Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 02, 2021 | |
Document And Entity Information Abstract | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38595 | |
Entity Registrant Name | First Western Financial Inc | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 37-1442266 | |
Entity Address, Address Line One | 1900 16th Street | |
Entity Address, Address Line Two | Suite 1200 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 303 | |
Local Phone Number | 531.8100 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | MYFW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,996,438 | |
Entity Central Index Key | 0001327607 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Cash and cash equivalents: | ||
Cash and due from banks | $ 2,921 | $ 2,405 |
Interest-bearing deposits in other financial institutions | 286,168 | 153,584 |
Total cash and cash equivalents | 289,089 | 155,989 |
Available-for-sale securities, at fair value | 25,532 | 36,666 |
Correspondent bank stock, at cost | 2,053 | 2,552 |
Mortgage loans held for sale | 48,563 | 161,843 |
Loans, net of allowance of $12,552 and $12,539 | 1,558,508 | 1,520,294 |
Premises and equipment, net | 5,885 | 5,320 |
Accrued interest receivable | 5,986 | 6,618 |
Accounts receivable | 4,923 | 4,865 |
Other receivables | 1,056 | 1,422 |
Other real estate owned, net | 194 | |
Goodwill and other intangible assets, net | 24,250 | 24,258 |
Deferred tax assets, net | 5,742 | 6,056 |
Company-owned life insurance | 15,626 | 15,449 |
Other assets | 22,091 | 32,129 |
Total assets | 2,009,304 | 1,973,655 |
Deposits: | ||
Noninterest-bearing | 555,106 | 481,457 |
Interest-bearing | 1,123,947 | 1,138,453 |
Total deposits | 1,679,053 | 1,619,910 |
Borrowings: | ||
Federal Home Loan Bank and Federal Reserve borrowings | 120,762 | 149,563 |
Subordinated notes | 24,261 | 24,291 |
Accrued interest payable | 312 | 453 |
Other liabilities | 16,930 | 24,476 |
Total liabilities | 1,841,318 | 1,818,693 |
SHAREHOLDERS' EQUITY | ||
Preferred stock - no par value; 10,000,000 shares authorized; 0 issued and outstanding | ||
Common stock - no par value; 90,000,000 shares authorized; 7,994,832 and 7,951,773 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | ||
Additional paid-in capital | 145,622 | 144,703 |
Retained earnings | 21,855 | 9,579 |
Accumulated other comprehensive income | 509 | 680 |
Total shareholders' equity | 167,986 | 154,962 |
Total liabilities and shareholders' equity | $ 2,009,304 | $ 1,973,655 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for loans | $ 12,552 | $ 12,539 |
Preferred Stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0 | $ 0 |
Common Stock, shares authorized | 90,000,000 | 90,000,000 |
Common Stock, shares issued | 7,994,832 | 7,951,773 |
Common Stock, shares outstanding | 7,994,832 | 7,951,773 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Interest and dividend income: | ||||
Loans, including fees | $ 15,287 | $ 12,202 | $ 29,499 | $ 23,204 |
Investment securities | 169 | 224 | 365 | 519 |
Federal funds sold and other | 92 | 44 | 183 | 259 |
Total interest and dividend income | 15,548 | 12,470 | 30,047 | 23,982 |
Interest expense: | ||||
Deposits | 866 | 1,319 | 1,840 | 3,712 |
Other borrowed funds | 459 | 355 | 931 | 543 |
Total interest expense | 1,325 | 1,674 | 2,771 | 4,255 |
Net interest income | 14,223 | 10,796 | 27,276 | 19,727 |
Less: provision for loan losses | 12 | 2,124 | 12 | 2,491 |
Net interest income, after provision for loan losses | 14,211 | 8,672 | 27,264 | 17,236 |
Non-interest income: | ||||
Trust and investment management fees | 5,009 | 4,609 | 9,856 | 9,340 |
Net gain on mortgage loans | 3,914 | 10,173 | 9,110 | 12,654 |
Bank fees | 394 | 221 | 767 | 589 |
Risk management and insurance fees | 92 | 333 | 143 | 429 |
Income on company-owned life insurance | 89 | 91 | 177 | 182 |
Other | 60 | |||
Total non-interest income | 9,498 | 15,427 | 20,113 | 23,194 |
Total income before non-interest expense | 23,709 | 24,099 | 47,377 | 40,430 |
Non-interest expense: | ||||
Salaries and employee benefits | 9,643 | 6,690 | 19,504 | 15,172 |
Occupancy and equipment | 1,443 | 1,515 | 2,852 | 2,955 |
Professional services | 1,370 | 1,231 | 2,649 | 2,254 |
Technology and information systems | 904 | 993 | 1,846 | 1,962 |
Data processing | 1,093 | 1,037 | 2,108 | 1,884 |
Marketing | 398 | 253 | 719 | 668 |
Amortization of other intangible assets | 4 | 38 | 8 | 40 |
Net loss on assets held for sale | 553 | |||
Other | 666 | 887 | 1,464 | 1,803 |
Total non-interest expense | 15,521 | 12,644 | 31,150 | 27,291 |
Income before income taxes | 8,188 | 11,455 | 16,227 | 13,139 |
Income tax expense | 1,911 | 2,759 | 3,951 | 3,109 |
Net income available to common shareholders | $ 6,277 | $ 8,696 | $ 12,276 | $ 10,030 |
Earnings per common share: | ||||
Basic | $ 0.79 | $ 1.10 | $ 1.54 | $ 1.27 |
Diluted | $ 0.76 | $ 1.10 | $ 1.50 | $ 1.26 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 6,277 | $ 8,696 | $ 12,276 | $ 10,030 |
Other comprehensive income items, net of tax effect: | ||||
Net change in unrealized losses on available-for-sale securities | (70) | 1,601 | (171) | 1,008 |
Comprehensive income | $ 6,207 | $ 10,297 | $ 12,105 | $ 11,038 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Total |
Balance at Beginning at Dec. 31, 2019 | $ 142,797 | $ (14,955) | $ (164) | $ 127,678 | |
Balance at Beginning (in shares) at Dec. 31, 2019 | 7,940,168 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 10,030 | 10,030 | |||
Other comprehensive loss, net of tax | 1,008 | 1,008 | |||
Share repurchase | (370) | (370) | |||
Share repurchase (in shares) | (22,679) | ||||
Settlement of share awards | (170) | (170) | |||
Settlement of share awards (in shares) | 21,535 | ||||
Stock-based compensation | 1,241 | 1,241 | |||
Balance at Ending at Jun. 30, 2020 | 143,498 | (4,925) | 844 | 139,417 | |
Balance at Ending (in shares) at Jun. 30, 2020 | 7,939,024 | ||||
Balance at Beginning at Mar. 31, 2020 | 143,081 | (13,621) | (757) | 128,703 | |
Balance at Beginning (in shares) at Mar. 31, 2020 | 7,917,489 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 8,696 | 8,696 | |||
Other comprehensive loss, net of tax | 1,601 | 1,601 | |||
Settlement of share awards | (170) | (170) | |||
Settlement of share awards (in shares) | 21,535 | ||||
Stock-based compensation | 587 | 587 | |||
Balance at Ending at Jun. 30, 2020 | 143,498 | (4,925) | 844 | 139,417 | |
Balance at Ending (in shares) at Jun. 30, 2020 | 7,939,024 | ||||
Balance at Beginning at Dec. 31, 2020 | 144,703 | 9,579 | 680 | 154,962 | |
Balance at Beginning (in shares) at Dec. 31, 2020 | 7,951,773 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 12,276 | 12,276 | |||
Other comprehensive loss, net of tax | (171) | (171) | |||
Settlement of share awards | (406) | (406) | |||
Settlement of share awards (in shares) | 43,059 | ||||
Stock-based compensation | 1,325 | 1,325 | |||
Balance at Ending at Jun. 30, 2021 | 145,622 | 21,855 | 509 | 167,986 | |
Balance at Ending (in shares) at Jun. 30, 2021 | 7,994,832 | ||||
Balance at Beginning at Mar. 31, 2021 | 145,282 | 15,578 | 579 | 161,439 | |
Balance at Beginning (in shares) at Mar. 31, 2021 | 7,957,900 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 6,277 | 6,277 | |||
Other comprehensive loss, net of tax | (70) | (70) | |||
Settlement of share awards | (372) | (372) | |||
Settlement of share awards (in shares) | 36,932 | ||||
Stock-based compensation | 712 | 712 | |||
Balance at Ending at Jun. 30, 2021 | $ 145,622 | $ 21,855 | $ 509 | $ 167,986 | |
Balance at Ending (in shares) at Jun. 30, 2021 | 7,994,832 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities | ||
Net income | $ 12,276 | $ 10,030 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 547 | 552 |
Deferred income tax expense/(benefits), net of valuation allowance | 384 | (1,314) |
Stock-based compensation | 1,325 | 1,241 |
Provision for loan losses | 12 | 2,491 |
Net amortization of investment securities | 278 | 231 |
Stock dividends received on correspondent bank stock | (43) | (12) |
Increase in cash surrender value of company-owned life insurance | (177) | (182) |
Net gain on mortgage loans | (9,110) | (12,654) |
Origination of mortgage loans held for sale | (810,517) | (541,222) |
Proceeds from mortgage loans | 938,152 | 526,355 |
Loss on assets held for sale | 553 | |
Recognition of capitalized subordinated notes issuance costs | (30) | (116) |
Net changes in operating assets and liabilities: | ||
Accounts receivable | 40 | 633 |
Accrued interest receivable and other assets | 809 | (2,444) |
Accrued interest payable and other liabilities | (4,054) | 6,588 |
Net cash provided by/(used in) operating activities | 129,892 | (9,270) |
Activity in available-for-sale securities: | ||
Maturities, prepayments, and calls | 10,877 | 12,662 |
Purchases of correspondent bank stock | (1) | (698) |
Redemption of correspondent bank stock | 543 | |
Purchases of premises and equipment | (1,104) | (523) |
Proceeds from sale of other real estate owned | 194 | |
Net cash paid on acquisitions | (61,316) | |
Loan and note receivable originations and principal collections, net | (37,237) | (304,658) |
Net cash used in investing activities | (26,728) | (354,533) |
Cash flows from financing activities | ||
Net change in deposits | 59,143 | 257,068 |
Proceeds from subordinated notes | 8,000 | |
Repurchase of common stock | (370) | |
Settlement of restricted stock | (406) | (170) |
Payments to Federal Reserve borrowings | (112,475) | |
Proceeds from Federal Reserve borrowings | 83,674 | 204,313 |
Payments to Federal Home Loan Bank borrowings | (27,000) | |
Proceeds from Federal Home Loan Bank borrowings | 35,000 | |
Net cash provided by financing activities | 29,936 | 476,841 |
Net change in cash and cash equivalents | 133,100 | 113,038 |
Cash and cash equivalents, beginning of year | 155,989 | 78,638 |
Cash and cash equivalents, end of period | 289,089 | 191,676 |
Supplemental cash flow information: | ||
Interest paid on deposits and borrowed funds | 2,912 | 4,349 |
Income tax payment, net of refunds received | 2,488 | 1,122 |
Cash paid for amounts included in the measurement of lease liabilities | 2,581 | 2,893 |
Supplemental noncash disclosures: | ||
Change in unrealized gain on available-for-sale securities | $ (241) | $ 1,334 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Basis of Presentation FWFI is a bank holding company with financial holding company status registered with the Board of Governors of the Federal Reserve System. FWFI wholly owns the following subsidiaries: First Western Trust Bank (the "Bank") and Ryder, Stilwell Inc. ("RSI"). The Bank wholly owns the following subsidiaries, which are therefore indirectly wholly-owned by FWFI: First Western Merger Corporation ("Merger Corp"), and RRI, LLC ("RRI"). RSI and RRI are not active operating entities. The Company provides a fully-integrated suite of wealth management services including, private banking, personal trust, investment management, mortgage loans, and institutional asset management services to individual and corporate clients principally in Colorado (metro Denver, Aspen, Boulder, Fort Collins and Vail Valley), Arizona (Phoenix and Scottsdale), California (Century City) and Wyoming (Jackson Hole and Laramie). The Company’s revenues are generated from its full range of product offerings as noted above, but principally from net interest income (the interest income earned on the Bank’s assets net of funding costs), fee-based wealth advisory, investment management, asset management and personal trust services, and net gains earned on mortgage loans. The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The December 31, 2020 condensed consolidated balance sheet has been derived from the audited financial statements for the year ended December 31, 2020. In the opinion of management, all adjustments that were recurring in nature and considered necessary have been included for fair presentation of the Company’s financial position and results of operations. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of results that may be expected for the full year ending December 31, 2021. In preparing the condensed consolidated financial statements, the Company is required to make estimates and assumptions that affect the reported amount of assets and liabilities and 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 be significantly different from those estimates. The condensed consolidated financial statements and notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC. Consolidation Business Combinations and Divestitures Use of Estimates The Company could experience a material adverse effect on its business as a result of the impact of the COVID-19 pandemic, and the resulting governmental actions to curtail its spread. Concentration of Credit Risk Mortgage Banking Derivatives In order to manage the interest rate risk on our uncommitted IRLC and mortgage loans held for sale pipeline, the Company enters into mortgage derivative financial instruments called To Be Announced ("TBA"), which we refer to as mortgage derivatives. TBA agreements are forward contracts to purchase mortgage backed securities ("MBS") that will be issued by a US Government Sponsored Enterprise. The Bank purchases or sells these derivatives to offset the changes in value of our mortgage loans held for sale and IRLC adjusted pipeline where we have exposure to interest rate volatility. Changes in the fair values of these derivatives are included in the Net gain on mortgage loans line of the Condensed Consolidated Statements of Income. Revenue Recognition Transition of LIBOR to an Alternative Reference Rate The administrator of LIBOR has proposed to extend publication of the most commonly used U.S. Dollar LIBOR settings to June 30, 2023, and to cease publishing other LIBOR settings on December 31, 2021. Certain of the Company’s assets and liabilities are indexed to LIBOR, with exposure extending beyond December 31, 2021. The Company is currently evaluating and planning for the eventual replacement of the LIBOR benchmark interest rate, including the possibility of SOFR as the dominant replacement. In general, the transition away from LIBOR may result in increased market risk, credit risk, operational risk and business risk for the Company. The Company has developed a LIBOR transition plan, which addresses governance, risk management, legal, operational, systems, fallback language, and other aspects of planning. The Company has prepared a timeline to transition from LIBOR before the end of 2021. COVID-19 and CARES Act The CARES Act created the Paycheck Protection Program ("PPP"), which is administered by the Small Business Administration ("SBA"). The PPP is intended to provide loans to small businesses to pay their employees, rent, mortgage interest and utilities. The loans may be forgiven conditioned upon the client providing payroll documentation evidencing their compliant use of funds and otherwise complying with the terms of the program. The Bank is an approved SBA lender and supported the community and clients by originating PPP loans during the six months ended June 30, 2021. PPP loans are classified in the Cash, Securities and Other portion of the loan portfolio. See Note 3 for further discussion on our PPP loans. As a result of the COVID-19 pandemic, a loan modification program was designed and implemented to assist our clients experiencing financial stress resulting from the economic impacts caused by the global pandemic. The Company offered loan extensions, temporary payment moratoriums, and financial covenant waivers for commercial and consumer borrowers impacted by the pandemic and had a risk rating of “pass” and had not been delinquent in making interest or principal payment by more than 30 days during the last two years. The CARES Act provides banks optional, temporary relief from accounting for certain loan modifications as troubled debt restructurings ("TDR"). The modifications must be related to the adverse effects of COVID-19, and certain other criteria are required to be met in order to apply the relief. Interagency guidance from Federal Reserve and the Federal Deposit Insurance Corporation ("FDIC") confirmed with the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered a TDR. We believe our loan modification program meets that definition and have not classified any of these modifications as a TDR as of June 30, 2021. See Note 3 for further discussion on our loan modification program. The Company is a participant in the Federal Reserve’s Main Street Lending Program ("MSLP") to support lending to small and medium-sized for profit businesses and nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic. The Company may sell a 95% participation in a new MSLP loan to the Main Street Special Purpose Vehicle ("SPV") at par value. The Company must retain 5% of the MSLP loan until (i) it matures or (ii) neither the Main Street SPV nor a Governmental Assignee holds an interest in MSLP Loan in any capacity, whichever comes first. See Note 3 for further discussion on our participation in the program. Reclassifications Recently adopted accounting pronouncements In January 2021, the FASB issued ASU 2021-01, " Reference Rate Reform (Topic 848) Recently issued accounting pronouncements, not yet adopted In February 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) ("ASU 2016-13"). ASU 2016-13 replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss ("CECL") model. The CECL model is applicable to the measurement of credit losses on the financial assets measured at amortized cost, including loan receivables, held-to-maturity debt securities, and reinsurance receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor. For all other assets within the scope of CECL, a cumulative-effect adjustment will be recognized in retained earnings and the allowance for loan losses as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 was set to be effective for most public companies on January 1, 2020. However, at the October 16, 2019 FASB meeting, the FASB voted unanimously to delay the effective date of CECL adoption for smaller reporting companies ("SRCs") to January 1, 2023. During the six months ended June 30, 2021, the CECL committee of the Company continued to work through its implementation plan. The Company has integrated historical and current loan level data as required by CECL and is working with its third-party vendor solution to begin evaluating the methodologies available under the CECL model on its loan portfolios. The Company also continues to evaluate documentation requirements, internal control structure, relevant data sources, and system configurations. The Company has completed a successful integration of the required fields and historical data for key loan, client and collateral data within the third-party solution and has been able to run parallels of our current allowance for loan and lease losses ("ALLL") calculation in the software to compare to our internal calculation and reconcile known differences. The Company has started the process of selecting the methodologies to be used for each segment of its loan portfolio and started preliminarily testing to determine the impact of each methodology. Currently, we are unable to estimate the impact the adoption of this update will have on the consolidated financial statements and disclosures. However, the Company expects the impact of the adoption will be significantly influenced by the composition and characteristics of its loan portfolios along with economic conditions prevalent as of the date of adoption. The Company expects to implement the new standard beginning January 1, 2023. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2021 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | NOTE 2 - INVESTMENT SECURITIES The following presents the amortized cost and fair value of securities available-for-sale, with unrealized gains and losses recognized in accumulated other comprehensive income as of June 30, 2021 and December 31, 2020 (in thousands): Gross Gross Amortized Unrealized Unrealized Fair June 30, 2021 Cost Gains Losses Value Investment securities available-for-sale: U.S. Treasury debt $ 250 $ 1 $ — $ 251 Corporate bonds 6,000 157 (15) 6,142 GNMA mortgage-backed securities – residential 15,619 467 — 16,086 FNMA mortgage-backed securities – residential 1,113 47 — 1,160 CMO and MBS 1,875 41 (23) 1,893 Total securities available-for-sale $ 24,857 $ 713 $ (38) $ 25,532 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2020 Cost Gains Losses Value Investment securities available-for-sale: U.S. Treasury debt $ 250 $ 4 $ — $ 254 Corporate bonds 6,000 55 (11) 6,044 GNMA mortgage-backed securities – residential 23,806 798 — 24,604 FNMA mortgage-backed securities – residential 1,616 61 — 1,677 Corporate CMO and MBS 4,078 62 (53) 4,087 Total securities available-for-sale $ 35,750 $ 980 $ (64) $ 36,666 As of June 30, 2021, the amortized cost and estimated fair value of available-for-sale securities have contractual maturity dates shown in the table below (in thousands). 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. Securities not due at a single maturity date are shown separately. Amortized Fair June 30, 2021 Cost Value Due within one year $ 250 $ 251 Due between one year and five years 1,250 1,245 Due between five years and ten years 4,750 4,897 Securities (agency, Corporate CMO, and MBS) 18,607 19,139 Total $ 24,857 $ 25,532 In 2014, the Company began investing in a small business investment company ("SBIC") fund administered by the Small Business Administration. During the six months ended June 30, 2021, the Company did not make any contributions to the SBIC fund. During the year ended December 31, 2020, the Company invested $0.5 million in SBIC. As of June 30, 2021 and December 31, 2020, the Company held a balance of $2.1 million with SBIC, which is included in Other assets in the accompanying Condensed Consolidated Balance Sheets. The Company may be obligated to invest up to an additional $0.9 million in future SBIC investments. As of June 30, 2021 and December 31, 2020, securities with carrying values totaling $2.9 million and $3.7 million, respectively, were pledged to secure various public deposits and credit facilities of the Company. As of June 30, 2021 and December 31, 2020, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities and agencies, in an amount greater than 10%of shareholders’ equity. As of June 30, 2021 and December 31, 2020, five securities and seven securities were in an unrealized loss position, with unrealized losses totaling an immaterial amount and $0.1 million, respectively. One of the securities in an unrealized loss position as of June 30, 2021 has been in a continuous unrealized loss position for more than twelve months, and the remaining have been in a continuous unrealized loss position for less than twelve months. The unrealized loss positions were caused primarily by interest rate changes and market assumptions about prepayments of principal and interest on the underlying mortgages. Because the decline in market value is attributable to market conditions, not credit quality, and because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be near or at maturity, the Company does not consider these investments to be other-than-temporarily impaired as of June 30, 2021. The following table summarizes securities with unrealized losses as of June 30, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands, before tax): Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized June 30, 2021 Value Losses Value Losses Value Losses GNMA mortgage-backed securities – residential $ 286 $ * $ — $ — $ 286 $ * Corporate bonds 1,735 (15) — — 1,735 (15) Corporate CMO and MBS — — 615 (23) 615 (23) Total $ 2,021 $ (15) $ 615 $ (23) $ 2,636 $ (38) ______________________________________ *Not meaningful Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2020 Value Losses Value Losses Value Losses Corporate bonds $ 3,489 $ (11) $ — $ — $ 3,489 $ (11) Corporate CMO and MBS 880 (40) 566 (13) 1,446 (53) Total $ 4,369 $ (51) $ 566 $ (13) $ 4,935 $ (64) The Company did not sell any securities during the three and six months ended June 30, 2021 or during the year ended December 31, 2020. |
LOANS AND THE ALLOWANCE FOR LOA
LOANS AND THE ALLOWANCE FOR LOAN LOSSES | 6 Months Ended |
Jun. 30, 2021 | |
LOANS AND THE ALLOWANCE FOR LOAN LOSSES | |
LOANS AND THE ALLOWANCE FOR LOAN LOSSES | NOTE 3 - LOANS AND THE ALLOWANCE FOR LOAN LOSSES The following presents a summary of the Company’s loans as of the dates noted (in thousands): June 30, December 31, 2021 2020 Cash, Securities and Other (1) $ 290,907 $ 357,020 Construction and Development 127,141 131,111 1-4 Family Residential 496,101 455,038 Non-Owner Occupied CRE 324,493 281,943 Owner Occupied CRE 178,847 163,042 Commercial and Industrial (2) 155,526 146,031 Total loans held for investment 1,573,015 1,534,185 Deferred fees and unamortized premiums/(unaccreted discounts), net (1,955) (1,352) Allowance for loan losses (12,552) (12,539) Loans, net $ 1,558,508 $ 1,520,294 ______________________________________ (1) (2) As of June 30, 2021 and December 31, 2020, total loans held for investment included $116.1 million and $127.2 million, respectively, of performing loans purchased as part of the Branch Acquisition. The CARES Act created the PPP, which is administered by the SBA. The PPP is intended to provide loans to small businesses to pay their employees, rent, mortgage interest, and utilities. The loans may be forgiven conditioned upon the client providing payroll documentation evidencing their compliant use of funds and otherwise complying with the terms of the program. The Bank is an approved SBA lender and as of June 30, 2021, the Cash, Securities, and Other portion of the loan portfolio included $103.1 million of PPP loans, or 35.5% of the total category. As of December 31, 2020, the Cash, Securities, and Other portion of the loan portfolio included $142.9 million of PPP loans, or 40.0% of the total category. The Company is a participant in the Federal Reserve’s MSLP to support lending to small and medium-sized for profit businesses and nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic. As of June 30, 2021, the Company’s Commercial and Industrial loans included six MSLP loans with the net carrying amount of $6.7 million, or 4.3% of the total category. As of December 31, 2020, the Company’s Commercial and Industrial loans included six MSLP loans with the net carrying amount of $6.6 million, or 4.5% of the total category. Loan Modifications As a result of the COVID-19 pandemic, a loan modification program was designed and implemented to assist our clients experiencing financial stress resulting from the economic impacts caused by the global pandemic. The Company offered loan extensions, temporary payment moratoriums, and financial covenant waivers for commercial and consumer borrowers impacted by the pandemic who have a pass risk rating and have not been delinquent over 30 days on payments in the last two years. As of June 30, 2021, the Company’s loan portfolio included 76 loans which were previously modified under the loan modification program, totaling $143.1 million. As of June 30, 2021, the deferral period has ended for all loans previously modified and payments have resumed under the original terms. The CARES Act provides banks optional, temporary relief from accounting for certain loan modifications as a TDR. The modifications must be related to the adverse effects of COVID-19, and certain other criteria are required to be met in order to apply the relief. Interagency guidance from Federal Reserve and the FDIC confirmed with the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. We believe our loan modification program meets that definition. In accordance with that guidance, the Company recognized interest income on all loans modified for temporary payment moratoriums, primarily for a period of 180 days or less. All loans modified in response to COVID-19 are classified as performing and pass rated as of June 30, 2021. These loans are included in the allowance for loan loss general reserve in accordance with ASC 450-20. Management has increased our loan level reviews and portfolio monitoring to address the changing environment. The Company continues to meet regularly with clients who could be more highly impacted by the recent COVID-19 pandemic. These are borrowers in accommodations, transportation and restaurant industries, which we believe may be more impacted by the pandemic, and those loans where there may be a greater than 50% probability of a downgrade, covenant violation or 20% reduction in collateral position. The portion of our credit exposure to the highest risk industries impacted by COVID-19, such as accommodations, transportation and restaurants, is less than 4.0% of our loan portfolio. Management believes the diversity of the loan portfolio is prudent and remains consistent with the credit culture and goals of the Bank. Interest accrued during the modification term on modified loans is deferred to the end of the loan term. As of June 30, 2021, no allowance for loan loss was deemed necessary on the accrued interest balances related to loan modifications. The following presents, by class, an aging analysis of the recorded investments (excluding accrued interest receivable, deferred (fees) costs, and unamortized premiums/ (unaccreted discounts) which are not material) in loans past due as of June 30, 2021 and December 31, 2020 (in thousands): 30-59 60-89 90 or Total Total Days Days More Days Loans Recorded June 30, 2021 Past Due Past Due Past Due Past Due Current Investment Cash, Securities and Other $ — $ — $ 12 $ 12 $ 290,895 $ 290,907 Construction and Development — — — — 127,141 127,141 1-4 Family Residential — 76 — 76 496,025 496,101 Non-Owner Occupied CRE — — — — 324,493 324,493 Owner Occupied CRE — — — — 178,847 178,847 Commercial and Industrial 1,898 — 3,105 5,003 150,523 155,526 Total $ 1,898 $ 76 $ 3,117 $ 5,091 $ 1,567,924 $ 1,573,015 30-59 60-89 90 or Total Total Days Days More Days Loans Recorded December 31, 2020 Past Due Past Due Past Due Past Due Current Investment Cash, Securities and Other $ 752 $ — $ 48 $ 800 $ 356,220 $ 357,020 Construction and Development — — — — 131,111 131,111 1-4 Family Residential 1,283 — — 1,283 453,755 455,038 Non-Owner Occupied CRE — — — — 281,943 281,943 Owner Occupied CRE 479 — — 479 162,563 163,042 Commercial and Industrial 271 — 3,529 3,800 142,231 146,031 Total $ 2,785 $ — $ 3,577 $ 6,362 $ 1,527,823 $ 1,534,185 As of June 30, 2021 and December 31, 2020, the Company did not have any loans which were more than 90 days delinquent and accruing interest. Non-Accrual Loans and Troubled Debt Restructurings The following presents the recorded investment in non-accrual loans by class as of the dates noted (in thousands): June 30, December 31, 2021 2020 Cash, Securities and Other $ 15 $ 50 Owner Occupied CRE — 479 Commercial and Industrial 3,105 3,529 Total $ 3,120 $ 4,058 Non-accrual loans classified as TDRs accounted for $3.1 million of the recorded investment as of June 30, 2021 and $3.6 million as of December 31, 2020. Non-accrual loans are classified as impaired loans and individually evaluated for impairment. The following presents a summary of the unpaid principal balance of loans classified as TDRs as of the dates noted (in thousands): June 30, December 31, 2021 2020 Non-accrual Cash, Securities, and Other $ 12 $ 48 Commercial and Industrial 3,105 3,529 Total 3,117 3,577 Allowance for loan losses associated with TDR (1,751) (1,619) Net recorded investment $ 1,366 $ 1,958 As of June 30, 2021 and December 31, 2020, the Company had not committed any additional funds to a borrower with a loan classified as a TDR. The Company did not modify any loans resulting in TDR status during the six months ended June 30, 2021. The Company modified one loan resulting in TDR status during the year ended December 31, 2020. The Borrower was having difficulty making payments in accordance with the original contract terms. The Company restructured the loan including receiving a large paydown and extended the maturity and lowered the interest rate as a result of the Borrower’s financial difficulties. The loan was paid off in full as of December 31, 2020. TDRs are reviewed individually for impairment and are included in the Company’s specific reserves in the allowance for loan losses. If charged off, the amount of the charge-off is included in the Company’s charge-off factors, which impact the Company’s reserves on non-impaired loans. The following table presents impaired loans by portfolio and related valuation allowance as of the periods presented (in thousands): June 30, 2021 December 31, 2020 Unpaid Allowance Unpaid Allowance Total Contractual for Total Contractual for Recorded Principal Loan Recorded Principal Loan Investment Balance Losses Investment Balance Losses Impaired loans with a valuation allowance: Cash, Securities, and Other $ 3 $ 3 $ 3 $ 2 $ 2 $ 2 Commercial and Industrial 3,040 3,040 1,751 3,419 3,419 1,619 Total $ 3,043 $ 3,043 $ 1,754 $ 3,421 $ 3,421 $ 1,621 Impaired loans with no related valuation allowance: Cash, Securities, and Other $ 12 $ 12 $ — $ 48 $ 48 $ — Owner Occupied CRE — — — 479 479 — Commercial and Industrial 65 65 — 110 110 — Total $ 77 $ 77 $ — $ 637 $ 637 $ — Total impaired loans: Cash, Securities, and Other $ 15 $ 15 $ 3 $ 50 $ 50 $ 2 Owner Occupied CRE — — — 479 479 — Commercial and Industrial 3,105 3,105 1,751 3,529 3,529 1,619 Total $ 3,120 $ 3,120 $ 1,754 $ 4,058 $ 4,058 $ 1,621 The recorded investment in loans in the previous tables excludes accrued interest, deferred (fees) costs, and unamortized premiums/ (unaccreted discounts), which are not material. Interest income, if any, was recognized on the cash basis on non-accrual loans. The average balance of impaired loans and interest income recognized on impaired loans during the three months ended June 30, 2021 and 2020 are included in the table below (in thousands): Three Months Ended June 30, 2021 2020 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized Impaired loans with a valuation allowance: Cash, Securities, and Other $ 4 $ — $ — $ — Commercial and Industrial 3,230 21 3,462 — Total $ 3,234 $ 21 $ 3,462 $ — Impaired loans with no related valuation allowance: Cash, Securities, and Other $ 15 $ — $ 1,493 $ — Owner Occupied CRE — 51 — — Commercial and Industrial 82 — 5,998 84 Total $ 97 $ 51 $ 7,491 $ 84 Total impaired loans: Cash, Securities, and Other $ 19 $ — $ 1,493 $ — Owner Occupied CRE — 51 — — Commercial and Industrial 3,312 21 9,460 84 Total $ 3,331 $ 72 $ 10,953 $ 84 The average balance of impaired loans and interest income recognized on impaired loans during the six months ended June 30, 2021 and 2020 are included in the table below (in thousands): Six Months Ended June 30, 2021 2020 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized Impaired loans with a valuation allowance: Cash, Securities, and Other $ 2 $ — $ — $ — Commercial and Industrial 2,162 21 3,476 — Total $ 2,164 $ 21 $ 3,476 $ — Impaired loans with no related valuation allowance: Cash, Securities, and Other $ 20 $ — $ 1,925 $ — Owner Occupied CRE — 51 — Commercial and Industrial 58 — 5,991 165 Total $ 78 $ 51 $ 7,916 $ 165 Total impaired loans: Cash, Securities, and Other $ 22 $ — $ 1,925 $ — Owner Occupied CRE — 51 — — Commercial and Industrial 2,220 21 9,467 165 Total $ 2,242 $ 72 $ 11,392 $ 165 Allowance for Loan Losses Allocation of a portion of the allowance for loan losses to one category of loans does not preclude its availability to absorb losses in other categories. The following presents the activity in the Company’s allowance for loan losses by portfolio class for the periods presented (in thousands): Cash, Construction 1-4 Non-Owner Owner Commercial Securities and Family Occupied Occupied and and Other Development Residential CRE CRE Industrial Total Changes in allowance for loan losses for the three months ended June 30, 2021 Beginning balance $ 2,573 $ 766 $ 3,152 $ 2,211 $ 1,123 $ 2,714 $ 12,539 (Recovery of)/provision for loan losses (535) 105 247 12 102 81 12 Charge-offs — — — — — — — Recoveries 1 — — — — — 1 Ending balance $ 2,039 $ 871 $ 3,399 $ 2,223 $ 1,225 $ 2,795 $ 12,552 Changes in allowance for loan losses for the six months ended June 30, 2021 Beginning balance $ 2,579 $ 932 $ 3,233 $ 2,004 $ 1,159 $ 2,632 $ 12,539 (Recovery of)/provision for loan losses (541) (61) 166 219 66 163 12 Charge-offs — — — — — — — Recoveries 1 — — — — — 1 Ending balance $ 2,039 $ 871 $ 3,399 $ 2,223 $ 1,225 $ 2,795 $ 12,552 Allowance for loan losses as of June 30, 2021 allocated to loans evaluated for impairment: Individually $ 3 $ — $ — $ — $ — $ 1,751 $ 1,754 Collectively 2,036 871 3,399 2,223 1,225 1,044 10,798 Ending balance $ 2,039 $ 871 $ 3,399 $ 2,223 $ 1,225 $ 2,795 $ 12,552 Loans as of June 30, 2021, evaluated for impairment: Individually $ 15 $ — $ — $ — $ — $ 3,105 $ 3,120 Collectively 290,892 127,141 496,101 324,493 178,847 152,421 1,569,895 Ending balance $ 290,907 $ 127,141 $ 496,101 $ 324,493 $ 178,847 $ 155,526 $ 1,573,015 Cash, Construction 1-4 Non-Owner Owner Commercial Securities and Family Occupied Occupied and and Other Development Residential CRE CRE Industrial Total Changes in allowance for loan losses for the three months ended June 30, 2020 Beginning balance $ 1,092 $ 186 $ 3,008 $ 1,403 $ 884 $ 1,669 $ 8,242 Provision for/(recovery of) loan losses 1,345 298 (300) 80 (124) 825 2,124 Charge-offs (24) — — — — — (24) Recoveries 12 — — — — — 12 Ending balance $ 2,425 $ 484 $ 2,708 $ 1,483 $ 760 $ 2,494 $ 10,354 Changes in allowance for loan losses for the six months ended June 30, 2020 Beginning balance $ 1,058 $ 200 $ 2,850 $ 1,176 $ 911 $ 1,680 $ 7,875 Provision for/(recovery of) loan losses 1,379 284 (142) 307 (151) 814 2,491 Charge-offs (24) — — — — — (24) Recoveries 12 — — — — — 12 Ending balance $ 2,425 $ 484 $ 2,708 $ 1,483 $ 760 $ 2,494 $ 10,354 Allowance for loan losses as of December 31, 2020 allocated to loans evaluated for impairment: Individually $ 2 $ — $ — $ — $ — $ 1,619 $ 1,621 Collectively 2,577 932 3,233 2,004 1,159 1,013 10,918 Ending balance $ 2,579 $ 932 $ 3,233 $ 2,004 $ 1,159 $ 2,632 $ 12,539 Loans as of December 31, 2020, evaluated for impairment: Individually $ 50 $ — $ — $ — $ 479 $ 3,529 $ 4,058 Collectively 356,970 131,111 455,038 281,943 162,563 142,502 1,530,127 Ending balance $ 357,020 $ 131,111 $ 455,038 $ 281,943 $ 163,042 $ 146,031 $ 1,534,185 The Company categorizes loans into risk categories based on relevant information about the ability of the 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 by credit risk on a quarterly basis. The Company uses the following definitions for risk ratings: Special Mention—Loans classified as special mention have a potential weakness or borrowing relationships that require more than the usual amount of management attention. Adverse industry conditions, deteriorating financial conditions, declining trends, management problems, documentation deficiencies or other similar weaknesses may be evident. Ability to meet current payment schedules may be questionable, even though interest and principal are still being paid as agreed. The asset has potential weaknesses that may result in deteriorating repayment prospects if left uncorrected. Loans in this risk grade are not considered adversely classified. Substandard—Substandard loans are considered "classified" and are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loans in this category may be placed on non-accrual status and may individually be evaluated for impairment if indicators of impairment exist. Doubtful—Loans graded Doubtful are considered "classified" and have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. However, the amount of certainty of eventual loss is not known because of specific pending factors. Loans not meeting any of the three criteria above are considered to be pass-rated loans. The following presents, by class and by credit quality indicator, the recorded investment in the Company’s loans as of June 30, 2021 and December 31, 2020 (in thousands): Special June 30, 2021 Pass Mention Substandard Total Cash, Securities and Other $ 290,892 $ — $ 15 $ 290,907 Construction and Development 127,141 — — 127,141 1-4 Family Residential 496,101 — — 496,101 Non-Owner Occupied CRE 318,512 5,981 — 324,493 Owner Occupied CRE 178,146 — 701 178,847 Commercial and Industrial 150,523 — 5,003 155,526 Total $ 1,561,315 $ 5,981 $ 5,719 $ 1,573,015 Special December 31, 2020 Pass Mention Substandard Total Cash, Securities and Other $ 356,970 $ — $ 50 $ 357,020 Construction and Development 131,111 — — 131,111 1-4 Family Residential 451,918 — 3,120 455,038 Non-Owner Occupied CRE 275,627 6,316 — 281,943 Owner Occupied CRE 161,850 — 1,192 163,042 Commercial and Industrial 140,432 — 5,599 146,031 Total $ 1,517,908 $ 6,316 $ 9,961 $ 1,534,185 The Company had no loans graded doubtful as of June 30, 2021 and December 31, 2020. |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill. | |
Goodwill | NOTE 4 - GOODWILL Changes in the carrying amount of goodwill were as follows (in thousands): June 30, December 31, 2021 2020 Beginning balance $ 24,191 $ 19,686 Acquisition activity — 4,505 Ending balance $ 24,191 $ 24,191 During the year ended December 31, 2020, the Company recorded $4.5 million of goodwill as a result of the Branch Acquisition on May 15, 2020. Goodwill is tested annually for impairment on October 31 or earlier upon the occurrence of certain events. Step 1 of the goodwill impairment analysis includes the determination of the carrying value of the reporting unit, including the existing goodwill, and estimating the fair value of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, we are required to perform the second step to the impairment test. As of June 30, 2021 and December 31, 2020, the Company's reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded the carrying value. Therefore, the Company did not complete the two-step impairment test. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2021 | |
LEASES | |
LEASES | NOTE 5 - LEASES Leases in which the Company is determined to be the lessee are primarily operating leases comprised of real estate property and office space for our corporate headquarters and profit centers with terms that extend to 2032. Certain properties contain portions that are subleased with terms that ended in 2020. In accordance with ASC 842, operating leases are required to be recognized as a right-of-use asset with a corresponding lease liability. The following table presents the classification of the right-of-use asset and corresponding liability within the Condensed Consolidated Balance Sheets. The Company elected to not include short-term leases with initial terms of twelve months or less, on the Condensed Consolidated Balance Sheets, (in thousands). June 30, December 31, 2021 2020 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Other assets $ 10,064 $ 11,341 Lease Liabilities Classification Operating lease liabilities Other liabilities $ 12,525 $ 13,970 The Company’s operating lease agreements typically include an option to renew the lease at the Company’s discretion. To the extent the Company is reasonably certain it will exercise the renewal option at the inception of the lease, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. ASC 842 requires the use of the rate implicit in the lease when it is readily determinable. As this rate is typically not readily determinable, at the inception of the lease, the Company uses its collateralized incremental borrowing rate over a similar term. The amount of the right-of-use asset and lease liability are impacted by the discount rate used to calculate the present value of the minimum lease payments over the term of the lease. June 30, December 31, 2021 2020 Weighted-Average Remaining Lease Term Operating leases 4.38 years 4.79 years Weighted-Average Discount Rate Operating leases 3.02 % 3.04 % The Company’s operating leases contain fixed and variable lease components and it has elected to account for all classes of underlying assets as a single lease component. Variable lease costs primarily represent common area maintenance and parking. The Company recognized lease costs in Occupancy and equipment expense in the accompanying Condensed Consolidated Statements of Income. The following table represents the Company’s net lease costs, (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Lease Costs Operating lease cost $ 731 $ 814 $ 1,483 $ 1,615 Variable lease cost 416 498 828 959 Sublease income — (100) — (199) Lease costs, net $ 1,147 $ 1,212 $ 2,311 $ 2,375 The following table presents a maturity analysis of the Company’s operating lease liabilities on an annual basis for each of the next five years and total amounts thereafter as of June 30, 2021 (in thousands): Year Ending December 31, Operating Leases 2021 (1) $ 1,676 2022 3,239 2023 2,937 2024 2,784 2025 1,783 Thereafter 876 Total future minimum lease payments 13,295 Less: imputed interest (770) Present value of net future minimum lease payments $ 12,525 ________________________________________ (1) |
DEPOSITS
DEPOSITS | 6 Months Ended |
Jun. 30, 2021 | |
Deposits [Abstract] | |
DEPOSITS | NOTE 6 - DEPOSITS The following presents the Company’s interest-bearing deposits at the dates noted (in thousands): June 30, December 31, 2021 2020 Money market deposit accounts $ 840,073 $ 847,430 Time deposits 137,499 172,682 Negotiable order of withdrawal accounts 141,076 113,052 Savings accounts 5,299 5,289 Total interest-bearing deposits $ 1,123,947 $ 1,138,453 Aggregate time deposits of $250,000 or greater $ 64,360 $ 73,401 Deposits acquired through acquisitions during the year ended 2020 totaled $63.1 million. Overdraft balances classified as loans totaled $0.1 million as of June 30, 2021 and December 31, 2020. The following presents the scheduled maturities of all time deposits for the next five years ending June 30 (in thousands): Year Ending December 31, Time Deposits 2021 (1) $ 69,580 2022 39,732 2023 23,155 2024 2,263 2025 1,540 Thereafter 1,229 Total $ 137,499 ________________________________________ (1) |
BORROWINGS
BORROWINGS | 6 Months Ended |
Jun. 30, 2021 | |
BORROWINGS | |
BORROWINGS | NOTE 7 - BORROWINGS The Bank has executed a blanket pledge and security agreement with the FHLB that requires certain loans and securities be pledged as collateral for any outstanding borrowings under the agreement. The collateral pledged as of June 30, 2021 and December 31, 2020 amounted to $698.3 million and $668.6 million, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow an additional $457.7 million as of June 30, 2021. Each advance is payable at its maturity date. The Company had the following required maturities on FHLB borrowings as of the dates noted (in thousands): June 30, December 31, Maturity Date Rate % 2021 2020 April 22, 2022 0.37 $ 5,000 $ 5,000 May 5, 2023 0.76 10,000 10,000 Total $ 15,000 $ 15,000 To bolster the effectiveness of the SBA’s PPP, the Federal Reserve is supplying liquidity to participating financial institutions through term financing collateralized by PPP loans to small businesses. The Paycheck Protection Program Liquidity Facility ("PPPLF") extends credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value and bearing interest at 35 2 The Bank has borrowing capacity associated with three unsecured federal funds lines of credit up to $10.0 million, $19.0 million, and $25.0 million. As of June 30, 2021 and December 31, 2020, there were no amounts outstanding on any of the federal funds lines. On October 28, 2020, the Company entered into a Business Loan Agreement and associated Promissory Note (the "Note"), dated June 30, 2020, with a correspondent lending partner. The Note is secured by stock of the Bank and bears interest at the one month ICE Benchmark Administration ("IBA") LIBOR plus 2.5%. As of June 30, 2021 and December 31, 2020, there were no amounts outstanding and the borrowing capacity associated with this facility was $5.0 million. The Company’s borrowing facilities include various financial and other covenants, including, but not limited to, a requirement that the Bank maintains regulatory capital that is deemed "well capitalized" by federal banking agencies (see Note 16 – Regulatory Capital Matters). As of June 30, 2021 and December 31, 2020, the Company was in compliance with the covenant requirements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES The Company is party to credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its clients. These financial instruments include commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Condensed Consolidated Balance Sheets. Commitments may expire without being utilized. The Company’s exposure to loan loss is represented by the contractual amount of these commitments, although material losses are not anticipated. The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments. The following presents the Company’s financial instruments whose contract amounts represent credit risk, as of the dates noted (in thousands): June 30, 2021 December 31, 2020 Fixed Rate Variable Rate Fixed Rate Variable Rate Unused lines of credit $ 65,274 $ 424,856 $ 78,506 $ 360,883 Standby letters of credit 3,555 16,125 1,933 17,524 Commitments to make loans to sell 115,213 — 370,512 — Commitments to make loans $ 44,384 $ 31,840 $ 24,225 $ 25,316 Unused lines of credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Several of the commitments may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the client. Unused lines of credit under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing clients. These lines of credit are uncollateralized and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client’s obligation to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. Substantially all letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients. The Company holds collateral supporting those commitments if deemed necessary. Commitments to make loans to sell are agreements to lend to a client which would then be sold to an investor in the secondary market for which the interest rate has been locked with the client, provided there is no violation of any condition within the contract with either party. Commitments to make loans to sell have fixed interest rates. Since commitments may expire without being extended, total commitment amounts may not necessarily represent cash requirements. Commitments to make loans are agreements to lend to a client, provided there is no violation of any condition within the contract. Commitments to make loans generally have fixed expiration dates or other termination clauses. Since commitments may expire without being extended, total commitment amounts may not necessarily represent cash requirements. Litigation, Claims and Settlements The Company is, from time to time, involved in various legal actions arising in the normal course of business. While the ultimate outcome of any such proceedings cannot be predicted with certainty, it is the opinion of management, based on advice from legal counsel, that no proceedings exist, either individually or in the aggregate, which, if determined adversely to the Company, would have a material effect on the Company’s condensed consolidated financial statements. |
SHAREHOLDERS EQUITY
SHAREHOLDERS EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
SHAREHOLDERS EQUITY | |
SHAREHOLDERS EQUITY | NOTE 9 - SHAREHOLDERS’ EQUITY Common Stock The Company’s common stock has no par value and each holder of common stock is entitled to one vote for each share (though certain voting restrictions may exist on non-vested restricted stock) held. On June 14, 2019, the Company announced that its board of directors had authorized a share repurchase plan (the "2019 Repurchase Plan") under which the Company may repurchase up to 300,000 shares of its common stock and that the Board of Governors of the Federal Reserve System advised the Company that it had no objection to the Company’s 2019 Repurchase Plan. The 2019 Repurchase Plan was in effect for a one-year On November 3, 2020, the Company announced that its board of directors authorized the repurchase of up to 400,000 shares of the Company’s common stock, no par value, from time to time, within one year (the "2020 Repurchase Plan") and that the Board of Governors of the Federal Reserve System advised the Company that it has no objection to the Company’s 2020 Repurchase Plan. The Company may repurchase shares in privately negotiated transactions, in the open market, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 promulgated by the SEC, or otherwise in a manner that complies with applicable federal securities laws. The 2020 Repurchase Plan does not obligate the Company to acquire a specific dollar amount or number of shares and it may be extended, modified or discontinued at any time without notice. During the three and six months ended June 30, 2021, the Company did not repurchase any shares under the 2020 Repurchase Plan. During the six months ended June 30, 2021 and 2020, the Company sold no shares of common stock. Restricted Stock Awards In 2017, the Company issued 105,264 shares of common stock ("Restricted Stock Awards") with a value of $3.0 million to the sole member of EMC Holdings, LLC ("EMC"), subject to forfeiture based on his continued employment with the Company. Half of the Restricted Stock Awards ($1.5 million or 52,632 shares) vests ratably over five-years As of June 30, 2021, the Restricted Stock Awards have a weighted-average grant date fair value of $28.50 per share. The Company recognized compensation expense of $0.1 million for the three months ended June 30, 2021 and 2020, for the Restricted Stock Awards. During the six months ended June 30, 2021 and 2020, the Company recognized compensation expense of $0.2 million and $0.3 million, respectively, for the Restricted Stock Awards. As of June 30, 2021, the Company has $ 0.4 Stock-Based Compensation Plans The 2008 Stock Incentive Plan ("the 2008 Plan") was frozen in connection with the adoption of the 2016 Plan and no new awards may be granted under the 2008 Plan. As of June 30, 2021, there were a total of 389,468 shares available for issuance under the First Western Financial, Inc. 2016 Omnibus Incentive Plan ("the 2016 Plan"). If the Awards outstanding under the 2008 Plan or the 2016 Plan are forfeited, cancelled or terminated with no consideration paid to the Company, those amounts will increase the number of shares eligible to be granted under the 2016 Plan. Stock Options The Company did not grant any stock options during the six months ended June 30, 2021 and 2020. During the three months ended June 30, 2021 and 2020, the Company recognized an immaterial amount and $0.1 million, respectively, of stock based compensation expense associated with stock options. During the six months ended June 30, 2021 and 2020, the Company recognized an immaterial amount and $0.1 million, respectively, of stock based compensation expense associated with stock options. As of June 30, 2021, the Company has an immaterial amount of unrecognized stock-based compensation expense related to stock options which are unvested. That cost is expected to be recognized over a weighted-average period of less than one year. The following summarizes activity for nonqualified stock options for the six months ended June 30, 2021: Weighted Weighted Average Number Average Remaining Aggregate of Exercise Contractual Intrinsic Options Price Term Value Outstanding as of December 31, 2020 419,197 $ 29.02 Granted — — Exercised — — Forfeited or expired (34,050) 36.43 Outstanding as of June 30, 2021 385,147 28.36 2.2 (1) Options fully vested / exercisable as of June 30, 2021 381,577 $ 28.38 2.2 (1) ______________________________________ (1) As of June 30, 2021, there were 381,577 options that were exercisable. Exercise prices are between $20.00 and $40.00 per share, and the options are exercisable for a period of ten-years from the original grant date and expire on various dates between 2022 and 2026. Restricted Stock Units Pursuant to the 2016 Plan, the Company can grant associates and non-associate directors long-term cash and stock-based compensation. Historically, the Company has granted certain associates restricted stock units which are earned over time or based on various performance measures and convert to common stock upon vesting, which are summarized here and expanded further below. The following summarizes the activity for the Time Vesting Units, the Financial Performance Units and the Market Performance Units for the six months ended June 30, 2021: Time Financial Market Vesting Performance Performance Units Units Units Outstanding as of December 31, 2020 285,052 152,430 14,862 Granted 58,817 41,366 — Vested (60,428) — — Forfeited (8,771) (3,953) (611) Outstanding as of June 30, 2021 274,670 189,843 14,251 During the three months ended June 30, 2021, the Company issued 36,932 shares of common stock upon the settlement of Restricted Stock Units. The remaining 14,545 shares were surrendered with a combined market value at the dates of settlement of $0.4 million to cover employee withholding taxes. During the six months ended June 30, 2021, the Company issued 43,059 shares of common stock upon the settlement of Restricted Stock Units. The remaining 17,369 shares were surrendered with a combined market value at the dates of settlement of $0.4 million to cover employee withholding taxes. During the three and six months ended June 30, 2020, the Company issued 34,260 shares of common stock upon the settlement of Restricted Stock Units. The remaining 19,852 shares were surrendered with a combined market value at the dates of settlement of $0.3 million to cover employee withholding taxes. Time Vesting Units Time Vesting Units are granted to full-time associates and board members at the date approved by the Company’s board of directors. The Company granted 58,817 Time Vesting Units with a five-year service period during the six months ended June 30, 2021, that vest in equal installments of 20% on the anniversary of the grant date, assuming continuous employment through the scheduled vesting dates. During the three months ended June 30, 2021 and 2020, the Company recognized compensation expense of $0.4 million and $0.3 million, respectively, for the Time Vesting Units. During the six months ended June 30, 2021 and 2020, the Company recognized compensation expense of $0.8 million and $0.6 million, respectively, for the Time Vesting Units. As of June 30, 2021, there was $4.5 million of unrecognized compensation expense related to the Time Vesting Units, which is expected to be recognized over a weighted-average period of 2.1 years. Financial Performance Units Financial Performance Units are granted to certain key associates and are earned based on the Company achieving various financial performance metrics. If the Company achieves the financial metrics, which include various thresholds from 0% up to 150%, then the Financial Performance Units will have a subsequent vesting period. The following presents the Company’s existing Financial Performance Units as of June 30, 2021 (dollars in thousands, except share amounts): Grant Period Threshold Accrual Maximum Issuable Shares at Current Threshold Unrecognized Compensation Expense Weighted-Average (1) Financial Metric End Date Vesting Requirement End Date Prior to May 1, 2019 50% on half; 100% on other half 9,577 $ 38 0.5 years December 31, 2019 December 31, 2021 May 1, 2019 through April 30, 2020 150% 83,961 431 2.6 years December 31, 2021 December 31, 2023 May 1, 2020 through December 31, 2020, excluding November 18, 2020 150% 85,044 533 3.5 years December 31, 2022 December 31, 2023 On November 18, 2020 150% 34,752 $ 363 3.4 years December 31, 2022 50% November 18, 2023 & 2025 On May 3, 2021 150% 61,854 $ 1,039 4.5 years December 31, 2023 December 31, 2025 ______________________________________ (1) The following presents the Company’s Financial Performance Units activity for the years noted June 30 (dollars in thousands, except share amounts): Units Granted Compensation Expense Recognized Grant Period 2021 2020 2021 2020 Prior to May 1, 2019 — — $ 18 $ 34 May 1, 2019 through April 30, 2020 — 1,866 117 181 May 1, 2020 through December 31, 2020, excluding November 18, 2020 — 58,294 109 39 On November 18, 2020 — 64 — On May 3, 2021 41,366 — $ 57 $ — Market Performance Units Market Performance Units were granted to certain key associates and are earned based on growth in the value of the Company’s common stock, and were dependent on the Company completing an initial public offering of stock during a defined period of time. On July 23, 2018, the Company completed its initial public offering and the Market Performance Units performance condition was met. Subsequent to the performance condition there is also a market condition as a vesting requirement for the Market Performance Units which affects the determination of the grant date fair value. The Company estimated the grant date fair value using various valuation assumptions. During the three and six months ended June 30, 2021 and 2020, the Company recognized an immaterial amount of compensation expense for the Market Performance Units. As of June 30, 2021, there was $0.4 million of unrecognized compensation expense related to the Market Performance Units which is expected to be recognized over a weighted-average period of 1 year. If the Company’s common stock is trading at or above certain prices, over a performance period which ended on June 30, 2020, the Market Performance Units would have been determined to be earned and vest following the completion of a subsequent service period ending on June 30, 2022. The Company’s common stock did not trade at or above the required prices over the performance period and as a result, no Market Performance Units are eligible to be earned. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2021 | |
EARNINGS PER COMMON SHARE | |
EARNINGS PER COMMON SHARE | NOTE 10 - EARNINGS PER COMMON SHARE The table below presents the calculation of basic and diluted earnings per common share for the periods indicated (dollars in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Earnings per common share - Basic Numerator: Net income available for common shareholders $ 6,277 $ 8,696 $ 12,276 $ 10,030 Denominator: Basic weighted average shares 7,961,785 7,890,337 7,948,796 7,876,951 Earnings per common share - basic $ 0.79 $ 1.10 $ 1.54 $ 1.27 Earnings per common share - Diluted Numerator: Net income available for common shareholders $ 6,277 $ 8,696 $ 12,276 $ 10,030 Denominator: Basic weighted average shares 7,961,785 7,890,337 7,948,796 7,876,951 Diluted effect of common stock equivalents: Stock options 35,849 — 20,386 — Time Vesting Units 131,684 18,401 117,107 23,517 Financial Performance Units 70,746 6,558 59,953 15,804 Market Performance Units 13,836 13,222 14,017 13,294 Total diluted effect of common stock equivalents 252,115 38,181 211,463 52,615 Diluted weighted average shares 8,213,900 7,928,518 8,160,259 7,929,566 Earnings per common share - diluted $ 0.76 $ 1.10 $ 1.50 $ 1.26 Diluted earnings per share was computed without consideration to potentially dilutive instruments as their inclusion would have been anti-dilutive. The table below presents potentially dilutive securities excluded from the diluted earnings per share calculation for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock options 141,639 419,197 209,874 419,197 Time Vesting Units — 92,388 1,991 89,656 Financial Performance Units 26,735 96,257 24,952 48,129 Restricted Stock Awards — 41,830 10,527 51,749 Total potentially dilutive securities 168,374 649,672 247,344 608,731 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 11 - INCOME TAXES During the three and six months ended June 30, 2021, the Company recorded an income tax provision of $1.9 million and $4.0 million, respectively, reflecting an effective tax rate of 23.3% and 24.3%, respectively. During the three and six months ended June 30, 2020, the Company recorded an income tax provision of $2.8 million and $3.1 million, respectively, reflecting an effective tax rate of 24.1% and 23.7%, respectively. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | NOTE 12 - RELATED-PARTY TRANSACTIONS The Bank extends credit to certain covered parties including Company directors, executive officers and their affiliates. As of June 30, 2021 and December 31, 2020, there were no delinquent or non-performing loans to any executive officer or director of the Company. These covered parties, along with principal owners, management, immediate family of management or principal owners, a parent company and its subsidiaries, trusts for the benefit of employees, and other parties, may be considered related parties. The following presents a summary of related-party loan activity as of the dates noted (in thousands): June 30, 2021 December 31, 2020 Balance, beginning of year $ 14,321 $ 5,675 Funded loans 4,505 17,348 Payments collected (6,000) (8,702) Balance, end of period $ 12,826 $ 14,321 Deposits from related parties held by the Bank as of June 30, 2021 and December 31, 2020 totaled $24.1 million and $26.2 million, respectively. The Company leases office spaces from entities controlled by one of the Company’s board members. During the six months ended June 30, 2021 and 2020, the Company incurred $0.1 million and $0.1 million, respectively, of expenses related to these leases. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2021 | |
FAIR VALUE | |
FAIR VALUE | NOTE 13 - FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (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. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other 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. Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate fair value: Investment Securities : Guarantee Asset and Liability : Mortgage Related Derivatives : The fair value estimate of the forward commitments is based on market prices of similar securities to the underlying MBS (Level 2). Our mortgage derivatives are carried at fair value in the Company’s financial statements with changes in the fair value accounted for within the Condensed Consolidated Statements of Income. Mortgage Loans Held for Sale : Other Real Estate Owned : Impaired Loans : Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Company reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. The following presents assets and liabilities measured on a recurring basis as of June 30, 2021 and December 31, 2020 (in thousands): Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Reported June 30, 2021 (Level 1) (Level 2) (Level 3) Balance Investment securities available-for-sale: U.S. Treasury debt $ 251 $ — $ — $ 251 Corporate bonds — 6,142 — 6,142 GNMA mortgage-backed securities - residential — 16,086 — 16,086 FNMA mortgage-backed securities - residential — 1,160 — 1,160 Corporate CMO and MBS — 1,893 — 1,893 Total securities available-for-sale $ 251 $ 25,281 $ — $ 25,532 Equity securities $ 719 $ — $ — $ 719 Guarantee asset $ — $ — $ 196 $ 196 IRLC, net $ — $ — $ 2,808 $ 2,808 Forward commitments and FSC $ — $ (140) $ — $ (140) Mortgage loans held for sale $ — $ 48,563 $ — $ 48,563 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Reported December 31, 2020 (Level 1) (Level 2) (Level 3) Balance Investment securities available-for-sale: U.S. Treasury debt $ 254 $ — $ — $ 254 Corporate bonds — 6,044 — 6,044 GNMA mortgage-backed securities - residential — 24,604 — 24,604 FNMA mortgage-backed securities - residential — 1,677 — 1,677 Corporate CMO and MBS — 4,087 — 4,087 Total securities available-for-sale $ 254 $ 36,412 $ — $ 36,666 Equity securities $ 730 $ — $ — $ 730 Guarantee asset $ — $ — $ 232 $ 232 IRLC, net $ — $ — $ 9,841 $ 9,841 Forward commitments and FSC $ — $ (2,534) $ (89) $ (2,623) Mortgage loans held for sale $ — $ 161,843 $ — $ 161,843 The following presents a reconciliation for level 3 instruments measured at fair value on a recurring basis (in thousands): Three Months Ended June 30, 2021 Guarantee Asset IRLC FSC Beginning balance $ 188 $ 2,105 $ (173) Acquisitions — 5,823 — Originations 2 (5,981) — Gains (losses) in net income, net 6 861 173 Other settlements — — — Ending balance $ 196 $ 2,808 $ — Three Months Ended June 30, 2020 Guarantee Asset IRLC FSC Beginning balance $ — $ 4,025 $ (16) Acquisitions — 9,395 (84) Originations 244 (6,574) — Gains (losses) in net income, net 16 720 16 Other settlements (38) — — Ending balance $ 222 $ 7,566 $ (84) Six Months Ended June 30, 2021 Guarantee Asset IRLC FSC Beginning balance $ 232 $ 9,841 $ (89) Acquisitions — 8,507 (173) Originations 2 (12,997) — Gains (losses) in net income, net (38) (2,543) 262 Other settlements — — — Ending balance $ 196 $ 2,808 $ — Six Months Ended June 30, 2020 Guarantee Asset IRLC FSC Beginning balance $ — $ 1,184 $ — Acquisitions — 16,718 (100) Originations 244 (10,983) — Gains (losses) in net income, net 16 647 16 Other settlements (38) — — Ending balance $ 222 $ 7,566 $ (84) U.S. Treasury debt is reported at fair value utilizing Level 1 inputs. The remaining portfolio of securities are reported at fair value with Level 2 inputs provided by a pricing service. As of June 30, 2021 and December 31, 2020, the majority of the securities had credit support provided by the Federal Home Loan Mortgage Corporation, GNMA, and FNMA. Factors used to value the securities by the pricing service include: benchmark yields, reported trades, interest spreads, prepayments, and other market research. In addition, ratings and collateral quality are considered. As of June 30, 2021, equity securities, IRLC, and guarantee assets have been recorded at fair value within the Other assets line item and the FSC have been recorded at fair value with the Other liabilities line item in the Condensed Consolidated Balance Sheets. All changes are recorded in the Other line item in the Condensed Consolidated Statements of Income. The following presents quantitative information about Level 3 assets measured on a recurring basis as of June 30, 2021 and December 31, 2020 (dollars in thousands): Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2021 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Guarantee asset $ 196 Discounted cash flow Discount rate 3% (3%) IRLC, net 2,808 Best execution model Pull through 72% to 100% (88%) FSC — Internal pricing model Market Differential 3bps to 61bps Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2020 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Guarantee asset $ 232 Discounted cash flow Discount rate 3% (3%) IRLC, net 9,841 Best execution model Pull through 55% to 100% (86%) FSC (89) Internal pricing model Market Differential -59bps to -17bps The following presents assets measured on a nonrecurring basis as of June 30, 2021 and December 31, 2020 (in thousands): Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Reported June 30, 2021 (Level 1) (Level 2) (Level 3) Balance Impaired loans (1) Commercial and Industrial $ — $ — $ 1,289 $ 1,289 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Reported December 31, 2020 (Level 1) (Level 2) (Level 3) Balance Other real estate owned: Commercial properties $ — $ — $ 194 $ 194 Impaired loans (1) Commercial and Industrial $ — $ — $ 1,800 $ 1,800 ______________________________________ (1) The sales comparison approach was utilized for estimating the fair value of non-recurring assets. As of June 30, 2021, the Company did not own any OREO properties. As of December 31, 2020, OREO had a carrying amount of $0.2 million, which is the cost basis of $2.1 million net of a valuation allowance of $1.9 million. As of June 30, 2021, total impaired loans measured for impairment using the fair value of the collateral for collateral dependent loans had carrying values of $3.0 million with valuation allowances of $1.8 million and were classified as Level 3. As of December 31, 2020, impaired loans measured for impairment using the fair value of the collateral for collateral dependent loans had carrying values of $3.4 million with valuation allowances of $1.6 million and were classified as Level 3. Impaired loans accounted for specific reserves of $1.8 million and $1.6 million as of June 30, 2021 and December 31, 2020. The Company did not have any charge offs during the six months ended June 30, 2021 from the specific reserve. The Company charged off an immaterial amount during the year ended December 31, 2020 from the specific reserve. The following presents quantitative information about the significant unobservable inputs used in the fair value measurement of nonrecurring assets categorized within Level 3 of the fair value hierarchy as of June 30, 2021 and December 31, 2020 (dollars in thousands): Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2021 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Impaired loans (1) Commercial and Industrial $ 1,289 Sales comparison, Market approach - guideline transaction method Management discount for asset/property type 17% - 45% (31%) Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2020 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Other real estate owned: Commercial properties $ 194 Sales contract Commission, cost to sell, closing costs 5% (5%) Impaired loans (1) Commercial and Industrial $ 1,800 Sales comparison, Market approach - guideline transaction method Management discount for asset/property type 17% - 35% (26%) ______________________________________ (1) The following presents carrying amounts and estimated fair values for financial instruments not carried at fair value as of June 30, 2021 and December 31, 2020 (in thousands): Carrying Fair Value Measurements Using: June 30, 2021 Amount Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 289,089 $ 289,089 $ — $ — Loans, net 1,558,508 — — 1,552,344 Accrued interest receivable 5,986 — 19 5,967 Liabilities: Deposits 1,679,053 — 1,680,464 — Borrowings: FHLB borrowings – fixed rate 15,000 — 15,062 — Federal Reserve borrowings – fixed rate 105,762 — 105,762 — Subordinated notes – fixed-to-floating rate 24,261 — — 23,895 Accrued interest payable $ 312 $ — $ 106 $ 206 Carrying Fair Value Measurements Using: December 31, 2020 Amount Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 155,989 $ 155,989 $ — $ — Loans, net 1,520,294 — — 1,512,699 Accrued interest receivable 6,618 — 90 6,528 Liabilities: Deposits 1,619,910 — 1,621,648 — Borrowings: FHLB borrowings – fixed rate 15,000 — 15,099 — Federal Reserve borrowings – fixed rate 134,563 — 134,563 — Subordinated notes – fixed-to-floating rate 24,291 — — 25,750 Accrued interest payable $ 453 $ — $ 124 $ 329 The fair value estimates presented and discussed above are based on pertinent information available to management as of the dates specified. The estimated fair value amounts are based on the exit price notion set forth by ASU 2016-01. Although management is not aware of any factors that would significantly affect the estimated fair values, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since the balance sheet dates. Therefore, current estimates of fair value may differ significantly from the amounts presented herein. The methods and assumptions, not previously presented, used to estimate fair values are described as follows. Cash and Cash Equivalents and Restricted Cash Loans, net Accrued Interest Receivable and Payable Deposits Fixed Rate Borrowings Fixed-to-Floating Rate Borrowings |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 14 - SEGMENT REPORTING The Company’s reportable segments consist of Wealth Management and Mortgage. The chief operating decision maker ("CODM") is the Chief Executive Officer. The measure of profit or loss used by the CODM to identify and measure the Company’s reportable segments is income before income tax. The Company completed the sale of its LA fixed income team in the fourth quarter 2020. The LA fixed income team and the related assets made up a majority of the previously reported Capital Management Segment. As a result of the sale the Company evaluated its reportable segments and determined the remaining assets following the sale in the Capital Management segment no longer meet the thresholds of income before income tax to be a reportable segment. The residual assets that remained in the Capital Management segment are now included in the Wealth Management segment. The Wealth Management segment consists of operations relative to the Company’s fully integrated wealth management products and services. Services provided include deposit, loan, insurance, and trust and investment management advisory products and services. The Mortgage segment consists of operations relative to the Company’s residential mortgage service offerings. Mortgage products and services are financial in nature for which premiums are recognized net of expenses, upon the sale of mortgage loans to third parties. For 2020 periods presented, the Wealth Management segment includes the previously reported key metrics of the previously reported Capital Management segment. The tables below present the financial information for each segment that is specifically identifiable or based on allocations using internal methods as of or for the three and six months ended June 30, 2021 and 2020 (in thousands): As of and for the three months ended June 30, 2021 Wealth Mortgage Consolidated Income Statement Total interest income $ 15,548 $ — $ 15,548 Total interest expense 1,325 — 1,325 Provision for loan losses 12 — 12 Net interest income, after provision for loan losses 14,211 — 14,211 Non-interest income 5,571 3,927 9,498 Total income before non-interest expense 19,782 3,927 23,709 Depreciation and amortization expense 262 13 275 All other non-interest expense 12,537 2,709 15,246 Income before income taxes $ 6,983 $ 1,205 $ 8,188 Goodwill $ 24,191 $ — $ 24,191 Total assets $ 1,956,393 $ 52,911 $ 2,009,304 As of and for the three months ended June 30, 2020 Wealth Mortgage Consolidated Income Statement Total interest income $ 12,470 $ — $ 12,470 Total interest expense 1,674 — 1,674 Provision for loan losses 2,124 — 2,124 Net interest income, after provision for loan losses 8,672 — 8,672 Non-interest income 5,230 10,197 15,427 Total income before non-interest expense 13,902 10,197 24,099 Depreciation and amortization expense 255 21 276 All other non-interest expense 10,499 1,869 12,368 Income before income taxes $ 3,148 $ 8,307 $ 11,455 Goodwill $ 24,191 $ — $ 24,191 Assets held for sale 3,010 — 3,010 Total assets $ 1,730,957 $ 79,569 $ 1,810,526 As of and for the six months ended June 30, 2021 Wealth Mortgage Consolidated Income Statement Total interest income $ 30,047 $ — $ 30,047 Total interest expense 2,771 — 2,771 Provision for loan losses 12 — 12 Net interest income, after provision for loan losses 27,264 — 27,264 Non-interest income 10,989 9,124 20,113 Total income before non-interest expense 38,253 9,124 47,377 Depreciation and amortization expense 520 27 547 All other non-interest expense 24,833 5,770 30,603 Income before income taxes $ 12,900 $ 3,327 $ 16,227 Goodwill $ 24,191 $ — $ 24,191 Total assets $ 1,956,393 $ 52,911 $ 2,009,304 As of and for the six months ended June 30, 2020 Wealth Mortgage Consolidated Income Statement Total interest income $ 23,982 $ — $ 23,982 Total interest expense 4,255 — 4,255 Provision for loan losses 2,491 — 2,491 Net interest income, after provision for loan losses 17,236 — 17,236 Non-interest income 10,493 12,701 23,194 Total income before non-interest expense 27,729 12,701 40,430 Depreciation and amortization expense 510 42 552 All other non-interest expense 23,100 (1) 3,639 26,739 Income before income taxes $ 4,119 $ 9,020 $ 13,139 Goodwill $ 24,191 $ — $ 24,191 Assets held for sale 3,010 — 3,010 Total assets $ 1,730,957 $ 79,569 $ 1,810,526 ______________________________________ (1) |
LOW-INCOME HOUSING TAX CREDIT I
LOW-INCOME HOUSING TAX CREDIT INVESTMENT | 6 Months Ended |
Jun. 30, 2021 | |
LOW-INCOME HOUSING TAX CREDIT INVESTMENTS | |
LOW-INCOME HOUSING TAX CREDIT INVESTMENTS | NOTE 15 – LOW-INCOME HOUSING TAX CREDIT INVESTMENTS On December 19, 2019, the Company invested in a low-income housing tax credit ("LIHTC") investment. As of June 30, 2021 and December 31, 2020, the balance of the investment for LIHTC was $0.9 million and $1.1 million, respectively. These balances are reflected in the Other assets line item of the Condensed Consolidated Balance Sheets. Total unfunded commitments related to the investment in the LIHTC total $2.1 million and $2.2 million as of June 30, 2021 and December 31, 2020, respectively. The Company expects to fulfill these commitments during the year ending 2021. The Company uses the proportional amortization method to account for this investment. During the three and six months ended June 30, 2021, the Company recognized amortization expense of $0.1 million and $0.2 million, respectively, which was included within the Income tax expense line item of the Condensed Consolidated Statements of Income. The Company did not recognize any related amortization expense during the three and six months ended June 30, 2020. Additionally, during the three and six months ended June 30, 2021, the Company recognized $0.1 million and $0.2 million of tax credits and other benefits from this investment in the LIHTC. The Company did not recognize any related tax credits or other benefits during the three and six months ended June 30, 2020. During the three and six months ended June 30, 2021 and 2020, the Company did not incur any impairment losses. |
REGULATORY CAPITAL MATTERS
REGULATORY CAPITAL MATTERS | 6 Months Ended |
Jun. 30, 2021 | |
REGULATORY CAPITAL MATTERS | |
REGULATORY CAPITAL MATTERS | NOTE 16 - REGULATORY CAPITAL MATTERS First Western and the Bank are subject to various regulatory capital adequacy 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 Company’s consolidated financial statements. Under capital adequacy guidelines and, additionally for banks, the regulatory framework for prompt corrective action, First Western and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. First Western and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators regarding components, risk weightings and other factors. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks ("Basel III rules") has been fully phased in. The net unrealized gain or loss on available-for-sale securities is not included in computing regulatory capital. Management believes as of June 30, 2021, First Western and the Bank meet all capital adequacy requirements to which they are subject to. Prompt corrective action regulations for First Western and the Bank provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. The standard ratios established by First Western and the Bank’s primary regulators to measure capital require First Western and the Bank to maintain minimum amounts and ratios, set forth in the following table. These ratios are common equity Tier 1 capital ("CET1"), Tier 1 capital and total capital (as defined in the regulations) to risk-weighted assets (as defined), and Tier 1 capital (as defined) to average assets (as defined). The actual capital ratios of First Western and the Bank, along with the applicable regulatory capital requirements as of June 30, 2021, were calculated in accordance with the requirements of Basel III. The final rules of Basel III also established a “capital conservation buffer” of 2.5% above new regulatory minimum capital ratios, which are fully effective following minimum ratios: (i) a CET1 ratio of 7.0%; (ii) a Tier 1 capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. Banks are subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained income that can be utilized for such activities. As of June 30, 2021 and December 31, 2020, the most recent filings with the FDIC categorized First Western and the Bank as well capitalized under the regulatory guidelines. To be categorized as well capitalized, an institution must maintain minimum CET1 risk-based, Tier 1 risk-based, total risk-based, and Tier 1 leverage ratios as set forth in the following table. Management believes there are no conditions or events since June 30, 2021, that have changed the categorization of First Western and the Bank as well capitalized. Management believes First Western and the Bank met all capital adequacy requirements to which it was subject as of June 30, 2021 and December 31, 2020. The following presents the actual and required capital amounts and ratios as of June 30, 2021 and December 31, 2020 (dollars in thousands): To be Well Capitalized Under Prompt Required for Capital Corrective Action Actual Adequacy Purposes (1) Regulations June 30, 2021 Amount Ratio Amount Ratio Amount Ratio Tier 1 capital to risk-weighted assets Bank $ 148,443 11.03 % $ 80,738 6.0 % $ 107,650 8.0 % Consolidated 144,728 10.68 N/A N/A N/A N/A CET1 to risk-weighted assets Bank 148,443 11.03 60,553 4.5 87,466 6.5 Consolidated 144,728 10.68 N/A N/A N/A N/A Total capital to risk-weighted assets Bank 161,335 11.99 107,650 8.0 134,563 10.0 Consolidated 182,180 13.45 N/A N/A N/A N/A Tier 1 capital to average assets Bank 148,443 7.98 74,429 4.0 93,036 5.0 Consolidated $ 144,728 7.75 % N/A N/A N/A N/A To be Well Capitalized Under Prompt Required for Capital Corrective Action Actual Adequacy Purposes (1) Regulations December 31, 2020 Amount Ratio Amount Ratio Amount Ratio Tier 1 capital to risk-weighted assets Bank $ 133,963 10.22 % $ 78,660 6.0 % $ 104,880 8.0 % Consolidated 131,507 9.96 N/A N/A N/A N/A CET1 to risk-weighted assets Bank 133,963 10.22 58,995 4.5 85,215 6.5 Consolidated 131,507 9.96 N/A N/A N/A N/A Total capital to risk-weighted assets Bank 146,853 11.20 104,880 8.0 131,100 10.0 Consolidated 168,957 12.80 N/A N/A N/A N/A Tier 1 capital to average assets Bank 133,963 7.62 70,301 4.0 87,877 5.0 Consolidated $ 131,507 7.45 % N/A N/A N/A N/A ______________________________________ (1) . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS. | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Business and Basis of Presentation | Business and Basis of Presentation FWFI is a bank holding company with financial holding company status registered with the Board of Governors of the Federal Reserve System. FWFI wholly owns the following subsidiaries: First Western Trust Bank (the "Bank") and Ryder, Stilwell Inc. ("RSI"). The Bank wholly owns the following subsidiaries, which are therefore indirectly wholly-owned by FWFI: First Western Merger Corporation ("Merger Corp"), and RRI, LLC ("RRI"). RSI and RRI are not active operating entities. The Company provides a fully-integrated suite of wealth management services including, private banking, personal trust, investment management, mortgage loans, and institutional asset management services to individual and corporate clients principally in Colorado (metro Denver, Aspen, Boulder, Fort Collins and Vail Valley), Arizona (Phoenix and Scottsdale), California (Century City) and Wyoming (Jackson Hole and Laramie). The Company’s revenues are generated from its full range of product offerings as noted above, but principally from net interest income (the interest income earned on the Bank’s assets net of funding costs), fee-based wealth advisory, investment management, asset management and personal trust services, and net gains earned on mortgage loans. The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The December 31, 2020 condensed consolidated balance sheet has been derived from the audited financial statements for the year ended December 31, 2020. In the opinion of management, all adjustments that were recurring in nature and considered necessary have been included for fair presentation of the Company’s financial position and results of operations. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of results that may be expected for the full year ending December 31, 2021. In preparing the condensed consolidated financial statements, the Company is required to make estimates and assumptions that affect the reported amount of assets and liabilities and 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 be significantly different from those estimates. The condensed consolidated financial statements and notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC. |
Consolidation | Consolidation |
Acquisitions | Business Combinations and Divestitures |
Use of Estimates | Use of Estimates The Company could experience a material adverse effect on its business as a result of the impact of the COVID-19 pandemic, and the resulting governmental actions to curtail its spread. |
Concentration of Credit Risk | Concentration of Credit Risk |
Mortgage Banking Derivatives | Mortgage Banking Derivatives In order to manage the interest rate risk on our uncommitted IRLC and mortgage loans held for sale pipeline, the Company enters into mortgage derivative financial instruments called To Be Announced ("TBA"), which we refer to as mortgage derivatives. TBA agreements are forward contracts to purchase mortgage backed securities ("MBS") that will be issued by a US Government Sponsored Enterprise. The Bank purchases or sells these derivatives to offset the changes in value of our mortgage loans held for sale and IRLC adjusted pipeline where we have exposure to interest rate volatility. Changes in the fair values of these derivatives are included in the Net gain on mortgage loans line of the Condensed Consolidated Statements of Income. |
Revenue Recognition | Revenue Recognition |
Transition of LIBOR to an Alternative Reference Rate | Transition of LIBOR to an Alternative Reference Rate The administrator of LIBOR has proposed to extend publication of the most commonly used U.S. Dollar LIBOR settings to June 30, 2023, and to cease publishing other LIBOR settings on December 31, 2021. Certain of the Company’s assets and liabilities are indexed to LIBOR, with exposure extending beyond December 31, 2021. The Company is currently evaluating and planning for the eventual replacement of the LIBOR benchmark interest rate, including the possibility of SOFR as the dominant replacement. In general, the transition away from LIBOR may result in increased market risk, credit risk, operational risk and business risk for the Company. The Company has developed a LIBOR transition plan, which addresses governance, risk management, legal, operational, systems, fallback language, and other aspects of planning. The Company has prepared a timeline to transition from LIBOR before the end of 2021. |
COVID-19 and CARES Act | COVID-19 and CARES Act The CARES Act created the Paycheck Protection Program ("PPP"), which is administered by the Small Business Administration ("SBA"). The PPP is intended to provide loans to small businesses to pay their employees, rent, mortgage interest and utilities. The loans may be forgiven conditioned upon the client providing payroll documentation evidencing their compliant use of funds and otherwise complying with the terms of the program. The Bank is an approved SBA lender and supported the community and clients by originating PPP loans during the six months ended June 30, 2021. PPP loans are classified in the Cash, Securities and Other portion of the loan portfolio. See Note 3 for further discussion on our PPP loans. As a result of the COVID-19 pandemic, a loan modification program was designed and implemented to assist our clients experiencing financial stress resulting from the economic impacts caused by the global pandemic. The Company offered loan extensions, temporary payment moratoriums, and financial covenant waivers for commercial and consumer borrowers impacted by the pandemic and had a risk rating of “pass” and had not been delinquent in making interest or principal payment by more than 30 days during the last two years. The CARES Act provides banks optional, temporary relief from accounting for certain loan modifications as troubled debt restructurings ("TDR"). The modifications must be related to the adverse effects of COVID-19, and certain other criteria are required to be met in order to apply the relief. Interagency guidance from Federal Reserve and the Federal Deposit Insurance Corporation ("FDIC") confirmed with the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered a TDR. We believe our loan modification program meets that definition and have not classified any of these modifications as a TDR as of June 30, 2021. See Note 3 for further discussion on our loan modification program. The Company is a participant in the Federal Reserve’s Main Street Lending Program ("MSLP") to support lending to small and medium-sized for profit businesses and nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic. The Company may sell a 95% participation in a new MSLP loan to the Main Street Special Purpose Vehicle ("SPV") at par value. The Company must retain 5% of the MSLP loan until (i) it matures or (ii) neither the Main Street SPV nor a Governmental Assignee holds an interest in MSLP Loan in any capacity, whichever comes first. See Note 3 for further discussion on our participation in the program. |
Reclassifications | Reclassifications |
Recently adopted accounting pronouncements and Recently issued accounting pronouncements, not yet adopted | Recently adopted accounting pronouncements In January 2021, the FASB issued ASU 2021-01, " Reference Rate Reform (Topic 848) Recently issued accounting pronouncements, not yet adopted In February 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) ("ASU 2016-13"). ASU 2016-13 replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss ("CECL") model. The CECL model is applicable to the measurement of credit losses on the financial assets measured at amortized cost, including loan receivables, held-to-maturity debt securities, and reinsurance receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor. For all other assets within the scope of CECL, a cumulative-effect adjustment will be recognized in retained earnings and the allowance for loan losses as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 was set to be effective for most public companies on January 1, 2020. However, at the October 16, 2019 FASB meeting, the FASB voted unanimously to delay the effective date of CECL adoption for smaller reporting companies ("SRCs") to January 1, 2023. During the six months ended June 30, 2021, the CECL committee of the Company continued to work through its implementation plan. The Company has integrated historical and current loan level data as required by CECL and is working with its third-party vendor solution to begin evaluating the methodologies available under the CECL model on its loan portfolios. The Company also continues to evaluate documentation requirements, internal control structure, relevant data sources, and system configurations. The Company has completed a successful integration of the required fields and historical data for key loan, client and collateral data within the third-party solution and has been able to run parallels of our current allowance for loan and lease losses ("ALLL") calculation in the software to compare to our internal calculation and reconcile known differences. The Company has started the process of selecting the methodologies to be used for each segment of its loan portfolio and started preliminarily testing to determine the impact of each methodology. Currently, we are unable to estimate the impact the adoption of this update will have on the consolidated financial statements and disclosures. However, the Company expects the impact of the adoption will be significantly influenced by the composition and characteristics of its loan portfolios along with economic conditions prevalent as of the date of adoption. The Company expects to implement the new standard beginning January 1, 2023. In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
INVESTMENT SECURITIES | |
Schedule of the amortized cost and fair value of securities available for sale, with gross unrealized gains and losses recognized | The following presents the amortized cost and fair value of securities available-for-sale, with unrealized gains and losses recognized in accumulated other comprehensive income as of June 30, 2021 and December 31, 2020 (in thousands): Gross Gross Amortized Unrealized Unrealized Fair June 30, 2021 Cost Gains Losses Value Investment securities available-for-sale: U.S. Treasury debt $ 250 $ 1 $ — $ 251 Corporate bonds 6,000 157 (15) 6,142 GNMA mortgage-backed securities – residential 15,619 467 — 16,086 FNMA mortgage-backed securities – residential 1,113 47 — 1,160 CMO and MBS 1,875 41 (23) 1,893 Total securities available-for-sale $ 24,857 $ 713 $ (38) $ 25,532 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2020 Cost Gains Losses Value Investment securities available-for-sale: U.S. Treasury debt $ 250 $ 4 $ — $ 254 Corporate bonds 6,000 55 (11) 6,044 GNMA mortgage-backed securities – residential 23,806 798 — 24,604 FNMA mortgage-backed securities – residential 1,616 61 — 1,677 Corporate CMO and MBS 4,078 62 (53) 4,087 Total securities available-for-sale $ 35,750 $ 980 $ (64) $ 36,666 |
Summary of the amortized cost and estimated fair value of available for sale securities, excluding SBIC with contractual maturity dates | As of June 30, 2021, the amortized cost and estimated fair value of available-for-sale securities have contractual maturity dates shown in the table below (in thousands) Amortized Fair June 30, 2021 Cost Value Due within one year $ 250 $ 251 Due between one year and five years 1,250 1,245 Due between five years and ten years 4,750 4,897 Securities (agency, Corporate CMO, and MBS) 18,607 19,139 Total $ 24,857 $ 25,532 |
Summary of securities with unrealized losses aggregated by major security type and length of time in a continuous unrealized loss position | The following table summarizes securities with unrealized losses as of June 30, 2021 and December 31, 2020, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands, before tax): Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized June 30, 2021 Value Losses Value Losses Value Losses GNMA mortgage-backed securities – residential $ 286 $ * $ — $ — $ 286 $ * Corporate bonds 1,735 (15) — — 1,735 (15) Corporate CMO and MBS — — 615 (23) 615 (23) Total $ 2,021 $ (15) $ 615 $ (23) $ 2,636 $ (38) ______________________________________ *Not meaningful Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2020 Value Losses Value Losses Value Losses Corporate bonds $ 3,489 $ (11) $ — $ — $ 3,489 $ (11) Corporate CMO and MBS 880 (40) 566 (13) 1,446 (53) Total $ 4,369 $ (51) $ 566 $ (13) $ 4,935 $ (64) |
LOANS AND THE ALLOWANCE FOR L_2
LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
LOANS AND THE ALLOWANCE FOR LOAN LOSSES | |
Summary of the Company's loans | The following presents a summary of the Company’s loans as of the dates noted (in thousands): June 30, December 31, 2021 2020 Cash, Securities and Other (1) $ 290,907 $ 357,020 Construction and Development 127,141 131,111 1-4 Family Residential 496,101 455,038 Non-Owner Occupied CRE 324,493 281,943 Owner Occupied CRE 178,847 163,042 Commercial and Industrial (2) 155,526 146,031 Total loans held for investment 1,573,015 1,534,185 Deferred fees and unamortized premiums/(unaccreted discounts), net (1,955) (1,352) Allowance for loan losses (12,552) (12,539) Loans, net $ 1,558,508 $ 1,520,294 ______________________________________ (1) (2) |
Summary of aging analysis of the recorded investments in loans past due | The following presents, by class, an aging analysis of the recorded investments (excluding accrued interest receivable, deferred (fees) costs, and unamortized premiums/ (unaccreted discounts) which are not material) in loans past due as of June 30, 2021 and December 31, 2020 (in thousands): 30-59 60-89 90 or Total Total Days Days More Days Loans Recorded June 30, 2021 Past Due Past Due Past Due Past Due Current Investment Cash, Securities and Other $ — $ — $ 12 $ 12 $ 290,895 $ 290,907 Construction and Development — — — — 127,141 127,141 1-4 Family Residential — 76 — 76 496,025 496,101 Non-Owner Occupied CRE — — — — 324,493 324,493 Owner Occupied CRE — — — — 178,847 178,847 Commercial and Industrial 1,898 — 3,105 5,003 150,523 155,526 Total $ 1,898 $ 76 $ 3,117 $ 5,091 $ 1,567,924 $ 1,573,015 30-59 60-89 90 or Total Total Days Days More Days Loans Recorded December 31, 2020 Past Due Past Due Past Due Past Due Current Investment Cash, Securities and Other $ 752 $ — $ 48 $ 800 $ 356,220 $ 357,020 Construction and Development — — — — 131,111 131,111 1-4 Family Residential 1,283 — — 1,283 453,755 455,038 Non-Owner Occupied CRE — — — — 281,943 281,943 Owner Occupied CRE 479 — — 479 162,563 163,042 Commercial and Industrial 271 — 3,529 3,800 142,231 146,031 Total $ 2,785 $ — $ 3,577 $ 6,362 $ 1,527,823 $ 1,534,185 |
Schedule of recorded investment in non accrual loans by class | The following presents the recorded investment in non-accrual loans by class as of the dates noted (in thousands): June 30, December 31, 2021 2020 Cash, Securities and Other $ 15 $ 50 Owner Occupied CRE — 479 Commercial and Industrial 3,105 3,529 Total $ 3,120 $ 4,058 |
Summary of the unpaid principal balance of loans classified as TDRs | The following presents a summary of the unpaid principal balance of loans classified as TDRs as of the dates noted (in thousands): June 30, December 31, 2021 2020 Non-accrual Cash, Securities, and Other $ 12 $ 48 Commercial and Industrial 3,105 3,529 Total 3,117 3,577 Allowance for loan losses associated with TDR (1,751) (1,619) Net recorded investment $ 1,366 $ 1,958 |
Summary of impaired loans by portfolio and related valuation allowance | The following table presents impaired loans by portfolio and related valuation allowance as of the periods presented (in thousands): June 30, 2021 December 31, 2020 Unpaid Allowance Unpaid Allowance Total Contractual for Total Contractual for Recorded Principal Loan Recorded Principal Loan Investment Balance Losses Investment Balance Losses Impaired loans with a valuation allowance: Cash, Securities, and Other $ 3 $ 3 $ 3 $ 2 $ 2 $ 2 Commercial and Industrial 3,040 3,040 1,751 3,419 3,419 1,619 Total $ 3,043 $ 3,043 $ 1,754 $ 3,421 $ 3,421 $ 1,621 Impaired loans with no related valuation allowance: Cash, Securities, and Other $ 12 $ 12 $ — $ 48 $ 48 $ — Owner Occupied CRE — — — 479 479 — Commercial and Industrial 65 65 — 110 110 — Total $ 77 $ 77 $ — $ 637 $ 637 $ — Total impaired loans: Cash, Securities, and Other $ 15 $ 15 $ 3 $ 50 $ 50 $ 2 Owner Occupied CRE — — — 479 479 — Commercial and Industrial 3,105 3,105 1,751 3,529 3,529 1,619 Total $ 3,120 $ 3,120 $ 1,754 $ 4,058 $ 4,058 $ 1,621 The recorded investment in loans in the previous tables excludes accrued interest, deferred (fees) costs, and unamortized premiums/ (unaccreted discounts), which are not material. Interest income, if any, was recognized on the cash basis on non-accrual loans. The average balance of impaired loans and interest income recognized on impaired loans during the three months ended June 30, 2021 and 2020 are included in the table below (in thousands): Three Months Ended June 30, 2021 2020 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized Impaired loans with a valuation allowance: Cash, Securities, and Other $ 4 $ — $ — $ — Commercial and Industrial 3,230 21 3,462 — Total $ 3,234 $ 21 $ 3,462 $ — Impaired loans with no related valuation allowance: Cash, Securities, and Other $ 15 $ — $ 1,493 $ — Owner Occupied CRE — 51 — — Commercial and Industrial 82 — 5,998 84 Total $ 97 $ 51 $ 7,491 $ 84 Total impaired loans: Cash, Securities, and Other $ 19 $ — $ 1,493 $ — Owner Occupied CRE — 51 — — Commercial and Industrial 3,312 21 9,460 84 Total $ 3,331 $ 72 $ 10,953 $ 84 The average balance of impaired loans and interest income recognized on impaired loans during the six months ended June 30, 2021 and 2020 are included in the table below (in thousands): Six Months Ended June 30, 2021 2020 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized Impaired loans with a valuation allowance: Cash, Securities, and Other $ 2 $ — $ — $ — Commercial and Industrial 2,162 21 3,476 — Total $ 2,164 $ 21 $ 3,476 $ — Impaired loans with no related valuation allowance: Cash, Securities, and Other $ 20 $ — $ 1,925 $ — Owner Occupied CRE — 51 — Commercial and Industrial 58 — 5,991 165 Total $ 78 $ 51 $ 7,916 $ 165 Total impaired loans: Cash, Securities, and Other $ 22 $ — $ 1,925 $ — Owner Occupied CRE — 51 — — Commercial and Industrial 2,220 21 9,467 165 Total $ 2,242 $ 72 $ 11,392 $ 165 |
Schedule of activity in the Company's allowance for loan losses by portfolio class | The following presents the activity in the Company’s allowance for loan losses by portfolio class for the periods presented (in thousands): Cash, Construction 1-4 Non-Owner Owner Commercial Securities and Family Occupied Occupied and and Other Development Residential CRE CRE Industrial Total Changes in allowance for loan losses for the three months ended June 30, 2021 Beginning balance $ 2,573 $ 766 $ 3,152 $ 2,211 $ 1,123 $ 2,714 $ 12,539 (Recovery of)/provision for loan losses (535) 105 247 12 102 81 12 Charge-offs — — — — — — — Recoveries 1 — — — — — 1 Ending balance $ 2,039 $ 871 $ 3,399 $ 2,223 $ 1,225 $ 2,795 $ 12,552 Changes in allowance for loan losses for the six months ended June 30, 2021 Beginning balance $ 2,579 $ 932 $ 3,233 $ 2,004 $ 1,159 $ 2,632 $ 12,539 (Recovery of)/provision for loan losses (541) (61) 166 219 66 163 12 Charge-offs — — — — — — — Recoveries 1 — — — — — 1 Ending balance $ 2,039 $ 871 $ 3,399 $ 2,223 $ 1,225 $ 2,795 $ 12,552 Allowance for loan losses as of June 30, 2021 allocated to loans evaluated for impairment: Individually $ 3 $ — $ — $ — $ — $ 1,751 $ 1,754 Collectively 2,036 871 3,399 2,223 1,225 1,044 10,798 Ending balance $ 2,039 $ 871 $ 3,399 $ 2,223 $ 1,225 $ 2,795 $ 12,552 Loans as of June 30, 2021, evaluated for impairment: Individually $ 15 $ — $ — $ — $ — $ 3,105 $ 3,120 Collectively 290,892 127,141 496,101 324,493 178,847 152,421 1,569,895 Ending balance $ 290,907 $ 127,141 $ 496,101 $ 324,493 $ 178,847 $ 155,526 $ 1,573,015 Cash, Construction 1-4 Non-Owner Owner Commercial Securities and Family Occupied Occupied and and Other Development Residential CRE CRE Industrial Total Changes in allowance for loan losses for the three months ended June 30, 2020 Beginning balance $ 1,092 $ 186 $ 3,008 $ 1,403 $ 884 $ 1,669 $ 8,242 Provision for/(recovery of) loan losses 1,345 298 (300) 80 (124) 825 2,124 Charge-offs (24) — — — — — (24) Recoveries 12 — — — — — 12 Ending balance $ 2,425 $ 484 $ 2,708 $ 1,483 $ 760 $ 2,494 $ 10,354 Changes in allowance for loan losses for the six months ended June 30, 2020 Beginning balance $ 1,058 $ 200 $ 2,850 $ 1,176 $ 911 $ 1,680 $ 7,875 Provision for/(recovery of) loan losses 1,379 284 (142) 307 (151) 814 2,491 Charge-offs (24) — — — — — (24) Recoveries 12 — — — — — 12 Ending balance $ 2,425 $ 484 $ 2,708 $ 1,483 $ 760 $ 2,494 $ 10,354 Allowance for loan losses as of December 31, 2020 allocated to loans evaluated for impairment: Individually $ 2 $ — $ — $ — $ — $ 1,619 $ 1,621 Collectively 2,577 932 3,233 2,004 1,159 1,013 10,918 Ending balance $ 2,579 $ 932 $ 3,233 $ 2,004 $ 1,159 $ 2,632 $ 12,539 Loans as of December 31, 2020, evaluated for impairment: Individually $ 50 $ — $ — $ — $ 479 $ 3,529 $ 4,058 Collectively 356,970 131,111 455,038 281,943 162,563 142,502 1,530,127 Ending balance $ 357,020 $ 131,111 $ 455,038 $ 281,943 $ 163,042 $ 146,031 $ 1,534,185 |
Summary of recorded investment in the Company's loans by class and by credit quality indicator | The following presents, by class and by credit quality indicator, the recorded investment in the Company’s loans as of June 30, 2021 and December 31, 2020 (in thousands): Special June 30, 2021 Pass Mention Substandard Total Cash, Securities and Other $ 290,892 $ — $ 15 $ 290,907 Construction and Development 127,141 — — 127,141 1-4 Family Residential 496,101 — — 496,101 Non-Owner Occupied CRE 318,512 5,981 — 324,493 Owner Occupied CRE 178,146 — 701 178,847 Commercial and Industrial 150,523 — 5,003 155,526 Total $ 1,561,315 $ 5,981 $ 5,719 $ 1,573,015 Special December 31, 2020 Pass Mention Substandard Total Cash, Securities and Other $ 356,970 $ — $ 50 $ 357,020 Construction and Development 131,111 — — 131,111 1-4 Family Residential 451,918 — 3,120 455,038 Non-Owner Occupied CRE 275,627 6,316 — 281,943 Owner Occupied CRE 161,850 — 1,192 163,042 Commercial and Industrial 140,432 — 5,599 146,031 Total $ 1,517,908 $ 6,316 $ 9,961 $ 1,534,185 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill. | |
Schedule of changes in carrying amount of goodwill | Changes in the carrying amount of goodwill were as follows (in thousands): June 30, December 31, 2021 2020 Beginning balance $ 24,191 $ 19,686 Acquisition activity — 4,505 Ending balance $ 24,191 $ 24,191 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
LEASES | |
Lease Balance Sheet Location | The Company elected to not include short-term leases with initial terms of twelve months or less, on the Condensed Consolidated Balance Sheets, (in thousands). June 30, December 31, 2021 2020 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Other assets $ 10,064 $ 11,341 Lease Liabilities Classification Operating lease liabilities Other liabilities $ 12,525 $ 13,970 |
Schedule Of Weighted Average Lease Term And Discount Rate | June 30, December 31, 2021 2020 Weighted-Average Remaining Lease Term Operating leases 4.38 years 4.79 years Weighted-Average Discount Rate Operating leases 3.02 % 3.04 % |
Lease Costs | The following table represents the Company’s net lease costs, (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Lease Costs Operating lease cost $ 731 $ 814 $ 1,483 $ 1,615 Variable lease cost 416 498 828 959 Sublease income — (100) — (199) Lease costs, net $ 1,147 $ 1,212 $ 2,311 $ 2,375 |
Schedule of Minimum Lease Payments Due | The following table presents a maturity analysis of the Company’s operating lease liabilities on an annual basis for each of the next five years and total amounts thereafter as of June 30, 2021 (in thousands): Year Ending December 31, Operating Leases 2021 (1) $ 1,676 2022 3,239 2023 2,937 2024 2,784 2025 1,783 Thereafter 876 Total future minimum lease payments 13,295 Less: imputed interest (770) Present value of net future minimum lease payments $ 12,525 ________________________________________ (1) |
DEPOSITS (Tables)
DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Deposits [Abstract] | |
Schedule of interest bearing deposits | The following presents the Company’s interest-bearing deposits at the dates noted (in thousands): June 30, December 31, 2021 2020 Money market deposit accounts $ 840,073 $ 847,430 Time deposits 137,499 172,682 Negotiable order of withdrawal accounts 141,076 113,052 Savings accounts 5,299 5,289 Total interest-bearing deposits $ 1,123,947 $ 1,138,453 Aggregate time deposits of $250,000 or greater $ 64,360 $ 73,401 |
Schedule Of Time Deposit Maturities | The following presents the scheduled maturities of all time deposits for the next five years ending June 30 (in thousands): Year Ending December 31, Time Deposits 2021 (1) $ 69,580 2022 39,732 2023 23,155 2024 2,263 2025 1,540 Thereafter 1,229 Total $ 137,499 ________________________________________ (1) |
BORROWINGS (Tables)
BORROWINGS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
BORROWINGS | |
Schedule of borrowings from FHLB Topeka | The Company had the following required maturities on FHLB borrowings as of the dates noted (in thousands): June 30, December 31, Maturity Date Rate % 2021 2020 April 22, 2022 0.37 $ 5,000 $ 5,000 May 5, 2023 0.76 10,000 10,000 Total $ 15,000 $ 15,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of contract amounts represent credit risk | The following presents the Company’s financial instruments whose contract amounts represent credit risk, as of the dates noted (in thousands): June 30, 2021 December 31, 2020 Fixed Rate Variable Rate Fixed Rate Variable Rate Unused lines of credit $ 65,274 $ 424,856 $ 78,506 $ 360,883 Standby letters of credit 3,555 16,125 1,933 17,524 Commitments to make loans to sell 115,213 — 370,512 — Commitments to make loans $ 44,384 $ 31,840 $ 24,225 $ 25,316 |
SHAREHOLDERS EQUITY (Tables)
SHAREHOLDERS EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SHAREHOLDERS EQUITY | |
Schedule of summarizes activity for nonqualified stock options | The following summarizes activity for nonqualified stock options for the six months ended June 30, 2021: Weighted Weighted Average Number Average Remaining Aggregate of Exercise Contractual Intrinsic Options Price Term Value Outstanding as of December 31, 2020 419,197 $ 29.02 Granted — — Exercised — — Forfeited or expired (34,050) 36.43 Outstanding as of June 30, 2021 385,147 28.36 2.2 (1) Options fully vested / exercisable as of June 30, 2021 381,577 $ 28.38 2.2 (1) ______________________________________ (1) |
Schedule of summarizes the activity for the Time Vesting Units, the Financial Performance Units and the Market Performance Units | Time Financial Market Vesting Performance Performance Units Units Units Outstanding as of December 31, 2020 285,052 152,430 14,862 Granted 58,817 41,366 — Vested (60,428) — — Forfeited (8,771) (3,953) (611) Outstanding as of June 30, 2021 274,670 189,843 14,251 |
Schedule of financial performance units activity | The following presents the Company’s existing Financial Performance Units as of June 30, 2021 (dollars in thousands, except share amounts): Grant Period Threshold Accrual Maximum Issuable Shares at Current Threshold Unrecognized Compensation Expense Weighted-Average (1) Financial Metric End Date Vesting Requirement End Date Prior to May 1, 2019 50% on half; 100% on other half 9,577 $ 38 0.5 years December 31, 2019 December 31, 2021 May 1, 2019 through April 30, 2020 150% 83,961 431 2.6 years December 31, 2021 December 31, 2023 May 1, 2020 through December 31, 2020, excluding November 18, 2020 150% 85,044 533 3.5 years December 31, 2022 December 31, 2023 On November 18, 2020 150% 34,752 $ 363 3.4 years December 31, 2022 50% November 18, 2023 & 2025 On May 3, 2021 150% 61,854 $ 1,039 4.5 years December 31, 2023 December 31, 2025 ______________________________________ (1) The following presents the Company’s Financial Performance Units activity for the years noted June 30 (dollars in thousands, except share amounts): Units Granted Compensation Expense Recognized Grant Period 2021 2020 2021 2020 Prior to May 1, 2019 — — $ 18 $ 34 May 1, 2019 through April 30, 2020 — 1,866 117 181 May 1, 2020 through December 31, 2020, excluding November 18, 2020 — 58,294 109 39 On November 18, 2020 — 64 — On May 3, 2021 41,366 — $ 57 $ — |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
EARNINGS PER COMMON SHARE | |
Schedule of basic and diluted earning (loss) per share | The table below presents the calculation of basic and diluted earnings per common share for the periods indicated (dollars in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Earnings per common share - Basic Numerator: Net income available for common shareholders $ 6,277 $ 8,696 $ 12,276 $ 10,030 Denominator: Basic weighted average shares 7,961,785 7,890,337 7,948,796 7,876,951 Earnings per common share - basic $ 0.79 $ 1.10 $ 1.54 $ 1.27 Earnings per common share - Diluted Numerator: Net income available for common shareholders $ 6,277 $ 8,696 $ 12,276 $ 10,030 Denominator: Basic weighted average shares 7,961,785 7,890,337 7,948,796 7,876,951 Diluted effect of common stock equivalents: Stock options 35,849 — 20,386 — Time Vesting Units 131,684 18,401 117,107 23,517 Financial Performance Units 70,746 6,558 59,953 15,804 Market Performance Units 13,836 13,222 14,017 13,294 Total diluted effect of common stock equivalents 252,115 38,181 211,463 52,615 Diluted weighted average shares 8,213,900 7,928,518 8,160,259 7,929,566 Earnings per common share - diluted $ 0.76 $ 1.10 $ 1.50 $ 1.26 |
Schedule of Antidilutive securities | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock options 141,639 419,197 209,874 419,197 Time Vesting Units — 92,388 1,991 89,656 Financial Performance Units 26,735 96,257 24,952 48,129 Restricted Stock Awards — 41,830 10,527 51,749 Total potentially dilutive securities 168,374 649,672 247,344 608,731 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
RELATED-PARTY TRANSACTIONS | |
Summary of related-party loan activity | The following presents a summary of related-party loan activity as of the dates noted (in thousands): June 30, 2021 December 31, 2020 Balance, beginning of year $ 14,321 $ 5,675 Funded loans 4,505 17,348 Payments collected (6,000) (8,702) Balance, end of period $ 12,826 $ 14,321 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
FAIR VALUE | |
Schedule of fair value assets and liabilities measured on recurring basis | The following presents assets and liabilities measured on a recurring basis as of June 30, 2021 and December 31, 2020 (in thousands): Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Reported June 30, 2021 (Level 1) (Level 2) (Level 3) Balance Investment securities available-for-sale: U.S. Treasury debt $ 251 $ — $ — $ 251 Corporate bonds — 6,142 — 6,142 GNMA mortgage-backed securities - residential — 16,086 — 16,086 FNMA mortgage-backed securities - residential — 1,160 — 1,160 Corporate CMO and MBS — 1,893 — 1,893 Total securities available-for-sale $ 251 $ 25,281 $ — $ 25,532 Equity securities $ 719 $ — $ — $ 719 Guarantee asset $ — $ — $ 196 $ 196 IRLC, net $ — $ — $ 2,808 $ 2,808 Forward commitments and FSC $ — $ (140) $ — $ (140) Mortgage loans held for sale $ — $ 48,563 $ — $ 48,563 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Reported December 31, 2020 (Level 1) (Level 2) (Level 3) Balance Investment securities available-for-sale: U.S. Treasury debt $ 254 $ — $ — $ 254 Corporate bonds — 6,044 — 6,044 GNMA mortgage-backed securities - residential — 24,604 — 24,604 FNMA mortgage-backed securities - residential — 1,677 — 1,677 Corporate CMO and MBS — 4,087 — 4,087 Total securities available-for-sale $ 254 $ 36,412 $ — $ 36,666 Equity securities $ 730 $ — $ — $ 730 Guarantee asset $ — $ — $ 232 $ 232 IRLC, net $ — $ — $ 9,841 $ 9,841 Forward commitments and FSC $ — $ (2,534) $ (89) $ (2,623) Mortgage loans held for sale $ — $ 161,843 $ — $ 161,843 |
Summary of assets and liability for level 3 instruments measured at fair value on recurring basis | The following presents a reconciliation for level 3 instruments measured at fair value on a recurring basis (in thousands): Three Months Ended June 30, 2021 Guarantee Asset IRLC FSC Beginning balance $ 188 $ 2,105 $ (173) Acquisitions — 5,823 — Originations 2 (5,981) — Gains (losses) in net income, net 6 861 173 Other settlements — — — Ending balance $ 196 $ 2,808 $ — Three Months Ended June 30, 2020 Guarantee Asset IRLC FSC Beginning balance $ — $ 4,025 $ (16) Acquisitions — 9,395 (84) Originations 244 (6,574) — Gains (losses) in net income, net 16 720 16 Other settlements (38) — — Ending balance $ 222 $ 7,566 $ (84) Six Months Ended June 30, 2021 Guarantee Asset IRLC FSC Beginning balance $ 232 $ 9,841 $ (89) Acquisitions — 8,507 (173) Originations 2 (12,997) — Gains (losses) in net income, net (38) (2,543) 262 Other settlements — — — Ending balance $ 196 $ 2,808 $ — Six Months Ended June 30, 2020 Guarantee Asset IRLC FSC Beginning balance $ — $ 1,184 $ — Acquisitions — 16,718 (100) Originations 244 (10,983) — Gains (losses) in net income, net 16 647 16 Other settlements (38) — — Ending balance $ 222 $ 7,566 $ (84) |
Summary of assets measured at fair value on nonrecurring basis | The following presents quantitative information about Level 3 assets measured on a recurring basis as of June 30, 2021 and December 31, 2020 (dollars in thousands): Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2021 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Guarantee asset $ 196 Discounted cash flow Discount rate 3% (3%) IRLC, net 2,808 Best execution model Pull through 72% to 100% (88%) FSC — Internal pricing model Market Differential 3bps to 61bps Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2020 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Guarantee asset $ 232 Discounted cash flow Discount rate 3% (3%) IRLC, net 9,841 Best execution model Pull through 55% to 100% (86%) FSC (89) Internal pricing model Market Differential -59bps to -17bps |
Summary of assets and liabilities measured at fair value on a recurring or nonrecurring, the significant unobservable inputs | The following presents quantitative information about the significant unobservable inputs used in the fair value measurement of nonrecurring assets categorized within Level 3 of the fair value hierarchy as of June 30, 2021 and December 31, 2020 (dollars in thousands): Quantitative Information about Level 3 Fair Value Measurements as of June 30, 2021 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Impaired loans (1) Commercial and Industrial $ 1,289 Sales comparison, Market approach - guideline transaction method Management discount for asset/property type 17% - 45% (31%) Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2020 Valuation Significant Range Fair Value Technique Unobservable Input (Weighted Average) Other real estate owned: Commercial properties $ 194 Sales contract Commission, cost to sell, closing costs 5% (5%) Impaired loans (1) Commercial and Industrial $ 1,800 Sales comparison, Market approach - guideline transaction method Management discount for asset/property type 17% - 35% (26%) ______________________________________ (1) |
Summary of carrying amounts and estimated fair values of financial instruments | The following presents carrying amounts and estimated fair values for financial instruments not carried at fair value as of June 30, 2021 and December 31, 2020 (in thousands): Carrying Fair Value Measurements Using: June 30, 2021 Amount Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 289,089 $ 289,089 $ — $ — Loans, net 1,558,508 — — 1,552,344 Accrued interest receivable 5,986 — 19 5,967 Liabilities: Deposits 1,679,053 — 1,680,464 — Borrowings: FHLB borrowings – fixed rate 15,000 — 15,062 — Federal Reserve borrowings – fixed rate 105,762 — 105,762 — Subordinated notes – fixed-to-floating rate 24,261 — — 23,895 Accrued interest payable $ 312 $ — $ 106 $ 206 Carrying Fair Value Measurements Using: December 31, 2020 Amount Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 155,989 $ 155,989 $ — $ — Loans, net 1,520,294 — — 1,512,699 Accrued interest receivable 6,618 — 90 6,528 Liabilities: Deposits 1,619,910 — 1,621,648 — Borrowings: FHLB borrowings – fixed rate 15,000 — 15,099 — Federal Reserve borrowings – fixed rate 134,563 — 134,563 — Subordinated notes – fixed-to-floating rate 24,291 — — 25,750 Accrued interest payable $ 453 $ — $ 124 $ 329 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT REPORTING | |
Schedule of segment data | The tables below present the financial information for each segment that is specifically identifiable or based on allocations using internal methods as of or for the three and six months ended June 30, 2021 and 2020 (in thousands): As of and for the three months ended June 30, 2021 Wealth Mortgage Consolidated Income Statement Total interest income $ 15,548 $ — $ 15,548 Total interest expense 1,325 — 1,325 Provision for loan losses 12 — 12 Net interest income, after provision for loan losses 14,211 — 14,211 Non-interest income 5,571 3,927 9,498 Total income before non-interest expense 19,782 3,927 23,709 Depreciation and amortization expense 262 13 275 All other non-interest expense 12,537 2,709 15,246 Income before income taxes $ 6,983 $ 1,205 $ 8,188 Goodwill $ 24,191 $ — $ 24,191 Total assets $ 1,956,393 $ 52,911 $ 2,009,304 As of and for the three months ended June 30, 2020 Wealth Mortgage Consolidated Income Statement Total interest income $ 12,470 $ — $ 12,470 Total interest expense 1,674 — 1,674 Provision for loan losses 2,124 — 2,124 Net interest income, after provision for loan losses 8,672 — 8,672 Non-interest income 5,230 10,197 15,427 Total income before non-interest expense 13,902 10,197 24,099 Depreciation and amortization expense 255 21 276 All other non-interest expense 10,499 1,869 12,368 Income before income taxes $ 3,148 $ 8,307 $ 11,455 Goodwill $ 24,191 $ — $ 24,191 Assets held for sale 3,010 — 3,010 Total assets $ 1,730,957 $ 79,569 $ 1,810,526 As of and for the six months ended June 30, 2021 Wealth Mortgage Consolidated Income Statement Total interest income $ 30,047 $ — $ 30,047 Total interest expense 2,771 — 2,771 Provision for loan losses 12 — 12 Net interest income, after provision for loan losses 27,264 — 27,264 Non-interest income 10,989 9,124 20,113 Total income before non-interest expense 38,253 9,124 47,377 Depreciation and amortization expense 520 27 547 All other non-interest expense 24,833 5,770 30,603 Income before income taxes $ 12,900 $ 3,327 $ 16,227 Goodwill $ 24,191 $ — $ 24,191 Total assets $ 1,956,393 $ 52,911 $ 2,009,304 As of and for the six months ended June 30, 2020 Wealth Mortgage Consolidated Income Statement Total interest income $ 23,982 $ — $ 23,982 Total interest expense 4,255 — 4,255 Provision for loan losses 2,491 — 2,491 Net interest income, after provision for loan losses 17,236 — 17,236 Non-interest income 10,493 12,701 23,194 Total income before non-interest expense 27,729 12,701 40,430 Depreciation and amortization expense 510 42 552 All other non-interest expense 23,100 (1) 3,639 26,739 Income before income taxes $ 4,119 $ 9,020 $ 13,139 Goodwill $ 24,191 $ — $ 24,191 Assets held for sale 3,010 — 3,010 Total assets $ 1,730,957 $ 79,569 $ 1,810,526 |
REGULATORY CAPITAL MATTERS (Tab
REGULATORY CAPITAL MATTERS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
REGULATORY CAPITAL MATTERS | |
Schedule of actual and required capital ratios | The following presents the actual and required capital amounts and ratios as of June 30, 2021 and December 31, 2020 (dollars in thousands): To be Well Capitalized Under Prompt Required for Capital Corrective Action Actual Adequacy Purposes (1) Regulations June 30, 2021 Amount Ratio Amount Ratio Amount Ratio Tier 1 capital to risk-weighted assets Bank $ 148,443 11.03 % $ 80,738 6.0 % $ 107,650 8.0 % Consolidated 144,728 10.68 N/A N/A N/A N/A CET1 to risk-weighted assets Bank 148,443 11.03 60,553 4.5 87,466 6.5 Consolidated 144,728 10.68 N/A N/A N/A N/A Total capital to risk-weighted assets Bank 161,335 11.99 107,650 8.0 134,563 10.0 Consolidated 182,180 13.45 N/A N/A N/A N/A Tier 1 capital to average assets Bank 148,443 7.98 74,429 4.0 93,036 5.0 Consolidated $ 144,728 7.75 % N/A N/A N/A N/A To be Well Capitalized Under Prompt Required for Capital Corrective Action Actual Adequacy Purposes (1) Regulations December 31, 2020 Amount Ratio Amount Ratio Amount Ratio Tier 1 capital to risk-weighted assets Bank $ 133,963 10.22 % $ 78,660 6.0 % $ 104,880 8.0 % Consolidated 131,507 9.96 N/A N/A N/A N/A CET1 to risk-weighted assets Bank 133,963 10.22 58,995 4.5 85,215 6.5 Consolidated 131,507 9.96 N/A N/A N/A N/A Total capital to risk-weighted assets Bank 146,853 11.20 104,880 8.0 131,100 10.0 Consolidated 168,957 12.80 N/A N/A N/A N/A Tier 1 capital to average assets Bank 133,963 7.62 70,301 4.0 87,877 5.0 Consolidated $ 131,507 7.45 % N/A N/A N/A N/A ______________________________________ (1) . |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Nov. 13, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Contingent consideration asset with an initial fair value | $ 3,100 | |||
Business Combination Period Of Quarterly Payments | 3 years | |||
Performance based incentive fees | $ 0 | $ 0 | ||
Collateral concentration risk | Loan portfolio | Real estate | ||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Concentration risk (as a percent) | 71.60% | 66.90% |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized cost and fair value of securities available-for-sale (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2021 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 35,750 | $ 24,857 |
Gross Unrealized Gains | 980 | 713 |
Gross Unrealized Losses | (64) | (38) |
Fair Value | 36,666 | 25,532 |
U.S. Treasury debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 250 | 250 |
Gross Unrealized Gains | 4 | 1 |
Fair Value | 254 | 251 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,000 | 6,000 |
Gross Unrealized Gains | 55 | 157 |
Gross Unrealized Losses | (11) | (15) |
Fair Value | 6,044 | 6,142 |
Government National Mortgage Association ("GNMA") mortgage-backed securities - residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,806 | 15,619 |
Gross Unrealized Gains | 798 | 467 |
Fair Value | 24,604 | 16,086 |
Federal National Mortgage Association ("FNMA") mortgage-backed securities - residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,616 | 1,113 |
Gross Unrealized Gains | 61 | 47 |
Fair Value | 1,677 | 1,160 |
Corporate collateralized mortgage obligations ("CMO") and MBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,078 | 1,875 |
Gross Unrealized Gains | 62 | 41 |
Gross Unrealized Losses | (53) | (23) |
Fair Value | 4,087 | 1,893 |
Small Business Investment Company ("SBIC") | ||
Debt Securities, Available-for-sale [Line Items] | ||
Payments to Acquire Investments | 500 | |
Contractual Obligation | 900 | |
Other Assets [Member] | Small Business Investment Company ("SBIC") | ||
Debt Securities, Available-for-sale [Line Items] | ||
Balance with SBIC included in other assets | $ 2,100 | $ 2,100 |
INVESTMENT SECURITIES - Amort_2
INVESTMENT SECURITIES - Amortized cost and estimated fair value of available-for-sale securities excluding SBIC (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($)security | Dec. 31, 2020USD ($)security | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 24,857 | $ 35,750 |
Fair Value | 25,532 | 36,666 |
Debt available for sale securities pledged as collateral | $ 2,900 | $ 3,700 |
Threshold Percentage Of Shareholders Equity Amount Held As Securities By One Issuer | 10.00% | 10.00% |
Unrealized loss | $ 38 | $ 64 |
Number of securities in continuous unrealized loss position for more than twelve months | security | 1 | |
Available for sale securities, excluding SBIC | ||
Debt Securities, Available-for-sale [Line Items] | ||
Due within one year amortized cost | $ 250 | |
Due between one year and five years amortized cost | 1,250 | |
Due between five years and ten years amortized cost | 4,750 | |
Due within one year fair value | 251 | |
Due between one year and five years fair value | 1,245 | |
Due between five years and ten years fair value | 4,897 | |
Securities, amortized cost | 18,607 | |
Securities, fair value | 19,139 | |
Amortized Cost | 24,857 | |
Fair Value | $ 25,532 | |
Number of securities in unrealized loss position | security | 5 | 7 |
INVESTMENT SECURITIES - Securit
INVESTMENT SECURITIES - Securities with unrealized losses (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | $ 2,021 | $ 4,369 |
Less than 12 months, Unrealized Losses | (15) | (51) |
12 months or Longer, Fair Value | 615 | 566 |
12 months or Longer, Unrealized Losses | (23) | (13) |
Total Fair Value | 2,636 | 4,935 |
Total Unrealized Losses | (38) | (64) |
Government National Mortgage Association ("GNMA") mortgage-backed securities - residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 286 | |
Total Fair Value | 286 | |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 1,735 | 3,489 |
Less than 12 months, Unrealized Losses | (15) | (11) |
Total Fair Value | 1,735 | 3,489 |
Total Unrealized Losses | (15) | (11) |
Corporate collateralized mortgage obligations ("CMO") and MBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 880 | |
Less than 12 months, Unrealized Losses | (40) | |
12 months or Longer, Fair Value | 615 | 566 |
12 months or Longer, Unrealized Losses | (23) | (13) |
Total Fair Value | 615 | 1,446 |
Total Unrealized Losses | $ (23) | $ (53) |
LOANS AND THE ALLOWANCE FOR L_3
LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Summary of loans (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | $ 1,573,015 | $ 1,534,185 |
Deferred fees and unamortized premiums/(unaccreted discounts), net | (1,955) | (1,352) |
Allowance for loan losses | (12,552) | (12,539) |
Loans, net | 1,558,508 | 1,520,294 |
Simmons Bank | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 116,100 | 127,200 |
Cash, Securities and Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 290,907 | 357,020 |
Construction and Development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 127,141 | 131,111 |
1-4 Family Residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 496,101 | 455,038 |
Non-Owner Occupied CRE | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 324,493 | 281,943 |
Owner Occupied CRE | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 178,847 | 163,042 |
Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 155,526 | 146,031 |
PPP Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 103,100 | 142,900 |
PPP Loans | Cash, Securities and Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | $ 103,100 | $ 142,900 |
Percent of Loans on Total Loan Segment | 35.50% | 40.00% |
MSLP loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | $ 6,700 | $ 6,600 |
COVID-19 | MSLP loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans, net | $ 6,700 | $ 6,600 |
Percent of Loans on Total Loan Segment | 4.30% | 4.50% |
Number of loans | loan | 6 | 6 |
LOANS AND THE ALLOWANCE FOR L_4
LOANS AND THE ALLOWANCE FOR LOAN LOSSES -Loan Modifications (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage of probability | 50.00% |
Percentage of reduction in collateral position | 20.00% |
Portion of loan portfolio exposed to high risk industries impacted by Covid-19 | 4.00% |
COVID-19 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Delinquent over period | 30 days |
Payments Period | 2 years |
# of Loans Modified | loan | 76 |
Outstanding Balance of Modified Loans | $ | $ 143.1 |
Loans modified for temporary payment | 180 days |
LOANS AND THE ALLOWANCE FOR L_5
LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Aging analysis of recorded investments by class (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 5,091 | $ 6,362 |
Total current | 1,567,924 | 1,527,823 |
Total Recorded Investment | 1,573,015 | 1,534,185 |
90 days past due and accruing interest | 0 | 0 |
30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 1,898 | 2,785 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 76 | |
90 or More Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 3,117 | 3,577 |
Cash, Securities and Other | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 12 | 800 |
Total current | 290,895 | 356,220 |
Total Recorded Investment | 290,907 | 357,020 |
Cash, Securities and Other | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 752 | |
Cash, Securities and Other | 90 or More Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 12 | 48 |
Construction and Development | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total current | 127,141 | 131,111 |
Total Recorded Investment | 127,141 | 131,111 |
1-4 Family Residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 76 | 1,283 |
Total current | 496,025 | 453,755 |
Total Recorded Investment | 496,101 | 455,038 |
1-4 Family Residential | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 1,283 | |
1-4 Family Residential | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 76 | |
Non-Owner Occupied CRE | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total current | 324,493 | 281,943 |
Total Recorded Investment | 324,493 | 281,943 |
Owner Occupied CRE | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 479 | |
Total current | 178,847 | 162,563 |
Total Recorded Investment | 178,847 | 163,042 |
Owner Occupied CRE | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 479 | |
Commercial and Industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 5,003 | 3,800 |
Total current | 150,523 | 142,231 |
Total Recorded Investment | 155,526 | 146,031 |
Commercial and Industrial | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 1,898 | 271 |
Commercial and Industrial | 90 or More Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 3,105 | $ 3,529 |
LOANS AND THE ALLOWANCE FOR L_6
LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Recorded investment in non-accrual loans by class (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-accrual loans | $ 3,120 | $ 4,058 |
Recorded investments | 3,100 | 3,600 |
Cash, Securities and Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-accrual loans | 15 | 50 |
Owner Occupied CRE | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-accrual loans | 479 | |
Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Non-accrual loans | $ 3,105 | $ 3,529 |
LOANS AND THE ALLOWANCE FOR L_7
LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Summary of unpaid principal balance of loans classified as TDRs (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)loan | Jun. 30, 2021USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Recorded Investment | $ 4,058,000 | $ 3,120,000 |
Allowance for loan associated with TDR | (1,621,000) | (1,754,000) |
Net recorded investment | 1,958,000 | 1,366,000 |
Additional funds to loans classified as TDRs | $ 0 | 0 |
Number of contracts modified | loan | 1 | |
Cash, Securities and Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Recorded Investment | $ 50,000 | 15,000 |
Allowance for loan associated with TDR | (2,000) | (3,000) |
Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Recorded Investment | 3,529,000 | 3,105,000 |
Allowance for loan associated with TDR | (1,619,000) | (1,751,000) |
Loans on nonaccrual status | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans classified as TDRs | 3,117,000 | |
Total Recorded Investment | 3,577,000 | |
Loans on nonaccrual status | Cash, Securities and Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Recorded Investment | 48,000 | 12,000 |
Loans on nonaccrual status | Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Recorded Investment | $ 3,529,000 | $ 3,105,000 |
LOANS AND THE ALLOWANCE FOR L_8
LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Recorded investment in impaired loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Total Recorded Investment With Allowance | $ 3,043 | $ 3,043 | $ 3,421 | ||
Total Recorded Investment With No Allowance | 77 | 77 | 637 | ||
Total Recorded Investment | 3,120 | 3,120 | 4,058 | ||
Unpaid Contractual Principal Balance with a valuation Allowance | 3,043 | 3,043 | 3,421 | ||
Unpaid Contractual Principal Balance with no related valuation Allowance | 77 | 77 | 637 | ||
Unpaid Contractual Principal Balance | 3,120 | 3,120 | 4,058 | ||
Allowance for Loan Losses | 1,754 | 1,754 | 1,621 | ||
Average Recorded Investment with Allowance | 3,234 | $ 3,462 | 2,164 | $ 3,476 | |
Average Recorded Investment with No Allowance | 97 | 7,491 | 78 | 7,916 | |
Average Recorded Investment | 3,331 | 10,953 | 2,242 | 11,392 | |
Interest Income Recognized with Allowance | 21 | 21 | |||
Interest Income Recognized with No Allowance | 51 | 84 | 51 | 165 | |
Interest Income Recognized | 72 | 84 | 72 | 165 | |
Cash, Securities and Other | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Total Recorded Investment With Allowance | 3 | 3 | 2 | ||
Total Recorded Investment With No Allowance | 12 | 12 | 48 | ||
Total Recorded Investment | 15 | 15 | 50 | ||
Unpaid Contractual Principal Balance with a valuation Allowance | 3 | 3 | 2 | ||
Unpaid Contractual Principal Balance with no related valuation Allowance | 12 | 12 | 48 | ||
Unpaid Contractual Principal Balance | 15 | 15 | 50 | ||
Allowance for Loan Losses | 3 | 3 | 2 | ||
Average Recorded Investment with Allowance | 4 | 2 | |||
Average Recorded Investment with No Allowance | 15 | 1,493 | 20 | 1,925 | |
Average Recorded Investment | 19 | 1,493 | 22 | 1,925 | |
Owner Occupied CRE | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Total Recorded Investment With No Allowance | 479 | ||||
Total Recorded Investment | 479 | ||||
Unpaid Contractual Principal Balance with no related valuation Allowance | 479 | ||||
Unpaid Contractual Principal Balance | 479 | ||||
Interest Income Recognized with No Allowance | 51 | 51 | |||
Interest Income Recognized | 51 | 51 | |||
Commercial and Industrial | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Total Recorded Investment With Allowance | 3,040 | 3,040 | 3,419 | ||
Total Recorded Investment With No Allowance | 65 | 65 | 110 | ||
Total Recorded Investment | 3,105 | 3,105 | 3,529 | ||
Unpaid Contractual Principal Balance with a valuation Allowance | 3,040 | 3,040 | 3,419 | ||
Unpaid Contractual Principal Balance with no related valuation Allowance | 65 | 65 | 110 | ||
Unpaid Contractual Principal Balance | 3,105 | 3,105 | 3,529 | ||
Allowance for Loan Losses | 1,751 | 1,751 | $ 1,619 | ||
Average Recorded Investment with Allowance | 3,230 | 3,462 | 2,162 | 3,476 | |
Average Recorded Investment with No Allowance | 82 | 5,998 | 58 | 5,991 | |
Average Recorded Investment | 3,312 | 9,460 | 2,220 | 9,467 | |
Interest Income Recognized with Allowance | 21 | 21 | |||
Interest Income Recognized with No Allowance | 84 | 165 | |||
Interest Income Recognized | $ 21 | $ 84 | $ 21 | $ 165 |
LOANS AND THE ALLOWANCE FOR L_9
LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Allowance for loan losses by portfolio (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Beginning balance | $ 12,539 | $ 8,242 | $ 12,539 | $ 7,875 | |
(Recovery of) provision for loan losses | 12 | 2,124 | 12 | 2,491 | |
Charge-offs | (24) | (24) | |||
Recoveries | 1 | 12 | 1 | 12 | |
Ending balance | 12,552 | 10,354 | 12,552 | 10,354 | |
Individually evaluated | 1,754 | 1,754 | $ 1,621 | ||
Collectively evaluated | 10,798 | 10,798 | 10,918 | ||
Loans individually evaluated | 3,120 | 3,120 | 4,058 | ||
Loans collectively evaluated | 1,569,895 | 1,569,895 | 1,530,127 | ||
Total Recorded Investment | 1,573,015 | 1,573,015 | 1,534,185 | ||
Cash, Securities and Other | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Beginning balance | 2,573 | 1,092 | 2,579 | 1,058 | |
(Recovery of) provision for loan losses | (535) | 1,345 | (541) | 1,379 | |
Charge-offs | (24) | (24) | |||
Recoveries | 1 | 12 | 1 | 12 | |
Ending balance | 2,039 | 2,425 | 2,039 | 2,425 | |
Individually evaluated | 3 | 3 | 2 | ||
Collectively evaluated | 2,036 | 2,036 | 2,577 | ||
Loans individually evaluated | 15 | 15 | 50 | ||
Loans collectively evaluated | 290,892 | 290,892 | 356,970 | ||
Total Recorded Investment | 290,907 | 290,907 | 357,020 | ||
Construction and Development | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Beginning balance | 766 | 186 | 932 | 200 | |
(Recovery of) provision for loan losses | 105 | 298 | (61) | 284 | |
Ending balance | 871 | 484 | 871 | 484 | |
Collectively evaluated | 871 | 871 | 932 | ||
Loans collectively evaluated | 127,141 | 127,141 | 131,111 | ||
Total Recorded Investment | 127,141 | 127,141 | 131,111 | ||
1-4 Family Residential | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Beginning balance | 3,152 | 3,008 | 3,233 | 2,850 | |
(Recovery of) provision for loan losses | 247 | (300) | 166 | (142) | |
Ending balance | 3,399 | 2,708 | 3,399 | 2,708 | |
Collectively evaluated | 3,399 | 3,399 | 3,233 | ||
Loans collectively evaluated | 496,101 | 496,101 | 455,038 | ||
Total Recorded Investment | 496,101 | 496,101 | 455,038 | ||
Non-Owner Occupied CRE | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Beginning balance | 2,211 | 1,403 | 2,004 | 1,176 | |
(Recovery of) provision for loan losses | 12 | 80 | 219 | 307 | |
Ending balance | 2,223 | 1,483 | 2,223 | 1,483 | |
Collectively evaluated | 2,223 | 2,223 | 2,004 | ||
Loans collectively evaluated | 324,493 | 324,493 | 281,943 | ||
Total Recorded Investment | 324,493 | 324,493 | 281,943 | ||
Owner Occupied CRE | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Beginning balance | 1,123 | 884 | 1,159 | 911 | |
(Recovery of) provision for loan losses | 102 | (124) | 66 | (151) | |
Ending balance | 1,225 | 760 | 1,225 | 760 | |
Collectively evaluated | 1,225 | 1,225 | 1,159 | ||
Loans individually evaluated | 479 | ||||
Loans collectively evaluated | 178,847 | 178,847 | 162,563 | ||
Total Recorded Investment | 178,847 | 178,847 | 163,042 | ||
Commercial and Industrial | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Beginning balance | 2,714 | 1,669 | 2,632 | 1,680 | |
(Recovery of) provision for loan losses | 81 | 825 | 163 | 814 | |
Ending balance | 2,795 | $ 2,494 | 2,795 | $ 2,494 | |
Individually evaluated | 1,751 | 1,751 | 1,619 | ||
Collectively evaluated | 1,044 | 1,044 | 1,013 | ||
Loans individually evaluated | 3,105 | 3,105 | 3,529 | ||
Loans collectively evaluated | 152,421 | 152,421 | 142,502 | ||
Total Recorded Investment | $ 155,526 | $ 155,526 | $ 146,031 |
LOANS AND THE ALLOWANCE FOR _10
LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Recorded investment in company's loans (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | $ 1,573,015,000 | $ 1,534,185,000 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,561,315,000 | 1,517,908,000 |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 5,981,000 | 6,316,000 |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 5,719,000 | 9,961,000 |
Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 0 | 0 |
Cash, Securities and Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 290,907,000 | 357,020,000 |
Cash, Securities and Other | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 290,892,000 | 356,970,000 |
Cash, Securities and Other | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 15,000 | 50,000 |
Construction and Development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 127,141,000 | 131,111,000 |
Construction and Development | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 127,141,000 | 131,111,000 |
1-4 Family Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 496,101,000 | 455,038,000 |
1-4 Family Residential | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 496,101,000 | 451,918,000 |
1-4 Family Residential | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 3,120,000 | |
Non-Owner Occupied CRE | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 324,493,000 | 281,943,000 |
Non-Owner Occupied CRE | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 318,512,000 | 275,627,000 |
Non-Owner Occupied CRE | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 5,981,000 | 6,316,000 |
Owner Occupied CRE | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 178,847,000 | 163,042,000 |
Owner Occupied CRE | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 178,146,000 | 161,850,000 |
Owner Occupied CRE | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 701,000 | 1,192,000 |
Commercial and Industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 155,526,000 | 146,031,000 |
Commercial and Industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 150,523,000 | 140,432,000 |
Commercial and Industrial | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | $ 5,003,000 | $ 5,599,000 |
GOODWILL (Details)
GOODWILL (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 19,686 |
Acquisition activity | 4,505 |
Ending balance | 24,191 |
Change in goodwill | $ 4,500 |
LEASES - Leases Balance Sheets
LEASES - Leases Balance Sheets Location (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
LEASES | ||
Operating lease right-of-use asset | $ 10,064 | $ 11,341 |
Operating lease liability | $ 12,525 | $ 13,970 |
Weighted-Average Remaining Lease Term - Operating leases | 4 years 4 months 17 days | 4 years 9 months 14 days |
Weighted-Average Discount Rate - Operating leases | 3.02% | 3.04% |
LEASES - Leases Costs (Details)
LEASES - Leases Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
LEASES | ||||
Operating lease cost | $ 731 | $ 814 | $ 1,483 | $ 1,615 |
Variable lease cost | 416 | 498 | 828 | 959 |
Sublease income | (100) | (199) | ||
Lease costs, net | $ 1,147 | $ 1,212 | $ 2,311 | $ 2,375 |
LEASES - Lease Maturity (Detail
LEASES - Lease Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
LEASES | ||
2021 | $ 1,676 | |
2022 | 3,239 | |
2023 | 2,937 | |
2024 | 2,784 | |
2025 | 1,783 | |
Thereafter | 876 | |
Total future minimum lease payments | 13,295 | |
Less: Imputed interest | (770) | |
Present value of net future minimum lease payments | $ 12,525 | $ 13,970 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2021 | |
Money market deposit accounts | $ 847,430 | $ 840,073 |
Time deposits | 172,682 | 137,499 |
Negotiable order of withdrawal accounts | 113,052 | 141,076 |
Savings accounts | 5,289 | 5,299 |
Total interest bearing deposits | 1,138,453 | 1,123,947 |
Aggregate time deposits of $250,000 or greater | 73,401 | 64,360 |
Overdrafts balances classified As loans | 100 | $ 100 |
Simmons Bank | ||
Deposits acquired via acquisitions | $ 63,100 |
DEPOSITS - Time Deposits (Detai
DEPOSITS - Time Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Scheduled maturities of time deposits | ||
2021 | $ 69,580 | |
2022 | 39,732 | |
2023 | 23,155 | |
2024 | 2,263 | |
2025 | 1,540 | |
Thereafter | 1,229 | |
Total | $ 137,499 | $ 172,682 |
BORROWINGS (Details)
BORROWINGS (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
BORROWINGS | ||
Borrowings from FHLB | $ 15,000,000 | $ 15,000,000 |
Number of unsecured federal funds lines of credit | 3 | 3 |
Total loans held for investment | $ 1,573,015,000 | $ 1,534,185,000 |
Federal Funds Lines of Credit One | ||
BORROWINGS | ||
Maximum borrowing capacity | 10,000,000 | 10,000,000 |
Amount outstanding | 0 | 0 |
Federal Funds Lines of Credit Two | ||
BORROWINGS | ||
Maximum borrowing capacity | 19,000,000 | 19,000,000 |
Federal Funds Line of Credit Three | ||
BORROWINGS | ||
Maximum borrowing capacity | 25,000,000 | 25,000,000 |
Credit Note [Member] | ||
BORROWINGS | ||
Amount outstanding | 0 | 0 |
Face amount | $ 5,000,000 | 5,000,000 |
interest rate (as a percent) | 2.50% | |
PPP Loans | ||
BORROWINGS | ||
Total loans held for investment | $ 105,800,000 | 134,600,000 |
PPPLF | ||
BORROWINGS | ||
Interest bearing rate | 0.35% | |
PPPLF | Minimum | ||
BORROWINGS | ||
Debt term | 2 years | |
PPPLF | Maximum | ||
BORROWINGS | ||
Debt term | 5 years | |
FHLB Topeka | ||
BORROWINGS | ||
Amount of collateral pledged | $ 698,300,000 | 668,600,000 |
Available balance | $ 457,700,000 | |
April 22, 2022 | ||
BORROWINGS | ||
Interest rate | 0.37% | |
Borrowings from FHLB | $ 5,000,000 | 5,000,000 |
May 5, 2023 | ||
BORROWINGS | ||
Interest rate | 0.76% | |
Borrowings from FHLB | $ 10,000,000 | $ 10,000,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Unused lines of credit-Fixed | ||
COMMITMENTS AND CONTINGENCIES | ||
Other commitment | $ 65,274 | $ 78,506 |
Standby letters of credit-Fixed | ||
COMMITMENTS AND CONTINGENCIES | ||
Other commitment | 3,555 | 1,933 |
Commitments to make loans to sell-Fixed | ||
COMMITMENTS AND CONTINGENCIES | ||
Other commitment | 115,213 | 370,512 |
Commitments to make loans-Fixed | ||
COMMITMENTS AND CONTINGENCIES | ||
Other commitment | 44,384 | 24,225 |
Unused lines of credit-Variable | ||
COMMITMENTS AND CONTINGENCIES | ||
Other commitment | 424,856 | 360,883 |
Standby letters of credit-Variable | ||
COMMITMENTS AND CONTINGENCIES | ||
Other commitment | 16,125 | 17,524 |
Commitments to make loans-Variable | ||
COMMITMENTS AND CONTINGENCIES | ||
Other commitment | $ 31,840 | $ 25,316 |
SHAREHOLDERS EQUITY - Common St
SHAREHOLDERS EQUITY - Common Stock (Details) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 14, 2020 | Dec. 31, 2020 | Nov. 03, 2020 | Jun. 14, 2019 | |
Class of Stock [Line Items] | |||||||
Common stock par value | $ 0 | $ 0 | $ 0 | ||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock par value | $ 0 | $ 0 | |||||
Number of votes per each share | one | ||||||
Effective term of program | 1 year | ||||||
Issuance of common stock (in shares) | 0 | 0 | |||||
Common Stock | 2019 Repurchase Plan | |||||||
Class of Stock [Line Items] | |||||||
Authorized share repurchase | 300,000 | ||||||
Number of shares repurchased | 22,679 | ||||||
Shares repurchased average price per share | $ 16.50 | ||||||
Common Stock | 2020 Repurchase Plan | |||||||
Class of Stock [Line Items] | |||||||
Common stock par value | $ 0 | ||||||
Authorized share repurchase | 400,000 | ||||||
Number of shares repurchased | 0 | 0 |
SHAREHOLDERS EQUITY - Stock bas
SHAREHOLDERS EQUITY - Stock based compensation - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2017 | |
Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares issued | 105,264 | ||||
Value of shares issued | $ 3 | ||||
Weighted-average grant date fair value (in dollars per share) | $ 28.50 | $ 28.50 | |||
Recognized compensation expense | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.3 | |
Unrecognized compensation expense | $ 0.4 | $ 0.4 | |||
Unrecognized compensation expense recognition period (in years) | 1 year | ||||
Number of stock awards vested | 0 | 0 | |||
Employee service period | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares issued | 52,632 | ||||
Value of shares issued | $ 1.5 | ||||
Vesting period (in years) | 5 years | ||||
Performance of mortgage division | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares issued | 52,632 | ||||
Value of shares issued | $ 1.5 | ||||
Recognized compensation expense | $ 0.1 | ||||
Shares non-vested | 14,114 | 14,114 | |||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recognized compensation expense | $ 0.1 | $ 0.1 | |||
Unrecognized compensation expense recognition period (in years) | 1 year |
SHAREHOLDERS EQUITY - Stock b_2
SHAREHOLDERS EQUITY - Stock based compensation - Stock Options (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 0 | 0 | |
Stock-based compensation expense | $ 0.1 | $ 0.1 | |
Unrecognized compensation expense recognition period (in years) | 1 year | ||
2016 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance | 389,468 |
SHAREHOLDERS EQUITY - Stock b_3
SHAREHOLDERS EQUITY - Stock based compensation - Stock Options Activity (Details) - Stock options - $ / shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning of year (in shares) | 419,197 | |
Granted (in shares) | 0 | 0 |
Forfeited or expired (in shares) | (34,050) | |
Outstanding at end of period (in shares) | 385,147 | |
Options fully vested / exercisable at end of period (in shares) | 381,577 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 29.02 | |
Forfeited or expired (in dollars per share) | 36.43 | |
Options, Outstanding, Weighted Average Exercise Price, Ending Balance | 28.36 | |
Options fully vested / exercisable | $ 28.38 | |
Weighted Average Remaining Contractual Term | ||
Outstanding at end of year | 2 years 2 months 12 days | |
Options fully vested / exercisable | 2 years 2 months 12 days | |
Aggregate Intrinsic Value | ||
Exercise price low range | $ 20 | |
Exercise price high range | $ 40 | |
Expiry period | 10 years |
SHAREHOLDERS EQUITY - Stock b_4
SHAREHOLDERS EQUITY - Stock based compensation - Share Awards (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Stock issued (in shares) | 36,932 | 34,260 | 43,059 | 34,260 |
Stock surrendered (in shares) | 14,545 | 19,852 | 17,369 | 19,852 |
Stock surrendered to cover employee withholding taxes | $ 0.4 | $ 0.3 | $ 0.4 | $ 0.3 |
Time Vesting Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at beginning of year | 285,052 | |||
Granted (in shares) | 58,817 | |||
Vested (in shares) | (60,428) | |||
Forfeited (in shares) | (8,771) | |||
Outstanding at end of year | 274,670 | 274,670 | ||
Stock-based compensation expense | $ 0.4 | $ 0.3 | $ 0.8 | $ 0.6 |
Unrecognized compensation expense | $ 4.5 | $ 4.5 | ||
Unrecognized compensation expense recognition period (in years) | 2 years 1 month 6 days | |||
Time Vesting Units | Third and fifth anniversaries | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Service period (in years) | 5 years | |||
Time Vesting Units | Anniversary of grant date | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Vesting Percentage | 20.00% | |||
Financial Performance Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at beginning of year | 152,430 | |||
Granted (in shares) | 41,366 | |||
Forfeited (in shares) | (3,953) | |||
Outstanding at end of year | 189,843 | 189,843 | ||
Market Performance Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at beginning of year | 14,862 | |||
Forfeited (in shares) | (611) | |||
Outstanding at end of year | 14,251 | 14,251 | ||
Unrecognized compensation expense | $ 0.4 | $ 0.4 | ||
Unrecognized compensation expense recognition period (in years) | 1 year |
SHAREHOLDERS EQUITY - Stock b_5
SHAREHOLDERS EQUITY - Stock based compensation - Financial Performance Units (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Financial performance threshold percentage | 150.00% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Financial performance threshold percentage | 0.00% | |
Financial Performance Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 41,366 | |
Financial Performance Units Granted Prior to May 1, 2019 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of shares can be issued | 9,577 | |
Unrecognized compensation expense | $ 38 | |
Unrecognized compensation expense recognition period (in years) | 6 months | |
Stock-based compensation expense | $ 18 | $ 34 |
Financial Performance Units Granted Prior to May 1, 2019 | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target threshold of awards | 100.00% | |
Financial Performance Units Granted Prior to May 1, 2019 | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target threshold of awards | 50.00% | |
Financial Performance Units Granted From May 1, 2019 Through April 30, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percent of awards accruing at maximum threshold | 150.00% | |
Maximum number of shares can be issued | 83,961 | |
Unrecognized compensation expense | $ 431 | |
Unrecognized compensation expense recognition period (in years) | 2 years 7 months 6 days | |
Granted (in shares) | 1,866 | |
Stock-based compensation expense | $ 117 | $ 181 |
Financial Performance Units Granted From May 01, 2020 Through December 31 2020, Excluding November 18, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percent of awards accruing at maximum threshold | 150.00% | |
Maximum number of shares can be issued | 85,044 | |
Unrecognized compensation expense | $ 533 | |
Unrecognized compensation expense recognition period (in years) | 3 years 6 months | |
Granted (in shares) | 58,294 | |
Stock-based compensation expense | $ 109 | $ 39 |
Financial Performance Units Granted on November 18, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percent of awards accruing at maximum threshold | 150.00% | |
Remainder threshold awards | 50.00% | |
Maximum number of shares can be issued | 34,752 | |
Unrecognized compensation expense | $ 363 | |
Unrecognized compensation expense recognition period (in years) | 3 years 4 months 24 days | |
Stock-based compensation expense | $ 64 | |
Financial Performance Units Granted On May 03 2021 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percent of awards accruing at maximum threshold | 150.00% | |
Maximum number of shares can be issued | 61,854 | |
Unrecognized compensation expense | $ 1,039 | |
Unrecognized compensation expense recognition period (in years) | 4 years 6 months | |
Granted (in shares) | 41,366 | |
Stock-based compensation expense | $ 57 |
SHAREHOLDERS EQUITY - Stock b_6
SHAREHOLDERS EQUITY - Stock based compensation - Market Performance Units (Details) - Market Performance Units $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 0.4 |
Unrecognized compensation expense recognition period (in years) | 1 year |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net income available for common shareholders | $ 6,277 | $ 8,696 | $ 12,276 | $ 10,030 |
Denominator: | ||||
Basic weighted average shares | 7,961,785 | 7,890,337 | 7,948,796 | 7,876,951 |
Earnings per common share - basic | $ 0.79 | $ 1.10 | $ 1.54 | $ 1.27 |
Numerator: | ||||
Net income | $ 6,277 | $ 8,696 | $ 12,276 | $ 10,030 |
Denominator: | ||||
Basic weighted average shares | 7,961,785 | 7,890,337 | 7,948,796 | 7,876,951 |
Diluted effect of common stock equivalents: | ||||
Total diluted effect of common stock equivalents | 252,115 | 38,181 | 211,463 | 52,615 |
Diluted weighted average shares | 8,213,900 | 7,928,518 | 8,160,259 | 7,929,566 |
Earnings per common share - diluted | $ 0.76 | $ 1.10 | $ 1.50 | $ 1.26 |
Stock options | ||||
Diluted effect of common stock equivalents: | ||||
Diluted effect of common stock equivalents | 35,849 | 20,386 | ||
Time Vesting Units | ||||
Diluted effect of common stock equivalents: | ||||
Diluted effect of common stock equivalents | 131,684 | 18,401 | 117,107 | 23,517 |
Financial Performance Units | ||||
Diluted effect of common stock equivalents: | ||||
Diluted effect of common stock equivalents | 70,746 | 6,558 | 59,953 | 15,804 |
Market Performance Units | ||||
Diluted effect of common stock equivalents: | ||||
Diluted effect of common stock equivalents | 13,836 | 13,222 | 14,017 | 13,294 |
EARNINGS PER COMMON SHARE - Ant
EARNINGS PER COMMON SHARE - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
EARNINGS PER COMMON SHARE | ||||
Total potentially dilutive securities | 168,374 | 649,672 | 247,344 | 608,731 |
Stock options | ||||
EARNINGS PER COMMON SHARE | ||||
Total potentially dilutive securities | 141,639 | 419,197 | 209,874 | 419,197 |
Time Vesting Units | ||||
EARNINGS PER COMMON SHARE | ||||
Total potentially dilutive securities | 92,388 | 1,991 | 89,656 | |
Financial Performance Units | ||||
EARNINGS PER COMMON SHARE | ||||
Total potentially dilutive securities | 26,735 | 96,257 | 24,952 | 48,129 |
Restricted Stock Awards | ||||
EARNINGS PER COMMON SHARE | ||||
Total potentially dilutive securities | 41,830 | 10,527 | 51,749 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
INCOME TAXES | ||||
Income tax provision | $ 1,911 | $ 2,759 | $ 3,951 | $ 3,109 |
Effective income tax rate | 23.30% | 24.10% | 24.30% | 23.70% |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Summary of related party loan activity | |||
Balance, beginning of year | $ 14,321 | $ 5,675 | $ 5,675 |
Funded loans | 4,505 | 17,348 | |
Payments collected | (6,000) | (8,702) | |
Balance, end of year | 12,826 | 14,321 | |
Deposits from related parties | 24,100 | $ 26,200 | |
Board Member | |||
Summary of related party loan activity | |||
Rent expense | $ 100 | $ 100 |
FAIR VALUE - Summary of assets
FAIR VALUE - Summary of assets measured at fair value on recurring basis (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | $ 25,532 | $ 36,666 |
Mortgage loans held for sale | 48,563 | 161,843 |
U.S. Treasury debt | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 251 | 254 |
Corporate bonds | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 6,142 | 6,044 |
Recurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 25,532 | 36,666 |
Equity securities | 719 | 730 |
Guarantee asset | 196 | 232 |
Mortgage loans held for sale | 48,563 | 161,843 |
Recurring | U.S. Treasury debt | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 251 | 254 |
Recurring | Corporate bonds | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 6,142 | 6,044 |
Recurring | Corporate collateralized mortgage obligations and mortgage-backed securities | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 1,893 | 4,087 |
Recurring | IRLC,net | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Derivative asset, Fair value | 2,808 | 9,841 |
Recurring | Forward Commitment | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Derivative asset, Fair value | (140) | (2,623) |
Recurring | GNMA | mortgage-backed securities - residential | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 16,086 | 24,604 |
Recurring | FNMA | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 1,677 | |
Recurring | FNMA | mortgage-backed securities - residential | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 1,160 | |
Level 1 | Recurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 251 | 254 |
Equity securities | 719 | 730 |
Level 1 | Recurring | U.S. Treasury debt | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 251 | 254 |
Level 2 | Recurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 25,281 | 36,412 |
Mortgage loans held for sale | 48,563 | 161,843 |
Level 2 | Recurring | Corporate bonds | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 6,142 | 6,044 |
Level 2 | Recurring | Corporate collateralized mortgage obligations and mortgage-backed securities | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 1,893 | 4,087 |
Level 2 | Recurring | Forward Commitment | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Derivative asset, Fair value | (140) | (2,534) |
Level 2 | Recurring | GNMA | mortgage-backed securities - residential | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 16,086 | 24,604 |
Level 2 | Recurring | FNMA | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 1,677 | |
Level 2 | Recurring | FNMA | mortgage-backed securities - residential | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Available-for-sale securities, at fair value | 1,160 | |
Level 3 | Recurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Guarantee asset | 196 | 232 |
Level 3 | Recurring | IRLC,net | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Derivative asset, Fair value | $ 2,808 | 9,841 |
Level 3 | Recurring | Forward Commitment | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Derivative asset, Fair value | $ (89) |
FAIR VALUE - Summary of asset_2
FAIR VALUE - Summary of assets measured at fair value on recurring basis (Details) - Level 3 - Recurring - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Guarantee Asset | ||||
Guarantee asset | ||||
Guarantee asset, Beginning balance | $ 188 | $ 232 | ||
Guarantee asset, Originations | 2 | $ 244 | 2 | 244 |
Guarantee asset, Gains (losses) in net income, net | 6 | 16 | (38) | 16 |
Guarantee asset, Other settlements | (38) | (38) | ||
Guarantee asset, Ending balance | 196 | 222 | 196 | 222 |
IRLC,net | ||||
Fair value on a recurring basis | ||||
Beginning balance | 2,105 | 4,025 | 9,841 | 1,184 |
Acquisitions | 5,823 | 9,395 | 8,507 | 16,718 |
Originations | (5,981) | (6,574) | (12,997) | (10,983) |
Gains (losses) in net income, net | 861 | 720 | (2,543) | 647 |
Ending balance | 2,808 | 7,566 | 2,808 | 7,566 |
Forward Commitment | ||||
Forward Commitments | ||||
Forward Commitments, Beginning balance | (173) | (16) | (89) | |
Forward Commitments, Acquisitions | (84) | (173) | (100) | |
Forward Commitments, Gains (losses) in net income, net | $ 173 | 16 | $ 262 | 16 |
Forward Commitments, Ending balance | $ (84) | $ (84) |
FAIR VALUE - Summary of asset_3
FAIR VALUE - Summary of assets and liabilities measured at fair value on a recurring or nonrecurring, the significant unobservable inputs (Details) $ in Thousands | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Commercial properties | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Estimate | $ 194 | |
Commercial and Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Estimate | $ 1,289 | $ 1,800 |
Discount | Commercial properties | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range and weighted average of discount | 5.00% | |
Minimum | Discount rate | Commercial and Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range and weighted average of discount rate | 17.00% | 17.00% |
Maximum | Discount rate | Commercial and Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range and weighted average of discount rate | 45.00% | 35.00% |
Weighted Average | Discount | Commercial properties | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range and weighted average of discount | 5.00% | |
Weighted Average | Discount rate | Commercial and Industrial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Range and weighted average of discount rate | 31.00% | 26.00% |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Guarantee asset, Fair Value | $ 196 | $ 232 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Guarantee asset, Fair Value | $ 196 | $ 232 |
Recurring | Discount rate | Level 3 | Discounted cash flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Guarantee asset | 3 | 3 |
Recurring | Prepayment rate | Level 3 | Discounted cash flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Guarantee asset, Fair Value | $ 196 | $ 232 |
Guarantee asset | 24 | 25 |
Recurring | Weighted Average | Discount rate | Level 3 | Discounted cash flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Guarantee asset | 3 | 3 |
Recurring | Weighted Average | Prepayment rate | Level 3 | Discounted cash flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Guarantee asset | 24 | 25 |
Recurring | IRLC,net | Pull through | Level 3 | Best execution model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, Fair Value | $ 2,808 | $ 9,841 |
Recurring | IRLC,net | Minimum | Pull through | Level 3 | Best execution model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 72 | 55 |
Recurring | IRLC,net | Maximum | Pull through | Level 3 | Best execution model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 100 | 100 |
Recurring | IRLC,net | Weighted Average | Pull through | Level 3 | Best execution model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 88 | 86 |
Recurring | Forward Commitment | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, Fair Value | $ (140) | $ (2,623) |
Recurring | Forward Commitment | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, Fair Value | (89) | |
Recurring | Forward Commitment | Market Differential | Level 3 | Internal Pricing Model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, Fair Value | $ (89) | |
Recurring | Forward Commitment | Minimum | Market Differential | Level 3 | Internal Pricing Model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0.03 | 0.59 |
Recurring | Forward Commitment | Maximum | Market Differential | Level 3 | Internal Pricing Model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0.61 | 0.17 |
Recurring | Forward Commitment | Weighted Average | Market Differential | Level 3 | Internal Pricing Model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0.19 | 0.31 |
FAIR VALUE - Summary of asset_4
FAIR VALUE - Summary of assets measured at level 3 fair value on recurring basis (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of assets measured on a recurring and nonrecurring basis | ||
Other real estate owned valuation allowance | $ 1,900 | |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | $ 3,043 | 3,421 |
Loans and Leases Receivable, Allowance | 12,552 | 12,539 |
Other real estate owned, gross | 2,100 | |
Other real estate owned | 194 | |
Net recorded investment | 1,366 | 1,958 |
Level 3 | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 3,000 | 3,400 |
Loans and Leases Receivable, Allowance | 1,800 | 1,600 |
Provision for loan losses | 1,800 | 1,600 |
Commercial properties | Nonrecurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Other real estate owned | 194 | |
Commercial properties | Level 3 | Nonrecurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Other real estate owned | 194 | |
Commercial and Industrial | Nonrecurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Net recorded investment | 1,289 | 1,800 |
Commercial and Industrial | Level 3 | Nonrecurring | ||
Summary of assets measured on a recurring and nonrecurring basis | ||
Net recorded investment | $ 1,289 | $ 1,800 |
FAIR VALUE - Summary of carryin
FAIR VALUE - Summary of carrying amounts and estimated fair values for financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||||
Cash and cash equivalents | $ 289,089 | $ 155,989 | $ 191,676 | $ 78,638 |
Loans, net | 1,558,508 | 1,520,294 | ||
Accrued interest receivable | 5,986 | 6,618 | ||
Liabilities | ||||
Deposits | 1,679,053 | 1,619,910 | ||
FHLB Topeka Borrowings - fixed rate | 120,762 | 149,563 | ||
Subordinated notes | 24,261 | 24,291 | ||
Accrued interest payable | 312 | 453 | ||
Carrying Amount | ||||
Assets | ||||
Cash and cash equivalents | 289,089 | 155,989 | ||
Loans, net | 1,558,508 | 1,520,294 | ||
Accrued interest receivable | 5,986 | 6,618 | ||
Liabilities | ||||
Deposits | 1,679,053 | 1,619,910 | ||
FHLB Topeka Borrowings - fixed rate | 15,000 | 15,000 | ||
Federal Reserve Borrowings - fixed rate | 105,762 | 134,563 | ||
Accrued interest payable | 312 | 453 | ||
Subordinated notes - fixed-to-floating rate | Carrying Amount | ||||
Liabilities | ||||
Subordinated notes | 24,261 | 24,291 | ||
Level 1 | Estimated Fair Value | ||||
Assets | ||||
Cash and cash equivalents | 289,089 | 155,989 | ||
Level 2 | Estimated Fair Value | ||||
Assets | ||||
Accrued interest receivable | 19 | 90 | ||
Liabilities | ||||
Deposits | 1,680,464 | 1,621,648 | ||
FHLB Topeka Borrowings - fixed rate | 15,062 | 15,099 | ||
Federal Reserve Borrowings - fixed rate | 105,762 | 134,563 | ||
Accrued interest payable | 106 | 124 | ||
Level 3 | Estimated Fair Value | ||||
Assets | ||||
Loans, net | 1,552,344 | 1,512,699 | ||
Accrued interest receivable | 5,967 | 6,528 | ||
Liabilities | ||||
Accrued interest payable | 206 | 329 | ||
Level 3 | Subordinated notes - fixed-to-floating rate | Estimated Fair Value | ||||
Liabilities | ||||
Subordinated notes | $ 23,895 | $ 25,750 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement | ||||||
Total interest income | $ 15,548 | $ 12,470 | $ 30,047 | $ 23,982 | ||
Total interest expense | 1,325 | 1,674 | 2,771 | 4,255 | ||
Provision for loan losses | 12 | 2,124 | 12 | 2,491 | ||
Net interest income, after provision for loan losses | 14,211 | 8,672 | 27,264 | 17,236 | ||
Non-interest income | 9,498 | 15,427 | 20,113 | 23,194 | ||
Total income | 23,709 | 24,099 | 47,377 | 40,430 | ||
Depreciation and amortization expense | 275 | 276 | 547 | 552 | ||
All other non-interest expense | 15,246 | 12,368 | 30,603 | 26,739 | ||
Income before income taxes | 8,188 | 11,455 | 16,227 | 13,139 | ||
Segment reporting | ||||||
Goodwill | 24,191 | 24,191 | 24,191 | 24,191 | $ 24,191 | $ 19,686 |
Assets held for sale | 3,010 | 3,010 | ||||
Total assets | 2,009,304 | 1,810,526 | 2,009,304 | 1,810,526 | $ 1,973,655 | |
Loss on intangibles held for sale | 553 | |||||
Wealth Management | ||||||
Income Statement | ||||||
Total interest income | 15,548 | 12,470 | 30,047 | 23,982 | ||
Total interest expense | 1,325 | 1,674 | 2,771 | 4,255 | ||
Provision for loan losses | 12 | 2,124 | 12 | 2,491 | ||
Net interest income, after provision for loan losses | 14,211 | 8,672 | 27,264 | 17,236 | ||
Non-interest income | 5,571 | 5,230 | 10,989 | 10,493 | ||
Total income | 19,782 | 13,902 | 38,253 | 27,729 | ||
Depreciation and amortization expense | 262 | 255 | 520 | 510 | ||
All other non-interest expense | 12,537 | 10,499 | 24,833 | 23,100 | ||
Income before income taxes | 6,983 | 3,148 | 12,900 | 4,119 | ||
Segment reporting | ||||||
Goodwill | 24,191 | 24,191 | 24,191 | 24,191 | ||
Assets held for sale | 3,010 | 3,010 | ||||
Total assets | 1,956,393 | 1,730,957 | 1,956,393 | 1,730,957 | ||
Loss on intangibles held for sale | 600 | |||||
Mortgage | ||||||
Income Statement | ||||||
Non-interest income | 3,927 | 10,197 | 9,124 | 12,701 | ||
Total income | 3,927 | 10,197 | 9,124 | 12,701 | ||
Depreciation and amortization expense | 13 | 21 | 27 | 42 | ||
All other non-interest expense | 2,709 | 1,869 | 5,770 | 3,639 | ||
Income before income taxes | 1,205 | 8,307 | 3,327 | 9,020 | ||
Segment reporting | ||||||
Total assets | $ 52,911 | $ 79,569 | $ 52,911 | $ 79,569 |
LOW-INCOME HOUSING TAX CREDIT_2
LOW-INCOME HOUSING TAX CREDIT INVESTMENT (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Schedule of Investments [Line Items] | |||||
Unfunded commitments | $ 2.1 | $ 2.1 | $ 2.2 | ||
Tax credits and other benefits | 0.1 | $ 0 | 0.2 | $ 0 | |
Impairment losses | 0 | 0 | 0 | 0 | |
Other Assets [Member] | |||||
Schedule of Investments [Line Items] | |||||
Investment balance | 0.9 | 0.9 | $ 1.1 | ||
Income Tax Expense (Benefit) | |||||
Schedule of Investments [Line Items] | |||||
Amortization expense | $ 0.1 | $ 0 | $ 0.2 | $ 0 |
REGULATORY CAPITAL MATTERS (Det
REGULATORY CAPITAL MATTERS (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021USD ($)item | Dec. 31, 2020USD ($) | |
REGULATORY CAPITAL MATTERS | ||
Capital conservation buffer | 7.00% | |
Number of conditions or events to be performed | item | 0 | |
Common Equity Tier 1 (CET 1) to risk-weighted assets | ||
Actual Amount | $ 144,728 | $ 131,507 |
Actual Ratio (as a percent) | 10.68% | 9.96% |
Tier 1 capital to risk-weighted assets | ||
Actual Amount | $ 144,728 | $ 131,507 |
Actual Ratio (as a percent) | 10.68 | 9.96 |
Required for Capital Adequacy Purposes Amount (as a percent) | 8.5 | |
Total capital to risk-weighted assets | ||
Actual Amount | $ 182,180 | $ 168,957 |
Actual Ratio (as a percent) | 13.45 | 12.80 |
Required for Capital Adequacy Purposes Ratio (as a percent) | 10.5 | |
Tier 1 capital to average assets | ||
Actual Amount | $ 144,728 | $ 131,507 |
Actual Ratio (as a percent) | 7.75 | 7.45 |
Bank | ||
Common Equity Tier 1 (CET 1) to risk-weighted assets | ||
Actual Amount | $ 148,443 | $ 133,963 |
Actual Ratio (as a percent) | 11.03% | 10.22% |
Required for Capital Adequacy Purposes Amount | $ 60,553 | $ 58,995 |
Required for Capital Adequacy Purposes Ratio (as a percent) | 4.50% | 4.50% |
To be Well Capitalized Under Prompt Corrective Action Regulations Amount | $ 87,466 | $ 85,215 |
To be Well Capitalized Under Prompt Corrective Action Regulations Ratio (as a percent) | 6.50% | 6.50% |
Tier 1 capital to risk-weighted assets | ||
Actual Amount | $ 148,443 | $ 133,963 |
Actual Ratio (as a percent) | 11.03 | 10.22 |
Required for Capital Adequacy Purposes Amount | $ 80,738 | $ 78,660 |
Required for Capital Adequacy Purposes Amount (as a percent) | 6 | 6 |
To be Well Capitalized Under Prompt Corrective Action Regulations Amount | $ 107,650 | $ 104,880 |
To be Well Capitalized Under Prompt Corrective Action Regulations Ratio (as a percent) | 8 | 8 |
Total capital to risk-weighted assets | ||
Actual Amount | $ 161,335 | $ 146,853 |
Actual Ratio (as a percent) | 11.99 | 11.20 |
Required for Capital Adequacy Purposes Amount | $ 107,650 | $ 104,880 |
Required for Capital Adequacy Purposes Ratio (as a percent) | 8 | 8 |
To be Well Capitalized Under Prompt Corrective Action Regulations Amount | $ 134,563 | $ 131,100 |
To be Well Capitalized Under Prompt Corrective Action Regulations Ratio (as a percent) | 10 | 10 |
Tier 1 capital to average assets | ||
Actual Amount | $ 148,443 | $ 133,963 |
Actual Ratio (as a percent) | 7.98 | 7.62 |
Required for Capital Adequacy Purposes Amount | $ 74,429 | $ 70,301 |
Required for Capital Adequacy Purposes Ratio (as a percent) | 4 | 4 |
To be Well Capitalized Under Prompt Corrective Action Regulations Amount | $ 93,036 | $ 87,877 |
Tier One Leverage Capital Required to be Well Capitalized to Average Assets | 5 | 5 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Teton Financial Services $ in Millions | Jun. 30, 2021USD ($) |
Subsequent Event [Line Items] | |
Total assets | $ 420.7 |
Total Deposit | 374.6 |
Total loans | $ 267.9 |