Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | NEW PEOPLES BANKSHARES INC | |
Entity Central Index Key | 0001163389 | |
Document Type | 10-Q | |
Entity File Number | 000-33411 | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | VA | |
Entity Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,922,086 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INTEREST AND DIVIDEND INCOME | ||
Loans including fees | $ 7,098 | $ 6,940 |
Federal funds sold | 1 | 2 |
Interest-earning deposits with banks | 162 | 243 |
Investments | 297 | 368 |
Dividends on equity securities (restricted) | 37 | 38 |
Total Interest and Dividend Income | 7,595 | 7,591 |
INTEREST EXPENSE | ||
Deposits | 1,262 | 1,260 |
Borrowed funds | 191 | 236 |
Total Interest Expense | 1,453 | 1,496 |
NET INTEREST INCOME | 6,142 | 6,095 |
PROVISION FOR LOAN LOSSES | 1,000 | 135 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 5,142 | 5,960 |
NONINTEREST INCOME | ||
Service charges and fees | 851 | 841 |
Card processing and interchange | 753 | 679 |
Insurance and investment fees | 132 | 161 |
Net gain on sales of available-for-sale securities | 4 | |
Other noninterest income | 425 | 96 |
Total Noninterest Income | 2,165 | 1,777 |
NONINTEREST EXPENSES | ||
Salaries and employee benefits | 3,501 | 3,646 |
Occupancy and equipment expense | 1,113 | 1,149 |
Data processing and telecommunications | 620 | 655 |
Other operating expenses | 2,017 | 1,778 |
Total Noninterest Expenses | 7,251 | 7,228 |
INCOME BEFORE INCOME TAXES | 56 | 509 |
INCOME TAX EXPENSE | 10 | 103 |
NET INCOME | $ 46 | $ 406 |
Income Per Share | ||
Basic and diluted (in dollars per share) | $ 0 | $ 0.02 |
Average Weighted Shares of Common Stock | ||
Basic and diluted (in shares) | 23,922,086 | 23,922,086 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Consolidated Statements Of Comprehensive Income Loss | ||
NET INCOME | $ 46 | $ 406 |
Investment Securities Activity | ||
Unrealized gains arising during the period | 767 | 467 |
Reclassification adjustment for net gains included In net income | (4) | |
Other comprehensive gain on investment securities | 763 | 467 |
Related tax expense | 160 | 97 |
TOTAL OTHER COMPREHENSIVE INCOME | 603 | 370 |
TOTAL COMPREHENSIVE INCOME | $ 649 | $ 776 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and due from banks | $ 15,616 | $ 13,998 |
Interest-bearing deposits with banks | 47,765 | 35,897 |
Federal funds sold | 288 | 252 |
Total Cash and Cash Equivalents | 63,669 | 50,147 |
Investment securities available-for-sale | 47,741 | 50,649 |
Loans held for sale | 489 | 2 |
Loans receivable | 560,468 | 562,544 |
Allowance for loan losses | (6,337) | (5,368) |
Net loans | 554,131 | 557,176 |
Bank premises and equipment, net | 22,801 | 22,242 |
Other real estate owned | 3,070 | 3,393 |
Accrued interest receivable | 2,045 | 2,115 |
Deferred taxes, net | 4,406 | 4,576 |
Right-of-use assets - operating leases | 5,737 | 5,835 |
Other assets | 11,055 | 10,238 |
Total Assets | 715,144 | 706,373 |
Deposits: | ||
Noninterest bearing | 177,406 | 170,782 |
Interest-bearing | 452,119 | 450,695 |
Total Deposits | 629,525 | 621,477 |
Borrowed funds | 21,496 | 21,496 |
Lease liabilities - operating leases | 5,737 | 5,835 |
Accrued interest payable | 706 | 694 |
Accrued expenses and other liabilities | 2,429 | 2,269 |
Total Liabilities | 659,893 | 651,771 |
STOCKHOLDERS' EQUITY | ||
Common stock - $2.00 par value; 50,000,000 shares authorized; 23,922,086 shares issued and outstanding at March 31, 2020 and December 31, 2019 | 47,844 | 47,844 |
Additional paid-in capital | 14,570 | 14,570 |
Retained deficit | (7,823) | (7,869) |
Accumulated other comprehensive income | 660 | 57 |
Total Stockholders' Equity | 55,251 | 54,602 |
Total Liabilities and Stockholders' Equity | $ 715,144 | $ 706,373 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 2 | $ 2 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 23,922,086 | 23,922,086 |
Common stock, outstanding | 23,922,086 | 23,922,086 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in- Capital [Member] | Retained Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2018 | $ 47,844 | $ 14,570 | $ (9,928) | $ (1,236) | $ 51,250 |
Balance,(in shares) at Dec. 31, 2018 | 23,922 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 406 | 406 | |||
Other comprehensive loss, net of tax | 370 | 370 | |||
Balance at Mar. 31, 2019 | $ 47,844 | 14,570 | (9,522) | (866) | 52,026 |
Balance,(in shares) at Mar. 31, 2019 | 23,922 | ||||
Balance at Dec. 31, 2019 | $ 47,844 | 14,570 | (7,869) | 57 | $ 54,602 |
Balance,(in shares) at Dec. 31, 2019 | 23,922 | 23,922,086 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 46 | $ 46 | |||
Other comprehensive loss, net of tax | 603 | 603 | |||
Balance at Mar. 31, 2020 | $ 47,844 | $ 14,570 | $ (7,823) | $ 660 | $ 55,251 |
Balance,(in shares) at Mar. 31, 2020 | 23,922 | 23,922,086 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 46 | $ 406 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 549 | 609 |
Provision for loan losses | 1,000 | 135 |
Income on bank owned life insurance | (18) | (15) |
Gain on sale of securities available-for-sale | (4) | |
Gain on sale of mortgage loans | (39) | |
Gain on sale of premises and equipment | (1) | |
Gain on sale of other real estate owned | (58) | (8) |
Loans originated for sale | (2,702) | |
Proceeds from sales of loans originated for sale | 2,254 | |
Adjustment of carrying value of other real estate owned | 87 | 113 |
Amortization/accretion of bond premiums/discounts | 117 | 144 |
Deferred tax expense (benefit) | 10 | 105 |
Net change in: | ||
Accrued interest receivable | 70 | (173) |
Other assets | (777) | (124) |
Accrued interest payable | 12 | 121 |
Accrued expenses and other liabilities | 160 | 121 |
Net Cash Provided by Operating Activities | 706 | 1,434 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net decrease (increase) in loans | 2,221 | (6,391) |
Purchase of securities available-for-sale | (790) | |
Proceeds from sale of investment securities available-for-sale | 1,025 | |
Proceeds from repayments and maturities of securities available-for-sale | 2,533 | 2,519 |
Net purchase of equity securities (restricted) | (22) | (14) |
Payments for the purchase of premises and equipment | (1,108) | (474) |
Proceeds from sale of premises and equipment | 1 | 1 |
Proceeds from insurance claims on other real estate owned | 19 | |
Proceeds from sales of other real estate owned | 118 | 856 |
Net Cash Provided (Used) in Investing Activities | 4,768 | (4,274) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net change in short term borrowings | (3,630) | |
Net change in non-interest bearing deposits | 6,624 | 13,246 |
Net change in interest bearing deposits | 1,424 | 29,171 |
Net Cash Provided by Financing Activities | 8,048 | 38,787 |
Net increase in cash and cash equivalents | 13,522 | 35,947 |
Cash and Cash Equivalents, Beginning of the Period | 50,147 | 28,173 |
Cash and Cash Equivalents, End of the Period | 63,669 | 64,120 |
Supplemental Disclosure of Cash Paid During the Period for: | ||
Interest | 1,441 | 1,375 |
Taxes | ||
Supplemental Disclosure of Non-cash Transactions: | ||
Other real estate acquired in settlement of foreclosed loans | 252 | |
Loans made to finance sale of other real estate owned | 428 | 94 |
Change in unrealized gains on securities available for sale | $ 763 | $ 467 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1 NATURE OF OPERATIONS Nature of Operations – |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These consolidated financial statements conform to U. S. generally accepted accounting principles (GAAP) and to general industry practices. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position at March 31, 2020 and December 31, 2019, and the results of operations for the three month periods ended March 31, 2020 and 2019. The notes included herein should be read in conjunction with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period. The consolidated financial statements include New Peoples, the Bank, NPB Insurance Services, Inc., and NPB Web Services, Inc. (Hereinafter, collectively referred to as the Company, we, us or our). All significant intercompany balances and transactions have been eliminated. In accordance with Accounting Standards Codification (ASC) 942, Financial Services – Depository and Lending, NPB Capital Trust I and 2 are not included in the consolidated financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The determination of the adequacy of the allowance for loan losses and the determination of the deferred tax asset and related valuation allowance are based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. |
INCOME PER SHARE
INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Income Per Share | |
INCOME PER SHARE | NOTE 3 INCOME PER SHARE Basic income per share computations are based on the weighted average number of shares outstanding during each period. Dilutive earnings per share reflect the additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued relate to outstanding common stock warrants and are determined by the Treasury Method. For the three-month periods ended March 31, 2020 and 2019, there were no potential common shares. Basic and diluted net income per common share calculations follows: (Dollars in Thousands, Except For the three months ended 2020 2019 Net income $ 46 $ 406 Weighted average shares outstanding 23,922,086 23,922,086 Weighted average dilutive shares outstanding 23,922,086 23,922,086 Basic and diluted income per share $ 0.00 $ 0.02 |
CAPITAL
CAPITAL | 3 Months Ended |
Mar. 31, 2020 | |
Banking Regulation, Total Capital [Abstract] | |
CAPITAL | NOTE 4 CAPITAL Capital Requirements and Ratios The Company meets eligibility criteria of a small bank holding company in accordance with the Federal Reserve’s Small Bank Holding Company Policy Statement issued in February, 2015 and, therefore, is not obligated to report consolidated regulatory capital. The Bank is subject to various capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital to risk-weighted assets, Tier 1 capital to average assets, and Common Equity Tier 1 capital to risk-weighted assets. As of March 31, 2020, the Bank meets all capital adequacy requirements to which it is subject. The Bank’s actual capital amounts and ratios are presented in the following table as of March 31, 2020 and December 31, 2019, respectively. Actual Minimum Capital Requirement Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions (Dollars are in thousands) Amount Ratio Amount Ratio Amount Ratio March 31, 2020: Total Capital to Risk Weighted Assets 72,977 15.06 % $ 38,770 8.0 % $ 48,463 10.0 % Tier 1 Capital to Risk Weighted Assets 66,916 13.81 % 29,078 6.0 % 38,770 8.0 % Tier 1 Capital to Average Assets 66,916 9.43 % 28,396 4.0 % 35,495 5.0 % Common Equity Tier 1 Capital to Risk Weighted Assets 66,916 13.81 % 21,808 4.5 % 31,501 6.5 % December 31, 2019: Total Capital to Risk Weighted Assets 72,109 14.83 % $ 38,910 8.0 % $ 48,637 10.0 % Tier 1 Capital to Risk Weighted Assets 66,741 13.72 % 29,182 6.0 % 38,910 8.0 % Tier 1 Capital to Average Assets 66,741 9.43 % 28,313 4.0 % 35,391 5.0 % Common Equity Tier 1 Capital to Risk Weighted Assets 66,741 13.72 % 21,887 4.5 % 31,614 6.5 % Accordingly, as of March 31, 2020 and December 31, 2019, the Bank was well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since such dates that management believes have changed the Bank’s category. The Bank is also subject to the rules implementing the Basel III capital framework and certain related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The final rules require the Bank to comply with the following minimum capital ratios: (i) a Common Equity Tier 1 capital to risk-weighted assets ratio of at least 4.5%, plus a 2.5% “capital conservation buffer” (effectively resulting in a minimum Common Equity Tier 1 capital to risk-weighted assets ratio of 7%), (ii) a ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer (effectively resulting in a minimum Tier 1 capital ratio of 8.5%), (iii) a ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer (effectively resulting in a minimum total capital ratio of 10.5%), and (iv) a leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average assets. The phase-in of the capital conservation buffer requirement began on January 1, 2016, at 0.625% of risk-weighted assets, increasing by the same amount each year until it was fully implemented at 2.5% on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a Common Equity Tier 1 capital to risk-weighted assets ratio above the minimum but below the conservation buffer face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. All ratios shown in the table above exceed the minimum requirements. The Bank’s capital conservation buffer as of March 31, 2020 was 7.06%. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 3 Months Ended |
Mar. 31, 2020 | |
Investment Securities Activity | |
INVESTMENT SECURITIES | NOTE 5 INVESTMENT SECURITIES The amortized cost and estimated fair value of available-for-sale (AFS) securities as March 31, 2020 and December 31, 2019 is as follows: Gross Gross Gross Amortized Unrealized Unrealized Unrealized Fair (Dollars are in thousands) Cost Gains Losses Value March 31, 2020 U.S. Government Agencies $ 14,659 $ 180 $ (67 ) $ 14,772 Taxable municipals 4,379 79 (2 ) 4,456 Corporate bonds 5,404 138 — 5,542 Mortgage backed securities 22,464 527 (20 ) 22,971 Total Securities AFS $ 46,906 $ 924 $ (89 ) $ 47,741 December 31, 2019 U.S. Government Agencies $ 15,703 $ 57 $ (127 ) $ 15,633 Taxable municipals 4,389 54 (1 ) 4,442 Corporate bonds 5,408 115 — 5,523 Mortgage backed securities 25,077 111 (137 ) 25,051 Total Securities AFS $ 50,577 $ 337 $ (265 ) $ 50,649 The following table details unrealized losses and related fair values in the AFS portfolio. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2020 and December 31, 2019. Less than 12 Months 12 Months or More Total (Dollars are in thousands) Fair Value Unrealized Fair Unrealized Fair Unrealized March 31, 2020 U.S. Government Agencies $ 233 $ (1 ) $ 4,412 $ (66 ) $ 4,645 $ (67 ) Taxable municipals 255 (2 ) — — 255 (2 ) Mortgage backed securities 503 (2 ) 1,515 (18 ) 2,018 (20 ) Total Securities AFS $ 991 $ (5 ) $ 5,927 $ (84 ) $ 6,918 $ (89 ) December 31, 2019 U.S. Government Agencies $ 6,788 $ (46 ) $ 4,516 $ (81 ) $ 11,304 $ (127 ) Taxable municipals 1,049 (1 ) — — 1,049 (1 ) Mortgage backed securities 1,586 (4 ) 12,002 (133 ) 13,588 (137 ) Total Securities AFS $ 9,423 $ (51 ) $ 16,518 $ (214 ) $ 25,941 $ (265 ) At March 31, 2020, there were 32 securities in a loss position, of which 27 have been in a loss position for twelve months or more. Management believes that all unrealized losses have resulted from temporary changes in the interest rates and current market conditions and not as a result of credit deterioration. Management does not intend to sell, and it is not likely that the Bank will be required to sell any of the securities referenced in the table above before recovery of their amortized cost. Investment securities with a carrying value of $7.6 million and $6.9 million at March 31, 2020 and December 31, 2019, respectively, were pledged as collateral to secure public deposits and for other purposes required by law. The following table summarizes sales of AFS debt securities for the three months-ended March 31, (Dollars are in thousands) 2020 2019 Proceeds $ 1,025 $ — Gains 7 — Losses (3 ) — Tax benefit (1 ) — The amortized cost and fair value of investment securities at March 31, 2020, by contractual maturity, are shown in the following schedule. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Weighted (Dollars are in thousands) Amortized Fair Average Securities Available-for-Sale Cost Value Yield Due in one year or less $ 253 $ 255 2.85% Due after one year through five years 4,462 4,580 2.67% Due after five years through ten years 12,038 12,256 3.44% Due after ten years 30,153 30,650 2.32% Total $ 46,906 $ 47,741 2.64% The Bank, as a member of the Federal Reserve Bank of Richmond (the Reserve Bank) and the Federal Home Loan Bank (the FHLB) of Atlanta, is required to hold stock in each. The Bank also owns stock in CBB Financial Corp., which is a correspondent of the Bank. These equity securities are restricted from trading and are recorded at a cost of $2.58 million and $2.56 million at March 30, 2020 and December 31, 2019, respectively. |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
LOANS | NOTE 6 LOANS Loans held for sale of $489 thousand and $2 thousand, at March 31, 2020 and December 31, 2019, respectively, represents mortgage loans originated for sale. These originations and sales are executed on a best efforts basis. Loans receivable outstanding as of March 31, 2020 and December 31, 2019 are summarized as follows: (Dollars are in thousands) March 31, December 31, 2019 Real estate secured: Commercial $ 171,658 $ 170,436 Construction and land development 30,841 31,130 Residential 1-4 family 240,328 242,922 Multifamily 14,039 13,638 Farmland 20,363 20,790 Total real estate loans 477,229 478,916 Commercial 53,590 53,994 Agriculture 5,241 4,797 Consumer installment loans 22,592 23,127 All other loans 1,816 1,710 Total loans $ 560,468 $ 562,544 Loans receivable on nonaccrual status as of March 31, 2020 and December 31, 209 are summarized as follows: (Dollars are in thousands) March 31, December 31, 2019 Real estate secured: Commercial $ 2,734 $ 1,601 Construction and land development 69 45 Residential 1-4 family 3,239 2,544 Farmland 353 531 Total real estate loans 6,395 4,721 Commercial 424 390 Consumer installment loans and other loans 55 45 Total loans receivable on nonaccrual status $ 6,874 $ 5,156 Total interest income not recognized on nonaccrual loans for the three months ended March 31, 2020 and March 31, 2019 was $189 thousand and $133 thousand, respectively. The following table presents information concerning the Company’s investment in loans considered impaired as of March 31, 2020 and December 31, 2019: As of March 31, 2020 (Dollars are in thousands) Average Interest Recorded Unpaid Principal Balance Related With no related allowance recorded: Real estate secured: Commercial $ 2,335 $ 9 $ 2,253 $ 2,328 $ — Construction and land development 67 4 63 337 — Residential 1-4 family 1,304 13 1,345 1,444 — Multifamily — — — — — Farmland 761 10 744 940 — Commercial 115 1 101 111 — Agriculture — — — — — Consumer installment loans — — — — — All other loans — — — — — With an allowance recorded: Real estate secured: Commercial 433 — 503 525 210 Construction and land development — — — — — Residential 1-4 family 54 — 53 60 39 Multifamily — — — — — Farmland 216 2 215 226 8 Commercial 286 — 286 886 200 Agriculture — — — — — Consumer installment loans — — — — — All other loans — — — — — Total $ 5,571 $ 39 $ 5,563 $ 6,857 $ 457 As of December 31, 2019 (Dollars are in thousands) Average Interest Recorded Unpaid Principal Balance Related With no related allowance recorded: Real estate secured: Commercial $ 2,017 $ 100 $ 2,416 $ 2,478 $ — Construction and land development 91 7 70 346 — Residential 1-4 family 1,944 55 1,263 1,460 — Multifamily 29 1 — — — Farmland 1,143 47 778 970 — Commercial 578 11 128 178 — Agriculture — — — 1 — Consumer installment loans 2 — — — — All other loans — — — — — With an allowance recorded: Real estate secured: Commercial 470 1 363 379 70 Construction and land development — — — — — Residential 1-4 family 302 — 55 60 44 Multifamily — — — — — Farmland 221 11 216 228 9 Commercial 507 7 286 886 200 Agriculture — — — — — Consumer installment loans 3 — — — — All other loans — — — — — Total $ 7,307 $ 240 $ 5,575 $ 6,986 $ 323 An age analysis of past due loans receivable as of March 31, 2020 and December 31, 2019 is below. At March 31, 2020 and December 31, 2019, there were no loans over 90 days past due that were accruing. As of March 31, 2020 (Dollars are in thousands) Loans Loans Loans Total Current Total Real estate secured: Commercial $ 516 $ 887 $ 188 $ 1,591 $ 170,067 $ 171,658 Construction and land 13 50 — 63 30,778 30,841 Residential 1-4 family 3,609 777 1,139 5,525 234,803 240,328 Multifamily 260 — — 260 13,779 14,039 Farmland 672 800 47 1,519 18,844 20,363 Total real estate loans 5,070 2,514 1,374 8,958 468,271 477,229 Commercial 407 60 286 753 52,837 53,590 Agriculture 111 — 22 133 5,108 5,241 Consumer installment 146 14 13 173 22,419 22,592 All other loans — — — — 1,816 1,816 Total loans $ 5,734 $ 2,588 $ 1,695 $ 10,017 $ 550,451 $ 560,468 As of December 31, 2019 (Dollars are in thousands) Loans Loans Loans Total Current Total Real estate secured: Commercial $ 502 $ 125 $ 262 $ 889 $ 169,547 $ 170,436 Construction and land 50 18 18 86 31,044 31,130 Residential 1-4 family 3,700 1,096 710 5,506 237,416 242,922 Multifamily 262 — — 262 13,376 13,638 Farmland 111 47 152 310 20,480 20,790 Total real estate loans 4,625 1,286 1,142 7,053 471,863 478,916 Commercial 406 — 323 729 53,265 53,994 Agriculture 244 — 21 265 4,532 4,797 Consumer installment 98 24 23 145 22,982 23,127 All other loans — — — — 1,710 1,710 Total loans $ 5,373 $ 1,310 $ 1,509 $ 8,192 $ 554,352 $ 562,544 The Company categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans receivable as to credit risk. The Company uses the following definitions for risk ratings: Pass Special Mention Substandard A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful Loans classified 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. Based on the most recent analysis performed, the risk categories of loans receivable as of March 31, 2020 and December 31, 2019 was as follows: As of March 31, 2020 (Dollars are in thousands) Pass Special Substandard Doubtful Total Real estate secured: Commercial $ 164,357 $ 4,562 $ 2,739 $ — $ 171,658 Construction and land development 30,446 326 69 — 30,841 Residential 1-4 family 235,504 1,622 3,202 — 240,328 Multifamily 13,797 242 — — 14,039 Farmland 18,583 1,427 353 — 20,363 Total real estate loans 462,687 8,179 6,363 — 477,229 Commercial 50,685 2,447 172 286 53,590 Agriculture 5,204 — 37 — 5,241 Consumer installment loans 22,560 13 19 — 22,592 All other loans 1,816 — — — 1,816 Total $ 542,952 $ 10,639 $ 6,591 $ 286 $ 560,468 As of December 31, 2019 (Dollars are in thousands) Pass Special Mention Substandard Doubtful Total Real estate secured: Commercial $ 165,570 $ 3,265 $ 1,601 $ — $ 170,436 Construction and land development 30,747 360 23 — 31,130 Residential 1-4 family 239,210 1,207 2,505 — 242,922 Multifamily 13,638 — — — 13,638 Farmland 18,779 1,480 531 — 20,790 Total real estate loans 467,944 6,312 4,660 — 478,916 Commercial 51,086 2,504 118 286 53,994 Agriculture 4,753 4 40 — 4,797 Consumer installment loans 23,087 12 28 — 23,127 All other loans 1,710 — — — 1,710 Total $ 548,580 $ 8,832 $ 4,846 $ 286 $ 562,544 |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
ALLOWANCE FOR LOAN LOSSES | NOTE 7 ALLOWANCE FOR LOAN LOSSES The following table details activity in the allowance for loan losses by portfolio segment for the three months period ended March 31, 2020. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. As of March 31, 2020 (Dollars are in thousands) Beginning Charge Recoveries Provisions Ending Real estate secured: Commercial $ 1,248 $ (22 ) $ 2 $ 452 $ 1,680 Construction and land development 158 — — 56 214 Residential 1-4 family 1,736 — 8 333 2,077 Multifamily 104 — — 28 132 Farmland 109 (42 ) 33 46 146 Total real estate loans 3,355 (64 ) 43 915 4,249 Commercial 1,789 (13 ) 29 51 1,856 Agriculture 27 — 1 11 39 Consumer installment loans 188 (33 ) 6 22 183 All other loans 7 — — 3 10 Unallocated 2 — — (2 ) — Total $ 5,368 $ (110 ) $ 79 $ 1,000 $ 6,337 The following table presents the allocation of the allowance for loan losses by portfolio segment, based on impairment method, as of March 31, 2020: Allowance for Loan Losses Recorded Investment in Loans (Dollars are in thousands) Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Real estate secured: Commercial $ 210 $ 1,470 $ 1,680 $ 2,756 $ 168,902 $ 171,658 Construction and land — 214 214 63 30,778 30,841 Residential 1-4 family 39 2,038 2,077 1,398 238,930 240,328 Multifamily — 132 132 — 14,039 14,039 Farmland 8 138 146 959 19,404 20,363 Total real estate loans 257 3,992 4,249 5,176 472,053 477,229 Commercial 200 1,656 1,856 387 53,203 53,590 Agriculture — 39 39 — 5,241 5,241 Consumer installment loans — 183 183 — 22,592 22,592 All other loans — 10 10 — 1,816 1,816 Unallocated — — — — — — Total $ 457 $ 5,880 $ 6,337 $ 5,563 $ 554,905 $ 560,468 The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2019. The commercial charge-off amount includes $1 million in losses incurred during the third quarter of 2019, related to three unrelated borrowers, who either ceased business operations or filed bankruptcy. These losses resulted in a provision to the allowance during the third quarter of $1 million. During the second quarter of 2019, $4.4 million of non-performing or under-performing real estate loans were sold resulting in $113 thousand of charge-offs and $57 thousand of recoveries. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. As of December 31, 2019 (Dollars are in thousands) Beginning Charge Recoveries Provisions Ending Real estate secured: Commercial $ 1,386 $ (192 ) $ 16 $ 38 $ 1,248 Construction and land development 202 — 34 (78 ) 158 Residential 1-4 family 2,437 (336 ) 202 (567 ) 1,736 Multifamily 89 — 30 (15 ) 104 Farmland 287 (33 ) 29 (174 ) 109 Total real estate loans 4,401 (561 ) 311 (796 ) 3,355 Commercial 448 (1,762 ) 61 3,042 1,789 Agriculture 37 (17 ) 2 5 27 Consumer installment loans 172 (114 ) 62 68 188 All other loans 3 — — 4 7 Unallocated 275 — — (273 ) 2 Total $ 5,336 $ (2,454 ) $ 436 $ 2,050 $ 5,368 The following table presents the allocation of the allowance for loan losses by portfolio segment, based on impairment method, as of December 31, 2019: Allowance for Loan Losses Recorded Investment in Loans As of December 31, 2019 (Dollars are in thousands) Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Real estate secured: Commercial $ 70 $ 1,178 $ 1,248 $ 2,779 $ 167,657 $ 170,436 Construction and land — 158 158 70 31,060 31,130 Residential 1-4 family 44 1,692 1,736 1,318 241,604 242,922 Multifamily — 104 104 — 13,638 13,638 Farmland 9 100 109 994 19,796 20,790 Total real estate loans 123 3,232 3,355 5,161 473,755 478,916 Commercial 200 1,589 1,789 414 53,580 53,994 Agriculture — 27 27 — 4,797 4,797 Consumer installment loans — 188 188 — 23,127 23,127 All other loans — 7 7 — 1,710 1,710 Unallocated — 2 2 — — — Total $ 323 $ 5,045 5,368 $ 5,575 $ 556,969 $ 562,544 In determining the amount of our allowance, we rely on an analysis of our loan portfolio, our experience and our evaluation of general economic conditions, as well as any regulatory input. If our assumptions prove to be incorrect, our current allowance may not be sufficient to cover future loan losses and we may experience significant increases to our provision. |
TROUBLED DEBT RESTRUCTURINGS
TROUBLED DEBT RESTRUCTURINGS | 3 Months Ended |
Mar. 31, 2020 | |
Troubled Debt Restructurings | |
TROUBLED DEBT RESTRUCTURINGS | NOTE 8 TROUBLED DEBT RESTRUCTURINGS: There were $4.3 million in loans that were classified as troubled debt restructurings at both March 31, 2020 and December 31, 2019. All loans considered to be troubled debt restructurings are individually evaluated for impairment as part of the allowance for loan losses calculation. No loans modified during the three months ended March 31, 2020 or March 31, 2019, were considered to be troubled debt restructurings. One loan previously modified as a troubled debt restructuring, with a balance of $663 thousand, defaulted during the three months ended March 31, 2020. No loans modified as troubled debt restructurings defaulted during the three months ended March 31, 2019. Generally, a troubled debt restructuring is considered to be in default once it becomes 90 days or more past due following a modification. In determining the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings in its estimate. The Company evaluates all troubled debt restructurings for possible further impairment. As a result, the allowance may be increased, adjustments may be made in the allocation of the allowance, or charge-offs may be taken to further write down the carrying value of the loan. |
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate [Abstract] | |
OTHER REAL ESTATE OWNED | NOTE 9 OTHER REAL ESTATE OWNED The following table summarizes the activity in other real estate owned for the three months ended March 31, 2020 and the year ended December 31, 2019: (Dollars are in thousands) March 31, December 31, 2019 Balance, beginning of period $ 3,393 $ 5,937 Additions 252 811 Transfers from premises and equipment — 683 Proceeds from sales (118 ) (1,322 ) Proceeds from insurance claims — (19 ) Loans made to finance sales (428 ) (2,360 ) Adjustment of carrying value (87 ) (214 ) Gains (losses) from sales 58 (123 ) Balance, end of period $ 3,070 $ 3,393 |
FAIR VALUES
FAIR VALUES | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUES | NOTE 10 FAIR VALUES: The financial reporting standard, “Fair Value Measurements and Disclosures” provides a framework for measuring fair value under generally accepted accounting principles and requires disclosures about the fair value of assets and liabilities recognized in the balance sheet in periods subsequent to initial recognition, whether the measurements are made on a recurring basis (for example, available-for-sale investment securities) or on a nonrecurring basis (for example, impaired loans and other real estate acquired through foreclosure). Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair Value Measurements and Disclosures also establish fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an exchange market, as well as U. S. Treasury, other U. S. Government and agency mortgage-backed debt securities that are highly liquid and are actively traded in over-the-counter markets. Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain derivative contracts and impaired loans. Level 3: Significant unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. For example, this category generally includes certain private equity investments, retained residual interests in securitizations, residential mortgage servicing rights, and highly structured or long-term derivative contracts. Investment Securities Available for Sale Loans - Foreclosed Assets – Assets and liabilities measured at fair value are as follows as of March 31, 2020 (for purpose of this table the impaired loans are shown net of the related allowance): (Dollars are in thousands) Quoted market price in active markets Significant other observable inputs Significant unobservable inputs (On a recurring basis) U.S. Government Agencies $ — $ 14,772 $ — Taxable municipals — 4,456 — Corporate bonds — 5,542 — Mortgage backed securities — 22,971 — (On a non-recurring basis) — — 3,070 Impaired loans — — 5,106 Total $ — $ 47,741 $ 8,176 Assets and liabilities measured at fair value are as follows as of December 31, 2019 (for purpose of this table the impaired loans are shown net of the related allowance): (Dollars are in thousands) Quoted market price in active markets Significant other observable inputs Significant unobservable inputs (On a recurring basis) U.S. Government Agencies $ — $ 15,633 $ — Taxable municipals — 4,442 — Corporate bonds — 5,523 — Mortgage backed securities — 25,051 — (On a non-recurring basis) — — 3,393 Impaired loans 5,252 Total $ — $ 50,649 $ 8,645 For Level 3 assets measured at fair value on a recurring or non-recurring basis as of March 31,2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows: Fair Value at March 31, 2020 Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Impaired Loans $ 5,106 $ 5,252 Appraised Value/Discounted Cash Flows/Market Value of Note Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell 0 – 18% Other Real Estate Owned $ 3,070 $ 3,393 Appraised Value/Comparable Sales/Other Estimates from Independent Sources Discounts to reflect current market conditions and estimated costs to sell 0 – 18% Fair Value of Financial Instruments Fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate the value is based upon the characteristics of the instruments and relevant market information. Financial instruments include cash, evidence of ownership in an entity, or contracts that convey or impose on an entity that contractual right or obligation to either receive or deliver cash for another financial instrument. The following summary presents the methodologies and assumptions used to estimate the fair value of the Company’s financial instruments presented below. The information used to determine fair value is highly subjective and judgmental in nature and, therefore, the results may not be precise. Subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality, and interest rates, all of which are subject to change. Since the fair value is estimated as of the balance sheet date, the amounts that will actually be realized or paid upon settlement or maturity on these various instruments could be significantly different. The carrying amount and fair value of the Company’s financial instruments that are not required to be measured or reported at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 are as follows: Fair Value Measurements (Dollars are in thousands) Carrying Fair Quoted market price in active markets Significant other observable inputs Significant unobservable inputs March 31, 2020 Financial Instruments – Assets Net Loans $ 554,131 $ 550,932 $ — $ 545,826 $ 5,106 Financial Instruments – Liabilities Time Deposits 260,111 262,228 — 262,228 — FHLB Advances 5,000 4,972 — 4,972 — December 31, 2019 Financial Instruments – Assets Net Loans $ 557,176 $ 550,495 $ — $ 545,243 $ 5,252 Financial Instruments – Liabilities Time Deposits 257,406 259,325 — 259,325 — FHLB Advances 5,000 5,054 — 5,054 — 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 judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions can significantly affect the estimates. Estimated fair values have been determined by the Company using historical data, as generally provided in the Company’s regulatory reports, and an estimation methodology suitable for each category of financial instruments. The Company’s fair value estimates, methods and assumptions are set forth below for the Company’s other financial instruments. The carrying values of cash and due from banks, federal funds sold, interest-bearing deposits, deposits with no stated maturities, trust preferred securities and accrued interest approximates fair value and are excluded from the table above. In accordance with our adoption of Accounting Standards Update (ASU) 2016-01 in 2018, the methods utilized to measure the fair value of financial instruments at March 31, 2020 and December 31, 2019, represent an approximation of exit price; however, an actual exit price may differ. |
LEASING ACTIVITIES
LEASING ACTIVITIES | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASING ACTIVITIES | NOTE 11 LEASING ACTIVITIES The Company adopted ASU 2016-02 (Topic 842) effective May 31, 2017, as the Bank entered into sale leaseback transactions for four branch office sites. In September 2019, the Bank entered into a sale leaseback transaction, with a non-affiliated third party, for its branch office located in Lebanon, Virginia for a total purchase price of $1.34 million. Net proceeds, after sales expenses of $42 thousand totaled $1.30 million and a gain of $803 thousand was recorded. The Bank provided financing to the purchaser, in the amount of $752 thousand, for a term of 5 years. In connection with this sale, the Bank entered into a lease agreement with the purchaser with an initial term of 15 years, with five 5-year renewal options. As of March 31, 2020, the Bank leases five branch offices and a loan production office. The lease agreements have maturity dates ranging from November 2020 to September 2034. It is assumed that there are currently no circumstances in which the leases would be terminated prior to expiration. The weighted average remaining life of the lease terms at March 31, 2020 was 12.61 years. The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded to the lease term for each transaction. This methodology is expected to be used for any other subsequent lease agreements. The weighted average discount rate for the leases at March 31, 2020 was 3.16%. For the three months ended March 31, 2020 and 2019, operating lease expenses were $144 thousand and $121 thousand, respectively. The Company’s other operating leases were evaluated and determined to be immaterial to the financial statements. At March 31, 2020, future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands): 2020 $ 424 2021 511 2022 530 2023 544 2024 546 Thereafter 4,416 Total lease payments 6,971 Less imputed interest 1,234 Total $ 5,737 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 12 REVENUE FROM CONTRACTS WITH CUSTOMERS Al l our revenue from contracts with customers as defined in ASC 606 is recognized within Non-interest income. The following table presents Non-interest income by revenue stream for the three months ended March 31, 2020 and 2019. For the three months ended March 31, (Dollars in thousands) 2020 2019 Service charges and fees $ 851 $ 841 Card processing and interchange income 753 679 Gain on sale of securities available-for-sale (1) 4 — Insurance and investment fees 132 161 Other noninterest income 425 96 Total Noninterest Income $ 2,165 $ 1,777 (1) Not within the scope of ASU 2014-09 |
NONINTEREST EXPENSES
NONINTEREST EXPENSES | 3 Months Ended |
Mar. 31, 2020 | |
Noninterest Expenses | |
NONINTEREST EXPENSES | NOTE 13 NONINTEREST EXPENSES Other operating expenses, included as part of noninterest expenses, consisted of the following for the periods presented: For the three months ended (Dollars are in thousands) 2020 2019 Advertising $ 65 $ 66 ATM network expense 392 444 Legal, professional and consulting fees 557 282 Loan related expenses 107 121 Printing and supplies 37 39 FDIC insurance premiums 93 108 Other real estate owned, net 63 193 Other 703 525 Total other operating expenses $ 2,017 $ 1,778 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 SUBSEQUENT EVENTS: Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed into law, authorizing the U.S. Small Business Administration (the SBA) to guarantee loans, up to $349 billion, funded under the Paycheck Protection Program (the PPP) for small businesses who meet certain eligibility requirements. An additional $310 billion was authorized when the Paycheck Protection Program and Health Care Enhancement Act was signed into law on April 23, 2020. PPP loans are forgivable, in whole or in part, provided the proceeds are used for payroll and other permitted purposes in accordance with guidelines outlined in the PPP. These loans have a fixed interest rate of 1.00% for a term of two years, for any portion not forgiven. Payments are deferred for the first six months. SBA provides a 100% guarantee and pays the originator a processing fee ranging from 1% to 5%, based on the loan amount. The SBA began accepting applications for the PPP on April 3, 2020, and since that date, we have received authorization from the SBA to fund 584 loans totaling approximately $42.7 million. We believe that the majority of these loans will be forgiven under the provisions of the program. However, there can be risks and liability associated with participation in PPP that cannot be immediately determined. In response to the economic impact brought on by the COVID-19 pandemic, banking and financial regulators have offered guidance to financial institutions in responding to borrower requests for forbearance. In general, short-term deferrals or other minor modifications, extended to borrowers who were current in their loan obligations at December 31, 2019, will not be considered troubled debt restructurings or impairments. Through May 11, 2020, 607 loans totaling approximately $98.6 million have received forbearance from the Bank, principally in the form of short-term extensions of 90 days. While we believe that the majority of these borrowers will be able to repay their obligations, we cannot reasonably estimate the risk of loss should the adverse economic impact of the pandemic continue for an extended period of time. On May 15, 2020, the Company announced, that based on the completion of a detailed review of its operations and staffing, it was implementing a plan to transition the organization to a new structure designed to align with its strategic plan. As a result, the Company is reducing certain positions representing approximately 12% of the workforce. The estimated annual pre-tax savings resulting from this plan of termination is $1.59 million. Affected employees have been notified and transitional support is being provided, including severance payments, assistance to aid in maintaining health insurance, and support in applying for unemployment benefits. The estimated pre-tax cost of this plan of termination is $358 thousand and will be recorded during the second quarter of 2020. |
RECENT ACCOUNTING DEVELOPMENTS
RECENT ACCOUNTING DEVELOPMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING DEVELOPMENTS | NOTE 15 RECENT ACCOUNTING DEVELOPMENTS: The following is a summary of recent authoritative announcements: In June 2016, per ASU No. 2016-13, ‘Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,’ the Financial Accounting Standards Board (the FASB) issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. Subsequently, per ASU No. 2019-10, implementation for the Company is delayed until reporting periods beginning after December 15, 2022. Early adoption is permitted for all organizations for periods beginning after December 15, 2018. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations, and cash flows. In August 2018, the FASB amended the Fair Value Measurement Topic of the ASC. The amendments remove, modify, and add certain fair value disclosure requirements based on the concepts in the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date. The Company does not expect these amendments to have a material effect on its financial statements. In August 2018, the FASB amended the Intangibles—Goodwill and Other Topic of the ASC to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments will be effective for the Company for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. In October 2018, the FASB amended the Consolidation topic of the ASC for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety. The amendments will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years . In November 2018, the FASB amended the Collaborative Arrangements Topic of the ASC to clarify the interaction between the guidance for certain collaborative arrangements and the new revenue recognition financial accounting and reporting standard. The amendments will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. In November 2018, the FASB issued guidance to amend the Financial Instruments—Credit Losses topic of the ASC. The guidance aligns the implementation date of the topic for annual financial statements of nonpublic companies with the implementation date for their interim financial statements. The guidance also clarifies that receivables arising from operating leases are not within the scope of the topic, but rather, should be accounted for in accordance with the leases topic. The amendments will be effective for the Company for reporting periods beginning after December 15, 2019 . In March 2019, as part of the FASB’s ongoing annual improvements project, it amended the Leases Topic of the ASC to clarify the Codification more generally and/or to correct unintended application of guidance. The amendments relate to determining the fair value of the underlying asset by lessors that are not manufacturers or dealers, presentation on the statement of cash flows – sales-type and direct financing leases, and transition disclosures related to the Accounting Changes and Error Corrections Topic. The amendments will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. In April 2019, as part of the FASB’s ongoing annual improvements project, it amended various Topics of the ASC related to financial instruments to clarify the Codification more generally and/or to correct unintended application of guidance. The amendments relate to Recognition and Measurement of Financial Assets and Financial Liabilities, Measurement of Credit Losses on Financial Instruments, and Targeted Improvements to Accounting for Hedging Activities. The amendments will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. In May 2019, the FASB issued targeted transition relief for entities which irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the amendments to the transition guidance for ASU 2016-13 will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Subsequently, per ASU No. 2019-10, implementation for the Company is delayed until reporting periods beginning after December 15, 2021. The Company is currently in the process of evaluating the impact of adoption of this guidance on its financial statements. In November, 2019, the FASB released ASU 2019-10, ‘Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),’ in which the FASB shared a new philosophy to extend and simplify how effective dates for certain major Updates would be staggered between larger public companies (bucket one) and all other entities (bucket two). A major Update would first be effective for bucket-one entities. For bucket-two entities, including the Company, it is anticipated that the FASB will consider requiring an effective date staggered at least two years after bucket one for major Updates. Generally, it is expected that early application would continue to be allowed for all entities. The Company is considered a bucket-two entity due to its eligibility to be a smaller reporting company, per the Securities and Exchange Commission (the SEC). This Update applies to ASU 2016-13, as discussed above, ASU 2017-12, which does not apply to the Company, and ASU 2016-02, which the Company has already early-adopted, as discussed above. In December, 2019, the FASB released ASU 2019-12, ‘Income Taxes (Topic 740),’ which simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, improve consistent application, and simplify GAAP for other areas of Topic 740. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company does not expect these amendments to have a material effect on its financial statements. In January, 2020, the FASB released ASU 2020-01, ‘Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815),’ which clarify certain interactions between the guidance to account for certain equity securities under Topic 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting. The Company does not expect these amendments to have a material effect on its financial statements. In March, 2020, the FASB released ASU 2020-03, ‘Codification Improvements to Financial Instruments,’ as part of its ongoing project for improving the Codification or correcting its unintended application. This particular Update is being issued to increase stakeholder awareness of these amendments. These amendments affect Fair Value Option Disclosures, Applicability of Portfolio Exception in Topic 820 to Nonfinancial Items, Disclosures for Depository and Lending Institutions, Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance in Subtopic 470-50, Cross-Reference to Net Asset Value Practical Expedient in Subtopic 820-10, Interaction of Topic 842 and Topic 326, and Interaction of Topic 326 and Subtopic 860-20. The Company does not expect these amendments to have a material effect on its financial statements. In March, 2020, the FASB released ASU 2020-04, ‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting,’ which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. The amendments in this Update are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in the Update are effective for the Company as of March 12, 2020 through December 31, 2022. The Company is currently in the process of evaluating the impact of adoption of this guidance on its financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | These consolidated financial statements conform to U. S. generally accepted accounting principles (GAAP) and to general industry practices. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position at March 31, 2020 and December 31, 2019, and the results of operations for the three month periods ended March 31, 2020 and 2019. The notes included herein should be read in conjunction with the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period. The consolidated financial statements include New Peoples, the Bank, NPB Insurance Services, Inc., and NPB Web Services, Inc. (Hereinafter, collectively referred to as the Company, we, us or our). All significant intercompany balances and transactions have been eliminated. In accordance with Accounting Standards Codification (ASC) 942, Financial Services – Depository and Lending, NPB Capital Trust I and 2 are not included in the consolidated financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The determination of the adequacy of the allowance for loan losses and the determination of the deferred tax asset and related valuation allowance are based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. |
INCOME PER SHARE (Tables)
INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Per Share | |
Schedule of basic and diluted net loss per common share calculations | For the three-month periods ended March 31, 2020 and 2019, there were no potential common shares. Basic and diluted net income per common share calculations follows: (Dollars in Thousands, Except For the three months ended 2020 2019 Net income $ 46 $ 406 Weighted average shares outstanding 23,922,086 23,922,086 Weighted average dilutive shares outstanding 23,922,086 23,922,086 Basic and diluted income per share $ 0.00 $ 0.02 |
CAPITAL (Tables)
CAPITAL (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Banking Regulation, Total Capital [Abstract] | |
Schedule of capital requirements | The Bank’s actual capital amounts and ratios are presented in the following table as of March 31, 2020 and December 31, 2019, respectively. Actual Minimum Capital Requirement Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions (Dollars are in thousands) Amount Ratio Amount Ratio Amount Ratio March 31, 2020: Total Capital to Risk Weighted Assets 72,977 15.06 % $ 38,770 8.0 % $ 48,463 10.0 % Tier 1 Capital to Risk Weighted Assets 66,916 13.81 % 29,078 6.0 % 38,770 8.0 % Tier 1 Capital to Average Assets 66,916 9.43 % 28,396 4.0 % 35,495 5.0 % Common Equity Tier 1 Capital to Risk Weighted Assets 66,916 13.81 % 21,808 4.5 % 31,501 6.5 % December 31, 2019: Total Capital to Risk Weighted Assets 72,109 14.83 % $ 38,910 8.0 % $ 48,637 10.0 % Tier 1 Capital to Risk Weighted Assets 66,741 13.72 % 29,182 6.0 % 38,910 8.0 % Tier 1 Capital to Average Assets 66,741 9.43 % 28,313 4.0 % 35,391 5.0 % Common Equity Tier 1 Capital to Risk Weighted Assets 66,741 13.72 % 21,887 4.5 % 31,614 6.5 % |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investment Securities Activity | |
Schedule of securities amortized cost and estimated fair value | The amortized cost and estimated fair value of available-for-sale (AFS) securities as March 31, 2020 and December 31, 2019 is as follows: Gross Gross Gross Amortized Unrealized Unrealized Unrealized Fair (Dollars are in thousands) Cost Gains Losses Value March 31, 2020 U.S. Government Agencies $ 14,659 $ 180 $ (67 ) $ 14,772 Taxable municipals 4,379 79 (2 ) 4,456 Corporate bonds 5,404 138 — 5,542 Mortgage backed securities 22,464 527 (20 ) 22,971 Total Securities AFS $ 46,906 $ 924 $ (89 ) $ 47,741 December 31, 2019 U.S. Government Agencies $ 15,703 $ 57 $ (127 ) $ 15,633 Taxable municipals 4,389 54 (1 ) 4,442 Corporate bonds 5,408 115 — 5,523 Mortgage backed securities 25,077 111 (137 ) 25,051 Total Securities AFS $ 50,577 $ 337 $ (265 ) $ 50,649 |
Schedule of fair value and gross unrealized losses on investment securities | The following table details unrealized losses and related fair values in the AFS portfolio. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2020 and December 31, 2019. Less than 12 Months 12 Months or More Total (Dollars are in thousands) Fair Value Unrealized Fair Unrealized Fair Unrealized March 31, 2020 U.S. Government Agencies $ 233 $ (1 ) $ 4,412 $ (66 ) $ 4,645 $ (67 ) Taxable municipals 255 (2 ) — — 255 (2 ) Mortgage backed securities 503 (2 ) 1,515 (18 ) 2,018 (20 ) Total Securities AFS $ 991 $ (5 ) $ 5,927 $ (84 ) $ 6,918 $ (89 ) December 31, 2019 U.S. Government Agencies $ 6,788 $ (46 ) $ 4,516 $ (81 ) $ 11,304 $ (127 ) Taxable municipals 1,049 (1 ) — — 1,049 (1 ) Mortgage backed securities 1,586 (4 ) 12,002 (133 ) 13,588 (137 ) Total Securities AFS $ 9,423 $ (51 ) $ 16,518 $ (214 ) $ 25,941 $ (265 ) |
Schedule of debt securities | The following table summarizes sales of AFS debt securities for the three months-ended March 31, (Dollars are in thousands) 2020 2019 Proceeds $ 1,025 $ — Gains 7 — Losses (3 ) — Tax benefit (1 ) — |
Schedule of amortized cost and fair value of investment securities contractual maturity | The amortized cost and fair value of investment securities at March 31, 2020, by contractual maturity, are shown in the following schedule. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Weighted (Dollars are in thousands) Amortized Fair Average Securities Available-for-Sale Cost Value Yield Due in one year or less $ 253 $ 255 2.85% Due after one year through five years 4,462 4,580 2.67% Due after five years through ten years 12,038 12,256 3.44% Due after ten years 30,153 30,650 2.32% Total $ 46,906 $ 47,741 2.64% |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Summary of loans receivable outstanding | Loans receivable outstanding as of March 31, 2020 and December 31, 2019 are summarized as follows: (Dollars are in thousands) March 31, December 31, 2019 Real estate secured: Commercial $ 171,658 $ 170,436 Construction and land development 30,841 31,130 Residential 1-4 family 240,328 242,922 Multifamily 14,039 13,638 Farmland 20,363 20,790 Total real estate loans 477,229 478,916 Commercial 53,590 53,994 Agriculture 5,241 4,797 Consumer installment loans 22,592 23,127 All other loans 1,816 1,710 Total loans $ 560,468 $ 562,544 |
Summary of loans receivable on nonaccrual status | Loans receivable on nonaccrual status as of March 31, 2020 and December 31, 209 are summarized as follows: (Dollars are in thousands) March 31, December 31, 2019 Real estate secured: Commercial $ 2,734 $ 1,601 Construction and land development 69 45 Residential 1-4 family 3,239 2,544 Farmland 353 531 Total real estate loans 6,395 4,721 Commercial 424 390 Consumer installment loans and other loans 55 45 Total loans receivable on nonaccrual status $ 6,874 $ 5,156 |
Summary of impaired loans | The following table presents information concerning the Company’s investment in loans considered impaired as of March 31, 2020 and December 31, 2019: As of March 31, 2020 (Dollars are in thousands) Average Interest Recorded Unpaid Principal Balance Related With no related allowance recorded: Real estate secured: Commercial $ 2,335 $ 9 $ 2,253 $ 2,328 $ — Construction and land development 67 4 63 337 — Residential 1-4 family 1,304 13 1,345 1,444 — Multifamily — — — — — Farmland 761 10 744 940 — Commercial 115 1 101 111 — Agriculture — — — — — Consumer installment loans — — — — — All other loans — — — — — With an allowance recorded: Real estate secured: Commercial 433 — 503 525 210 Construction and land development — — — — — Residential 1-4 family 54 — 53 60 39 Multifamily — — — — — Farmland 216 2 215 226 8 Commercial 286 — 286 886 200 Agriculture — — — — — Consumer installment loans — — — — — All other loans — — — — — Total $ 5,571 $ 39 $ 5,563 $ 6,857 $ 457 As of December 31, 2019 (Dollars are in thousands) Average Interest Recorded Unpaid Principal Balance Related With no related allowance recorded: Real estate secured: Commercial $ 2,017 $ 100 $ 2,416 $ 2,478 $ — Construction and land development 91 7 70 346 — Residential 1-4 family 1,944 55 1,263 1,460 — Multifamily 29 1 — — — Farmland 1,143 47 778 970 — Commercial 578 11 128 178 — Agriculture — — — 1 — Consumer installment loans 2 — — — — All other loans — — — — — With an allowance recorded: Real estate secured: Commercial 470 1 363 379 70 Construction and land development — — — — — Residential 1-4 family 302 — 55 60 44 Multifamily — — — — — Farmland 221 11 216 228 9 Commercial 507 7 286 886 200 Agriculture — — — — — Consumer installment loans 3 — — — — All other loans — — — — — Total $ 7,307 $ 240 $ 5,575 $ 6,986 $ 323 |
Summary of age analysis of past due loans receivable | An age analysis of past due loans receivable as of March 31, 2020 and December 31, 2019 is below. At March 31, 2020 and December 31, 2019, there were no loans over 90 days past due that were accruing. As of March 31, 2020 (Dollars are in thousands) Loans Loans Loans Total Current Total Real estate secured: Commercial $ 516 $ 887 $ 188 $ 1,591 $ 170,067 $ 171,658 Construction and land 13 50 — 63 30,778 30,841 Residential 1-4 family 3,609 777 1,139 5,525 234,803 240,328 Multifamily 260 — — 260 13,779 14,039 Farmland 672 800 47 1,519 18,844 20,363 Total real estate loans 5,070 2,514 1,374 8,958 468,271 477,229 Commercial 407 60 286 753 52,837 53,590 Agriculture 111 — 22 133 5,108 5,241 Consumer installment 146 14 13 173 22,419 22,592 All other loans — — — — 1,816 1,816 Total loans $ 5,734 $ 2,588 $ 1,695 $ 10,017 $ 550,451 $ 560,468 As of December 31, 2019 (Dollars are in thousands) Loans Loans Loans Total Current Total Real estate secured: Commercial $ 502 $ 125 $ 262 $ 889 $ 169,547 $ 170,436 Construction and land 50 18 18 86 31,044 31,130 Residential 1-4 family 3,700 1,096 710 5,506 237,416 242,922 Multifamily 262 — — 262 13,376 13,638 Farmland 111 47 152 310 20,480 20,790 Total real estate loans 4,625 1,286 1,142 7,053 471,863 478,916 Commercial 406 — 323 729 53,265 53,994 Agriculture 244 — 21 265 4,532 4,797 Consumer installment 98 24 23 145 22,982 23,127 All other loans — — — — 1,710 1,710 Total loans $ 5,373 $ 1,310 $ 1,509 $ 8,192 $ 554,352 $ 562,544 |
Summary of risk category of loans receivable | Based on the most recent analysis performed, the risk categories of loans receivable as of March 31, 2020 and December 31, 2019 was as follows: As of March 31, 2020 (Dollars are in thousands) Pass Special Substandard Doubtful Total Real estate secured: Commercial $ 164,357 $ 4,562 $ 2,739 $ — $ 171,658 Construction and land development 30,446 326 69 — 30,841 Residential 1-4 family 235,504 1,622 3,202 — 240,328 Multifamily 13,797 242 — — 14,039 Farmland 18,583 1,427 353 — 20,363 Total real estate loans 462,687 8,179 6,363 — 477,229 Commercial 50,685 2,447 172 286 53,590 Agriculture 5,204 — 37 — 5,241 Consumer installment loans 22,560 13 19 — 22,592 All other loans 1,816 — — — 1,816 Total $ 542,952 $ 10,639 $ 6,591 $ 286 $ 560,468 As of December 31, 2019 (Dollars are in thousands) Pass Special Mention Substandard Doubtful Total Real estate secured: Commercial $ 165,570 $ 3,265 $ 1,601 $ — $ 170,436 Construction and land development 30,747 360 23 — 31,130 Residential 1-4 family 239,210 1,207 2,505 — 242,922 Multifamily 13,638 — — — 13,638 Farmland 18,779 1,480 531 — 20,790 Total real estate loans 467,944 6,312 4,660 — 478,916 Commercial 51,086 2,504 118 286 53,994 Agriculture 4,753 4 40 — 4,797 Consumer installment loans 23,087 12 28 — 23,127 All other loans 1,710 — — — 1,710 Total $ 548,580 $ 8,832 $ 4,846 $ 286 $ 562,544 |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Summary of activity in the allowance for loan losses | The following table details activity in the allowance for loan losses by portfolio segment for the three months period ended March 31, 2020. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. As of March 31, 2020 (Dollars are in thousands) Beginning Charge Recoveries Provisions Ending Real estate secured: Commercial $ 1,248 $ (22 ) $ 2 $ 452 $ 1,680 Construction and land development 158 — — 56 214 Residential 1-4 family 1,736 — 8 333 2,077 Multifamily 104 — — 28 132 Farmland 109 (42 ) 33 46 146 Total real estate loans 3,355 (64 ) 43 915 4,249 Commercial 1,789 (13 ) 29 51 1,856 Agriculture 27 — 1 11 39 Consumer installment loans 188 (33 ) 6 22 183 All other loans 7 — — 3 10 Unallocated 2 — — (2 ) — Total $ 5,368 $ (110 ) $ 79 $ 1,000 $ 6,337 As of December 31, 2019 (Dollars are in thousands) Beginning Charge Recoveries Provisions Ending Real estate secured: Commercial $ 1,386 $ (192 ) $ 16 $ 38 $ 1,248 Construction and land development 202 — 34 (78 ) 158 Residential 1-4 family 2,437 (336 ) 202 (567 ) 1,736 Multifamily 89 — 30 (15 ) 104 Farmland 287 (33 ) 29 (174 ) 109 Total real estate loans 4,401 (561 ) 311 (796 ) 3,355 Commercial 448 (1,762 ) 61 3,042 1,789 Agriculture 37 (17 ) 2 5 27 Consumer installment loans 172 (114 ) 62 68 188 All other loans 3 — — 4 7 Unallocated 275 — — (273 ) 2 Total $ 5,336 $ (2,454 ) $ 436 $ 2,050 $ 5,368 |
Schedule of allocation of portion of allowance | The following table presents the allocation of the allowance for loan losses by portfolio segment, based on impairment method, as of March 31, 2020: Allowance for Loan Losses Recorded Investment in Loans (Dollars are in thousands) Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Real estate secured: Commercial $ 210 $ 1,470 $ 1,680 $ 2,756 $ 168,902 $ 171,658 Construction and land — 214 214 63 30,778 30,841 Residential 1-4 family 39 2,038 2,077 1,398 238,930 240,328 Multifamily — 132 132 — 14,039 14,039 Farmland 8 138 146 959 19,404 20,363 Total real estate loans 257 3,992 4,249 5,176 472,053 477,229 Commercial 200 1,656 1,856 387 53,203 53,590 Agriculture — 39 39 — 5,241 5,241 Consumer installment loans — 183 183 — 22,592 22,592 All other loans — 10 10 — 1,816 1,816 Unallocated — — — — — — Total $ 457 $ 5,880 $ 6,337 $ 5,563 $ 554,905 $ 560,468 The following table presents the allocation of the allowance for loan losses by portfolio segment, based on impairment method, as of December 31, 2019: Allowance for Loan Losses Recorded Investment in Loans As of December 31, 2019 (Dollars are in thousands) Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Real estate secured: Commercial $ 70 $ 1,178 $ 1,248 $ 2,779 $ 167,657 $ 170,436 Construction and land — 158 158 70 31,060 31,130 Residential 1-4 family 44 1,692 1,736 1,318 241,604 242,922 Multifamily — 104 104 — 13,638 13,638 Farmland 9 100 109 994 19,796 20,790 Total real estate loans 123 3,232 3,355 5,161 473,755 478,916 Commercial 200 1,589 1,789 414 53,580 53,994 Agriculture — 27 27 — 4,797 4,797 Consumer installment loans — 188 188 — 23,127 23,127 All other loans — 7 7 — 1,710 1,710 Unallocated — 2 2 — — — Total $ 323 $ 5,045 5,368 $ 5,575 $ 556,969 $ 562,544 |
OTHER REAL ESTATE OWNED (Tables
OTHER REAL ESTATE OWNED (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate [Abstract] | |
Schedule of other real estate owned | The following table summarizes the activity in other real estate owned for the three months ended March 31, 2020 and the year ended December 31, 2019: (Dollars are in thousands) March 31, December 31, 2019 Balance, beginning of period $ 3,393 $ 5,937 Additions 252 811 Transfers from premises and equipment — 683 Proceeds from sales (118 ) (1,322 ) Proceeds from insurance claims — (19 ) Loans made to finance sales (428 ) (2,360 ) Adjustment of carrying value (87 ) (214 ) Gains (losses) from sales 58 (123 ) Balance, end of period $ 3,070 $ 3,393 |
FAIR VALUES (Tables)
FAIR VALUES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of summary of assets and liabilities measured at fair value | Assets and liabilities measured at fair value are as follows as of March 31, 2020 (for purpose of this table the impaired loans are shown net of the related allowance): (Dollars are in thousands) Quoted market price in active markets Significant other observable inputs Significant unobservable inputs (On a recurring basis) U.S. Government Agencies $ — $ 14,772 $ — Taxable municipals — 4,456 — Corporate bonds — 5,542 — Mortgage backed securities — 22,971 — (On a non-recurring basis) — — 3,070 Impaired loans — — 5,106 Total $ — $ 47,741 $ 8,176 Assets and liabilities measured at fair value are as follows as of December 31, 2019 (for purpose of this table the impaired loans are shown net of the related allowance): (Dollars are in thousands) Quoted market price in active markets Significant other observable inputs Significant unobservable inputs (On a recurring basis) U.S. Government Agencies $ — $ 15,633 $ — Taxable municipals — 4,442 — Corporate bonds — 5,523 — Mortgage backed securities — 25,051 — (On a non-recurring basis) — — 3,393 Impaired loans 5,252 Total $ — $ 50,649 $ 8,645 |
Schedule of significant unobservable inputs In level 3 assets | For Level 3 assets measured at fair value on a recurring or non-recurring basis as of March 31,2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows: Fair Value at March 31, 2020 Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs General Range of Significant Unobservable Input Values Impaired Loans $ 5,106 $ 5,252 Appraised Value/Discounted Cash Flows/Market Value of Note Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell 0 – 18% Other Real Estate Owned $ 3,070 $ 3,393 Appraised Value/Comparable Sales/Other Estimates from Independent Sources Discounts to reflect current market conditions and estimated costs to sell 0 – 18% |
Schedule of estimated fair value of financial instruments | The carrying amount and fair value of the Company’s financial instruments that are not required to be measured or reported at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 are as follows: Fair Value Measurements (Dollars are in thousands) Carrying Fair Quoted market price in active markets Significant other observable inputs Significant unobservable inputs March 31, 2020 Financial Instruments – Assets Net Loans $ 554,131 $ 550,932 $ — $ 545,826 $ 5,106 Financial Instruments – Liabilities Time Deposits 260,111 262,228 — 262,228 — FHLB Advances 5,000 4,972 — 4,972 — December 31, 2019 Financial Instruments – Assets Net Loans $ 557,176 $ 550,495 $ — $ 545,243 $ 5,252 Financial Instruments – Liabilities Time Deposits 257,406 259,325 — 259,325 — FHLB Advances 5,000 5,054 — 5,054 — |
LEASING ACTIVITIES (Tables)
LEASING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of future minimum rental commitments under the non-cancellable operating leases | The Company’s other operating leases were evaluated and determined to be immaterial to the financial statements. At March 31, 2020, future minimum rental commitments under the non-cancellable operating leases discussed above are as follows (dollars are in thousands): 2020 $ 424 2021 511 2022 530 2023 544 2024 546 Thereafter 4,416 Total lease payments 6,971 Less imputed interest 1,234 Total $ 5,737 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue from contracts with customers | The following table presents Non-interest income by revenue stream for the three months ended March 31, 2020 and 2019. For the three months ended March 31, (Dollars in thousands) 2020 2019 Service charges and fees $ 851 $ 841 Card processing and interchange income 753 679 Gain on sale of securities available-for-sale (1) 4 — Insurance and investment fees 132 161 Other noninterest income 425 96 Total Noninterest Income $ 2,165 $ 1,777 (1) Not within the scope of ASU 2014-09 |
NON-INTEREST EXPENSES (Tables)
NON-INTEREST EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Noninterest Expenses | |
Schedule of noninterest expenses | Other operating expenses, included as part of noninterest expenses, consisted of the following for the periods presented: For the three months ended (Dollars are in thousands) 2020 2019 Advertising $ 65 $ 66 ATM network expense 392 444 Legal, professional and consulting fees 557 282 Loan related expenses 107 121 Printing and supplies 37 39 FDIC insurance premiums 93 108 Other real estate owned, net 63 193 Other 703 525 Total other operating expenses $ 2,017 $ 1,778 |
INCOME PER SHARE (Details)
INCOME PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Per Share | ||
Net income | $ 46 | $ 406 |
Weighted average shares outstanding | 23,922,086 | 23,922,086 |
Weighted average dilutive shares outstanding | 23,922,086 | 23,922,086 |
Basic and diluted income per share | $ 0 | $ 0.02 |
CAPITAL (Details)
CAPITAL (Details) - Bank $ in Thousands | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Total Capital to Risk Weighted Assets, Actual, Amount | $ 72,977 | $ 72,109 |
Total Capital to Risk Weighted Assets, Actual, Ratio | 0.1506 | 0.1483 |
Total Capital to Risk Weighted Assets, Minimum Capital Requirement, Amount | $ 38,770 | $ 38,910 |
Total Capital to Risk Weighted Assets, Minimum Capital Requirement, Ratio | 0.0800 | 0.080 |
Total Capital to Risk Weighted Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 48,463 | $ 48,637 |
Total Capital to Risk Weighted Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.1000 | 0.100 |
Tier 1 Capital Risk Weighted Assets, Actual, Amount | $ 66,916 | $ 66,741 |
Tier 1 Capital Risk Weighted Assets, Actual, Ratio | 0.1381 | 0.1372 |
Tier 1 Capital Risk Weighted Assets, Minimum Capital Requirement, Amount | $ 29,078 | $ 29,182 |
Tier 1 Capital Risk Weighted Assets, Minimum Capital Requirement, Ratio | 0.0600 | 0.060 |
Tier 1 Capital Risk Weighted Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 38,770 | $ 38,910 |
Tier 1 Capital Risk Weighted Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0800 | 0.080 |
Tier 1 Capital to Average Assets, Actual, Amount | $ 66,916 | $ 66,741 |
Tier 1 Capital to Average Assets, Actual, Ratio | 0.0943 | 0.0943 |
Tier 1 Capital to Average Assets, Minimum Capital Requirement, Amount | $ 28,396 | $ 28,313 |
Tier 1 Capital to Average Assets, Minimum Capital Requirement, Ratio | 0.0400 | 0.040 |
Tier 1 Capital to Average Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 35,495 | $ 35,391 |
Tier 1 Capital to Average Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0500 | 0.050 |
Common Equity Tier 1 Capital to Risk Weighted Assets, Actual, Amount | $ 66,916 | $ 66,741 |
Common Equity Tier 1 Capital to Risk Weighted Assets, Actual, Ratio | 13.81% | 13.72% |
Common Equity Tier 1 Capital to Risk Weighted Assets, Minimum Capital Requirement, Amount | $ 21,808 | $ 21,887 |
Common Equity Tier 1 Capital to Risk Weighted Assets, Minimum Capital Requirement, Ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital to Risk Weighted Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 31,501 | $ 31,614 |
Common Equity Tier 1 Capital to Risk Weighted Assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 6.50% | 6.50% |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Amortized Cost | $ 46,906 | $ 50,577 |
Gross Unrealized Gains | 924 | 337 |
Gross Unrealized Losses | (89) | (265) |
Approximate Fair Value | 47,741 | 50,649 |
U.S. Government Agencies [Member] | ||
Amortized Cost | 14,659 | 15,703 |
Gross Unrealized Gains | 180 | 57 |
Gross Unrealized Losses | (67) | (127) |
Approximate Fair Value | 14,772 | 15,633 |
Taxable Municipals [Member] | ||
Amortized Cost | 4,379 | 4,389 |
Gross Unrealized Gains | 79 | 54 |
Gross Unrealized Losses | (2) | (1) |
Approximate Fair Value | 4,456 | 4,442 |
Corporate Bonds [Member] | ||
Amortized Cost | 5,404 | 5,408 |
Gross Unrealized Gains | 138 | 115 |
Gross Unrealized Losses | ||
Approximate Fair Value | 5,542 | 5,523 |
Mortgage Backed Securities [Member] | ||
Amortized Cost | 22,464 | 25,077 |
Gross Unrealized Gains | 527 | 111 |
Gross Unrealized Losses | (20) | (137) |
Approximate Fair Value | $ 22,971 | $ 25,051 |
INVESTMENT SECURITIES (Details
INVESTMENT SECURITIES (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Less than 12 Months | $ 991 | $ 9,423 |
Unrealized Losses, Less than 12 Months | (5) | (51) |
Fair Value, 12 Months or More | 5,927 | 16,518 |
Unrealized Losses, 12 Months or More | (84) | (214) |
Fair Value, Total | 6,918 | 25,941 |
Unrealized Losses, Total | (89) | (265) |
U.S. Government Agencies [Member] | ||
Fair Value, Less than 12 Months | 233 | 6,788 |
Unrealized Losses, Less than 12 Months | (1) | (46) |
Fair Value, 12 Months or More | 4,412 | 4,516 |
Unrealized Losses, 12 Months or More | (66) | (81) |
Fair Value, Total | 4,645 | 11,304 |
Unrealized Losses, Total | (67) | (127) |
Taxable Municipals [Member] | ||
Fair Value, Less than 12 Months | 255 | 1,049 |
Unrealized Losses, Less than 12 Months | (2) | (1) |
Fair Value, 12 Months or More | ||
Unrealized Losses, 12 Months or More | ||
Fair Value, Total | 255 | 1,049 |
Unrealized Losses, Total | (2) | (1) |
Mortgage Backed Securities [Member] | ||
Fair Value, Less than 12 Months | 503 | 1,586 |
Unrealized Losses, Less than 12 Months | (2) | (4) |
Fair Value, 12 Months or More | 1,515 | 12,002 |
Unrealized Losses, 12 Months or More | (18) | (133) |
Fair Value, Total | 2,018 | 13,588 |
Unrealized Losses, Total | $ (20) | $ (137) |
INVESTMENT SECURITIES (Detail_2
INVESTMENT SECURITIES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Investment Securities Activity | ||
Proceeds | $ 1,025 | |
Gains | 7 | |
Losses | (3) | |
Tax benefit | $ (1) |
INVESTMENT SECURITIES (Detail_3
INVESTMENT SECURITIES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Investment Securities Activity | ||
Due in one year or less, amortized Cost | $ 253 | |
Due after one year through five years, amortized cost | 4,462 | |
Due after five years through ten years, amortized cost | 12,038 | |
Due after ten years, amortized cost | 30,153 | |
Amortized cost, total | 46,906 | $ 50,577 |
Due in one year or less, fair value | 255 | |
Due after one year through five years, fair value | 4,580 | |
Due after five years through ten years, fair value | 12,256 | |
Due after ten years, fair value | 30,650 | |
Approximate fair value | $ 47,741 | $ 50,649 |
Due in one year or less, weighted average yield | 2.85% | |
Due after one year through five years, weighted average yield | 2.67% | |
Due after five years through ten years, weighted average yield | 3.44% | |
Due after ten years, weighted average yield | 2.32% | |
Weighted average yield, total | 2.64% |
LOANS (Details)
LOANS (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total loans and leases | $ 560,468 | $ 562,544 |
Real Estate [Member] | ||
Total loans and leases | 477,229 | 478,916 |
Commercial [Member] | ||
Total loans and leases | 53,590 | 53,994 |
Commercial [Member] | Real Estate [Member] | ||
Total loans and leases | 171,658 | 170,436 |
Construction and Land Development [Member] | Real Estate [Member] | ||
Total loans and leases | 30,841 | 31,130 |
Residential 1-4 Family [Member] | Real Estate [Member] | ||
Total loans and leases | 240,328 | 242,922 |
Multifamily [Member] | Real Estate [Member] | ||
Total loans and leases | 14,039 | 13,638 |
Farmland [Member] | Real Estate [Member] | ||
Total loans and leases | 20,363 | 20,790 |
Agriculture [Member] | ||
Total loans and leases | 5,241 | 4,797 |
Consumer Installment Loans [Member] | ||
Total loans and leases | 22,592 | 23,127 |
Other Loans [Member] | ||
Total loans and leases | $ 1,816 | $ 1,710 |
LOANS (Details 1)
LOANS (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total loans receivable on nonaccrual status | $ 6,874 | $ 5,156 |
Real Estate [Member] | ||
Total loans receivable on nonaccrual status | 6,395 | 4,721 |
Commercial [Member] | ||
Total loans receivable on nonaccrual status | 424 | 390 |
Commercial [Member] | Real Estate [Member] | ||
Total loans receivable on nonaccrual status | 2,734 | 1,601 |
Construction and Land Development [Member] | Real Estate [Member] | ||
Total loans receivable on nonaccrual status | 69 | 45 |
Residential 1-4 Family [Member] | Real Estate [Member] | ||
Total loans receivable on nonaccrual status | 3,239 | 2,544 |
Farmland [Member] | Real Estate [Member] | ||
Total loans receivable on nonaccrual status | 353 | 531 |
Consumer Installment Loans [Member] | ||
Total loans receivable on nonaccrual status | $ 55 | $ 45 |
LOANS (Details 2)
LOANS (Details 2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Average Recorded Investment | $ 5,571 | $ 7,307 |
Interest Income Recognized | 39 | 240 |
Recorded Investment | 5,563 | 5,575 |
Unpaid Principal Balance | 6,857 | 6,986 |
Related Allowance | 457 | 323 |
Commercial [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | 115 | 578 |
Interest Income Recognized | 1 | 11 |
Recorded Investment | 101 | 128 |
Unpaid Principal Balance | 111 | 178 |
Related Allowance | ||
Commercial [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | 286 | 507 |
Interest Income Recognized | 7 | |
Recorded Investment | 286 | 286 |
Unpaid Principal Balance | 886 | 886 |
Related Allowance | 200 | 200 |
Agriculture [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | ||
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | 1 | |
Related Allowance | ||
Agriculture [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | ||
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance | ||
Consumer Installment Loans [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | 2 | |
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance | ||
Consumer Installment Loans [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | 3 | |
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance | ||
Commercial [Member] | Real Estate [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | 2,335 | 2,017 |
Interest Income Recognized | 9 | 100 |
Recorded Investment | 2,253 | 2,416 |
Unpaid Principal Balance | 2,328 | 2,478 |
Related Allowance | ||
Commercial [Member] | Real Estate [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | 433 | 470 |
Interest Income Recognized | 1 | |
Recorded Investment | 503 | 363 |
Unpaid Principal Balance | 525 | 379 |
Related Allowance | 210 | 70 |
Construction and Land Development [Member] | Real Estate [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | 67 | 91 |
Interest Income Recognized | 4 | 7 |
Recorded Investment | 63 | 70 |
Unpaid Principal Balance | 337 | 346 |
Related Allowance | ||
Construction and Land Development [Member] | Real Estate [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | ||
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance | ||
Residential 1-4 Family [Member] | Real Estate [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | 1,304 | 1,944 |
Interest Income Recognized | 13 | 55 |
Recorded Investment | 1,345 | 1,263 |
Unpaid Principal Balance | 1,444 | 1,460 |
Related Allowance | ||
Residential 1-4 Family [Member] | Real Estate [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | 54 | 302 |
Interest Income Recognized | ||
Recorded Investment | 53 | 55 |
Unpaid Principal Balance | 60 | 60 |
Related Allowance | 39 | 44 |
Multifamily [Member] | Real Estate [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | 29 | |
Interest Income Recognized | 1 | |
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance | ||
Multifamily [Member] | Real Estate [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | ||
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance | ||
Farmland [Member] | Real Estate [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | 761 | 1,143 |
Interest Income Recognized | 10 | 47 |
Recorded Investment | 744 | 778 |
Unpaid Principal Balance | 940 | 970 |
Related Allowance | ||
Farmland [Member] | Real Estate [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | 216 | 221 |
Interest Income Recognized | 2 | 11 |
Recorded Investment | 215 | 216 |
Unpaid Principal Balance | 226 | 228 |
Related Allowance | 8 | 9 |
Other Loans [Member] | Impaired Financing Receivables With No Related Allowance [Member] | ||
Average Recorded Investment | ||
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance | ||
Other Loans [Member] | Impaired Financing Receivables With Related Allowance [Member] | ||
Average Recorded Investment | ||
Interest Income Recognized | ||
Recorded Investment | ||
Unpaid Principal Balance | ||
Related Allowance |
LOANS (Details 3)
LOANS (Details 3) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loans 30-59 Days Past Due | $ 5,734 | $ 5,373 |
Loans 60-89 Days Past Due | 2,588 | 1,310 |
Loans 90 or More Days Past Due | 1,695 | 1,509 |
Total Past Due Loans | 10,017 | 8,192 |
Current Loans | 550,451 | 554,352 |
Total loans and leases | 560,468 | 562,544 |
Real Estate [Member] | ||
Loans 30-59 Days Past Due | 5,070 | 4,625 |
Loans 60-89 Days Past Due | 2,514 | 1,286 |
Loans 90 or More Days Past Due | 1,374 | 1,142 |
Total Past Due Loans | 8,958 | 7,053 |
Current Loans | 468,271 | 471,863 |
Total loans and leases | 477,229 | 478,916 |
Commercial [Member] | ||
Loans 30-59 Days Past Due | 407 | 406 |
Loans 60-89 Days Past Due | 60 | |
Loans 90 or More Days Past Due | 286 | 323 |
Total Past Due Loans | 753 | 729 |
Current Loans | 52,837 | 53,265 |
Total loans and leases | 53,590 | 53,994 |
Commercial [Member] | Real Estate [Member] | ||
Loans 30-59 Days Past Due | 516 | 502 |
Loans 60-89 Days Past Due | 887 | 125 |
Loans 90 or More Days Past Due | 188 | 262 |
Total Past Due Loans | 1,591 | 889 |
Current Loans | 170,067 | 169,547 |
Total loans and leases | 171,658 | 170,436 |
Construction and Land Development [Member] | Real Estate [Member] | ||
Loans 30-59 Days Past Due | 13 | 50 |
Loans 60-89 Days Past Due | 50 | 18 |
Loans 90 or More Days Past Due | 18 | |
Total Past Due Loans | 63 | 86 |
Current Loans | 30,778 | 31,044 |
Total loans and leases | 30,841 | 31,130 |
Residential 1-4 Family [Member] | Real Estate [Member] | ||
Loans 30-59 Days Past Due | 3,609 | 3,700 |
Loans 60-89 Days Past Due | 777 | 1,096 |
Loans 90 or More Days Past Due | 1,139 | 710 |
Total Past Due Loans | 5,525 | 5,506 |
Current Loans | 234,803 | 237,416 |
Total loans and leases | 240,328 | 242,922 |
Multifamily [Member] | Real Estate [Member] | ||
Loans 30-59 Days Past Due | 260 | 262 |
Loans 60-89 Days Past Due | ||
Loans 90 or More Days Past Due | ||
Total Past Due Loans | 260 | 262 |
Current Loans | 13,779 | 13,376 |
Total loans and leases | 14,039 | 13,638 |
Farmland [Member] | Real Estate [Member] | ||
Loans 30-59 Days Past Due | 672 | 111 |
Loans 60-89 Days Past Due | 800 | 47 |
Loans 90 or More Days Past Due | 47 | 152 |
Total Past Due Loans | 1,519 | 310 |
Current Loans | 18,844 | 20,480 |
Total loans and leases | 20,363 | 20,790 |
Agriculture [Member] | ||
Loans 30-59 Days Past Due | 111 | 244 |
Loans 60-89 Days Past Due | ||
Loans 90 or More Days Past Due | 22 | 21 |
Total Past Due Loans | 133 | 265 |
Current Loans | 5,108 | 4,532 |
Total loans and leases | 5,241 | 4,797 |
Consumer Installment Loans [Member] | ||
Loans 30-59 Days Past Due | 146 | 98 |
Loans 60-89 Days Past Due | 14 | 24 |
Loans 90 or More Days Past Due | 13 | 23 |
Total Past Due Loans | 173 | 145 |
Current Loans | 22,419 | 22,982 |
Total loans and leases | 22,592 | 23,127 |
Other Loans [Member] | ||
Loans 30-59 Days Past Due | ||
Loans 60-89 Days Past Due | ||
Loans 90 or More Days Past Due | ||
Total Past Due Loans | ||
Current Loans | 1,816 | 1,710 |
Total loans and leases | $ 1,816 | $ 1,710 |
LOANS (Details 4)
LOANS (Details 4) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total | $ 560,468 | $ 562,544 |
Pass [Member] | ||
Total | 542,952 | 548,580 |
Special Mention [Member] | ||
Total | 10,639 | 8,832 |
Substandard [Member] | ||
Total | 6,591 | 4,846 |
Doubtful [Member] | ||
Total | 286 | 286 |
Real Estate [Member] | ||
Total | 477,229 | 478,916 |
Real Estate [Member] | Pass [Member] | ||
Total | 462,687 | 467,944 |
Real Estate [Member] | Special Mention [Member] | ||
Total | 8,179 | 6,312 |
Real Estate [Member] | Substandard [Member] | ||
Total | 6,363 | 4,660 |
Real Estate [Member] | Doubtful [Member] | ||
Total | ||
Commercial [Member] | ||
Total | 53,590 | 53,994 |
Commercial [Member] | Pass [Member] | ||
Total | 50,685 | 51,086 |
Commercial [Member] | Special Mention [Member] | ||
Total | 2,447 | 2,504 |
Commercial [Member] | Substandard [Member] | ||
Total | 172 | 118 |
Commercial [Member] | Doubtful [Member] | ||
Total | 286 | 286 |
Commercial [Member] | Real Estate [Member] | ||
Total | 171,658 | 170,436 |
Commercial [Member] | Real Estate [Member] | Pass [Member] | ||
Total | 164,357 | 165,570 |
Commercial [Member] | Real Estate [Member] | Special Mention [Member] | ||
Total | 4,562 | 3,265 |
Commercial [Member] | Real Estate [Member] | Substandard [Member] | ||
Total | 2,739 | 1,601 |
Commercial [Member] | Real Estate [Member] | Doubtful [Member] | ||
Total | ||
Construction and Land Development [Member] | Real Estate [Member] | ||
Total | 30,841 | 31,130 |
Construction and Land Development [Member] | Real Estate [Member] | Pass [Member] | ||
Total | 30,446 | 30,747 |
Construction and Land Development [Member] | Real Estate [Member] | Special Mention [Member] | ||
Total | 326 | 360 |
Construction and Land Development [Member] | Real Estate [Member] | Substandard [Member] | ||
Total | 69 | 23 |
Construction and Land Development [Member] | Real Estate [Member] | Doubtful [Member] | ||
Total | ||
Residential 1-4 Family [Member] | Real Estate [Member] | ||
Total | 240,328 | 242,922 |
Residential 1-4 Family [Member] | Real Estate [Member] | Pass [Member] | ||
Total | 235,504 | 239,210 |
Residential 1-4 Family [Member] | Real Estate [Member] | Special Mention [Member] | ||
Total | 1,622 | 1,207 |
Residential 1-4 Family [Member] | Real Estate [Member] | Substandard [Member] | ||
Total | 3,202 | 2,505 |
Residential 1-4 Family [Member] | Real Estate [Member] | Doubtful [Member] | ||
Total | ||
Multifamily [Member] | Real Estate [Member] | ||
Total | 14,039 | 13,638 |
Multifamily [Member] | Real Estate [Member] | Pass [Member] | ||
Total | 13,797 | 13,638 |
Multifamily [Member] | Real Estate [Member] | Special Mention [Member] | ||
Total | 242 | |
Multifamily [Member] | Real Estate [Member] | Substandard [Member] | ||
Total | ||
Multifamily [Member] | Real Estate [Member] | Doubtful [Member] | ||
Total | ||
Farmland [Member] | Real Estate [Member] | ||
Total | 20,363 | 20,790 |
Farmland [Member] | Real Estate [Member] | Pass [Member] | ||
Total | 18,583 | 18,779 |
Farmland [Member] | Real Estate [Member] | Special Mention [Member] | ||
Total | 1,427 | 1,480 |
Farmland [Member] | Real Estate [Member] | Substandard [Member] | ||
Total | 353 | 531 |
Farmland [Member] | Real Estate [Member] | Doubtful [Member] | ||
Total | ||
Agriculture [Member] | ||
Total | 5,241 | 4,797 |
Agriculture [Member] | Pass [Member] | ||
Total | 5,204 | 4,753 |
Agriculture [Member] | Special Mention [Member] | ||
Total | 4 | |
Agriculture [Member] | Substandard [Member] | ||
Total | 37 | 40 |
Agriculture [Member] | Doubtful [Member] | ||
Total | ||
Consumer Installment Loans [Member] | ||
Total | 22,592 | 23,127 |
Consumer Installment Loans [Member] | Pass [Member] | ||
Total | 22,560 | 23,087 |
Consumer Installment Loans [Member] | Special Mention [Member] | ||
Total | 13 | 12 |
Consumer Installment Loans [Member] | Substandard [Member] | ||
Total | 19 | 28 |
Consumer Installment Loans [Member] | Doubtful [Member] | ||
Total | ||
Other Loans [Member] | ||
Total | 1,816 | 1,710 |
Other Loans [Member] | Pass [Member] | ||
Total | 1,816 | 1,710 |
Other Loans [Member] | Special Mention [Member] | ||
Total | ||
Other Loans [Member] | Substandard [Member] | ||
Total | ||
Other Loans [Member] | Doubtful [Member] | ||
Total |
ALLOWANCE FOR LOAN LOSSES (Deta
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Balance, beginning of year | $ 5,368 | $ 5,336 | $ 5,336 |
Charge Offs | (110) | (2,454) | |
Recoveries | 79 | 436 | |
Provision for loan losses | 1,000 | 135 | 2,050 |
Balance, End of period | 6,337 | 5,368 | |
Real Estate [Member] | |||
Balance, beginning of year | 3,355 | 4,401 | 4,401 |
Charge Offs | (64) | (561) | |
Recoveries | 43 | 311 | |
Provision for loan losses | 915 | (796) | |
Balance, End of period | 4,249 | 3,355 | |
Commercial [Member] | |||
Balance, beginning of year | 1,789 | 448 | 448 |
Charge Offs | (13) | (1,762) | |
Recoveries | 29 | 61 | |
Provision for loan losses | 51 | 3,042 | |
Balance, End of period | 1,856 | 1,789 | |
Commercial [Member] | Real Estate [Member] | |||
Balance, beginning of year | 1,248 | 1,386 | 1,386 |
Charge Offs | (22) | (192) | |
Recoveries | 2 | 16 | |
Provision for loan losses | 452 | 38 | |
Balance, End of period | 1,680 | 1,248 | |
Construction and Land Development [Member] | Real Estate [Member] | |||
Balance, beginning of year | 158 | 202 | 202 |
Charge Offs | |||
Recoveries | 34 | ||
Provision for loan losses | 56 | (78) | |
Balance, End of period | 214 | 158 | |
Residential 1-4 Family [Member] | Real Estate [Member] | |||
Balance, beginning of year | 1,736 | 2,437 | 2,437 |
Charge Offs | (336) | ||
Recoveries | 8 | 202 | |
Provision for loan losses | 333 | (567) | |
Balance, End of period | 2,077 | 1,736 | |
Multifamily [Member] | Real Estate [Member] | |||
Balance, beginning of year | 104 | 89 | 89 |
Charge Offs | |||
Recoveries | 30 | ||
Provision for loan losses | 28 | (15) | |
Balance, End of period | 132 | 104 | |
Farmland [Member] | Real Estate [Member] | |||
Balance, beginning of year | 109 | 287 | 287 |
Charge Offs | (42) | (33) | |
Recoveries | 33 | 29 | |
Provision for loan losses | 46 | (174) | |
Balance, End of period | 146 | 109 | |
Agriculture [Member] | |||
Balance, beginning of year | 27 | 37 | 37 |
Charge Offs | (17) | ||
Recoveries | 1 | 2 | |
Provision for loan losses | 11 | 5 | |
Balance, End of period | 39 | 27 | |
Consumer Installment Loans [Member] | |||
Balance, beginning of year | 188 | 172 | 172 |
Charge Offs | (33) | (114) | |
Recoveries | 6 | 62 | |
Provision for loan losses | 22 | 68 | |
Balance, End of period | 183 | 188 | |
Other Loans [Member] | |||
Balance, beginning of year | 7 | 3 | 3 |
Charge Offs | |||
Recoveries | |||
Provision for loan losses | 3 | 4 | |
Balance, End of period | 10 | 7 | |
Unallocated [Member] | |||
Balance, beginning of year | 2 | $ 275 | 275 |
Charge Offs | |||
Recoveries | |||
Provision for loan losses | (2) | (273) | |
Balance, End of period | $ 2 |
ALLOWANCE FOR LOAN LOSSES (De_2
ALLOWANCE FOR LOAN LOSSES (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for loan losses, individually evaluated for impairment | $ 457 | $ 323 | |
Allowance for loan losses, collectively evaluated for impairment | 5,880 | 5,045 | |
Allowance for loan losses, total | 6,337 | 5,368 | $ 5,336 |
Recorded investment in loans, individually evaluated for impairment | 5,563 | 5,575 | |
Recorded investment in loans, collectively evaluated for impairment | 554,905 | 556,969 | |
Recorded investment in loans, total | 560,468 | 562,544 | |
Real Estate [Member] | |||
Allowance for loan losses, individually evaluated for impairment | 257 | 123 | |
Allowance for loan losses, collectively evaluated for impairment | 3,992 | 3,232 | |
Allowance for loan losses, total | 4,249 | ||
Recorded investment in loans, individually evaluated for impairment | 5,176 | 5,161 | |
Recorded investment in loans, collectively evaluated for impairment | 472,053 | 473,755 | |
Recorded investment in loans, total | 477,229 | 478,916 | |
Commercial [Member] | |||
Allowance for loan losses, individually evaluated for impairment | 200 | 200 | |
Allowance for loan losses, collectively evaluated for impairment | 1,656 | 1,589 | |
Allowance for loan losses, total | 1,856 | 1,789 | |
Recorded investment in loans, individually evaluated for impairment | 387 | 414 | |
Recorded investment in loans, collectively evaluated for impairment | 53,203 | 53,580 | |
Recorded investment in loans, total | 53,590 | 53,994 | |
Commercial [Member] | Real Estate [Member] | |||
Allowance for loan losses, individually evaluated for impairment | 210 | 70 | |
Allowance for loan losses, collectively evaluated for impairment | 1,470 | 1,178 | |
Allowance for loan losses, total | 1,680 | 1,248 | |
Recorded investment in loans, individually evaluated for impairment | 2,756 | 2,779 | |
Recorded investment in loans, collectively evaluated for impairment | 168,902 | 167,657 | |
Recorded investment in loans, total | 171,658 | 170,436 | |
Construction and Land Development [Member] | Real Estate [Member] | |||
Allowance for loan losses, individually evaluated for impairment | |||
Allowance for loan losses, collectively evaluated for impairment | 214 | 158 | |
Allowance for loan losses, total | 214 | 158 | |
Recorded investment in loans, individually evaluated for impairment | 63 | 70 | |
Recorded investment in loans, collectively evaluated for impairment | 30,778 | 31,060 | |
Recorded investment in loans, total | 30,841 | 31,130 | |
Residential 1-4 Family [Member] | Real Estate [Member] | |||
Allowance for loan losses, individually evaluated for impairment | 39 | 44 | |
Allowance for loan losses, collectively evaluated for impairment | 2,038 | 1,692 | |
Allowance for loan losses, total | 2,077 | 1,736 | |
Recorded investment in loans, individually evaluated for impairment | 1,398 | 1,318 | |
Recorded investment in loans, collectively evaluated for impairment | 238,930 | 241,604 | |
Recorded investment in loans, total | 240,328 | 242,922 | |
Multifamily [Member] | Real Estate [Member] | |||
Allowance for loan losses, individually evaluated for impairment | |||
Allowance for loan losses, collectively evaluated for impairment | 132 | 104 | |
Allowance for loan losses, total | 132 | 104 | |
Recorded investment in loans, individually evaluated for impairment | |||
Recorded investment in loans, collectively evaluated for impairment | 14,039 | 13,638 | |
Recorded investment in loans, total | 14,039 | 13,638 | |
Farmland [Member] | Real Estate [Member] | |||
Allowance for loan losses, individually evaluated for impairment | 8 | 9 | |
Allowance for loan losses, collectively evaluated for impairment | 138 | 100 | |
Allowance for loan losses, total | 146 | 109 | |
Recorded investment in loans, individually evaluated for impairment | 959 | 994 | |
Recorded investment in loans, collectively evaluated for impairment | 19,404 | 19,796 | |
Recorded investment in loans, total | 20,363 | 20,790 | |
Agriculture [Member] | |||
Allowance for loan losses, individually evaluated for impairment | |||
Allowance for loan losses, collectively evaluated for impairment | 39 | 27 | |
Allowance for loan losses, total | 39 | 27 | 37 |
Recorded investment in loans, individually evaluated for impairment | |||
Recorded investment in loans, collectively evaluated for impairment | 5,241 | 4,797 | |
Recorded investment in loans, total | 5,241 | 4,797 | |
Consumer Installment Loans [Member] | |||
Allowance for loan losses, individually evaluated for impairment | |||
Allowance for loan losses, collectively evaluated for impairment | 183 | 188 | |
Allowance for loan losses, total | 183 | 188 | 172 |
Recorded investment in loans, individually evaluated for impairment | |||
Recorded investment in loans, collectively evaluated for impairment | 22,592 | 23,127 | |
Recorded investment in loans, total | 22,592 | 23,127 | |
Other Loans [Member] | |||
Allowance for loan losses, individually evaluated for impairment | |||
Allowance for loan losses, collectively evaluated for impairment | 10 | 7 | |
Allowance for loan losses, total | 10 | 7 | 3 |
Recorded investment in loans, individually evaluated for impairment | |||
Recorded investment in loans, collectively evaluated for impairment | 1,816 | 1,710 | |
Recorded investment in loans, total | 1,816 | 1,710 | |
Unallocated [Member] | |||
Allowance for loan losses, individually evaluated for impairment | |||
Allowance for loan losses, collectively evaluated for impairment | 2 | ||
Allowance for loan losses, total | 2 | $ 275 | |
Recorded investment in loans, individually evaluated for impairment | |||
Recorded investment in loans, collectively evaluated for impairment | |||
Recorded investment in loans, total |
OTHER REAL ESTATE OWNED (Detail
OTHER REAL ESTATE OWNED (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Real Estate [Abstract] | ||
Balance, beginning of year | $ 3,393 | $ 5,937 |
Additions | 252 | 811 |
Transfers from premises and equipment | 683 | |
Proceeds from sales | (118) | (1,322) |
Proceeds from insurance claims | (19) | |
Loans made to finance sales | (428) | (2,360) |
Adjustment of carrying value | (87) | (214) |
Gains (losses) from sales | 58 | (123) |
Balance, end of year | $ 3,070 | $ 3,393 |
FAIR VALUES (Details)
FAIR VALUES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Inputs, Level 2 [Member] | ||
Available for sale investments | $ 47,741 | $ 50,649 |
Fair Value, Inputs, Level 3 [Member] | ||
Available for sale investments | 8,176 | 8,645 |
Other real estate owned | 3,070 | 3,393 |
Impaired loans | 5,106 | 8,645 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | U.S. Government Agencies [Member] | ||
Available for sale investments | 14,772 | 15,633 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Taxable Municipals | ||
Available for sale investments | 4,456 | 4,442 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate Bonds | ||
Available for sale investments | 5,542 | 5,523 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage Backed Securities [Member] | ||
Available for sale investments | $ 22,971 | $ 25,051 |
FAIR VALUES (Details 1)
FAIR VALUES (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Impaired Loans | ||
Fair Value | $ 5,106 | $ 5,252 |
Valuation Technique | Appraised Value/Discounted Cash Flows/Market Value of Note | |
Significant Unobservable Inputs | Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell | |
Other Real Estate Owned | ||
Fair Value | $ 3,070 | $ 3,393 |
Valuation Technique | Appraised Value/Comparable Sales/Other Estimates from Independent Sources | |
Significant Unobservable Inputs | Discounts to reflect current market conditions and estimated costs to sell | |
Minimum [Member] | Impaired Loans | ||
General Range of Significant Unobservable Input Values | 0.00% | |
Minimum [Member] | Other Real Estate Owned | ||
General Range of Significant Unobservable Input Values | 0.00% | |
Maximum [Member] | Impaired Loans | ||
General Range of Significant Unobservable Input Values | 18.00% | |
Maximum [Member] | Other Real Estate Owned | ||
General Range of Significant Unobservable Input Values | 18.00% |
FAIR VALUES (Details 2)
FAIR VALUES (Details 2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Net Loans | $ 554,131 | $ 557,176 |
Fair Value, Inputs, Level 2 [Member] | ||
Net Loans | 545,826 | 545,243 |
Time deposits | 262,228 | 259,325 |
FHLB advances | 4,972 | 5,054 |
Fair Value, Inputs, Level 3 [Member] | ||
Net Loans | 5,106 | 5,252 |
Time deposits | ||
FHLB advances | ||
Reported Value Measurement [Member] | ||
Net Loans | 554,131 | 557,176 |
Time deposits | 260,111 | 257,406 |
FHLB advances | 5,000 | 5,000 |
Estimate of Fair Value Measurement [Member] | ||
Net Loans | 550,932 | 550,495 |
Time deposits | 262,228 | 259,325 |
FHLB advances | $ 4,972 | $ 5,054 |
LEASING ACTIVITIES (Details)
LEASING ACTIVITIES (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 424 |
2021 | 511 |
2022 | 530 |
2023 | 544 |
2024 | 546 |
Thereafter | 4,416 |
Total lease payments | 6,971 |
Less imputed interest | 1,234 |
Total | $ 5,737 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Service charges and fees | $ 851 | $ 841 |
Card Processing and interchange income | 753 | 679 |
Gain on sale and leaseback transactions | 4 | |
Insurance and investment fees | 132 | 161 |
Other noninterest income | 425 | 96 |
Total Noninterest Income | $ 2,165 | $ 1,777 |
NONINTEREST EXPENSES (Details)
NONINTEREST EXPENSES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Noninterest Expenses | ||
Advertising | $ 65 | $ 66 |
ATM network expense | 392 | 444 |
Legal and professional fees | 557 | 282 |
Loan related expenses | 107 | 121 |
Printing and supplies | 37 | 39 |
FDIC insurance premiums | 93 | 108 |
Other real estate owned expenses, net | 63 | 193 |
Other operating expenses | 703 | 525 |
Total | $ 2,017 | $ 1,778 |