Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | PEOPLES BANCORP OF NORTH CAROLINA INC | |
Entity Central Index Key | 1,093,672 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 5,995,256 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks, including reserve requirements of $10,581 at 09/30/18 and $7,472 at 12/31/17 | $ 44,743 | $ 53,186 |
Interest-bearing deposits | 12,298 | 4,118 |
Cash and cash equivalents | 57,041 | 57,304 |
Investment securities available for sale | 205,966 | 229,321 |
Other investments | 4,394 | 1,830 |
Total securities | 210,360 | 231,151 |
Mortgage loans held for sale | 1,740 | 857 |
Loans | 786,724 | 759,764 |
Less allowance for loan losses | (6,295) | (6,366) |
Net loans | 780,429 | 753,398 |
Premises and equipment, net | 19,453 | 19,911 |
Cash surrender value of life insurance | 15,839 | 15,552 |
Other real estate | 0 | 118 |
Accrued interest receivable and other assets | 15,430 | 13,875 |
Total assets | 1,100,292 | 1,092,166 |
Deposits: | ||
Noninterest-bearing demand | 306,834 | 285,406 |
NOW, MMDA & savings | 478,898 | 498,445 |
Time, $250,000 or more | 16,777 | 18,756 |
Other time | 90,950 | 104,345 |
Total deposits | 893,459 | 906,952 |
Securities sold under agreements to repurchase | 55,766 | 37,757 |
Junior subordinated debentures | 20,619 | 20,619 |
Accrued interest payable and other liabilities | 10,729 | 10,863 |
Total liabilities | 980,573 | 976,191 |
Commitments | ||
Shareholders' equity: | ||
Series A preferred stock, $1,000 stated value; authorized 5,000,000 shares; no shares issued and outstanding | 0 | 0 |
Common stock, no par value; authorized 20,000,000 shares; issued and outstanding 5,995,256 shares | 62,096 | 62,096 |
Retained earnings | 57,882 | 50,286 |
Accumulated other comprehensive income (loss) | (259) | 3,593 |
Total shareholders' equity | 119,719 | 115,975 |
Total liabilities and shareholders' equity | $ 1,100,292 | $ 1,092,166 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks, reserve requirements | $ 10,581 | $ 7,472 |
Shareholders' equity: | ||
Series A preferred stock, stated value (in dollars per share) | $ 1,000 | $ 1,000 |
Series A preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Series A preferred stock, shares issued (in shares) | 0 | 0 |
Series A preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 5,995,256 | 5,995,256 |
Common stock, shares outstanding (in shares) | 5,995,256 | 5,995,256 |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest income: | ||||
Interest and fees on loans | $ 9,907 | $ 8,966 | $ 28,362 | $ 25,935 |
Interest on due from banks | 86 | 60 | 255 | 138 |
Interest on investment securities: | ||||
U.S. Government sponsored enterprises | 591 | 578 | 1,721 | 1,795 |
State and political subdivisions | 974 | 1,047 | 2,950 | 3,198 |
Other | 50 | 47 | 138 | 157 |
Total interest income | 11,608 | 10,698 | 33,426 | 31,223 |
Interest expense: | ||||
NOW, MMDA & savings deposits | 189 | 156 | 551 | 431 |
Time deposits | 127 | 112 | 342 | 360 |
FHLB borrowings | 0 | 211 | 0 | 604 |
Junior subordinated debentures | 209 | 152 | 578 | 432 |
Other | 32 | 19 | 66 | 43 |
Total interest expense | 557 | 650 | 1,537 | 1,870 |
Net interest income | 11,051 | 10,048 | 31,889 | 29,353 |
Provision for (reduction of provision for) loan losses | 110 | (218) | 372 | (405) |
Net interest income after provision for loan losses | 10,941 | 10,266 | 31,517 | 29,758 |
Non-interest income: | ||||
Service charges | 1,083 | 1,140 | 3,163 | 3,340 |
Other service charges and fees | 173 | 145 | 528 | 447 |
Gain on sale of securities | 0 | 0 | 50 | 0 |
Mortgage banking income | 216 | 280 | 672 | 945 |
Insurance and brokerage commissions | 206 | 221 | 591 | 568 |
Appraisal management fee income | 799 | 855 | 2,442 | 2,447 |
Gain/(loss) on sale and write-down of other real estate | 14 | 43 | 17 | (240) |
Miscellaneous | 1,424 | 1,475 | 4,204 | 4,023 |
Total non-interest income | 3,915 | 4,159 | 11,667 | 11,530 |
Non-interest expense: | ||||
Salaries and employee benefits | 5,519 | 4,933 | 15,866 | 15,038 |
Occupancy | 1,761 | 1,669 | 5,367 | 4,981 |
Professional fees | 314 | 303 | 1,067 | 788 |
Advertising | 207 | 247 | 708 | 859 |
Debit card expense | 282 | 320 | 774 | 894 |
FDIC insurance | 81 | 87 | 248 | 260 |
Appraisal management fee expense | 627 | 655 | 1,873 | 1,869 |
Other | 1,911 | 1,792 | 5,401 | 5,661 |
Total non-interest expense | 10,702 | 10,006 | 31,304 | 30,350 |
Earnings before income taxes | 4,154 | 4,419 | 11,880 | 10,938 |
Income tax expense | 687 | 1,177 | 1,934 | 2,680 |
Net earnings | $ 3,467 | $ 3,242 | $ 9,946 | $ 8,258 |
Basic net earnings per share | $ 0.58 | $ 0.54 | $ 1.66 | $ 1.38 |
Diluted net earnings per share | 0.57 | 0.52 | 1.65 | 1.35 |
Cash dividends declared per share | $ 0.13 | $ 0.11 | $ 0.39 | $ 0.33 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Consolidated Statements Of Comprehensive Income | ||||
Net earnings | $ 3,467 | $ 3,242 | $ 9,946 | $ 8,258 |
Other comprehensive income: | ||||
Unrealized holding gains (losses) on securities available for sale | (1,469) | (666) | (4,951) | 2,027 |
Reclassification adjustment for gains on securities available for sale included in net earnings | 0 | 0 | (50) | 0 |
Total other comprehensive income (loss), before income taxes | (1,469) | (666) | (5,001) | 2,027 |
Income tax benefit related to other comprehensive income: | ||||
Unrealized holding gains (losses) on securities available for sale | (338) | (239) | (1,138) | 502 |
Reclassification adjustment for gains on securities available for sale included in net earnings | 0 | 0 | (11) | 0 |
Total income tax benefit related to other comprehensive income (loss) | (338) | (239) | (1,149) | 502 |
Total other comprehensive income (loss), net of tax | (1,131) | (427) | (3,852) | 1,525 |
Total comprehensive income | $ 2,336 | $ 2,815 | $ 6,094 | $ 9,783 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning Balance, Shares at Dec. 31, 2016 | 5,417,800 | |||
Beginning Balance, Amount at Dec. 31, 2016 | $ 44,187 | $ 60,254 | $ 2,987 | $ 107,428 |
Cash dividends declared on common stock | (1,973) | (1,973) | ||
Restricted stock units exercised, shares | 32,612 | |||
Restricted stock units exercised, amount | $ 915 | 915 | ||
Net earnings | 8,258 | 8,258 | ||
Change in accumulated other comprehensive income (loss), net of tax | 1,525 | 1,525 | ||
Ending Balance, Shares at Sep. 30, 2017 | 5,450,412 | |||
Ending Balance, Amount at Sep. 30, 2017 | $ 45,102 | 66,539 | 4,512 | 116,153 |
Beginning Balance, Shares at Dec. 31, 2017 | 5,995,256 | |||
Beginning Balance, Amount at Dec. 31, 2017 | $ 62,096 | 50,286 | 3,593 | 115,975 |
Cash dividends declared on common stock | (2,350) | (2,350) | ||
Net earnings | 9,946 | 9,946 | ||
Change in accumulated other comprehensive income (loss), net of tax | (3,852) | (3,852) | ||
Ending Balance, Shares at Sep. 30, 2018 | 5,995,256 | |||
Ending Balance, Amount at Sep. 30, 2018 | $ 62,096 | $ 57,882 | $ (259) | $ 119,719 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net earnings | $ 9,946 | $ 8,258 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation, amortization and accretion | 3,508 | 3,764 |
Provision (reduction of provision) for loan losses | 372 | (405) |
Deferred income taxes | (1,159) | (1,122) |
Gain on sale of investment securities | (50) | 0 |
Gain on sale of other real estate | (17) | 0 |
Write-down of other real estate | 0 | 240 |
Loss on sale of premises and equipment | 2 | 32 |
Restricted stock expense | 131 | 566 |
Proceeds from sales of mortgage loans held for sale | 27,209 | 49,259 |
Origination of mortgage loans held for sale | (28,092) | (46,173) |
Change in: | ||
Cash surrender value of life insurance | (287) | (500) |
Other assets | 754 | 763 |
Other liabilities | (265) | (408) |
Net cash provided by operating activities | 12,052 | 14,274 |
Cash flows from investing activities: | ||
Purchases of investment securities available for sale | (20,218) | (6,492) |
Proceeds from sales, calls and maturities of investment securities available for sale | 24,203 | 6,535 |
Proceeds from paydowns of investment securities available for sale | 12,651 | 13,963 |
Purchases of other investments | (2,611) | 0 |
Proceeds from paydowns on other investments | 73 | 0 |
Purchases of FHLB stock | (4) | (45) |
Net change in loans | (27,500) | (23,927) |
Purchases of premises and equipment | (1,307) | (4,810) |
Proceeds from sale of other real estate and repossessions | 232 | 43 |
Net cash used by investing activities | (14,481) | (14,733) |
Cash flows from financing activities: | ||
Net change in deposits | (13,493) | 8,721 |
Net change in securities sold under agreement to repurchase | 18,009 | 16,873 |
Proceeds from Fed Funds purchased | 850 | 0 |
Repayments of Fed Funds purchased | (850) | 0 |
Cash dividends paid on common stock | (2,350) | (1,973) |
Net cash provided by financing activities | 2,166 | 23,621 |
Net change in cash and cash equivalents | (263) | 23,162 |
Cash and cash equivalents at beginning of period | 57,304 | 70,094 |
Cash and cash equivalents at end of period | 57,041 | 93,256 |
Cash paid during the period for: | ||
Interest | 1,531 | 1,858 |
Income taxes | 905 | 872 |
Noncash investing and financing activities: | ||
Change in unrealized gain on investment securities available for sale, net | (3,852) | 1,525 |
Issuance of accrued restricted stock units | 0 | (915) |
Transfers of loans to other real estate and repossessions | $ 97 | $ 0 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
1. Summary of Significant Accounting Policies | The consolidated financial statements include the financial statements of Peoples Bancorp of North Carolina, Inc. and its wholly owned subsidiary, Peoples Bank (the “Bank”), along with the Bank’s wholly owned subsidiaries, Peoples Investment Services, Inc. (“PIS”), Real Estate Advisory Services, Inc. (“REAS”), Community Bank Real Estate Solutions, LLC (“CBRES”) and PB Real Estate Holdings, LLC (collectively called the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. The Bank operates three banking offices focused on the Latino population that were formerly operated as a division of the Bank under the name Banco de la Gente (“Banco”). These offices are now branded as Bank branches and considered a separate market territory of the Bank as they offer normal and customary banking services as are offered in the Bank’s other branches such as the taking of deposits and the making of loans. The consolidated financial statements in this report (other than the Consolidated Balance Sheet at December 31, 2017) are unaudited. In the opinion of management, all adjustments (none of which were other than normal accruals) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). Actual results could differ from those estimates. The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. Many of the Company’s accounting policies require significant judgment regarding valuation of assets and liabilities and/or significant interpretation of the specific accounting guidance. A description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2017 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the May 3, 2018 Annual Meeting of Shareholders. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, (Topic 606): Revenue from Contracts with Customers The Company has applied ASU No. 2014-09 using a modified retrospective approach. The Company’s revenue is comprised of net interest income and noninterest income. The scope of ASU No. 2014-09 explicitly excludes net interest income as well as many other revenues for financial assets and liabilities including loans, leases, securities, and derivatives. Accordingly, the majority of the Company’s revenues are not affected. Appraisal management fee income and expense from the Bank’s subsidiary, CBRES, was reported as a net amount prior to March 31, 2018, which was included in miscellaneous non-interest income. This income and expense is now reported on separate line items under non-interest income and non-interest expense. See below for additional information related to revenue generated from contracts with customers. Revenue and Method of Adoption The majority of the Company's revenue is derived primarily from interest income from receivables (loans) and securities. Other revenues are derived from fees received in connection with deposit accounts, investment advisory, and appraisal services. On January 1, 2018, the Company adopted the requirements of ASU No. 2014-09. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU No. 2014-09 using the modified retrospective transition approach which does not require restatement of prior periods. The method was selected as there were no material changes in the timing of revenue recognition resulting in no comparability issues with prior periods. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature of and reason for the change, which is solely a result of the adoption of the required standard. When applying the modified retrospective approach under ASU No. 2014-09, the Company has elected, as a practical expedient, to apply this approach only to contracts that were not completed as of January 1, 2018. A completed contract is considered to be a contract for which all (or substantially all) of the revenue was recognized in accordance with revenue guidance that was in effect before January 1, 2018. There were no uncompleted contracts as of January 1, 2018 for which application of the new standard required an adjustment to retained earnings. The following disclosures involve the Company's material income streams derived from contracts with customers which are within the scope of ASU No. 2014-09. Through the Company's wholly-owned subsidiary, PIS, the Company contracts with a registered investment advisor to perform investment advisory services on behalf of our customers. The Company receives commissions from this third party investment advisor based on the volume of business that the Company's customers do with such investment advisor. Total revenue recognized from these contracts for the nine months ended September 30, 2018 was $590,000. The Company utilizes third parties to contract with the Company's customers to perform debit and credit card clearing services. These third parties pay the Company commissions based on the volume of transactions that they process on behalf of the Company's customers. Total revenue recognized for the nine months ended September 30, 2018 from the contract with these third parties was $2.9 million. Through the Company's wholly-owned subsidiary, REAS, the Company provides property appraisal services for negotiated fee amounts on a per appraisal basis. Total revenue recognized for the nine months ended September 30, 2018 from these contracts with customers was $422,000. Through the Company's wholly-owned subsidiary, CBRES, the Company provides appraisal management services. Total revenue recognized for the nine months ended September 30, 2018 from these contracts with customers was $2.4 million. Due to the nature of the Company's relationship with the customers that the Company provides services, the Company does not incur costs to obtain contracts and there are no material incremental costs to fulfill these contracts that should be capitalized. Disaggregation of Revenue Contract Balances Performance Obligations Significant Judgements In January 2016, FASB issued ASU No. 2016-01, (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, FASB issued ASU No. 2016-02, (Topic 842): Leases The Company expects to adopt ASU No. 2016-02 using the modified retrospective method and practical expedients for transition. The practical expedients allow the Company to largely account for its existing leases consistent with current guidance except for the incremental balance sheet recognition for lessees. The Company has started an initial evaluation of its leasing contracts and activities and has started developing its methodology to estimate the right-of use assets and lease liabilities, which is based on the present value of lease payments (at December 31, 2017, the future minimum lease payments were $4.8 million). While the Company does not expect there to be a material change in the timing of expense recognition, it is too early in the evaluation process to determine if there will be a material change to the timing of expense recognition. The Company is evaluating its existing disclosures and may need to provide additional information as a result of adoption of ASU No. 2016-02. In June 2016, FASB issued ASU No. 2016-13, (Topic 326): Measurement of Credit Losses on Financial Instruments The Company will apply the amendments to ASU No. 2016-13 through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. While early adoption is permitted beginning in the first quarter of 2019, the Company does not expect to elect that option. The Company is evaluating the impact of ASU No. 2016-13 on its consolidated financial statements. The Company anticipates that ASU No. 2016-13 will have no material impact on the recorded allowance for loan losses given the change to estimated losses over the contractual life of the loans adjusted for expected prepayments. In addition to the Company’s allowance for loan losses, it will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. In January 2017, FASB issued ASU No. 2017-01, (Topic 805): Clarifying the Definition of a Business. In January 2017, FASB issued ASU No. 2017-04, (Topic 350): Simplifying the Test for Goodwill Impairment In February 2017, FASB issued ASU No. 2017-05, (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets Revenue from Contracts with Customers In March 2017, FASB issued ASU No. 2017-07, (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs In March 2017, FASB issued ASU No. 2017-08, (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. In May 2017, FASB issued ASU No. 2017-09, (Topic 718): Scope of Modification Accounting In September 2017, FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic In November 2017, FASB issued ASU No. 2017-14, Income Statement—Reporting Comprehensive, Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) In February 2018, FASB issued ASU 2018-02, Income Statement (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities In March 2018, FASB issued ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update) In March 2018, FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update) In May 2018, FASB issued ASU 2018-06, Codification Improvements to Topic 942: Financial Services—Depository and Lending. Accounting for Net Deferred Tax Charges rescinded it. The amendments were effective upon issuance. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures. In July 2018, FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. In August 2018, FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). In August 2018, FASB issued ASU 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20). In August 2018, FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures. |
2. Investment Securities
2. Investment Securities | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
2. Investment Securities | Investment securities available for sale at September 30, 2018 and December 31, 2017 are as follows: (Dollars in thousands) September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Mortgage-backed securities $ 47,017 250 977 46,290 U.S. Government sponsored enterprises 36,278 1 1,278 35,001 State and political subdivisions 121,755 1,911 252 123,414 Corporate bonds 1,000 11 — 1,011 Trust preferred securities 250 — — 250 Total $ 206,300 2,173 2,507 205,966 (Dollars in thousands) December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Mortgage-backed securities $ 53,124 814 329 53,609 U.S. Government sponsored enterprises 40,504 140 264 40,380 State and political subdivisions 129,276 4,310 16 133,570 Corporate bonds 1,500 12 — 1,512 Trust preferred securities 250 — — 250 Total $ 224,654 5,276 609 229,321 The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2018 and December 31, 2017 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position. (Dollars in thousands) September 30, 2018 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 20,557 276 14,698 701 35,255 977 U.S. Government sponsored enterprises 19,435 586 14,564 692 33,999 1,278 State and political subdivisions 15,042 212 1,733 40 16,775 252 Total $ 55,034 1,074 30,995 1,433 86,029 2,507 (Dollars in thousands) December 31, 2017 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 8,701 75 11,259 254 19,960 329 U.S. Government sponsored enterprises 12,661 98 10,067 166 22,728 264 State and political subdivisions 798 2 1,501 14 2,299 16 Total $ 22,160 175 22,827 434 44,987 609 At September 30, 2018, unrealized losses in the investment securities portfolio relating to debt securities totaled $2.5 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2018 tables above, 23 out of 152 securities issued by state and political subdivisions contained unrealized losses and 37 out of 44 securities issued by U.S. Government sponsored enterprises contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations of entities that issued each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed. The amortized cost and estimated fair value of investment securities available for sale at September 30, 2018, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2018 (Dollars in thousands) Amortized Cost Estimated Fair Value Due within one year $ 24,659 24,800 Due from one to five years 95,923 96,934 Due from five to ten years 31,869 31,208 Due after ten years 6,582 6,484 Mortgage-backed securities 47,017 46,290 Trust preferred securities 250 250 Total $ 206,300 205,966 Proceeds from sales of securities available for sale during the three and nine months ended September 30, 2018 were $14.0 million and resulted in net gains of $50,000. No securities available for sale were sold during the three and nine months ended September 30, 2017. Securities with a fair value of approximately $92.1 million and $105.6 million at September 30, 2018 and December 31, 2017, respectively, were pledged to secure public deposits and for other purposes as required by law. |
3. Loans
3. Loans | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
3. Loans | Major classifications of loans at September 30, 2018 and December 31, 2017 are summarized as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Real estate loans: Construction and land development $ 76,987 84,987 Single-family residential 249,812 246,703 Single-family residential - Banco de la Gente non-traditional 34,742 37,249 Commercial 275,629 248,637 Multifamily and farmland 31,102 28,937 Total real estate loans 668,272 646,513 Loans not secured by real estate: Commercial loans 97,085 89,022 Farm loans 994 1,204 Consumer loans 9,512 9,888 All other loans 10,861 13,137 Total loans 786,724 759,764 Less allowance for loan losses 6,295 6,366 Total net loans $ 780,429 753,398 The Bank grants loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties, and also in Mecklenburg, Wake and Durham counties of North Carolina. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market. Risk characteristics of the major components of the Bank’s loan portfolio are discussed below: · Construction and land development loans – The risk of loss is largely dependent on the initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing. During the construction phase, a number of factors can result in delays or cost overruns. If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral. As of September 30, 2018, construction and land development loans comprised approximately 10% of the Bank’s total loan portfolio. · Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans. As of September 30, 2018, single-family residential loans comprised approximately 36% of the Bank’s total loan portfolio, and include Banco’s non-traditional single-family residential loans, which were approximately 4% of the Bank’s total loan portfolio. · Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service. These loans also involve greater risk because they are generally not fully amortizing over a loan period, but rather have a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property. As of September 30, 2018, commercial real estate loans comprised approximately 35% of the Bank’s total loan portfolio. · Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid or fluctuate in value based on the success of the business. As of September 30, 2018, commercial loans comprised approximately 12% of the Bank’s total loan portfolio. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following tables present an age analysis of past due loans, by loan type, as of September 30, 2018 and December 31, 2017: September 30, 2018 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 1,170 38 1,208 75,779 76,987 — Single-family residential 2,597 366 2,963 246,849 249,812 — Single-family residential - Banco de la Gente non-traditional 940 485 1,425 33,317 34,742 — Commercial 1,157 100 1,257 274,372 275,629 — Multifamily and farmland — — — 31,102 31,102 — Total real estate loans 5,864 989 6,853 661,419 668,272 — Loans not secured by real estate: Commercial loans 490 94 584 96,501 97,085 — Farm loans — — — 994 994 — Consumer loans 85 35 120 9,392 9,512 — All other loans — — — 10,861 10,861 — Total loans $ 6,439 1,118 7,557 779,167 786,724 — December 31, 2017 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 277 — 277 84,710 84,987 — Single-family residential 3,241 193 3,434 243,269 246,703 — Single-family residential - Banco de la Gente non-traditional 4,078 465 4,543 32,706 37,249 — Commercial 588 — 588 248,049 248,637 — Multifamily and farmland — 12 12 28,925 28,937 — Total real estate loans 8,184 670 8,854 637,659 646,513 — Loans not secured by real estate: Commercial loans 53 100 153 88,869 89,022 — Farm loans — — — 1,204 1,204 — Consumer loans 113 5 118 9,770 9,888 — All other loans — — — 13,137 13,137 — Total loans $ 8,350 775 9,125 750,639 759,764 — The following table presents non-accrual loans as of September 30, 2018 and December 31, 2017: (Dollars in thousands) September 30, 2018 December 31, 2017 Real estate loans: Construction and land development $ 39 14 Single-family residential 1,824 1,634 Single-family residential - Banco de la Gente non-traditional 1,475 1,543 Commercial 445 396 Multifamily and farmland — 12 Total real estate loans 3,783 3,599 Loans not secured by real estate: Commercial loans 94 100 Consumer loans 42 12 Total $ 3,919 3,711 At each reporting period, the Bank determines which loans are impaired. Accordingly, the Bank’s impaired loans are reported at their estimated fair value on a non-recurring basis. An allowance for each impaired loan that is collateral-dependent is calculated based on the fair value of its collateral. The fair value of the collateral is based on appraisals performed by REAS, a subsidiary of the Bank. REAS is staffed by certified appraisers that also perform appraisals for other companies. Factors, including the assumptions and techniques utilized by the appraiser, are considered by management. If the recorded investment in the impaired loan exceeds the measure of fair value of the collateral, a valuation allowance is recorded as a component of the allowance for loan losses. An allowance for each impaired loan that is not collateral dependent is calculated based on the present value of projected cash flows. If the recorded investment in the impaired loan exceeds the present value of projected cash flows, a valuation allowance is recorded as a component of the allowance for loan losses. Impaired loans under $250,000 are not individually evaluated for impairment with the exception of the Bank’s troubled debt restructured (“TDR”) loans in the residential mortgage loan portfolio, which are individually evaluated for impairment. Accruing impaired loans were $23.6 million, $24.6 million and $21.3 million at September 30, 2018, December 31, 2017 and September 30, 2017, respectively. Interest income recognized on accruing impaired loans was $1.0 million, $1.4 million, and $1.1 million for the nine months ended September 30, 2018, the year ended December 31, 2017 and the nine months ended September 30, 2017, respectively. No interest income is recognized on non-accrual impaired loans subsequent to their classification as non-accrual. The following table presents impaired loans as of September 30, 2018: (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Real estate loans: Construction and land development $ 337 — 282 282 11 Single-family residential 5,533 429 4,620 5,049 36 Single-family residential - Banco de la Gente non-traditional 16,565 — 15,934 15,934 1,055 Commercial 2,371 190 1,861 2,051 13 Multifamily and farmland — — — — — Total impaired real estate loans 24,806 619 22,697 23,316 1,115 Loans not secured by real estate: Commercial loans 257 94 1 95 — Consumer loans 158 — 155 155 2 Total impaired loans $ 25,221 713 22,853 23,566 1,117 The following table presents the average impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2018 and 2017. (Dollars in thousands) Three months ended Nine months ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Real estate loans: Construction and land development $ 320 2 246 5 326 14 253 11 Single-family residential 6,441 73 4,783 71 6,350 207 5,113 202 Single-family residential - Banco de la Gente non-traditional 14,602 236 17,283 225 14,851 703 17,235 694 Commercial 2,320 17 3,852 18 2,307 97 3,712 144 Multifamily and farmland — — 12 — 3 — 45 — Total impaired real estate loans 23,683 328 26,176 319 23,837 1,021 26,358 1,051 Loans not secured by real estate: Commercial loans 96 — 243 — 99 — 130 3 Consumer loans 144 3 183 3 147 7 206 8 Total impaired loans $ 23,923 331 26,602 322 24,083 1,028 26,694 1,062 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 282 — 277 277 6 253 17 Single-family residential 5,226 1,135 3,686 4,821 41 5,113 265 Single-family residential - Banco de la Gente non-traditional 17,360 — 16,805 16,805 1,149 16,867 920 Commercial 2,761 807 1,661 2,468 1 3,411 148 Multifamily and farmland 78 — 12 12 — 28 — Total impaired real estate loans 25,707 1,942 22,441 24,383 1,197 25,672 1,350 Loans not secured by real estate: Commercial loans 264 100 4 104 — 149 3 Consumer loans 158 — 154 154 2 194 9 Total impaired loans $ 26,129 2,042 22,599 24,641 1,199 26,015 1,362 Changes in the allowance for loan losses for the three and nine months ended September 30, 2018 and 2017 were as follows: (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2018: Allowance for loan losses: Beginning balance $ 804 1,812 1,280 1,193 72 574 — 155 476 6,366 Charge-offs (53 ) (115 ) — (271 ) (5 ) (4 ) — (318 ) — (766 ) Recoveries 4 55 — 101 1 23 — 139 — 323 Provision (63 ) (293 ) (75 ) 438 10 12 — 182 161 372 Ending balance $ 692 1,459 1,205 1,461 78 605 — 158 637 6,295 Three months ended September 30, 2018: Allowance for loan losses: Beginning balance $ 668 1,638 1,233 1,420 72 587 — 150 509 6,277 Charge-offs (53 ) (73 ) — — — (1 ) — (132 ) — (259 ) Recoveries 1 28 — 94 — 7 — 37 — 167 Provision 76 (134 ) (28 ) (53 ) 6 12 — 103 128 110 Ending balance $ 692 1,459 1,205 1,461 78 605 — 158 637 6,295 Allowance for loan losses at September 30, 2018: Ending balance: individually evaluated for impairment $ 5 2 1,036 12 — — — — — 1,055 Ending balance: collectively evaluated for impairment 687 1,457 169 1,449 78 605 — 158 637 5,240 Ending balance $ 692 1,459 1,205 1,461 78 605 — 158 637 6,295 Loans at September 30, 2018: Ending balance $ 76,987 249,812 34,742 275,629 31,102 97,085 994 20,373 — 786,724 Ending balance: individually evaluated for impairment $ 98 2,171 14,557 1,879 — 94 — — — 18,799 Ending balance: collectively evaluated for impairment $ 76,889 247,641 20,185 273,750 31,102 96,991 994 20,373 — 767,925 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2017: Allowance for loan losses: Beginning balance $ 1,152 2,126 1,377 1,593 52 675 — 204 371 7,550 Charge-offs — (64 ) — — (66 ) (63 ) — (288 ) — (481 ) Recoveries 12 26 — 17 — 23 — 102 — 180 Provision (178 ) (211 ) (101 ) (192 ) 86 (74 ) — 143 122 (405 ) Ending balance $ 986 1,877 1,276 1,418 72 561 — 161 493 6,844 Three months ended September 30, 2017: Allowance for loan losses: Beginning balance $ 1,183 1,819 1,293 1,463 75 704 — 158 472 7,167 Charge-offs — (20 ) — — — (26 ) — (106 ) — (152 ) Recoveries 2 9 — 4 — 8 — 24 — 47 Provision (199 ) 69 (17 ) (49 ) (3 ) (125 ) — 85 21 (218 ) Ending balance $ 986 1,877 1,276 1,418 72 561 — 161 493 6,844 Allowance for loan losses at September 30, 2017: Ending balance: individually evaluated for impairment $ — — 1,104 42 — — — — — 1,146 Ending balance: collectively evaluated for impairment 986 1,877 172 1,376 72 561 — 161 493 5,698 Ending balance $ 986 1,877 1,276 1,418 72 561 — 161 493 6,844 Loans at September 30, 2017: Ending balance $ 75,483 247,184 37,840 245,279 28,662 87,019 895 25,075 — 747,437 Ending balance: individually evaluated for impairment $ 10 1,875 15,732 3,069 — 229 — — — 20,915 Ending balance: collectively evaluated for impairment $ 75,473 245,309 22,108 242,210 28,662 86,790 895 25,075 — 726,522 The provision for loan losses for the three months ended September 30, 2018 was an expense of $110,000, as compared to a credit of $218,000 for the three months ended September 30, 2017. The increase in the provision for loan losses is primarily attributable to a $39.3 million increase in loans from September 30, 2017 to September 30, 2018. The provision for loan losses for the nine months ended September 30, 2018 was an expense of $372,000, as compared to a credit of $405,000 for the nine months ended September 30, 2017. The increase in the provision for loan losses is primarily attributable to a $39.3 million increase in loans from September 30, 2017 to September 30, 2018. The Company utilizes an internal risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 8. These risk grades are evaluated on an ongoing basis. A description of the general characteristics of the eight risk grades is as follows: · Risk Grade 1 – Excellent Quality: Loans are well above average quality and a minimal amount of credit risk exists. Certificates of deposit or cash secured loans or properly margined actively traded stock or bond secured loans would fall in this grade. · Risk Grade 2 – High Quality: Loans are of good quality with risk levels well within the Company’s range of acceptability. The organization or individual is established with a history of successful performance though somewhat susceptible to economic changes. · Risk Grade 3 – Good Quality: Loans of average quality with risk levels within the Company’s range of acceptability but higher than normal. This may be a new organization or an existing organization in a transitional phase (e.g. expansion, acquisition, market change). · Risk Grade 4 – Management Attention: These loans have higher risk and servicing needs but still are acceptable. Evidence of marginal performance or deteriorating trends is observed. These are not problem credits presently, but may be in the future if the borrower is unable to change its present course. · Risk Grade 5 – Watch: These loans are currently performing satisfactorily, but there has been some recent past due history on repayment and there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Company’s position at some future date. · Risk Grade 6 – Substandard: A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged (if there is any). There is a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. · Risk Grade 7 – Doubtful: Loans classified as Doubtful have all the weaknesses inherent in loans classified as Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. Doubtful is a temporary grade where a loss is expected but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is charged off. · Risk Grade 8 – Loss: Loans classified as Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be realized in the future. Loss is a temporary grade until the appropriate authority is obtained to charge the loan off. The following tables present the credit risk profile of each loan type based on internally assigned risk grades as of September 30, 2018 and December 31, 2017: September 30, 2018 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 410 7,583 — — — 662 — 668 — 9,323 2- High Quality 15,413 125,945 — 35,362 430 24,141 — 3,462 2,174 206,927 3- Good Quality 51,835 91,936 13,927 215,902 25,758 65,302 845 4,733 7,924 478,162 4- Management Attention 5,210 17,218 15,392 21,271 3,813 6,601 149 581 763 70,998 5- Watch 3,924 3,844 2,425 2,649 1,101 273 — 18 — 14,234 6- Substandard 195 3,286 2,998 445 — 106 — 50 — 7,080 7- Doubtful — — — — — — — — — — 8- Loss — — — — — — — — — — Total $ 76,987 249,812 34,742 275,629 31,102 97,085 994 9,512 10,861 786,724 December 31, 2017 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 152 8,590 — — — 446 — 791 — 9,979 2- High Quality 20,593 120,331 — 34,360 561 17,559 — 3,475 2,410 199,289 3- Good Quality 53,586 89,120 14,955 196,439 25,306 65,626 1,085 5,012 9,925 461,054 4- Management Attention 4,313 20,648 15,113 13,727 1,912 5,051 119 562 802 62,247 5- Watch 6,060 4,796 3,357 3,671 1,146 223 — 23 — 19,276 6- Substandard 283 3,218 3,824 440 12 117 — 25 — 7,919 7- Doubtful — — — — — — — — — — 8- Loss — — — — — — — — — — Total $ 84,987 246,703 37,249 248,637 28,937 89,022 1,204 9,888 13,137 759,764 Current year TDR modifications, past due TDR loans and non-accrual TDR loans totaled $2.2 million and $4.5 million at September 30, 2018 and December 31, 2017, respectively. The terms of these loans have been renegotiated to provide a concession to original terms, including a reduction in principal or interest as a result of the deteriorating financial position of the borrower. There was $93,000 and $21,000 in performing loans classified as TDR loans at September 30, 2018 and December 31, 2017, respectively. The following table presents an analysis of TDR loan modifications during the three months ended September 30, 2018. Three months ended September 30, 2018 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Real estate loans Single-family residential 1 $ 61 61 Total real estate TDR loans 1 61 61 Total TDR loans 1 $ 61 61 During the three months ended September 30, 2018, one loan was modified that was considered to be a new TDR loan. The interest rate was modified on this TDR loan. The following table presents an analysis of TDR loan modifications during the nine months ended September 30, 2018. Nine months ended September 30, 2018 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Real estate loans Single-family residential 2 $ 94 94 Total real estate TDR loans 2 94 94 Total TDR loans 2 $ 94 94 During the nine months ended September 30, 2018, two loan were modified that was considered to be new TDR loans. The interest rates were modified on these TDR loans. The following table presents an analysis of TDR loan modifications during the three and nine months ended September 30, 2017. Three and nine months ended September 30, 2017 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Real estate loans Single-family residential 2 $ 22 22 Total real estate TDR loans 2 22 22 Total TDR loans 2 $ 22 22 During the three and nine months ended September 30, 2017, two loans were modified that were considered to be new TDR loans. The interest rate was modified on these TDR loans. There were no loans modified as TDR that defaulted during the three and nine months ended September 30, 2018 and 2017, which were within 12 months of their modification date. Generally, a TDR loan is considered to be in default once it becomes 90 days or more past due following a modification. |
4. Net Earnings Per Share
4. Net Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
4. Net Earnings Per Share | Net earnings per share is based on the weighted average number of shares outstanding during the period while the effects of potential shares outstanding during the period are included in diluted earnings per share. The average market price during the year is used to compute equivalent shares. The reconciliation of the amounts used in the computation of both “basic earnings per share” and “diluted earnings per share” for the three and nine months ended September 30, 2018 and 2017 is as follows: For the three months ended September 30, 2018 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 3,467 5,995,256 $ 0.58 Effect of dilutive securities: Restricted stock units — 21,445 Diluted earnings per share $ 3,467 6,016,701 $ 0.57 For the nine months ended September 30, 2018 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 9,946 5,995,256 $ 1.66 Effect of dilutive securities: Restricted stock units — 19,137 Diluted earnings per share $ 9,946 6,014,393 $ 1.65 For the three months ended September 30, 2017 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 3,242 5,995,453 $ 0.54 Effect of dilutive securities: Restricted stock units — 96,339 Diluted earnings per share $ 3,242 6,091,792 $ 0.52 For the nine months ended September 30, 2017 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 8,258 5,985,051 $ 1.38 Effect of dilutive securities: Restricted stock units — 94,566 Diluted earnings per share $ 8,258 6,079,616 $ 1.35 In November 2017, the Board of Directors of the Company declared a 10% stock dividend. As a result of the stock dividend, each shareholder received one new share of stock for every ten shares of stock they held as of the record date of December 4, 2017. The payable date for the stock dividend was December 15, 2017. All previously reported per share amounts have been restated to reflect this stock dividend. |
5. Stock-Based Compensation
5. Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
5. Stock-Based Compensation | The Company has an Omnibus Stock Ownership and Long Term Incentive Plan that was approved by shareholders on May 7, 2009 (the “Plan”) whereby certain stock-based rights, such as stock options, restricted stock, restricted stock units, performance units, stock appreciation rights or book value shares, may be granted to eligible directors and employees. A total of 280,933 shares are currently reserved for possible issuance under the Plan. All stock-based rights under the Plan must be granted or awarded by May 7, 2019 (i.e., ten years from the Plan effective date). The Company granted 32,465 restricted stock units under the Plan at a grant date fair value of $7.18 per share during the first quarter of 2012, of which 5,891 restricted stock units were forfeited by the executive officers of the Company as required by the agreement with the U.S. Department of the Treasury in conjunction with the Company’s participation in the Capital Purchase Program under the Troubled Asset Relief Program. In July 2012, the Company granted 5,891 restricted stock units at a grant date fair value of $7.50 per share. The Company granted 29,475 restricted stock units under the Plan at a grant date fair value of $10.82 per share during the second quarter of 2013. The Company granted 23,162 restricted stock units under the Plan at a grant date fair value of $14.27 per share during the first quarter of 2014. The Company granted 16,583 restricted stock units under the Plan at a grant date fair value of $16.34 per share during the first quarter of 2015. The Company granted 5,544 restricted stock units under the Plan at a grant date fair value of $16.91 per share during the first quarter of 2016. The Company granted 4,114 restricted stock units under the Plan at a grant date fair value of $25.00 per share during the first quarter of 2017. The Company granted 3,725 restricted stock units under the Plan at a grant date fair value of $31.43 per share during the first quarter of 2018. The number of restricted stock units granted and grant date fair values have been restated to reflect the 10% stock dividend during the fourth quarter of 2017. The Company recognizes compensation expense on the restricted stock units over the period of time the restrictions are in place (five years from the grant date for the 2012 grants, four years from the grant date for the 2013, 2015, 2016, 2017 and 2018 grants and three years from the grant date for the 2014 grants). The amount of expense recorded each period reflects the changes in the Company’s stock price during such period. As of September 30, 2018, the total unrecognized compensation expense related to the restricted stock unit grants under the Plan was $248,000. The Company recognized compensation expense for restricted stock unit awards granted under the Plan of $131,000 and $471,000 for the nine months ended September 30, 2018 and 2017, respectively. |
6. Fair Value
6. Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
6. Fair Value | The Company is required to disclose fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value. The assumptions used in the estimation of the fair value of the Company’s financial instruments are detailed below. Where quoted prices are not available, fair values are based on estimates using discounted cash flows and other valuation techniques. The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The following disclosures should not be considered a surrogate of the liquidation value of the Company, but rather a good faith estimate of the increase or decrease in the value of financial instruments held by the Company since purchase, origination or issuance. The methods of determining the fair value of assets and liabilities presented in this note are consistent with methodologies disclosed in Note 15 of the Company’s 2017 Form 10-K, except for the valuation of loans which was impacted by the adoption of ASU No. 2016-01. The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: · Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets. · Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. · Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. Cash and Cash Equivalents For cash, due from banks and interest-bearing deposits, the carrying amount is a reasonable estimate of fair value. Cash and cash equivalents are reported in the Level 1 fair value category. Investment Securities Available for Sale Fair values of investment securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges when available. If quoted prices are not available, fair value is determined using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Fair values for investment securities with quoted market prices are reported in the Level 1 fair value category. Fair value measurements obtained from independent pricing services are reported in the Level 2 fair value category. All other fair value measurements are reported in the Level 3 fair value category. Other Investments For other investments, the carrying value is a reasonable estimate of fair value. Other investments are reported in the Level 3 fair value category. Mortgage Loans Held for Sale Mortgage loans held for sale are carried at the lower of aggregate cost or market value. The cost of mortgage loans held for sale approximates the market value. Mortgage loans held for sale are reported in the Level 3 fair value category. Loans In accordance with ASU No. 2016-01, the fair value of loans, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit, and nonperformance risk of the loans. Loans are reported in the Level 3 fair value category, as the pricing of loans is more subjective than the pricing of other financial instruments. Cash Surrender Value of Life Insurance For cash surrender value of life insurance, the carrying value is a reasonable estimate of fair value. Cash surrender value of life insurance is reported in the Level 2 fair value category. Other Real Estate The fair value of other real estate is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. Other real estate is reported in the Level 3 fair value category. Deposits The fair value of demand deposits, interest-bearing demand deposits and savings is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. Deposits are reported in the Level 2 fair value category. Securities Sold Under Agreements to Repurchase For securities sold under agreements to repurchase, the carrying value is a reasonable estimate of fair value. Securities sold under agreements to repurchase are reported in the Level 2 fair value category. Federal Home Loan Bank (“FHLB”) Borrowings The fair value of FHLB borrowings is estimated based upon discounted future cash flows using a discount rate comparable to the current market rate for such borrowings. FHLB borrowings are reported in the Level 2 fair value category. Junior Subordinated Debentures Because the Company’s junior subordinated debentures were issued at a floating rate, the carrying amount is a reasonable estimate of fair value. Junior subordinated debentures are reported in the Level 2 fair value category. Commitments to Extend Credit and Standby Letters of Credit Commitments to extend credit and standby letters of credit are generally short-term and at variable interest rates. Therefore, both the carrying value and estimated fair value associated with these instruments are immaterial. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. The table below presents the balance of securities available for sale, which are measured at fair value on a recurring basis by level within the fair value hierarchy, as of September 30, 2018 and December 31, 2017. (Dollars in thousands) September 30, 2018 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage-backed securities $ 46,290 — 46,290 — U.S. Government sponsored enterprises $ 35,001 — 35,001 — State and political subdivisions $ 123,414 — 123,414 — Corporate bonds $ 1,011 — 1,011 — Trust preferred securities $ 250 — — 250 (Dollars in thousands) December 31, 2017 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage-backed securities $ 53,609 — 53,609 — U.S. Government sponsored enterprises $ 40,380 — 40,380 — State and political subdivisions $ 133,570 — 133,570 — Corporate bonds $ 1,512 — 1,512 — Trust preferred securities $ 250 — — 250 The following is an analysis of fair value measurements of investment securities available for sale using Level 3, significant unobservable inputs, for the nine months ended September 30, 2018. (Dollars in thousands) Investment Securities Available for Sale Level 3 Valuation Balance, beginning of period $ 250 Change in book value — Change in gain/(loss) realized and unrealized — Purchases/(sales and calls) — Transfers in and/or (out) of Level 3 — Balance, end of period $ 250 Change in unrealized gain/(loss) for assets still held in Level 3 $ — The fair value measurements for mortgage loans held for sale, impaired loans and other real estate on a non-recurring basis at September 30, 2018 and December 31, 2017 are presented below. The fair value measurement process uses certified appraisals and other market-based information; however, in many cases, it also requires significant input based on management’s knowledge of, and judgment about, current market conditions, specific issues relating to the collateral and other matters. As a result, all fair value measurements for impaired loans and other real estate are considered Level 3. (Dollars in thousands) Fair Value Measurements September 30, 2018 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 1,740 — — 1,740 Impaired loans $ 22,449 — — 22,449 Other real estate $ — — — — (Dollars in thousands) Fair Value Measurements December 31, 2017 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 857 — — 857 Impaired loans $ 23,442 — — 23,442 Other real estate $ 118 — — 118 (Dollars in thousands) Fair Value September 30, 2018 Fair Value December 31, 2017 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Mortgage loans held for sale $ 1,740 857 Rate lock commitment N/A N/A Impaired loans $ 22,449 23,442 Appraised value and discounted cash flows Discounts to reflect current market conditions and ultimate collectability 0 - 25% Other real estate $ — 118 Appraised value Discounts to reflect current market conditions and estimated costs to sell 0 - 25% The carrying amount and estimated fair value of financial instruments at September 30, 2018 and December 31, 2017 are as follows: (Dollars in thousands) Fair Value Measurements at September 30, 2018 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 57,041 57,041 — — 57,041 Investment securities available for sale $ 205,966 — 205,716 250 205,966 Other investments $ 4,394 — — 4,394 4,394 Mortgage loans held for sale $ 1,740 — — 1,740 1,740 Loans, net $ 780,429 — — 774,242 774,242 Cash surrender value of life insurance $ 15,839 — 15,839 — 15,839 Liabilities: Deposits $ 893,459 — — 874,065 874,065 Securities sold under agreements to repurchase $ 55,766 — 55,766 — 55,766 Junior subordinated debentures $ 20,619 — 20,619 — 20,619 (Dollars in thousands) Fair Value Measurements at December 31, 2017 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 57,304 57,304 — — 57,304 Investment securities available for sale $ 229,321 — 229,071 250 229,321 Other investments $ 1,830 — — 1,830 1,830 Mortgage loans held for sale $ 857 — — 857 857 Loans, net $ 753,398 — — 735,837 735,837 Cash surrender value of life insurance $ 15,552 — 15,552 — 15,552 Liabilities: Deposits $ 906,952 — — 894,932 894,932 Securities sold under agreements to repurchase $ 37,757 — 37,757 — 37,757 Junior subordinated debentures $ 20,619 — 20,619 — 20,619 |
7. Subsequent Events
7. Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
7. Subsequent Events | The Company has reviewed and evaluated subsequent events and transactions for material subsequent events through the date the financial statements are issued. Management has concluded that there were no material subsequent events other than the event noted below. On October 19, 2018, the Bank received a draft audit report from the North Carolina Department of Revenue (“NCDOR”) setting forth certain proposed adjustments to the North Carolina income tax returns for the Bank for the tax years January 1, 2014 through December 31, 2016. The NCDOR is seeking to disallow certain tax credits taken by the Bank in tax years January 1, 2014 through December 31, 2016 from an investment made by the Bank. The total proposed adjustments sought by the NCDOR as of the date of the draft audit report (including additional tax, penalties and interest up to the date of the draft audit report) is approximately $1.4 million. The Bank disagrees with the NCDOR’s proposed adjustments and the disallowance of certain tax credits, and intends to challenge the proposed adjustments and the disallowance of such tax credits. The Bank purchased a Guaranty Agreement along with this tax credit investment that unconditionally guarantees the amount of its investment plus associated penalties and interest which we believe would limit the Bank’s exposure to approximately $150,000. The Tax Credit Guaranty Agreement from State Tax Credit Exchange, LLC dated September 10, 2014 is attached to this Form 10-Q as Exhibit 99. |
2. Investment Securities (Table
2. Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment securities available for sale | (Dollars in thousands) September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Mortgage-backed securities $ 47,017 250 977 46,290 U.S. Government sponsored enterprises 36,278 1 1,278 35,001 State and political subdivisions 121,755 1,911 252 123,414 Corporate bonds 1,000 11 — 1,011 Trust preferred securities 250 — — 250 Total $ 206,300 2,173 2,507 205,966 (Dollars in thousands) December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Mortgage-backed securities $ 53,124 814 329 53,609 U.S. Government sponsored enterprises 40,504 140 264 40,380 State and political subdivisions 129,276 4,310 16 133,570 Corporate bonds 1,500 12 — 1,512 Trust preferred securities 250 — — 250 Total $ 224,654 5,276 609 229,321 |
Current fair value and associated unrealized losses on investments in securities with unrealized losses | (Dollars in thousands) September 30, 2018 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 20,557 276 14,698 701 35,255 977 U.S. Government sponsored enterprises 19,435 586 14,564 692 33,999 1,278 State and political subdivisions 15,042 212 1,733 40 16,775 252 Total $ 55,034 1,074 30,995 1,433 86,029 2,507 (Dollars in thousands) December 31, 2017 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 8,701 75 11,259 254 19,960 329 U.S. Government sponsored enterprises 12,661 98 10,067 166 22,728 264 State and political subdivisions 798 2 1,501 14 2,299 16 Total $ 22,160 175 22,827 434 44,987 609 |
Amortized cost and estimated fair value of investment securities available for sale by contractual maturity | September 30, 2018 (Dollars in thousands) Amortized Cost Estimated Fair Value Due within one year $ 24,659 24,800 Due from one to five years 95,923 96,934 Due from five to ten years 31,869 31,208 Due after ten years 6,582 6,484 Mortgage-backed securities 47,017 46,290 Trust preferred securities 250 250 Total $ 206,300 205,966 |
3. Loans (Tables)
3. Loans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Major classifications of loans | (Dollars in thousands) September 30, 2018 December 31, 2017 Real estate loans: Construction and land development $ 76,987 84,987 Single-family residential 249,812 246,703 Single-family residential - Banco de la Gente non-traditional 34,742 37,249 Commercial 275,629 248,637 Multifamily and farmland 31,102 28,937 Total real estate loans 668,272 646,513 Loans not secured by real estate: Commercial loans 97,085 89,022 Farm loans 994 1,204 Consumer loans 9,512 9,888 All other loans 10,861 13,137 Total loans 786,724 759,764 Less allowance for loan losses 6,295 6,366 Total net loans $ 780,429 753,398 |
Age analysis of past due loans, by loan type | September 30, 2018 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 1,170 38 1,208 75,779 76,987 — Single-family residential 2,597 366 2,963 246,849 249,812 — Single-family residential - Banco de la Gente non-traditional 940 485 1,425 33,317 34,742 — Commercial 1,157 100 1,257 274,372 275,629 — Multifamily and farmland — — — 31,102 31,102 — Total real estate loans 5,864 989 6,853 661,419 668,272 — Loans not secured by real estate: Commercial loans 490 94 584 96,501 97,085 — Farm loans — — — 994 994 — Consumer loans 85 35 120 9,392 9,512 — All other loans — — — 10,861 10,861 — Total loans $ 6,439 1,118 7,557 779,167 786,724 — December 31, 2017 (Dollars in thousands) Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Total Current Loans Total Loans Accruing Loans 90 or More Days Past Due Real estate loans: Construction and land development $ 277 — 277 84,710 84,987 — Single-family residential 3,241 193 3,434 243,269 246,703 — Single-family residential - Banco de la Gente non-traditional 4,078 465 4,543 32,706 37,249 — Commercial 588 — 588 248,049 248,637 — Multifamily and farmland — 12 12 28,925 28,937 — Total real estate loans 8,184 670 8,854 637,659 646,513 — Loans not secured by real estate: Commercial loans 53 100 153 88,869 89,022 — Farm loans — — — 1,204 1,204 — Consumer loans 113 5 118 9,770 9,888 — All other loans — — — 13,137 13,137 — Total loans $ 8,350 775 9,125 750,639 759,764 — |
Non-accrual loans | (Dollars in thousands) September 30, 2018 December 31, 2017 Real estate loans: Construction and land development $ 39 14 Single-family residential 1,824 1,634 Single-family residential - Banco de la Gente non-traditional 1,475 1,543 Commercial 445 396 Multifamily and farmland — 12 Total real estate loans 3,783 3,599 Loans not secured by real estate: Commercial loans 94 100 Consumer loans 42 12 Total $ 3,919 3,711 |
Impaired loans | (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Real estate loans: Construction and land development $ 337 — 282 282 11 Single-family residential 5,533 429 4,620 5,049 36 Single-family residential - Banco de la Gente non-traditional 16,565 — 15,934 15,934 1,055 Commercial 2,371 190 1,861 2,051 13 Multifamily and farmland — — — — — Total impaired real estate loans 24,806 619 22,697 23,316 1,115 Loans not secured by real estate: Commercial loans 257 94 1 95 — Consumer loans 158 — 155 155 2 Total impaired loans $ 25,221 713 22,853 23,566 1,117 (Dollars in thousands) Three months ended Nine months ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Average Balance Interest Income Recognized Real estate loans: Construction and land development $ 320 2 246 5 326 14 253 11 Single-family residential 6,441 73 4,783 71 6,350 207 5,113 202 Single-family residential - Banco de la Gente non-traditional 14,602 236 17,283 225 14,851 703 17,235 694 Commercial 2,320 17 3,852 18 2,307 97 3,712 144 Multifamily and farmland — — 12 — 3 — 45 — Total impaired real estate loans 23,683 328 26,176 319 23,837 1,021 26,358 1,051 Loans not secured by real estate: Commercial loans 96 — 243 — 99 — 130 3 Consumer loans 144 3 183 3 147 7 206 8 Total impaired loans $ 23,923 331 26,602 322 24,083 1,028 26,694 1,062 (Dollars in thousands) Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Recorded Investment in Impaired Loans Related Allowance Average Outstanding Impaired Loans YTD Interest Income Recognized Real estate loans: Construction and land development $ 282 — 277 277 6 253 17 Single-family residential 5,226 1,135 3,686 4,821 41 5,113 265 Single-family residential - Banco de la Gente non-traditional 17,360 — 16,805 16,805 1,149 16,867 920 Commercial 2,761 807 1,661 2,468 1 3,411 148 Multifamily and farmland 78 — 12 12 — 28 — Total impaired real estate loans 25,707 1,942 22,441 24,383 1,197 25,672 1,350 Loans not secured by real estate: Commercial loans 264 100 4 104 — 149 3 Consumer loans 158 — 154 154 2 194 9 Total impaired loans $ 26,129 2,042 22,599 24,641 1,199 26,015 1,362 |
Changes in the allowance for loan losses | (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2018: Allowance for loan losses: Beginning balance $ 804 1,812 1,280 1,193 72 574 — 155 476 6,366 Charge-offs (53 ) (115 ) — (271 ) (5 ) (4 ) — (318 ) — (766 ) Recoveries 4 55 — 101 1 23 — 139 — 323 Provision (63 ) (293 ) (75 ) 438 10 12 — 182 161 372 Ending balance $ 692 1,459 1,205 1,461 78 605 — 158 637 6,295 Three months ended September 30, 2018: Allowance for loan losses: Beginning balance $ 668 1,638 1,233 1,420 72 587 — 150 509 6,277 Charge-offs (53 ) (73 ) — — — (1 ) — (132 ) — (259 ) Recoveries 1 28 — 94 — 7 — 37 — 167 Provision 76 (134 ) (28 ) (53 ) 6 12 — 103 128 110 Ending balance $ 692 1,459 1,205 1,461 78 605 — 158 637 6,295 Allowance for loan losses at September 30, 2018: Ending balance: individually evaluated for impairment $ 5 2 1,036 12 — — — — — 1,055 Ending balance: collectively evaluated for impairment 687 1,457 169 1,449 78 605 — 158 637 5,240 Ending balance $ 692 1,459 1,205 1,461 78 605 — 158 637 6,295 Loans at September 30, 2018: Ending balance $ 76,987 249,812 34,742 275,629 31,102 97,085 994 20,373 — 786,724 Ending balance: individually evaluated for impairment $ 98 2,171 14,557 1,879 — 94 — — — 18,799 Ending balance: collectively evaluated for impairment $ 76,889 247,641 20,185 273,750 31,102 96,991 994 20,373 — 767,925 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer and All Other Unallocated Total Nine months ended September 30, 2017: Allowance for loan losses: Beginning balance $ 1,152 2,126 1,377 1,593 52 675 — 204 371 7,550 Charge-offs — (64 ) — — (66 ) (63 ) — (288 ) — (481 ) Recoveries 12 26 — 17 — 23 — 102 — 180 Provision (178 ) (211 ) (101 ) (192 ) 86 (74 ) — 143 122 (405 ) Ending balance $ 986 1,877 1,276 1,418 72 561 — 161 493 6,844 Three months ended September 30, 2017: Allowance for loan losses: Beginning balance $ 1,183 1,819 1,293 1,463 75 704 — 158 472 7,167 Charge-offs — (20 ) — — — (26 ) — (106 ) — (152 ) Recoveries 2 9 — 4 — 8 — 24 — 47 Provision (199 ) 69 (17 ) (49 ) (3 ) (125 ) — 85 21 (218 ) Ending balance $ 986 1,877 1,276 1,418 72 561 — 161 493 6,844 Allowance for loan losses at September 30, 2017: Ending balance: individually evaluated for impairment $ — — 1,104 42 — — — — — 1,146 Ending balance: collectively evaluated for impairment 986 1,877 172 1,376 72 561 — 161 493 5,698 Ending balance $ 986 1,877 1,276 1,418 72 561 — 161 493 6,844 Loans at September 30, 2017: Ending balance $ 75,483 247,184 37,840 245,279 28,662 87,019 895 25,075 — 747,437 Ending balance: individually evaluated for impairment $ 10 1,875 15,732 3,069 — 229 — — — 20,915 Ending balance: collectively evaluated for impairment $ 75,473 245,309 22,108 242,210 28,662 86,790 895 25,075 — 726,522 |
Credit risk profile of each loan type based on internally assigned risk grade | September 30, 2018 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 410 7,583 — — — 662 — 668 — 9,323 2- High Quality 15,413 125,945 — 35,362 430 24,141 — 3,462 2,174 206,927 3- Good Quality 51,835 91,936 13,927 215,902 25,758 65,302 845 4,733 7,924 478,162 4- Management Attention 5,210 17,218 15,392 21,271 3,813 6,601 149 581 763 70,998 5- Watch 3,924 3,844 2,425 2,649 1,101 273 — 18 — 14,234 6- Substandard 195 3,286 2,998 445 — 106 — 50 — 7,080 7- Doubtful — — — — — — — — — — 8- Loss — — — — — — — — — — Total $ 76,987 249,812 34,742 275,629 31,102 97,085 994 9,512 10,861 786,724 December 31, 2017 (Dollars in thousands) Real Estate Loans Construction and Land Development Single-Family Residential Single-Family Residential - Banco de la Gente Non-traditional Commercial Multifamily and Farmland Commercial Farm Consumer All Other Total 1- Excellent Quality $ 152 8,590 — — — 446 — 791 — 9,979 2- High Quality 20,593 120,331 — 34,360 561 17,559 — 3,475 2,410 199,289 3- Good Quality 53,586 89,120 14,955 196,439 25,306 65,626 1,085 5,012 9,925 461,054 4- Management Attention 4,313 20,648 15,113 13,727 1,912 5,051 119 562 802 62,247 5- Watch 6,060 4,796 3,357 3,671 1,146 223 — 23 — 19,276 6- Substandard 283 3,218 3,824 440 12 117 — 25 — 7,919 7- Doubtful — — — — — — — — — — 8- Loss — — — — — — — — — — Total $ 84,987 246,703 37,249 248,637 28,937 89,022 1,204 9,888 13,137 759,764 |
Analysis of TDR loans by loan type | Three months ended September 30, 2018 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Real estate loans Single-family residential 1 $ 61 61 Total real estate TDR loans 1 61 61 Total TDR loans 1 $ 61 61 Nine months ended September 30, 2018 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Real estate loans Single-family residential 2 $ 94 94 Total real estate TDR loans 2 94 94 Total TDR loans 2 $ 94 94 Three and nine months ended September 30, 2017 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Real estate loans Single-family residential 2 $ 22 22 Total real estate TDR loans 2 22 22 Total TDR loans 2 $ 22 22 |
4. Net Earnings Per Share (Tabl
4. Net Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliations of the amounts used in the computation of both basic earnings per common share and diluted earnings per common share | For the three months ended September 30, 2018 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 3,467 5,995,256 $ 0.58 Effect of dilutive securities: Restricted stock units — 21,445 Diluted earnings per share $ 3,467 6,016,701 $ 0.57 For the nine months ended September 30, 2018 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 9,946 5,995,256 $ 1.66 Effect of dilutive securities: Restricted stock units — 19,137 Diluted earnings per share $ 9,946 6,014,393 $ 1.65 For the three months ended September 30, 2017 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 3,242 5,995,453 $ 0.54 Effect of dilutive securities: Restricted stock units — 96,339 Diluted earnings per share $ 3,242 6,091,792 $ 0.52 For the nine months ended September 30, 2017 Net Earnings (Dollars in thousands) Weighted Average Number of Shares Per Share Amount Basic earnings per share $ 8,258 5,985,051 $ 1.38 Effect of dilutive securities: Restricted stock units — 94,566 Diluted earnings per share $ 8,258 6,079,616 $ 1.35 |
6. Fair Value (Tables)
6. Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Available for sale securities measured at fair value on a recurring basis | (Dollars in thousands) September 30, 2018 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage-backed securities $ 46,290 — 46,290 — U.S. Government sponsored enterprises $ 35,001 — 35,001 — State and political subdivisions $ 123,414 — 123,414 — Corporate bonds $ 1,011 — 1,011 — Trust preferred securities $ 250 — — 250 (Dollars in thousands) December 31, 2017 Fair Value Measurements Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage-backed securities $ 53,609 — 53,609 — U.S. Government sponsored enterprises $ 40,380 — 40,380 — State and political subdivisions $ 133,570 — 133,570 — Corporate bonds $ 1,512 — 1,512 — Trust preferred securities $ 250 — — 250 |
Fair value measurements of investment securities available for sale using Level 3 significant unobservable inputs | (Dollars in thousands) Investment Securities Available for Sale Level 3 Valuation Balance, beginning of period $ 250 Change in book value — Change in gain/(loss) realized and unrealized — Purchases/(sales and calls) — Transfers in and/or (out) of Level 3 — Balance, end of period $ 250 Change in unrealized gain/(loss) for assets still held in Level 3 $ — |
Fair value measurements for mortgage loans held for sale, impaired loans and other real estate on a non-recurring basis | (Dollars in thousands) Fair Value Measurements September 30, 2018 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 1,740 — — 1,740 Impaired loans $ 22,449 — — 22,449 Other real estate $ — — — — (Dollars in thousands) Fair Value Measurements December 31, 2017 Level 1 Valuation Level 2 Valuation Level 3 Valuation Mortgage loans held for sale $ 857 — — 857 Impaired loans $ 23,442 — — 23,442 Other real estate $ 118 — — 118 (Dollars in thousands) Fair Value September 30, 2018 Fair Value December 31, 2017 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Mortgage loans held for sale $ 1,740 857 Rate lock commitment N/A N/A Impaired loans $ 22,449 23,442 Appraised value and discounted cash flows Discounts to reflect current market conditions and ultimate collectability 0 - 25% Other real estate $ — 118 Appraised value Discounts to reflect current market conditions and estimated costs to sell 0 - 25% |
Carrying amount and estimated fair value of the Company's financial instruments | (Dollars in thousands) Fair Value Measurements at September 30, 2018 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 57,041 57,041 — — 57,041 Investment securities available for sale $ 205,966 — 205,716 250 205,966 Other investments $ 4,394 — — 4,394 4,394 Mortgage loans held for sale $ 1,740 — — 1,740 1,740 Loans, net $ 780,429 — — 774,242 774,242 Cash surrender value of life insurance $ 15,839 — 15,839 — 15,839 Liabilities: Deposits $ 893,459 — — 874,065 874,065 Securities sold under agreements to repurchase $ 55,766 — 55,766 — 55,766 Junior subordinated debentures $ 20,619 — 20,619 — 20,619 (Dollars in thousands) Fair Value Measurements at December 31, 2017 Carrying Amount Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 57,304 57,304 — — 57,304 Investment securities available for sale $ 229,321 — 229,071 250 229,321 Other investments $ 1,830 — — 1,830 1,830 Mortgage loans held for sale $ 857 — — 857 857 Loans, net $ 753,398 — — 735,837 735,837 Cash surrender value of life insurance $ 15,552 — 15,552 — 15,552 Liabilities: Deposits $ 906,952 — — 894,932 894,932 Securities sold under agreements to repurchase $ 37,757 — 37,757 — 37,757 Junior subordinated debentures $ 20,619 — 20,619 — 20,619 |
2. Investment Securities (Detai
2. Investment Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Investment securities available for sale | ||
Amortized Cost | $ 206,300 | |
Estimated Fair Value | 205,966 | $ 229,321 |
Mortgage-backed securities | ||
Investment securities available for sale | ||
Amortized Cost | 47,017 | 53,124 |
Gross Unrealized Gains | 250 | 814 |
Gross Unrealized Losses | 977 | 329 |
Estimated Fair Value | 46,290 | 53,609 |
U.S. Government sponsored enterprises | ||
Investment securities available for sale | ||
Amortized Cost | 36,278 | 40,504 |
Gross Unrealized Gains | 1 | 140 |
Gross Unrealized Losses | 1,278 | 264 |
Estimated Fair Value | 35,001 | 40,380 |
State and political subdivisions | ||
Investment securities available for sale | ||
Amortized Cost | 121,755 | 129,276 |
Gross Unrealized Gains | 1,911 | 4,310 |
Gross Unrealized Losses | 252 | 16 |
Estimated Fair Value | 123,414 | 133,570 |
Corporate bonds | ||
Investment securities available for sale | ||
Amortized Cost | 1,000 | 1,500 |
Gross Unrealized Gains | 11 | 12 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 1,011 | 1,512 |
Trust preferred securities | ||
Investment securities available for sale | ||
Amortized Cost | 250 | 250 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 250 | 250 |
Total | ||
Investment securities available for sale | ||
Amortized Cost | 206,300 | 224,654 |
Gross Unrealized Gains | 2,173 | 5,276 |
Gross Unrealized Losses | 2,507 | 609 |
Estimated Fair Value | $ 205,966 | $ 229,321 |
2. Investment securities, Conti
2. Investment securities, Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Investment securities with continuous unrealized loss position | ||
Less than 12 Months, Fair Value | $ 55,034 | $ 22,160 |
Less than 12 Months, Unrealized Losses | 1,074 | 175 |
12 Months or More, Fair Value | 30,995 | 22,827 |
12 Months or More, Unrealized Losses | 1,433 | 434 |
Total, Fair Value | 86,029 | 44,987 |
Total, Unrealized Losses | 2,507 | 609 |
Mortgage-backed securities | ||
Investment securities with continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 20,557 | 8,701 |
Less than 12 Months, Unrealized Losses | 276 | 75 |
12 Months or More, Fair Value | 14,698 | 11,259 |
12 Months or More, Unrealized Losses | 701 | 254 |
Total, Fair Value | 35,255 | 19,960 |
Total, Unrealized Losses | 977 | 329 |
U.S. Government sponsored enterprises | ||
Investment securities with continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 19,435 | 12,661 |
Less than 12 Months, Unrealized Losses | 586 | 98 |
12 Months or More, Fair Value | 14,564 | 10,067 |
12 Months or More, Unrealized Losses | 692 | 166 |
Total, Fair Value | 33,999 | 22,728 |
Total, Unrealized Losses | 1,278 | 264 |
State and political subdivisions | ||
Investment securities with continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 15,042 | 798 |
Less than 12 Months, Unrealized Losses | 212 | 2 |
12 Months or More, Fair Value | 1,733 | 1,501 |
12 Months or More, Unrealized Losses | 40 | 14 |
Total, Fair Value | 16,775 | 2,299 |
Total, Unrealized Losses | $ 252 | $ 16 |
2. Investment securities, Contr
2. Investment securities, Contractual Maturity (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Amortized Cost | |
Due within one year | $ 24,659 |
Due from one to five years | 95,923 |
Due from five to ten years | 31,869 |
Due after ten years | 6,582 |
Mortgage-backed securities | 47,017 |
Trust preferred securities | 250 |
Total | 206,300 |
Estimated Fair Value | |
Due within one year | 24,800 |
Due from one to five years | 96,934 |
Due from five to ten years | 31,208 |
Due after ten years | 6,484 |
Mortgage-backed securities | 46,290 |
Trust preferred securities | 250 |
Total | $ 205,966 |
2. Investment Securities (Det_2
2. Investment Securities (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Pledged to secure public deposits | $ 92,100 | $ 105,600 |
3. Loans (Details)
3. Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Major classifications | ||||||
Total loans | $ 786,724 | $ 759,764 | $ 747,437 | |||
Less allowance for loan losses | 6,295 | $ 6,277 | 6,366 | 6,844 | $ 7,167 | $ 7,550 |
Total net loans | 780,429 | 753,398 | ||||
Construction and land development | ||||||
Major classifications | ||||||
Total loans | 76,987 | 84,987 | 75,483 | |||
Less allowance for loan losses | 692 | 668 | 804 | 986 | 1,183 | 1,152 |
Single-family residential | ||||||
Major classifications | ||||||
Total loans | 249,812 | 246,703 | 247,184 | |||
Less allowance for loan losses | 1,459 | 1,638 | 1,812 | 1,877 | 1,819 | 2,126 |
Single-family residential - Banco de la Gente stated income | ||||||
Major classifications | ||||||
Total loans | 34,742 | 37,249 | 37,840 | |||
Less allowance for loan losses | 1,205 | 1,233 | 1,280 | 1,276 | 1,293 | 1,377 |
Commercial | ||||||
Major classifications | ||||||
Total loans | 275,629 | 248,637 | 245,279 | |||
Less allowance for loan losses | 1,461 | 1,420 | 1,193 | 1,418 | 1,463 | 1,593 |
Multifamily and Farmland | ||||||
Major classifications | ||||||
Total loans | 31,102 | 28,937 | 28,662 | |||
Less allowance for loan losses | 78 | 72 | 72 | 72 | 75 | 52 |
Total real estate loans | ||||||
Major classifications | ||||||
Total loans | 668,272 | 646,513 | ||||
Commercial loans (not secured by real estate) | ||||||
Major classifications | ||||||
Total loans | 97,085 | 89,022 | 87,019 | |||
Less allowance for loan losses | 605 | 587 | 574 | 561 | 704 | 675 |
Farm loans (not secured by real estate) | ||||||
Major classifications | ||||||
Total loans | 994 | 1,204 | 895 | |||
Less allowance for loan losses | 0 | $ 0 | 0 | $ 0 | $ 0 | $ 0 |
Consumer loans (not secured by real estate) | ||||||
Major classifications | ||||||
Total loans | 9,512 | 9,888 | ||||
All other loans (not secured by real estate) | ||||||
Major classifications | ||||||
Total loans | $ 10,861 | $ 13,137 |
3. Loans, Past Due (Details)
3. Loans, Past Due (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Past due loans | |||
Loans 30-89 Days Past Due | $ 6,439 | $ 8,350 | |
Loans 90 or More Days Past Due | 1,118 | 775 | |
Total Past Due Loans | 7,557 | 9,125 | |
Total Current Loans | 779,167 | 750,639 | |
Total loans | 786,724 | 759,764 | $ 747,437 |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Construction and land development | |||
Past due loans | |||
Loans 30-89 Days Past Due | 1,170 | 277 | |
Loans 90 or More Days Past Due | 38 | 0 | |
Total Past Due Loans | 1,208 | 277 | |
Total Current Loans | 75,779 | 84,710 | |
Total loans | 76,987 | 84,987 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Single-family residential | |||
Past due loans | |||
Loans 30-89 Days Past Due | 2,597 | 3,241 | |
Loans 90 or More Days Past Due | 366 | 193 | |
Total Past Due Loans | 2,963 | 3,434 | |
Total Current Loans | 246,849 | 243,269 | |
Total loans | 249,812 | 246,703 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Single-family residential - Banco de la Gente stated income | |||
Past due loans | |||
Loans 30-89 Days Past Due | 940 | 4,078 | |
Loans 90 or More Days Past Due | 485 | 465 | |
Total Past Due Loans | 1,425 | 4,543 | |
Total Current Loans | 33,317 | 32,706 | |
Total loans | 34,742 | 37,249 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Commercial | |||
Past due loans | |||
Loans 30-89 Days Past Due | 1,157 | 588 | |
Loans 90 or More Days Past Due | 100 | 0 | |
Total Past Due Loans | 1,257 | 588 | |
Total Current Loans | 274,372 | 248,049 | |
Total loans | 275,629 | 248,637 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Multifamily and Farmland | |||
Past due loans | |||
Loans 30-89 Days Past Due | 0 | 0 | |
Loans 90 or More Days Past Due | 0 | 12 | |
Total Past Due Loans | 0 | 12 | |
Total Current Loans | 31,102 | 28,925 | |
Total loans | 31,102 | 28,937 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Total real estate loans | |||
Past due loans | |||
Loans 30-89 Days Past Due | 5,864 | 8,184 | |
Loans 90 or More Days Past Due | 989 | 670 | |
Total Past Due Loans | 6,853 | 8,854 | |
Total Current Loans | 661,419 | 637,659 | |
Total loans | 668,272 | 646,513 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Commercial loans (not secured by real estate) | |||
Past due loans | |||
Loans 30-89 Days Past Due | 490 | 53 | |
Loans 90 or More Days Past Due | 94 | 100 | |
Total Past Due Loans | 584 | 153 | |
Total Current Loans | 96,501 | 88,869 | |
Total loans | 97,085 | 89,022 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Farm loans (not secured by real estate) | |||
Past due loans | |||
Loans 30-89 Days Past Due | 0 | 0 | |
Loans 90 or More Days Past Due | 0 | 0 | |
Total Past Due Loans | 0 | 0 | |
Total Current Loans | 994 | 1,204 | |
Total loans | 994 | 1,204 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
Consumer loans (not secured by real estate) | |||
Past due loans | |||
Loans 30-89 Days Past Due | 85 | 113 | |
Loans 90 or More Days Past Due | 35 | 5 | |
Total Past Due Loans | 120 | 118 | |
Total Current Loans | 9,392 | 9,770 | |
Total loans | 9,512 | 9,888 | |
Accruing Loans 90 or More Days Past Due | 0 | 0 | |
All other loans (not secured by real estate) | |||
Past due loans | |||
Loans 30-89 Days Past Due | 0 | 0 | |
Loans 90 or More Days Past Due | 0 | 0 | |
Total Past Due Loans | 0 | 0 | |
Total Current Loans | 10,861 | 13,137 | |
Total loans | 10,861 | 13,137 | |
Accruing Loans 90 or More Days Past Due | $ 0 | $ 0 |
3. Loans, Nonaccrual (Details)
3. Loans, Nonaccrual (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Non-accrual loans | ||
Non-accrual loans | $ 3,919 | $ 3,711 |
Construction and land development | ||
Non-accrual loans | ||
Non-accrual loans | 39 | 14 |
Single-family residential | ||
Non-accrual loans | ||
Non-accrual loans | 1,824 | 1,634 |
Single-family residential - Banco de la Gente stated income | ||
Non-accrual loans | ||
Non-accrual loans | 1,475 | 1,543 |
Commercial | ||
Non-accrual loans | ||
Non-accrual loans | 445 | 396 |
Multifamily and Farmland | ||
Non-accrual loans | ||
Non-accrual loans | 0 | 12 |
Total real estate loans | ||
Non-accrual loans | ||
Non-accrual loans | 3,783 | 3,599 |
Commercial loans (not secured by real estate) | ||
Non-accrual loans | ||
Non-accrual loans | 94 | 100 |
Consumer loans (not secured by real estate) | ||
Non-accrual loans | ||
Non-accrual loans | $ 42 | $ 12 |
3. Loans, Impaired (Details)
3. Loans, Impaired (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Impaired loans | |||||
Unpaid Contractual Principal Balance | $ 25,221 | $ 25,221 | $ 26,129 | ||
Recorded Investment With No Allowance | 713 | 713 | 2,042 | ||
Recorded Investment With Allowance | 22,853 | 22,853 | 22,599 | ||
Recorded Investment in Impaired Loans | 23,566 | 23,566 | 24,641 | ||
Related Allowance | 1,117 | 1,117 | 1,199 | ||
Average Outstanding Impaired Loans | 23,923 | $ 26,602 | 24,083 | $ 26,694 | 26,015 |
Interest Income Recognized | 331 | 322 | 1,028 | 1,062 | 1,362 |
Construction and land development | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 337 | 337 | 282 | ||
Recorded Investment With No Allowance | 0 | 0 | 0 | ||
Recorded Investment With Allowance | 282 | 282 | 277 | ||
Recorded Investment in Impaired Loans | 282 | 282 | 277 | ||
Related Allowance | 11 | 11 | 6 | ||
Average Outstanding Impaired Loans | 320 | 246 | 326 | 253 | 253 |
Interest Income Recognized | 2 | 5 | 14 | 11 | 17 |
Single-family residential | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 5,533 | 5,533 | 5,226 | ||
Recorded Investment With No Allowance | 429 | 429 | 1,135 | ||
Recorded Investment With Allowance | 4,620 | 4,620 | 3,686 | ||
Recorded Investment in Impaired Loans | 5,049 | 5,049 | 4,821 | ||
Related Allowance | 36 | 36 | 41 | ||
Average Outstanding Impaired Loans | 6,441 | 4,783 | 6,350 | 5,113 | 5,113 |
Interest Income Recognized | 73 | 71 | 207 | 202 | 265 |
Single-family residential - Banco de la Gente stated income | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 16,565 | 16,565 | 17,360 | ||
Recorded Investment With No Allowance | 0 | 0 | 0 | ||
Recorded Investment With Allowance | 15,934 | 15,934 | 16,805 | ||
Recorded Investment in Impaired Loans | 15,934 | 15,934 | 16,805 | ||
Related Allowance | 1,055 | 1,055 | 1,149 | ||
Average Outstanding Impaired Loans | 14,602 | 17,283 | 14,851 | 17,235 | 16,867 |
Interest Income Recognized | 236 | 225 | 703 | 694 | 920 |
Commercial | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 2,371 | 2,371 | 2,761 | ||
Recorded Investment With No Allowance | 190 | 190 | 807 | ||
Recorded Investment With Allowance | 1,861 | 1,861 | 1,661 | ||
Recorded Investment in Impaired Loans | 2,051 | 2,051 | 2,468 | ||
Related Allowance | 13 | 13 | 1 | ||
Average Outstanding Impaired Loans | 2,320 | 3,852 | 2,307 | 3,712 | 3,411 |
Interest Income Recognized | 17 | 18 | 97 | 144 | 148 |
Multifamily and Farmland | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 0 | 0 | 78 | ||
Recorded Investment With No Allowance | 0 | 0 | 0 | ||
Recorded Investment With Allowance | 0 | 0 | 12 | ||
Recorded Investment in Impaired Loans | 0 | 0 | 12 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Outstanding Impaired Loans | 0 | 12 | 3 | 45 | 28 |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 |
Total real estate loans | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 24,806 | 24,806 | 25,707 | ||
Recorded Investment With No Allowance | 619 | 619 | 1,942 | ||
Recorded Investment With Allowance | 22,697 | 22,697 | 22,441 | ||
Recorded Investment in Impaired Loans | 23,316 | 23,316 | 24,383 | ||
Related Allowance | 1,115 | 1,115 | 1,197 | ||
Average Outstanding Impaired Loans | 23,683 | 26,176 | 23,837 | 26,358 | 25,672 |
Interest Income Recognized | 328 | 319 | 1,021 | 1,051 | 1,350 |
Commercial loans (not secured by real estate) | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 257 | 257 | 264 | ||
Recorded Investment With No Allowance | 94 | 94 | 100 | ||
Recorded Investment With Allowance | 1 | 1 | 4 | ||
Recorded Investment in Impaired Loans | 95 | 95 | 104 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Outstanding Impaired Loans | 96 | 243 | 99 | 130 | 149 |
Interest Income Recognized | 0 | 0 | 0 | 3 | 3 |
Consumer loans (not secured by real estate) | |||||
Impaired loans | |||||
Unpaid Contractual Principal Balance | 158 | 158 | 158 | ||
Recorded Investment With No Allowance | 0 | 0 | 0 | ||
Recorded Investment With Allowance | 155 | 155 | 154 | ||
Recorded Investment in Impaired Loans | 155 | 155 | 154 | ||
Related Allowance | 2 | 2 | 2 | ||
Average Outstanding Impaired Loans | 144 | 183 | 147 | 206 | 194 |
Interest Income Recognized | 3 | 3 | 7 | 8 | $ 9 |
Farm loans (not secured by real estate) | |||||
Impaired loans | |||||
Average Outstanding Impaired Loans | 0 | 0 | 0 | 0 | |
Interest Income Recognized | $ 0 | $ 0 | $ 0 | $ 0 |
3. Loans, Allowance for Loan Lo
3. Loans, Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Allowance for loan losses | ||||
Beginning balance | $ 6,277 | $ 7,167 | $ 6,366 | $ 7,550 |
Charge-offs | (259) | (152) | (766) | (481) |
Recoveries | 167 | 47 | 323 | 180 |
Provision | 110 | (218) | 372 | (405) |
Ending balance | 6,295 | 6,844 | 6,295 | 6,844 |
Ending balance: individually evaluated for impairments | 1,055 | 1,146 | 1,055 | 1,146 |
Ending balance: collectively evaluated for impairments | 5,240 | 5,698 | 5,240 | 5,698 |
Ending balance | 6,295 | 6,844 | 6,295 | 6,844 |
Loans | ||||
Ending balance | 786,724 | 747,437 | 786,724 | 747,437 |
Ending balance: individually evaluated for impairment | 18,799 | 20,915 | 18,799 | 20,915 |
Ending balance: collectively evaluated for impairment | 767,925 | 726,522 | 767,925 | 726,522 |
Construction and land development | ||||
Allowance for loan losses | ||||
Beginning balance | 668 | 1,183 | 804 | 1,152 |
Charge-offs | (53) | 0 | (53) | 0 |
Recoveries | 1 | 2 | 4 | 12 |
Provision | 76 | (199) | (63) | (178) |
Ending balance | 692 | 986 | 692 | 986 |
Ending balance: individually evaluated for impairments | 5 | 0 | 5 | 0 |
Ending balance: collectively evaluated for impairments | 687 | 986 | 687 | 986 |
Ending balance | 692 | 986 | 692 | 986 |
Loans | ||||
Ending balance | 76,987 | 75,483 | 76,987 | 75,483 |
Ending balance: individually evaluated for impairment | 98 | 10 | 98 | 10 |
Ending balance: collectively evaluated for impairment | 76,889 | 75,473 | 76,889 | 75,473 |
Single-family residential | ||||
Allowance for loan losses | ||||
Beginning balance | 1,638 | 1,819 | 1,812 | 2,126 |
Charge-offs | (73) | (20) | (115) | (64) |
Recoveries | 28 | 9 | 55 | 26 |
Provision | (134) | 69 | (293) | (211) |
Ending balance | 1,459 | 1,877 | 1,459 | 1,877 |
Ending balance: individually evaluated for impairments | 2 | 0 | 2 | 0 |
Ending balance: collectively evaluated for impairments | 1,457 | 1,877 | 1,457 | 1,877 |
Ending balance | 1,459 | 1,877 | 1,459 | 1,877 |
Loans | ||||
Ending balance | 249,812 | 247,184 | 249,812 | 247,184 |
Ending balance: individually evaluated for impairment | 2,171 | 1,875 | 2,171 | 1,875 |
Ending balance: collectively evaluated for impairment | 247,641 | 245,309 | 247,641 | 245,309 |
Single-family residential - Banco de la Gente stated income | ||||
Allowance for loan losses | ||||
Beginning balance | 1,233 | 1,293 | 1,280 | 1,377 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | (28) | (17) | (75) | (101) |
Ending balance | 1,205 | 1,276 | 1,205 | 1,276 |
Ending balance: individually evaluated for impairments | 1,036 | 1,104 | 1,036 | 1,104 |
Ending balance: collectively evaluated for impairments | 169 | 172 | 169 | 172 |
Ending balance | 1,205 | 1,276 | 1,205 | 1,276 |
Loans | ||||
Ending balance | 34,742 | 37,840 | 34,742 | 37,840 |
Ending balance: individually evaluated for impairment | 14,557 | 15,732 | 14,557 | 15,732 |
Ending balance: collectively evaluated for impairment | 20,185 | 22,108 | 20,185 | 22,108 |
Commercial | ||||
Allowance for loan losses | ||||
Beginning balance | 1,420 | 1,463 | 1,193 | 1,593 |
Charge-offs | 0 | 0 | (271) | 0 |
Recoveries | 94 | 4 | 101 | 17 |
Provision | (53) | (49) | 438 | (192) |
Ending balance | 1,461 | 1,418 | 1,461 | 1,418 |
Ending balance: individually evaluated for impairments | 12 | 42 | 12 | 42 |
Ending balance: collectively evaluated for impairments | 1,449 | 1,376 | 1,449 | 1,376 |
Ending balance | 1,461 | 1,418 | 1,461 | 1,418 |
Loans | ||||
Ending balance | 275,629 | 245,279 | 275,629 | 245,279 |
Ending balance: individually evaluated for impairment | 1,879 | 3,069 | 1,879 | 3,069 |
Ending balance: collectively evaluated for impairment | 273,750 | 242,210 | 273,750 | 242,210 |
Multifamily and Farmland | ||||
Allowance for loan losses | ||||
Beginning balance | 72 | 75 | 72 | 52 |
Charge-offs | 0 | 0 | (5) | (66) |
Recoveries | 0 | 0 | 1 | 0 |
Provision | 6 | (3) | 10 | 86 |
Ending balance | 78 | 72 | 78 | 72 |
Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairments | 78 | 72 | 78 | 72 |
Ending balance | 78 | 72 | 78 | 72 |
Loans | ||||
Ending balance | 31,102 | 28,662 | 31,102 | 28,662 |
Ending balance: individually evaluated for impairment | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairment | 31,102 | 28,662 | 31,102 | 28,662 |
Commercial loans (not secured by real estate) | ||||
Allowance for loan losses | ||||
Beginning balance | 587 | 704 | 574 | 675 |
Charge-offs | (1) | (26) | (4) | (63) |
Recoveries | 7 | 8 | 23 | 23 |
Provision | 12 | (125) | 12 | (74) |
Ending balance | 605 | 561 | 605 | 561 |
Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairments | 605 | 561 | 605 | 561 |
Ending balance | 605 | 561 | 605 | 561 |
Loans | ||||
Ending balance | 97,085 | 87,019 | 97,085 | 87,019 |
Ending balance: individually evaluated for impairment | 94 | 229 | 94 | 229 |
Ending balance: collectively evaluated for impairment | 96,991 | 86,790 | 96,991 | 86,790 |
Farm loans (not secured by real estate) | ||||
Allowance for loan losses | ||||
Beginning balance | 0 | 0 | 0 | 0 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | 0 | 0 | 0 | 0 |
Ending balance | 0 | 0 | 0 | 0 |
Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairments | 0 | 0 | 0 | 0 |
Ending balance | 0 | 0 | 0 | 0 |
Loans | ||||
Ending balance | 994 | 895 | 994 | 895 |
Ending balance: individually evaluated for impairment | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairment | 994 | 895 | 994 | 895 |
Consumer And All Other Loans | ||||
Allowance for loan losses | ||||
Beginning balance | 150 | 158 | 155 | 204 |
Charge-offs | (132) | (106) | (318) | (288) |
Recoveries | 37 | 24 | 139 | 102 |
Provision | 103 | 85 | 182 | 143 |
Ending balance | 158 | 161 | 158 | 161 |
Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairments | 158 | 161 | 158 | 161 |
Ending balance | 158 | 161 | 158 | 161 |
Loans | ||||
Ending balance | 20,373 | 25,075 | 20,373 | 25,075 |
Ending balance: individually evaluated for impairment | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairment | 20,373 | 25,075 | 20,373 | 25,075 |
Unallocated | ||||
Allowance for loan losses | ||||
Beginning balance | 509 | 472 | 476 | 371 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision | 128 | 21 | 161 | 122 |
Ending balance | 637 | 493 | 637 | 493 |
Ending balance: individually evaluated for impairments | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairments | 637 | 493 | 637 | 493 |
Ending balance | 637 | 493 | 637 | 493 |
Loans | ||||
Ending balance | 0 | 0 | 0 | 0 |
Ending balance: individually evaluated for impairment | 0 | 0 | 0 | 0 |
Ending balance: collectively evaluated for impairment | $ 0 | $ 0 | $ 0 | $ 0 |
3. Loans, Credit Risk (Details)
3. Loans, Credit Risk (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Credit risk profile | |||
Total Loans | $ 786,724 | $ 759,764 | $ 747,437 |
Excellent Quality | |||
Credit risk profile | |||
Total Loans | 9,323 | 9,979 | |
High Quality | |||
Credit risk profile | |||
Total Loans | 206,927 | 199,289 | |
Good Quality | |||
Credit risk profile | |||
Total Loans | 478,162 | 461,054 | |
Management Attention | |||
Credit risk profile | |||
Total Loans | 70,998 | 62,247 | |
Watch | |||
Credit risk profile | |||
Total Loans | 14,234 | 19,276 | |
Substandard | |||
Credit risk profile | |||
Total Loans | 7,080 | 7,919 | |
Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Construction and land development | |||
Credit risk profile | |||
Total Loans | 76,987 | 84,987 | |
Single-family residential | |||
Credit risk profile | |||
Total Loans | 249,812 | 246,703 | |
Single-family residential - Banco de la Gente stated income | |||
Credit risk profile | |||
Total Loans | 34,742 | 37,249 | |
Commercial | |||
Credit risk profile | |||
Total Loans | 275,629 | 248,637 | |
Multifamily and Farmland | |||
Credit risk profile | |||
Total Loans | 31,102 | 28,937 | |
Commercial loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 97,085 | 89,022 | |
Farm loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 994 | 1,204 | |
Consumer loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 9,512 | 9,888 | |
All other loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 10,861 | 13,137 | |
Construction and land development | |||
Credit risk profile | |||
Total Loans | 76,987 | 84,987 | 75,483 |
Construction and land development | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 410 | 152 | |
Construction and land development | High Quality | |||
Credit risk profile | |||
Total Loans | 15,413 | 20,593 | |
Construction and land development | Good Quality | |||
Credit risk profile | |||
Total Loans | 51,835 | 53,586 | |
Construction and land development | Management Attention | |||
Credit risk profile | |||
Total Loans | 5,210 | 4,313 | |
Construction and land development | Watch | |||
Credit risk profile | |||
Total Loans | 3,924 | 6,060 | |
Construction and land development | Substandard | |||
Credit risk profile | |||
Total Loans | 195 | 283 | |
Construction and land development | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Construction and land development | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Single-family residential | |||
Credit risk profile | |||
Total Loans | 249,812 | 246,703 | 247,184 |
Single-family residential | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 7,583 | 8,590 | |
Single-family residential | High Quality | |||
Credit risk profile | |||
Total Loans | 125,945 | 120,331 | |
Single-family residential | Good Quality | |||
Credit risk profile | |||
Total Loans | 91,936 | 89,120 | |
Single-family residential | Management Attention | |||
Credit risk profile | |||
Total Loans | 17,218 | 20,648 | |
Single-family residential | Watch | |||
Credit risk profile | |||
Total Loans | 3,844 | 4,796 | |
Single-family residential | Substandard | |||
Credit risk profile | |||
Total Loans | 3,286 | 3,218 | |
Single-family residential | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Single-family residential | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Single-family residential - Banco de la Gente stated income | |||
Credit risk profile | |||
Total Loans | 34,742 | 37,249 | 37,840 |
Single-family residential - Banco de la Gente stated income | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Single-family residential - Banco de la Gente stated income | High Quality | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Single-family residential - Banco de la Gente stated income | Good Quality | |||
Credit risk profile | |||
Total Loans | 13,927 | 14,955 | |
Single-family residential - Banco de la Gente stated income | Management Attention | |||
Credit risk profile | |||
Total Loans | 15,392 | 15,113 | |
Single-family residential - Banco de la Gente stated income | Watch | |||
Credit risk profile | |||
Total Loans | 2,425 | 3,357 | |
Single-family residential - Banco de la Gente stated income | Substandard | |||
Credit risk profile | |||
Total Loans | 2,998 | 3,824 | |
Single-family residential - Banco de la Gente stated income | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Single-family residential - Banco de la Gente stated income | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Commercial | |||
Credit risk profile | |||
Total Loans | 275,629 | 248,637 | 245,279 |
Commercial | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Commercial | High Quality | |||
Credit risk profile | |||
Total Loans | 35,362 | 34,360 | |
Commercial | Good Quality | |||
Credit risk profile | |||
Total Loans | 215,902 | 196,439 | |
Commercial | Management Attention | |||
Credit risk profile | |||
Total Loans | 21,271 | 13,727 | |
Commercial | Watch | |||
Credit risk profile | |||
Total Loans | 2,649 | 3,671 | |
Commercial | Substandard | |||
Credit risk profile | |||
Total Loans | 445 | 440 | |
Commercial | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Commercial | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Multifamily and Farmland | |||
Credit risk profile | |||
Total Loans | 31,102 | 28,937 | 28,662 |
Multifamily and Farmland | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Multifamily and Farmland | High Quality | |||
Credit risk profile | |||
Total Loans | 430 | 561 | |
Multifamily and Farmland | Good Quality | |||
Credit risk profile | |||
Total Loans | 25,758 | 25,306 | |
Multifamily and Farmland | Management Attention | |||
Credit risk profile | |||
Total Loans | 3,813 | 1,912 | |
Multifamily and Farmland | Watch | |||
Credit risk profile | |||
Total Loans | 1,101 | 1,146 | |
Multifamily and Farmland | Substandard | |||
Credit risk profile | |||
Total Loans | 0 | 12 | |
Multifamily and Farmland | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Multifamily and Farmland | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Commercial loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 97,085 | 89,022 | 87,019 |
Commercial loans (not secured by real estate) | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 662 | 446 | |
Commercial loans (not secured by real estate) | High Quality | |||
Credit risk profile | |||
Total Loans | 24,141 | 17,559 | |
Commercial loans (not secured by real estate) | Good Quality | |||
Credit risk profile | |||
Total Loans | 65,302 | 65,626 | |
Commercial loans (not secured by real estate) | Management Attention | |||
Credit risk profile | |||
Total Loans | 6,601 | 5,051 | |
Commercial loans (not secured by real estate) | Watch | |||
Credit risk profile | |||
Total Loans | 273 | 223 | |
Commercial loans (not secured by real estate) | Substandard | |||
Credit risk profile | |||
Total Loans | 106 | 117 | |
Commercial loans (not secured by real estate) | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Commercial loans (not secured by real estate) | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Farm loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 994 | 1,204 | $ 895 |
Farm loans (not secured by real estate) | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Farm loans (not secured by real estate) | High Quality | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Farm loans (not secured by real estate) | Good Quality | |||
Credit risk profile | |||
Total Loans | 845 | 1,085 | |
Farm loans (not secured by real estate) | Management Attention | |||
Credit risk profile | |||
Total Loans | 149 | 119 | |
Farm loans (not secured by real estate) | Watch | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Farm loans (not secured by real estate) | Substandard | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Farm loans (not secured by real estate) | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Farm loans (not secured by real estate) | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Consumer loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 9,512 | 9,888 | |
Consumer loans (not secured by real estate) | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 668 | 791 | |
Consumer loans (not secured by real estate) | High Quality | |||
Credit risk profile | |||
Total Loans | 3,462 | 3,475 | |
Consumer loans (not secured by real estate) | Good Quality | |||
Credit risk profile | |||
Total Loans | 4,733 | 5,012 | |
Consumer loans (not secured by real estate) | Management Attention | |||
Credit risk profile | |||
Total Loans | 581 | 562 | |
Consumer loans (not secured by real estate) | Watch | |||
Credit risk profile | |||
Total Loans | 18 | 23 | |
Consumer loans (not secured by real estate) | Substandard | |||
Credit risk profile | |||
Total Loans | 50 | 25 | |
Consumer loans (not secured by real estate) | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
Consumer loans (not secured by real estate) | Loss | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
All other loans (not secured by real estate) | |||
Credit risk profile | |||
Total Loans | 10,861 | 13,137 | |
All other loans (not secured by real estate) | Excellent Quality | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
All other loans (not secured by real estate) | High Quality | |||
Credit risk profile | |||
Total Loans | 2,174 | 2,410 | |
All other loans (not secured by real estate) | Good Quality | |||
Credit risk profile | |||
Total Loans | 7,924 | 9,925 | |
All other loans (not secured by real estate) | Management Attention | |||
Credit risk profile | |||
Total Loans | 763 | 802 | |
All other loans (not secured by real estate) | Watch | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
All other loans (not secured by real estate) | Substandard | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
All other loans (not secured by real estate) | Doubtful | |||
Credit risk profile | |||
Total Loans | 0 | 0 | |
All other loans (not secured by real estate) | Loss | |||
Credit risk profile | |||
Total Loans | $ 0 | $ 0 |
3. Loans, TDR Loan Modification
3. Loans, TDR Loan Modifications (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)Integer | Sep. 30, 2017USD ($)Integer | Sep. 30, 2018USD ($)Integer | Sep. 30, 2017USD ($)Integer | |
Single-family residential TDR | ||||
TDR Loans | ||||
Number of Contracts | Integer | 1 | 2 | 2 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 61 | $ 22 | $ 94 | $ 22 |
Post-Modification Outstanding Recorded Investment | $ 61 | $ 22 | $ 94 | $ 22 |
Total real estate TDR loans | ||||
TDR Loans | ||||
Number of Contracts | Integer | 1 | 2 | 2 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 61 | $ 22 | $ 94 | $ 22 |
Post-Modification Outstanding Recorded Investment | $ 61 | $ 22 | $ 94 | $ 22 |
Total TDR Loans | ||||
TDR Loans | ||||
Number of Contracts | Integer | 1 | 2 | 2 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 61 | $ 22 | $ 94 | $ 22 |
Post-Modification Outstanding Recorded Investment | $ 61 | $ 22 | $ 94 | $ 22 |
3. Loans (Details Narrative)
3. Loans (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Receivables [Abstract] | |||||
Percentage of construction and land development loans in Bank's loan portfolio | 10.00% | 10.00% | |||
Percentage of single-family residential loans in Bank's loan portfolio | 36.00% | 36.00% | |||
Percentage of Single-family residential - Banco de la Gente stated income loans in Bank's loan portfolio | 4.00% | 4.00% | |||
Percentage of commercial real estate loans in Bank's loan portfolio | 35.00% | 35.00% | |||
Percentage of commercial loans in Bank's loan portfolio | 12.00% | 12.00% | |||
Accruing impaired loans | $ 23,600 | $ 21,300 | $ 23,600 | $ 21,300 | $ 24,600 |
Interest income recognized on accruing impaired loans | 331 | 322 | 1,028 | 1,062 | 1,362 |
Provision for loan losses | (110) | $ 218 | (372) | $ 405 | |
TDR loans modified, past-due TDR loans and non-accrual TDR Loans | $ 2,200 | $ 2,200 | $ 4,500 |
4. Net Earnings Per Share (Deta
4. Net Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Earnings | ||||
Basic earnings per share | $ 3,467 | $ 3,242 | $ 9,946 | $ 8,258 |
Effect of dilutive securities: Restricted stock units | 0 | 0 | 0 | 0 |
Diluted earnings per share | $ 3,467 | $ 3,242 | $ 9,946 | $ 8,258 |
Weighted Average Number of Shares | ||||
Basic earnings per share (in shares) | 5,995,256 | 5,995,453 | 5,995,256 | 5,985,051 |
Effect of dilutive securities: Restricted stock units (in shares) | 21,445 | 96,339 | 19,137 | 94,566 |
Diluted earnings per share (in shares) | 6,016,701 | 6,091,792 | 6,014,393 | 6,079,616 |
Per Share Amount | ||||
Basic earnings per share | $ 0.58 | $ 0.54 | $ 1.66 | $ 1.38 |
Diluted earnings per share | $ 0.57 | $ 0.52 | $ 1.65 | $ 1.35 |
5. Stock-Based Compensation (De
5. Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Unrecognized compensation cost | $ 248 | |
Recognized compensation expense | $ 131 | $ 471 |
6. Fair Value, Level of Hierarc
6. Fair Value, Level of Hierarchy (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Estimated Fair Value | $ 205,966 | $ 229,321 |
Level 1 | ||
Estimated Fair Value | 0 | 0 |
Level 2 | ||
Estimated Fair Value | 205,716 | 229,071 |
Level 3 | ||
Estimated Fair Value | 250 | 250 |
Mortgage-backed securities | ||
Estimated Fair Value | 46,290 | 53,609 |
Mortgage-backed securities | Level 1 | ||
Estimated Fair Value | 0 | 0 |
Mortgage-backed securities | Level 2 | ||
Estimated Fair Value | 46,290 | 53,609 |
Mortgage-backed securities | Level 3 | ||
Estimated Fair Value | 0 | 0 |
U.S. Government sponsored enterprises | ||
Estimated Fair Value | 35,001 | 40,380 |
U.S. Government sponsored enterprises | Level 1 | ||
Estimated Fair Value | 0 | 0 |
U.S. Government sponsored enterprises | Level 2 | ||
Estimated Fair Value | 35,001 | 40,380 |
U.S. Government sponsored enterprises | Level 3 | ||
Estimated Fair Value | 0 | 0 |
State and political subdivisions | ||
Estimated Fair Value | 123,414 | 133,570 |
State and political subdivisions | Level 1 | ||
Estimated Fair Value | 0 | 0 |
State and political subdivisions | Level 2 | ||
Estimated Fair Value | 123,414 | 133,570 |
State and political subdivisions | Level 3 | ||
Estimated Fair Value | 0 | 0 |
Corporate bonds | ||
Estimated Fair Value | 1,011 | 1,512 |
Corporate bonds | Level 1 | ||
Estimated Fair Value | 0 | 0 |
Corporate bonds | Level 2 | ||
Estimated Fair Value | 1,011 | 1,512 |
Corporate bonds | Level 3 | ||
Estimated Fair Value | 0 | 0 |
Trust preferred securities | ||
Estimated Fair Value | 250 | 250 |
Trust preferred securities | Level 1 | ||
Estimated Fair Value | 0 | 0 |
Trust preferred securities | Level 2 | ||
Estimated Fair Value | 0 | 0 |
Trust preferred securities | Level 3 | ||
Estimated Fair Value | $ 250 | $ 250 |
6. Fair Value, Level 3 Valuatio
6. Fair Value, Level 3 Valuation (Details) - Level 3 $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Investment Securities Available for Sale Level 3 Valuation | |
Balance, beginning of period | $ 250 |
Change in book value | 0 |
Change in gain/(loss) realized and unrealized | 0 |
Purchases/(sales and calls) | 0 |
Transfers in and/or (out) of Level 3 | 0 |
Balance, end of period | 250 |
Change in unrealized gain/(loss) for assets still held in Level 3 | $ 0 |
6. Fair Value, Loans Impaired (
6. Fair Value, Loans Impaired (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Mortgage loans held for sale | $ 1,740 | $ 857 |
Impaired loans | 22,449 | 23,442 |
Other real estate | $ 0 | 118 |
Mortgage loans held for sale [Member] | ||
Valuation Technique | Rate lock commitment | |
Significant Unobservable Inputs | N/A | |
General Range of Significant Unobservable Input Values | N/A | |
Impaired loans [Member] | ||
Valuation Technique | Appraised value and discounted cash flows | |
Significant Unobservable Inputs | Discounts to reflect current market conditions and ultimate collectibility | |
General Range of Significant Unobservable Input Values | 0 - 25% | |
Other real estate [Member] | ||
Valuation Technique | Appraised value | |
Significant Unobservable Inputs | Discounts to reflect current market conditions and estimated costs to sell | |
General Range of Significant Unobservable Input Values | 0 - 25% | |
Level 1 | ||
Mortgage loans held for sale | $ 0 | 0 |
Impaired loans | 0 | 0 |
Other real estate | 0 | 0 |
Level 2 | ||
Mortgage loans held for sale | 0 | 0 |
Impaired loans | 0 | 0 |
Other real estate | 0 | 0 |
Level 3 | ||
Mortgage loans held for sale | 1,740 | 857 |
Impaired loans | 22,449 | 23,442 |
Other real estate | $ 0 | $ 118 |
6. Fair Value, Financial Instru
6. Fair Value, Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Cash and cash equivalents | $ 57,041 | $ 57,304 |
Investment securities available for sale | 205,966 | 229,321 |
Other investments | 4,394 | 1,830 |
Mortgage loans held for sale | 1,740 | 857 |
Loans, net | 780,429 | 753,398 |
Cash surrender value of life insurance | 15,839 | 15,552 |
Liabilities: | ||
Deposits | 893,459 | 906,952 |
Securities sold under agreements to repurchase | 55,766 | 37,757 |
Junior subordinated debentures | 20,619 | 20,619 |
Estimated Fair Value | ||
Assets: | ||
Cash and cash equivalents | 57,041 | 57,304 |
Investment securities available for sale | 205,966 | 229,321 |
Other investments | 4,394 | 1,830 |
Mortgage loans held for sale | 1,740 | 857 |
Loans, net | 774,242 | 735,837 |
Cash surrender value of life insurance | 15,839 | 15,552 |
Liabilities: | ||
Deposits | 874,065 | 894,932 |
Securities sold under agreements to repurchase | 55,766 | 37,757 |
Junior subordinated debentures | 20,619 | 20,619 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 57,041 | 57,304 |
Investment securities available for sale | 0 | 0 |
Other investments | 0 | 0 |
Mortgage loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Cash surrender value of life insurance | 0 | 0 |
Liabilities: | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase | 0 | 0 |
Junior subordinated debentures | 0 | 0 |
Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available for sale | 205,716 | 229,071 |
Other investments | 0 | 0 |
Mortgage loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Cash surrender value of life insurance | 15,839 | 15,552 |
Liabilities: | ||
Deposits | 0 | 0 |
Securities sold under agreements to repurchase | 55,766 | 37,757 |
Junior subordinated debentures | 20,619 | 20,619 |
Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available for sale | 250 | 250 |
Other investments | 4,394 | 1,830 |
Mortgage loans held for sale | 1,740 | 857 |
Loans, net | 774,242 | 735,837 |
Cash surrender value of life insurance | 0 | 0 |
Liabilities: | ||
Deposits | 874,065 | 894,932 |
Securities sold under agreements to repurchase | 0 | 0 |
Junior subordinated debentures | $ 0 | $ 0 |