incentive Plan which included a provision for the issuance of 50,000 shares of common stock to be issuable as restricted stock grants. As of December 31, 2019, 32,349 shares of restricted stock were available for grant. Shares of restricted stock granted to employees under the stock plans are subject to restrictions as to continuous employment for a specified time period following the date of grant. During this period, the holder is entitled to full voting rights and dividends. A summary of the status of the Company’s nonvested restricted stock and changes for the years ended December 31, 2019, 2018, and 2017 is as follows: December 31, 2019 2018 2017 Weighted Weighted Weighted Average Average Average Restricted Grant-Date Restricted Grant-Date Restricted Grant-Date Shares Fair Value Shares Fair Value Shares Fair Value Nonvested at beginning of year 29,625 $ 34.00 25,000 $ 26.43 36,125 $ 20.13 Granted 14,700 33.64 13,000 42.87 6,500 35.14 Vested (10,375 ) 31.61 (8,375 ) 25.17 (17,625 ) 16.73 Forfeited (1,125 ) 28.03 - - - - Nonvested at end of year 32,825 $ 34.78 29,625 $ 34.00 25,000 $ 26.43 At December 31, 2019, there was $793,000 of total unrecognized compensation cost related to nonvested restricted stock grants. The cost is expected to be recognized over a weighted-average period of 2.6 years. |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2019 | |
Dividends [Abstract] | |
Dividends | NOTE 22 – Dividends The ability of the Company to pay cash dividends is dependent upon receiving cash in the form of dividends from the Bank. The dividends that may be paid by the Bank to the Company are subject to legal limitations and regulatory capital requirements. Also, the payment of cash dividends on the Company's common stock by the Company in the future will be subject to certain other legal and regulatory limitations (including the requirement that the Company’s capital be maintained at certain minimum levels) and will be subject to ongoing review by banking regulators. The Federal Reserve has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the Federal Reserve’s policies provide that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Matters [Abstract] | |
Regulatory Matters | NOTE 23 – Regulatory Matters The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. The capital rules require banks and bank holding companies (other than bank holding companies, such as the Company, that qualify under the Federal Reserve’s Small Bank Holding Company Policy Statement) to maintain a minimum total risked-based capital ratio of at least 8%, a total Tier 1 capital ratio of at least 6%, a minimum common equity Tier 1 capital ratio of at least 4.5%, and a leverage ratio of at least 4%. Bank holding companies and banks are also required to hold a capital conservation buffer of common equity Tier 1 capital of 2.5% to avoid limitations on capital distributions and discretionary executive compensation payments. The capital conservation buffer will be phased in incrementally over time, becoming fully effective on January 1, 2019, and will consist of an additional amount of common equity equal to 2.5% of risk-weighted assets. To be considered “well-capitalized” for purposes of certain rules and prompt corrective action requirements, the Bank must maintain a minimum total risked-based capital ratio of at least 10%, a total Tier 1 capital ratio of at least 8%, a common equity Tier 1 capital ratio of at least 6.5%, and a leverage ratio of at least 5%. As of December 31, 2019, our capital ratios exceed these ratios and we remain “well capitalized.” The following table summarizes the capital amounts and ratios of the Bank and the Company and the regulatory minimum requirements at December 31, 2019 and 2018. To be well capitalized For capital under prompt adequacy purposes corrective action Actual minimum provisions minimum (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2019 The Bank Total Capital (to risk weighted assets) $ 250,847 13.31% $ 150,807 8.00% $ 188,510 10.00% Tier 1 Capital (to risk weighted assets) 234,205 12.42% 113,106 6.00% 150,807 8.00% Common Equity Tier 1 Capital (to risk weighted assets) 234,205 12.42% 84,829 4.50% 122,531 6.50% Tier 1 Capital (to average assets) 234,205 10.80% 86,772 4.00% 108,465 5.00% The Company (1) Total Capital (to risk weighted assets) 258,800 13.73% 150,807 8.00% n/a n/a Tier 1 Capital (to risk weighted assets) 219,158 11.63% 113,106 6.00% n/a n/a Common Equity Tier 1 Capital (to risk weighted assets) 206,158 10.94% 84,829 4.50% n/a n/a Tier 1 Capital (to average assets) 219,158 10.10% 86,772 4.00% n/a n/a To be well capitalized For capital under prompt adequacy purposes corrective action Actual minimum provisions minimum (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018 The Bank Total Capital (to risk weighted assets) $ 198,195 12.16% $ 130,368 8.00% $ 162,960 10.00% Tier 1 Capital (to risk weighted assets) 182,433 11.20% 97,776 6.00% 130,368 8.00% Common Equity Tier 1 Capital (to risk weighted assets) 182,433 11.20% 73,332 4.50% 105,924 6.50% Tier 1 Capital (to average assets) 182,433 9.84% 74,126 4.00% 92,658 5.00% The Company (1) Total Capital (to risk weighted assets) 203,595 12.49% 130,368 8.00% n/a n/a Tier 1 Capital (to risk weighted assets) 187,833 11.53% 97,776 6.00% n/a n/a Common Equity Tier 1 Capital (to risk weighted assets) 174,833 10.73% 73,332 4.50% n/a n/a Tier 1 Capital (to average assets) 187,833 10.14% 74,126 4.00% n/a n/a (1) Under the Federal Reserve’s Small Bank Holding Company Policy Statement, the Company is not subject to the minimum capital adequacy and capital conservation buffer capital requirements at the holding company level, unless otherwise advised by the Federal Reserve (such capital requirements are applicable only at the Bank level). Although the minimum regulatory capital requirements are not applicable to the Company, we calculate these ratios for our own planning and monitoring purposes. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segments | NOTE 24 – Reportable Segments The Company’s reportable segments represent the distinct product lines the Company offers and are viewed separately for strategic planning purposes by management. The three segments include Commercial and Retail Banking, Mortgage Banking, and Corporate Operations. The following schedule presents financial information for each reportable segment. Year ended December 31, 2019 Commercial and Retail Mortgage Corporate (dollars in thousands) Banking Banking Operations Eliminations Consolidated Interest income $ 91,923 729 13 (13 ) 92,652 Interest expense 24,467 - 929 (13 ) 25,383 Net interest income (loss) 67,456 729 (916 ) - 67,269 Provision for loan losses 2,300 - - - 2,300 Noninterest income 5,060 9,923 - - 14,983 Noninterest expense 37,798 6,435 240 - 44,473 Net income (loss) before taxes 32,418 4,217 (1,156 ) - 35,479 Income tax provision (benefit) 6,978 886 (243 ) - 7,621 Net income (loss) $ 25,440 3,331 (913 ) - 27,858 Total assets $ 2,239,430 27,356 242,069 (241,660 ) 2,267,195 Year ended December 31, 2018 Commercial and Retail Mortgage Banking Banking Corporate Eliminations Consolidated Interest income $ 76,282 375 9 (9 ) 76,657 Interest expense 15,922 - 592 (9 ) 16,505 Net interest income (loss) 60,360 375 (583 ) - 60,152 Provision for loan losses 1,900 - - - 1,900 Noninterest income 4,657 5,544 - - 10,201 Noninterest expense 35,371 4,152 240 - 39,763 Net income (loss) before taxes 27,746 1,767 (823 ) - 28,690 Income tax expense (benefit) 6,185 389 (173 ) - 6,401 Net income (loss) $ 21,561 1,378 (650 ) - 22,289 Total assets $ 1,905,474 8,602 187,327 (200,789 ) 1,900,614 Commercial and retail banking. The Company’s primary business is to provide traditional deposit and lending products and services to its commercial and retail banking clients. Mortgage banking. The mortgage banking segment provides mortgage loan origination services for loans that will be sold in the secondary market to investors. Corporate operations. Corporate operations is comprised primarily of compensation and benefits for certain members of management and interest on parent company debt. |
Parent Company Financial Inform
Parent Company Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Information | NOTE 25 – Parent Company Financial Information Following is condensed financial information of Southern First Bancshares, Inc. (parent company only): Condensed Balance Sheets December 31, (dollars in thousands) 2019 2018 Assets Cash and cash equivalents $ 7,753 5,389 Investment in subsidiaries 234,310 181,919 Other assets 6 19 Total assets $ 242,069 187,327 Liabilities and Shareholders’ Equity Accounts payable and accrued expenses $ 319 8 Subordinated debentures 35,890 13,403 Shareholders’ equity 205,860 173,916 Total liabilities and shareholders’ equity $ 242,069 187,327 Condensed Statements of Income For the years ended December 31, (dollars in thousands) 2019 2018 2017 Revenues Interest income $ 13 9 11 Total revenue 13 9 11 Expenses Interest expense 929 592 514 Other expenses 240 240 246 Total expenses 1,169 832 760 Income tax benefit 243 173 262 Loss before equity in undistributed net income of subsidiaries (913 ) (650 ) (487 ) Equity in undistributed net income of subsidiaries 28,771 22,939 13,532 Net income $ 27,858 22,289 13,045 Condensed Statements of Cash Flows For the years ended December 31, (dollars in thousands) 2019 2018 2017 Operating activities Net income $ 27,858 22,289 13,045 Adjustments to reconcile net income to cash provided by (used for) operating activities Equity in undistributed net income of subsidiaries (28,771 ) (22,939 ) (13,532 ) Compensation expense related to stock options and restricted stock grants 1,698 1,502 1,258 (Increase) decrease in other assets 12 12 2,772 Increase (decrease) in accounts payable and accrued expenses (202 ) 2 2 Net cash provided by operating activities 595 866 3,545 Investing activities Investment in subsidiaries, net - - (27,334 ) Net cash used for investing activities - - (27,334 ) Financing activities Issuance of common stock - - 24,758 Proceeds from the exercise of stock options and warrants 1,769 900 705 Net cash provided by financing activities 1,769 900 25,463 Net increase (decrease) in cash and cash equivalents 2,364 1,766 1,674 Cash and cash equivalents, beginning of year 5,389 3,623 1,949 Cash and cash equivalents, end of year $ 7,753 5,389 3,623 |
Selected Condensed Quarterly Fi
Selected Condensed Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Condensed Quarterly Financial Data (Unaudited) | NOTE 26 – Selected Condensed Quarterly Financial Data (Unaudited) 2019 For the quarters ended (dollars in thousands, except share data) March 31 June 30 September 30 December 31 Interest income $ 21,612 23,088 24,056 23,896 Interest expense 5,794 6,549 6,777 6,263 Net interest income 15,818 16,539 17,279 17,633 Provision for loan losses 300 300 650 1,050 Noninterest income 2,994 4,090 4,396 3,503 Noninterest expenses 10,648 11,368 11,484 10,973 Income before income tax expense 7,864 8,961 9,541 9,113 Income tax expense 1,855 1,722 2,129 1,915 Net income available to common shareholders $ 6,009 7,239 7,412 7,198 Earnings per common share Basic $ 0.81 0.97 0.98 0.94 Diluted $ 0.78 0.93 0.95 0.92 Weighted average common shares outstanding Basic 7,459,342 7,495,508 7,548,184 7,608,241 Diluted 7,741,860 7,756,044 7,780,504 7,810,922 2018 For the quarters ended March 31 June 30 September 30 December 31 Interest income $ 17,178 18,535 19,865 21,079 Interest expense 3,136 3,923 4,364 5,082 Net interest income 14,042 14,612 15,501 15,997 Provision for loan losses 500 400 400 600 Noninterest income 2,420 2,771 2,533 2,477 Noninterest expenses 9,205 9,979 10,188 10,391 Income before income tax expense 6,757 7,004 7,446 7,483 Income tax expense 1,543 1,494 1,664 1,700 Net income available to common shareholders $ 5,214 5,510 5,782 5,783 Earnings per common share Basic $ 0.71 0.75 0.78 0.78 Diluted $ 0.67 0.71 0.75 0.75 Weighted average common shares outstanding Basic 7,336,839 7,370,709 7,400,174 7,427,902 Diluted 7,726,885 7,751,146 7,746,205 7,725,661 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Activities (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Business activity | Southern First Bancshares, Inc. (the "Company") is a South Carolina corporation that owns all of the capital stock of Southern First Bank (the "Bank") and all of the stock of Greenville First Statutory Trust I and II (collectively, the "Trusts"). The Trusts are special purpose non-consolidated entities organized for the sole purpose of issuing trust preferred securities. The Bank's primary federal regulator is the Federal Deposit Insurance Corporation (the "FDIC"). The Bank is also regulated and examined by the South Carolina Board of Financial Institutions. The Bank is primarily engaged in the business of accepting demand deposits and savings deposits insured by the FDIC, and providing commercial, consumer and mortgage loans to the general public. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Southern First Bank. In consolidation, all significant intercompany transactions have been eliminated. The accounting and reporting policies conform to accounting principles generally accepted in the United States of America. In accordance with guidance issued by the Financial Accounting Standards Board (“FASB”), the operations of the Trusts have not been consolidated in these financial statements. |
Business Segments | Business Segments ASC Topic 280-10, “Segment Reporting,” requires selected segment information of operating segments based on a management approach. The Company’s three reportable segments represent the distinct product lines the Company offers and are viewed separately for strategic planning by management. Please refer to “Note 24 – Reportable Segments” for further information on the reporting for the Company’s three business segments. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of income and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, derivatives, real estate acquired in settlement of loans, fair value of financial instruments, evaluating other-than-temporary-impairment of investment securities and valuation of deferred tax assets. |
Risks and Uncertainties | Risks and Uncertainties In the normal course of its business, the Company encounters two significant types of risks: economic and regulatory. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on different bases, than its interest-earning assets. Credit risk is the risk of default within the Company’s loan portfolio that results from borrowers’ inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of collateral underlying loans receivable and the valuation of real estate held by the Company. The Company is subject to the regulations of various governmental agencies. These regulations can and do change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to changes with respect to valuation of assets, amount of required loan loss allowance and operating restrictions resulting from the regulators’ judgments based on information available to them at the time of their examinations. The Bank makes loans to individuals and businesses in the Upstate, Midlands, and Lowcountry regions of South Carolina as well as the Triangle and Triad regions of North Carolina and Atlanta, Georgia for various personal and commercial purposes. The Bank’s loan portfolio has a concentration of real estate loans. As of December 31, 2019 and 2018, real estate loans represented 82.8% and 82.3%, respectively, of total loans. However, borrowers’ ability to repay their loans is not dependent upon any specific economic sector. |
Subsequent Events | Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management performed an evaluation to determine whether there have been any subsequent events since the balance sheet date and determined that no subsequent events occurred requiring accrual or disclosure. |
Reclassifications | Reclassifications Certain amounts, previously reported, have been reclassified to state all periods on a comparable basis and had no effect on shareholders’ equity or net income. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and due from banks, interest bearing deposits and federal funds sold. Cash and cash equivalents have original maturities of three months or less, and federal funds sold are generally purchased and sold for one-day periods. Accordingly, the carrying value of these instruments is deemed to be a reasonable estimate of fair value. At December 31, 2019 and 2018, included in cash and cash equivalents was $6.0 million and $4.9 million, respectively, on deposit with the Federal Reserve Bank. |
Investment Securities | Investment Securities We classify our investment securities as held to maturity securities, trading securities and available for sale securities as applicable. Investment securities are designated as held to maturity if we have the intent and the ability to hold the securities to maturity. Held to maturity securities are carried at amortized cost, adjusted for the amortization of any related premiums or the accretion of any related discounts into interest income using a methodology which approximates a level yield of interest over the estimated remaining period until maturity. Unrealized losses on held to maturity securities, reflecting a decline in value judged by us to be other than temporary, are charged to income in the Consolidated Statements of Income. Investment securities that are purchased and held principally for the purpose of selling in the near term are reported as trading securities. Trading securities are carried at fair value with unrealized holding gains and losses included in earnings. We classify investment securities as available for sale when at the time of purchase we determine that such securities may be sold at a future date or if we do not have the intent or ability to hold such securities to maturity. Securities designated as available for sale are recorded at fair value. Changes in the fair value of available for sale debt securities are included in shareholders’ equity as unrealized gains or losses, net of the related tax effect. Unrealized losses on available for sale securities, reflecting a decline in value judged to be other than temporary, are charged to income in the Consolidated Statements of Income. Realized gains or losses on available for sale securities are computed on the specific identification basis. |
Other Investments | Other Investments The Bank, as a member institution, is required to own a stock investment in the Federal Home Loan Bank of Atlanta (“FHLB”). This stock is generally pledged against any borrowings from the FHLB and cash dividends on our FHLB stock are recorded in investment income. No ready market exists for these stocks and they have no quoted market value. However, redemption of this stock has historically been at par value. Other investments also include a $403,000 investment in the Trusts. |
Loans | Loans Loans are stated at the principal balance outstanding. Unamortized net loan fees and the allowance for possible loan losses are deducted from total loans on the balance sheets. Interest income is recognized over the term of the loan based on the principal amount outstanding. The net of loan origination fees received and direct costs incurred in the origination of loans is deferred and amortized to interest income over the contractual life of the loans adjusted for actual principal prepayments using a method approximating the interest method. |
Nonaccrual and Past Due Loans | Nonaccrual and Past Due Loans Loans are generally placed on nonaccrual status when principal or interest becomes 90 days past due, or when payment in full is not anticipated. When a loan is placed on nonaccrual status, interest accrued but not received is generally reversed against interest income. Cash receipts on nonaccrual loans are not recorded as interest income, but are used to reduce the loan’s principal balance. A nonaccrual loan is generally returned to accrual status and accrual of interest is resumed when payments have been made according to the terms and conditions of the loan for a continuous six month period. Our loans are considered past due when contractually required principal or interest payments have not been made on the due dates. |
Nonperforming Assets | Nonperforming Assets Nonperforming assets include real estate acquired through foreclosure or deed taken in lieu of foreclosure, loans on nonaccrual status and loans past due 90 days or more and still accruing interest. Loans are placed on nonaccrual status when, in the opinion of management, the collection of additional interest is uncertain. Thereafter no interest is taken into income until such time as the borrower demonstrates the ability to pay both principal and interest. |
Impaired Loans | Impaired Loans Our impaired loans include loans on nonaccrual status and loans modified in a troubled debt restructuring (“TDR”), whether on accrual or nonaccrual status. For loans that are classified as impaired, an allowance is established when the fair value (discounted cash flows, collateral value, or observable market price) of the impaired loan less costs to sell, are lower than the carrying value of that loan. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due, among other factors. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including, without limitation, 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. Impairment is measured on a loan by loan basis for commercial and consumer loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. |
Loan Charge-off Policy | Loan Charge-off Policy For commercial loans, we generally fully charge off or charge collateralized loans down to net realizable value when management determines the loan to be uncollectible; repayment is deemed to be projected beyond reasonable time frames; the loan has been classified as a loss by either our internal loan review process or our banking regulatory agencies; the client has filed bankruptcy and the loss becomes evident owing to a lack of assets; or the loan is 120 days past due unless both well-secured and in the process of collection. For consumer loans, we generally charge down to net realizable value when the loan is 180 days past due. |
Troubled Debt Restructuring (TDRs) | Troubled Debt Restructuring (TDRs) The Company considers a loan to be a TDR when the debtor experiences financial difficulties and the Company provides concessions such that we will not collect all principal and interest in accordance with the original terms of the loan agreement. Concessions can relate to the contractual interest rate, maturity date, or payment structure of the note. As part of our workout plan for individual loan relationships, we may restructure loan terms to assist borrowers facing challenges in the current economic environment. Our policy with respect to accrual of interest on loans restructured in a TDR follows relevant supervisory guidance. That is, if a borrower has demonstrated performance under the previous loan terms and shows capacity to perform under the restructured loan terms; continued accrual of interest at the restructured interest rate is likely. If a borrower was materially delinquent on payments prior to the restructuring, but shows capacity to meet the restructured loan terms, the loan will likely continue as nonaccrual going forward. Lastly, if the borrower does not perform under the restructured terms, the loan is placed on nonaccrual status. We will continue to closely monitor these loans and will cease accruing interest on them if management believes that the borrowers may not continue performing based on the restructured note terms. If, after previously being classified as a TDR, a loan is restructured a second time and the borrower continues to experience financial difficulties, then that loan is automatically placed on nonaccrual status. Our policy with respect to nonperforming loans requires the borrower to make a minimum of six consecutive payments of principal and interest in accordance with the loan terms before that loan can be placed back on accrual status. Further, the borrower must show capacity to continue performing into the future prior to restoration of accrual status. In addition, our policy, in accordance with supervisory guidance, also provides for a loan to be removed from TDR status if the loan is modified or renewed at terms consistent with current market rates and the loan has been performing under modified terms for an extended period of time or under certain circumstances. In the determination of the allowance for loan losses, management considers TDRs on commercial and consumer loans and subsequent defaults in these restructurings by measuring impairment, on a loan by loan basis, based on either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral, less costs to sell, if the loan is collateral dependent. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is management’s estimate of credit losses inherent in the loan portfolio. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. We have an established process to determine the adequacy of the allowance for loan losses that assesses the losses inherent in our portfolio. While we attribute portions of the allowance to specific portfolio segments, the entire allowance is available to absorb credit losses inherent in the total loan portfolio. Our process involves procedures to appropriately consider the unique risk characteristics of our commercial and consumer loan portfolio segments. For each portfolio segment, impairment is measured individually for each impaired loan. Our allowance levels are influenced by loan volume, loan grade or delinquency status, historic loss experience and other economic conditions. See Note 4 to the Consolidated Financial Statements for additional information on the allowance for loan losses. |
Other Real Estate Owned | Other Real Estate Owned Real estate acquired through foreclosure is initially recorded at the lower of cost or estimated fair value less selling costs. Subsequent to the date of acquisition, it is carried at the lower of cost or fair value, adjusted for net selling costs. Fair values of real estate owned are reviewed regularly and write-downs are recorded when it is determined that the carrying value of real estate exceeds the fair value less estimated costs to sell. Costs relating to the development and improvement of such property are capitalized, whereas those costs relating to holding the property are expensed. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Major repairs are charged to operations, while major improvements are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Upon retirement, sale, or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts, and gain or loss is included in income from operations. Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. |
Bank Owned Life Insurance Policies | Bank Owned Life Insurance Policies Bank owned life insurance policies represent the cash value of policies on certain officers of the Company. |
Comprehensive Income | Comprehensive Income Comprehensive income (loss) consists of net income and net unrealized gains (losses) on securities and is presented in the statements of shareholders’ equity and comprehensive income. The statement requires only additional disclosures in the consolidated financial statements; it does not affect our results of operations. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“Topic 606”). Under Topic 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods. The Company’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of Topic 606. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Our accounting policies did not change materially since the principles of revenue recognition from Topic 606 are largely consistent with existing guidance and current practices applied by our business. The following is a discussion of revenues within the scope of the guidance: ● Service fees on deposit accounts - The Company earns fees from its deposit clients for various transaction-based, account maintenance, and overdraft or non-sufficient funds (“NSF”) services. Transaction-based fees, which include services such as stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the client's request. Account maintenance fees, which relate primarily to monthly maintenance and account management, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft and NSF fees are recognized at the point in time that the overdraft occurs or the NSF item is presented. Service charges on deposits are withdrawn from the client's account balance. ● ATM and debit card income - The Company earns interchange fees from debit cardholder transactions conducted through the payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. |
Income Taxes | Income Taxes The financial statements have been prepared on the accrual basis. When income and expenses are recognized in different periods for financial reporting purposes versus for the purposes of computing income taxes currently payable, deferred taxes are provided on such temporary differences. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The Company believes that its income tax filing positions taken or expected to be taken on its tax returns will more likely than not be sustained upon audit by the taxing authorities and does not anticipate any adjustments that will result in a material adverse impact on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded. The Company’s federal and state income tax returns are open and subject to examination from the 2016 tax return year and forward. On December 22, 2017, the Tax Act was signed into law and includes numerous provisions that impact the Company, most notably a reduction in the corporate tax rate from the maximum rate of 35% to a flat rate of 21%. As a result, the Company recorded an incremental income tax expense of $2.4 million in the fourth quarter of 2017. |
Stock-Based Compensation | Stock-Based Compensation The Company has a stock-based employee compensation plan. Compensation cost is recognized for all stock options granted and for any outstanding unvested awards as if the fair value method had been applied to those awards as of the date of grant. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” . The guidance in the update supersedes the requirements in ASC Topic 840, Leases. The guidance is intended to increase transparency and comparability among organizations by recognizing right-of-use (“ROU”) assets and lease liabilities on the balance sheet. For public companies, this update was effective for interim and annual periods beginning after December 15, 2018. The Company adopted this guidance in the first quarter of 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. The Company has also elected to not recognize right-of-use assets and lease liabilities arising from short-term leases. Implementation of the guidance resulted in the recording of a right-of-use asset and lease liability on the balance sheet; however it does not have a material impact on the Company's other consolidated financial statements. See additional disclosures in Note 7. |
Newly Issued, But Not yet Effective Accounting Standards | Newly Issued, But Not yet Effective Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” . Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. ASU 2016-13 was originally effective for all annual and interim periods beginning after December 31, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. Adoption will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company has established a team of individuals from credit, finance and risk management to evaluate the requirements of the new standard and the impact it will have on its processes. In November 2019, the FASB issued guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” . The amendments affect a variety of Topics in the Accounting Standards Codification. For public business entities that meet the definition of a smaller reporting company, such as the Company, the amendments are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as the Company has adopted to amendments in ASU 2016-13. Currently, the Company does not expect to adopt the ASU before the effective period. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of amortized costs and fair value of investment securities | The amortized costs and fair value of investment securities are as follows: December 31, 2019 Amortized Gross Unrealized Fair (dollars in thousands) Cost Gains Losses Value Available for sale US government agencies $ 500 - 1 499 SBA securities 550 - 19 531 State and political subdivisions 4,205 3 24 4,184 Asset-backed securities 13,351 - 184 13,167 Mortgage-backed securities FHLMC 10,609 14 15 10,608 FNMA 35,275 34 169 35,140 GNMA 3,581 5 21 3,565 Total mortgage-backed securities 49,465 53 205 49,313 Total $ 68,071 56 433 67,694 December 31, 2018 Amortized Gross Unrealized Fair Cost Gains Losses Value Available for sale US government agencies $ 8,975 1 194 8,782 SBA securities 3,628 - 103 3,525 State and political subdivisions 8,371 48 63 8,356 Asset-backed securities 9,595 12 49 9,558 Mortgage-backed securities FHLMC 12,258 87 242 12,103 FNMA 29,068 25 551 28,542 GNMA 4,170 1 132 4,039 Total mortgage-backed securities 45,496 113 925 44,684 Total $ 76,065 174 1,334 74,905 |
Summary of amortized costs and fair values of investment securities available for sale by contractual maturity | The amortized costs and fair values of investment securities available for sale at December 31, 2019 and 2018, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers have the right to prepay the obligations. December 31, 2019 2018 Amortized Fair Amortized Fair (dollars in thousands) Cost Value Cost Value Available for sale Due within one year $ - - - - Due after one through five years 4,699 4,675 8,681 8,578 Due after five through ten years 10,454 10,414 22,796 22,379 Due after ten years 52,918 52,605 44,588 43,948 $ 68,071 67,694 76,065 74,905 |
Summary of gross unrealized losses on investment securities and fair market value of related securities | The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2019 and 2018. Less than 12 months 12 months or longer Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) # value losses # value losses # value losses As of December 31, 2019 Available for sale US government agencies 1 $ 499 $ 1 - $ - $ - 1 $ 499 $ 1 SBA securities - - - 1 531 19 1 531 19 State and political subdivisions 2 2,093 24 - - - 2 2,093 24 Asset-backed 5 5,921 68 5 7,246 116 10 13,167 184 Mortgage-backed FHLMC 4 3,842 2 4 2,323 13 8 6,165 15 FNMA 14 15,500 67 11 9,462 102 25 24,962 169 GNMA 2 2,240 6 1 734 15 3 2,974 21 28 $ 30,095 $ 168 22 $ 20,296 $ 265 50 $ 50,391 $ 433 Less than 12 months 12 months or longer Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) # value losses # value losses # value losses As of December 31, 2018 Available for sale US government agencies 1 $ 1,246 $ 3 8 $ 7,035 $ 191 9 $ 8,281 $ 194 SBA securities - - - 2 3,525 103 2 3,525 103 State and political subdivisions - - - 7 2,829 63 7 2,829 63 Asset-backed 4 6,707 49 - - - 4 6,707 49 Mortgage-backed FHLMC - - - 10 7,402 242 10 7,402 242 FNMA 2 2,689 6 23 22,814 545 25 25,503 551 GNMA 1 1,104 6 3 2,919 126 4 4,023 132 8 $ 11,746 $ 64 53 $ 46,524 $ 1,270 61 $ 58,270 $ 1,334 |
Summary of other investments | Other investments are comprised of the following and are recorded at cost which approximates fair value: December 31, (dollars in thousands) 2019 2018 Federal Home Loan Bank stock $ 6,386 3,587 Other investments 159 131 Investment in Trust Preferred subsidiaries 403 403 $ 6,948 4,121 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Summary of composition of loan portfolio | The following table summarizes the composition of our loan portfolio. Total gross loans are recorded net of deferred loan fees and costs, which totaled $3.3 million and $2.8 million as of December 31, 2019 and December 31, 2018, respectively. December 31, (dollars in thousands) 2019 2018 Commercial Owner occupied RE $ 407,851 21.0% 367,018 21.9% Non-owner occupied RE 501,878 25.8% 404,296 24.1% Construction 80,486 4.1% 84,411 5.0% Business 308,123 15.9% 272,980 16.3% Total commercial loans 1,298,338 66.8% 1,128,705 67.3% Consumer Real estate 398,245 20.5% 320,943 19.1% Home equity 179,738 9.3% 165,937 9.9% Construction 41,471 2.1% 37,925 2.3% Other 25,733 1.3% 23,822 1.4% Total consumer loans 645,187 33.2% 548,627 32.7% Total gross loans, net of deferred fees 1,943,525 100.0% 1,677,332 100.0% Less – allowance for loan losses (16,642 ) (15,762 ) Total loans, net $ 1,926,883 1,661,570 |
Composition of gross loans by rate type | The composition of gross loans by rate type is as follows: December 31, (dollars in thousands) 2019 2018 Variable rate loans $ 432,540 402,148 Fixed rate loans 1,510,985 1,275,184 $ 1,943,525 1,677,332 |
Summary of nonperforming assets, including nonaccruing TDRs | The following table shows the nonperforming assets and the related percentage of nonperforming assets to total assets and gross loans. Generally, a loan is placed on nonaccrual status when it becomes 90 days past due as to principal or interest, or when we believe, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of the contractual principal or interest on the loan is doubtful. A payment of interest on a loan that is classified as nonaccrual is recognized as a reduction in principal when received. December 31, (dollars in thousands) 2019 2018 Commercial Owner occupied RE $ - - Non-owner occupied RE 188 210 Construction - - Business 235 81 Consumer Real estate 1,829 1,980 Home equity 431 1,006 Construction - - Other - 12 Nonaccruing troubled debt restructurings 4,111 2,541 Total nonaccrual loans, including nonaccruing TDRs 6,794 5,830 Other real estate owned - - Total nonperforming assets $ 6,794 5,830 Nonperforming assets as a percentage of: Total assets 0.30% 0.31% Gross loans 0.35% 0.35% Total loans over 90 days past due $ 2,038 458 Loans over 90 days past due and still accruing - - Accruing TDRs 5,219 6,742 |
Summary of key information for impaired loans | The table below summarizes key information for impaired loans. Our impaired loans include loans on nonaccrual status and loans modified in a TDR, whether on accrual or nonaccrual status. These impaired loans may have estimated impairment which is included in the allowance for loan losses. Our commercial and consumer impaired loans are evaluated individually to determine the related allowance for loan losses. December 31, 2019 Recorded investment Impaired loans Impaired loans Unpaid with no related with related Related Principal Impaired allowance for allowance for allowance for (dollars in thousands) Balance loans loan losses loan losses loan losses Commercial Owner occupied RE $ 2,791 2,726 2,270 456 75 Non-owner occupied RE 4,512 4,051 2,419 1,632 465 Construction - - - - - Business 1,620 1,531 558 973 452 Total commercial 8,923 8,308 5,247 3,061 992 Consumer Real estate 2,727 2,720 1,638 1,082 364 Home equity 885 838 459 379 66 Construction - - - - - Other 147 147 - 147 16 Total consumer 3,759 3,705 2,097 1,608 446 Total $ 12,682 12,013 7,344 4,669 1,438 December 31, 2018 Recorded investment Impaired loans Impaired loans Unpaid with no related with related Related Principal Impaired allowance for allowance for allowance for (dollars in thousands) Balance loans loan losses loan losses loan losses Commercial Owner occupied RE $ 2,827 2,762 2,311 451 75 Non-owner occupied RE 3,321 2,807 603 2,204 558 Construction - - - - - Business 3,745 2,520 515 2,005 895 Total commercial 9,893 8,089 3,429 4,660 1,528 Consumer Real estate 2,993 2,892 1,494 1,398 456 Home equity 1,935 1,421 1,421 - - Construction - - - - - Other 170 170 - 170 30 Total consumer 5,098 4,483 2,915 1,568 486 Total $ 14,991 12,572 6,344 6,228 2,014 |
Summary of average recorded investment and interest income recognized on impaired loans | The following table provides the average recorded investment in impaired loans and the amount of interest income recognized on impaired loans after impairment by portfolio segment and class. Year ended December 31, 2019 2018 2017 Average Recognized Average Recognized Average Recognized recorded interest recorded interest recorded interest (dollars in thousands) investment income investment income investment income Commercial Owner occupied RE $ 2,739 128 2,784 142 2,255 104 Non-owner occupied RE 4,161 255 2,860 174 4,144 199 Construction - - - - - - Business 1,582 79 2,883 162 2,823 162 Total commercial 8,482 462 8,527 478 9,222 465 Consumer Real estate 2,771 131 2,930 151 2,047 69 Home equity 853 42 1,453 99 1,576 97 Construction - - - - - - Other 153 5 174 5 174 6 Total consumer 3,777 178 4,557 255 3,797 172 Total $ 12,259 640 13,084 733 13,019 637 |
Summary of activity related to allowance for loan losses | The following table summarizes the activity related to our allowance for loan losses: Year ended December 31, (dollars in thousands) 2019 2018 2017 Balance, beginning of period $ 15,762 15,523 14,855 Provision for loan losses 2,300 1,900 2,000 Loan charge-offs: Commercial Owner occupied RE (110 ) - - Non-owner occupied RE (239 ) (432 ) (589 ) Construction - - - Business (910 ) (695 ) (638 ) Total commercial (1,259 ) (1,127 ) (1,227 ) Consumer Real estate - (749 ) - Home equity (174 ) (217 ) (400 ) Construction - - - Other (82 ) (53 ) (11 ) Total consumer (256 ) (1,019 ) (411 ) Total loan charge-offs (1,515 ) (2,146 ) (1,638 ) Loan recoveries: Commercial Owner occupied RE - - - Non-owner occupied RE 2 132 119 Construction - - - Business 43 229 86 Total commercial 45 361 205 Consumer Real estate 37 5 86 Home equity 2 115 13 Construction - - - Other 11 4 2 Total consumer 50 124 101 Total recoveries 95 485 306 Net loan charge-offs (1,420 ) (1,661 ) (1,332 ) Balance, end of period $ 16,642 15,762 15,523 |
Summary of allowance for loan losses by commercial and consumer portfolio segments | The following tables summarize the activity in the allowance for loan losses by our commercial and consumer portfolio segments. Year ended December 31, 2019 (dollars in thousands) Commercial Consumer Total Balance, beginning of period $ 10,768 4,994 15,762 Provision 1,818 482 2,300 Loan charge-offs (1,259 ) (256 ) (1,515 ) Loan recoveries 45 50 95 Net loan charge-offs (1,214 ) (206 ) (1,420 ) Balance, end of period $ 11,372 5,270 16,642 Year ended December 31, 2018 Commercial Consumer Total Balance, beginning of period $ 9,937 5,586 15,523 Provision 1,597 303 1,900 Loan charge-offs (1,127 ) (1,019 ) (2,146 ) Loan recoveries 361 124 485 Net loan charge-offs (766 ) (895 ) (1,661 ) Balance, end of period $ 10,768 4,994 15,762 |
Summary of allowance for loan losses and recorded investment in loans by impairment methodology | The following table disaggregates our allowance for loan losses and recorded investment in loans by method of impairment evaluation. December 31, 2019 Allowance for loan losses Recorded investment in loans (dollars in thousands) Commercial Consumer Total Commercial Consumer Total Individually evaluated $ 992 446 1,438 8,308 3,705 12,013 Collectively evaluated 10,380 4,824 15,204 1,290,030 641,482 1,931,512 Total $ 11,372 5,270 16,642 1,298,338 645,187 1,943,525 December 31, 2018 Allowance for loan losses Recorded investment in loans Commercial Consumer Total Commercial Consumer Total Individually evaluated $ 1,528 486 2,014 8,089 4,483 12,572 Collectively evaluated 9,240 4,508 13,748 1,120,616 544,144 1,664,760 Total $ 10,768 4,994 15,762 1,128,705 548,627 1,677,332 |
Consumer [Member] | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Outstanding commercial and consumer loans which include loans on nonaccrual by past due status | The following tables provide past due information for outstanding consumer loans and include loans on nonaccrual status. December 31, 2019 (dollars in thousands) Real estate Home equity Construction Other Total Current $ 396,445 179,051 41,471 25,650 642,617 30-59 days past due 799 369 - 83 1,251 60-89 days past due - 118 - - 118 Greater than 90 days 1,001 200 - - 1,201 $ 398,245 179,738 41,471 25,733 645,187 December 31, 2018 Real estate Home equity Construction Other Total Current $ 317,267 165,727 37,925 23,603 544,522 30-59 days past due 2,555 30 - 106 2,691 60-89 days past due 923 - - 113 1,036 Greater than 90 days 198 180 - - 378 $ 320,943 165,937 37,925 23,822 548,627 |
Summary of breakdown of outstanding loans by risk category | The tables below provide a breakdown of outstanding consumer loans by risk category. December 31, 2019 (dollars in thousands) Real estate Home equity Construction Other Total Pass $ 392,572 176,532 41,471 25,421 635,996 Special Mention 2,267 775 - 261 3,303 Substandard 3,406 2,431 - 51 5,888 Doubtful - - - - - Loss - - - - - $ 398,245 179,738 41,471 25,733 645,187 December 31, 2018 (dollars in thousands) Real estate Home equity Construction Other Total Pass $ 314,586 162,626 37,925 23,586 538,723 Special Mention 1,792 864 - 139 2,795 Substandard 4,565 2,447 - 97 7,109 Doubtful - - - - - Loss - - - - - $ 320,943 165,937 37,925 23,822 548,627 |
Commercial [Member] | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Outstanding commercial and consumer loans which include loans on nonaccrual by past due status | The following tables provide past due information for outstanding commercial loans and include loans on nonaccrual status. December 31, 2019 Owner Non-owner (dollars in thousands) occupied RE occupied RE Construction Business Total Current $ 406,594 501,676 80,486 307,710 1,296,466 30-59 days past due 706 151 - 178 1,035 60-89 days past due - - - - - Greater than 90 days 551 51 - 235 837 $ 407,851 501,878 80,486 308,123 1,298,338 December 31, 2018 Owner Non-owner occupied RE occupied RE Construction Business Total Current $ 367,018 404,179 84,411 272,864 1,128,472 30-59 days past due - 117 - 36 153 60-89 days past due - - - - - Greater than 90 days - - - 80 80 $ 367,018 404,296 84,411 272,980 1,128,705 |
Summary of breakdown of outstanding loans by risk category | The tables below provide a breakdown of outstanding commercial loans by risk category. December 31, 2019 Owner Non-owner (dollars in thousands) occupied RE occupied RE Construction Business Total Pass $ 404,237 492,941 80,486 301,504 1,279,168 Special Mention 1,312 744 - 3,108 5,164 Substandard 2,302 8,193 - 3,511 14,006 Doubtful - - - - - $ 407,851 501,878 80,486 308,123 1,298,338 December 31, 2018 Owner Non-owner occupied RE occupied RE Construction Business Total Pass $ 363,621 400,266 84,411 266,898 1,115,196 Special Mention 296 118 - 2,971 3,385 Substandard 3,101 3,912 - 3,111 10,124 Doubtful - - - - - $ 367,018 404,296 84,411 272,980 1,128,705 |
Troubled Debt Restructurings (T
Troubled Debt Restructurings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Troubled Debt Restructurings [Abstract] | |
Summary of concession at the time of modification and the recorded investment in our TDRs before and after their modificatioN | The following table summarizes the concession at the time of modification and the recorded investment in our TDRs before and after their modification. For the year ended December 31, 2019 Pre- Post- modification modification Renewals Reduced Converted Maturity Total outstanding outstanding deemed a or deferred to interest date number recorded recorded (dollars in thousands) concession payments only extensions of loans investment Investment Commercial Business 1 - - - 1 $ 1,823 $ 1,823 Total loans 1 1 - - 1 $ 1,823 $ 1,823 For the year ended December 31, 2018 Pre- Post- modification modification Renewals Reduced Converted Maturity Total outstanding outstanding deemed a or deferred to interest date number recorded recorded concession payments only extensions of loans investment Investment Commercial Owner occupied RE 1 - - - 1 $ 506 $ 592 Non-owner occupied RE - 1 - - 1 1,287 1,287 Business 4 - - - 4 1,207 1,532 Consumer Real estate 2 - - - 2 549 669 Total loans 7 1 - - 8 $ 3,549 $ 4,080 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Components of property and equipment | Property and equipment are stated at cost less accumulated depreciation. Components of property and equipment included in the consolidated balance sheets are as follows: December 31, (dollars in thousands) 2019 2018 Land $ 11,531 6,827 Buildings 24,136 24,064 Leasehold improvements 4,486 2,899 Furniture and equipment 10,219 8,890 Software 367 329 Construction in process 939 281 Accumulated depreciation and amortization (12,705 ) (10,860 ) Property and equipment, excluding ROU assets 38,973 32,430 ROU assets 19,505 - Total property and equipment $ 58,478 32,430 |
Schedule of estimated useful lives of property and equipment | The estimated useful lives for the principal items follow: Type of Asset Life in Years Software 3 Furniture and equipment 5 to 7 Leasehold improvements 5 to 15 Buildings 40 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 were as follows: (dollars in thousands) Operating 2020 $ 2,103 2021 2,152 2022 1,400 2023 1,273 2024 1,305 Thereafter 17,404 Total undiscounted lease payments 25,637 Discount effect of cash flows 5,549 Total lease liability $ 20,088 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
Summary of activity of real estate acquired in settlement of loans portion of other real estate owned | The following summarizes the activity in the real estate acquired in settlement of loans portion of other real estate owned: For the year ended December 31, (dollars in thousands) 2019 2018 Balance, beginning of year $ - $ 242 Additions - - Sales - (125 ) Write-downs, net - (117 ) Balance, end of year $ - $ - |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Schedule of detail in deposit accounts | The following is a detail of the deposit accounts: December 31, (dollars in thousands) 2019 2018 Noninterest bearing $ 397,331 346,570 Interest bearing: NOW accounts 228,680 186,795 Money market accounts 898,923 730,765 Savings 16,258 15,486 Time, less than $100,000 47,941 63,073 Time, $100,000 and over 286,991 305,447 Total deposits $ 1,876,124 1,648,136 |
Scheduled maturities of certificates of deposit | At December 31, 2019 the scheduled maturities of certificates of deposit are as follows: (dollars in thousands) 2020 $ 277,342 2021 38,528 2022 10,783 2023 6,133 2024 and after 2,146 $ 334,932 |
Federal Home Loan Bank Advanc_2
Federal Home Loan Bank Advances and Other Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Federal Home Loan Bank Advances and Other Borrowings [Abstract] | |
Summary of terms and maturities of advances of FHLB | Listed below is a summary of the terms and maturities of the advances outstanding at December 31, 2019 and 2018. The $110.0 million outstanding at December 31, 2019 was at a variable rate. December 31, (dollars in thousands) 2019 2018 Maturity Amount Rate Amount Rate December 31, 2019 $ - -% $ 25,000 2.65 % July 7, 2022 - -% 10,000 3.11 % July 7, 2023 - -% 15,000 3.53 % December 31, 2020 110,000 1.78 % - -% $ 110,000 1.78 % $ 50,000 3.01 % |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of outstanding financial derivative instruments | The following table summarizes the Company’s outstanding financial derivative instruments at December 31, 2019 and December 31, 2018. December 31, 2019 Fair Value (dollars in thousands) Notional Balance Sheet Location Asset/(Liability) Mortgage loan interest rate lock commitments $ 26,446 Other assets $ 344 MBS forward sales commitments 20,500 Other liabilities (39 ) Total derivative financial instruments $ 46,946 $ 305 December 31, 2018 Fair Value Notional Balance Sheet Location Asset/(Liability) Mortgage loan interest rate lock commitments $ 20,552 Other assets $ 345 MBS forward sales commitments 11,750 Other liabilities (121 ) Total derivative financial instruments $ 32,302 $ 224 |
Fair Value Accounting (Tables)
Fair Value Accounting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis. December 31, 2019 (dollars in thousands) Level 1 Level 2 Level 3 Total Assets Securities available for sale: US government agencies $ - 499 - 499 SBA securities - 531 - 531 State and political subdivisions - 4,184 - 4,184 Asset-backed securities - 13,167 - 13,167 Mortgage-backed securities - 49,313 - 49,313 Mortgage loans held for sale - 27,046 - 27,046 Mortgage loan interest rate lock commitments - 344 - 344 Total assets measured at fair value on a recurring basis $ - 95,084 - 95,084 Liabilities MBS forward sales commitments $ - 39 - 39 Total liabilities measured at fair value on a recurring basis $ - 39 - 39 December 31, 2018 (dollars in thousands) Level 1 Level 2 Level 3 Total Assets Securities available for sale: US government agencies $ - 8,782 - 8,782 SBA securities - 3,525 - 3,525 State and political subdivisions - 8,356 - 8,356 Asset-backed securities - 9,558 - 9,558 Mortgage-backed securities - 44,684 - 44,684 Mortgage loans held for sale - 9,241 - 9,241 Mortgage loan interest rate lock commitments - 345 - 345 Total assets measured at fair value on a recurring basis $ - 84,491 - 84,491 Liabilities MBS forward sales commitments $ - 121 - 121 Total liabilities measured at fair value on a recurring basis $ - 121 - 121 |
Schedule of assets and liabilities measured at fair value on nonrecurring basis | The tables below present the recorded amount of assets and liabilities measured at fair value on a nonrecurring basis. December 31, 2019 (dollars in thousands) Level 1 Level 2 Level 3 Total Assets Impaired loans $ - 5,634 4,941 10,575 Total assets measured at fair value on a nonrecurring basis $ - 5,634 4,941 10,575 December 31, 2018 Level 1 Level 2 Level 3 Total Assets Impaired loans $ - 2,190 8,368 10,558 Total assets measured at fair value on a nonrecurring basis $ - 2,190 8,368 10,558 |
Schedule of unobservable inputs used in the fair value measurements | For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows: Valuation Technique Significant Unobservable Inputs Range of Inputs Impaired loans Appraised Value/ Discounts to appraisals or cash flows for estimated holding and/or selling costs or age of appraisal 0-25% Other real estate owned Appraised Value/ Discounts to appraisals for estimated holding or selling costs 0-25% |
Schedule of estimated fair values of the Company's financial instruments | The estimated fair values of the Company’s financial instruments at December 31, 2019 and 2018 are as follows: December 31, 2019 (dollars in thousands) Carrying Fair Level 1 Level 2 Level 3 Financial Assets: Other investments, at cost $ 6,948 6,948 - - 6,948 Loans (1) 1,914,870 1,900,216 - - 1,900,216 Financial Liabilities: Deposits 1,876,124 1,772,121 - 1,772,121 - FHLB and other borrowings 110,000 109,737 - 109,737 - Subordinated debentures 35,890 33,250 - 33,250 - December 31, 2018 (dollars in thousands) Carrying Fair Level 1 Level 2 Level 3 Financial Assets: Other investments, at cost $ 4,121 4,121 - - 4,121 Loans (1) 1,648,998 1,618,618 - - 1,618,618 Financial Liabilities: Deposits 1,648,136 1,515,123 - 1,515,123 - FHLB and other borrowings 50,000 50,147 - 50,147 - Subordinated debentures 13,403 14,807 - 14,807 - (1) Carrying amount is net of the allowance for loan losses and previously presented impaired loans. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per common share | |
Schedule of earnings per share calculation | These options were therefore excluded from the diluted earnings per share calculation. December 31, (dollars in thousands, except share data) 2019 2018 2017 Numerator: Net income $ 27,858 $ 22,289 13,045 Net income available to common shareholders $ 27,858 $ 22,289 13,045 Denominator: Weighted-average common shares outstanding - basic 7,528,283 7,384,200 7,005,703 Common stock equivalents 244,261 353,295 387,674 Weighted-average common shares outstanding - diluted 7,772,544 7,737,495 7,393,377 Earnings per common share: Basic $ 3.70 $ 3.02 1.86 Diluted $ 3.58 $ 2.88 1.76 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of components of income tax expense | The components of income tax expense were as follows: For the years ended December 31, (dollars in thousands) 2019 2018 2017 Current income taxes: Federal $ 6,791 5,536 7,139 State 1,250 990 573 Total current tax expense 8,041 6,526 7,712 Deferred income tax expense (benefit) (420 ) (125 ) 2,904 Income tax expense $ 7,621 6,401 10,616 |
Summary of taxes computed using the statutory tax rate | The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory tax rate: For the years ended December 31, (dollars in thousands) 2019 2018 2017 Tax expense at statutory rate $ 7,451 6,025 8,281 Effect of state income taxes, net of federal benefit 987 782 372 Exempt income (26 ) (34 ) (146 ) Effect of change in federal tax rate - - 2,441 Effect of stock-based compensation (693 ) (248 ) (2 ) Other (98 ) (124 ) (330 ) Income tax expense $ 7,621 6,401 10,616 |
Summary of components of the deferred tax assets and liabilities | The components of the deferred tax assets and liabilities are as follows: December 31, (dollars in thousands) 2019 2018 Deferred tax assets: Allowance for loan losses $ 3,495 3,310 Unrealized loss on securities available for sale 79 244 Net deferred loan fees 697 592 Deferred compensation 1,404 1,280 Sale of real estate owned - 128 Lease liabilities 4,219 - Other 234 130 10,128 5,684 Deferred tax liabilities: Property and equipment 1,398 1,433 Hedging transactions 227 112 Prepaid expenses 132 107 Right-of-use assets 4,096 - Other - 12 5,853 1,664 Net deferred tax asset $ 4,275 4,020 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of loan transactions with directors and executive officers, including their affiliates | A summary of loan transactions with directors and executive officers, including their affiliates is as follows: For the years ended December 31, (dollars in thousands) 2019 2018 Balance, beginning of year $ 13,969 15,276 New loans 6,709 5,686 Less loan payments (9,787 ) (6,993 ) Balance, end of year $ 10,891 13,969 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | Stock-based compensation expense was recorded as follows: For the years ended December 31, (dollars in thousands) 2019 2018 2017 Stock option expense $ 1,270 1,183 959 Restricted stock grant expense 428 319 299 Total stock-based compensation expense $ 1,698 1,502 1,258 |
Summary of the status of the stock option plan and changes | A summary of the status of the stock option plan and changes for the period is presented below: For the years ended December 31, 2019 2018 2017 Weighted Weighted Weighted Weighted Average Weighted Average Weighted Average average Remaining average Remaining average Remaining exercise Contractual exercise Contractual exercise Contractual Shares price Life Shares price Life Shares price Life Outstanding at beginning of year 648,311 $ 20.74 662,841 $ 15.70 642,203 $ 11.77 Granted 101,350 32.81 94,700 43.13 110,950 35.34 Exercised (191,497 ) 9.24 (105,630 ) 8.51 (74,437 ) 9.48 Forfeited or expired (16,750 ) 34.01 (3,600 ) 40.03 (15,875 ) 23.49 Outstanding at end of year 541,414 $ 26.65 6.3 years 648,311 $ 20.74 5.6 years 662,841 $ 15.70 5.6 years Options exercisable at year-end 305,991 $ 20.00 4.9 years 404,851 $ 12.58 4.0 years 419,766 $ 9.20 4.1 years Weighted average fair value of options granted during the year $ 11.81 $ 16.76 $ 14.14 Shares available for grant 183,990 270,090 359,690 |
Schedule of assumptions used | The fair value of the option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for grants: 2019 2018 2017 Dividend yield - - - Expected life 7 years 7 years 7 years Expected volatility 28.21% 32.07% 34.63% Risk-free interest rate 2.59% 2.50% 2.04% |
Summary of the status of the Company's nonvested restricted stock and changes | A summary of the status of the Company’s nonvested restricted stock and changes for the years ended December 31, 2019, 2018, and 2017 is as follows: December 31, 2019 2018 2017 Weighted Weighted Weighted Average Average Average Restricted Grant-Date Restricted Grant-Date Restricted Grant-Date Shares Fair Value Shares Fair Value Shares Fair Value Nonvested at beginning of year 29,625 $ 34.00 25,000 $ 26.43 36,125 $ 20.13 Granted 14,700 33.64 13,000 42.87 6,500 35.14 Vested (10,375 ) 31.61 (8,375 ) 25.17 (17,625 ) 16.73 Forfeited (1,125 ) 28.03 - - - - Nonvested at end of year 32,825 $ 34.78 29,625 $ 34.00 25,000 $ 26.43 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Matters [Abstract] | |
Summary of capital amounts and ratios of the Bank and the Company and the regulatory minimum requirements | The following table summarizes the capital amounts and ratios of the Bank and the Company and the regulatory minimum requirements at December 31, 2019 and 2018. To be well capitalized For capital under prompt adequacy purposes corrective action Actual minimum provisions minimum (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2019 The Bank Total Capital (to risk weighted assets) $ 250,847 13.31% $ 150,807 8.00% $ 188,510 10.00% Tier 1 Capital (to risk weighted assets) 234,205 12.42% 113,106 6.00% 150,807 8.00% Common Equity Tier 1 Capital (to risk weighted assets) 234,205 12.42% 84,829 4.50% 122,531 6.50% Tier 1 Capital (to average assets) 234,205 10.80% 86,772 4.00% 108,465 5.00% The Company (1) Total Capital (to risk weighted assets) 258,800 13.73% 150,807 8.00% n/a n/a Tier 1 Capital (to risk weighted assets) 219,158 11.63% 113,106 6.00% n/a n/a Common Equity Tier 1 Capital (to risk weighted assets) 206,158 10.94% 84,829 4.50% n/a n/a Tier 1 Capital (to average assets) 219,158 10.10% 86,772 4.00% n/a n/a To be well capitalized For capital under prompt adequacy purposes corrective action Actual minimum provisions minimum (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018 The Bank Total Capital (to risk weighted assets) $ 198,195 12.16% $ 130,368 8.00% $ 162,960 10.00% Tier 1 Capital (to risk weighted assets) 182,433 11.20% 97,776 6.00% 130,368 8.00% Common Equity Tier 1 Capital (to risk weighted assets) 182,433 11.20% 73,332 4.50% 105,924 6.50% Tier 1 Capital (to average assets) 182,433 9.84% 74,126 4.00% 92,658 5.00% The Company (1) Total Capital (to risk weighted assets) 203,595 12.49% 130,368 8.00% n/a n/a Tier 1 Capital (to risk weighted assets) 187,833 11.53% 97,776 6.00% n/a n/a Common Equity Tier 1 Capital (to risk weighted assets) 174,833 10.73% 73,332 4.50% n/a n/a Tier 1 Capital (to average assets) 187,833 10.14% 74,126 4.00% n/a n/a (1) Under the Federal Reserve’s Small Bank Holding Company Policy Statement, the Company is not subject to the minimum capital adequacy and capital conservation buffer capital requirements at the holding company level, unless otherwise advised by the Federal Reserve (such capital requirements are applicable only at the Bank level). Although the minimum regulatory capital requirements are not applicable to the Company, we calculate these ratios for our own planning and monitoring purposes. |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of financial information for each reportable segment | The following schedule presents financial information for each reportable segment. Year ended December 31, 2019 Commercial and Retail Mortgage Corporate (dollars in thousands) Banking Banking Operations Eliminations Consolidated Interest income $ 91,923 729 13 (13 ) 92,652 Interest expense 24,467 - 929 (13 ) 25,383 Net interest income (loss) 67,456 729 (916 ) - 67,269 Provision for loan losses 2,300 - - - 2,300 Noninterest income 5,060 9,923 - - 14,983 Noninterest expense 37,798 6,435 240 - 44,473 Net income (loss) before taxes 32,418 4,217 (1,156 ) - 35,479 Income tax provision (benefit) 6,978 886 (243 ) - 7,621 Net income (loss) $ 25,440 3,331 (913 ) - 27,858 Total assets $ 2,239,430 27,356 242,069 (241,660 ) 2,267,195 Year ended December 31, 2018 Commercial and Retail Mortgage Banking Banking Corporate Eliminations Consolidated Interest income $ 76,282 375 9 (9 ) 76,657 Interest expense 15,922 - 592 (9 ) 16,505 Net interest income (loss) 60,360 375 (583 ) - 60,152 Provision for loan losses 1,900 - - - 1,900 Noninterest income 4,657 5,544 - - 10,201 Noninterest expense 35,371 4,152 240 - 39,763 Net income (loss) before taxes 27,746 1,767 (823 ) - 28,690 Income tax expense (benefit) 6,185 389 (173 ) - 6,401 Net income (loss) $ 21,561 1,378 (650 ) - 22,289 Total assets $ 1,905,474 8,602 187,327 (200,789 ) 1,900,614 |
Parent Company Financial Info_2
Parent Company Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed financial information of Southern First Bancshares, Inc. (parent company only) | Following is condensed financial information of Southern First Bancshares, Inc. (parent company only): Condensed Balance Sheets December 31, (dollars in thousands) 2019 2018 Assets Cash and cash equivalents $ 7,753 5,389 Investment in subsidiaries 234,310 181,919 Other assets 6 19 Total assets $ 242,069 187,327 Liabilities and Shareholders’ Equity Accounts payable and accrued expenses $ 319 8 Subordinated debentures 35,890 13,403 Shareholders’ equity 205,860 173,916 Total liabilities and shareholders’ equity $ 242,069 187,327 Condensed Statements of Income For the years ended December 31, (dollars in thousands) 2019 2018 2017 Revenues Interest income $ 13 9 11 Total revenue 13 9 11 Expenses Interest expense 929 592 514 Other expenses 240 240 246 Total expenses 1,169 832 760 Income tax benefit 243 173 262 Loss before equity in undistributed net income of subsidiaries (913 ) (650 ) (487 ) Equity in undistributed net income of subsidiaries 28,771 22,939 13,532 Net income $ 27,858 22,289 13,045 Condensed Statements of Cash Flows For the years ended December 31, (dollars in thousands) 2019 2018 2017 Operating activities Net income $ 27,858 22,289 13,045 Adjustments to reconcile net income to cash provided by (used for) operating activities Equity in undistributed net income of subsidiaries (28,771 ) (22,939 ) (13,532 ) Compensation expense related to stock options and restricted stock grants 1,698 1,502 1,258 (Increase) decrease in other assets 12 12 2,772 Increase (decrease) in accounts payable and accrued expenses (202 ) 2 2 Net cash provided by operating activities 595 866 3,545 Investing activities Investment in subsidiaries, net - - (27,334 ) Net cash used for investing activities - - (27,334 ) Financing activities Issuance of common stock - - 24,758 Proceeds from the exercise of stock options and warrants 1,769 900 705 Net cash provided by financing activities 1,769 900 25,463 Net increase (decrease) in cash and cash equivalents 2,364 1,766 1,674 Cash and cash equivalents, beginning of year 5,389 3,623 1,949 Cash and cash equivalents, end of year $ 7,753 5,389 3,623 |
Selected Condensed Quarterly _2
Selected Condensed Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of selected quarterly financial information | 2019 For the quarters ended (dollars in thousands, except share data) March 31 June 30 September 30 December 31 Interest income $ 21,612 23,088 24,056 23,896 Interest expense 5,794 6,549 6,777 6,263 Net interest income 15,818 16,539 17,279 17,633 Provision for loan losses 300 300 650 1,050 Noninterest income 2,994 4,090 4,396 3,503 Noninterest expenses 10,648 11,368 11,484 10,973 Income before income tax expense 7,864 8,961 9,541 9,113 Income tax expense 1,855 1,722 2,129 1,915 Net income available to common shareholders $ 6,009 7,239 7,412 7,198 Earnings per common share Basic $ 0.81 0.97 0.98 0.94 Diluted $ 0.78 0.93 0.95 0.92 Weighted average common shares outstanding Basic 7,459,342 7,495,508 7,548,184 7,608,241 Diluted 7,741,860 7,756,044 7,780,504 7,810,922 2018 For the quarters ended March 31 June 30 September 30 December 31 Interest income $ 17,178 18,535 19,865 21,079 Interest expense 3,136 3,923 4,364 5,082 Net interest income 14,042 14,612 15,501 15,997 Provision for loan losses 500 400 400 600 Noninterest income 2,420 2,771 2,533 2,477 Noninterest expenses 9,205 9,979 10,188 10,391 Income before income tax expense 6,757 7,004 7,446 7,483 Income tax expense 1,543 1,494 1,664 1,700 Net income available to common shareholders $ 5,214 5,510 5,782 5,783 Earnings per common share Basic $ 0.71 0.75 0.78 0.78 Diluted $ 0.67 0.71 0.75 0.75 Weighted average common shares outstanding Basic 7,336,839 7,370,709 7,400,174 7,427,902 Diluted 7,726,885 7,751,146 7,746,205 7,725,661 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Activities (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effect of Fourth Quarter Events [Line Items] | ||||
Real estate loan percentage of total loan | 82.80% | |||
Investment in trusts | $ 403,000 | |||
Description of tax | The Tax Act was signed into law and includes numerous provisions that impact the Company, most notably a reduction in the corporate tax rate from the maximum rate of 35% to a flat rate of 21%. | |||
Incremental income tax expense | (98,000) | $ (124,000) | $ (330,000) | |
Cash and cash equivalents | $ 6,000,000 | $ 4,900,000 | ||
Fourth Quarter [Member] | ||||
Effect of Fourth Quarter Events [Line Items] | ||||
Incremental income tax expense | $ 2,400,000 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Available for sale | ||
Total investment securities available for sale, Amortized Cost | $ 68,071 | $ 76,065 |
Total investment securities available for sale, Gross Unrealized Gains | 56 | 174 |
Total investment securities available for sale, Gross Unrealized Losses | 433 | 1,334 |
Available-for-sale securities, investment securities, Fair Value | 67,694 | 74,905 |
US government agencies [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 500 | 8,975 |
Total investment securities available for sale, Gross Unrealized Gains | 1 | |
Total investment securities available for sale, Gross Unrealized Losses | 1 | 194 |
Available-for-sale securities, investment securities, Fair Value | 499 | 8,782 |
SBA securities [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 550 | 3,628 |
Total investment securities available for sale, Gross Unrealized Gains | ||
Total investment securities available for sale, Gross Unrealized Losses | 19 | 103 |
Available-for-sale securities, investment securities, Fair Value | 531 | 3,525 |
State and political subdivisions [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 4,205 | 8,371 |
Total investment securities available for sale, Gross Unrealized Gains | 3 | 48 |
Total investment securities available for sale, Gross Unrealized Losses | 24 | 63 |
Available-for-sale securities, investment securities, Fair Value | 4,184 | 8,356 |
Asset-backed Securities [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 13,351 | 9,595 |
Total investment securities available for sale, Gross Unrealized Gains | 12 | |
Total investment securities available for sale, Gross Unrealized Losses | 184 | 49 |
Available-for-sale securities, investment securities, Fair Value | 13,167 | 9,558 |
Mortgage-backed securities [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 49,465 | 45,496 |
Total investment securities available for sale, Gross Unrealized Gains | 53 | 113 |
Total investment securities available for sale, Gross Unrealized Losses | 205 | 925 |
Available-for-sale securities, investment securities, Fair Value | 49,313 | 44,684 |
Mortgage-backed securities [Member] | FHLMC [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 10,609 | 12,258 |
Total investment securities available for sale, Gross Unrealized Gains | 14 | 87 |
Total investment securities available for sale, Gross Unrealized Losses | 15 | 242 |
Available-for-sale securities, investment securities, Fair Value | 10,608 | 12,103 |
Mortgage-backed securities [Member] | FNMA [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 35,275 | 29,068 |
Total investment securities available for sale, Gross Unrealized Gains | 34 | 25 |
Total investment securities available for sale, Gross Unrealized Losses | 169 | 551 |
Available-for-sale securities, investment securities, Fair Value | 35,140 | 28,542 |
Mortgage-backed securities [Member] | GNMA [Member] | ||
Available for sale | ||
Total investment securities available for sale, Amortized Cost | 3,581 | 4,170 |
Total investment securities available for sale, Gross Unrealized Gains | 5 | 1 |
Total investment securities available for sale, Gross Unrealized Losses | 21 | 132 |
Available-for-sale securities, investment securities, Fair Value | $ 3,565 | $ 4,039 |
Investment Securities (Details
Investment Securities (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of amortized costs and fair values of investment securities available for sale by contractual maturity | ||
Due within one year, Amortized Cost | ||
Due after one through five years, Amortized Cost | 4,699 | 8,681 |
Due after five through ten years, Amortized Cost | 10,454 | 22,796 |
Due after ten years, Amortized Cost | 52,918 | 44,588 |
Available for sale, Amortized Cost | 68,071 | 76,065 |
Due within one year, Fair Value | ||
Due after one through five years, Fair Value | 4,675 | 8,578 |
Due after five through ten years, Fair Value | 10,414 | 22,379 |
Due after ten years, Fair Value | 52,605 | 43,948 |
Available for sale, Fair Value | $ 67,694 | $ 74,905 |
Investment Securities (Detail_2
Investment Securities (Details 2) $ in Thousands | Dec. 31, 2019USD ($)Investments | Dec. 31, 2018USD ($)Investments |
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | 28 | 8 |
Available-for-sale Securities, Less than 12 months, Fair Value | $ 30,095 | $ 11,746 |
Available-for-sale Securities, Less than 12 months, Unrealized losses | $ 168 | $ 64 |
Number of investments, 12 months or longer | Investments | 22 | 53 |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 20,296 | $ 46,524 |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 265 | $ 1,270 |
Number of investments, Total | Investments | 50 | 61 |
Available-for-sale Securities, Fair Value, Total | $ 50,391 | $ 58,270 |
Available-for-sale Securities, Unrealized Losses, Total | $ 433 | $ 1,334 |
US government agencies [Member] | ||
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | 1 | 1 |
Available-for-sale Securities, Less than 12 months, Fair Value | $ 499 | $ 1,246 |
Available-for-sale Securities, Less than 12 months, Unrealized losses | 1 | $ 3 |
Number of investments, 12 months or longer | Investments | 8 | |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 7,035 | |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 191 | |
Number of investments, Total | Investments | 1 | 9 |
Available-for-sale Securities, Fair Value, Total | $ 499 | $ 8,281 |
Available-for-sale Securities, Unrealized Losses, Total | $ 1 | $ 194 |
SBA securities [Member] | ||
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | ||
Available-for-sale Securities, Less than 12 months, Fair Value | ||
Available-for-sale Securities, Less than 12 months, Unrealized losses | ||
Number of investments, 12 months or longer | Investments | 1 | 2 |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 531 | $ 3,525 |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 19 | $ 103 |
Number of investments, Total | Investments | 1 | 2 |
Available-for-sale Securities, Fair Value, Total | $ 531 | $ 3,525 |
Available-for-sale Securities, Unrealized Losses, Total | $ 19 | $ 103 |
State and political subdivisions [Member] | ||
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | 2 | |
Available-for-sale Securities, Less than 12 months, Fair Value | $ 2,093 | |
Available-for-sale Securities, Less than 12 months, Unrealized losses | 24 | |
Number of investments, 12 months or longer | Investments | 7 | |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 2,829 | |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 63 | |
Number of investments, Total | Investments | 2 | 7 |
Available-for-sale Securities, Fair Value, Total | $ 2,093 | $ 2,829 |
Available-for-sale Securities, Unrealized Losses, Total | $ 24 | $ 63 |
Asset-backed Securities [Member] | ||
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | 5 | 4 |
Available-for-sale Securities, Less than 12 months, Fair Value | $ 5,921 | $ 6,707 |
Available-for-sale Securities, Less than 12 months, Unrealized losses | $ 68 | $ 49 |
Number of investments, 12 months or longer | Investments | 5 | |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 7,246 | |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 116 | |
Number of investments, Total | Investments | 10 | 4 |
Available-for-sale Securities, Fair Value, Total | $ 13,167 | $ 6,707 |
Available-for-sale Securities, Unrealized Losses, Total | $ 184 | $ 49 |
Mortgage-backed securities [Member] | FHLMC [Member] | ||
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | 4 | |
Available-for-sale Securities, Less than 12 months, Fair Value | $ 3,842 | |
Available-for-sale Securities, Less than 12 months, Unrealized losses | $ 2 | |
Number of investments, 12 months or longer | Investments | 4 | 10 |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 2,323 | $ 7,402 |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 13 | $ 242 |
Number of investments, Total | Investments | 8 | 10 |
Available-for-sale Securities, Fair Value, Total | $ 6,165 | $ 7,402 |
Available-for-sale Securities, Unrealized Losses, Total | $ 15 | $ 242 |
Mortgage-backed securities [Member] | FNMA [Member] | ||
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | 14 | 2 |
Available-for-sale Securities, Less than 12 months, Fair Value | $ 15,500 | $ 2,689 |
Available-for-sale Securities, Less than 12 months, Unrealized losses | $ 67 | $ 6 |
Number of investments, 12 months or longer | Investments | 11 | 23 |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 9,462 | $ 22,814 |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 102 | $ 545 |
Number of investments, Total | Investments | 25 | 25 |
Available-for-sale Securities, Fair Value, Total | $ 24,962 | $ 25,503 |
Available-for-sale Securities, Unrealized Losses, Total | $ 169 | $ 551 |
Mortgage-backed securities [Member] | GNMA [Member] | ||
Summary of gross unrealized losses on investment securities and fair market value of related securities | ||
Number of investments, Less than 12 months | Investments | 2 | 1 |
Available-for-sale Securities, Less than 12 months, Fair Value | $ 2,240 | $ 1,104 |
Available-for-sale Securities, Less than 12 months, Unrealized losses | $ 6 | $ 6 |
Number of investments, 12 months or longer | Investments | 1 | 3 |
Available-for-sale Securities, 12 months or longer, Fair Value | $ 734 | $ 2,919 |
Available-for-sale Securities, 12 months or Longer, Unrealized losses | $ 15 | $ 126 |
Number of investments, Total | Investments | 3 | 4 |
Available-for-sale Securities, Fair Value, Total | $ 2,974 | $ 4,023 |
Available-for-sale Securities, Unrealized Losses, Total | $ 21 | $ 132 |
Investment Securities (Detail_3
Investment Securities (Details 3) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other investments | ||
Federal Home Loan Bank stock | $ 6,386 | $ 3,587 |
Other investments | 159 | 131 |
Investment in Trust Preferred subsidiaries | 403 | 403 |
Total other investments | $ 6,948 | $ 4,121 |
Investment Securities (Detail_4
Investment Securities (Details Textual) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)Investments | Dec. 31, 2018USD ($)Investments | Dec. 31, 2017USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |||
Sale of investment securities | $ 34,900 | ||
Gain on sale of investment securities | $ 727 | $ 7 | $ 4 |
Number of investments, Less than 12 months | Investments | 28 | 8 | |
Fair market value, less than 12 months | $ 30,100 | ||
Number of investments, 12 months or longer | Investments | 22 | 53 | |
Fair market value,12 months or longer | $ 20,300 |
Mortgage Loans Held for Sale (D
Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Mortgage Loans Held for Sale (Textual) | ||
Mortgage loans held for sale, fair value | $ 27 | $ 9.2 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 1,943,525 | $ 1,677,332 |
Less - allowance for loan losses | (16,642) | (15,762) |
Total loans, net | $ 1,926,883 | $ 1,661,570 |
Total gross loans, net of deferred fees, (Percentage) | 100.00% | 100.00% |
Consumer [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 645,187 | $ 548,627 |
Total gross loans, net of deferred fees, (Percentage) | 33.20% | 32.70% |
Consumer [Member] | Other [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 25,733 | $ 23,822 |
Total gross loans, net of deferred fees, (Percentage) | 1.30% | 1.40% |
Consumer [Member] | Real estate [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 398,245 | $ 320,943 |
Total gross loans, net of deferred fees, (Percentage) | 20.50% | 19.10% |
Consumer [Member] | Construction [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 41,471 | $ 37,925 |
Total gross loans, net of deferred fees, (Percentage) | 2.10% | 2.30% |
Consumer [Member] | Home equity [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 179,738 | $ 165,937 |
Total gross loans, net of deferred fees, (Percentage) | 9.30% | 9.90% |
Commercial [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 1,298,338 | $ 1,128,705 |
Total gross loans, net of deferred fees, (Percentage) | 66.80% | 67.30% |
Commercial [Member] | Business [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 308,123 | $ 272,980 |
Total gross loans, net of deferred fees, (Percentage) | 15.90% | 16.30% |
Commercial [Member] | Non-owner occupied RE [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 501,878 | $ 404,296 |
Total gross loans, net of deferred fees, (Percentage) | 25.80% | 24.10% |
Commercial [Member] | Owner occupied RE [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 407,851 | $ 367,018 |
Total gross loans, net of deferred fees, (Percentage) | 21.00% | 21.90% |
Commercial [Member] | Construction [Member] | ||
Composition of loan portfolio | ||
Total gross loans, net of deferred fees | $ 80,486 | $ 84,411 |
Total gross loans, net of deferred fees, (Percentage) | 4.10% | 5.00% |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Composition of gross loans by rate type | ||
Variable rate loans | $ 432,540 | $ 402,148 |
Fixed rate loans | 1,510,985 | 1,275,184 |
Total gross loans, net of deferred fees | $ 1,943,525 | $ 1,677,332 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses (Details 2) - Commercial [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | $ 1,296,466 | $ 1,128,472 |
30-59 days past due | 1,035 | 153 |
60-89 days past due | ||
Greater than 90 days | 837 | 80 |
Total commercial loans | 1,298,338 | 1,128,705 |
Business [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 307,710 | 272,864 |
30-59 days past due | 178 | 36 |
60-89 days past due | ||
Greater than 90 days | 235 | 80 |
Total commercial loans | 308,123 | 272,980 |
Non-owner occupied RE [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 501,676 | 404,179 |
30-59 days past due | 151 | 117 |
60-89 days past due | ||
Greater than 90 days | 51 | |
Total commercial loans | 501,878 | 404,296 |
Owner occupied RE [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 406,594 | 367,018 |
30-59 days past due | 706 | |
60-89 days past due | ||
Greater than 90 days | 551 | |
Total commercial loans | 407,851 | 367,018 |
Construction [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 80,486 | 84,411 |
30-59 days past due | ||
60-89 days past due | ||
Greater than 90 days | ||
Total commercial loans | $ 80,486 | $ 84,411 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses (Details 3) - Commercial Loans [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | $ 1,298,338 | $ 1,128,705 |
Business [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 308,123 | 272,980 |
Non-owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 501,878 | 404,296 |
Owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 407,851 | 367,018 |
Construction [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 80,486 | 84,411 |
Doubtful [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | ||
Doubtful [Member] | Business [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | ||
Doubtful [Member] | Non-owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | ||
Doubtful [Member] | Owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | ||
Doubtful [Member] | Construction [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | ||
Special Mention [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 5,164 | 3,385 |
Special Mention [Member] | Business [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 3,108 | 2,971 |
Special Mention [Member] | Non-owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 744 | 118 |
Special Mention [Member] | Owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 1,312 | 296 |
Special Mention [Member] | Construction [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | ||
Substandard [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 14,006 | 10,124 |
Substandard [Member] | Business [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 3,511 | 3,111 |
Substandard [Member] | Non-owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 8,193 | 3,912 |
Substandard [Member] | Owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 2,302 | 3,101 |
Substandard [Member] | Construction [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | ||
Pass [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 1,279,168 | 1,115,196 |
Pass [Member] | Business [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 301,504 | 266,898 |
Pass [Member] | Non-owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 492,941 | 400,266 |
Pass [Member] | Owner occupied RE [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | 404,237 | 363,621 |
Pass [Member] | Construction [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Outstanding commercial loans | $ 80,486 | $ 84,411 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses (Details 4) - Consumer [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | $ 642,617 | $ 544,522 |
30-59 days past due | 1,251 | 2,691 |
60-89 days past due | 118 | 1,036 |
Greater than 90 days | 1,201 | 378 |
Total consumer loans | 645,187 | 548,627 |
Other [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 25,650 | 23,603 |
30-59 days past due | 83 | 106 |
60-89 days past due | 113 | |
Greater than 90 days | ||
Total consumer loans | 25,733 | 23,822 |
Real Estate [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 396,445 | 317,267 |
30-59 days past due | 799 | 2,555 |
60-89 days past due | 923 | |
Greater than 90 days | 1,001 | 198 |
Total consumer loans | 398,245 | 320,943 |
Construction [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 41,471 | 37,925 |
30-59 days past due | ||
60-89 days past due | ||
Greater than 90 days | ||
Total consumer loans | 41,471 | 37,925 |
Home equity [Member] | ||
Outstanding commercial and consumer loans which include loans on nonaccrual status | ||
Current | 179,051 | 165,727 |
30-59 days past due | 369 | 30 |
60-89 days past due | 118 | |
Greater than 90 days | 200 | 180 |
Total consumer loans | $ 179,738 | $ 165,937 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses (Details 5) - Consumer [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | $ 645,187 | $ 548,627 |
Other [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 25,733 | 23,822 |
Loss [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Loss [Member] | Other [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Special Mention [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 3,303 | 2,795 |
Special Mention [Member] | Other [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 261 | 139 |
Doubtful [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Doubtful [Member] | Other [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Substandard [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 5,888 | 7,109 |
Substandard [Member] | Other [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 51 | 97 |
Pass [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 635,996 | 538,723 |
Pass [Member] | Other [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 25,421 | 23,586 |
Real estate [Member] | Loss [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Real estate [Member] | Special Mention [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 2,267 | 1,792 |
Real estate [Member] | Doubtful [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Real estate [Member] | Substandard [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 3,406 | 4,565 |
Real estate [Member] | Pass [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 392,572 | 314,586 |
Home equity [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 179,738 | 165,937 |
Home equity [Member] | Loss [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Home equity [Member] | Special Mention [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 775 | 864 |
Home equity [Member] | Doubtful [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Home equity [Member] | Substandard [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 2,431 | 2,447 |
Home equity [Member] | Pass [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 176,532 | 162,626 |
Construction [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 41,471 | 37,925 |
Construction [Member] | Loss [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Construction [Member] | Special Mention [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Construction [Member] | Doubtful [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Construction [Member] | Substandard [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | ||
Construction [Member] | Pass [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | 41,471 | 37,925 |
Real Estate [Member] | ||
Outstanding commercial and consumer loans by risk category | ||
Outstanding consumer loans | $ 398,245 | $ 320,943 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses (Details 6) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | $ 4,111 | $ 2,541 | |
Total nonaccrual loans, including nonaccruing TDRs | 6,794 | 5,830 | |
Other real estate owned | $ 242 | ||
Total nonperforming assets | $ 6,794 | $ 5,830 | |
Nonperforming assets as a percentage of: | |||
Total assets | 0.30% | 0.31% | |
Gross loans | 0.35% | 0.35% | |
Total loans over 90 days past due | $ 2,038 | $ 458 | |
Loans over 90 days past due and still accruing | |||
Accruing TDRs | 5,219 | 6,742 | |
Commercial [Member] | Owner occupied RE [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | |||
Commercial [Member] | Non-owner occupied RE [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | 188 | 210 | |
Commercial [Member] | Business [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | 235 | 81 | |
Commercial [Member] | Construction [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | |||
Consumer [Member] | Other [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | 12 | ||
Consumer [Member] | Construction [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | |||
Consumer [Member] | Real estate [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | 1,829 | 1,980 | |
Consumer [Member] | Home equity [Member] | |||
Summary of nonperforming assets | |||
Nonaccruing troubled debt restructurings | $ 431 | $ 1,006 |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses (Details 7) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of key information for impaired loans | ||
Unpaid Principal Balance | $ 12,682 | $ 14,991 |
Impaired loans | 12,013 | 12,572 |
Impaired loans with no related allowance for loan losses | 7,344 | 6,344 |
Impaired loans with related allowance for loan losses | 4,669 | 6,228 |
Related allowance for loan losses | 1,438 | 2,014 |
Commercial [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 8,923 | 9,893 |
Impaired loans | 8,308 | 8,089 |
Impaired loans with no related allowance for loan losses | 5,247 | 3,429 |
Impaired loans with related allowance for loan losses | 3,061 | 4,660 |
Related allowance for loan losses | 992 | 1,528 |
Commercial [Member] | Owner occupied RE [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 2,791 | 2,827 |
Impaired loans | 2,726 | 2,762 |
Impaired loans with no related allowance for loan losses | 2,270 | 2,311 |
Impaired loans with related allowance for loan losses | 456 | 451 |
Related allowance for loan losses | 75 | 75 |
Commercial [Member] | Non-owner occupied RE [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 4,512 | 3,321 |
Impaired loans | 4,051 | 2,807 |
Impaired loans with no related allowance for loan losses | 2,419 | 603 |
Impaired loans with related allowance for loan losses | 1,632 | 2,204 |
Related allowance for loan losses | 465 | 558 |
Commercial [Member] | Business [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 1,620 | 3,745 |
Impaired loans | 1,531 | 2,520 |
Impaired loans with no related allowance for loan losses | 558 | 515 |
Impaired loans with related allowance for loan losses | 973 | 2,005 |
Related allowance for loan losses | 452 | 895 |
Commercial [Member] | Construction [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | ||
Impaired loans | ||
Impaired loans with no related allowance for loan losses | ||
Impaired loans with related allowance for loan losses | ||
Related allowance for loan losses | ||
Consumer [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 3,759 | 5,098 |
Impaired loans | 3,705 | 4,483 |
Impaired loans with no related allowance for loan losses | 2,097 | 2,915 |
Impaired loans with related allowance for loan losses | 1,608 | 1,568 |
Related allowance for loan losses | 446 | 486 |
Consumer [Member] | Other [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 147 | 170 |
Impaired loans | 147 | 170 |
Impaired loans with no related allowance for loan losses | ||
Impaired loans with related allowance for loan losses | 147 | 170 |
Related allowance for loan losses | 16 | 30 |
Consumer [Member] | Construction [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | ||
Impaired loans | ||
Impaired loans with no related allowance for loan losses | ||
Impaired loans with related allowance for loan losses | ||
Related allowance for loan losses | ||
Consumer [Member] | Real estate [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 2,727 | 2,993 |
Impaired loans | 2,720 | 2,892 |
Impaired loans with no related allowance for loan losses | 1,638 | 1,494 |
Impaired loans with related allowance for loan losses | 1,082 | 1,398 |
Related allowance for loan losses | 364 | 456 |
Consumer [Member] | Home equity [Member] | ||
Summary of key information for impaired loans | ||
Unpaid Principal Balance | 885 | 1,935 |
Impaired loans | 838 | 1,421 |
Impaired loans with no related allowance for loan losses | 459 | 1,421 |
Impaired loans with related allowance for loan losses | 379 | |
Related allowance for loan losses | $ 66 |
Loans and Allowance for Loan_11
Loans and Allowance for Loan Losses (Details 8) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | $ 12,259 | $ 13,084 | $ 13,019 |
Recognized interest income | 640 | 733 | 637 |
Commercial [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 8,482 | 8,527 | 9,222 |
Recognized interest income | 462 | 478 | 465 |
Commercial [Member] | Owner occupied RE [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 2,739 | 2,784 | 2,255 |
Recognized interest income | 128 | 142 | 104 |
Commercial [Member] | Non-owner occupied RE [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 4,161 | 2,860 | 4,144 |
Recognized interest income | 255 | 174 | 199 |
Commercial [Member] | Business [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 1,582 | 2,883 | 2,823 |
Recognized interest income | 79 | 162 | 162 |
Commercial [Member] | Construction [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | |||
Recognized interest income | |||
Consumer [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 3,777 | 4,557 | 3,797 |
Recognized interest income | 178 | 255 | 172 |
Consumer [Member] | Other [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 153 | 174 | 174 |
Recognized interest income | 5 | 5 | 6 |
Consumer [Member] | Construction [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | |||
Recognized interest income | |||
Consumer [Member] | Real estate [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 2,771 | 2,930 | 2,047 |
Recognized interest income | 131 | 151 | 69 |
Consumer [Member] | Home equity [Member] | |||
Average recorded investment and interest income recognized on impaired loans | |||
Average recorded investment | 853 | 1,453 | 1,576 |
Recognized interest income | $ 42 | $ 99 | $ 97 |
Loans and Allowance for Loan_12
Loans and Allowance for Loan Losses (Details 9) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Balance, beginning of period | $ 15,762 | $ 15,523 | $ 14,855 |
Provision for loan losses | 2,300 | 1,900 | 2,000 |
Total loan charge-offs | (1,515) | (2,146) | (1,638) |
Loan recoveries | 95 | 485 | 306 |
Net loan charge-offs | (1,420) | (1,661) | (1,332) |
Balance, end of period | 16,642 | 15,762 | 15,523 |
Commercial [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Balance, beginning of period | 10,768 | ||
Total loan charge-offs | (1,259) | (1,127) | (1,227) |
Loan recoveries | 45 | 361 | 205 |
Balance, end of period | 11,372 | 10,768 | |
Commercial [Member] | Owner occupied RE [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | (110) | ||
Loan recoveries | |||
Commercial [Member] | Non-owner occupied RE [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | (239) | (432) | (589) |
Loan recoveries | 2 | 132 | 119 |
Commercial [Member] | Business [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | (910) | (695) | (638) |
Loan recoveries | 43 | 229 | 86 |
Commercial [Member] | Construction [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | |||
Loan recoveries | |||
Consumer [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Balance, beginning of period | 4,994 | ||
Total loan charge-offs | (256) | (1,019) | (411) |
Loan recoveries | 50 | 124 | 101 |
Balance, end of period | 5,270 | 4,994 | |
Consumer [Member] | Other [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | (82) | (53) | (11) |
Loan recoveries | 11 | 4 | 2 |
Consumer [Member] | Construction [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | |||
Loan recoveries | |||
Consumer [Member] | Real estate [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | (749) | ||
Loan recoveries | 37 | 5 | 86 |
Consumer [Member] | Home equity [Member] | |||
Financing Receivable, Allowance For Credit Losses [Roll Forward] | |||
Total loan charge-offs | (174) | (217) | (400) |
Loan recoveries | $ 2 | $ 115 | $ 13 |
Loans and Allowance for Loan_13
Loans and Allowance for Loan Losses (Details 10) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of activity related to our allowance for loan losses | |||
Balance, beginning of period | $ 15,762 | $ 15,523 | $ 14,855 |
Provision | 2,300 | 1,900 | 2,000 |
Loan charge-offs | (1,515) | (2,146) | (1,638) |
Loan recoveries | 95 | 485 | 306 |
Net loan charge-offs | (1,420) | (1,661) | (1,332) |
Balance, end of period | 16,642 | 15,762 | 15,523 |
Commercial Portfolio Segment [Member] | |||
Summary of activity related to our allowance for loan losses | |||
Balance, beginning of period | 10,768 | 9,937 | |
Provision | 1,818 | 1,597 | |
Loan charge-offs | (1,259) | (1,127) | |
Loan recoveries | 45 | 361 | |
Net loan charge-offs | (1,214) | (766) | |
Balance, end of period | 11,372 | 10,768 | 9,937 |
Consumer Portfolio Segment [Member] | |||
Summary of activity related to our allowance for loan losses | |||
Balance, beginning of period | 4,994 | 5,586 | |
Provision | 482 | 303 | |
Loan charge-offs | (256) | (1,019) | |
Loan recoveries | 50 | 124 | |
Net loan charge-offs | (206) | (895) | |
Balance, end of period | $ 5,270 | $ 4,994 | $ 5,586 |
Loans and Allowance for Loan_14
Loans and Allowance for Loan Losses (Details 11) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for loan losses and recorded investment in loans by impairment methodology | ||||
Allowance for loan losses, Individually evaluated | $ 1,438 | $ 2,014 | ||
Recorded investment in loans, Individually evaluated | 12,013 | 12,572 | ||
Allowance for loan losses, Collectively evaluated | 15,204 | 13,748 | ||
Recorded investment in loans, Collectively evaluated | 1,931,512 | 1,664,760 | ||
Allowance for loan losses, Total | 16,642 | 15,762 | $ 15,523 | $ 14,855 |
Recorded investment in loans, Total | 1,943,525 | 1,677,332 | ||
Commercial [Member] | ||||
Allowance for loan losses and recorded investment in loans by impairment methodology | ||||
Allowance for loan losses, Individually evaluated | 992 | 1,528 | ||
Recorded investment in loans, Individually evaluated | 8,308 | 8,089 | ||
Allowance for loan losses, Collectively evaluated | 10,380 | 9,240 | ||
Recorded investment in loans, Collectively evaluated | 1,290,030 | 1,120,616 | ||
Allowance for loan losses, Total | 11,372 | 10,768 | ||
Recorded investment in loans, Total | 1,298,338 | 1,128,705 | ||
Consumer [Member] | ||||
Allowance for loan losses and recorded investment in loans by impairment methodology | ||||
Allowance for loan losses, Individually evaluated | 446 | 486 | ||
Recorded investment in loans, Individually evaluated | 3,705 | 4,483 | ||
Allowance for loan losses, Collectively evaluated | 4,824 | 4,508 | ||
Recorded investment in loans, Collectively evaluated | 641,482 | 544,144 | ||
Allowance for loan losses, Total | 5,270 | 4,994 | ||
Recorded investment in loans, Total | $ 645,187 | $ 548,627 |
Loans and Allowance for Loan_15
Loans and Allowance for Loan Losses (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Part of loans of 30 days or more past due as a percentage of total loan portfolio | 0.23% | 0.26% |
Real estate loan percentage of total loan | 82.80% | |
Consumer loans percentage of total real estate loan | 38.50% | |
Mortgage loan pledged as collateral for advances from FHLB | $ 716,000 | $ 5,976 |
Commercial loans percentage of total real estate loan | 61.50% | |
Foregone interest income on non accrual loans | $ 23 | 53 |
Net of deferred loan fees and costs | $ 33 | $ 28 |
Owner occupied RE [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Commercial loans percentage of total real estate loan | 21.00% | |
Construction [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Commercial loans percentage of total real estate loan | 4.10% | |
Non-owner occupied RE [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Commercial loans percentage of total real estate loan | 25.80% | |
Consumer [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Part of loans of 30 days or more past due as a percentage of total loan portfolio | 0.13% | 0.25% |
Commercial [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Part of loans of 30 days or more past due as a percentage of total loan portfolio | 0.10% | 0.01% |
Troubled Debt Restructurings (D
Troubled Debt Restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)Investments | Dec. 31, 2018USD ($)Investments | |
Summary of concession at the time of modification and the recorded investment in TDRs before and after their modification | ||
Renewals deemed a concession | 1 | 7 |
Reduced or deferred payments | 1 | 1 |
Converted to interest only | ||
Maturity date extensions | ||
Total number of loans | 1 | 8 |
Pre-modification outstanding recorded investment | $ | $ 1,823 | $ 3,549 |
Post-modification outstanding recorded investment | $ | $ 1,823 | $ 4,080 |
Commercial [Member] | Non-owner occupied RE [Member] | ||
Summary of concession at the time of modification and the recorded investment in TDRs before and after their modification | ||
Renewals deemed a concession | ||
Reduced or deferred payments | 1 | |
Converted to interest only | ||
Maturity date extensions | ||
Total number of loans | 1 | |
Pre-modification outstanding recorded investment | $ | $ 1,287 | |
Post-modification outstanding recorded investment | $ | $ 1,287 | |
Commercial [Member] | Owner occupied RE [Member] | ||
Summary of concession at the time of modification and the recorded investment in TDRs before and after their modification | ||
Renewals deemed a concession | 1 | |
Reduced or deferred payments | ||
Converted to interest only | ||
Maturity date extensions | ||
Total number of loans | 1 | |
Pre-modification outstanding recorded investment | $ | $ 506 | |
Post-modification outstanding recorded investment | $ | $ 592 | |
Commercial [Member] | Business [Member] | ||
Summary of concession at the time of modification and the recorded investment in TDRs before and after their modification | ||
Renewals deemed a concession | 1 | 4 |
Reduced or deferred payments | 1 | |
Converted to interest only | ||
Maturity date extensions | ||
Total number of loans | 1 | 4 |
Pre-modification outstanding recorded investment | $ | $ 1,823 | $ 1,207 |
Post-modification outstanding recorded investment | $ | $ 1,823 | $ 1,532 |
Consumer [Member] | Real estate [Member] | ||
Summary of concession at the time of modification and the recorded investment in TDRs before and after their modification | ||
Renewals deemed a concession | 2 | |
Reduced or deferred payments | ||
Converted to interest only | ||
Maturity date extensions | ||
Total number of loans | 2 | |
Pre-modification outstanding recorded investment | $ | $ 549 | |
Post-modification outstanding recorded investment | $ | $ 669 |
Troubled Debt Restructurings _2
Troubled Debt Restructurings (Details Textual) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($)Investments | Dec. 31, 2018USD ($)Investments | |
Troubled Debt Restructurings (Textual) | ||
Total number of loans classified under troubled debt restructurings (TDRs) | 19 | 26 |
Total sum of loans classified as troubled debt restructurings (TDRs) | $ | $ 9.3 | $ 9.3 |
Number of months previous loan payment defaulted | 12 months | 12 months |
Commercial [Member] | ||
Troubled Debt Restructurings (Textual) | ||
Total number of loans added under troubled debt restructurings (TDRs) | 1 | |
Total sum of loans added as troubled debt restructurings (TDRs) | $ | $ 1.8 | |
Total number of loans removed under TDR | 9 | |
Total number of nonaccrual loans restored | 5 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Components of property and equipment | ||
Accumulated depreciation and amortization | $ (12,705) | $ (10,860) |
Property and equipment, excluding ROU assets | 38,973 | 32,430 |
ROU assets | 19,505 | |
Total property and equipment | 58,478 | 32,430 |
Land [Member] | ||
Components of property and equipment | ||
Property and equipment, excluding ROU assets | 11,531 | 6,827 |
Buildings [Member] | ||
Components of property and equipment | ||
Property and equipment, excluding ROU assets | 24,136 | 24,064 |
Leasehold Improvements [Member] | ||
Components of property and equipment | ||
Property and equipment, excluding ROU assets | 4,486 | 2,899 |
Furniture and equipment [Member] | ||
Components of property and equipment | ||
Property and equipment, excluding ROU assets | 10,219 | 8,890 |
Software [Member] | ||
Components of property and equipment | ||
Property and equipment, excluding ROU assets | 367 | 329 |
Construction in process [Member] | ||
Components of property and equipment | ||
Property and equipment, excluding ROU assets | $ 939 | $ 281 |
Property and Equipment (Detai_2
Property and Equipment (Details 1) | 12 Months Ended |
Dec. 31, 2019 | |
Software [Member] | |
Schedule of estimated useful lives of property plant and equipment | |
Property and equipment, estimated useful life (in years) | 3 years |
Buildings [Member] | |
Schedule of estimated useful lives of property plant and equipment | |
Property and equipment, estimated useful life (in years) | 40 years |
Minimum [Member] | Furniture and equipment [Member] | |
Schedule of estimated useful lives of property plant and equipment | |
Property and equipment, estimated useful life (in years) | 5 years |
Minimum [Member] | Leasehold Improvements [Member] | |
Schedule of estimated useful lives of property plant and equipment | |
Property and equipment, estimated useful life (in years) | 5 years |
Maximum [Member] | Furniture and equipment [Member] | |
Schedule of estimated useful lives of property plant and equipment | |
Property and equipment, estimated useful life (in years) | 7 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Schedule of estimated useful lives of property plant and equipment | |
Property and equipment, estimated useful life (in years) | 15 years |
Property and Equipment (Detai_3
Property and Equipment (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Purchased property | $ 4.7 | |
Depreciation and amortization expense | $ 1.9 | $ 1.8 |
Leases (Details)
Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Year one | $ 2,103 |
Year two | 2,152 |
Year three | 1,400 |
Year four | 1,273 |
Year five | 1,305 |
Thereafter | 17,404 |
Total undiscounted lease payments | 25,637 |
Discount effect of cash flows | 5,549 |
Total lease liability | $ 20,088 |
Leases (Details Textual)
Leases (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Weighted average remaining life | 7 years 11 months 19 days | |
Weighted average discount rate | 2.86% | |
Operating lease costs | $ 2,200 | $ 1,800 |
Operating lease, right-of-use asset | 19,505 | |
Lease liabilities | $ 20,088 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of activity of real estate acquired in settlement of loans portion of other real estate owned | ||
Balance, beginning of year | $ 242 | |
Additions | ||
Sales | (125) | |
Write-downs, net | (117) | |
Balance, end of year |
Other Real Estate Owned (Deta_2
Other Real Estate Owned (Details Textual) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Real Estate [Abstract] | ||
Real estate acquired in settlement loans |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deposits [Abstract] | ||
Noninterest bearing | $ 397,331 | $ 346,570 |
Interest bearing: | ||
NOW accounts | 228,680 | 186,795 |
Money market accounts | 898,923 | 730,765 |
Savings | 16,258 | 15,486 |
Time, less than $100,000 | 47,941 | 63,073 |
Time, $100,000 and over | 286,991 | 305,447 |
Total deposits | $ 1,876,124 | $ 1,648,136 |
Deposits (Details 1)
Deposits (Details 1) - Certificates Of Deposit [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Scheduled maturities of certificates of deposit | |
2020 | $ 277,342 |
2021 | 38,528 |
2022 | 10,783 |
2023 | 6,133 |
2024 and after | 2,146 |
Certificates of deposit | $ 334,932 |
Deposits (Details Textual)
Deposits (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deposits [Abstract] | |||
Time deposits greater $250,000 | $ 220.1 | $ 214 | |
Time deposits obtained outside of primary market | 67.4 | 79.3 | |
Interest expense on time deposits greater than $100,000 | $ 6.9 | $ 4.7 | $ 2.7 |
Federal Home Loan Bank Advanc_3
Federal Home Loan Bank Advances and Other Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of the terms and maturities of advances of FHLB | ||
Amount | $ 110,000 | $ 50,000 |
Rate | 1.78% | 3.01% |
Federal Home Loan Bank Advances One [Member] | ||
Summary of the terms and maturities of advances of FHLB | ||
Maturity | Dec. 31, 2019 | Dec. 31, 2019 |
Amount | $ 25,000 | |
Rate | 2.65% | |
Federal Home Loan Bank Advances Two [Member] | ||
Summary of the terms and maturities of advances of FHLB | ||
Maturity | Jul. 7, 2022 | Jul. 7, 2022 |
Amount | $ 10,000 | |
Rate | 3.11% | |
Federal Home Loan Bank Advances Three [Member] | ||
Summary of the terms and maturities of advances of FHLB | ||
Maturity | Jul. 7, 2023 | Jul. 7, 2023 |
Amount | $ 15,000 | |
Rate | 3.53% | |
Federal Home Loan Bank Advances Four [Member] | ||
Summary of the terms and maturities of advances of FHLB | ||
Maturity | Dec. 31, 2020 | Dec. 31, 2020 |
Amount | $ 110,000 | |
Rate | 1.78% |
Federal Home Loan Bank Advanc_4
Federal Home Loan Bank Advances and Other Borrowings (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Federal Home Loan Bank Advances and Other Borrowings (Textual) | |||
FHLB advances | $ 110,000 | $ 110,000 | $ 50,000 |
FHLB advances are secured mortgage loans | 716,000 | 716,000 | $ 5,976 |
FHLB stock | 6,400 | 6,400 | |
Interest only line of credit | 15,000 | $ 15,000 | |
Line of credit facility, maturity date | Jun. 30, 2020 | ||
Repayment of advance loan | 25,000 | ||
Prepayment fees on advances net | $ 1,500 | ||
Percentage of average cost of advances | 3.36% | 3.36% | |
London Interbank Offered Rate (LIBOR) [Member] | |||
Federal Home Loan Bank Advances and Other Borrowings (Textual) | |||
Line of credit, interest rate | 2.50% | 2.50% | |
Line of credit facility, Interest rate description | LIBOR plus 2.50 |
Subordinated Debentures (Detail
Subordinated Debentures (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 22, 2005 | Jun. 26, 2003 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subordinated Debentures (Textual) | |||||
Subordinated debentures | $ 35,890,000 | $ 13,403,000 | |||
Dodd-Frank Act prohibits, Description | Dodd-Frank Act prohibit institutions that had more than $15 billion in assets on December 31, 2009 from including trust preferred securities as Tier 1 capital beginning in 2013, with one-third phased out over the two years ending in 2015. Financial institutions with less than $15 billion in total assets, such as the Bank, may continue to include their trust preferred securities issued prior to May 19, 2010 in Tier 1 capital, but cannot include in Tier 1 capital trust preferred securities issued after such date. | ||||
Subordinated Debt [Member] | |||||
Subordinated Debentures (Textual) | |||||
Aggregate principal amount of subordinated notes | $ 23,000,000 | ||||
Rate of interest of subordinated notes | 4.75% | ||||
Proceeds from issue of subordinated debts | $ 22,500,000 | ||||
Term of subordinated notes | 10 years | ||||
Basis points of interest rate calculation | 3.408% | ||||
Greenville First Statutory Trust One [Member] | |||||
Subordinated Debentures (Textual) | |||||
Amount of trust preferred securities issued at floating rate | $ 6,000,000 | ||||
Maturity date of trust preferred securities | Jun. 26, 2033 | ||||
Floating interest rate of trust preferred securities | 5.05% | ||||
LIBOR rate | 3.10% | ||||
Indexed period of LIBOR rate | 3-month | ||||
Proceeds from issuance trust preferred securities | $ 6,000,000 | ||||
Initial proceeds from capital investment in trust | 186,000 | ||||
Subordinated debentures | $ 6,200,000 | ||||
Greenville First Statutory Trust Two [Member] | |||||
Subordinated Debentures (Textual) | |||||
Amount of trust preferred securities issued at floating rate | $ 7,000,000 | ||||
Maturity date of trust preferred securities | Dec. 22, 2035 | ||||
Floating interest rate of trust preferred securities | 3.40% | ||||
LIBOR rate | 1.44% | ||||
Indexed period of LIBOR rate | 3-month | ||||
Proceeds from issuance trust preferred securities | $ 7,000,000 | ||||
Initial proceeds from capital investment in trust | 217,000 | ||||
Subordinated debentures | $ 7,200,000 |
Unused Lines of Credit (Details
Unused Lines of Credit (Details) $ in Millions | Dec. 31, 2019USD ($) |
Unused Lines of Credit [Abstract] | |
Lines of credit to purchase federal funds | $ 72 |
Additional borrowings under FHLB | $ 312.4 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Interest Rate Lock Commitments [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative financial instruments, Notional amount | $ 26,446 | $ 20,552 |
Derivative Asset/(Liability), Fair Value | $ 344 | $ 345 |
Balance Sheet Location, description | Other assets | Other assets |
Securities Sold, Not yet Purchased [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative financial instruments, Notional amount | $ 20,500 | $ 11,750 |
Derivative Asset/(Liability), Fair Value | $ (39) | $ (121) |
Balance Sheet Location, description | Other liabilities | Other liabilities |
Derivative [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative financial instruments, Notional amount | $ 46,946 | $ 32,302 |
Derivative Asset/(Liability), Fair Value | $ 305 | $ 224 |
Fair Value Accounting (Details)
Fair Value Accounting (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Securities available for sale: | ||
US government agencies | $ 499 | $ 8,782 |
SBA securities | 531 | 3,525 |
State and political subdivisions | 4,184 | 8,356 |
Asset-backed securities | 13,167 | 9,558 |
Mortgage-backed securities | 49,313 | 44,684 |
Mortgage loans held for sale | 27,046 | 9,241 |
Mortgage loan interest rate lock commitments | 344 | 345 |
Total assets measured at fair value on a recurring basis | 95,084 | 84,491 |
Liabilities | ||
MBS forward sales commitments | 39 | 121 |
Total liabilities measured at fair value on a recurring basis | 39 | 121 |
Fair Value, Inputs, Level 1 [Member] | ||
Securities available for sale: | ||
US government agencies | ||
SBA securities | ||
State and political subdivisions | ||
Asset-backed securities | ||
Mortgage-backed securities | ||
Mortgage loans held for sale | ||
Mortgage loan interest rate lock commitments | ||
Total assets measured at fair value on a recurring basis | ||
Liabilities | ||
MBS forward sales commitments | ||
Total liabilities measured at fair value on a recurring basis | ||
Fair Value, Inputs, Level 2 [Member] | ||
Securities available for sale: | ||
US government agencies | 499 | 8,782 |
SBA securities | 531 | 3,525 |
State and political subdivisions | 4,184 | 8,356 |
Asset-backed securities | 13,167 | 9,558 |
Mortgage-backed securities | 49,313 | 44,684 |
Mortgage loans held for sale | 27,046 | 9,241 |
Mortgage loan interest rate lock commitments | 344 | 345 |
Total assets measured at fair value on a recurring basis | 95,084 | 84,891 |
Liabilities | ||
MBS forward sales commitments | 39 | 121 |
Total liabilities measured at fair value on a recurring basis | 39 | 121 |
Fair Value, Inputs, Level 3 [Member] | ||
Securities available for sale: | ||
US government agencies | ||
SBA securities | ||
State and political subdivisions | ||
Asset-backed securities | ||
Mortgage-backed securities | ||
Mortgage loans held for sale | ||
Mortgage loan interest rate lock commitments | ||
Total assets measured at fair value on a recurring basis | ||
Liabilities | ||
MBS forward sales commitments | ||
Total liabilities measured at fair value on a recurring basis |
Fair Value Accounting (Details
Fair Value Accounting (Details 1) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Impaired loans | $ 10,575 | $ 10,558 |
Total assets measured at fair value on a nonrecurring basis | 10,575 | 10,558 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Impaired loans | ||
Total assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Impaired loans | 5,634 | 2,190 |
Total assets measured at fair value on a nonrecurring basis | 5,634 | 2,190 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Impaired loans | 4,941 | 8,368 |
Total assets measured at fair value on a nonrecurring basis | $ 4,941 | $ 8,368 |
Fair Value Accounting (Detail_2
Fair Value Accounting (Details 2) | 12 Months Ended |
Dec. 31, 2019 | |
Other Real Estate Owned [Member] | |
Schedule of unobservable inputs used in the fair value measurements | |
Valuation Technique | Appraised Value/Comparable Sales |
Significant Unobservable Inputs | Discounts to appraisals for estimated holding or selling costs |
Impaired Loans [Member] | |
Schedule of unobservable inputs used in the fair value measurements | |
Valuation Technique | Appraised Value/Discounted Cash Flows |
Significant Unobservable Inputs | Discounts to appraisals or cash flows for estimated holding and/or selling costs or age of appraisal |
Minimum [Member] | Other Real Estate Owned [Member] | |
Schedule of unobservable inputs used in the fair value measurements | |
Range of Inputs | 0.00% |
Minimum [Member] | Impaired Loans [Member] | |
Schedule of unobservable inputs used in the fair value measurements | |
Range of Inputs | 0.00% |
Maximum [Member] | Other Real Estate Owned [Member] | |
Schedule of unobservable inputs used in the fair value measurements | |
Range of Inputs | 25.00% |
Maximum [Member] | Impaired Loans [Member] | |
Schedule of unobservable inputs used in the fair value measurements | |
Range of Inputs | 25.00% |
Fair Value Accounting (Detail_3
Fair Value Accounting (Details 3) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Financial Assets: | |||
Other investments, at cost, Carrying Amount | $ 6,948 | $ 4,121 | |
Loans, net, Carrying Amount | [1] | 1,914,870 | 1,648,998 |
Other investments, at cost, Fair Value | 6,948 | 4,121 | |
Loans, net, Fair Value | [1] | 1,900,216 | 1,618,618 |
Financial Liabilities: | |||
Deposits, Carrying Amount | 1,876,124 | 1,648,136 | |
FHLB and other borrowings, Carrying Amount | 110,000 | 50,000 | |
Subordinated debentures, Carrying Amount | 35,890 | 13,403 | |
Deposits, Fair Value | 1,772,121 | 1,515,123 | |
FHLB and other borrowings, Fair Value | 109,737 | 50,147 | |
Junior subordinated debentures, Fair Value | 33,250 | 14,807 | |
Estimate Of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Financial Assets: | |||
Other investments, at cost, Fair Value | |||
Loans, net, Fair Value | [1] | ||
Financial Liabilities: | |||
Deposits, Fair Value | |||
FHLB and other borrowings, Fair Value | |||
Junior subordinated debentures, Fair Value | |||
Estimate Of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Financial Assets: | |||
Other investments, at cost, Fair Value | |||
Loans, net, Fair Value | [1] | ||
Financial Liabilities: | |||
Deposits, Fair Value | 1,772,121 | 1,515,123 | |
FHLB and other borrowings, Fair Value | 109,737 | 50,147 | |
Junior subordinated debentures, Fair Value | 33,250 | 14,807 | |
Estimate Of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Financial Assets: | |||
Other investments, at cost, Fair Value | 6,948 | 4,121 | |
Loans, net, Fair Value | [1] | 1,900,216 | 1,618,618 |
Financial Liabilities: | |||
Deposits, Fair Value | |||
FHLB and other borrowings, Fair Value | |||
Junior subordinated debentures, Fair Value | |||
[1] | Carrying amount is net of the allowance for loan losses and previously presented impaired loans. |
Fair Value Accounting (Detail_4
Fair Value Accounting (Details Textual) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Percentage of loans collateralize by real estate | More than 83% |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||
Net income | $ 27,858 | $ 22,289 | $ 13,045 |
Net income available to common shareholders | $ 27,858 | $ 22,289 | $ 13,045 |
Denominator: | |||
Weighted-average common shares outstanding - basic | 7,528,283 | 7,384,200 | 7,005,703 |
Common stock equivalents | 244,261 | 353,295 | 387,674 |
Weighted-average common shares outstanding - diluted | 7,772,544 | 7,737,495 | 7,393,377 |
Earnings per common share: | |||
Basic | $ 3.70 | $ 3.02 | $ 1.86 |
Diluted | $ 3.58 | $ 2.88 | $ 1.76 |
Earnings Per Common Share (De_2
Earnings Per Common Share (Details Textual) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per common share | |||
Antidilutive securities excluded from computation of earnings per share, amount | 94,885 | 195,425 | 107,015 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)ExecutiveOfficers | |
Commitments and Contingencies (Textual) | |
Description of employment agreement | These agreements also include a) an incentive program, b) a stock option plan, c) a one-year non-compete agreement upon termination and a severance payment equal to one year of compensation. |
Estimated aggregate salary commitment | $ | $ 3,300 |
Agreement with data processor expire date | 2023 |
President [Member] | |
Commitments and Contingencies (Textual) | |
Period of employment agreement | 2 years |
Vice President [Member] | |
Commitments and Contingencies (Textual) | |
Number of executive officers | ExecutiveOfficers | 12 |
Chief Executive Officer [Member] | |
Commitments and Contingencies (Textual) | |
Period of employment agreement | 3 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current income taxes: | |||
Federal | $ 6,791 | $ 5,536 | $ 7,139 |
State | 1,250 | 990 | 573 |
Total current tax expense | 8,041 | 6,526 | 7,712 |
Deferred income tax expense (benefit) | (420) | (125) | 2,904 |
Income tax expense | $ 7,621 | $ 6,401 | $ 10,616 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of the items that caused recorded income taxes to differ from taxes computed using the statutory tax rate | |||
Tax expense at statutory rate | $ 7,451 | $ 6,025 | $ 8,281 |
Effect of state income taxes, net of federal benefit | 987 | 782 | 372 |
Exempt income | (26) | (34) | (146) |
Effect of change in federal tax rate | 2,441 | ||
Effect of stock-based compensation | (693) | (248) | (2) |
Other | (98) | (124) | (330) |
Income tax expense | $ 7,621 | $ 6,401 | $ 10,616 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Allowance for loan losses | $ 3,495 | $ 3,310 |
Unrealized loss on securities available for sale | 79 | 244 |
Net deferred loan fees | 697 | 592 |
Deferred compensation | 1,404 | 1,280 |
Sale of real estate owned | 128 | |
Lease liabilities | 4,219 | |
Other | 234 | 130 |
Deferred tax assets, gross | 10,128 | 5,684 |
Deferred tax liabilities: | ||
Property and equipment | 1,398 | 1,433 |
Hedging transactions | 227 | 112 |
Prepaid expenses | 132 | 107 |
Right-of-use assets | 4,096 | |
Other | 12 | |
Deferred tax liabilities, gross | 5,853 | 1,664 |
Net deferred tax asset | $ 4,275 | $ 4,020 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Provisional net tax expense | $ 2,441 | ||
Percentage of federal statutory income tax rate | 21.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - Directors Affiliates and Executive Officers [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of loan transactions with directors, including their affiliates and executive officers | ||
Balance, beginning of year | $ 13,969 | $ 15,276 |
New loans | 6,709 | 5,686 |
Less loan payments | (9,787) | (6,993) |
Balance, end of year | $ 10,891 | $ 13,969 |
Related Party Transactions (D_2
Related Party Transactions (Details Textual) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)Offices | Dec. 31, 2017USD ($) | |
Related Party Transactions (Textual) | |||
Number of offices | Offices | 4 | ||
Director [Member] | |||
Related Party Transactions (Textual) | |||
Monthly payments of land lease by Company | $ 8,256 | ||
Property management services expense for Bank | $ 21,000 | $ 38,000 | |
Property development and advisory fees | 600,000 | ||
Payment for employment recruiting services | 38,000 | ||
Directors Affiliates and Executive Officers [Member] | |||
Related Party Transactions (Textual) | |||
Deposits by related parties | $ 2,500,000 | $ 2,700,000 |
Financial Instruments With Of_2
Financial Instruments With Off-Balance Sheet Risk (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Financial instruments with off-balance sheet risk (Textual) | ||
Commitment under letters of credit | $ 9.9 | $ 10 |
Commitments To Extend Credit [Member] | ||
Financial instruments with off-balance sheet risk (Textual) | ||
Amount of unfunded commitments to extend credit | 426.6 | 399.4 |
Unfunded commitments to extend credit at fixed rate | 105 | 130.5 |
Unfunded commitments to extend credit at variable rate | $ 321.6 | $ 269 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)ExecutiveOfficers | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Profit Sharing and Four Hundred One K Plan [Member] | |||
Employee Benefit Plan (Textual) | |||
Defined benefit plan, annual cost | $ 693,000 | $ 587,000 | $ 476,000 |
Supplemental Executive Retirement Plan [Member] | |||
Employee Benefit Plan (Textual) | |||
Defined benefit plan, annual cost | $ 657,000 | 940,000 | $ 792,000 |
Number of executive officers | ExecutiveOfficers | 24 | ||
Accrued benefit obligation | $ 6,700,000 | $ 6,100,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Stock option expense | $ 1,270 | $ 1,183 | $ 959 |
Restricted stock grant expense | 428 | 319 | 299 |
Total stock-based compensation expense | $ 1,698 | $ 1,502 | $ 1,258 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of the status of the stock option plan and changes | |||
Shares Outstanding at beginning of year | 648,311 | 662,841 | 642,203 |
Shares Granted | 101,350 | 94,700 | 110,950 |
Shares Exercised | (191,497) | (105,630) | (74,437) |
Shares Forfeited or expired | (16,750) | (3,600) | (15,875) |
Shares Outstanding at end of year | 541,414 | 648,311 | 662,841 |
Shares options exercisable at year-end | 305,991 | 404,851 | 419,766 |
Shares available for grant | 183,990 | 270,090 | 359,690 |
Weighted average exercise price Outstanding at beginning of year | $ 20.74 | $ 15.70 | $ 11.77 |
Weighted average exercise price Granted | 32.81 | 43.13 | 35.34 |
Weighted average exercise price Exercised | 9.24 | 8.51 | 9.48 |
Weighted average exercise price Forfeited or expired | 34.01 | 40.03 | 23.49 |
Weighted average exercise price Outstanding at end of year | 26.65 | 20.74 | 15.70 |
Weighted average exercise price, Options exercisable at year-end | 20 | 12.58 | 9.20 |
Weighted average fair value of options granted during the year | $ 11.81 | $ 16.76 | $ 14.14 |
Weighted Average Remaining Contractual Life, Outstanding at end of year | 6 years 3 months 19 days | 5 years 7 months 6 days | 5 years 7 months 6 days |
Weighted Average Remaining Contractual Life, Options exercisable at year-end | 4 years 10 months 25 days | 4 years | 4 years 1 month 6 days |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details 2) - Employee Stock Option [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | |||
Expected life | 7 years | 7 years | 7 years |
Expected volatility | 28.21% | 32.07% | 34.63% |
Risk-free interest rate | 2.59% | 2.50% | 2.04% |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details 3) - Nonvested restricted stock [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of the status of the Company's nonvested restricted stock and changes | |||
Restricted Shares Nonvested at beginning of year | 29,625 | 25,000 | 36,125 |
Restricted Shares Granted | 14,700 | 13,000 | 6,500 |
Restricted Shares Vested | (10,375) | (8,375) | (17,625) |
Restricted Shares Forfeited | (1,125) | ||
Restricted Shares Nonvested at end of year | 32,825 | 29,625 | 25,000 |
Weighted Average Grant-Date Fair Value Nonvested at beginning of year | $ 34 | $ 26.43 | $ 20.13 |
Weighted Average Grant-Date Fair Value Granted | 33.64 | 42.87 | 35.14 |
Weighted Average Grant-Date Fair Value Vested | 31.61 | 25.17 | 16.73 |
Weighted Average Grant-Date Fair Value Forfeited | 28.03 | ||
Weighted Average Grant-Date Fair Value Nonvested at end of year | $ 34.78 | $ 34 | $ 26.43 |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details Textual) - USD ($) $ in Thousands | May 17, 2016 | May 20, 2014 | May 18, 2010 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock-Based Compensation (Textual) | ||||||
Unrecognized compensation cost | $ 2,000 | |||||
Recognized weighted average period | 2 years 4 months 24 days | |||||
Fair value of stock option grants | $ 1,200 | $ 973 | $ 775 | |||
Stock Compensation Plan [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Aggregate intrinsic value outstanding | 8,600 | 8,700 | ||||
Aggregate intrinsic value options exercisable at year-end | $ 6,900 | $ 8,000 | ||||
Two Thousand Ten Incentive Plan [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Number of stock option available for grant | 566,025 | 366,025 | 9,275 | |||
Option expiration period | 10 years | |||||
Adjusted percentage of stock dividends | 10.00% | |||||
Additional shares of common stock | 200,000 | |||||
Two Thousand Sixteen Equity Incentive Plan [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Number of stock option available for grant | 400,000 | 174,715 | ||||
Option expiration period | 10 years | |||||
Shares issued under provision of issuance of shares of restricted stock | 50,000 | |||||
Restricted Stock Plan [Member] | ||||||
Stock-Based Compensation (Textual) | ||||||
Number of stock option available for grant | 32,349 | |||||
Unrecognized compensation cost | $ 793,000 | |||||
Recognized weighted average period | 2 years 7 months 6 days |
Regulatory Matters (Details)
Regulatory Matters (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Bank [Member] | |||
Summary of capital amounts and ratios of the Bank and the Company and the regulatory minimum requirements | |||
Total Capital (to risk weighted assets) Actual | $ 250,847 | $ 198,195 | |
Total Capital (to risk weighted assets) Actual, Ratio | 13.31% | 12.16% | |
Total Capital (to risk weighted assets) For capital adequacy purposes minimum | $ 150,807 | $ 130,368 | |
Total Capital (to risk weighted assets) For capital adequacy purposes minimum, Ratio | 8.00% | 8.00% | |
Total Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum | $ 188,510 | $ 162,960 | |
Total Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | 10.00% | 10.00% | |
Tier 1 Capital (to risk weighted assets) Actual | $ 234,205 | $ 182,433 | |
Tier 1 Capital (to risk weighted assets) Actual, Ratio | 12.42% | 11.20% | |
Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum | $ 113,106 | $ 97,776 | |
Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum, Ratio | 6.00% | 6.00% | |
Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum | $ 150,807 | $ 130,368 | |
Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | 8.00% | 8.00% | |
Common Equity Tier 1 Capital (to risk weighted assets) Actual | $ 234,205 | $ 182,433 | |
Common Equity Tier 1 Capital (to risk weighted assets) Actual, Ratio | 12.42% | 11.20% | |
Common Equity Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum | $ 84,829 | $ 73,332 | |
Common Equity Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum, Ratio | 4.50% | 4.50% | |
Common Equity Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum | $ 122,531 | $ 105,924 | |
Common Equity Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | 6.50% | 6.50% | |
Tier 1 Capital (to average assets) Actual | $ 234,205 | $ 182,433 | |
Tier 1 Capital (to average assets), Actual Ratio | 10.80% | 9.84% | |
Tier 1 Capital (to average assets) For capital adequacy purposes minimum | $ 86,772 | $ 74,126 | |
Tier 1 Capital (to average assets) For capital adequacy purposes minimum, Ratio | 4.00% | 4.00% | |
Tier 1 Capital (to average assets) To be well capitalized under prompt corrective action provisions minimum | $ 108,465 | $ 92,658 | |
Tier 1 Capital (to average assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | 5.00% | 5.00% | |
Company [Member] | |||
Summary of capital amounts and ratios of the Bank and the Company and the regulatory minimum requirements | |||
Total Capital (to risk weighted assets) Actual | [1] | $ 258,800 | $ 203,595 |
Total Capital (to risk weighted assets) Actual, Ratio | [1] | 13.73% | 12.49% |
Total Capital (to risk weighted assets) For capital adequacy purposes minimum | [1] | $ 150,807 | $ 130,368 |
Total Capital (to risk weighted assets) For capital adequacy purposes minimum, Ratio | [1] | 8.00% | 8.00% |
Total Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum | [1] | ||
Total Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | [1] | ||
Tier 1 Capital (to risk weighted assets) Actual | [1] | $ 219,158 | $ 187,833 |
Tier 1 Capital (to risk weighted assets) Actual, Ratio | [1] | 11.63% | 11.53% |
Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum | [1] | $ 113,106 | $ 97,776 |
Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum, Ratio | [1] | 6.00% | 6.00% |
Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum | [1] | ||
Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | [1] | ||
Common Equity Tier 1 Capital (to risk weighted assets) Actual | [1] | $ 206,158 | $ 174,833 |
Common Equity Tier 1 Capital (to risk weighted assets) Actual, Ratio | [1] | 10.94% | 10.73% |
Common Equity Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum | [1] | $ 84,829 | $ 73,332 |
Common Equity Tier 1 Capital (to risk weighted assets) For capital adequacy purposes minimum, Ratio | [1] | 4.50% | 4.50% |
Common Equity Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum | [1] | ||
Common Equity Tier 1 Capital (to risk weighted assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | [1] | ||
Tier 1 Capital (to average assets) Actual | [1] | $ 219,158 | $ 187,833 |
Tier 1 Capital (to average assets), Actual Ratio | [1] | 10.10% | 10.14% |
Tier 1 Capital (to average assets) For capital adequacy purposes minimum | [1] | $ 86,772 | $ 74,126 |
Tier 1 Capital (to average assets) For capital adequacy purposes minimum, Ratio | [1] | 4.00% | 4.00% |
Tier 1 Capital (to average assets) To be well capitalized under prompt corrective action provisions minimum | [1] | ||
Tier 1 Capital (to average assets) To be well capitalized under prompt corrective action provisions minimum, Ratio | [1] | ||
[1] | Under the Federal Reserve's Small Bank Holding Company Policy Statement, the Company is not subject to the minimum capital adequacy and capital conservation buffer capital requirements at the holding company level, unless otherwise advised by the Federal Reserve (such capital requirements are applicable only at the Bank level). Although the minimum regulatory capital requirements are not applicable to the Company, we calculate these ratios for our own planning and monitoring purposes. |
Reportable Segments (Details)
Reportable Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Interest income | $ 92,652 | $ 76,657 | $ 61,209 |
Interest expense | 25,383 | 16,505 | 10,333 |
Net interest income (loss) | 67,269 | 60,152 | 50,876 |
Provision for loan losses | 2,300 | 1,900 | 2,000 |
Noninterest income | 14,983 | 10,201 | 9,337 |
Noninterest expense | 44,473 | 39,763 | 34,552 |
Net income (loss) before taxes | 35,479 | 28,690 | 23,661 |
Income tax provision (benefit) | 7,621 | 6,401 | 10,616 |
Net income (loss) | 27,858 | 22,289 | $ 13,045 |
Total assets | 2,267,195 | 1,900,614 | |
Mortgage Banking [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest income | 729 | 375 | |
Interest expense | |||
Net interest income (loss) | 729 | 375 | |
Provision for loan losses | |||
Noninterest income | 9,923 | 5,544 | |
Noninterest expense | 6,435 | 4,152 | |
Net income (loss) before taxes | 4,217 | 1,767 | |
Income tax provision (benefit) | 886 | 389 | |
Net income (loss) | 3,331 | 1,378 | |
Total assets | 27,356 | 8,602 | |
Commercial And Retail Banking [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest income | 91,923 | 76,282 | |
Interest expense | 24,467 | 15,922 | |
Net interest income (loss) | 67,456 | 60,360 | |
Provision for loan losses | 2,300 | 1,900 | |
Noninterest income | 5,060 | 4,657 | |
Noninterest expense | 37,798 | 35,371 | |
Net income (loss) before taxes | 32,418 | 27,746 | |
Income tax provision (benefit) | 6,978 | 6,185 | |
Net income (loss) | 25,440 | 21,561 | |
Total assets | 2,239,430 | 1,905,474 | |
Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest income | 13 | 9 | |
Interest expense | 929 | 592 | |
Net interest income (loss) | (916) | (583) | |
Provision for loan losses | |||
Noninterest income | |||
Noninterest expense | 240 | 240 | |
Net income (loss) before taxes | (1,156) | (823) | |
Income tax provision (benefit) | (243) | (173) | |
Net income (loss) | (913) | (650) | |
Total assets | 242,069 | 187,327 | |
Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Interest income | (13) | (9) | |
Interest expense | (13) | (9) | |
Net interest income (loss) | |||
Provision for loan losses | |||
Noninterest income | |||
Noninterest expense | |||
Net income (loss) before taxes | |||
Income tax provision (benefit) | |||
Net income (loss) | |||
Total assets | $ (241,660) | $ (200,789) |
Reportable Segments (Details Te
Reportable Segments (Details Textual) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Number of segments | 3 |
Parent Company Financial Info_3
Parent Company Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets | ||||
Cash and cash equivalents | $ 127,816 | $ 72,873 | ||
Other assets | 8,044 | 7,444 | ||
Total assets | 2,267,195 | 1,900,614 | ||
Liabilities and Shareholders' Equity | ||||
Subordinated debentures | 35,890 | 13,403 | ||
Shareholders' equity | 205,860 | 173,916 | $ 149,686 | $ 109,872 |
Total liabilities and shareholders' equity | 2,267,195 | 1,900,614 | ||
Revenues | ||||
Interest income | 92,652 | 76,657 | 61,209 | |
Expenses | ||||
Interest expense | 25,383 | 16,505 | 10,333 | |
Income tax benefit | 7,621 | 6,401 | 10,616 | |
Net income | 27,858 | 22,289 | 13,045 | |
Operating activities | ||||
Net income | 27,858 | 22,289 | 13,045 | |
Adjustments to reconcile net income to cash provided by (used for) operating activities | ||||
Compensation expense related to stock options and restricted stock grants | 1,698 | 1,502 | 1,258 | |
(Increase) decrease in other assets | (600) | 325 | (1,183) | |
Net cash provided by operating activities | 18,282 | 31,703 | 17,193 | |
Investing activities | ||||
Net cash used for investing activities | (275,583) | (301,708) | (239,015) | |
Financing activities | ||||
Issuance of common stock | (24,758) | |||
Net cash provided by financing activities | 312,244 | 250,713 | 267,435 | |
Net increase (decrease) in cash and cash equivalents | 54,943 | (19,292) | 45,613 | |
Cash and cash equivalents, beginning of year | 72,873 | 92,165 | 46,552 | |
Cash and cash equivalents, end of year | 127,816 | 72,873 | 92,165 | |
Parent Company [Member] | ||||
Assets | ||||
Cash and cash equivalents | 7,753 | 5,389 | ||
Investment in subsidiaries | 234,310 | 181,919 | ||
Other assets | 6 | 19 | ||
Total assets | 242,069 | 187,327 | ||
Liabilities and Shareholders' Equity | ||||
Accounts payable and accrued expenses | 319 | 8 | ||
Subordinated debentures | 35,890 | 13,403 | ||
Shareholders' equity | 205,860 | 173,916 | ||
Total liabilities and shareholders' equity | 242,069 | 187,327 | ||
Revenues | ||||
Interest income | 13 | 9 | 11 | |
Total revenue | 13 | 9 | 11 | |
Expenses | ||||
Interest expense | 929 | 592 | 514 | |
Other expenses | 240 | 240 | 246 | |
Total expenses | 1,169 | 832 | 760 | |
Income tax benefit | 243 | 173 | 262 | |
Loss before equity in undistributed net income of subsidiaries | (913) | (650) | (487) | |
Equity in undistributed net income of subsidiaries | 28,771 | 22,939 | 13,532 | |
Net income | 27,858 | 22,289 | 13,045 | |
Operating activities | ||||
Net income | 27,858 | 22,289 | 13,045 | |
Adjustments to reconcile net income to cash provided by (used for) operating activities | ||||
Equity in undistributed net income of subsidiaries | (28,771) | (22,939) | (13,532) | |
Compensation expense related to stock options and restricted stock grants | 1,698 | 1,502 | 1,258 | |
(Increase) decrease in other assets | 12 | 12 | 2,772 | |
Increase (decrease) in accounts payable and accrued expenses | (202) | 2 | 2 | |
Net cash provided by operating activities | 595 | 866 | 3,545 | |
Investing activities | ||||
Investment in subsidiaries, net | (27,334) | |||
Net cash used for investing activities | (27,334) | |||
Financing activities | ||||
Issuance of common stock | 24,758 | |||
Proceeds from the exercise of stock options and warrants | 1,769 | 900 | 705 | |
Net cash provided by financing activities | 1,769 | 900 | 25,463 | |
Net increase (decrease) in cash and cash equivalents | 2,364 | 1,766 | 1,674 | |
Cash and cash equivalents, beginning of year | 5,389 | 3,623 | 1,949 | |
Cash and cash equivalents, end of year | $ 7,753 | $ 5,389 | $ 3,623 |
Selected Condensed Quarterly _3
Selected Condensed Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of selected quarterly financial information | |||||||||||
Interest income | $ 92,652 | $ 76,657 | $ 61,209 | ||||||||
Interest expense | 25,383 | 16,505 | 10,333 | ||||||||
Net interest income | 67,269 | 60,152 | 50,876 | ||||||||
Provision for loan losses | 2,300 | 1,900 | 2,000 | ||||||||
Noninterest income | 14,983 | 10,201 | 9,337 | ||||||||
Noninterest expenses | 44,473 | 39,763 | 34,552 | ||||||||
Income before income tax expense | 35,479 | 28,690 | 23,661 | ||||||||
Income tax expense | 7,621 | 6,401 | 10,616 | ||||||||
Net income available to common shareholders | $ 27,858 | $ 22,289 | $ 13,045 | ||||||||
Earnings per common share | |||||||||||
Basic | $ 3.70 | $ 3.02 | $ 1.86 | ||||||||
Diluted | $ 3.58 | $ 2.88 | $ 1.76 | ||||||||
Weighted average common shares outstanding | |||||||||||
Basic | 7,528,283 | 7,384,200 | 7,005,703 | ||||||||
Diluted | 7,772,544 | 7,737,495 | 7,393,377 | ||||||||
Quarterly Financial Information [Member] | |||||||||||
Summary of selected quarterly financial information | |||||||||||
Interest income | $ 23,896 | $ 24,056 | $ 23,088 | $ 21,612 | $ 21,079 | $ 19,865 | $ 18,535 | $ 17,178 | |||
Interest expense | 6,263 | 6,777 | 6,549 | 5,794 | 5,082 | 4,364 | 3,923 | 3,136 | |||
Net interest income | 17,633 | 17,279 | 16,539 | 15,818 | 15,997 | 15,501 | 14,612 | 14,042 | |||
Provision for loan losses | 1,050 | 650 | 300 | 300 | 600 | 400 | 400 | 500 | |||
Noninterest income | 3,503 | 4,396 | 4,090 | 2,994 | 2,477 | 2,533 | 2,771 | 2,420 | |||
Noninterest expenses | 10,973 | 11,484 | 11,368 | 10,648 | 10,391 | 10,188 | 9,979 | 9,205 | |||
Income before income tax expense | 9,113 | 9,541 | 8,961 | 7,864 | 7,483 | 7,446 | 7,004 | 6,757 | |||
Income tax expense | 1,915 | 2,129 | 1,722 | 1,855 | 1,700 | 1,664 | 1,494 | 1,543 | |||
Net income available to common shareholders | $ 7,198 | $ 7,412 | $ 7,239 | $ 6,009 | $ 5,783 | $ 5,782 | $ 5,510 | $ 5,214 | |||
Earnings per common share | |||||||||||
Basic | $ 0.94 | $ 0.98 | $ 0.97 | $ 0.81 | $ 0.78 | $ 0.78 | $ 0.75 | $ 0.71 | |||
Diluted | $ 0.92 | $ 0.95 | $ 0.93 | $ 0.78 | $ 0.75 | $ 0.75 | $ 0.71 | $ 0.67 | |||
Weighted average common shares outstanding | |||||||||||
Basic | 7,608,241 | 7,548,184 | 7,495,508 | 7,459,342 | 7,427,902 | 7,400,174 | 7,370,709 | 7,336,839 | |||
Diluted | 7,810,922 | 7,780,504 | 7,756,044 | 7,741,860 | 7,725,661 | 7,746,205 | 7,751,146 | 7,726,885 |