Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 07, 2018 | |
Entity Registrant Name | Bridgewater Bancshares Inc | |
Entity Central Index Key | 1,341,317 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Voting Common Stock | ||
Entity Common Stock, Shares Outstanding | 27,235,832 | |
Nonvoting Common Stock | ||
Entity Common Stock, Shares Outstanding | 2,832,542 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and Cash Equivalents | $ 21,917 | $ 23,725 |
Bank-owned Certificates of Deposits | 3,803 | 3,072 |
Securities Available for Sale, at Fair Value | 246,071 | 229,491 |
Loans, Net of Allowance for Loan Losses of $17,666 at June 30, 2018 (unaudited) and $16,502 at December 31, 2017 | 1,441,596 | 1,326,507 |
Federal Home Loan Bank (FHLB) Stock, at Cost | 5,294 | 5,147 |
Premises and Equipment, Net | 10,457 | 10,115 |
Foreclosed Assets | 148 | 581 |
Accrued Interest | 5,971 | 5,342 |
Goodwill | 2,626 | 2,626 |
Other Intangible Assets, Net | 1,147 | 1,243 |
Other Assets | 13,888 | 8,763 |
Total Assets | 1,752,918 | 1,616,612 |
Deposits: | ||
Noninterest Bearing | 323,320 | 292,539 |
Interest Bearing | 1,091,371 | 1,046,811 |
Total Deposits | 1,414,691 | 1,339,350 |
Federal Funds Purchased | 23,000 | |
Notes Payable | 16,000 | 17,000 |
FHLB Advances | 84,000 | 68,000 |
Subordinated Debentures, Net of Issuance Costs | 24,578 | 24,527 |
Accrued Interest Payable | 1,502 | 1,408 |
Other Liabilities | 6,220 | 6,165 |
Total Liabilities | 1,546,991 | 1,479,450 |
SHAREHOLDERS' EQUITY | ||
Preferred Stock- $0.01 par value Authorized 10,000,000; None Issued and Outstanding at June 30, 2018 (unaudited) and December 31, 2017 | ||
Additional Paid-In Capital | 125,516 | 66,324 |
Retained Earnings | 82,010 | 69,508 |
Accumulated Other Comprehensive Income (Loss) | (1,899) | 1,084 |
Total Shareholders' Equity | 205,927 | 137,162 |
Total Liabilities and Equity | 1,752,918 | 1,616,612 |
Voting Common Stock | ||
SHAREHOLDERS' EQUITY | ||
Common Stock- $0.01 par value | 272 | 208 |
Nonvoting Common Stock | ||
SHAREHOLDERS' EQUITY | ||
Common Stock- $0.01 par value | $ 28 | $ 38 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Allowance of loan loss | $ 17,666 | $ 16,502 |
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Voting Common Stock | ||
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 27,235,832 | 20,834,001 |
Common stock, shares outstanding (in shares) | 27,235,832 | 20,834,001 |
Nonvoting Common Stock | ||
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 2,823,542 | 3,845,860 |
Common stock, shares outstanding (in shares) | 2,823,542 | 3,845,860 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
INTEREST INCOME | ||||
Loans, Including Fees | $ 18,800 | $ 14,161 | $ 35,848 | $ 27,353 |
Investment Securities | 1,473 | 1,547 | 3,040 | 2,906 |
Other | 119 | 66 | 214 | 127 |
Total Interest Income | 20,392 | 15,774 | 39,102 | 30,386 |
INTEREST EXPENSE | ||||
Deposits | 3,522 | 2,288 | 6,531 | 4,306 |
Notes Payable | 146 | 168 | 298 | 335 |
FHLB Advances | 372 | 186 | 671 | 373 |
Subordinated Debentures | 397 | 766 | ||
Federal Funds Purchased | 56 | 60 | 174 | 109 |
Total Interest Expense | 4,493 | 2,702 | 8,440 | 5,123 |
NET INTEREST INCOME | 15,899 | 13,072 | 30,662 | 25,263 |
Provision for Loan Losses | 900 | 825 | 1,500 | 1,775 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 14,999 | 12,247 | 29,162 | 23,488 |
NONINTEREST INCOME | ||||
Customer Service Fees | 185 | 157 | 355 | 309 |
Net Loss on Sales of Available for Sale Securities | (59) | (97) | (59) | (66) |
Net Gain (Loss) on Sales of Foreclosed Assets | (141) | 111 | (137) | 150 |
Other Income | 500 | 315 | 713 | 573 |
Total Noninterest Income | 485 | 486 | 872 | 966 |
NONINTEREST EXPENSE | ||||
Salaries and Employee Benefits | 4,306 | 3,092 | 8,624 | 6,260 |
Occupancy and Equipment | 597 | 510 | 1,171 | 1,059 |
Other Expense | 1,561 | 1,669 | 3,201 | 3,206 |
Total Noninterest Expense | 6,464 | 5,271 | 12,996 | 10,525 |
INCOME BEFORE INCOME TAXES | 9,020 | 7,462 | 17,038 | 13,929 |
Provision for Income Taxes | 2,274 | 2,665 | 4,342 | 5,049 |
NET INCOME | $ 6,746 | $ 4,797 | $ 12,696 | $ 8,880 |
EARNINGS PER SHARE | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.20 | $ 0.45 | $ 0.36 |
Diluted (in dollars per share) | $ 0.22 | $ 0.19 | $ 0.45 | $ 0.36 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Consolidated Statements of Comprehensive Income | ||||
Net Income | $ 6,746 | $ 4,797 | $ 12,696 | $ 8,880 |
Other Comprehensive Income (Loss): | ||||
Unrealized Gains (Losses) on Available for Sale Securities | (151) | 4,454 | (4,298) | 6,345 |
Unrealized Gains (Losses) on Cash Flow Hedge | 31 | (37) | 150 | 12 |
Reclassification Adjustment for Losses Realized in Income | 59 | 97 | 59 | 66 |
Income Tax Impact | 13 | (1,580) | 912 | (2,248) |
Total Other Comprehensive Income (Loss), Net of Tax | (48) | 2,934 | (3,177) | 4,175 |
Comprehensive Income | $ 6,698 | $ 7,731 | $ 9,519 | $ 13,055 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Common StockVoting Common Stock | Common StockNonvoting Common Stock | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at the beginning at Dec. 31, 2016 | $ 207,000 | $ 38,000 | $ 65,777,000 | $ 52,619,000 | $ (3,275,000) | $ 115,366,000 |
Balance at the beginning (in shares) at Dec. 31, 2016 | 20,744,001 | 3,845,860 | ||||
Stock-based Compensation | 104,000 | 104,000 | ||||
Comprehensive Income (Loss) | 8,880,000 | 4,175,000 | 13,055,000 | |||
Balance at the end at Jun. 30, 2017 | $ 207,000 | $ 38,000 | 65,881,000 | 61,499,000 | 900,000 | 128,525,000 |
Balance at the end (in shares) at Jun. 30, 2017 | 20,744,001 | 3,845,860 | ||||
Balance at the beginning at Dec. 31, 2017 | $ 208,000 | $ 38,000 | 66,324,000 | 69,508,000 | 1,084,000 | 137,162,000 |
Balance at the beginning (in shares) at Dec. 31, 2017 | 20,834,001 | 3,845,860 | ||||
Stock-based Compensation | 389,000 | 389,000 | ||||
Comprehensive Income (Loss) | 12,696,000 | (3,177,000) | 9,519,000 | |||
Issuance of Common Stock, Net of Issuance Costs | $ 54,000 | 58,803,000 | 58,857,000 | |||
Issuance of Common Stock, Net of Issuance Costs (in shares) | 5,379,513 | |||||
Conversion of Non-voting Stock to Voting Stock | $ 10,000 | $ (10,000) | ||||
Conversion of Non-voting Stock to Voting Stock (in shares) | 1,022,318 | (1,022,318) | ||||
Reclassification of the Income Tax Effects of the Tax Cuts and Jobs Act to Retained Earnings | (194,000) | 194,000 | ||||
Balance at the end at Jun. 30, 2018 | $ 272,000 | $ 28,000 | $ 125,516,000 | $ 82,010,000 | $ (1,899,000) | $ 205,927,000 |
Balance at the end (in shares) at Jun. 30, 2018 | 27,235,832 | 2,823,542 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income | $ 12,696 | $ 8,880 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Net Amortization on Securities Available for Sale | 1,638 | 1,399 |
Net Loss on Sales of Securities Available for Sale | 59 | 66 |
Provision for Loan Losses | 1,500 | 1,775 |
Depreciation and Amortization of Premises and Equipment | 368 | 336 |
Amortization of Other Intangible Assets | 95 | 95 |
Amortization of Subordinated Debt Issuance Costs | 51 | |
Net (Gain) Loss on Sale of Foreclosed Assets | 137 | (150) |
Stock-based Compensation | 389 | 104 |
Changes in Operating Assets and Liabilities: | ||
Accrued Interest Receivable and Other Assets | (4,692) | (476) |
Accrued Interest Payable and Other Liabilities | 149 | 421 |
Net Cash Provided by Operating Activities | 12,390 | 12,450 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
(Increase) Decrease in Bank-owned Certificates of Deposit | (731) | 146 |
Proceeds from Sales of Securities Available for Sale | 10,950 | 6,624 |
Proceeds from Maturities, Paydowns, Payups and Calls of Securities Available for Sale | 12,539 | 13,168 |
Purchases of Securities Available for Sale | (46,004) | (30,732) |
Net Increase in Loans | (116,589) | (172,334) |
Net (Increase) Decrease in FHLB Stock | (147) | 563 |
Purchases of Premises and Equipment | (710) | (965) |
Proceeds from Sales of Foreclosed Assets | 296 | 2,860 |
Net Cash Used in Investing Activities | (140,396) | (180,670) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Increase in Deposits | 75,341 | 198,532 |
Net Decrease in Federal Funds Purchased | (23,000) | (19,000) |
Principal Payments on Notes Payable | (1,000) | (1,000) |
Proceeds from FHLB Advances | 20,000 | 4,000 |
Principal Payments on FHLB Advances | (4,000) | (9,000) |
Issuance of Common Stock | 58,857 | |
Net Cash Provided by Financing Activities | 126,198 | 173,532 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (1,808) | 5,312 |
Cash and Cash Equivalents Beginning | 23,725 | 16,499 |
Cash and Cash Equivalents Ending | 21,917 | 21,811 |
SUPPLEMENTAL CASH FLOW DISCLOSURE | ||
Cash Paid for Interest | 8,320 | 5,100 |
Cash Paid for Income Taxes | $ 3,325 | 5,460 |
Loans Transferred to Foreclosed Assets | $ 689 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Description of the Business and Summary of Significant Accounting Policies | |
Description of the Business and Summary of Significant Accounting Policies | Note 1: Description of the Business and Summary of Significant Accounting Policies Organization Bridgewater Bancshares, Inc. (the “Company”) is a financial holding company whose operations are the ownership of its wholly-owned subsidiaries, Bridgewater Bank (the “Bank”) and Bridgewater Risk Management, Inc. The Bank commenced operations in 2005 and provides retail and commercial loan and deposit services, principally to customers within the Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area. In 2008, the Bank formed BWB Holdings, LLC, a wholly owned subsidiary of the Bank, for the purpose of holding repossessed property. In 2018, the Bank formed Bridgewater Investment Management, Inc., a wholly owned subsidiary of the Bank, for the purpose of holding certain municipal securities and to engage in municipal lending activities. Bridgewater Risk Management was incorporated in December 2016 as a wholly-owned insurance company subsidiary of the Company. It insures the Company and its subsidiaries against certain risks unique to the operations of the Company and for which insurance may not be currently available or economically feasible in today’s insurance marketplace. Bridgewater Risk Management pools resources with several other insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. Initial Public Offering On March 16, 2018, the Company completed an initial public offering (“IPO”) and received net proceeds, after deducting underwriting discounts and offering expenses, of $58.9 million for the shares of common stock sold by the Company in the offering. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10‑Q and, therefore, do not include all disclosures necessary for a complete presentation of the consolidated balance sheets, consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity and consolidated statements of cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). However, all normal recurring adjustments which are, in the opinion of management, necessary for the fair presentation of the interim financial statements have been included. The results of operations for the six-month period ended June 30, 2018 are not necessarily indicative of the results which may be expected for the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s prospectus filed with the Securities and Exchange Commission (“SEC”) on March 14, 2018, pursuant to Rule 424(b)(4) under the Securities Act of 1933. Principles of Consolidation These consolidated financial statements include the amounts of the Company, the Bank and Bridgewater Risk Management. All significant intercompany balances and transactions have been eliminated in consolidation. Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period. Impact of Recently Adopted Accounting Standards In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017‑09, Compensation – Stock Compensation (Topic 718) (“ASU 2017-09”). ASU 2017-09 provides clarity about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company did not modify any share-based payment awards, thus, the impact of adopting the new standard had no impact on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU 2018‑02, Income Statement-Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The amendments of this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company elected to adopt ASU 2018-02 and, as a result, reclassified $194,000 from accumulated other comprehensive income to retained earnings as of January 1, 2018. The reclassification impacted the consolidated balance sheet and the consolidated statement of shareholders’ equity as of and for the six months ended June 30, 2018. Impact of Recently Issued Accounting Standards The following ASUs have been issued by FASB and may impact the Company’s consolidated financial statements in future reporting periods. In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014‑09”). ASU 2014‑09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014‑09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2015‑14, Revenue from Contracts with Customers (Topic 606) (“ASU 2015‑14”) was issued in August 2015 which defers adoption to annual reporting periods beginning after December 15, 2018 and interim reporting periods beginning after December 15, 2019. The timing of the Company’s revenue recognition is not expected to materially change. The Company’s largest portions of revenue, interest and fees on loans and gain on sales of loans, are specifically excluded from the scope of the guidance, and the Company currently recognizes the majority of the remaining revenue sources in a manner that management believes is consistent with the new guidance. Because of this, management believes that revenue recognized under the new guidance will generally approximate revenue recognized under current GAAP. These observations are subject to change as the evaluation is completed. In January 2016, the FASB issued ASU 2016‑01, Financial Instruments—Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016‑01”). This guidance changes how entities account for equity investments that do not result in consolidation and are not accounted for under the equity method of accounting. Entities will be required to measure these investments at fair value at the end of each reporting period and recognize changes in fair value in net income. A practicability exception will be available for equity investments that do not have readily determinable fair values; however, the exception requires the Company to adjust the carrying amount for impairment and observable price changes in orderly transactions for the identical or a similar investment of the same issuer. This guidance also changes certain disclosure requirements and other aspects of current GAAP. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim reporting periods beginning after December 15, 2019. Early adoption is permitted for only one of the six amendments. The Company is evaluating the impact this new standard will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) (“ASU 2016‑02”). The new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. Entities will be required to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective for fiscal years beginning after December 15, 2019 and interim reporting periods beginning after December 15, 2020. The Company’s assets and liabilities will increase based on the present value of the remaining lease payments for leases in place at the adoption date; however, this is not expected to be significant to the Company’s results of operations. The Company is evaluating the impact this new standard will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016‑05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (“ASU 2016‑05”). The new guidance clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. This guidance is effective for fiscal years beginning after December 15, 2017 and interim reporting periods beginning after December 15, 2018. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016‑09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016‑09”). The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Entities will be required to recognize the income tax effects of awards in the income statement when the awards vest or are settled. This guidance is effective for fiscal years beginning after December 15, 2017 and interim reporting periods beginning after December 31, 2018. The adoption of this ASU is not expected to have a significant impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU affect all entities that measure credit losses on financial instruments including loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial asset that has a contractual right to receive cash that is not specifically excluded. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology required in current GAAP with a methodology that reflects expected credit losses that requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The amendments in this ASU will affect entities to varying degrees depending on the credit quality of the assets held by the entity, the duration of the assets held, and how the entity applies the current incurred loss methodology. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020 and interim reporting periods beginning after December 15, 2021. All entities may adopt the amendments in the ASU early as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Amendments should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The Company is evaluating the impact this new standard will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU were issued to address concerns over the cost and complexity of the two-step goodwill impairment test and resulted in the removal of the second step of the test. The amendments require an entity to apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This ASU is intended to reduce the cost and complexity of the two-step goodwill impairment test and is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2021, with early adoption permitted for testing performed after January 1, 2017. Upon adoption, the amendments should be applied on a prospective basis and the entity is required to disclose the nature of and reason for the change in accounting principle upon transition. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU 2017‑08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310‑20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this ASU shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount as discounts continue to be accreted to maturity. This ASU is intended to more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. In most cases, market participants price securities to the call date that produces the worst yield when the coupon is above current market rates and prices securities to maturity when the coupon is below market rates. As a result, the amendments more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument. This ASU is intended to reduce diversity in practice and is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Upon adoption, the amendments should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principles. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017‑12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments of this ASU better align an entity’s accounting and financial reporting for hedging activities with the economic objectives of those activities. The ASU is effective for fiscal years beginning after December 15, 2019 and interim reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the impact this new standard with have on its consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share | |
Earnings Per Share | Note 2: Earnings Per Share Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share are calculated by dividing net income by the weighted average number of shares adjusted for the dilutive effect of stock options. The dilutive effect was computed using the treasury stock method, which assumes the stock options were exercised and the hypothetical proceeds from the exercise were used by the Company to purchase common stock at the average market price during the period. The following table presents the numerators and denominators for basic and diluted earnings per share computations for the three and six months ended June 30, 2018 and 2017: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Net Income Available to Common Shareholders $ 6,746 $ 4,797 $ 12,696 $ 8,880 Weighted Average Common Stock Outstanding: Weighted Average Common Stock Outstanding (Basic) 30,059,374 24,589,861 27,919,457 24,589,861 Stock Options 427,427 219,208 426,387 219,208 Weighted Average Common Stock Outstanding (Dilutive) 30,486,801 24,809,069 28,345,844 24,809,069 Basic Earnings per Common Share $ 0.22 $ 0.20 $ 0.45 $ 0.36 Diluted Earnings per Common Share 0.22 0.19 0.45 0.36 |
Securities
Securities | 6 Months Ended |
Jun. 30, 2018 | |
Securities | |
Securities | Note 3: Securities The following tables present the amortized cost and estimated fair value of securities with gross unrealized gains and losses at June 30, 2018 and December 31, 2017: June 30, 2018 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Securities Available for Sale: U.S. Treasury Securities $ 9,908 $ — $ (5) $ 9,903 Municipal Bonds 125,800 1,288 (1,453) 125,635 Mortgage-Backed Securities 50,977 4 (2,054) 48,927 Corporate Securities 10,663 51 (77) 10,637 SBA Securities 51,620 21 (672) 50,969 Total Securities Available for Sale $ 248,968 $ 1,364 $ (4,261) $ 246,071 December 31, 2017 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Securities Available for Sale: Municipal Bonds $ 115,784 $ 3,005 $ (469) $ 118,320 Mortgage-Backed Securities 61,945 11 (1,275) 60,681 Corporate Securities 5,052 80 (25) 5,107 SBA Securities 45,368 242 (227) 45,383 Total Securities Available for Sale $ 228,149 $ 3,338 $ (1,996) $ 229,491 The following table shows the fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: Less Than 12 Months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses June 30, 2018 U.S. Treasury Securities $ 9,903 $ (5) $ — $ — $ 9,903 $ (5) Municipal Bonds 48,123 (645) 21,669 (808) 69,792 (1,453) Mortgage-Backed Securities 16,186 (426) 32,224 (1,628) 48,410 (2,054) Corporate Securities 1,946 (23) 1,995 (54) 3,941 (77) SBA Securities 37,604 (570) 4,590 (102) 42,194 (672) Total Securities Available for Sale $ 113,762 $ (1,669) $ 60,478 $ (2,592) $ 174,240 $ (4,261) Less Than 12 Months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses December 31, 2017 Municipal Bonds $ 15,043 $ (89) $ 21,111 $ (380) $ 36,154 $ (469) Mortgage-Backed Securities 16,046 (105) 41,800 (1,170) 57,846 (1,275) Corporate Securities — — 2,028 (25) 2,028 (25) SBA Securities 15,634 (189) 3,775 (38) 19,409 (227) Total Securities Available for Sale $ 46,723 $ (383) $ 68,714 $ (1,613) $ 115,437 $ (1,996) At June 30, 2018, 213 debt securities had unrealized losses with aggregate depreciation of approximately 2% from the Company’s amortized cost basis. At December 31, 2017, 133 debt securities had unrealized losses with aggregate depreciation of approximately 1% from the Company’s amortized cost basis. These unrealized losses relate principally to changes in interest rates and are not due to changes in the financial condition of the issuer, the quality of any underlying assets, or applicable credit enhancements. In analyzing whether unrealized losses on debt securities are other than temporary, management considers whether the securities are issued by a government body or agency, whether a rating agency has downgraded the securities, industry analysts’ reports, the financial condition and performance of the issuer, and the quality of any underlying assets or credit enhancements. Since management has the ability and intent to hold debt securities for the foreseeable future, no declines were deemed to be other than temporary as of June 30, 2018. The following is a summary of amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of June 30, 2018. Call date is used when a call of the debt security is expected, determined by the Company when the security has a market value above its amortized cost. Contractual maturities will differ from expected maturities for mortgage-backed and SBA securities because borrowers may have the right to call or prepay obligations without penalties. June 30, 2018 Amortized Cost Fair Value Due in One Year or Less $ 1,381 $ 1,382 Due After One Year Through Five Years 24,961 25,044 Due After Five Years Through 10 Years 56,530 56,715 Due After 10 Years 63,499 63,034 Subtotal 146,371 146,175 Mortgage-Backed Securities 50,977 48,927 SBA Securities 51,620 50,969 Totals $ 248,968 $ 246,071 As of June 30, 2018, the securities portfolio was unencumbered. To increase on-balance sheet liquidity, all securities previously pledged to secure public deposits had the designation removed and an alternative means of permissible collateralization was utilized, primarily Federal Home Loan Bank letters of credit. As of December 31, 2017, the amortized cost and fair value of securities pledged to secure public deposits and for other purposes required or permitted by law were $79,400 and $81,639, respectively. The following is a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, for the three and six months ended June 30, 2018 and 2017: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Proceeds From Sales of Securities $ 10,950 $ 6,059 $ 10,950 $ 6,624 Gross Gains on Sales 53 108 53 139 Gross Losses on Sales (112) (205) (112) (205) |
Loans
Loans | 6 Months Ended |
Jun. 30, 2018 | |
Loans | |
Loans | Note 4: Loans The following table presents the components of loans at June 30, 2018 and December 31, 2017: June 30, December 31, 2018 2017 Commercial $ 204,072 $ 217,753 Construction and Land Development 164,492 130,586 Real Estate Mortgage: 1-4 Family Mortgage 213,265 195,707 Multifamily 340,888 317,872 CRE Owner Occupied 65,891 65,909 CRE Non-owner Occupied 470,437 415,034 Total Real Estate Mortgage Loans 1,090,481 994,522 Consumer and Other 4,275 4,252 Total Loans, Gross 1,463,320 1,347,113 Net Deferred Loan Fees (4,058) (4,104) Allowance for Loan Losses (17,666) (16,502) Total Loans, Net $ 1,441,596 $ 1,326,507 The following table presents the activity in the allowance for loan losses, by segment, for the three months ended June 30, 2018 and 2017: Construction CRE CRE and Land 1-‑4 Family Owner Non‑owner Consumer Three Months Ended June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Unallocated Total Allowance for Loan Losses: Beginning Balance $ 2,225 $ 1,765 $ 2,418 $ 3,476 $ 914 $ 5,407 $ 50 $ 866 $ 17,121 Provision for Loan Losses 21 557 146 76 (91) 204 10 (23) 900 Loans Charged-off — (357) — — — — (4) — (361) Recoveries of Loans 2 — 3 — — — 1 — 6 Total Ending Allowance Balance 2,248 1,965 2,567 3,552 823 5,611 57 843 17,666 Three Months Ended June 30, 2017 Allowance for Loan Losses: Beginning Balance $ 1,437 $ 1,549 $ 2,407 $ 2,053 $ 1,213 $ 3,660 $ 74 $ 823 $ 13,216 Provision for Loan Losses 104 55 (316) 4 (82) 689 (1) 372 825 Loans Charged-off — — — — — — (3) — (3) Recoveries of Loans 1 — 11 — — — 3 — 15 Total Ending Allowance Balance 1,542 1,604 2,102 2,057 1,131 4,349 73 1,195 14,053 The following table presents the activity in the allowance for loan losses, by segment, for the six months ended June 30, 2018 and 2017: Construction CRE CRE and Land 1-‑4 Family Owner Non‑owner Consumer Six Months Ended June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Unallocated Total Allowance for Loan Losses: Beginning Balance $ 2,435 $ 1,892 $ 2,317 $ 3,170 $ 956 $ 5,087 $ 60 $ 585 $ 16,502 Provision for Loan Losses (209) 430 237 382 (133) 524 11 258 1,500 Loans Charged-off — (357) — — — — (16) — (373) Recoveries of Loans 22 — 13 — — — 2 — 37 Total Ending Allowance Balance 2,248 1,965 2,567 3,552 823 5,611 57 843 17,666 Six Months Ended June 30, 2017 Allowance for Loan Losses: Beginning Balance $ 1,315 $ 1,379 $ 2,410 $ 1,568 $ 1,160 $ 3,323 $ 78 $ 1,100 $ 12,333 Provision for Loan Losses 226 223 (329) 489 (29) 1,100 — 95 1,775 Loans Charged-off (1) — — — — (74) (8) — (83) Recoveries of Loans 2 2 21 — — — 3 — 28 Total Ending Allowance Balance 1,542 1,604 2,102 2,057 1,131 4,349 73 1,195 14,053 The following tables present the balance in the allowance for loan losses and the recorded investment in loans, by segment, based on impairment method as of June 30, 2018 and December 31, 2017: Construction CRE CRE and Land 1-‑4 Family Owner Non‑owner Consumer Allowance for Loan Losses at June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Unallocated Total Individually Evaluated for Impairment $ 14 $ 3 $ 46 $ — $ 23 $ — $ — $ — $ 86 Collectively Evaluated for Impairment 2,234 1,962 2,521 3,552 800 5,611 57 843 17,580 Totals $ 2,248 $ 1,965 $ 2,567 $ 3,552 $ 823 $ 5,611 $ 57 $ 843 $ 17,666 Allowance for Loan Losses at December 31, 2017 Individually Evaluated for Impairment $ 14 $ — $ 57 $ 14 $ 24 $ — $ — $ — $ 109 Collectively Evaluated for Impairment 2,421 1,892 2,260 3,156 932 5,087 60 585 16,393 Totals $ 2,435 $ 1,892 $ 2,317 $ 3,170 $ 956 $ 5,087 $ 60 $ 585 $ 16,502 Construction CRE CRE and Land 1‑4 Family Owner Non‑owner Consumer Loans at June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Total Individually Evaluated for Impairment $ 14 $ 212 $ 1,912 $ 65 $ 664 $ — $ 66 $ 2,933 Collectively Evaluated for Impairment 204,058 164,280 211,353 340,823 65,227 470,437 4,209 1,460,387 Totals $ 204,072 $ 164,492 $ 213,265 $ 340,888 $ 65,891 $ 470,437 $ 4,275 $ 1,463,320 Loans at December 31, 2017 Individually Evaluated for Impairment $ 14 $ 583 $ 1,693 $ 66 $ 2,165 $ — $ 75 $ 4,596 Collectively Evaluated for Impairment 217,739 130,003 194,014 317,806 63,744 415,034 4,177 1,342,517 Totals $ 217,753 $ 130,586 $ 195,707 $ 317,872 $ 65,909 $ 415,034 $ 4,252 $ 1,347,113 The following table presents information regarding total carrying amounts and total unpaid principal balances of impaired loans by loan segment as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Loans With No Related Allowance for Loan Losses: Construction and Land Development $ — $ — $ — $ 583 $ 833 $ — Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 494 494 — 508 515 — 1st REM - 1-4 Family 374 374 — 125 125 — 1st REM - Rentals 980 980 — 726 726 — Multifamily 65 65 — — — — CRE Owner Occupied 506 506 — 2,006 2,023 — Consumer and Other 66 84 — 75 92 — Totals 2,485 2,503 — 4,023 4,314 — Loans With An Allowance for Loan Losses: Commercial 14 14 14 14 14 14 Construction and Land Development 212 821 3 — — — Real Estate Mortgage: LOCs and 2nd REM - Rentals 64 64 46 64 64 47 1st REM - Rentals — — — 270 270 10 Multifamily — — — 66 66 14 CRE Owner Occupied 158 158 23 159 159 24 Totals 448 1,057 86 573 573 109 Grand Totals $ 2,933 $ 3,560 $ 86 $ 4,596 $ 4,887 $ 109 The following table presents information regarding the average balances and interest income recognized on impaired loans by loan segment for the three and six months ended June 30, 2018 and 2017: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Average Interest Average Interest Average Interest Average Interest Investment Recognized Investment Recognized Investment Recognized Investment Recognized Loans With No Related Allowance for Loan Losses: Commercial $ — $ — $ 2,086 $ 25 $ — $ — $ 2,005 $ 43 Construction and Land Development — — 745 2 — — 748 3 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage $ 506 1 $ 262 4 $ 509 $ 4 $ 263 $ 7 1st REM - 1-4 Family 376 5 792 — 378 5 798 — 1st REM - Rentals 981 11 995 12 986 24 999 25 Multifamily 65 1 — — 33 1 — — CRE Owner Occupied 512 7 1,850 20 518 14 989 27 Consumer and Other 67 — — — 69 — — — Totals 2,507 25 6,730 63 2,493 48 5,802 105 Loans With An Allowance for Loan Losses: Commercial 14 — — — 14 — — — Construction and Land Development 216 — 10 — 110 — 10 — Real Estate Mortgage: LOCs and 2nd REM - Rentals 64 1 65 1 64 2 65 1 1st REM - Rentals — — 278 3 67 1 279 5 Multifamily — — 66 1 33 1 66 1 CRE Owner Occupied 158 2 161 2 158 4 161 2 Consumer and Other — — 84 1 — — 85 2 Totals 452 3 664 8 445 8 666 11 Grand Totals $ 2,959 $ 28 $ 7,394 $ 71 $ 2,938 $ 56 $ 6,468 $ 116 The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The process of analyzing loans for changes in risk rating is ongoing through routine monitoring of the portfolio and annual internal credit reviews for credits meeting certain thresholds. The following tables present the risk category of loans by loan segment as of June 30, 2018 and December 31, 2017, based on the most recent analysis performed by management: June 30, 2018 Pass Watch Substandard Total Commercial $ 203,439 $ 614 $ 19 $ 204,072 Construction and Land Development 161,464 2,816 212 164,492 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 31,459 587 — 32,046 1st REM - 1-4 Family 34,575 621 374 35,570 LOCs and 2nd REM - Rentals 9,307 2,258 558 12,123 1st REM - Rentals 132,546 — 980 133,526 Multifamily 340,823 — 65 340,888 CRE Owner Occupied 58,361 5,136 2,394 65,891 CRE Non-owner Occupied 467,027 3,252 158 470,437 Consumer and Other 4,209 — 66 4,275 Totals $ 1,443,210 $ 15,284 $ 4,826 $ 1,463,320 December 31, 2017 Pass Watch Substandard Total Commercial $ 217,739 $ — $ 14 $ 217,753 Construction and Land Development 130,003 — 583 130,586 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 28,238 — 347 28,585 1st REM - 1-4 Family 33,219 — 125 33,344 LOCs and 2nd REM - Rentals 13,409 — 225 13,634 1st REM - Rentals 118,891 — 1,253 120,144 Multifamily 317,806 — 66 317,872 CRE Owner Occupied 63,290 — 2,619 65,909 CRE Non-owner Occupied 409,533 5,501 — 415,034 Consumer and Other 4,177 — 75 4,252 Totals $ 1,336,305 $ 5,501 $ 5,307 $ 1,347,113 The following tables present the aging of the recorded investment in past due loans by loan segment as of June 30, 2018 and December 31, 2017: Accruing Interest 30-89 Days 90 Days or June 30, 2018 Current Past Due More Past Due Nonaccrual Total Commercial $ 204,045 $ 13 $ — $ 14 $ 204,072 Construction and Land Development 164,280 — — 212 164,492 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 31,711 — — 335 32,046 1st REM - 1-4 Family 35,451 — — 119 35,570 LOCs and 2nd REM - Rentals 11,964 159 — — 12,123 1st REM - Rentals 133,060 466 — — 133,526 Multifamily 340,888 — — — 340,888 CRE Owner Occupied 65,891 — — — 65,891 CRE Non-owner Occupied 470,437 — — — 470,437 Consumer and Other 4,202 7 — 66 4,275 Totals $ 1,461,929 $ 645 $ — $ 746 $ 1,463,320 Accruing Interest 30-89 Days 90 Days or December 31, 2017 Current Past Due More Past Due Nonaccrual Total Commercial $ 217,734 $ 10 $ — $ 9 $ 217,753 Construction and Land Development 130,003 — — 583 130,586 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 28,238 — — 347 28,585 1st REM - 1-4 Family 33,219 — — 125 33,344 LOCs and 2nd REM - Rentals 13,474 160 — — 13,634 1st REM - Rentals 119,876 268 — — 120,144 Multifamily 317,872 — — — 317,872 CRE Owner Occupied 65,686 223 — — 65,909 CRE Non-owner Occupied 415,034 — — — 415,034 Consumer and Other 4,174 3 — 75 4,252 Totals $ 1,345,310 $ 664 $ — $ 1,139 $ 1,347,113 At June 30, 2018, there were four loans classified as troubled debt restructurings with a current outstanding balance of $582,000. In comparison, at December 31, 2017, there were nine loans classified as troubled debt restructurings with an outstanding balance of $3.0 million. There were no new loans classified as troubled debt restructurings during the six month period ended June 30, 2018 and no loans classified as troubled debt restructurings during the previous twelve months that subsequently defaulted during the six months ended June 30, 2018. |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2018 | |
Deposits. | |
Deposits | Note 5: Deposits The following table presents the composition of deposits at June 30, 2018 and December 31, 2017: June 30, December 31, 2018 2017 Transaction Deposits $ 501,365 $ 469,831 Savings and Money Market Deposits 381,942 369,942 Brokered Deposits 230,683 207,481 Time Deposits 300,701 292,096 Totals $ 1,414,691 $ 1,339,350 |
Subordinated Debentures
Subordinated Debentures | 6 Months Ended |
Jun. 30, 2018 | |
Subordinated Debentures | |
Subordinated Debentures | Note 6: Subordinated Debentures On July 12, 2017, the Company entered into a Subordinated Note Purchase Agreement with certain institutional accredited investors (the “Purchasers”) whereby the Company sold and issued $25.0 million in aggregate principal amount of fixed-to-floating subordinated notes due 2027 (the “Notes”). The Notes were issued by the Company to the Purchasers at a price equal to 100% of their face amount. Issuance costs were $516,000 and have been netted against Subordinated Debt on the consolidated balance sheets. These costs are being amortized over five years, which represents the period from issuance to the first redemption date of July 15, 2022. Total amortization expense for the three and six months ended June 30, 2018 was $26,000 and $51,000, with $422,000 remaining to be amortized as of June 30, 2018. The Notes mature on July 15, 2027, with a fixed interest rate of 5.875% payable semiannually in arrears for five years until July 15, 2022. Thereafter, the Company will be obligated to pay interest at a rate equal to 3‑month LIBOR plus 388 basis points quarterly in arrears until either the early redemption date or the maturity date. The Notes are not convertible into or exchangeable for any other securities or assets of the Company or any of its subsidiaries. The Notes are redeemable by the Company, in whole or in part, on or after July 15, 2022, and at any time upon the occurrence of certain events. Any redemption by the Company would be at a redemption price equal to 100% of the outstanding principal amount of the Notes being redeemed, including any accrued and unpaid interest thereon. |
Commitments, Contingencies and
Commitments, Contingencies and Credit Risk | 6 Months Ended |
Jun. 30, 2018 | |
Commitments, Contingencies and Credit Risk | |
Commitments, Contingencies and Credit Risk | Note 7: Commitments, Contingencies and Credit Risk Financial Instruments with Off-Balance Sheet Credit Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Company’s exposure to credit loss is represented by the contractual, or notional, amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments. Since some of the commitments are expected to expire without being drawn upon and some of the commitments may not be drawn upon to the total extent of the commitment, the notional amount of these commitments does not necessarily represent future cash requirements. The following commitments were outstanding at June 30, 2018 and December 31, 2017: June 30, December 31, 2018 2017 Unfunded Commitments Under Lines of Credit $ 413,135 $ 309,513 Letters of Credit 73,655 64,546 Totals $ 486,790 $ 374,059 Legal Contingencies Neither the Company nor any of its subsidiaries is a party, and no property of these entities is subject, to any material pending legal proceedings, other than ordinary routine litigation incidental to the Bank’s business. The Company does not know of any proceeding contemplated by a governmental authority against the Company or any of its subsidiaries. |
Stock Options
Stock Options | 6 Months Ended |
Jun. 30, 2018 | |
Stock Options | |
Stock Options | Note 8: Stock Options In 2017, the Company approved the Bridgewater Bancshares, Inc. 2017 Combined Incentive and Non-Statutory Stock Option Plan (the “2017 Plan”). Under the 2017 Plan, the Company may grant options to its directors, officers, and employees for up to 1,500,000 shares of common stock. Both incentive stock options and nonqualified stock options may be granted under the Plan. The exercise price of each option equals the estimated market value of the Company’s stock on the date of grant and an option’s maximum term is ten years and a vesting period of five years. As of June 30, 2018, there were 638,000 of unissued shares of the Company’s common stock authorized for option grants under the 2017 Plan. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on an industry index as described below. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. Historically, the Company has not paid a dividend on its common share and does not expect to do so in the near future. The Company used the S&P 600 CM Bank Index as its historical volatility index. The S&P 600 CM Bank Index is an index of publicly traded small capitalization, regional, commercial banks located throughout the United States. There were 36 banks in the index ranging in market capitalization from $395 million up to $3.5 billion. June 30, 2018 Dividend Yield — % Expected Life 7 Years Expected Volatility 21.84 % Risk-Free Interest Rate 2.90 % The following table presents a summary of the status of the Company’s stock option plans for the six months ended June 30, 2018: June 30, 2018 Weighted Average Shares Exercise Price Outstanding at Beginning of Year 1,721,000 $ 5.68 Granted 30,000 12.31 Exercised — — Forfeitures (4,000) 7.47 Outstanding at Period End 1,747,000 $ 5.79 Options Exercisable at Period End 551,000 $ 2.85 For the three months ended June 30, 2018 and 2017, the Company recognized compensation expense for stock options of $190 and $52, respectively. For the six months ended June 30, 2018 and 2017, the Company recognized compensation expense for stock options of $389 and $104, respectively. The following table presents information pertaining to options outstanding at June 30, 2018: Options Outstanding Options Exercisable Number Remaining Number Exercise Price Outstanding Contractual Life Exercise Price Outstanding $ 1.65 15,000 3.4 Years $ 1.65 15,000 2.13 90,000 4.8 Years 2.13 90,000 3.00 520,000 5.5 Years 3.00 416,000 3.58 50,000 6.5 Years 3.58 30,000 7.47 1,042,000 9.3 Years 7.47 — 7.78 5,000 9.6 Years 7.78 — 13.22 25,000 9.9 Years 13.22 — Totals 1,747,000 7.8 Years $ 5.79 $ 551,000 As of June 30, 2018, there was $2,698 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the 2017 Plan that is expected to be recognized over a period of five years. The following is an analysis of nonvested options to purchase shares of the Company’s stock issued and outstanding for the six months ended June 30, 2018: Weighted Number of Average Grant Shares Date Fair Value Nonvested Options at December 31, 2017 1,302,000 $ 2.55 Granted 30,000 3.91 Vested (132,000) 1.49 Forfeited (4,000) 2.80 Nonvested Options at June 30, 2018 1,196,000 $ 2.70 |
Regulatory Capital
Regulatory Capital | 6 Months Ended |
Jun. 30, 2018 | |
Regulatory Capital | |
Regulatory Capital | Note 9: Regulatory Capital Effective January 1, 2015, the capital requirements of the Company and the Bank were changed to implement the regulatory requirements of the Basel III capital reforms. The Basel III requirements, among other things, (i) apply a strengthened set of capital requirements to the Company and Bank, including requirements related to common equity as a component of core capital, (ii) implement a “capital conservation buffer” against risk and higher minimum tier capital requirement, and (iii) revise the rules for calculating risk-weighted assets for purposes of such requirements. The rules made corresponding revisions to the prompt corrective action framework and include the new capital ratios and buffer requirements which will be phased in incrementally, with full implementation scheduled for January 1, 2019. 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve qualitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the table and defined in the regulation) of Total Capital to Risk Weighted Assets, Tier 1 Capital to Risk Weighted Assets, Common Equity Tier 1 Capital to Risk Weighted Assets, and Tier 1 Capital to Average Assets. The following tables present the Company and the Bank’s capital amounts and ratios as of June 30, 2018 and December 31, 2017: To be Well Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Regulations June 30, 2018 Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Company (Consolidated): Total Risk-Based Capital $ 246,657 15.80 % $ 124,863 8.00 % N/A N/A Tier 1 Risk-Based Capital 204,053 13.07 93,647 6.00 N/A N/A Common Equity Tier 1 Capital 204,053 13.07 70,235 4.50 N/A N/A Leverage Ratio 204,053 11.92 68,462 4.00 N/A N/A Bank: Total Risk-Based Capital $ 211,313 13.60 % $ 124,325 8.00 % $ 155,407 10.00 % Tier 1 Risk-Based Capital 193,287 12.44 93,244 6.00 124,325 8.00 Common Equity Tier 1 Capital 193,287 12.44 69,933 4.50 101,014 6.50 Leverage Ratio 193,287 11.32 68,321 4.00 85,401 5.00 To be Well Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Regulations December 31, 2017 Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Company (Consolidated): Total Risk-Based Capital $ 173,848 12.46 % $ 111,638 8.00 % N/A N/A Tier 1 Risk-Based Capital 132,459 9.49 83,729 6.00 N/A N/A Common Equity Tier 1 Capital 132,459 9.49 62,797 4.50 N/A N/A Leverage Ratio 132,459 8.38 63,264 4.00 N/A N/A Bank: Total Risk-Based Capital $ 171,805 12.37 % $ 111,134 8.00 % $ 138,918 10.00 % Tier 1 Risk-Based Capital 154,943 11.15 83,351 6.00 111,134 8.00 Common Equity Tier 1 Capital 154,943 11.15 62,513 4.50 90,297 6.50 Leverage Ratio 154,943 9.83 63,060 4.00 78,825 5.00 The Bank must maintain a capital conservation buffer as defined by Basel III regulatory capital guidelines, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. For 2018 and 2017, the capital conservation buffer is 1.875% and 1.25%, respectively. The buffer will increase incrementally each year until 2019 when the entire 2.5% capital conservation buffer will be fully phrased-in. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurement | |
Fair Value Measurement | Note 10: Fair Value Measurement The Company categorizes its assets and liabilities measured at fair value into a three-level hierarchy based on the priority of the inputs to the valuation technique used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement. Assets and liabilities valued at fair value are categorized based on the inputs to the valuation techniques as follows: Level 1 – Inputs that utilized quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 – Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 3 – Inputs that are unobservable for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. Subsequent to initial recognition, the Company may re-measure the carrying value of assets and liabilities measured on a nonrecurring basis to fair value. Adjustments to fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their fair value. Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company adopted the policy to value certain financial instruments at fair value. The Company has not elected to measure any existing financial instruments at fair value; however, it may elect to measure newly acquired financial instruments at fair value in the future. Recurring Basis The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The following table presents the balances of the assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017: June 30, 2018 Level 1 Level 2 Level 3 Total Securities Available for Sale: U.S. Treasury Securities $ — $ 9,903 $ — $ 9,903 Municipal Bonds — 125,635 — 125,635 Mortgage-Backed Securities — 48,927 — 48,927 Corporate Securities — 10,637 — 10,637 SBA Securities — 50,969 — 50,969 Interest Rate Swap — 494 — 494 Totals $ — $ 246,565 $ — $ 246,565 December 31, 2017 Level 1 Level 2 Level 3 Total Securities Available for Sale: Municipal Bonds $ — $ 118,320 $ — $ 118,320 Mortgage-Backed Securities — 60,681 — 60,681 Corporate Securities — 5,107 — 5,107 SBA Securities — 45,383 — 45,383 Interest Rate Swap — 344 — 344 Totals $ — $ 229,835 $ — $ 229,835 Investment Securities When available, the Company uses quoted market prices to determine the fair value of investment securities; such items are classified in Level 1 of the fair value hierarchy. For the Company’s investments, when quoted prices are not available for identical securities in an active market, the Company determines fair value utilizing vendors who apply matrix pricing for similar bonds where no price is observable or may compile prices from various sources. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market, and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially, all of these assumptions are observable in the marketplace and can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Fair values from these models are verified, where possible, against quoted market prices for recent trading activity of assets with similar characteristics to the security being valued. Such methods are generally classified as Level 2. However, when prices from independent sources vary, or cannot be obtained or corroborated, a security is generally classified as Level 3. Interest Rate Swap Interest rate swaps are traded in over-the-counter markets where quoted market prices are not readily available. For those interest rate swaps, fair value is determined using internally developed models of a third party that uses primarily market observable inputs, such as yield curves and option volatilities and, accordingly are valued using Level 2 inputs. Nonrecurring Basis Certain assets are measured at fair value on a nonrecurring basis. These assets are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment or a change in the amount of previously recognized impairment. The following tables present net impairment losses related to nonrecurring fair value measurements of certain assets for the periods ended June 30, 2018 and December 31, 2017: June 30, 2018 Level 1 Level 2 Level 3 Loss Impaired Loans $ — $ 362 $ — $ 429 Foreclosed Assets — 148 141 Totals $ — $ 510 $ — $ 570 December 31, 2017 Level 1 Level 2 Level 3 Loss Impaired Loans $ — $ 464 $ — $ 109 Totals $ — $ 464 $ — $ 109 Impaired Loans In accordance with the provisions of the loan impairment guidance, impairment is measured on loans when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, or discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceeds the recorded investments in such loans. Impaired loans for which an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. Collateral values are estimated using Level 2 inputs based on customized discounting criteria. Impairment amounts on impaired loans represent specific valuation allowance and write-downs during the period presented on impaired loans that were individually evaluated for impairment based on the estimated fair value of the collateral less estimated selling costs, excluding impaired loans fully charged-off. Foreclosed Assets Foreclosed assets are recorded at fair value based on property appraisals, less estimated selling costs, at the date of the transfer with any impairment amount charged to the allowance for loan losses. Subsequent to the transfer, foreclosed assets are carried at the lower of cost or fair value, less estimated selling costs with changes in fair value or any impairment amount recorded in other noninterest income. Values are estimated using Level 2 inputs based on customized discounting criteria. The carrying value of foreclosed assets is not re-measured to fair value on a recurring basis, but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs. Fair Value Disclosure of fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the consolidated balance sheets. In cases where quoted market prices are not available, fair values are based on estimates using present value of cash flow or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases could not be realized in immediate settlement of the instruments. Certain financial instruments with a fair value that is not practicable to estimate and all non-financial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not necessarily represent the underlying value of the Company. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters that could affect the estimates. Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business. Deposits with no stated maturities are defined as having a fair value equivalent to the amount payable on demand. This prohibits adjusting fair value derived from retaining those deposits for an expected future period of time. This component, commonly referred to as a deposit base intangible, is neither considered in the above amounts nor is it recorded as an intangible asset on the balance sheet. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. The following tables present the carrying amount and estimated fair values of financial instruments at June 30, 2018 and December 31, 2017: June 30, 2018 Fair Value Hierarchy Carrying Estimated Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 21,917 $ 21,917 $ — $ — $ 21,917 Bank-Owned Certificates of Deposit 3,803 — 3,791 — 3,791 Securities Available for Sale 246,071 — 246,071 — 246,071 FHLB Stock, at Cost 5,294 — 5,294 — 5,294 Loans, Net 1,441,596 — 1,430,207 — 1,430,207 Accrued Interest Receivable 5,971 — 5,971 — 5,971 Interest Rate Swap 494 — 494 — 494 Financial Liabilities: Deposits $ 1,414,691 $ — $ 1,413,112 $ — $ 1,413,112 Federal Funds Purchased — — — — — Notes Payable 16,000 — 16,023 — 16,023 FHLB Advances 84,000 — 82,729 — 82,729 Subordinated Debentures 24,578 — 24,669 — 24,669 Accrued Interest Payable 1,502 — 1,502 — 1,502 December 31, 2017 Fair Value Hierarchy Carrying Estimated Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 23,725 $ 23,725 $ — $ — $ 23,725 Bank-Owned Certificates of Deposit 3,072 — 3,075 — 3,075 Securities Available for Sale 229,491 — 229,491 — 229,491 FHLB Stock, at Cost 5,147 — 5,147 — 5,147 Loans, Net 1,326,507 — 1,323,495 — 1,323,495 Accrued Interest Receivable 5,342 — 5,342 — 5,342 Interest Rate Swap 344 — 344 — 344 Financial Liabilities: Deposits $ 1,339,350 $ — $ 1,340,109 $ — $ 1,340,109 Federal Funds Purchased 23,000 — 23,000 — 23,000 Notes Payable 17,000 — 17,024 — 17,024 FHLB Advances 68,000 — 67,282 — 67,282 Subordinated Debentures 24,527 — 25,090 — 25,090 Accrued Interest Payable 1,408 — 1,408 — 1,408 The following methods and assumptions were used by the Company to estimate fair value of consolidated financial statements not previously discussed. Cash and cash equivalents – The carrying amount of cash and cash equivalents approximates their fair value. Bank-owned certificates of deposit – Fair values of bank-owned certificates of deposit are estimated using the discounted cash flow analysis based on current rates for similar types of deposits. FHLB stock – The carrying amount of FHLB stock approximates its fair value. Loans, Net – Fair values for loans are estimated based on discounted cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. Accrued interest receivable – The carrying amount of accrued interest receivable approximates its fair value since it is short term in nature and does not present anticipated credit concerns. Deposits – The fair values disclosed for demand deposits without stated maturities (interest and noninterest transaction, savings, and money market accounts) are equal to the amount payable on demand at the reporting date (their carrying amounts). Fair values for the fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits. Federal funds purchased – The carrying amount of federal funds purchased approximates the fair value. Notes payable and subordinated debt – The fair value of the Company’s notes payable and subordinated debt are estimated using a discounted cash flow analysis, based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements. FHLB advances – The fair values of the Company’s FHLB advances are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rates for similar types of borrowing agreements. Accrued interest payable – The carrying amount of accrued interest payable approximates its fair value since it is short term in nature. Off-balance-sheet instruments – Fair values of the Company’s off-balance-sheet instruments (lending commitments and unused lines of credit) are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the counterparties’ credit standing and discounted cash flow analysis. The fair value of these off-balance-sheet items approximates the recorded amounts of the related fees and is not material at June 30, 2018 and December 31, 2017. Limitations – The fair value of a financial instrument is the current amount that would be exchanged between market participants, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events | |
Subsequent Events | Note 11: Subsequent Events The Company intends to sign, in the near-term, an agreement with a general contractor for the construction of the Company’s corporate headquarters office building in St. Louis Park, Minnesota. The commitment under this contract will approximate $24 million. The Company anticipates entering into additional contracts to complete the build-out of the interior of the building. Costs associated with the construction of the building will be capitalized on the Company’s balance sheet and depreciated over the estimated life of the asset once placed in service. |
Description of the Business a19
Description of the Business and Summary of Significant Accounting Policies (Policies ) | 6 Months Ended |
Jun. 30, 2018 | |
Description of the Business and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10‑Q and, therefore, do not include all disclosures necessary for a complete presentation of the consolidated balance sheets, consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity and consolidated statements of cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). However, all normal recurring adjustments which are, in the opinion of management, necessary for the fair presentation of the interim financial statements have been included. The results of operations for the six-month period ended June 30, 2018 are not necessarily indicative of the results which may be expected for the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s prospectus filed with the Securities and Exchange Commission (“SEC”) on March 14, 2018, pursuant to Rule 424(b)(4) under the Securities Act of 1933. |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the amounts of the Company, the Bank and Bridgewater Risk Management. All significant intercompany balances and transactions have been eliminated in consolidation. |
Impact of Recent Accounting Standards | Impact of Recently Adopted Accounting Standards In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017‑09, Compensation – Stock Compensation (Topic 718) (“ASU 2017-09”). ASU 2017-09 provides clarity about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company did not modify any share-based payment awards, thus, the impact of adopting the new standard had no impact on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU 2018‑02, Income Statement-Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The amendments of this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company elected to adopt ASU 2018-02 and, as a result, reclassified $194,000 from accumulated other comprehensive income to retained earnings as of January 1, 2018. The reclassification impacted the consolidated balance sheet and the consolidated statement of shareholders’ equity as of and for the six months ended June 30, 2018. Impact of Recently Issued Accounting Standards The following ASUs have been issued by FASB and may impact the Company’s consolidated financial statements in future reporting periods. In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014‑09”). ASU 2014‑09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014‑09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2015‑14, Revenue from Contracts with Customers (Topic 606) (“ASU 2015‑14”) was issued in August 2015 which defers adoption to annual reporting periods beginning after December 15, 2018 and interim reporting periods beginning after December 15, 2019. The timing of the Company’s revenue recognition is not expected to materially change. The Company’s largest portions of revenue, interest and fees on loans and gain on sales of loans, are specifically excluded from the scope of the guidance, and the Company currently recognizes the majority of the remaining revenue sources in a manner that management believes is consistent with the new guidance. Because of this, management believes that revenue recognized under the new guidance will generally approximate revenue recognized under current GAAP. These observations are subject to change as the evaluation is completed. In January 2016, the FASB issued ASU 2016‑01, Financial Instruments—Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016‑01”). This guidance changes how entities account for equity investments that do not result in consolidation and are not accounted for under the equity method of accounting. Entities will be required to measure these investments at fair value at the end of each reporting period and recognize changes in fair value in net income. A practicability exception will be available for equity investments that do not have readily determinable fair values; however, the exception requires the Company to adjust the carrying amount for impairment and observable price changes in orderly transactions for the identical or a similar investment of the same issuer. This guidance also changes certain disclosure requirements and other aspects of current GAAP. This guidance is effective for fiscal years beginning after December 15, 2018 and for interim reporting periods beginning after December 15, 2019. Early adoption is permitted for only one of the six amendments. The Company is evaluating the impact this new standard will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) (“ASU 2016‑02”). The new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. Entities will be required to recognize the lease assets and lease liabilities that arise from leases in the statement of financial position and to disclose qualitative and quantitative information about lease transactions, such as information about variable lease payments and options to renew and terminate leases. This guidance is effective for fiscal years beginning after December 15, 2019 and interim reporting periods beginning after December 15, 2020. The Company’s assets and liabilities will increase based on the present value of the remaining lease payments for leases in place at the adoption date; however, this is not expected to be significant to the Company’s results of operations. The Company is evaluating the impact this new standard will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016‑05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (“ASU 2016‑05”). The new guidance clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. This guidance is effective for fiscal years beginning after December 15, 2017 and interim reporting periods beginning after December 15, 2018. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016‑09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016‑09”). The new guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Entities will be required to recognize the income tax effects of awards in the income statement when the awards vest or are settled. This guidance is effective for fiscal years beginning after December 15, 2017 and interim reporting periods beginning after December 31, 2018. The adoption of this ASU is not expected to have a significant impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU affect all entities that measure credit losses on financial instruments including loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial asset that has a contractual right to receive cash that is not specifically excluded. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology required in current GAAP with a methodology that reflects expected credit losses that requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The amendments in this ASU will affect entities to varying degrees depending on the credit quality of the assets held by the entity, the duration of the assets held, and how the entity applies the current incurred loss methodology. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020 and interim reporting periods beginning after December 15, 2021. All entities may adopt the amendments in the ASU early as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Amendments should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The Company is evaluating the impact this new standard will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU were issued to address concerns over the cost and complexity of the two-step goodwill impairment test and resulted in the removal of the second step of the test. The amendments require an entity to apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This ASU is intended to reduce the cost and complexity of the two-step goodwill impairment test and is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2021, with early adoption permitted for testing performed after January 1, 2017. Upon adoption, the amendments should be applied on a prospective basis and the entity is required to disclose the nature of and reason for the change in accounting principle upon transition. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU 2017‑08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310‑20): Premium Amortization on Purchased Callable Debt Securities. The amendments in this ASU shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount as discounts continue to be accreted to maturity. This ASU is intended to more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. In most cases, market participants price securities to the call date that produces the worst yield when the coupon is above current market rates and prices securities to maturity when the coupon is below market rates. As a result, the amendments more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument. This ASU is intended to reduce diversity in practice and is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Upon adoption, the amendments should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principles. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017‑12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments of this ASU better align an entity’s accounting and financial reporting for hedging activities with the economic objectives of those activities. The ASU is effective for fiscal years beginning after December 15, 2019 and interim reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the impact this new standard with have on its consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share | |
Schedule of numerators and denominators for basic and diluted earnings per share computations | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Net Income Available to Common Shareholders $ 6,746 $ 4,797 $ 12,696 $ 8,880 Weighted Average Common Stock Outstanding: Weighted Average Common Stock Outstanding (Basic) 30,059,374 24,589,861 27,919,457 24,589,861 Stock Options 427,427 219,208 426,387 219,208 Weighted Average Common Stock Outstanding (Dilutive) 30,486,801 24,809,069 28,345,844 24,809,069 Basic Earnings per Common Share $ 0.22 $ 0.20 $ 0.45 $ 0.36 Diluted Earnings per Common Share 0.22 0.19 0.45 0.36 |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Securities | |
Summary of the amortized cost and estimated fair value of securities with gross unrealized gains and losses | June 30, 2018 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Securities Available for Sale: U.S. Treasury Securities $ 9,908 $ — $ (5) $ 9,903 Municipal Bonds 125,800 1,288 (1,453) 125,635 Mortgage-Backed Securities 50,977 4 (2,054) 48,927 Corporate Securities 10,663 51 (77) 10,637 SBA Securities 51,620 21 (672) 50,969 Total Securities Available for Sale $ 248,968 $ 1,364 $ (4,261) $ 246,071 December 31, 2017 Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value Securities Available for Sale: Municipal Bonds $ 115,784 $ 3,005 $ (469) $ 118,320 Mortgage-Backed Securities 61,945 11 (1,275) 60,681 Corporate Securities 5,052 80 (25) 5,107 SBA Securities 45,368 242 (227) 45,383 Total Securities Available for Sale $ 228,149 $ 3,338 $ (1,996) $ 229,491 |
Summary of fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | Less Than 12 Months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses June 30, 2018 U.S. Treasury Securities $ 9,903 $ (5) $ — $ — $ 9,903 $ (5) Municipal Bonds 48,123 (645) 21,669 (808) 69,792 (1,453) Mortgage-Backed Securities 16,186 (426) 32,224 (1,628) 48,410 (2,054) Corporate Securities 1,946 (23) 1,995 (54) 3,941 (77) SBA Securities 37,604 (570) 4,590 (102) 42,194 (672) Total Securities Available for Sale $ 113,762 $ (1,669) $ 60,478 $ (2,592) $ 174,240 $ (4,261) Less Than 12 Months 12 Months or Greater Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses December 31, 2017 Municipal Bonds $ 15,043 $ (89) $ 21,111 $ (380) $ 36,154 $ (469) Mortgage-Backed Securities 16,046 (105) 41,800 (1,170) 57,846 (1,275) Corporate Securities — — 2,028 (25) 2,028 (25) SBA Securities 15,634 (189) 3,775 (38) 19,409 (227) Total Securities Available for Sale $ 46,723 $ (383) $ 68,714 $ (1,613) $ 115,437 $ (1,996) |
Schedule of contractual maturities of debt | June 30, 2018 Amortized Cost Fair Value Due in One Year or Less $ 1,381 $ 1,382 Due After One Year Through Five Years 24,961 25,044 Due After Five Years Through 10 Years 56,530 56,715 Due After 10 Years 63,499 63,034 Subtotal 146,371 146,175 Mortgage-Backed Securities 50,977 48,927 SBA Securities 51,620 50,969 Totals $ 248,968 $ 246,071 |
Summary of the proceeds from sales of securities available for sale, as well as gross gains and losses | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Proceeds From Sales of Securities $ 10,950 $ 6,059 $ 10,950 $ 6,624 Gross Gains on Sales 53 108 53 139 Gross Losses on Sales (112) (205) (112) (205) |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Loans | |
Summary of components of loans | June 30, December 31, 2018 2017 Commercial $ 204,072 $ 217,753 Construction and Land Development 164,492 130,586 Real Estate Mortgage: 1-4 Family Mortgage 213,265 195,707 Multifamily 340,888 317,872 CRE Owner Occupied 65,891 65,909 CRE Non-owner Occupied 470,437 415,034 Total Real Estate Mortgage Loans 1,090,481 994,522 Consumer and Other 4,275 4,252 Total Loans, Gross 1,463,320 1,347,113 Net Deferred Loan Fees (4,058) (4,104) Allowance for Loan Losses (17,666) (16,502) Total Loans, Net $ 1,441,596 $ 1,326,507 |
Summary of the activity in the allowance for loan losses by segment | The following table presents the activity in the allowance for loan losses, by segment, for the three months ended June 30, 2018 and 2017: Construction CRE CRE and Land 1-‑4 Family Owner Non‑owner Consumer Three Months Ended June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Unallocated Total Allowance for Loan Losses: Beginning Balance $ 2,225 $ 1,765 $ 2,418 $ 3,476 $ 914 $ 5,407 $ 50 $ 866 $ 17,121 Provision for Loan Losses 21 557 146 76 (91) 204 10 (23) 900 Loans Charged-off — (357) — — — — (4) — (361) Recoveries of Loans 2 — 3 — — — 1 — 6 Total Ending Allowance Balance 2,248 1,965 2,567 3,552 823 5,611 57 843 17,666 Three Months Ended June 30, 2017 Allowance for Loan Losses: Beginning Balance $ 1,437 $ 1,549 $ 2,407 $ 2,053 $ 1,213 $ 3,660 $ 74 $ 823 $ 13,216 Provision for Loan Losses 104 55 (316) 4 (82) 689 (1) 372 825 Loans Charged-off — — — — — — (3) — (3) Recoveries of Loans 1 — 11 — — — 3 — 15 Total Ending Allowance Balance 1,542 1,604 2,102 2,057 1,131 4,349 73 1,195 14,053 The following table presents the activity in the allowance for loan losses, by segment, for the six months ended June 30, 2018 and 2017: Construction CRE CRE and Land 1-‑4 Family Owner Non‑owner Consumer Six Months Ended June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Unallocated Total Allowance for Loan Losses: Beginning Balance $ 2,435 $ 1,892 $ 2,317 $ 3,170 $ 956 $ 5,087 $ 60 $ 585 $ 16,502 Provision for Loan Losses (209) 430 237 382 (133) 524 11 258 1,500 Loans Charged-off — (357) — — — — (16) — (373) Recoveries of Loans 22 — 13 — — — 2 — 37 Total Ending Allowance Balance 2,248 1,965 2,567 3,552 823 5,611 57 843 17,666 Six Months Ended June 30, 2017 Allowance for Loan Losses: Beginning Balance $ 1,315 $ 1,379 $ 2,410 $ 1,568 $ 1,160 $ 3,323 $ 78 $ 1,100 $ 12,333 Provision for Loan Losses 226 223 (329) 489 (29) 1,100 — 95 1,775 Loans Charged-off (1) — — — — (74) (8) — (83) Recoveries of Loans 2 2 21 — — — 3 — 28 Total Ending Allowance Balance 1,542 1,604 2,102 2,057 1,131 4,349 73 1,195 14,053 The following tables present the balance in the allowance for loan losses and the recorded investment in loans, by segment, based on impairment method as of June 30, 2018 and December 31, 2017: Construction CRE CRE and Land 1-‑4 Family Owner Non‑owner Consumer Allowance for Loan Losses at June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Unallocated Total Individually Evaluated for Impairment $ 14 $ 3 $ 46 $ — $ 23 $ — $ — $ — $ 86 Collectively Evaluated for Impairment 2,234 1,962 2,521 3,552 800 5,611 57 843 17,580 Totals $ 2,248 $ 1,965 $ 2,567 $ 3,552 $ 823 $ 5,611 $ 57 $ 843 $ 17,666 Allowance for Loan Losses at December 31, 2017 Individually Evaluated for Impairment $ 14 $ — $ 57 $ 14 $ 24 $ — $ — $ — $ 109 Collectively Evaluated for Impairment 2,421 1,892 2,260 3,156 932 5,087 60 585 16,393 Totals $ 2,435 $ 1,892 $ 2,317 $ 3,170 $ 956 $ 5,087 $ 60 $ 585 $ 16,502 Construction CRE CRE and Land 1‑4 Family Owner Non‑owner Consumer Loans at June 30, 2018 Commercial Development Mortgage Multifamily Occupied Occupied and Other Total Individually Evaluated for Impairment $ 14 $ 212 $ 1,912 $ 65 $ 664 $ — $ 66 $ 2,933 Collectively Evaluated for Impairment 204,058 164,280 211,353 340,823 65,227 470,437 4,209 1,460,387 Totals $ 204,072 $ 164,492 $ 213,265 $ 340,888 $ 65,891 $ 470,437 $ 4,275 $ 1,463,320 Loans at December 31, 2017 Individually Evaluated for Impairment $ 14 $ 583 $ 1,693 $ 66 $ 2,165 $ — $ 75 $ 4,596 Collectively Evaluated for Impairment 217,739 130,003 194,014 317,806 63,744 415,034 4,177 1,342,517 Totals $ 217,753 $ 130,586 $ 195,707 $ 317,872 $ 65,909 $ 415,034 $ 4,252 $ 1,347,113 |
Summary of impaired loans by loan segment | The following table presents information regarding total carrying amounts and total unpaid principal balances of impaired loans by loan segment as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance Loans With No Related Allowance for Loan Losses: Construction and Land Development $ — $ — $ — $ 583 $ 833 $ — Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 494 494 — 508 515 — 1st REM - 1-4 Family 374 374 — 125 125 — 1st REM - Rentals 980 980 — 726 726 — Multifamily 65 65 — — — — CRE Owner Occupied 506 506 — 2,006 2,023 — Consumer and Other 66 84 — 75 92 — Totals 2,485 2,503 — 4,023 4,314 — Loans With An Allowance for Loan Losses: Commercial 14 14 14 14 14 14 Construction and Land Development 212 821 3 — — — Real Estate Mortgage: LOCs and 2nd REM - Rentals 64 64 46 64 64 47 1st REM - Rentals — — — 270 270 10 Multifamily — — — 66 66 14 CRE Owner Occupied 158 158 23 159 159 24 Totals 448 1,057 86 573 573 109 Grand Totals $ 2,933 $ 3,560 $ 86 $ 4,596 $ 4,887 $ 109 The following table presents information regarding the average balances and interest income recognized on impaired loans by loan segment for the three and six months ended June 30, 2018 and 2017: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Average Interest Average Interest Average Interest Average Interest Investment Recognized Investment Recognized Investment Recognized Investment Recognized Loans With No Related Allowance for Loan Losses: Commercial $ — $ — $ 2,086 $ 25 $ — $ — $ 2,005 $ 43 Construction and Land Development — — 745 2 — — 748 3 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage $ 506 1 $ 262 4 $ 509 $ 4 $ 263 $ 7 1st REM - 1-4 Family 376 5 792 — 378 5 798 — 1st REM - Rentals 981 11 995 12 986 24 999 25 Multifamily 65 1 — — 33 1 — — CRE Owner Occupied 512 7 1,850 20 518 14 989 27 Consumer and Other 67 — — — 69 — — — Totals 2,507 25 6,730 63 2,493 48 5,802 105 Loans With An Allowance for Loan Losses: Commercial 14 — — — 14 — — — Construction and Land Development 216 — 10 — 110 — 10 — Real Estate Mortgage: LOCs and 2nd REM - Rentals 64 1 65 1 64 2 65 1 1st REM - Rentals — — 278 3 67 1 279 5 Multifamily — — 66 1 33 1 66 1 CRE Owner Occupied 158 2 161 2 158 4 161 2 Consumer and Other — — 84 1 — — 85 2 Totals 452 3 664 8 445 8 666 11 Grand Totals $ 2,959 $ 28 $ 7,394 $ 71 $ 2,938 $ 56 $ 6,468 $ 116 |
Summary of risk category of loans by loan segment, based on the most recent analysis performed by management | June 30, 2018 Pass Watch Substandard Total Commercial $ 203,439 $ 614 $ 19 $ 204,072 Construction and Land Development 161,464 2,816 212 164,492 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 31,459 587 — 32,046 1st REM - 1-4 Family 34,575 621 374 35,570 LOCs and 2nd REM - Rentals 9,307 2,258 558 12,123 1st REM - Rentals 132,546 — 980 133,526 Multifamily 340,823 — 65 340,888 CRE Owner Occupied 58,361 5,136 2,394 65,891 CRE Non-owner Occupied 467,027 3,252 158 470,437 Consumer and Other 4,209 — 66 4,275 Totals $ 1,443,210 $ 15,284 $ 4,826 $ 1,463,320 December 31, 2017 Pass Watch Substandard Total Commercial $ 217,739 $ — $ 14 $ 217,753 Construction and Land Development 130,003 — 583 130,586 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 28,238 — 347 28,585 1st REM - 1-4 Family 33,219 — 125 33,344 LOCs and 2nd REM - Rentals 13,409 — 225 13,634 1st REM - Rentals 118,891 — 1,253 120,144 Multifamily 317,806 — 66 317,872 CRE Owner Occupied 63,290 — 2,619 65,909 CRE Non-owner Occupied 409,533 5,501 — 415,034 Consumer and Other 4,177 — 75 4,252 Totals $ 1,336,305 $ 5,501 $ 5,307 $ 1,347,113 |
Summary of aging of the recorded investment in past due loans by loan segment | Accruing Interest 30-89 Days 90 Days or June 30, 2018 Current Past Due More Past Due Nonaccrual Total Commercial $ 204,045 $ 13 $ — $ 14 $ 204,072 Construction and Land Development 164,280 — — 212 164,492 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 31,711 — — 335 32,046 1st REM - 1-4 Family 35,451 — — 119 35,570 LOCs and 2nd REM - Rentals 11,964 159 — — 12,123 1st REM - Rentals 133,060 466 — — 133,526 Multifamily 340,888 — — — 340,888 CRE Owner Occupied 65,891 — — — 65,891 CRE Non-owner Occupied 470,437 — — — 470,437 Consumer and Other 4,202 7 — 66 4,275 Totals $ 1,461,929 $ 645 $ — $ 746 $ 1,463,320 Accruing Interest 30-89 Days 90 Days or December 31, 2017 Current Past Due More Past Due Nonaccrual Total Commercial $ 217,734 $ 10 $ — $ 9 $ 217,753 Construction and Land Development 130,003 — — 583 130,586 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 28,238 — — 347 28,585 1st REM - 1-4 Family 33,219 — — 125 33,344 LOCs and 2nd REM - Rentals 13,474 160 — — 13,634 1st REM - Rentals 119,876 268 — — 120,144 Multifamily 317,872 — — — 317,872 CRE Owner Occupied 65,686 223 — — 65,909 CRE Non-owner Occupied 415,034 — — — 415,034 Consumer and Other 4,174 3 — 75 4,252 Totals $ 1,345,310 $ 664 $ — $ 1,139 $ 1,347,113 |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deposits. | |
Schedule of composition of deposits | June 30, December 31, 2018 2017 Transaction Deposits $ 501,365 $ 469,831 Savings and Money Market Deposits 381,942 369,942 Brokered Deposits 230,683 207,481 Time Deposits 300,701 292,096 Totals $ 1,414,691 $ 1,339,350 |
Commitments, Contingencies an24
Commitments, Contingencies and Credit Risk (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments, Contingencies and Credit Risk | |
Schedule of commitments outstanding | June 30, December 31, 2018 2017 Unfunded Commitments Under Lines of Credit $ 413,135 $ 309,513 Letters of Credit 73,655 64,546 Totals $ 486,790 $ 374,059 |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock Options | |
Summary of the fair value of each option award using a closed form option valuation (Black-Scholes) model that uses the assumptions | June 30, 2018 Dividend Yield — % Expected Life 7 Years Expected Volatility 21.84 % Risk-Free Interest Rate 2.90 % |
Summary of the status of the Company’s stock option plans | June 30, 2018 Weighted Average Shares Exercise Price Outstanding at Beginning of Year 1,721,000 $ 5.68 Granted 30,000 12.31 Exercised — — Forfeitures (4,000) 7.47 Outstanding at Period End 1,747,000 $ 5.79 Options Exercisable at Period End 551,000 $ 2.85 |
Summary of information pertaining to options outstanding based on range of exercise price | Options Outstanding Options Exercisable Number Remaining Number Exercise Price Outstanding Contractual Life Exercise Price Outstanding $ 1.65 15,000 3.4 Years $ 1.65 15,000 2.13 90,000 4.8 Years 2.13 90,000 3.00 520,000 5.5 Years 3.00 416,000 3.58 50,000 6.5 Years 3.58 30,000 7.47 1,042,000 9.3 Years 7.47 — 7.78 5,000 9.6 Years 7.78 — 13.22 25,000 9.9 Years 13.22 — Totals 1,747,000 7.8 Years $ 5.79 $ 551,000 |
Summary of analysis of non-vested options to purchase shares of the Company’s stock issued and outstanding | Weighted Number of Average Grant Shares Date Fair Value Nonvested Options at December 31, 2017 1,302,000 $ 2.55 Granted 30,000 3.91 Vested (132,000) 1.49 Forfeited (4,000) 2.80 Nonvested Options at June 30, 2018 1,196,000 $ 2.70 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Regulatory Capital | |
Summary of company and the Bank’s capital amounts and ratios | To be Well Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Regulations June 30, 2018 Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Company (Consolidated): Total Risk-Based Capital $ 246,657 15.80 % $ 124,863 8.00 % N/A N/A Tier 1 Risk-Based Capital 204,053 13.07 93,647 6.00 N/A N/A Common Equity Tier 1 Capital 204,053 13.07 70,235 4.50 N/A N/A Leverage Ratio 204,053 11.92 68,462 4.00 N/A N/A Bank: Total Risk-Based Capital $ 211,313 13.60 % $ 124,325 8.00 % $ 155,407 10.00 % Tier 1 Risk-Based Capital 193,287 12.44 93,244 6.00 124,325 8.00 Common Equity Tier 1 Capital 193,287 12.44 69,933 4.50 101,014 6.50 Leverage Ratio 193,287 11.32 68,321 4.00 85,401 5.00 To be Well Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Regulations December 31, 2017 Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) Company (Consolidated): Total Risk-Based Capital $ 173,848 12.46 % $ 111,638 8.00 % N/A N/A Tier 1 Risk-Based Capital 132,459 9.49 83,729 6.00 N/A N/A Common Equity Tier 1 Capital 132,459 9.49 62,797 4.50 N/A N/A Leverage Ratio 132,459 8.38 63,264 4.00 N/A N/A Bank: Total Risk-Based Capital $ 171,805 12.37 % $ 111,134 8.00 % $ 138,918 10.00 % Tier 1 Risk-Based Capital 154,943 11.15 83,351 6.00 111,134 8.00 Common Equity Tier 1 Capital 154,943 11.15 62,513 4.50 90,297 6.50 Leverage Ratio 154,943 9.83 63,060 4.00 78,825 5.00 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurement | |
Summary of balances of the assets and liabilities measured at fair value on a recurring basis | June 30, 2018 Level 1 Level 2 Level 3 Total Securities Available for Sale: U.S. Treasury Securities $ — $ 9,903 $ — $ 9,903 Municipal Bonds — 125,635 — 125,635 Mortgage-Backed Securities — 48,927 — 48,927 Corporate Securities — 10,637 — 10,637 SBA Securities — 50,969 — 50,969 Interest Rate Swap — 494 — 494 Totals $ — $ 246,565 $ — $ 246,565 December 31, 2017 Level 1 Level 2 Level 3 Total Securities Available for Sale: Municipal Bonds $ — $ 118,320 $ — $ 118,320 Mortgage-Backed Securities — 60,681 — 60,681 Corporate Securities — 5,107 — 5,107 SBA Securities — 45,383 — 45,383 Interest Rate Swap — 344 — 344 Totals $ — $ 229,835 $ — $ 229,835 |
Summary of net impairment losses related to nonrecurring fair value measurements of certain asset | June 30, 2018 Level 1 Level 2 Level 3 Loss Impaired Loans $ — $ 362 $ — $ 429 Foreclosed Assets — 148 141 Totals $ — $ 510 $ — $ 570 December 31, 2017 Level 1 Level 2 Level 3 Loss Impaired Loans $ — $ 464 $ — $ 109 Totals $ — $ 464 $ — $ 109 |
Summary of carrying amount and estimated fair values of financial instruments | June 30, 2018 Fair Value Hierarchy Carrying Estimated Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 21,917 $ 21,917 $ — $ — $ 21,917 Bank-Owned Certificates of Deposit 3,803 — 3,791 — 3,791 Securities Available for Sale 246,071 — 246,071 — 246,071 FHLB Stock, at Cost 5,294 — 5,294 — 5,294 Loans, Net 1,441,596 — 1,430,207 — 1,430,207 Accrued Interest Receivable 5,971 — 5,971 — 5,971 Interest Rate Swap 494 — 494 — 494 Financial Liabilities: Deposits $ 1,414,691 $ — $ 1,413,112 $ — $ 1,413,112 Federal Funds Purchased — — — — — Notes Payable 16,000 — 16,023 — 16,023 FHLB Advances 84,000 — 82,729 — 82,729 Subordinated Debentures 24,578 — 24,669 — 24,669 Accrued Interest Payable 1,502 — 1,502 — 1,502 December 31, 2017 Fair Value Hierarchy Carrying Estimated Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 23,725 $ 23,725 $ — $ — $ 23,725 Bank-Owned Certificates of Deposit 3,072 — 3,075 — 3,075 Securities Available for Sale 229,491 — 229,491 — 229,491 FHLB Stock, at Cost 5,147 — 5,147 — 5,147 Loans, Net 1,326,507 — 1,323,495 — 1,323,495 Accrued Interest Receivable 5,342 — 5,342 — 5,342 Interest Rate Swap 344 — 344 — 344 Financial Liabilities: Deposits $ 1,339,350 $ — $ 1,340,109 $ — $ 1,340,109 Federal Funds Purchased 23,000 — 23,000 — 23,000 Notes Payable 17,000 — 17,024 — 17,024 FHLB Advances 68,000 — 67,282 — 67,282 Subordinated Debentures 24,527 — 25,090 — 25,090 Accrued Interest Payable 1,408 — 1,408 — 1,408 |
Description of the Business a28
Description of the Business and Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 16, 2018 | Jun. 30, 2018 |
IPO | ||
Description of the Business and Summary of Significant Accounting Policies | ||
Net proceeds from issuance of common stock | $ 58,900,000 | |
Retained Earnings | ||
Impact of Recently Adopted Accounting Standards | ||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | $ (194,000) | |
Accumulated Other Comprehensive Income (Loss) | ||
Impact of Recently Adopted Accounting Standards | ||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 194,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share | ||||
Net Income Available to Common Shareholders | $ 6,746 | $ 4,797 | $ 12,696 | $ 8,880 |
Weighted Average Common Stock Outstanding: | ||||
Weighted Average Common Stock Outstanding (Basic) | 30,059,374 | 24,589,861 | 27,919,457 | 24,589,861 |
Stock Options | 427,427 | 219,208 | 426,387 | 219,208 |
Weighted Average Common Stock Outstanding (Dilutive) | 30,486,801 | 24,809,069 | 28,345,844 | 24,809,069 |
Basic Earnings per Common Share (in dollars per share) | $ 0.22 | $ 0.20 | $ 0.45 | $ 0.36 |
Diluted Earnings per Common Share (in dollars per share) | $ 0.22 | $ 0.19 | $ 0.45 | $ 0.36 |
Securities - Securities Availab
Securities - Securities Available for Sale (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized Cost | $ 248,968 | $ 228,149 |
Gross Unrealized Gains | 1,364 | 3,338 |
Gross Unrealized Losses | (4,261) | (1,996) |
Fair Value | 246,071 | 229,491 |
U.S. Treasury Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized Cost | 9,908 | |
Gross Unrealized Losses | (5) | |
Fair Value | 9,903 | |
Municipal Bonds | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized Cost | 125,800 | 115,784 |
Gross Unrealized Gains | 1,288 | 3,005 |
Gross Unrealized Losses | (1,453) | (469) |
Fair Value | 125,635 | 118,320 |
Mortgage-Backed Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized Cost | 50,977 | 61,945 |
Gross Unrealized Gains | 4 | 11 |
Gross Unrealized Losses | (2,054) | (1,275) |
Fair Value | 48,927 | 60,681 |
Corporate Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized Cost | 10,663 | 5,052 |
Gross Unrealized Gains | 51 | 80 |
Gross Unrealized Losses | (77) | (25) |
Fair Value | 10,637 | 5,107 |
SBA Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized Cost | 51,620 | 45,368 |
Gross Unrealized Gains | 21 | 242 |
Gross Unrealized Losses | (672) | (227) |
Fair Value | $ 50,969 | $ 45,383 |
Securities - Continuous Unreali
Securities - Continuous Unrealized Loss Position (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)security | Dec. 31, 2017USD ($)security | |
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Less Than 12 Months, Fair Value | $ 113,762 | $ 46,723 |
Less Than 12 Months, Unrealized Losses | (1,669) | (383) |
12 Months or Greater, Fair Value | 60,478 | 68,714 |
12 Months or Greater, Unrealized Losses | (2,592) | (1,613) |
Fair Value | 174,240 | 115,437 |
Unrealized Losses | $ (4,261) | $ (1,996) |
Number of debt securities with unrealized losses | security | 213 | 133 |
Percentage of aggregate depreciation from amortized cost basis | 2.00% | 1.00% |
U.S. Treasury Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Less Than 12 Months, Fair Value | $ 9,903 | |
Less Than 12 Months, Unrealized Losses | (5) | |
Fair Value | 9,903 | |
Unrealized Losses | (5) | |
Municipal Bonds | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Less Than 12 Months, Fair Value | 48,123 | $ 15,043 |
Less Than 12 Months, Unrealized Losses | (645) | (89) |
12 Months or Greater, Fair Value | 21,669 | 21,111 |
12 Months or Greater, Unrealized Losses | (808) | (380) |
Fair Value | 69,792 | 36,154 |
Unrealized Losses | (1,453) | (469) |
Mortgage-Backed Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Less Than 12 Months, Fair Value | 16,186 | 16,046 |
Less Than 12 Months, Unrealized Losses | (426) | (105) |
12 Months or Greater, Fair Value | 32,224 | 41,800 |
12 Months or Greater, Unrealized Losses | (1,628) | (1,170) |
Fair Value | 48,410 | 57,846 |
Unrealized Losses | (2,054) | (1,275) |
Corporate Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Less Than 12 Months, Fair Value | 1,946 | |
Less Than 12 Months, Unrealized Losses | (23) | |
12 Months or Greater, Fair Value | 1,995 | 2,028 |
12 Months or Greater, Unrealized Losses | (54) | (25) |
Fair Value | 3,941 | 2,028 |
Unrealized Losses | (77) | (25) |
SBA Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Less Than 12 Months, Fair Value | 37,604 | 15,634 |
Less Than 12 Months, Unrealized Losses | (570) | (189) |
12 Months or Greater, Fair Value | 4,590 | 3,775 |
12 Months or Greater, Unrealized Losses | (102) | (38) |
Fair Value | 42,194 | 19,409 |
Unrealized Losses | $ (672) | $ (227) |
Securities - Contractual Maturi
Securities - Contractual Maturities (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Contractual maturities, amortized cost | |
Due in One Year or Less | $ 1,381 |
Due After One Year Through Five Years | 24,961 |
Due After Five Years Through 10 Years | 56,530 |
Due After 10 Years | 63,499 |
Subtotal | 146,371 |
Totals | 248,968 |
Contractual maturities, fair value | |
Due in One Year or Less | 1,382 |
Due After One Year Through Five Years | 25,044 |
Due After Five Years Through 10 Years | 56,715 |
Due After 10 Years | 63,034 |
Subtotal | 146,175 |
Totals | 246,071 |
Mortgage-Backed Securities | |
Contractual maturities, amortized cost | |
Contractual securities | 50,977 |
Contractual maturities, fair value | |
Contractual securities | 48,927 |
SBA Securities | |
Contractual maturities, amortized cost | |
Contractual securities | 51,620 |
Contractual maturities, fair value | |
Contractual securities | $ 50,969 |
Securities - Available for Sale
Securities - Available for Sale Securities Gross Realized Gain Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Securities | |||||
Amortized cost of securities pledged to secure public deposits and for other purposes required or permitted by law | $ 79,400 | ||||
Fair value of securities pledged to secure public deposits and for other purposes required or permitted by law | $ 81,639 | ||||
Summary of the proceeds from sales of securities available for sale, as well as gross gains and losses | |||||
Proceeds From Sales of Securities | $ 10,950 | $ 6,059 | $ 10,950 | $ 6,624 | |
Gross Gains on Sales | 53 | 108 | 53 | 139 | |
Gross Losses on Sales | $ (112) | $ (205) | $ (112) | $ (205) |
Loans - Components of loans (De
Loans - Components of loans (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Components of loans | ||||||
Total Loans, Gross | $ 1,463,320 | $ 1,347,113 | ||||
Net Deferred Loan Fees | (4,058) | (4,104) | ||||
Allowance for Loan Losses | (17,666) | $ (17,121) | (16,502) | $ (14,053) | $ (13,216) | $ (12,333) |
Total Loans, Net | 1,441,596 | 1,326,507 | ||||
Commercial | ||||||
Components of loans | ||||||
Total Loans, Gross | 204,072 | 217,753 | ||||
Allowance for Loan Losses | (2,248) | (2,225) | (2,435) | (1,542) | (1,437) | (1,315) |
Construction and Land Development | ||||||
Components of loans | ||||||
Total Loans, Gross | 164,492 | 130,586 | ||||
Allowance for Loan Losses | (1,965) | (1,765) | (1,892) | (1,604) | (1,549) | (1,379) |
Real Estate Mortgage | ||||||
Components of loans | ||||||
Total Loans, Gross | 1,090,481 | 994,522 | ||||
1-4 Family Mortgage | ||||||
Components of loans | ||||||
Total Loans, Gross | 213,265 | 195,707 | ||||
Allowance for Loan Losses | (2,567) | (2,418) | (2,317) | (2,102) | (2,407) | (2,410) |
Multifamily | ||||||
Components of loans | ||||||
Total Loans, Gross | 340,888 | 317,872 | ||||
Allowance for Loan Losses | (3,552) | (3,476) | (3,170) | (2,057) | (2,053) | (1,568) |
CRE Owner Occupied | ||||||
Components of loans | ||||||
Total Loans, Gross | 65,891 | 65,909 | ||||
Allowance for Loan Losses | (823) | (914) | (956) | (1,131) | (1,213) | (1,160) |
CRE Non-owner Occupied | ||||||
Components of loans | ||||||
Total Loans, Gross | 470,437 | 415,034 | ||||
Allowance for Loan Losses | (5,611) | (5,407) | (5,087) | (4,349) | (3,660) | (3,323) |
Consumer and other | ||||||
Components of loans | ||||||
Total Loans, Gross | 4,275 | 4,252 | ||||
Allowance for Loan Losses | $ (57) | $ (50) | $ (60) | $ (73) | $ (74) | $ (78) |
Loans - Allowance for loan loss
Loans - Allowance for loan losses by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | |
Allowance for Loan Losses: | ||||||
Beginning Balance | $ 17,121 | $ 13,216 | $ 16,502 | $ 12,333 | ||
Provision for Loan Losses | 900 | 825 | 1,500 | 1,775 | ||
Loans Charged-off | (361) | (3) | (373) | (83) | ||
Recoveries of Loans | 6 | 15 | 37 | 28 | ||
Total Ending Allowance Balance | 17,666 | 14,053 | 17,666 | 14,053 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | $ 86 | $ 109 | ||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 17,580 | 16,393 | ||||
Totals Allowance for Loan Losses and Loans | 17,121 | 13,216 | 16,502 | 12,333 | 17,666 | 16,502 |
Loans, Individually Evaluated for Impairment | 2,933 | 4,596 | ||||
Loans, Collectively Evaluated for Impairment | 1,460,387 | 1,342,517 | ||||
Totals | 1,463,320 | 1,347,113 | ||||
Commercial | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 2,225 | 1,437 | 2,435 | 1,315 | ||
Provision for Loan Losses | 21 | 104 | (209) | 226 | ||
Loans Charged-off | (1) | |||||
Recoveries of Loans | 2 | 1 | 22 | 2 | ||
Total Ending Allowance Balance | 2,248 | 1,542 | 2,248 | 1,542 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | 14 | 14 | ||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 2,234 | 2,421 | ||||
Totals Allowance for Loan Losses and Loans | 2,225 | 1,437 | 2,435 | 1,315 | 2,248 | 2,435 |
Loans, Individually Evaluated for Impairment | 14 | 14 | ||||
Loans, Collectively Evaluated for Impairment | 204,058 | 217,739 | ||||
Totals | 204,072 | 217,753 | ||||
Construction and Land Development | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 1,765 | 1,549 | 1,892 | 1,379 | ||
Provision for Loan Losses | 557 | 55 | 430 | 223 | ||
Loans Charged-off | (357) | (357) | ||||
Recoveries of Loans | 2 | |||||
Total Ending Allowance Balance | 1,965 | 1,604 | 1,965 | 1,604 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | 3 | |||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 1,962 | 1,892 | ||||
Totals Allowance for Loan Losses and Loans | 1,765 | 1,549 | 1,892 | 1,379 | 1,965 | 1,892 |
Loans, Individually Evaluated for Impairment | 212 | 583 | ||||
Loans, Collectively Evaluated for Impairment | 164,280 | 130,003 | ||||
Totals | 164,492 | 130,586 | ||||
1-4 Family Mortgage | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 2,418 | 2,407 | 2,317 | 2,410 | ||
Provision for Loan Losses | 146 | (316) | 237 | (329) | ||
Recoveries of Loans | 3 | 11 | 13 | 21 | ||
Total Ending Allowance Balance | 2,567 | 2,102 | 2,567 | 2,102 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | 46 | 57 | ||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 2,521 | 2,260 | ||||
Totals Allowance for Loan Losses and Loans | 2,418 | 2,407 | 2,317 | 2,410 | 2,567 | 2,317 |
Loans, Individually Evaluated for Impairment | 1,912 | 1,693 | ||||
Loans, Collectively Evaluated for Impairment | 211,353 | 194,014 | ||||
Totals | 213,265 | 195,707 | ||||
Multifamily | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 3,476 | 2,053 | 3,170 | 1,568 | ||
Provision for Loan Losses | 76 | 4 | 382 | 489 | ||
Total Ending Allowance Balance | 3,552 | 2,057 | 3,552 | 2,057 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | 14 | |||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 3,552 | 3,156 | ||||
Totals Allowance for Loan Losses and Loans | 3,476 | 2,053 | 3,170 | 1,568 | 3,552 | 3,170 |
Loans, Individually Evaluated for Impairment | 65 | 66 | ||||
Loans, Collectively Evaluated for Impairment | 340,823 | 317,806 | ||||
Totals | 340,888 | 317,872 | ||||
CRE Owner Occupied | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 914 | 1,213 | 956 | 1,160 | ||
Provision for Loan Losses | (91) | (82) | (133) | (29) | ||
Total Ending Allowance Balance | 823 | 1,131 | 823 | 1,131 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | 23 | 24 | ||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 800 | 932 | ||||
Totals Allowance for Loan Losses and Loans | 914 | 1,213 | 956 | 1,160 | 823 | 956 |
Loans, Individually Evaluated for Impairment | 664 | 2,165 | ||||
Loans, Collectively Evaluated for Impairment | 65,227 | 63,744 | ||||
Totals | 65,891 | 65,909 | ||||
CRE Non-owner Occupied | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 5,407 | 3,660 | 5,087 | 3,323 | ||
Provision for Loan Losses | 204 | 689 | 524 | 1,100 | ||
Loans Charged-off | (74) | |||||
Total Ending Allowance Balance | 5,611 | 4,349 | 5,611 | 4,349 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 5,611 | 5,087 | ||||
Totals Allowance for Loan Losses and Loans | 5,407 | 3,660 | 5,087 | 3,323 | 5,611 | 5,087 |
Loans, Collectively Evaluated for Impairment | 470,437 | 415,034 | ||||
Totals | 470,437 | 415,034 | ||||
Consumer and other | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 50 | 74 | 60 | 78 | ||
Provision for Loan Losses | 10 | (1) | 11 | |||
Loans Charged-off | (4) | (3) | (16) | (8) | ||
Recoveries of Loans | 1 | 3 | 2 | 3 | ||
Total Ending Allowance Balance | 57 | 73 | 57 | 73 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 57 | 60 | ||||
Totals Allowance for Loan Losses and Loans | 50 | 74 | 60 | 78 | 57 | 60 |
Loans, Individually Evaluated for Impairment | 66 | 75 | ||||
Loans, Collectively Evaluated for Impairment | 4,209 | 4,177 | ||||
Totals | 4,275 | 4,252 | ||||
Unallocated | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 866 | 823 | 585 | 1,100 | ||
Provision for Loan Losses | (23) | 372 | 258 | 95 | ||
Total Ending Allowance Balance | 843 | 1,195 | 843 | 1,195 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 843 | 585 | ||||
Totals Allowance for Loan Losses and Loans | $ 866 | $ 823 | $ 585 | $ 1,100 | $ 843 | $ 585 |
Loans - Impaired loans by loan
Loans - Impaired loans by loan segment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | $ 2,485 | $ 4,023 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 2,503 | 4,314 |
Total Recorded Investment | 2,933 | 4,596 |
Total Principal Balance | 3,560 | 4,887 |
Related Allowance | 86 | 109 |
Construction and Land Development | ||
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | 583 | |
Loans With No Related Allowance for Loan Losses, Principal Balance | 833 | |
Loans With An Allowance for Loan Losses, Recorded Investment | 212 | |
Loans With An Allowance for Loan Losses, Principal Balance | 821 | |
Related Allowance | 3 | |
Commercial | ||
Impaired loans by loan segment | ||
Loans With An Allowance for Loan Losses, Recorded Investment | 14 | 14 |
Loans With An Allowance for Loan Losses, Principal Balance | 14 | 14 |
Related Allowance | 14 | 14 |
Real Estate Mortgage | ||
Impaired loans by loan segment | ||
Loans With An Allowance for Loan Losses, Recorded Investment | 448 | 573 |
Loans With An Allowance for Loan Losses, Principal Balance | 1,057 | 573 |
Related Allowance | 86 | 109 |
HELOC and 1-4 Family Junior Mortgage | ||
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | 494 | 508 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 494 | 515 |
1st REM - 1-4 Family | ||
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | 374 | 125 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 374 | 125 |
LOCs and 2nd REM - Rentals | ||
Impaired loans by loan segment | ||
Loans With An Allowance for Loan Losses, Recorded Investment | 64 | 64 |
Loans With An Allowance for Loan Losses, Principal Balance | 64 | 64 |
Related Allowance | 46 | 47 |
1st REM - Rentals | ||
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | 980 | 726 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 980 | 726 |
Loans With An Allowance for Loan Losses, Recorded Investment | 270 | |
Loans With An Allowance for Loan Losses, Principal Balance | 270 | |
Related Allowance | 10 | |
Consumer and other | ||
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | 66 | 75 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 84 | 92 |
Multifamily | ||
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | 65 | |
Loans With No Related Allowance for Loan Losses, Principal Balance | 65 | |
Loans With An Allowance for Loan Losses, Recorded Investment | 66 | |
Loans With An Allowance for Loan Losses, Principal Balance | 66 | |
Related Allowance | 14 | |
CRE Owner Occupied | ||
Impaired loans by loan segment | ||
Loans With No Related Allowance for Loan Losses, Recorded Investment | 506 | 2,006 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 506 | 2,023 |
Loans With An Allowance for Loan Losses, Recorded Investment | 158 | 159 |
Loans With An Allowance for Loan Losses, Principal Balance | 158 | 159 |
Related Allowance | $ 23 | $ 24 |
Loans - Average balances and in
Loans - Average balances and interest income recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | $ 2,507 | $ 6,730 | $ 2,493 | $ 5,802 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 25 | 63 | 48 | 105 |
Total Average Investment | 2,959 | 7,394 | 2,938 | 6,468 |
Total Interest Recognized | 28 | 71 | 56 | 116 |
Construction and Land Development | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 745 | 748 | ||
Loans With No Related Allowance for Loan Losses, Interest Recognized | 2 | 3 | ||
Loans With An Allowance for Loan Losses, Average Investment | 216 | 10 | 110 | 10 |
Commercial | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 2,086 | 2,005 | ||
Loans With No Related Allowance for Loan Losses, Interest Recognized | 25 | 43 | ||
Loans With An Allowance for Loan Losses, Average Investment | 14 | |||
Total Average Investment | 14 | |||
Real Estate Mortgage | ||||
Impaired loans by loan segment | ||||
Loans With An Allowance for Loan Losses, Average Investment | 452 | 664 | 445 | 666 |
Loans With An Allowance for Loan Losses, Interest Recognized | 3 | 8 | 8 | 11 |
HELOC and 1-4 Family Junior Mortgage | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 506 | 262 | 509 | 263 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 1 | 4 | 4 | 7 |
1st REM - 1-4 Family | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 376 | 792 | 378 | 798 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 5 | 5 | ||
LOCs and 2nd REM - Rentals | ||||
Impaired loans by loan segment | ||||
Loans With An Allowance for Loan Losses, Average Investment | 64 | 65 | 64 | 65 |
Loans With An Allowance for Loan Losses, Interest Recognized | 1 | 1 | 2 | 1 |
1st REM - Rentals | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 981 | 995 | 986 | 999 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 11 | 12 | 24 | 25 |
Loans With An Allowance for Loan Losses, Average Investment | 278 | 67 | 279 | |
Loans With An Allowance for Loan Losses, Interest Recognized | 3 | 1 | 5 | |
Consumer and other | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 67 | 69 | ||
Loans With An Allowance for Loan Losses, Average Investment | 84 | 85 | ||
Loans With An Allowance for Loan Losses, Interest Recognized | 1 | 2 | ||
Multifamily | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 65 | 33 | ||
Loans With No Related Allowance for Loan Losses, Interest Recognized | 1 | 1 | ||
Loans With An Allowance for Loan Losses, Average Investment | 66 | 33 | 66 | |
Loans With An Allowance for Loan Losses, Interest Recognized | 1 | 1 | 1 | |
CRE Owner Occupied | ||||
Impaired loans by loan segment | ||||
Loans With No Related Allowance for Loan Losses, Average Investment | 512 | 1,850 | 518 | 989 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 7 | 20 | 14 | 27 |
Loans With An Allowance for Loan Losses, Average Investment | 158 | 161 | 158 | 161 |
Loans With An Allowance for Loan Losses, Interest Recognized | $ 2 | $ 2 | $ 4 | $ 2 |
Loans - Risk category of loans
Loans - Risk category of loans by loan segment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | $ 1,463,320 | $ 1,347,113 |
Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 1,443,210 | 1,336,305 |
Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 15,284 | 5,501 |
Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 4,826 | 5,307 |
Commercial | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 204,072 | 217,753 |
Commercial | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 203,439 | 217,739 |
Commercial | Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 614 | |
Commercial | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 19 | 14 |
Construction and Land Development | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 164,492 | 130,586 |
Construction and Land Development | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 161,464 | 130,003 |
Construction and Land Development | Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 2,816 | |
Construction and Land Development | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 212 | 583 |
HELOC and 1-4 Family Junior Mortgage | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 32,046 | 28,585 |
HELOC and 1-4 Family Junior Mortgage | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 31,459 | 28,238 |
HELOC and 1-4 Family Junior Mortgage | Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 587 | |
HELOC and 1-4 Family Junior Mortgage | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 347 | |
1st REM - 1-4 Family | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 35,570 | 33,344 |
1st REM - 1-4 Family | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 34,575 | 33,219 |
1st REM - 1-4 Family | Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 621 | |
1st REM - 1-4 Family | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 374 | 125 |
LOCs and 2nd REM - Rentals | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 12,123 | 13,634 |
LOCs and 2nd REM - Rentals | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 9,307 | 13,409 |
LOCs and 2nd REM - Rentals | Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 2,258 | |
LOCs and 2nd REM - Rentals | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 558 | 225 |
1st REM - Rentals | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 133,526 | 120,144 |
1st REM - Rentals | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 132,546 | 118,891 |
1st REM - Rentals | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 980 | 1,253 |
Multifamily | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 340,888 | 317,872 |
Multifamily | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 340,823 | 317,806 |
Multifamily | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 65 | 66 |
CRE Owner Occupied | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 65,891 | 65,909 |
CRE Owner Occupied | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 58,361 | 63,290 |
CRE Owner Occupied | Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 5,136 | |
CRE Owner Occupied | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 2,394 | 2,619 |
CRE Non-owner Occupied | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 470,437 | 415,034 |
CRE Non-owner Occupied | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 467,027 | 409,533 |
CRE Non-owner Occupied | Watch | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 3,252 | 5,501 |
CRE Non-owner Occupied | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 158 | |
Consumer and other | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 4,275 | 4,252 |
Consumer and other | Pass | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | 4,209 | 4,177 |
Consumer and other | Substandard | ||
Risk category of loans by loan segment, based on the most recent analysis performed by management | ||
Totals | $ 66 | $ 75 |
Loans - Recorded investment in
Loans - Recorded investment in past due loans by loan segment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | $ 1,461,929 | $ 1,345,310 |
Nonaccrual | 746 | 1,139 |
Totals | 1,463,320 | 1,347,113 |
30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, past due | 645 | 664 |
Commercial | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 204,045 | 217,734 |
Nonaccrual | 14 | 9 |
Totals | 204,072 | 217,753 |
Commercial | 30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, past due | 13 | 10 |
Construction and Land Development | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 164,280 | 130,003 |
Nonaccrual | 212 | 583 |
Totals | 164,492 | 130,586 |
HELOC and 1-4 Family Junior Mortgage | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 31,711 | 28,238 |
Nonaccrual | 335 | 347 |
Totals | 32,046 | 28,585 |
1st REM - 1-4 Family | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 35,451 | 33,219 |
Nonaccrual | 119 | 125 |
Totals | 35,570 | 33,344 |
LOCs and 2nd REM - Rentals | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 11,964 | 13,474 |
Totals | 12,123 | 13,634 |
LOCs and 2nd REM - Rentals | 30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, past due | 159 | 160 |
1st REM - Rentals | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 133,060 | 119,876 |
Totals | 133,526 | 120,144 |
1st REM - Rentals | 30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, past due | 466 | 268 |
Multifamily | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 340,888 | 317,872 |
Totals | 340,888 | 317,872 |
CRE Owner Occupied | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 65,891 | 65,686 |
Totals | 65,891 | 65,909 |
CRE Owner Occupied | 30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, past due | 223 | |
CRE Non-owner Occupied | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 470,437 | 415,034 |
Totals | 470,437 | 415,034 |
Consumer and other | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, Current | 4,202 | 4,174 |
Nonaccrual | 66 | 75 |
Totals | 4,275 | 4,252 |
Consumer and other | 30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Accruing Interest, past due | $ 7 | $ 3 |
Loans - Summary of loans modifi
Loans - Summary of loans modified in TDRs and those restructurings (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Loans | ||
Troubled Debt Restructurings, Number of Loans | 4 | 9 |
New Troubled Debt Restructurings, Post-Modification Outstanding Balance | $ | $ 582,000 | $ 3,000,000 |
New Troubled Debt Restructurings, Number of Loans | 0 | |
Troubled Debt Restructurings That Subsequently Defaulted Within 12 Months of The Restructure Date, Number of Loans | 0 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Deposits, by Type [Abstract] | ||
Transaction Deposits | $ 501,365 | $ 469,831 |
Savings and Money Market Deposits | 381,942 | 369,942 |
Brokered Deposits | 230,683 | 207,481 |
Time Deposits | 300,701 | 292,096 |
Total Deposits | $ 1,414,691 | $ 1,339,350 |
Subordinated Debentures (Detail
Subordinated Debentures (Details) - USD ($) | Jul. 12, 2017 | Jun. 30, 2018 | Jun. 30, 2018 |
Subordinated Debentures | |||
Total amortization expense | $ 51,000 | ||
Subordinated notes due 2027 | |||
Subordinated Debentures | |||
Aggregate principal amount | $ 25,000,000 | ||
Percentage of face value at which notes are issued | 100.00% | ||
Issuance costs | $ 516,000 | ||
Amortization period of debt | 5 years | ||
Total amortization expense | $ 26,000 | 51,000 | |
Remaining to be amortized | $ 422,000 | $ 422,000 | |
Fixed interest rate | 5.875% | ||
Redemption percentage of the outstanding principal amount | 100.00% | ||
3 month LIBOR | Subordinated notes due 2027 | |||
Subordinated Debentures | |||
Variable spread on debt | 388.00% |
Commitments, Contingencies an43
Commitments, Contingencies and Credit Risk (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Commitments, Contingencies and Credit Risk | ||
Unfunded Commitments Under Lines of Credit | $ 413,135 | $ 309,513 |
Letters of Credit | 73,655 | 64,546 |
Totals | $ 486,790 | $ 374,059 |
Stock Options (Details)
Stock Options (Details) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)itemshares | Dec. 31, 2017shares | |
Stock Options | ||
Number of shares authorized for grant options to its directors, officers, and employees | shares | 1,500,000 | |
Term of award | P10Y | |
Vesting period | 5 years | |
Number of unissued shares of the Company’s common stock authorized for option grants | shares | 638,000 | |
Number of banks in the index | item | 36 | |
Minimum | ||
Stock Options | ||
Market capitalization | $ | $ 395 | |
Maximum | ||
Stock Options | ||
Market capitalization | $ | $ 3,500 |
Stock Options - Black-Scholes A
Stock Options - Black-Scholes Assumptions (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Black-Scholes Assumptions | |
Expected Life | 7 years |
Expected Volatility | 21.84% |
Risk-Free Interest Rate | 2.90% |
Stock Options - Stock Option Pl
Stock Options - Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock Option Plans | ||||
Outstanding at Beginning of Year | 1,721,000 | |||
Granted | 30,000 | |||
Forfeitures | (4,000) | |||
Outstanding at Period End | 1,747,000 | 1,747,000 | ||
Options Exercisable at Period End | 551,000 | 551,000 | ||
Weighted Average Exercise Price | ||||
Outstanding at Beginning of Year | $ 5.68 | |||
Granted | 12.31 | |||
Forfeitures | 7.47 | |||
Outstanding at Period End | $ 5.79 | 5.79 | ||
Options Exercisable at Period End | $ 2.85 | 2.85 | ||
Granted During the Period | $ 3.91 | |||
Compensation expense for stock options | $ 190 | $ 52 | $ 389 | $ 104 |
Stock Options - Exercise Price
Stock Options - Exercise Price (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Exercise Price | |
Options Outstanding, Number Outstanding | 1,747,000 |
Options Outstanding, Remaining Contractual Life | 7 years 9 months 18 days |
Options Outstanding, Exercise Price | $ / shares | $ 5.79 |
Options Exercisable, Number Outstanding | 551,000 |
Total unrecognized compensation cost | $ | $ 2,698 |
Total unrecognized compensation cost expected to be recognized (in years) | 5 years |
1.65 | |
Exercise Price | |
Options Outstanding, Number Outstanding | 15,000 |
Options Outstanding, Remaining Contractual Life | 3 years 4 months 24 days |
Options Outstanding, Exercise Price | $ / shares | $ 1.65 |
Options Exercisable, Number Outstanding | 15,000 |
2.13 | |
Exercise Price | |
Options Outstanding, Number Outstanding | 90,000 |
Options Outstanding, Remaining Contractual Life | 4 years 9 months 18 days |
Options Outstanding, Exercise Price | $ / shares | $ 2.13 |
Options Exercisable, Number Outstanding | 90,000 |
3 | |
Exercise Price | |
Options Outstanding, Number Outstanding | 520,000 |
Options Outstanding, Remaining Contractual Life | 5 years 6 months |
Options Outstanding, Exercise Price | $ / shares | $ 3 |
Options Exercisable, Number Outstanding | 416,000 |
3.58 | |
Exercise Price | |
Options Outstanding, Number Outstanding | 50,000 |
Options Outstanding, Remaining Contractual Life | 6 years 6 months |
Options Outstanding, Exercise Price | $ / shares | $ 3.58 |
Options Exercisable, Number Outstanding | 30,000 |
7.47 | |
Exercise Price | |
Options Outstanding, Number Outstanding | 1,042,000 |
Options Outstanding, Remaining Contractual Life | 9 years 3 months 18 days |
Options Outstanding, Exercise Price | $ / shares | $ 7.47 |
7.78 | |
Exercise Price | |
Options Outstanding, Number Outstanding | 5,000 |
Options Outstanding, Remaining Contractual Life | 9 years 7 months 6 days |
Options Outstanding, Exercise Price | $ / shares | $ 7.78 |
13.22 | |
Exercise Price | |
Options Outstanding, Number Outstanding | 25,000 |
Options Outstanding, Remaining Contractual Life | 9 years 10 months 24 days |
Options Outstanding, Exercise Price | $ / shares | $ 13.22 |
Stock Options - Non-Vested Opti
Stock Options - Non-Vested Options (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Shares | |
Nonvested Options at December 31, 2017 | shares | 1,302,000 |
Granted | shares | 30,000 |
Vested | shares | (132,000) |
Forfeited | shares | (4,000) |
Nonvested Options at March 31, 2018 | shares | 1,196,000 |
Weighted Average Grant Date Fair Value | |
Nonvested Options at December 31, 2017 | $ / shares | $ 2.55 |
Granted | $ / shares | 3.91 |
Vested | $ / shares | 1.49 |
Forfeited | $ / shares | 2.80 |
Nonvested Options at March 31, 2018 | $ / shares | $ 2.70 |
Regulatory Capital (Details)
Regulatory Capital (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Total Risk-Based Capital | ||
Total Risk-Based Capital, Actual amount | $ 246,657 | $ 173,848 |
Total Risk-Based Capital, For Capital Adequacy Purposes, amount | $ 124,863 | $ 111,638 |
Total Risk-Based Capital, Actual ratio | 15.80% | 12.46% |
Total Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 8.00% | 8.00% |
Tier 1 Risk-Based Capital | ||
Tier One Risk Based Capital | $ 204,053 | $ 132,459 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, amount | $ 93,647 | $ 83,729 |
Tier 1 Risk-Based Capital, Actual ratio | 13.07% | 9.49% |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 6.00% | 6.00% |
Common Equity Tier 1 Capital | ||
Common Equity Tier 1 Capital, Actual amount | $ 204,053 | $ 132,459 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, amount | $ 70,235 | $ 62,797 |
Common Equity Tier 1 Capital, Actual ratio | 13.07% | 9.49% |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, Ratio | 4.50% | 4.50% |
Leverage Ratio | ||
Leverage Ratio, Actual amount | $ 204,053 | $ 132,459 |
Leverage Ratio, For Capital Adequacy Purposes, amount | $ 68,462 | $ 63,264 |
Leverage Ratio, Actual ratio | 11.92% | 8.38% |
Leverage Ratio, For Capital Adequacy Purposes, Ratio | 4.00% | 4.00% |
Capital conservation buffer (as a percent) | 1.875% | 1.25% |
Incremental increase in buffer (as a percent) | 2.50% | |
Bank | ||
Total Risk-Based Capital | ||
Total Risk-Based Capital, Actual amount | $ 211,313 | $ 171,805 |
Total Risk-Based Capital, For Capital Adequacy Purposes, amount | 124,325 | 111,134 |
Total Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 155,407 | $ 138,918 |
Total Risk-Based Capital, Actual ratio | 13.60% | 12.37% |
Total Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 8.00% | 8.00% |
Total Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 10.00% | 10.00% |
Tier 1 Risk-Based Capital | ||
Tier One Risk Based Capital | $ 193,287 | $ 154,943 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, amount | 93,244 | 83,351 |
Tier 1 Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 124,325 | $ 111,134 |
Tier 1 Risk-Based Capital, Actual ratio | 12.44% | 11.15% |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 6.00% | 6.00% |
Tier 1 Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 8.00% | 8.00% |
Common Equity Tier 1 Capital | ||
Common Equity Tier 1 Capital, Actual amount | $ 193,287 | $ 154,943 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, amount | 69,933 | 62,513 |
Common Equity Tier 1 Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 101,014 | $ 90,297 |
Common Equity Tier 1 Capital, Actual ratio | 12.44% | 11.15% |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, Ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 6.50% | 6.50% |
Leverage Ratio | ||
Leverage Ratio, Actual amount | $ 193,287 | $ 154,943 |
Leverage Ratio, For Capital Adequacy Purposes, amount | 68,321 | 63,060 |
Leverage Ratio, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 85,401 | $ 78,825 |
Leverage Ratio, Actual ratio | 11.32% | 9.83% |
Leverage Ratio, For Capital Adequacy Purposes, Ratio | 4.00% | 4.00% |
Leverage Ratio, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 5.00% | 5.00% |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | $ 246,071 | $ 229,491 |
Interest Rate Swap | 494 | 344 |
Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Swap | 494 | 344 |
Totals | 246,565 | 229,835 |
U.S. Treasury Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 9,903 | |
U.S. Treasury Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 9,903 | |
Municipal Bonds | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 125,635 | 118,320 |
Municipal Bonds | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 125,635 | 118,320 |
Mortgage-Backed Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 48,927 | 60,681 |
Mortgage-Backed Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 48,927 | 60,681 |
Corporate Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 10,637 | 5,107 |
Corporate Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 10,637 | 5,107 |
SBA Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 50,969 | 45,383 |
SBA Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 50,969 | 45,383 |
Level 2 | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 246,071 | 229,491 |
Interest Rate Swap | 494 | 344 |
Level 2 | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Swap | 494 | 344 |
Totals | 246,565 | 229,835 |
Level 2 | U.S. Treasury Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 9,903 | |
Level 2 | Municipal Bonds | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 125,635 | 118,320 |
Level 2 | Mortgage-Backed Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 48,927 | 60,681 |
Level 2 | Corporate Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 10,637 | 5,107 |
Level 2 | SBA Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | $ 50,969 | $ 45,383 |
Fair Value Measurement - Nonrec
Fair Value Measurement - Nonrecurring (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Loss | $ 900 | $ 825 | $ 1,500 | $ 1,775 | |
Nonrecurring | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Loss | 570 | $ 109 | |||
Nonrecurring | Impaired Loans | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Loss | 429 | 109 | |||
Nonrecurring | Foreclosed Assets | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Assets measured at fair value | 141 | 141 | |||
Level 2 | Nonrecurring | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Assets measured at fair value | 510 | 510 | 464 | ||
Level 2 | Nonrecurring | Impaired Loans | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Assets measured at fair value | 362 | 362 | $ 464 | ||
Level 2 | Nonrecurring | Foreclosed Assets | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Assets measured at fair value | $ 148 | $ 148 |
Fair Value Measurement - Estima
Fair Value Measurement - Estimated Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Financial Assets: | ||
Cash and Due From Banks | $ 21,917 | $ 23,725 |
Bank-owned Certificates of Deposits | 3,803 | 3,072 |
Securities Available for Sale, at Fair Value | 246,071 | 229,491 |
FHLB Stock, at Cost | 5,294 | 5,147 |
Loans, Net | 1,441,596 | 1,326,507 |
Accrued Interest Receivable | 5,971 | 5,342 |
Interest Rate Swap | 494 | 344 |
Financial Liabilities: | ||
Deposits | 1,414,691 | 1,339,350 |
Federal Funds Purchased | 23,000 | |
Notes Payable | 16,000 | 17,000 |
FHLB Advances | 84,000 | 68,000 |
Subordinated Debentures | 24,578 | 24,527 |
Accrued Interest Payable | 1,502 | 1,408 |
Level 1 | ||
Financial Assets: | ||
Cash and Due From Banks | 21,917 | 23,725 |
Level 2 | ||
Financial Assets: | ||
Bank-owned Certificates of Deposits | 3,791 | 3,075 |
Securities Available for Sale, at Fair Value | 246,071 | 229,491 |
FHLB Stock, at Cost | 5,294 | 5,147 |
Loans, Net | 1,430,207 | 1,323,495 |
Accrued Interest Receivable | 5,971 | 5,342 |
Interest Rate Swap | 494 | 344 |
Financial Liabilities: | ||
Deposits | 1,413,112 | 1,340,109 |
Federal Funds Purchased | 23,000 | |
Notes Payable | 16,023 | 17,024 |
FHLB Advances | 82,729 | 67,282 |
Subordinated Debentures | 24,669 | 25,090 |
Accrued Interest Payable | 1,502 | 1,408 |
Estimated Fair Value | ||
Financial Assets: | ||
Cash and Due From Banks | 21,917 | 23,725 |
Bank-owned Certificates of Deposits | 3,791 | 3,075 |
Securities Available for Sale, at Fair Value | 246,071 | 229,491 |
FHLB Stock, at Cost | 5,294 | 5,147 |
Loans, Net | 1,430,207 | 1,323,495 |
Accrued Interest Receivable | 5,971 | 5,342 |
Interest Rate Swap | 494 | 344 |
Financial Liabilities: | ||
Deposits | 1,413,112 | 1,340,109 |
Federal Funds Purchased | 23,000 | |
Notes Payable | 16,023 | 17,024 |
FHLB Advances | 82,729 | 67,282 |
Subordinated Debentures | 24,669 | 25,090 |
Accrued Interest Payable | $ 1,502 | $ 1,408 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Construction of corporate headquarters office | |
Subsequent Events | |
Commitment under contract | $ 24 |