Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Level One Bancorp Inc | |
Entity Central Index Key | 0001412707 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Statues | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 7,717,850 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 49,361 | $ 33,296 |
Securities available-for-sale | 205,242 | 204,258 |
Federal Home Loan Bank stock | 8,325 | 8,325 |
Mortgage loans held for sale, at fair value | 26,864 | 5,595 |
Loans: | ||
Total loans | 1,168,923 | 1,126,565 |
Less: Allowance for loan losses | (12,307) | (11,566) |
Net loans | 1,156,616 | 1,114,999 |
Premises and equipment | 13,427 | 13,242 |
Goodwill | 9,387 | 9,387 |
Other intangible assets, net | 331 | 447 |
Bank-owned life insurance | 12,080 | 11,866 |
Income tax benefit | 469 | 2,467 |
Other assets | 27,361 | 12,333 |
Total assets | 1,509,463 | 1,416,215 |
Deposits: | ||
Noninterest-bearing demand deposits | 322,069 | 309,384 |
Interest-bearing demand deposits | 66,716 | 52,804 |
Money market and savings deposits | 332,432 | 287,575 |
Time deposits | 473,325 | 484,872 |
Total deposits | 1,194,542 | 1,134,635 |
Borrowings | 111,937 | 99,574 |
Subordinated notes | 14,934 | 14,891 |
Other liabilities | 20,082 | 15,355 |
Total liabilities | 1,341,495 | 1,264,455 |
Common stock, no par value per share: | ||
Authorized—20,000,000 shares Issued and outstanding—7,714,000 shares at September 30, 2019 and 7,750,216 shares at December 31, 2018 | 89,206 | 90,621 |
Retained earnings | 73,394 | 62,891 |
Accumulated other comprehensive income (loss), net of tax | 5,368 | (1,752) |
Total shareholders' equity | 167,968 | 151,760 |
Total liabilities and shareholders' equity | 1,509,463 | 1,416,215 |
Originated | ||
Loans: | ||
Total loans | 1,093,694 | 1,041,898 |
Acquired | ||
Loans: | ||
Total loans | $ 75,229 | $ 84,667 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common stock, no par value per share: | ||
Shares authorized (in shares) | 20,000,000 | 20,000,000 |
Shares issued (in shares) | 7,714,000 | 7,750,216 |
Shares outstanding (in shares) | 7,714,000 | 7,750,216 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Securities: | ||||
Taxable | $ 857 | $ 816 | $ 2,773 | $ 2,057 |
Tax-exempt | 588 | 450 | 1,728 | 1,181 |
Federal funds sold and other | 404 | 256 | 1,034 | 708 |
Total interest income | 17,983 | 16,629 | 53,082 | 46,783 |
Interest Expense | ||||
Deposits | 4,478 | 2,802 | 13,216 | 7,467 |
Borrowed funds | 261 | 502 | 960 | 946 |
Subordinated notes | 256 | 256 | 759 | 759 |
Total interest expense | 4,995 | 3,560 | 14,935 | 9,172 |
Net interest income | 12,988 | 13,069 | 38,147 | 37,611 |
Provision expense (benefit) for loan losses | (16) | 619 | 835 | 463 |
Net interest income after provision for loan losses | 13,004 | 12,450 | 37,312 | 37,148 |
Noninterest income | ||||
Service charges on deposits | 627 | 655 | 1,914 | 1,915 |
Net gain on sales of securities | 151 | 0 | 151 | 0 |
Mortgage banking activities | 2,352 | 754 | 5,788 | 1,394 |
Net gain (loss) on sale of commercial loans | (37) | 0 | (37) | 11 |
Other charges and fees | 765 | 515 | 1,805 | 1,428 |
Total noninterest income | 3,858 | 1,924 | 9,621 | 4,748 |
Noninterest expense | ||||
Salary and employee benefits | 7,536 | 6,888 | 21,642 | 19,013 |
Occupancy and equipment expense | 1,203 | 1,173 | 3,575 | 3,293 |
Professional service fees | 465 | 494 | 1,212 | 1,231 |
Acquisition and due diligence fees | 319 | 0 | 319 | 0 |
Marketing expense | 379 | 264 | 843 | 697 |
Printing and supplies expense | 78 | 127 | 250 | 343 |
Data processing expense | 661 | 565 | 1,862 | 1,512 |
Other expense | 898 | 943 | 3,371 | 3,205 |
Total noninterest expense | 11,539 | 10,454 | 33,074 | 29,294 |
Income before income taxes | 5,323 | 3,920 | 13,859 | 12,602 |
Income tax provision | 914 | 665 | 2,428 | 2,167 |
Net income | $ 4,409 | $ 3,255 | $ 11,431 | $ 10,435 |
Per common share data: | ||||
Basic earnings per share (in dollars per share) | $ 0.57 | $ 0.42 | $ 1.48 | $ 1.44 |
Diluted earnings per common share (in dollars per share) | 0.56 | 0.41 | 1.46 | 1.41 |
Cash dividends declared per common share (in dollars per share) | $ 0.04 | $ 0.03 | $ 0.12 | $ 0.09 |
Weighted average common shares outstanding—basic (in shares) | 7,721,000 | 7,749,047 | 7,738,000 | 7,264,494 |
Weighted average common shares outstanding—diluted (in shares) | 7,752,000 | 7,901,109 | 7,776,000 | 7,413,676 |
Originated | ||||
Interest income | ||||
Loans, including fees | $ 14,633 | $ 12,653 | $ 42,652 | $ 35,664 |
Acquired | ||||
Interest income | ||||
Loans, including fees | $ 1,501 | $ 2,454 | $ 4,895 | $ 7,173 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 4,409 | $ 3,255 | $ 11,431 | $ 10,435 | |
Other comprehensive income: | |||||
Unrealized holding gains (losses) on securities available-for-sale arising during the period | 1,414 | (1,247) | 8,861 | (4,016) | |
Reclassification adjustment for gains included in income | 151 | 0 | 151 | 0 | |
Tax effect | [1] | (327) | 261 | (1,892) | 842 |
Net unrealized gains (losses) on securities available-for-sale, net of tax | 1,238 | (986) | 7,120 | (3,174) | |
Total comprehensive income, net of tax | $ 5,647 | $ 2,269 | $ 18,551 | $ 7,261 | |
[1] | Includes $32 thousand of tax expense related to reclassification adjustment for gains included in income for the three months and nine months ended September 30, 2019. There was no tax expense (benefit) for the three months and nine months ended September 30, 2018 as a result of no reclassification adjustment. |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax expense (benefit) related to reclassification | $ 32,000 | $ 0 | $ 32,000 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Balance at Dec. 31, 2017 | $ 107,960 | $ 59,511 | $ 49,232 | $ (783) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 10,435 | 10,435 | ||
Other comprehensive income (loss) | (3,174) | (3,174) | ||
Reclass of tax reform adjustments due to early adoption of ASU 2018-02 | 168 | (168) | ||
Initial public offering of 1,150,765 shares of common stock, net of issuance costs | 29,030 | 29,030 | ||
Common stock dividends paid/declared | (662) | (662) | ||
Exercise of stock options | 1,269 | 1,269 | ||
Stock-based compensation expense | 601 | 601 | ||
Balance at Sep. 30, 2018 | 145,459 | 90,411 | 59,173 | (4,125) |
Balance at Jun. 30, 2018 | 143,445 | 90,201 | 56,383 | (3,139) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 3,255 | 3,255 | ||
Other comprehensive income (loss) | (986) | (986) | ||
Common stock dividends paid/declared | (465) | (465) | ||
Exercise of stock options | 12 | 12 | ||
Stock-based compensation expense | 198 | 198 | ||
Balance at Sep. 30, 2018 | 145,459 | 90,411 | 59,173 | (4,125) |
Balance at Dec. 31, 2018 | 151,760 | 90,621 | 62,891 | (1,752) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 11,431 | 11,431 | ||
Other comprehensive income (loss) | 7,120 | 7,120 | ||
Redeemed stock | (2,108) | (2,108) | ||
Common stock dividends paid/declared | (928) | (928) | ||
Exercise of stock options | 219 | 219 | ||
Stock-based compensation expense | 474 | 474 | ||
Balance at Sep. 30, 2019 | 167,968 | 89,206 | 73,394 | 5,368 |
Balance at Jun. 30, 2019 | 162,867 | 89,442 | 69,295 | 4,130 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 4,409 | 4,409 | ||
Other comprehensive income (loss) | 1,238 | 1,238 | ||
Redeemed stock | (488) | (488) | ||
Common stock dividends paid/declared | (310) | (310) | ||
Exercise of stock options | 63 | 63 | ||
Stock-based compensation expense | 189 | 189 | ||
Balance at Sep. 30, 2019 | $ 167,968 | $ 89,206 | $ 73,394 | $ 5,368 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividend declared (in dollars per share) | $ 0.04 | $ 0.03 | $ 0.12 | $ 0.09 |
Cash dividend paid (in dollars per share) | $ 0.03 | $ 0.09 | ||
Redeemed stock (in shares) | 20,530 | 88,457 | ||
Exercise of stock options (in shares) | 6,250 | 1,100 | 21,550 | 126,494 |
Initial public offering, shares of common stock (in shares) | 1,150,765 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 11,431 | $ 10,435 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of fixed assets | 986 | 1,008 |
Amortization of core deposit intangibles | 117 | 165 |
Stock-based compensation expense | 517 | 615 |
Provision expense for loan losses | 835 | 463 |
Net securities premium amortization | 1,277 | 1,001 |
Net gain on sales of securities | (151) | 0 |
Originations of loans held for sale | (196,616) | (53,918) |
Proceeds from sales of loans originated for sale | 179,350 | 50,160 |
Net gain on sales of loans | (5,788) | (1,550) |
Accretion on acquired purchase credit impaired loans | (1,772) | (3,076) |
Gain on sale of other real estate owned and repossessed assets | 0 | (48) |
Increase in cash surrender value of life insurance, net of 1035 exchange charge | (214) | (243) |
Amortization of debt issuance costs | 43 | 38 |
Net (increase) decrease in accrued interest receivable and other assets | (14,127) | 2,586 |
Net increase (decrease) in accrued interest payable and other liabilities | 4,065 | (1,370) |
Deferred income tax benefit | 0 | (180) |
Net cash (used in) provided by operating activities | (20,047) | 6,086 |
Cash flows from investing activities | ||
Net increase in loans | (39,007) | (76,822) |
Principal payments on securities available-for-sale | 11,730 | 7,073 |
Purchases of securities available-for-sale | (51,373) | (60,877) |
Purchases of FHLB Stock | 0 | (22) |
Additions to premises and equipment | (1,269) | (1,100) |
Proceeds from: | ||
Sale of securities available-for-sale | 46,545 | 704 |
Sale of other real estate owned and repossessed assets | 0 | 700 |
Net cash used in investing activities | (33,374) | (130,344) |
Cash flows from financing activities | ||
Net increase in deposits | 59,907 | 9,929 |
Change in short-term borrowings | (87,584) | |
Change in short-term borrowings | 98,702 | |
Issuances of long term FHLB advances | 100,000 | 0 |
Change in secured borrowing | (53) | (52) |
Net proceeds from issuance of common stock related to initial public offering | 0 | 29,030 |
Share buyback - redeemed stock | (2,108) | 0 |
Common stock dividends paid | (852) | (430) |
Proceeds from exercised stock options | 219 | 1,269 |
Payments related to tax-withholding for share based compensation awards | (43) | (14) |
Net cash provided by financing activities | 69,486 | 138,434 |
Net change in cash and cash equivalents | 16,065 | 14,176 |
Beginning cash and cash equivalents | 33,296 | 63,661 |
Ending cash and cash equivalents | 49,361 | 77,837 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 14,109 | 8,678 |
Taxes paid | 2,071 | 1,380 |
Transfer from loans held for sale to loans held for investment | 1,895 | 453 |
Transfer from loans to other real estate owned | 373 | 0 |
Transfer from premises and equipment to other assets | $ 0 | $ 20 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations: Level One Bancorp, Inc. (the "Company" “we,” “our,” or “us”) is a financial holding company headquartered in Farmington Hills, Michigan. Its wholly owned bank subsidiary, Level One Bank (the "Bank"), has 13 offices, including 9 banking centers (our full service branches) in Oakland County, one banking center in each of Detroit and Grand Rapids, Michigan’s two largest cities, one banking center in Sterling Heights, and one mortgage loan production office in Ann Arbor. The Bank is a Michigan banking corporation with depository accounts insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (the "FDIC"). The Bank provides a wide range of business and consumer financial services in southeastern Michigan and west Michigan. Its primary deposit products are checking, interest-bearing demand, money market and savings, and term certificate accounts, and its primary lending products are commercial real estate, commercial and industrial, residential real estate, and consumer loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Other financial instruments, which potentially represent concentrations of credit risk, include federal funds sold. The Company's subsidiary, Hamilton Court Insurance Company ("Hamilton Court"), is a wholly owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company and the Bank and reinsurance to ten other third party insurance captives for which insurance may not be currently available or economically feasible in the insurance marketplace. Hamilton Court was designed to insure the risks of the Company and the Bank by providing additional insurance coverage for deductibles, excess limits and uninsured exposures. Hamilton Court is incorporated in Nevada. Initial Public Offering: On April 24, 2018, the Company sold 1,150,765 shares of common stock in its initial public offering, including 180,000 shares of common stock pursuant to the exercise in full by the underwriters of their option to purchase additional shares. The aggregate offering price for the shares sold by the Company was $ 32.2 million , and after deducting $ 2.1 million of underwriting discounts and $ 1.1 million of offering expenses paid to third parties, the Company received total net proceeds of $ 29.0 million from the initial public offering. In addition, certain selling shareholders participated in the offering and sold an aggregate of 229,235 shares of our common stock at an aggregate offering price of $ 6.4 million . The Company did not receive any proceeds from the sales of shares by the selling shareholders. Proposed Merger with Ann Arbor State Bank: On August 13, 2019, the Company and Ann Arbor Bancorp, Inc. ("AAB") jointly announced the signing of an Agreement and Plan of Merger, dated August 12, 2019, pursuant to which the Company has agreed to acquire AAB and its wholly owned subsidiary, Ann Arbor State Bank. The transaction is anticipated to close in the fourth quarter of 2019 or the first quarter of 2020, subject to the satisfaction or waiver of customary closing conditions. Basis of Presentation and Principles of Consolidation: The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2018, included in our Annual Form 10-K, filed with the SEC on March 22, 2019. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank and Hamilton Court, after elimination of significant intercompany transactions and accounts. Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided; therefore, future results could differ. Change in Accounting Policy: For fiscal years beginning after December 31, 2018, the Company has elected to evaluate goodwill for impairment as of October 1st as opposed to September 30th, as was done in the preceding years. The change will have no impact on the current year's or prior years' financial statements. Emerging Growth Company Status: The Company is an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period when complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period, which means these financial statements, as well as financial statements we file in the future for as long as we remain an emerging growth company, will be subject to all new or revised accounting standards generally applicable to private companies. Impact of Recently Issued Accounting Standards: Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)," which provides a framework for revenue recognition that replaces the existing industry and transaction specific requirements under the existing standards. ASU 2014-09 requires an entity to apply a five-step model to determine when to recognize revenue and at what amount. The model specifies that revenue should be recognized when (or as) an entity transfers control of goods or services to a customer at the amount in which the entity expects to be entitled. Depending on whether certain criteria are met, revenue should be recognized either over time, in a manner that depicts the entity's performance, or at a point in time, when control of the goods or services are transferred to the customer. The amendments of ASU 2014-09 may be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company performed an analysis of the impact of adoption of this ASU, reviewing revenue recorded from service charges on deposit accounts, gains (losses) on other real estate owned and other assets, debit card interchange fees, and merchant processing fees. Certain revenue received, such as service charges on deposit accounts, interchange fees, and merchant processing fees, is recorded on a transaction by transaction basis or as the service is performed. Finally, the methodology used to record revenue from gains (losses) due to the sale of other real estate owned is not anticipated to change, as the Company currently records income or expense only upon consummation of the sale. The Company adopted ASU 2014-09 and related issuances on January 1, 2019, with no cumulative effect adjustment to opening retained earnings required upon implementation of this standard. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," to improve the accounting for financial instruments. This ASU requires equity investments with readily determinable fair values to be measured at fair value with changes recognized in net income regardless of classification. For equity investments without a readily determinable fair value, the value of the investment would be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer instead of fair value, unless a qualitative assessment indicates impairment. Additionally, this ASU requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, as well as the required use of exit pricing when measuring the fair value of financial instruments for disclosure purposes. The guidance is effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, and is to be applied prospectively with a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently developing processes and procedures to comply with the disclosures requirements of this ASU, which will impact the disclosures the Company makes related to fair value of its financial instruments. This standard is not expected to have a material impact on the Company's consolidated financial statements. The Company is planning to adopt this new guidance within the time frames stated above. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to improve transparency and comparability across entities regarding leasing arrangements. This ASU requires the recognition of a separate lease liability representing the required discounted lease payments over the lease term and a separate lease asset representing the right to use the underlying asset during the same lease term. Additionally, this ASU provides clarification regarding the identification of certain components of contracts that would represent a lease as well as requires additional disclosures to the notes of the financial statements. The guidance will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2021, and is to be applied under an optional transition method. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. Additionally, the Company does not expect to significantly change operating lease agreements prior to adoption. In October 2019, the FASB approved a delayed effective date for the leases standard to January 2021 for certain entities, including certain SEC filers, public business entities, and private companies. As an emerging growth company, the Company is eligible for the delayed effective date. The Company is planning to adopt this new guidance within the time frames stated above but would delay the implementation to the delayed effective date if the proposed delay is effected. Allowance for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," to replace the current incurred loss methodology for recognizing credit losses, which delays recognition until it is probable a loss has been incurred, with a methodology that reflects an estimate of all expected credit losses and considers additional reasonable and supportable forecasted information when determining credit loss estimates. This impacts the calculation of the allowance for credit losses for all financial assets measured under the amortized cost basis, including PCI loans at the time of and subsequent to acquisition. Additionally, credit losses related to available-for-sale debt securities would be recorded through the allowance for credit losses and not as a direct adjustment to the amortized cost of the securities. Based on the ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses," the guidance will be effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and is to be applied under a modified retrospective approach. In October 2019, the FASB approved a delayed effective date for the credit losses standard to January 2023 for certain entities, including certain SEC filers, public business entities, and private companies. As a smaller reporting company, the Company is eligible for the delayed effective date. The Company is currently evaluating the impact of the delay on its implementation project plan as well as the impact of adopting this new guidance on the consolidated financial statements, current systems and processes. At this time, the Company is reviewing potential methodologies for estimating expected credit losses using reasonable and supportable forecast information and has identified certain data and system requirements. Once adopted, we expect our allowance for loan losses to increase through a one-time adjustment to retained earnings; however, until our evaluation is complete, the estimated increase in allowance will be unknown. The Company is planning to adopt this new guidance within the time frames stated above but would delay the implementation to the delayed effective date if the proposed delay is effected. Income Taxes - Tax Cuts and Jobs Act In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)," which allowed an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act ("TCJA"). The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. In addition, the ASU required that an entity state if an election to reclassify the tax effects to retained earnings is made, along with a description of other income tax effects that are reclassified from AOCI. This guidance became effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the ASU and reclassified $168 thousand from retained earnings to AOCI during the first quarter of 2018. In May 2018, the FASB issued an update to ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118," regarding the accounting implications of the recently issued TCJA. The update clarified that in a company's financial statements that include the reporting period in which the TCJA was enacted, a company must first reflect the income tax effects of the TCJA in which the accounting under GAAP is complete. These amounts would not be provisional amounts. The company would also report provisional amounts for those specific income tax effects for which the accounting under GAAP will be incomplete but for which a reasonable estimate can be determined. This accounting update was effective immediately upon announcement. The Company believes its accounting for the income tax effects of the TCJA is complete. Technical corrections or other forthcoming guidance could change how we interpret provisions of the TCJA, which may impact our effective tax rate and could affect our deferred tax assets, tax positions and/or our tax liabilities. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | SECURITIES The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at September 30, 2019 and December 31, 2018 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss). (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2019 U.S. government sponsored entities & agencies $ 1,422 $ 75 $ — $ 1,497 State and political subdivision 85,845 4,892 (4 ) 90,733 Mortgage-backed securities: residential 9,389 93 (92 ) 9,390 Mortgage-backed securities: commercial 19,985 1,067 (3 ) 21,049 Collateralized mortgage obligations: residential 9,128 43 (102 ) 9,069 Collateralized mortgage obligations: commercial 30,747 862 (11 ) 31,598 U.S. Treasury 1,974 27 — 2,001 SBA 23,583 104 (151 ) 23,536 Asset backed securities 10,384 — (197 ) 10,187 Corporate bonds 5,992 191 (1 ) 6,182 Total available-for-sale $ 198,449 $ 7,354 $ (561 ) $ 205,242 December 31, 2018 U.S. government sponsored entities & agencies $ 2,404 $ 4 $ (11 ) $ 2,397 State and political subdivision 75,093 657 (604 ) 75,146 Mortgage-backed securities: residential 10,114 4 (379 ) 9,739 Mortgage-backed securities: commercial 12,594 17 (229 ) 12,382 Collateralized mortgage obligations: residential 18,916 51 (296 ) 18,671 Collateralized mortgage obligations: commercial 32,390 98 (500 ) 31,988 U.S. Treasury 21,232 — (751 ) 20,481 SBA 15,856 — (168 ) 15,688 Asset backed securities 3,872 — (30 ) 3,842 Corporate bonds 14,006 18 (100 ) 13,924 Total available-for-sale $ 206,477 $ 849 $ (3,068 ) $ 204,258 The proceeds from sales of securities and the associated gains and losses for the periods below are as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Proceeds $ 11,080 $ 704 $ 46,545 $ 704 Gross gains 202 2 543 2 Gross losses (51 ) (2 ) (392 ) (2 ) The amortized cost and fair value of securities are shown in the table below by contractual maturity. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2019 (Dollars in thousands) Amortized Cost Fair Value Within one year $ 2,683 $ 2,684 One to five years 24,918 25,353 Five to ten years 52,715 54,997 Beyond ten years 118,133 122,208 Total $ 198,449 $ 205,242 Securities pledged at September 30, 2019 and December 31, 2018 had a carrying amount of $36.7 million and $22.7 million , respectively, and were pledged to secure Federal Home Loan Bank ("FHLB") advances, a Federal Reserve Bank line of credit, repurchase agreements, deposits and mortgage derivatives. As of September 30, 2019 , the Bank held 56 tax-exempt state and local municipal securities totaling $41.1 million backed by the Michigan School Bond Loan Fund. Other than the aforementioned investments, at September 30, 2019 and December 31, 2018 , there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders' equity. The following table summarizes securities with unrealized losses at September 30, 2019 and December 31, 2018 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Fair value Unrealized Losses Fair value Unrealized Losses Fair value Unrealized Losses September 30, 2019 Available-for-sale State and political subdivision $ 1,051 $ (2 ) $ 304 $ (2 ) $ 1,355 $ (4 ) Mortgage-backed securities: residential — — 5,570 (92 ) 5,570 (92 ) Mortgage-backed securities: commercial 898 (2 ) 434 (1 ) 1,332 (3 ) Collateralized mortgage obligations: residential — — 5,799 (102 ) 5,799 (102 ) Collateralized mortgage obligations: commercial — — 1,730 (11 ) 1,730 (11 ) U.S. Treasury — — — — — — SBA 4,058 (12 ) 13,286 (139 ) 17,344 (151 ) Asset backed securities 10,187 (197 ) — — 10,187 (197 ) Corporate bonds — — 1,004 (1 ) 1,004 (1 ) Total available-for-sale $ 16,194 $ (213 ) $ 28,127 $ (348 ) $ 44,321 $ (561 ) December 31, 2018 Available-for-sale U.S. government sponsored entities & agencies $ 978 $ (11 ) $ — $ — $ 978 $ (11 ) State and political subdivision 5,121 (25 ) 27,667 (579 ) 32,788 (604 ) Mortgage-backed securities: residential 2,595 (4 ) 6,393 (375 ) 8,988 (379 ) Mortgage-backed securities: commercial 1,967 (8 ) 8,944 (221 ) 10,911 (229 ) Collateralized mortgage obligations: residential 3,814 (27 ) 8,958 (269 ) 12,772 (296 ) Collateralized mortgage obligations: commercial — — 17,939 (500 ) 17,939 (500 ) U.S. Treasury — — 20,481 (751 ) 20,481 (751 ) SBA 12,420 (91 ) 3,268 (77 ) 15,688 (168 ) Asset backed securities 3,842 (30 ) — — 3,842 (30 ) Corporate bonds 7,526 (28 ) 2,950 (72 ) 10,476 (100 ) Total available-for-sale $ 38,263 $ (224 ) $ 96,600 $ (2,844 ) $ 134,863 $ (3,068 ) As of September 30, 2019 , the Company's investment portfolio consisted of 240 securities, 46 of which were in an unrealized loss position. The unrealized losses for these securities resulted primarily from changes in interest rates since purchased. The Company expects full recovery of the carrying amount of these securities and does not intend to sell the securities in an unrealized loss position nor does it believe it will be required to sell securities in an unrealized loss position before the value is recovered. The Company does not consider these securities to be other-than-temporarily impaired at September 30, 2019 . |
Loans
Loans | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Loans | LOANS The following table presents the recorded investment in loans at September 30, 2019 and December 31, 2018 . The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2019 Commercial real estate $ 509,704 $ 56,077 $ 565,781 Commercial and industrial 395,804 8,326 404,130 Residential real estate 187,485 10,792 198,277 Consumer 701 34 735 Total $ 1,093,694 $ 75,229 $ 1,168,923 December 31, 2018 Commercial real estate $ 500,809 $ 61,284 $ 562,093 Commercial and industrial 375,130 8,325 383,455 Residential real estate 165,015 15,003 180,018 Consumer 944 55 999 Total $ 1,041,898 $ 84,667 $ 1,126,565 At September 30, 2019 and December 31, 2018 , the Company had residential loans held for sale, which were originated with the intent to sell, totaling $26.9 million and $5.6 million , respectively. During the three months ended September 30, 2019 and 2018 , the Company sold residential real estate loans with proceeds totaling $86.4 million and $25.1 million , respectively and $179.4 million and $50.2 million , during the nine months ended September 30, 2019 and 2018, respectively. Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Nonaccrual loans: Commercial real estate $ 5,043 $ 5,927 Commercial and industrial 4,071 9,605 Residential real estate 2,339 2,915 Total nonaccrual loans 11,453 18,447 Other real estate owned 373 — Total nonperforming assets $ 11,826 $ 18,447 Loans 90 days or more past due and still accruing $ 157 $ 243 At September 30, 2019 and December 31, 2018 , all of the loans 90 days or more past due and still accruing were PCI loans. Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total September 30, 2019 Commercial real estate $ 561,062 $ 4,288 $ — $ 431 $ 565,781 Commercial and industrial 403,065 918 26 121 404,130 Residential real estate 195,740 802 743 992 198,277 Consumer 717 — 18 — 735 Total $ 1,160,584 $ 6,008 $ 787 $ 1,544 $ 1,168,923 December 31, 2018 Commercial real estate $ 559,523 $ 497 $ — $ 2,073 $ 562,093 Commercial and industrial 381,424 664 82 1,285 383,455 Residential real estate 174,831 2,499 1,314 1,374 180,018 Consumer 998 — 1 — 999 Total $ 1,116,776 $ 3,660 $ 1,397 $ 4,732 $ 1,126,565 Impaired Loans: Information as to impaired loans, excluding purchased credit impaired loans, was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Nonaccrual loans $ 11,453 $ 18,447 Performing troubled debt restructurings: Commercial and industrial 553 568 Residential real estate 361 363 Total performing troubled debt restructurings 914 931 Total impaired loans, excluding purchase credit impaired loans $ 12,367 $ 19,378 Troubled Debt Restructurings: The Company assesses loan modifications to determine whether a modification constitutes a troubled debt restructuring ("TDR"). This applies to all loan modifications except for modifications to loans accounted for in pools under ASC 310-30, which are not subject to TDR accounting/classification. For loans excluded from ASC 310-30 accounting, a modification is considered a TDR when a borrower is experiencing financial difficulties and the Company grants a concession to the borrower. For loans accounted for individually under ASC 310-30, a modification is considered a TDR when a borrower is experiencing financial difficulties and the effective yield after the modification is less than the effective yield at the time the loan was acquired or less than the effective yield of any re-estimation of cash flows subsequent to acquisition in association with consideration of qualitative factors included within ASC 310-40. All TDRs are considered impaired loans. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, are considered in the determination of an appropriate level of allowance for loan losses. As of September 30, 2019 and December 31, 2018 , the Company had a recorded investment in troubled debt restructurings of $4.1 million and $5.9 million , respectively. The Company allocated a specific reserve of $498 thousand for those loans at September 30, 2019 and a specific reserve of $258 thousand for those loans at December 31, 2018 . The Company has not committed to lend additional amounts to borrowers whose loans have been modified. As of September 30, 2019 , there were $3.2 million of nonperforming TDRs and $914 thousand of performing TDRs included in impaired loans. As of December 31, 2018 , there were $5.0 million of nonperforming TDRs and $931 thousand of performing TDRs included in impaired loans. All TDRs are considered impaired loans in the calendar year of their restructuring. A loan that has been modified can return to performing status if it satisfies a six-month performance requirement; however, it will continue to be reported as a TDR and considered impaired. The following table presents the recorded investment of loans modified as TDRs during the nine months ended September 30, 2019 and 2018 , by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2019 and 2018. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession. Concession type Financial effects of (Dollars in thousands) Principal Interest Forbearance Total Total Net Provision Nine months ended September 30, 2019 Commercial and industrial $ — $ — $ 351 2 $ 351 $ — $ 174 Total $ — $ — $ 351 2 $ 351 $ — $ 174 Nine months ended September 30, 2018 Commercial real estate $ — $ — $ 2,087 4 $ 2,087 $ 101 $ — Commercial and industrial 133 — 990 3 1,123 — — Residential real estate — — 112 2 112 — 5 Total $ 133 $ — $ 3,189 9 $ 3,322 $ 101 $ 5 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. The following table presents the number of loans modified as TDRs during the twelve months ended September 30, 2018 for which there was a subsequent payment default, including the recorded investment as of the period end. There were no loans modified as TDRs during the twelve months ending September 30, 2019 for which there was a subsequent default. A payment on a TDR is considered to be in default once it is greater than 30 days past due. Three months ended September 30, 2018 Nine months ended September 30, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,087 $ — 3 $ 2,087 $ — Commercial and industrial 2 1,182 — 3 1,316 — Residential real estate — — — 1 111 — Total 5 $ 3,269 $ — 7 $ 3,514 $ — Credit Quality Indicators: 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 Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial and industrial and commercial real estate loans and is performed on an annual basis. The Company uses the following definitions for risk ratings: Pass. Loans classified as pass are higher quality loans that do not fit any of the other categories described below. This category includes loans risk rated with the following ratings: cash/stock secured, excellent credit risk, superior credit risk, good credit risk, satisfactory credit risk, and marginal credit risk. Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company's credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total September 30, 2019 Commercial real estate $ 552,320 $ 8,342 $ 4,653 $ 466 $ 565,781 Commercial and industrial 383,380 14,270 6,440 40 404,130 Total $ 935,700 $ 22,612 $ 11,093 $ 506 $ 969,911 December 31, 2018 Commercial real estate $ 545,843 $ 10,240 $ 5,966 $ 44 $ 562,093 Commercial and industrial 368,189 2,841 12,425 — 383,455 Total $ 914,032 $ 13,081 $ 18,391 $ 44 $ 945,548 For residential real estate loans and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. Residential real estate loans and consumer loans are considered nonperforming if they are 90 days or more past due. Consumer loan types are continuously monitored for changes in delinquency trends and other asset quality indicators. The following presents residential real estate and consumer loans by credit quality: (Dollars in thousands) Performing Nonperforming Total September 30, 2019 Residential real estate $ 195,938 $ 2,339 $ 198,277 Consumer 735 — 735 Total $ 196,673 $ 2,339 $ 199,012 December 31, 2018 Residential real estate $ 177,103 $ 2,915 $ 180,018 Consumer 999 — 999 Total $ 178,102 $ 2,915 $ 181,017 Purchased Credit Impaired Loans: As part of the Company's previous four acquisitions, the Company acquired purchase credit impaired ("PCI") loans for which there was evidence of credit quality deterioration since origination, and we determined that it was probable that the Company would be unable to collect all contractually required principal and interest payments. The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2019 Commercial real estate $ 6,190 $ 3,640 Commercial and industrial 280 162 Residential real estate 4,317 3,081 Total PCI loans $ 10,787 $ 6,883 December 31, 2018 Commercial real estate $ 7,406 $ 4,344 Commercial and industrial 177 122 Residential real estate 4,974 3,409 Total PCI loans $ 12,557 $ 7,875 The following table reflects the activity in the accretable yield of PCI loans from past acquisitions, which includes total expected cash flows, including interest, in excess of the recorded investment. For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Accretable yield at beginning of period $ 10,194 $ 12,390 $ 10,947 $ 14,452 Accretion of income (597 ) (1,167 ) (1,772 ) (3,076 ) Adjustments to accretable yield — — 422 (159 ) Other activity, net — — — 6 Accretable yield at end of period $ 9,597 $ 11,223 $ 9,597 $ 11,223 "Accretion of income" represents the income earned on these loans for the year. "Adjustments to accretable yield" represents the net amount of accretable yield added or removed as a result of the semi-annual re-estimation of expected cash flows. OFF-BALANCE SHEET ACTIVITIES In the normal course of business, the Company offers a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include outstanding commitments to extend credit, credit lines, commercial letters of credit and standby letters of credit. These are agreements to provide credit, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies used for loans are used to make such commitments, including obtaining collateral at exercise of the commitment. A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2019 December 31, 2018 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 16,252 $ 22,769 $ 8,608 $ 10,900 Unused lines of credit 19,544 289,779 18,672 229,490 Unused standby letters of credit and commercial letters of credit 4,195 — 3,861 232 Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments of $16.3 million as of September 30, 2019 , have interest rates ranging from 3.6% to 7.8% and maturities ranging from 2 years to 30 years. |
Allowance for Loan Losses
Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Allowance for Loan Losses | ALLOWANCE FOR LOAN LOSSES An allowance for loan losses is maintained to absorb probable incurred losses from the loan portfolio. The allowance for loan losses is based on management's continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of nonaccrual loans. The Company established an allowance for loan losses associated with PCI loans (accounted for under ASC 310-30) based on credit deterioration subsequent to the acquisition date. As of September 30, 2019 , the Company had six PCI loan pools and 11 non-pooled PCI loans. The Company re-estimates cash flows expected to be collected for PCI loans on a semi-annual basis, with any decline in expected cash flows recorded as provision for loan losses on a discounted basis during the period. For any increases in cash flows expected to be collected, the Company adjusts the amount of accretable yield to be recognized on a prospective basis over the loan's remaining life. For loans not accounted for under ASC 310-30, the Company individually evaluates certain impaired loans on a quarterly basis and establishes specific allowances for such loans, if required. A loan is considered impaired when it is probable that interest or principal payments will not be made in accordance with the contractual terms of the loan agreement. Consistent with this definition, all loans for which the accrual of interest has been discontinued (nonaccrual loans) and all TDRs are considered impaired. The Company individually evaluates nonaccrual loans with book balances of $250 thousand or more, all loans whose terms have been modified in a TDR, and certain other loans. The threshold for individual evaluation is revised on an infrequent basis, generally when economic circumstances significantly change. Specific allowances for impaired loans are estimated using one of several methods, including the estimated fair value of underlying collateral, observable market value of similar debt or discounted expected future cash flows. All other impaired loans are individually evaluated by identifying its risk characteristics and applying the standard reserve factor for the corresponding loan pool. Loans which do not meet the criteria to be individually evaluated are evaluated in pools of loans with similar risk characteristics. Business loans are assigned to pools based on the Company's internal risk rating system. Internal risk ratings are assigned to each business loan at the time of approval and are subjected to subsequent periodic reviews by the Company's senior management, generally at least annually or more frequently upon the occurrence of a circumstance that affects the credit risk of the loan. For business loans not individually evaluated, losses inherent to the pool are estimated by applying standard reserve factors to outstanding principal balances. The allowance for loans not individually evaluated is determined by applying estimated loss rates to various pools of loans within the portfolios with similar risk characteristics. Estimated loss rates for all pools are updated quarterly, incorporating quantitative and qualitative factors such as recent charge-off experience, current economic conditions and trends, changes in collateral values of properties securing loans (using index-based estimates), and trends with respect to past due and nonaccrual amounts. Loans acquired in business combinations are initially recorded at fair value, which includes an estimate of credit losses expected to be realized over the remaining lives of the loans, and therefore no corresponding allowance for loan losses is recorded for these loans at acquisition. Methods utilized to estimate any subsequently required allowance for loan losses for acquired loans not deemed credit-impaired at acquisition are similar to originated loans; however, the estimate of loss is based on the unpaid principal balance less any remaining purchase discount. Loans individually evaluated for impairment are presented below. (Dollars in thousands) Recorded investment with no related allowance Recorded investment with related allowance (1) Total recorded investment Contractual principal balance Related allowance (1) September 30, 2019 Individually evaluated impaired loans: Commercial real estate $ 4,479 $ 564 $ 5,043 $ 5,244 $ 37 Commercial and industrial 2,292 2,051 4,343 4,608 443 Residential real estate 1,207 189 1,396 1,541 18 Total $ 7,978 $ 2,804 $ 10,782 $ 11,393 $ 498 December 31, 2018 Individually evaluated impaired loans: Commercial real estate $ 5,898 $ 3,991 $ 9,889 $ 13,076 $ 815 Commercial and industrial 5,892 4,059 9,951 10,411 526 Residential real estate 1,666 3,255 4,921 6,604 101 Total $ 13,456 $ 11,305 $ 24,761 $ 30,091 $ 1,442 (1) December 31, 2018 individually evaluated impaired loans included $7.2 million of PCI loans with a related allowance of $920 thousand . September 30, 2019 individually evaluated impaired loans do not include PCI loans with a related allowance. (Dollars in thousands) Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized For the three months ended September 30, 2019 Individually evaluated impaired loans (1) : Commercial real estate $ 3,111 $ 2 $ 35 Commercial and industrial 6,752 14 349 Residential real estate 1,428 7 — Total $ 11,291 $ 23 $ 384 For the nine months ended September 30, 2019 Individually evaluated impaired loans (1) : Commercial real estate $ 4,034 $ 2 $ 209 Commercial and industrial 9,080 33 573 Residential real estate 2,059 21 10 Total $ 15,173 $ 56 $ 792 For the three months ended September 30, 2018 Individually evaluated impaired loans (1) : Commercial real estate $ 9,524 $ 430 $ 142 Commercial and industrial 6,559 22 — Residential real estate 5,217 90 — Total $ 21,300 $ 542 $ 142 For the nine months ended September 30, 2018 Individually evaluated impaired loans (1) : Commercial real estate $ 9,258 $ 1,275 $ 142 Commercial and industrial 7,736 71 112 Residential real estate 5,256 277 — Total $ 22,250 $ 1,623 $ 254 (1) September 30, 2018 individually evaluated impaired loans included PCI loans, whereas September 30, 2019 individually evaluated impaired loans excluded PCI loans. Activity in the allowance for loan losses and the allocation of the allowance for loans was as follows: (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total For the three months ended September 30, 2019 Allowance for loan losses: Beginning balance $ 5,219 $ 5,990 $ 1,142 $ 2 $ 12,353 Provision (benefit) for loan losses 184 (280 ) 72 8 (16 ) Gross chargeoffs — (49 ) — (34 ) (83 ) Recoveries 5 10 12 26 53 Net (chargeoffs) recoveries 5 (39 ) 12 (8 ) (30 ) Ending allowance for loan losses $ 5,408 $ 5,671 $ 1,226 $ 2 $ 12,307 For the nine months ended September 30, 2019 Allowance for loan losses: Beginning balance $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Provision for loan losses 249 560 7 19 835 Gross chargeoffs (74 ) (164 ) — (48 ) (286 ) Recoveries 6 101 55 30 192 Net (chargeoffs) recoveries (68 ) (63 ) 55 (18 ) (94 ) Ending allowance for loan losses $ 5,408 $ 5,671 $ 1,226 $ 2 $ 12,307 For the three months ended September 30, 2018 Allowance for loan losses: Beginning balance $ 5,060 $ 5,423 $ 977 $ 5 $ 11,465 Provision for loan losses 34 475 101 9 619 Gross chargeoffs — (237 ) — (8 ) (245 ) Recoveries 23 8 19 1 51 Net (chargeoffs) recoveries 23 (229 ) 19 (7 ) (194 ) Ending allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 For the nine months ended September 30, 2018 Allowance for loan losses: Beginning balance $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Provision (benefit) for loan losses 352 (53 ) 143 21 463 Gross chargeoffs (112 ) (995 ) (47 ) (23 ) (1,177 ) Recoveries 25 814 51 1 891 Net (chargeoffs) recoveries (87 ) (181 ) 4 (22 ) (286 ) Ending allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total September 30, 2019 Allowance for loan losses: Individually evaluated for impairment $ 37 $ 443 $ 18 $ — $ 498 Collectively evaluated for impairment 4,619 5,189 1,195 2 11,005 Acquired with deteriorated credit quality 752 39 13 — 804 Ending allowance for loan losses $ 5,408 $ 5,671 $ 1,226 $ 2 $ 12,307 Balance of loans: Individually evaluated for impairment $ 5,043 $ 4,343 $ 1,396 $ — $ 10,782 Collectively evaluated for impairment 557,098 399,625 193,800 735 1,151,258 Acquired with deteriorated credit quality 3,640 162 3,081 — 6,883 Total loans $ 565,781 $ 404,130 $ 198,277 $ 735 $ 1,168,923 December 31, 2018 Allowance for loan losses: Individually evaluated for impairment $ — $ 504 $ 18 $ — $ 522 Collectively evaluated for impairment 4,412 4,648 1,063 1 10,124 Acquired with deteriorated credit quality 815 22 83 — 920 Ending allowance for loan losses $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Balance of loans: Individually evaluated for impairment $ 5,898 $ 9,829 $ 1,854 $ — $ 17,581 Collectively evaluated for impairment 551,851 373,504 174,755 999 1,101,109 Acquired with deteriorated credit quality 4,344 122 3,409 — 7,875 Total loans $ 562,093 $ 383,455 $ 180,018 $ 999 $ 1,126,565 |
Premises and Equipment
Premises and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | PREMISES AND EQUIPMENT Premises and equipment were as follows at September 30, 2019 and December 31, 2018 : (Dollars in thousands) September 30, 2019 December 31, 2018 Land $ 2,253 $ 2,197 Buildings 9,825 9,746 Leasehold improvements 2,192 1,708 Furniture, fixtures and equipment 6,322 6,024 Total premises and equipment $ 20,592 $ 19,675 Less: Accumulated depreciation 7,165 6,433 Net premises and equipment $ 13,427 $ 13,242 Depreciation expense was $326 thousand and $345 thousand for the three months ended September 30, 2019 and 2018 , and $986 thousand and $1.0 million for the nine months ended September 30, 2019 and 2018 , respectively. Most of the Company's branch facilities are rented under non-cancelable operating lease agreements. Total rent expense was $307 thousand and $285 thousand for the three months ended September 30, 2019 and 2018 , and $840 thousand and $790 thousand for the nine months ended September 30, 2019 and 2018 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill : The Company acquired two banks, Lotus Bank in March 2015 and Bank of Michigan in March 2016, which resulted in the recognition of $4.6 million and $4.8 million of goodwill, respectively. Goodwill was $9.4 million at both September 30, 2019 and December 31, 2018 . Goodwill is not amortized but is evaluated at least annually for impairment. The Company's most recent annual goodwill impairment review performed as of September 30, 2018 did not indicate that an impairment of goodwill existed. The Company also determined that no triggering events have occurred that indicated impairment from the most recent valuation date through September 30, 2019 and that the Company's goodwill was not impaired at September 30, 2019 . Beginning with fiscal year 2019, the Company has elected to evaluate goodwill for impairment as of October 1st rather than September 30th as was done in the preceding years. The change will have no impact on the current year's or prior year's financial statements. Acquired Intangible Assets : The Company has recorded core deposit intangibles ("CDIs") associated with each of its acquisitions. CDIs are amortized on an accelerated basis over their estimated useful lives. The table below presents the Company's net carrying amount of CDIs: (Dollars in thousands) September 30, 2019 December 31, 2018 Gross carrying amount $ 2,045 $ 2,045 Accumulated amortization (1,715 ) (1,598 ) Net Intangible $ 330 $ 447 Amortization expense for the CDIs was $29 thousand and $55 thousand for the three months ended September 30, 2019 and 2018 and $117 thousand and $165 thousand for the nine months ended September 30, 2019 and 2018 , respectively. |
Borrowings and Subordinated Deb
Borrowings and Subordinated Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings and Subordinated Debt | BORROWINGS AND SUBORDINATED DEBT The following table presents the components of our short-term borrowings and long-term debt. September 30, 2019 December 31, 2018 (Dollars in thousands) Amount Weighted (1) Amount Weighted (1) Short-term borrowings: FHLB Advances $ — — % $ 90,000 2.54 % Securities sold under agreements to repurchase 545 0.30 609 0.30 FHLB line of credit — — 2,520 2.87 Federal funds purchased 10,000 1.90 5,000 2.50 Total short-term borrowings 10,545 1.82 98,129 2.53 Long-term debt: Secured borrowing due in 2022 1,392 1.00 1,445 1.00 FHLB advances due in 2022 to 2029 (2) 100,000 1.11 — — Subordinated notes due in 2025 (3) 14,934 6.38 14,891 6.38 Total long-term debt 116,326 1.79 16,336 5.90 Total short-term and long-term borrowings $ 126,871 1.79 % $ 114,465 3.01 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) At September 30, 2019 , the long-term FHLB advances consisted of 0.66% - 2.35% fixed rate notes. (3) The September 30, 2019 balance includes subordinated notes of $15.0 million and debt issuance costs of $66 thousand . The December 31, 2018 balance includes subordinated notes of $15.0 million and debt issuance costs of $109 thousand . The Bank is a member of the FHLB of Indianapolis, which provides short- and long-term funding collateralized by mortgage-related assets to its members. FHLB short-term borrowings bear interest at variable rates based on LIBOR. The advances were secured by a blanket lien on $419.6 million of real estate-related loans as of September 30, 2019 . Based on this collateral and the Company's holdings of FHLB stock, the Company was eligible to borrow up to an additional $144.9 million from the FHLB at September 30, 2019 . In addition, the Bank can borrow up to $130.0 million through the unsecured lines of credit it has established with other correspondent banks, as well as $4.9 million through a secured line with the Federal Reserve Bank. The Bank had $10.0 million outstanding federal funds purchased as of September 30, 2019 and $5.0 million outstanding as of December 31, 2018. At September 30, 2019 , the Company had $545 thousand of securities sold under agreements to repurchase with customers, which mature overnight. These borrowings were secured by residential collateralized mortgage obligation securities with a fair value of $1.2 million at September 30, 2019 . The Company had a secured borrowing of $1.4 million as of September 30, 2019 relating to certain loan participations sold by the Company that did not qualify for sales treatment. The secured borrowing bears a fixed rate of 1.00% and matures on September 15, 2022. As of September 30, 2019 , the Company had outstanding $15.0 million of subordinated notes. The notes bear a fixed interest rate of 6.375% per annum, payable semiannually through December 15, 2020. The notes will bear a floating interest rate of three-month LIBOR plus 477 basis points payable quarterly after December 15, 2020 through maturity. The notes mature no later than December 15, 2025, and the Company has the option to redeem or prepay any or all of the subordinated notes without premium or penalty any time after December 15, 2020 or upon an occurrence of a Tier 2 capital event or tax event. The notes are subordinated to all other borrowings. At September 30, 2019 , there was $66 thousand of debt issuance costs remaining, which are netted against the balance of the subordinated notes and recognized as expense over the expected term of the notes. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company records its federal income tax expense using its estimate of the effective income tax rate expected for the full year and applies that rate on a year-to-date basis. The fluctuations in the Company's effective federal income tax rate reflect changes related to interest income exempt from federal taxation and other nondeductible expenses relative to income tax credits. A reconciliation of expected income tax expense using the federal corporate tax rate of 21% and the actual income tax expense recorded in our consolidated financial statements was as follows : For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Income tax expense based on federal corporate tax rate $ 1,118 $ 823 $ 2,911 $ 2,646 Changes resulting from: Tax-exempt income (142 ) (104 ) (398 ) (289 ) Other, net (62 ) (54 ) (85 ) (190 ) Income tax expense $ 914 $ 665 $ 2,428 $ 2,167 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | STOCK BASED COMPENSATION On March 15, 2018, the Company’s Board of Directors approved the 2018 Equity Incentive Compensation Plan ("2018 Plan"). The 2018 Plan became effective upon shareholder approval at the annual shareholders meeting held on April 17, 2018. Under the 2018 Plan, the Company can grant incentive and non-qualified stock options, stock awards, stock appreciation rights, and other incentive awards to directors and employees of, and certain service providers to, the Company and its subsidiaries. Once the 2018 Plan became effective, no further awards could be granted from the 2007 Stock Option Plan ("Stock Option Plan") or the 2014 Equity Incentive Plan ("2014 Plan"). However, any outstanding equity awards granted under the Stock Option Plan or the 2014 Plan will remain subject to the terms of such plans until the time it is no longer outstanding. For further discussion on the Stock Option Plan and 2014 Plan, refer to the disclosures included within the Annual Form 10-K, filed with the SEC on March 22, 2019. The Company has reserved 250,000 shares of common stock for issuance under the 2018 Plan. During the nine months ended September 30, 2019 , the Company granted no stock options and issued 35,633 restricted stock awards under the 2018 Plan, resulting in 207,617 shares available to be granted as of September 30, 2019 . During the nine months ended September 30, 2018 , the Company granted 30,000 stock options under the Stock Option Plan and 30,271 restricted stock awards under the 2014 Plan. Stock Options As of September 30, 2019 , all of the Company's outstanding options were granted under the Stock Option Plan. The term of these options is ten years, and they vest one-third each year, over a three year period. The Company will use authorized, but unissued shares to satisfy share option exercises. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. Expected volatilities are based on historical volatilities of the Company's common stock. The Company assumes all awards will vest. The expected term of options granted 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. The fair value of the stock options granted in the nine months ended September 30, 2018 was determined using the following weighted-average assumptions as of grant date: September 30, 2018 Risk Free Interest Rate 2.83% Expected Term (years) 7.0 Expected Volatility 0.04% Weighted average fair value of options granted $4.46 The summary of our stock option activity for the nine months ended September 30, 2019 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Options outstanding at January 1, 2019 376,768 $ 16.26 5.8 Exercised (21,550 ) 10.16 Options outstanding at September 30, 2019 355,218 16.63 5.3 Options exercisable at September 30, 2019 335,214 $ 16.14 5.1 The aggregate intrinsic value was $2.7 million for both options outstanding and exercisable as of September 30, 2019 . As of September 30, 2019 , there was $ 61 thousand of total unrecognized compensation cost related to stock options granted under the Stock Option Plan. The cost is expected to be recognized over a weighted-average period of 1.1 years. Share-based compensation expense charged against income was $12 thousand and $38 thousand for the three months ended September 30, 2019 and 2018 , and $43 thousand and $128 thousand for the nine months ended September 30, 2019 and 2018 , respectively. Restricted Stock Awards A summary of changes in the Company's nonvested shares for the nine months ended September 30, 2019 is as follows: Nonvested Shares Shares Weighted Average Grant-Date Fair Value Nonvested at January 1, 2019 53,770 $ 24.14 Granted 35,633 23.76 Vested (6,700 ) 20.75 Forfeited (3,150 ) 23.99 Nonvested at September 30, 2019 79,553 $ 24.26 As of September 30, 2019 , there was $ 990 thousand of total unrecognized compensation cost related to nonvested shares granted under the 2014 Plan and 2018 Plan. The cost is expected to be recognized over a weighted average period of 1.9 years. The total fair value of shares vested during the nine months ended September 30, 2019 was $139 thousand . Total expense for restricted stock awards totaled $177 thousand and $175 thousand for the three months ended September 30, 2019 and 2018 , and $474 thousand and $487 thousand for the nine months ended September 30, 2019 and 2018, respectively. For the nine months ended September 30, 2019, there was $43 thousand of restricted stock redeemed to cover the payroll taxes due at the time of vesting. |
Off- Balance Sheet Activities
Off- Balance Sheet Activities | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Off- Balance Sheet Activities | LOANS The following table presents the recorded investment in loans at September 30, 2019 and December 31, 2018 . The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2019 Commercial real estate $ 509,704 $ 56,077 $ 565,781 Commercial and industrial 395,804 8,326 404,130 Residential real estate 187,485 10,792 198,277 Consumer 701 34 735 Total $ 1,093,694 $ 75,229 $ 1,168,923 December 31, 2018 Commercial real estate $ 500,809 $ 61,284 $ 562,093 Commercial and industrial 375,130 8,325 383,455 Residential real estate 165,015 15,003 180,018 Consumer 944 55 999 Total $ 1,041,898 $ 84,667 $ 1,126,565 At September 30, 2019 and December 31, 2018 , the Company had residential loans held for sale, which were originated with the intent to sell, totaling $26.9 million and $5.6 million , respectively. During the three months ended September 30, 2019 and 2018 , the Company sold residential real estate loans with proceeds totaling $86.4 million and $25.1 million , respectively and $179.4 million and $50.2 million , during the nine months ended September 30, 2019 and 2018, respectively. Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Nonaccrual loans: Commercial real estate $ 5,043 $ 5,927 Commercial and industrial 4,071 9,605 Residential real estate 2,339 2,915 Total nonaccrual loans 11,453 18,447 Other real estate owned 373 — Total nonperforming assets $ 11,826 $ 18,447 Loans 90 days or more past due and still accruing $ 157 $ 243 At September 30, 2019 and December 31, 2018 , all of the loans 90 days or more past due and still accruing were PCI loans. Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total September 30, 2019 Commercial real estate $ 561,062 $ 4,288 $ — $ 431 $ 565,781 Commercial and industrial 403,065 918 26 121 404,130 Residential real estate 195,740 802 743 992 198,277 Consumer 717 — 18 — 735 Total $ 1,160,584 $ 6,008 $ 787 $ 1,544 $ 1,168,923 December 31, 2018 Commercial real estate $ 559,523 $ 497 $ — $ 2,073 $ 562,093 Commercial and industrial 381,424 664 82 1,285 383,455 Residential real estate 174,831 2,499 1,314 1,374 180,018 Consumer 998 — 1 — 999 Total $ 1,116,776 $ 3,660 $ 1,397 $ 4,732 $ 1,126,565 Impaired Loans: Information as to impaired loans, excluding purchased credit impaired loans, was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Nonaccrual loans $ 11,453 $ 18,447 Performing troubled debt restructurings: Commercial and industrial 553 568 Residential real estate 361 363 Total performing troubled debt restructurings 914 931 Total impaired loans, excluding purchase credit impaired loans $ 12,367 $ 19,378 Troubled Debt Restructurings: The Company assesses loan modifications to determine whether a modification constitutes a troubled debt restructuring ("TDR"). This applies to all loan modifications except for modifications to loans accounted for in pools under ASC 310-30, which are not subject to TDR accounting/classification. For loans excluded from ASC 310-30 accounting, a modification is considered a TDR when a borrower is experiencing financial difficulties and the Company grants a concession to the borrower. For loans accounted for individually under ASC 310-30, a modification is considered a TDR when a borrower is experiencing financial difficulties and the effective yield after the modification is less than the effective yield at the time the loan was acquired or less than the effective yield of any re-estimation of cash flows subsequent to acquisition in association with consideration of qualitative factors included within ASC 310-40. All TDRs are considered impaired loans. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, are considered in the determination of an appropriate level of allowance for loan losses. As of September 30, 2019 and December 31, 2018 , the Company had a recorded investment in troubled debt restructurings of $4.1 million and $5.9 million , respectively. The Company allocated a specific reserve of $498 thousand for those loans at September 30, 2019 and a specific reserve of $258 thousand for those loans at December 31, 2018 . The Company has not committed to lend additional amounts to borrowers whose loans have been modified. As of September 30, 2019 , there were $3.2 million of nonperforming TDRs and $914 thousand of performing TDRs included in impaired loans. As of December 31, 2018 , there were $5.0 million of nonperforming TDRs and $931 thousand of performing TDRs included in impaired loans. All TDRs are considered impaired loans in the calendar year of their restructuring. A loan that has been modified can return to performing status if it satisfies a six-month performance requirement; however, it will continue to be reported as a TDR and considered impaired. The following table presents the recorded investment of loans modified as TDRs during the nine months ended September 30, 2019 and 2018 , by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2019 and 2018. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession. Concession type Financial effects of (Dollars in thousands) Principal Interest Forbearance Total Total Net Provision Nine months ended September 30, 2019 Commercial and industrial $ — $ — $ 351 2 $ 351 $ — $ 174 Total $ — $ — $ 351 2 $ 351 $ — $ 174 Nine months ended September 30, 2018 Commercial real estate $ — $ — $ 2,087 4 $ 2,087 $ 101 $ — Commercial and industrial 133 — 990 3 1,123 — — Residential real estate — — 112 2 112 — 5 Total $ 133 $ — $ 3,189 9 $ 3,322 $ 101 $ 5 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. The following table presents the number of loans modified as TDRs during the twelve months ended September 30, 2018 for which there was a subsequent payment default, including the recorded investment as of the period end. There were no loans modified as TDRs during the twelve months ending September 30, 2019 for which there was a subsequent default. A payment on a TDR is considered to be in default once it is greater than 30 days past due. Three months ended September 30, 2018 Nine months ended September 30, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,087 $ — 3 $ 2,087 $ — Commercial and industrial 2 1,182 — 3 1,316 — Residential real estate — — — 1 111 — Total 5 $ 3,269 $ — 7 $ 3,514 $ — Credit Quality Indicators: 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 Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial and industrial and commercial real estate loans and is performed on an annual basis. The Company uses the following definitions for risk ratings: Pass. Loans classified as pass are higher quality loans that do not fit any of the other categories described below. This category includes loans risk rated with the following ratings: cash/stock secured, excellent credit risk, superior credit risk, good credit risk, satisfactory credit risk, and marginal credit risk. Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company's credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total September 30, 2019 Commercial real estate $ 552,320 $ 8,342 $ 4,653 $ 466 $ 565,781 Commercial and industrial 383,380 14,270 6,440 40 404,130 Total $ 935,700 $ 22,612 $ 11,093 $ 506 $ 969,911 December 31, 2018 Commercial real estate $ 545,843 $ 10,240 $ 5,966 $ 44 $ 562,093 Commercial and industrial 368,189 2,841 12,425 — 383,455 Total $ 914,032 $ 13,081 $ 18,391 $ 44 $ 945,548 For residential real estate loans and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. Residential real estate loans and consumer loans are considered nonperforming if they are 90 days or more past due. Consumer loan types are continuously monitored for changes in delinquency trends and other asset quality indicators. The following presents residential real estate and consumer loans by credit quality: (Dollars in thousands) Performing Nonperforming Total September 30, 2019 Residential real estate $ 195,938 $ 2,339 $ 198,277 Consumer 735 — 735 Total $ 196,673 $ 2,339 $ 199,012 December 31, 2018 Residential real estate $ 177,103 $ 2,915 $ 180,018 Consumer 999 — 999 Total $ 178,102 $ 2,915 $ 181,017 Purchased Credit Impaired Loans: As part of the Company's previous four acquisitions, the Company acquired purchase credit impaired ("PCI") loans for which there was evidence of credit quality deterioration since origination, and we determined that it was probable that the Company would be unable to collect all contractually required principal and interest payments. The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2019 Commercial real estate $ 6,190 $ 3,640 Commercial and industrial 280 162 Residential real estate 4,317 3,081 Total PCI loans $ 10,787 $ 6,883 December 31, 2018 Commercial real estate $ 7,406 $ 4,344 Commercial and industrial 177 122 Residential real estate 4,974 3,409 Total PCI loans $ 12,557 $ 7,875 The following table reflects the activity in the accretable yield of PCI loans from past acquisitions, which includes total expected cash flows, including interest, in excess of the recorded investment. For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Accretable yield at beginning of period $ 10,194 $ 12,390 $ 10,947 $ 14,452 Accretion of income (597 ) (1,167 ) (1,772 ) (3,076 ) Adjustments to accretable yield — — 422 (159 ) Other activity, net — — — 6 Accretable yield at end of period $ 9,597 $ 11,223 $ 9,597 $ 11,223 "Accretion of income" represents the income earned on these loans for the year. "Adjustments to accretable yield" represents the net amount of accretable yield added or removed as a result of the semi-annual re-estimation of expected cash flows. OFF-BALANCE SHEET ACTIVITIES In the normal course of business, the Company offers a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include outstanding commitments to extend credit, credit lines, commercial letters of credit and standby letters of credit. These are agreements to provide credit, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies used for loans are used to make such commitments, including obtaining collateral at exercise of the commitment. A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2019 December 31, 2018 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 16,252 $ 22,769 $ 8,608 $ 10,900 Unused lines of credit 19,544 289,779 18,672 229,490 Unused standby letters of credit and commercial letters of credit 4,195 — 3,861 232 Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments of $16.3 million as of September 30, 2019 , have interest rates ranging from 3.6% to 7.8% and maturities ranging from 2 years to 30 years. |
Regulatory Capital Matters
Regulatory Capital Matters | 9 Months Ended |
Sep. 30, 2019 | |
Regulated Operations [Abstract] | |
Regulatory Capital Matters | REGULATORY CAPITAL MATTERS Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believed as of September 30, 2019 , the Company and Bank met all capital adequacy requirements to which they were subject. The Basel III rules require the Company to maintain a capital conservation buffer of common equity capital of 2.5% above the minimum risk-weighted assets ratios, which is the fully phased-in amount of the capital conservation buffer. The capital conservation buffer was 2.5% at September 30, 2019 and 1.875% at December 31, 2018 . Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2019 and December 31, 2018 , the Bank was classified as "well capitalized" under the regulatory framework for prompt corrective action. There are no conditions or events that management believes have changed the Bank's category. Actual and required capital amounts and ratios are presented below: Actual For Capital Adequacy Purposes For Capital Adequacy Purposes + Capital Conservation Buffer(1) Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2019 Common equity tier 1 to risk-weighted assets: Consolidated $ 153,143 11.73 % $ 58,754 4.50 % $ 91,396 7.00 % Bank 160,141 12.25 % 58,804 4.50 % 91,472 7.00 % $ 84,939 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 153,143 11.73 % $ 78,339 6.00 % $ 110,980 8.50 % Bank 160,141 12.25 % 78,405 6.00 % 111,074 8.50 % $ 104,540 8.00 % Total capital to risk-weighted assets: Consolidated $ 180,711 13.84 % $ 104,452 8.00 % $ 137,093 10.50 % Bank 172,774 13.22 % 104,540 8.00 % 137,209 10.50 % $ 130,675 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 153,143 10.12 % $ 60,503 4.00 % $ 60,503 4.00 % Bank 160,141 10.64 % 60,191 4.00 % 60,191 4.00 % $ 75,238 5.00 % December 31, 2018 Common equity tier 1 to risk-weighted assets: Consolidated $ 144,008 11.82 % $ 54,803 4.50 % $ 77,699 6.38 % Bank 147,495 12.12 % 54,780 4.50 % 77,666 6.38 % $ 79,126 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 144,008 11.82 % $ 73,071 6.00 % $ 95,967 7.88 % Bank 147,495 12.12 % 73,040 6.00 % 95,926 7.88 % $ 97,386 8.00 % Total capital to risk-weighted assets: Consolidated $ 170,503 14.00 % $ 97,428 8.00 % $ 120,324 9.88 % Bank 159,100 13.07 % 97,386 8.00 % 120,272 9.88 % $ 121,733 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 144,008 10.21 % $ 56,411 4.00 % $ 56,411 4.00 % Bank 147,495 10.48 % 56,309 4.00 % 56,309 4.00 % $ 70,386 5.00 % _______________________________________________________________________________ (1) Reflects the capital conservation buffer of 2.5% and 1.875% applicable during 2019 and 2018 , respectively. Dividend Restrictions - The Company’s primary source of cash is dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. As of September 30, 2019 , the Bank had the capacity to pay the Company a dividend of up to $35.6 million without the need to obtain prior regulatory approval. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1—Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Investment Securities: Securities available for sale are recorded at fair value on a recurring basis as follows: the fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). No securities are valued using a Level 3 approach. Loans Held for Sale, at Fair Value: The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2). Loans Measured at Fair Value: During the normal course of business, loans originated with the initial intention to sell but not ultimately sold, are transferred from held for sale to our portfolio of loans held for investment at fair value as the Company adopted the fair value option at origination. The fair value of these loans is determined by obtaining fair value pricing from a third-party software, and then layering an additional adjustment, ranging from 5 to 75 basis points, as determined by management, depending on the reason for the transfer. Due to the adjustments made, the Company classifies the loans transferred from loans held for sale as recurring Level 3. Impaired Loans: Impaired loans are measured and recorded at fair value on a non-recurring basis. All of our nonaccrual loans and trouble debt restructured loans are considered impaired and are reviewed individually for the amount of impairment, if any. The fair value of impaired loans is estimated using one of several methods, including the fair value of the collateral or the present value of the expected future cash flows discounted at the loan's effective interest rate. For loans that are collateral dependent, the fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Non-real estate collateral may be valued using an appraisal, net book value per the borrower's financial statements, or aging reports, adjusted or discounted based on management's historical knowledge, changes in market conditions from the time of the valuation, and management's expertise and knowledge of the client and client's business. Such adjustments are considered unobservable and the fair value measurement is categorized as a Level 3 measurement. Other Real Estate Owned: Other real estate owned assets are recorded at the lower of cost or fair value upon the transfer of a loan to other real estate owned and, subsequently, continue to be measured and carried at the lower of cost or fair value. The fair value of other real estate owned is based on recent real estate appraisals which are generally updated annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales, cost, and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Other real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Appraisals for both collateral-dependent impaired loans and real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by either the Company or the Company's appraisal services vendor. Once received, management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Management monitors the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. Derivatives: Customer-initiated derivatives are traded in over-the counter markets where quoted market prices are not readily available. Fair value of customer-initiated derivatives is measured on a recurring basis using valuation models that use market observable inputs (Level 2). Mortgage banking related derivatives including commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are recorded at fair value on a recurring basis. The fair value of these commitments is based on the fair value of related mortgage loans determined using observable market data (Level 2). Interest rate lock commitments are adjusted for expectations of exercise and funding. This adjustment is not considered to be material input. Assets and liabilities measured at fair value on a recurring basis are summarized below: (Dollars in thousands) Total Quoted Prices Significant Other Significant September 30, 2019 Securities available for sale: U.S. government sponsored entities and agencies $ 1,497 $ — $ 1,497 $ — State and political subdivision 90,733 — 90,733 — Mortgage-backed securities: residential 9,390 — 9,390 — Mortgage-backed securities: commercial 21,049 — 21,049 — Collateralized mortgage obligations: residential 9,069 — 9,069 — Collateralized mortgage obligations: commercial 31,598 — 31,598 — U.S. Treasury 2,001 — 2,001 — SBA 23,536 — 23,536 — Asset backed securities 10,187 — 10,187 — Corporate bonds 6,182 — 6,182 — Total securities available for sale 205,242 — 205,242 — Loans held for sale 26,864 — 26,864 — Loans measured at fair value: Residential real estate 4,890 — — 4,890 Derivative assets: Customer-initiated derivatives 5,628 — 5,628 — Forward contracts related to mortgage loans to be delivered for sale 185 — 185 — Interest rate lock commitments 359 — 359 — Total assets at fair value $ 243,168 $ — $ 238,278 $ 4,890 Derivative liabilities: Customer-initiated derivatives 5,628 — 5,628 — Forward contracts related to mortgage loans to be delivered for sale 56 — 56 — Interest rate lock commitments 5 — 5 — Total liabilities at fair value $ 5,689 $ — $ 5,689 $ — (Dollars in thousands) Total Quoted Prices Significant Other Significant December 31, 2018 Securities available for sale: U.S. government sponsored entities and agencies $ 2,397 $ — $ 2,397 $ — State and political subdivision 75,146 — 75,146 — Mortgage-backed securities: residential 9,739 — 9,739 — Mortgage-backed securities: commercial 12,382 — 12,382 — Collateralized mortgage obligations: residential 18,671 — 18,671 — Collateralized mortgage obligations: commercial 31,988 — 31,988 — U.S. Treasury 20,481 — 20,481 — SBA 15,688 — 15,688 — Asset backed securities 3,842 — 3,842 — Corporate bonds 13,924 — 13,924 — Total securities available for sale $ 204,258 $ — $ 204,258 $ — Loans held for sale 5,595 — 5,595 — Loans measured at fair value: Residential real estate 4,571 — — 4,571 Derivative assets: Customer-initiated derivatives 1,126 — 1,126 — Forward contracts related to mortgage loans to be delivered for sale 22 — 22 — Interest rate lock commitments 198 — 198 — Total assets at fair value $ 215,770 $ — $ 211,199 $ 4,571 Derivative liabilities: Customer-initiated derivatives 1,126 — 1,126 — Forward contracts related to mortgage loans to be delivered for sale 43 — 43 — Total liabilities at fair value $ 1,169 $ — $ 1,169 $ — There were no transfers between levels within the fair value hierarchy, within a specific category, during the nine months ended September 30, 2019 or during the year ended December 31, 2018. The following table summarizes the changes in Level 3 assets measured at fair value on a recurring basis. For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Loans held for investment Beginning balance $ 5,624 $ 4,414 $ 4,571 $ 4,291 Transfers from loans held for sale 466 149 1,895 453 Gains (losses): Recorded in "Mortgage banking activities" (9 ) (32 ) 151 (144 ) Repayments (1,191 ) (44 ) (1,727 ) (113 ) Ending balance $ 4,890 $ 4,487 $ 4,890 $ 4,487 The Company has elected the fair value option for loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company's policy on loans held for investment. There were no loans held for sale that were on nonaccrual status or 90 days past due as of September 30, 2019 or December 31, 2018 . As of September 30, 2019 and December 31, 2018 , the aggregate fair value, contractual balance (including accrued interest), and gain or loss for loans held for sale carried at fair value was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Aggregate fair value $ 26,864 $ 5,595 Contractual balance 26,429 5,512 Unrealized gain 435 83 The total amount of gains as a result of changes in fair value of loans held for sale included in "Mortgage banking activities" for the three and nine months ended September 30, 2019 and 2018 were as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Change in fair value $ (98 ) $ 69 $ 352 $ 100 Assets measured at fair value on a non-recurring basis are summarized below: (Dollars in thousands) Total Significant Unobservable Inputs September 30, 2019 Impaired loans: Commercial real estate $ 897 $ 897 Commercial and industrial 1,291 1,291 Other real estate owned 373 373 Total $ 2,561 $ 2,561 December 31, 2018 Impaired loans: Commercial and industrial $ 3,337 $ 3,337 Total $ 3,337 $ 3,337 The Company recorded specific reserves of $246 thousand and $278 thousand to reduce the value of these loans at September 30, 2019 and December 31, 2018 , respectively, based on the estimated fair value of the underlying collateral. The Company also recorded chargeoffs of $74 thousand during the nine months ended September 30, 2019 related to the impaired loans at fair value. There were no charge-offs related to impaired loans at fair value during the year ended December 31, 2018. There were no write downs recorded in other real estate owned during the three and nine months ended September 30, 2019 . There were no other real estate owned assets at fair value at December 31, 2018 . The table below presents quantitative information about the significant unobservable inputs for assets measured at fair value on a nonrecurring basis at September 30, 2019 and December 31, 2018 : (Dollars in thousands) Fair value at September 30, 2019 Valuation Technique(s) Significant Unobservable Input(s) Discount % Range Impaired loans $ 2,188 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10-50% Other real estate owned 373 Appraisal of property Discounted appraisal value 36 % (Dollars in thousands) Fair value at Valuation Significant Discount % Range Impaired loans $ 3,337 Discounted appraisals Collateral discounts 17-50% The carrying amounts and estimated fair values of financial instruments, excluding those previously presented unless otherwise noted, at September 30, 2019 and December 31, 2018 were as follows: Estimated Fair Value (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total September 30, 2019 Financial assets: Cash and cash equivalents $ 49,361 $ 32,400 $ 16,961 $ — $ 49,361 Federal Home Loan Bank stock 8,325 NA NA NA NA Net loans 1,156,616 — — 1,164,984 1,164,984 Accrued interest receivable 5,280 — 1,916 3,364 5,280 Financial liabilities: Deposits 1,194,542 — 1,197,718 — 1,197,718 Borrowings 111,937 — 111,729 — 111,729 Subordinated notes 14,934 — 15,405 — 15,405 Accrued interest payable 2,500 — 2,500 — 2,500 December 31, 2018 Financial assets: Cash and cash equivalents $ 33,296 $ 27,072 $ 6,224 $ — $ 33,296 Federal Home Loan Bank stock 8,325 NA NA NA NA Net loans 1,114,999 — — 1,113,648 1,113,648 Accrued interest receivable 4,207 — 1,210 2,997 4,207 Financial liabilities: Deposits 1,134,635 — 1,137,575 — 1,137,575 Borrowings 99,574 — 100,602 — 100,602 Subordinated notes 14,891 — 15,450 — 15,450 Accrued interest payable 1,674 — 1,674 — 1,674 The methods and assumptions, not previously presented, used to estimate fair value are described as follows: (a) Cash and Cash Equivalents The carrying amounts of cash on hand and non-interest due from bank accounts approximate fair values and are classified as Level 1. The carrying amounts of fed funds sold and interest bearing due from bank accounts approximate fair values and are classified as Level 2. (b) FHLB Stock It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability. (c) Loans Fair value of loans, excluding loans held for sale, are estimated as follows: Fair values for all loans are estimated using present value of future estimated cash flows, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality, resulting in a Level 3 classification. Impaired loans are values at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. (d) Deposits The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. Fair values for fixed and variable rate certificates of deposit are estimated using a present value of future estimated cash flows calculation that applies interest rates currently being offered on certificates of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification . (e) Borrowings The fair values of the Company's short-term and long-term borrowings are estimated using present value of future estimated cash flows using current interest rates offered to the Company for similar types of borrowing arrangements, resulting in a Level 2 classification. (f) Subordinated notes The fair value of the Company's subordinated notes is calculated based on present value of future estimated cash flows using current interest rates offered to the Company for similar types of borrowing arrangements, resulting in a Level 2 classification. (g) Accrued Interest Receivable/Payable The carrying amounts of accrued interest approximate fair value resulting in a Level 3 classification for receivable and a Level 2 classification for payable, consistent with their associated assets/liabilities. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DERIVATIVES The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. These interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions with approved, reputable, independent counterparties with substantially matching terms. The agreements are considered standalone derivatives, and changes in the fair value of derivatives are reported in earnings as non-interest income. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Company's exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. There are provisions in the agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, the Company minimizes credit risk through credit approvals, limits, and monitoring procedures. Commitments to fund certain mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. It is the Company's practice to enter into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from its commitments to fund the loans. These mortgage banking derivatives are not designated in hedge relationships. Fair values were estimated based on changes in mortgage interest rates from the date of the commitments. Changes in the fair values of these mortgage-banking derivatives are included in mortgage banking activities. The following table presents the notional amount and fair value of the Company's derivative instruments held or issued in connection with customer initiated and mortgage banking activities: September 30, 2019 December 31, 2018 (Dollars in thousands) Notional Amount Fair Value Notional Amount Fair Value Included in other assets: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 73,512 $ 5,628 $ 35,733 $ 1,126 Forward contracts related to mortgage loans to be delivered for sale 34,459 185 5,241 22 Interest rate lock commitments 42,091 359 18,375 198 Total derivatives included in other assets $ 150,062 $ 6,172 $ 59,349 $ 1,346 Included in other liabilities: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 73,512 $ 5,628 $ 35,733 $ 1,126 Forward contracts related to mortgage loans to be delivered for sale 19,148 56 11,195 43 Interest rate lock commitments 2,296 5 — — Total derivatives included in other liabilities $ 94,956 $ 5,689 $ 46,928 $ 1,169 In the normal course of business, the Company may decide to settle a forward contract rather than fulfill the contract. Cash received or paid in this settlement manner is included in "Mortgage banking activities" in the consolidated statements of income and is considered a cost of executing a forward contract. The following table presents the gains (losses) related to derivative instruments reflecting the changes in fair value: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) Location of Gain (Loss) 2019 2018 2019 2018 Forward contracts related to mortgage loans to be delivered for sale Mortgage Banking Activities $ (26 ) $ 20 $ (417 ) $ 14 Interest rate lock commitments Mortgage Banking Activities (48 ) 65 156 149 Total gain (loss) recognized in income $ (74 ) $ 85 $ (261 ) $ 163 Balance Sheet Offsetting: Certain financial instruments, including customer-initiated derivatives and interest rate swaps, may be eligible for offset in the consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The Company is a party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes based on an accounting policy election. The table below presents information about the Company's financial instruments that are eligible for offset. Gross amounts not offset in the statements of financial position (Dollars in thousands) Gross amounts recognized Gross amounts offset in the statements of financial condition Net amounts presented in the statements of financial condition Financial instruments Collateral (received)/posted Net amount September 30, 2019 Offsetting derivative assets: Customer initiated derivatives $ 5,628 $ — $ 5,628 $ — $ — $ 5,628 Offsetting derivative liabilities: Customer initiated derivatives 5,628 — 5,628 — 6,527 (899 ) December 31, 2018 Offsetting derivative assets: Customer initiated derivatives $ 1,126 $ — $ 1,126 $ — $ — $ 1,126 Offsetting derivative liabilities: Customer initiated derivatives 1,126 — 1,126 — 1,020 106 |
Parent Company Financial Statem
Parent Company Financial Statements | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Statements | PARENT COMPANY FINANCIAL STATEMENTS Balance Sheets—Parent Company (Dollars in thousands) September 30, 2019 December 31, 2018 Assets Cash and cash equivalents $ 5,910 $ 9,690 Investment in banking subsidiary 174,966 155,248 Investment in captive insurance subsidiary 2,264 1,622 Income tax benefit 456 393 Other assets 73 21 Total assets $ 183,669 $ 166,974 Liabilities Subordinated notes $ 14,934 $ 14,891 Accrued expenses and other liabilities 767 323 Total liabilities 15,701 15,214 Shareholders' equity 167,968 151,760 Total liabilities and shareholders' equity $ 183,669 $ 166,974 Statements of Income and Comprehensive Income—Parent Company For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Expenses Interest on subordinated notes $ 256 $ 256 $ 759 $ 759 Other expenses 516 151 902 480 Total expenses 772 407 1,661 1,239 Loss before income taxes and equity in undistributed net earnings of subsidiaries (772 ) (407 ) (1,661 ) (1,239 ) Income tax (benefit) expense 181 (2 ) 272 201 Equity in undistributed earnings of subsidiaries 5,000 3,664 12,820 11,473 Net income $ 4,409 $ 3,255 $ 11,431 $ 10,435 Other comprehensive income (loss) 1,238 (986 ) 7,120 (3,174 ) Total comprehensive income, net of tax $ 5,647 $ 2,269 $ 18,551 $ 7,261 Statements of Cash Flows—Parent Company For the nine months ended September 30, (Dollars in thousands) 2019 2018 Cash flows from operating activities Net income $ 11,431 $ 10,435 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (12,820 ) (11,473 ) Stock based compensation expense 54 242 (Increase) decrease in other assets, net (115 ) 33 Increase in other liabilities, net 411 135 Net cash used in operating activities (1,039 ) (628 ) Cash flows from investing activities Capital infusion to subsidiaries — (20,000 ) Net cash used in investing activities — (20,000 ) Cash flows from financing activities Net proceeds from issuance of common stock related to initial public offering — 29,030 Share buyback - redeemed stock (2,108 ) — Common stock dividends paid (852 ) (430 ) Proceeds from exercised stock options 219 1,269 Net cash provided by (used in) financing activities (2,741 ) 29,869 Net increase (decrease) in cash and cash equivalents (3,780 ) 9,241 Beginning cash and cash equivalents 9,690 1,158 Ending cash and cash equivalents $ 5,910 $ 10,399 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Beginning in the second quarter of 2019, the Company has elected to prospectively use the two-class method in calculating earnings per share due to the restricted stock awards qualifying as participating securities. The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participating rights in undistributed earnings. Average shares of common stock for diluted net income per common share include shares to be issued upon the exercise of stock options granted under the Company's share-based compensation plans and restricted stock awards. The calculation of basic and diluted earnings per share using the two-class method for each period noted below was as follows: (Dollars in thousands, except per share data) For the three months ended September 30, 2019 For the nine months ended September 30, 2019 Net income $ 4,409 $ 11,431 Net income allocated to participating securities 45 110 Net income allocated to common shareholders (1) $ 4,364 $ 11,321 Weighted average common shares - issued 7,721 7,738 Average unvested restricted share awards (80 ) (76 ) Weighted average common shares outstanding - basic 7,641 7,662 Effect of dilutive securities Weighted average common stock equivalents 111 114 Weighted average common shares outstanding - diluted 7,752 7,776 EPS available to common shareholders Basic earnings per common share $ 0.57 $ 1.48 Diluted earnings per common share $ 0.56 $ 1.46 (1) Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share. For the three and nine months ended September 30, 2018, the basic and diluted earnings per share were calculated using the treasury stock method, as disclosed in the table below. (Dollars in thousands, except per share data) For the three months ended September 30, 2018 For the nine months ended September 30, 2018 Basic: Net Income attributable to common shareholders $ 3,255 $ 10,435 Weighted average common shares outstanding 7,749,047 7,264,494 Basic earnings per share $ 0.42 $ 1.44 Diluted: Net Income attributable to common shareholders $ 3,255 $ 10,435 Weighted average common shares outstanding 7,749,047 7,264,494 Add: Dilutive effects of assumed exercises of stock options 152,062 149,182 Weighted average common and dilutive potential common shares outstanding 7,901,109 7,413,676 Diluted earnings per common share $ 0.41 $ 1.41 Stock options for 30,000 shares of common stock were not considered in computing diluted earnings per common share for the three months ended September 30, 2019 and 2018 , and stock options for 30,000 shares and 25,055 shares of common stock were not considered in computing diluted earnings per common share for the nine months ended September 30, 2019 and 2018 , respectively, because they were antidilutive. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2018, included in our Annual Form 10-K, filed with the SEC on March 22, 2019. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank and Hamilton Court, after elimination of significant intercompany transactions and accounts. |
Use of Estimates | To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided; therefore, future results could differ. |
Impact of Recently Issued Accounting Standards | Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)," which provides a framework for revenue recognition that replaces the existing industry and transaction specific requirements under the existing standards. ASU 2014-09 requires an entity to apply a five-step model to determine when to recognize revenue and at what amount. The model specifies that revenue should be recognized when (or as) an entity transfers control of goods or services to a customer at the amount in which the entity expects to be entitled. Depending on whether certain criteria are met, revenue should be recognized either over time, in a manner that depicts the entity's performance, or at a point in time, when control of the goods or services are transferred to the customer. The amendments of ASU 2014-09 may be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company performed an analysis of the impact of adoption of this ASU, reviewing revenue recorded from service charges on deposit accounts, gains (losses) on other real estate owned and other assets, debit card interchange fees, and merchant processing fees. Certain revenue received, such as service charges on deposit accounts, interchange fees, and merchant processing fees, is recorded on a transaction by transaction basis or as the service is performed. Finally, the methodology used to record revenue from gains (losses) due to the sale of other real estate owned is not anticipated to change, as the Company currently records income or expense only upon consummation of the sale. The Company adopted ASU 2014-09 and related issuances on January 1, 2019, with no cumulative effect adjustment to opening retained earnings required upon implementation of this standard. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," to improve the accounting for financial instruments. This ASU requires equity investments with readily determinable fair values to be measured at fair value with changes recognized in net income regardless of classification. For equity investments without a readily determinable fair value, the value of the investment would be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer instead of fair value, unless a qualitative assessment indicates impairment. Additionally, this ASU requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, as well as the required use of exit pricing when measuring the fair value of financial instruments for disclosure purposes. The guidance is effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, and is to be applied prospectively with a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently developing processes and procedures to comply with the disclosures requirements of this ASU, which will impact the disclosures the Company makes related to fair value of its financial instruments. This standard is not expected to have a material impact on the Company's consolidated financial statements. The Company is planning to adopt this new guidance within the time frames stated above. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to improve transparency and comparability across entities regarding leasing arrangements. This ASU requires the recognition of a separate lease liability representing the required discounted lease payments over the lease term and a separate lease asset representing the right to use the underlying asset during the same lease term. Additionally, this ASU provides clarification regarding the identification of certain components of contracts that would represent a lease as well as requires additional disclosures to the notes of the financial statements. The guidance will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2021, and is to be applied under an optional transition method. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. Additionally, the Company does not expect to significantly change operating lease agreements prior to adoption. In October 2019, the FASB approved a delayed effective date for the leases standard to January 2021 for certain entities, including certain SEC filers, public business entities, and private companies. As an emerging growth company, the Company is eligible for the delayed effective date. The Company is planning to adopt this new guidance within the time frames stated above but would delay the implementation to the delayed effective date if the proposed delay is effected. Allowance for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," to replace the current incurred loss methodology for recognizing credit losses, which delays recognition until it is probable a loss has been incurred, with a methodology that reflects an estimate of all expected credit losses and considers additional reasonable and supportable forecasted information when determining credit loss estimates. This impacts the calculation of the allowance for credit losses for all financial assets measured under the amortized cost basis, including PCI loans at the time of and subsequent to acquisition. Additionally, credit losses related to available-for-sale debt securities would be recorded through the allowance for credit losses and not as a direct adjustment to the amortized cost of the securities. Based on the ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments—Credit Losses," the guidance will be effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and is to be applied under a modified retrospective approach. In October 2019, the FASB approved a delayed effective date for the credit losses standard to January 2023 for certain entities, including certain SEC filers, public business entities, and private companies. As a smaller reporting company, the Company is eligible for the delayed effective date. The Company is currently evaluating the impact of the delay on its implementation project plan as well as the impact of adopting this new guidance on the consolidated financial statements, current systems and processes. At this time, the Company is reviewing potential methodologies for estimating expected credit losses using reasonable and supportable forecast information and has identified certain data and system requirements. Once adopted, we expect our allowance for loan losses to increase through a one-time adjustment to retained earnings; however, until our evaluation is complete, the estimated increase in allowance will be unknown. The Company is planning to adopt this new guidance within the time frames stated above but would delay the implementation to the delayed effective date if the proposed delay is effected. Income Taxes - Tax Cuts and Jobs Act In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)," which allowed an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act ("TCJA"). The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. In addition, the ASU required that an entity state if an election to reclassify the tax effects to retained earnings is made, along with a description of other income tax effects that are reclassified from AOCI. This guidance became effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the ASU and reclassified $168 thousand from retained earnings to AOCI during the first quarter of 2018. In May 2018, the FASB issued an update to ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118," regarding the accounting implications of the recently issued TCJA. The update clarified that in a company's financial statements that include the reporting period in which the TCJA was enacted, a company must first reflect the income tax effects of the TCJA in which the accounting under GAAP is complete. These amounts would not be provisional amounts. The company would also report provisional amounts for those specific income tax effects for which the accounting under GAAP will be incomplete but for which a reasonable estimate can be determined. This accounting update was effective immediately upon announcement. The Company believes its accounting for the income tax effects of the TCJA is complete. Technical corrections or other forthcoming guidance could change how we interpret provisions of the TCJA, which may impact our effective tax rate and could affect our deferred tax assets, tax positions and/or our tax liabilities. |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale Securities | The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at September 30, 2019 and December 31, 2018 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss). (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2019 U.S. government sponsored entities & agencies $ 1,422 $ 75 $ — $ 1,497 State and political subdivision 85,845 4,892 (4 ) 90,733 Mortgage-backed securities: residential 9,389 93 (92 ) 9,390 Mortgage-backed securities: commercial 19,985 1,067 (3 ) 21,049 Collateralized mortgage obligations: residential 9,128 43 (102 ) 9,069 Collateralized mortgage obligations: commercial 30,747 862 (11 ) 31,598 U.S. Treasury 1,974 27 — 2,001 SBA 23,583 104 (151 ) 23,536 Asset backed securities 10,384 — (197 ) 10,187 Corporate bonds 5,992 191 (1 ) 6,182 Total available-for-sale $ 198,449 $ 7,354 $ (561 ) $ 205,242 December 31, 2018 U.S. government sponsored entities & agencies $ 2,404 $ 4 $ (11 ) $ 2,397 State and political subdivision 75,093 657 (604 ) 75,146 Mortgage-backed securities: residential 10,114 4 (379 ) 9,739 Mortgage-backed securities: commercial 12,594 17 (229 ) 12,382 Collateralized mortgage obligations: residential 18,916 51 (296 ) 18,671 Collateralized mortgage obligations: commercial 32,390 98 (500 ) 31,988 U.S. Treasury 21,232 — (751 ) 20,481 SBA 15,856 — (168 ) 15,688 Asset backed securities 3,872 — (30 ) 3,842 Corporate bonds 14,006 18 (100 ) 13,924 Total available-for-sale $ 206,477 $ 849 $ (3,068 ) $ 204,258 |
Proceeds from Sales of Securities and Associated Gains and Losses | The proceeds from sales of securities and the associated gains and losses for the periods below are as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Proceeds $ 11,080 $ 704 $ 46,545 $ 704 Gross gains 202 2 543 2 Gross losses (51 ) (2 ) (392 ) (2 ) |
Securities by Contractual Maturity | The amortized cost and fair value of securities are shown in the table below by contractual maturity. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2019 (Dollars in thousands) Amortized Cost Fair Value Within one year $ 2,683 $ 2,684 One to five years 24,918 25,353 Five to ten years 52,715 54,997 Beyond ten years 118,133 122,208 Total $ 198,449 $ 205,242 |
Securities with Unrealized Losses | The following table summarizes securities with unrealized losses at September 30, 2019 and December 31, 2018 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Fair value Unrealized Losses Fair value Unrealized Losses Fair value Unrealized Losses September 30, 2019 Available-for-sale State and political subdivision $ 1,051 $ (2 ) $ 304 $ (2 ) $ 1,355 $ (4 ) Mortgage-backed securities: residential — — 5,570 (92 ) 5,570 (92 ) Mortgage-backed securities: commercial 898 (2 ) 434 (1 ) 1,332 (3 ) Collateralized mortgage obligations: residential — — 5,799 (102 ) 5,799 (102 ) Collateralized mortgage obligations: commercial — — 1,730 (11 ) 1,730 (11 ) U.S. Treasury — — — — — — SBA 4,058 (12 ) 13,286 (139 ) 17,344 (151 ) Asset backed securities 10,187 (197 ) — — 10,187 (197 ) Corporate bonds — — 1,004 (1 ) 1,004 (1 ) Total available-for-sale $ 16,194 $ (213 ) $ 28,127 $ (348 ) $ 44,321 $ (561 ) December 31, 2018 Available-for-sale U.S. government sponsored entities & agencies $ 978 $ (11 ) $ — $ — $ 978 $ (11 ) State and political subdivision 5,121 (25 ) 27,667 (579 ) 32,788 (604 ) Mortgage-backed securities: residential 2,595 (4 ) 6,393 (375 ) 8,988 (379 ) Mortgage-backed securities: commercial 1,967 (8 ) 8,944 (221 ) 10,911 (229 ) Collateralized mortgage obligations: residential 3,814 (27 ) 8,958 (269 ) 12,772 (296 ) Collateralized mortgage obligations: commercial — — 17,939 (500 ) 17,939 (500 ) U.S. Treasury — — 20,481 (751 ) 20,481 (751 ) SBA 12,420 (91 ) 3,268 (77 ) 15,688 (168 ) Asset backed securities 3,842 (30 ) — — 3,842 (30 ) Corporate bonds 7,526 (28 ) 2,950 (72 ) 10,476 (100 ) Total available-for-sale $ 38,263 $ (224 ) $ 96,600 $ (2,844 ) $ 134,863 $ (3,068 ) |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Schedule of Recorded Investment in Loans | The following table presents the recorded investment in loans at September 30, 2019 and December 31, 2018 . The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2019 Commercial real estate $ 509,704 $ 56,077 $ 565,781 Commercial and industrial 395,804 8,326 404,130 Residential real estate 187,485 10,792 198,277 Consumer 701 34 735 Total $ 1,093,694 $ 75,229 $ 1,168,923 December 31, 2018 Commercial real estate $ 500,809 $ 61,284 $ 562,093 Commercial and industrial 375,130 8,325 383,455 Residential real estate 165,015 15,003 180,018 Consumer 944 55 999 Total $ 1,041,898 $ 84,667 $ 1,126,565 |
Information as to Nonperforming Assets | Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Nonaccrual loans: Commercial real estate $ 5,043 $ 5,927 Commercial and industrial 4,071 9,605 Residential real estate 2,339 2,915 Total nonaccrual loans 11,453 18,447 Other real estate owned 373 — Total nonperforming assets $ 11,826 $ 18,447 Loans 90 days or more past due and still accruing $ 157 $ 243 |
Summary of Loan Delinquency | Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total September 30, 2019 Commercial real estate $ 561,062 $ 4,288 $ — $ 431 $ 565,781 Commercial and industrial 403,065 918 26 121 404,130 Residential real estate 195,740 802 743 992 198,277 Consumer 717 — 18 — 735 Total $ 1,160,584 $ 6,008 $ 787 $ 1,544 $ 1,168,923 December 31, 2018 Commercial real estate $ 559,523 $ 497 $ — $ 2,073 $ 562,093 Commercial and industrial 381,424 664 82 1,285 383,455 Residential real estate 174,831 2,499 1,314 1,374 180,018 Consumer 998 — 1 — 999 Total $ 1,116,776 $ 3,660 $ 1,397 $ 4,732 $ 1,126,565 |
Information as to Impaired Loans, Excluding PCI Loans | Information as to impaired loans, excluding purchased credit impaired loans, was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Nonaccrual loans $ 11,453 $ 18,447 Performing troubled debt restructurings: Commercial and industrial 553 568 Residential real estate 361 363 Total performing troubled debt restructurings 914 931 Total impaired loans, excluding purchase credit impaired loans $ 12,367 $ 19,378 The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2019 Commercial real estate $ 6,190 $ 3,640 Commercial and industrial 280 162 Residential real estate 4,317 3,081 Total PCI loans $ 10,787 $ 6,883 December 31, 2018 Commercial real estate $ 7,406 $ 4,344 Commercial and industrial 177 122 Residential real estate 4,974 3,409 Total PCI loans $ 12,557 $ 7,875 Loans individually evaluated for impairment are presented below. (Dollars in thousands) Recorded investment with no related allowance Recorded investment with related allowance (1) Total recorded investment Contractual principal balance Related allowance (1) September 30, 2019 Individually evaluated impaired loans: Commercial real estate $ 4,479 $ 564 $ 5,043 $ 5,244 $ 37 Commercial and industrial 2,292 2,051 4,343 4,608 443 Residential real estate 1,207 189 1,396 1,541 18 Total $ 7,978 $ 2,804 $ 10,782 $ 11,393 $ 498 December 31, 2018 Individually evaluated impaired loans: Commercial real estate $ 5,898 $ 3,991 $ 9,889 $ 13,076 $ 815 Commercial and industrial 5,892 4,059 9,951 10,411 526 Residential real estate 1,666 3,255 4,921 6,604 101 Total $ 13,456 $ 11,305 $ 24,761 $ 30,091 $ 1,442 (1) December 31, 2018 individually evaluated impaired loans included $7.2 million of PCI loans with a related allowance of $920 thousand . September 30, 2019 individually evaluated impaired loans do not include PCI loans with a related allowance. (Dollars in thousands) Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized For the three months ended September 30, 2019 Individually evaluated impaired loans (1) : Commercial real estate $ 3,111 $ 2 $ 35 Commercial and industrial 6,752 14 349 Residential real estate 1,428 7 — Total $ 11,291 $ 23 $ 384 For the nine months ended September 30, 2019 Individually evaluated impaired loans (1) : Commercial real estate $ 4,034 $ 2 $ 209 Commercial and industrial 9,080 33 573 Residential real estate 2,059 21 10 Total $ 15,173 $ 56 $ 792 For the three months ended September 30, 2018 Individually evaluated impaired loans (1) : Commercial real estate $ 9,524 $ 430 $ 142 Commercial and industrial 6,559 22 — Residential real estate 5,217 90 — Total $ 21,300 $ 542 $ 142 For the nine months ended September 30, 2018 Individually evaluated impaired loans (1) : Commercial real estate $ 9,258 $ 1,275 $ 142 Commercial and industrial 7,736 71 112 Residential real estate 5,256 277 — Total $ 22,250 $ 1,623 $ 254 (1) September 30, 2018 individually evaluated impaired loans included PCI loans, whereas September 30, 2019 individually evaluated impaired loans excluded PCI loans. |
Summary of Recorded Investment of Loans Modified in TDRs | The following table presents the number of loans modified as TDRs during the twelve months ended September 30, 2018 for which there was a subsequent payment default, including the recorded investment as of the period end. There were no loans modified as TDRs during the twelve months ending September 30, 2019 for which there was a subsequent default. A payment on a TDR is considered to be in default once it is greater than 30 days past due. Three months ended September 30, 2018 Nine months ended September 30, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,087 $ — 3 $ 2,087 $ — Commercial and industrial 2 1,182 — 3 1,316 — Residential real estate — — — 1 111 — Total 5 $ 3,269 $ — 7 $ 3,514 $ — The following table presents the recorded investment of loans modified as TDRs during the nine months ended September 30, 2019 and 2018 , by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2019 and 2018. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession. Concession type Financial effects of (Dollars in thousands) Principal Interest Forbearance Total Total Net Provision Nine months ended September 30, 2019 Commercial and industrial $ — $ — $ 351 2 $ 351 $ — $ 174 Total $ — $ — $ 351 2 $ 351 $ — $ 174 Nine months ended September 30, 2018 Commercial real estate $ — $ — $ 2,087 4 $ 2,087 $ 101 $ — Commercial and industrial 133 — 990 3 1,123 — — Residential real estate — — 112 2 112 — 5 Total $ 133 $ — $ 3,189 9 $ 3,322 $ 101 $ 5 |
Risk Category of Loans by Class of Loans | The following presents residential real estate and consumer loans by credit quality: (Dollars in thousands) Performing Nonperforming Total September 30, 2019 Residential real estate $ 195,938 $ 2,339 $ 198,277 Consumer 735 — 735 Total $ 196,673 $ 2,339 $ 199,012 December 31, 2018 Residential real estate $ 177,103 $ 2,915 $ 180,018 Consumer 999 — 999 Total $ 178,102 $ 2,915 $ 181,017 Based on the most recent analysis performed, the risk category of loans by class of loans was as follows: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total September 30, 2019 Commercial real estate $ 552,320 $ 8,342 $ 4,653 $ 466 $ 565,781 Commercial and industrial 383,380 14,270 6,440 40 404,130 Total $ 935,700 $ 22,612 $ 11,093 $ 506 $ 969,911 December 31, 2018 Commercial real estate $ 545,843 $ 10,240 $ 5,966 $ 44 $ 562,093 Commercial and industrial 368,189 2,841 12,425 — 383,455 Total $ 914,032 $ 13,081 $ 18,391 $ 44 $ 945,548 |
Total Balance of PCI Loans and Activity in Accretable Yield | The following table reflects the activity in the accretable yield of PCI loans from past acquisitions, which includes total expected cash flows, including interest, in excess of the recorded investment. For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Accretable yield at beginning of period $ 10,194 $ 12,390 $ 10,947 $ 14,452 Accretion of income (597 ) (1,167 ) (1,772 ) (3,076 ) Adjustments to accretable yield — — 422 (159 ) Other activity, net — — — 6 Accretable yield at end of period $ 9,597 $ 11,223 $ 9,597 $ 11,223 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Information as to Impaired Loans, including PCI Loans | Information as to impaired loans, excluding purchased credit impaired loans, was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Nonaccrual loans $ 11,453 $ 18,447 Performing troubled debt restructurings: Commercial and industrial 553 568 Residential real estate 361 363 Total performing troubled debt restructurings 914 931 Total impaired loans, excluding purchase credit impaired loans $ 12,367 $ 19,378 The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2019 Commercial real estate $ 6,190 $ 3,640 Commercial and industrial 280 162 Residential real estate 4,317 3,081 Total PCI loans $ 10,787 $ 6,883 December 31, 2018 Commercial real estate $ 7,406 $ 4,344 Commercial and industrial 177 122 Residential real estate 4,974 3,409 Total PCI loans $ 12,557 $ 7,875 Loans individually evaluated for impairment are presented below. (Dollars in thousands) Recorded investment with no related allowance Recorded investment with related allowance (1) Total recorded investment Contractual principal balance Related allowance (1) September 30, 2019 Individually evaluated impaired loans: Commercial real estate $ 4,479 $ 564 $ 5,043 $ 5,244 $ 37 Commercial and industrial 2,292 2,051 4,343 4,608 443 Residential real estate 1,207 189 1,396 1,541 18 Total $ 7,978 $ 2,804 $ 10,782 $ 11,393 $ 498 December 31, 2018 Individually evaluated impaired loans: Commercial real estate $ 5,898 $ 3,991 $ 9,889 $ 13,076 $ 815 Commercial and industrial 5,892 4,059 9,951 10,411 526 Residential real estate 1,666 3,255 4,921 6,604 101 Total $ 13,456 $ 11,305 $ 24,761 $ 30,091 $ 1,442 (1) December 31, 2018 individually evaluated impaired loans included $7.2 million of PCI loans with a related allowance of $920 thousand . September 30, 2019 individually evaluated impaired loans do not include PCI loans with a related allowance. (Dollars in thousands) Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized For the three months ended September 30, 2019 Individually evaluated impaired loans (1) : Commercial real estate $ 3,111 $ 2 $ 35 Commercial and industrial 6,752 14 349 Residential real estate 1,428 7 — Total $ 11,291 $ 23 $ 384 For the nine months ended September 30, 2019 Individually evaluated impaired loans (1) : Commercial real estate $ 4,034 $ 2 $ 209 Commercial and industrial 9,080 33 573 Residential real estate 2,059 21 10 Total $ 15,173 $ 56 $ 792 For the three months ended September 30, 2018 Individually evaluated impaired loans (1) : Commercial real estate $ 9,524 $ 430 $ 142 Commercial and industrial 6,559 22 — Residential real estate 5,217 90 — Total $ 21,300 $ 542 $ 142 For the nine months ended September 30, 2018 Individually evaluated impaired loans (1) : Commercial real estate $ 9,258 $ 1,275 $ 142 Commercial and industrial 7,736 71 112 Residential real estate 5,256 277 — Total $ 22,250 $ 1,623 $ 254 (1) September 30, 2018 individually evaluated impaired loans included PCI loans, whereas September 30, 2019 individually evaluated impaired loans excluded PCI loans. |
Activity in the Allowance for Loan Losses and Allocation of the Allowance for Loans | Activity in the allowance for loan losses and the allocation of the allowance for loans was as follows: (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total For the three months ended September 30, 2019 Allowance for loan losses: Beginning balance $ 5,219 $ 5,990 $ 1,142 $ 2 $ 12,353 Provision (benefit) for loan losses 184 (280 ) 72 8 (16 ) Gross chargeoffs — (49 ) — (34 ) (83 ) Recoveries 5 10 12 26 53 Net (chargeoffs) recoveries 5 (39 ) 12 (8 ) (30 ) Ending allowance for loan losses $ 5,408 $ 5,671 $ 1,226 $ 2 $ 12,307 For the nine months ended September 30, 2019 Allowance for loan losses: Beginning balance $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Provision for loan losses 249 560 7 19 835 Gross chargeoffs (74 ) (164 ) — (48 ) (286 ) Recoveries 6 101 55 30 192 Net (chargeoffs) recoveries (68 ) (63 ) 55 (18 ) (94 ) Ending allowance for loan losses $ 5,408 $ 5,671 $ 1,226 $ 2 $ 12,307 For the three months ended September 30, 2018 Allowance for loan losses: Beginning balance $ 5,060 $ 5,423 $ 977 $ 5 $ 11,465 Provision for loan losses 34 475 101 9 619 Gross chargeoffs — (237 ) — (8 ) (245 ) Recoveries 23 8 19 1 51 Net (chargeoffs) recoveries 23 (229 ) 19 (7 ) (194 ) Ending allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 For the nine months ended September 30, 2018 Allowance for loan losses: Beginning balance $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Provision (benefit) for loan losses 352 (53 ) 143 21 463 Gross chargeoffs (112 ) (995 ) (47 ) (23 ) (1,177 ) Recoveries 25 814 51 1 891 Net (chargeoffs) recoveries (87 ) (181 ) 4 (22 ) (286 ) Ending allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total September 30, 2019 Allowance for loan losses: Individually evaluated for impairment $ 37 $ 443 $ 18 $ — $ 498 Collectively evaluated for impairment 4,619 5,189 1,195 2 11,005 Acquired with deteriorated credit quality 752 39 13 — 804 Ending allowance for loan losses $ 5,408 $ 5,671 $ 1,226 $ 2 $ 12,307 Balance of loans: Individually evaluated for impairment $ 5,043 $ 4,343 $ 1,396 $ — $ 10,782 Collectively evaluated for impairment 557,098 399,625 193,800 735 1,151,258 Acquired with deteriorated credit quality 3,640 162 3,081 — 6,883 Total loans $ 565,781 $ 404,130 $ 198,277 $ 735 $ 1,168,923 December 31, 2018 Allowance for loan losses: Individually evaluated for impairment $ — $ 504 $ 18 $ — $ 522 Collectively evaluated for impairment 4,412 4,648 1,063 1 10,124 Acquired with deteriorated credit quality 815 22 83 — 920 Ending allowance for loan losses $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Balance of loans: Individually evaluated for impairment $ 5,898 $ 9,829 $ 1,854 $ — $ 17,581 Collectively evaluated for impairment 551,851 373,504 174,755 999 1,101,109 Acquired with deteriorated credit quality 4,344 122 3,409 — 7,875 Total loans $ 562,093 $ 383,455 $ 180,018 $ 999 $ 1,126,565 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment were as follows at September 30, 2019 and December 31, 2018 : (Dollars in thousands) September 30, 2019 December 31, 2018 Land $ 2,253 $ 2,197 Buildings 9,825 9,746 Leasehold improvements 2,192 1,708 Furniture, fixtures and equipment 6,322 6,024 Total premises and equipment $ 20,592 $ 19,675 Less: Accumulated depreciation 7,165 6,433 Net premises and equipment $ 13,427 $ 13,242 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Core Deposit Intangibles | The table below presents the Company's net carrying amount of CDIs: (Dollars in thousands) September 30, 2019 December 31, 2018 Gross carrying amount $ 2,045 $ 2,045 Accumulated amortization (1,715 ) (1,598 ) Net Intangible $ 330 $ 447 |
Borrowings and Subordinated D_2
Borrowings and Subordinated Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Components of Long-term Debt and Short-term Borrowings | The following table presents the components of our short-term borrowings and long-term debt. September 30, 2019 December 31, 2018 (Dollars in thousands) Amount Weighted (1) Amount Weighted (1) Short-term borrowings: FHLB Advances $ — — % $ 90,000 2.54 % Securities sold under agreements to repurchase 545 0.30 609 0.30 FHLB line of credit — — 2,520 2.87 Federal funds purchased 10,000 1.90 5,000 2.50 Total short-term borrowings 10,545 1.82 98,129 2.53 Long-term debt: Secured borrowing due in 2022 1,392 1.00 1,445 1.00 FHLB advances due in 2022 to 2029 (2) 100,000 1.11 — — Subordinated notes due in 2025 (3) 14,934 6.38 14,891 6.38 Total long-term debt 116,326 1.79 16,336 5.90 Total short-term and long-term borrowings $ 126,871 1.79 % $ 114,465 3.01 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) At September 30, 2019 , the long-term FHLB advances consisted of 0.66% - 2.35% fixed rate notes. (3) The September 30, 2019 balance includes subordinated notes of $15.0 million and debt issuance costs of $66 thousand . The December 31, 2018 balance includes subordinated notes of $15.0 million and debt issuance costs of $109 thousand . |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Expected Income Tax Expense | A reconciliation of expected income tax expense using the federal corporate tax rate of 21% and the actual income tax expense recorded in our consolidated financial statements was as follows : For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Income tax expense based on federal corporate tax rate $ 1,118 $ 823 $ 2,911 $ 2,646 Changes resulting from: Tax-exempt income (142 ) (104 ) (398 ) (289 ) Other, net (62 ) (54 ) (85 ) (190 ) Income tax expense $ 914 $ 665 $ 2,428 $ 2,167 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Weighted-Average Assumptions Used in Determining the Fair Value of Stock Options Granted | The fair value of the stock options granted in the nine months ended September 30, 2018 was determined using the following weighted-average assumptions as of grant date: September 30, 2018 Risk Free Interest Rate 2.83% Expected Term (years) 7.0 Expected Volatility 0.04% Weighted average fair value of options granted $4.46 |
Summary of Employee Stock Option Activity | The summary of our stock option activity for the nine months ended September 30, 2019 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Options outstanding at January 1, 2019 376,768 $ 16.26 5.8 Exercised (21,550 ) 10.16 Options outstanding at September 30, 2019 355,218 16.63 5.3 Options exercisable at September 30, 2019 335,214 $ 16.14 5.1 |
Summary of Changes in Nonvested Shares | A summary of changes in the Company's nonvested shares for the nine months ended September 30, 2019 is as follows: Nonvested Shares Shares Weighted Average Grant-Date Fair Value Nonvested at January 1, 2019 53,770 $ 24.14 Granted 35,633 23.76 Vested (6,700 ) 20.75 Forfeited (3,150 ) 23.99 Nonvested at September 30, 2019 79,553 $ 24.26 |
Off- Balance Sheet Activities (
Off- Balance Sheet Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Exposure to Off-balance Sheet Risk | A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2019 December 31, 2018 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 16,252 $ 22,769 $ 8,608 $ 10,900 Unused lines of credit 19,544 289,779 18,672 229,490 Unused standby letters of credit and commercial letters of credit 4,195 — 3,861 232 |
Regulatory Capital Matters (Tab
Regulatory Capital Matters (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Regulated Operations [Abstract] | |
Schedule of actual and required capital amounts and ratios | Actual and required capital amounts and ratios are presented below: Actual For Capital Adequacy Purposes For Capital Adequacy Purposes + Capital Conservation Buffer(1) Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2019 Common equity tier 1 to risk-weighted assets: Consolidated $ 153,143 11.73 % $ 58,754 4.50 % $ 91,396 7.00 % Bank 160,141 12.25 % 58,804 4.50 % 91,472 7.00 % $ 84,939 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 153,143 11.73 % $ 78,339 6.00 % $ 110,980 8.50 % Bank 160,141 12.25 % 78,405 6.00 % 111,074 8.50 % $ 104,540 8.00 % Total capital to risk-weighted assets: Consolidated $ 180,711 13.84 % $ 104,452 8.00 % $ 137,093 10.50 % Bank 172,774 13.22 % 104,540 8.00 % 137,209 10.50 % $ 130,675 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 153,143 10.12 % $ 60,503 4.00 % $ 60,503 4.00 % Bank 160,141 10.64 % 60,191 4.00 % 60,191 4.00 % $ 75,238 5.00 % December 31, 2018 Common equity tier 1 to risk-weighted assets: Consolidated $ 144,008 11.82 % $ 54,803 4.50 % $ 77,699 6.38 % Bank 147,495 12.12 % 54,780 4.50 % 77,666 6.38 % $ 79,126 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 144,008 11.82 % $ 73,071 6.00 % $ 95,967 7.88 % Bank 147,495 12.12 % 73,040 6.00 % 95,926 7.88 % $ 97,386 8.00 % Total capital to risk-weighted assets: Consolidated $ 170,503 14.00 % $ 97,428 8.00 % $ 120,324 9.88 % Bank 159,100 13.07 % 97,386 8.00 % 120,272 9.88 % $ 121,733 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 144,008 10.21 % $ 56,411 4.00 % $ 56,411 4.00 % Bank 147,495 10.48 % 56,309 4.00 % 56,309 4.00 % $ 70,386 5.00 % _______________________________________________________________________________ (1) Reflects the capital conservation buffer of 2.5% and 1.875% applicable during 2019 and 2018 , respectively. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: (Dollars in thousands) Total Quoted Prices Significant Other Significant September 30, 2019 Securities available for sale: U.S. government sponsored entities and agencies $ 1,497 $ — $ 1,497 $ — State and political subdivision 90,733 — 90,733 — Mortgage-backed securities: residential 9,390 — 9,390 — Mortgage-backed securities: commercial 21,049 — 21,049 — Collateralized mortgage obligations: residential 9,069 — 9,069 — Collateralized mortgage obligations: commercial 31,598 — 31,598 — U.S. Treasury 2,001 — 2,001 — SBA 23,536 — 23,536 — Asset backed securities 10,187 — 10,187 — Corporate bonds 6,182 — 6,182 — Total securities available for sale 205,242 — 205,242 — Loans held for sale 26,864 — 26,864 — Loans measured at fair value: Residential real estate 4,890 — — 4,890 Derivative assets: Customer-initiated derivatives 5,628 — 5,628 — Forward contracts related to mortgage loans to be delivered for sale 185 — 185 — Interest rate lock commitments 359 — 359 — Total assets at fair value $ 243,168 $ — $ 238,278 $ 4,890 Derivative liabilities: Customer-initiated derivatives 5,628 — 5,628 — Forward contracts related to mortgage loans to be delivered for sale 56 — 56 — Interest rate lock commitments 5 — 5 — Total liabilities at fair value $ 5,689 $ — $ 5,689 $ — (Dollars in thousands) Total Quoted Prices Significant Other Significant December 31, 2018 Securities available for sale: U.S. government sponsored entities and agencies $ 2,397 $ — $ 2,397 $ — State and political subdivision 75,146 — 75,146 — Mortgage-backed securities: residential 9,739 — 9,739 — Mortgage-backed securities: commercial 12,382 — 12,382 — Collateralized mortgage obligations: residential 18,671 — 18,671 — Collateralized mortgage obligations: commercial 31,988 — 31,988 — U.S. Treasury 20,481 — 20,481 — SBA 15,688 — 15,688 — Asset backed securities 3,842 — 3,842 — Corporate bonds 13,924 — 13,924 — Total securities available for sale $ 204,258 $ — $ 204,258 $ — Loans held for sale 5,595 — 5,595 — Loans measured at fair value: Residential real estate 4,571 — — 4,571 Derivative assets: Customer-initiated derivatives 1,126 — 1,126 — Forward contracts related to mortgage loans to be delivered for sale 22 — 22 — Interest rate lock commitments 198 — 198 — Total assets at fair value $ 215,770 $ — $ 211,199 $ 4,571 Derivative liabilities: Customer-initiated derivatives 1,126 — 1,126 — Forward contracts related to mortgage loans to be delivered for sale 43 — 43 — Total liabilities at fair value $ 1,169 $ — $ 1,169 $ — |
Level 3 Rollforward | The following table summarizes the changes in Level 3 assets measured at fair value on a recurring basis. For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Loans held for investment Beginning balance $ 5,624 $ 4,414 $ 4,571 $ 4,291 Transfers from loans held for sale 466 149 1,895 453 Gains (losses): Recorded in "Mortgage banking activities" (9 ) (32 ) 151 (144 ) Repayments (1,191 ) (44 ) (1,727 ) (113 ) Ending balance $ 4,890 $ 4,487 $ 4,890 $ 4,487 |
Information for Loans Held for Sale Carried at Fair Value | As of September 30, 2019 and December 31, 2018 , the aggregate fair value, contractual balance (including accrued interest), and gain or loss for loans held for sale carried at fair value was as follows: (Dollars in thousands) September 30, 2019 December 31, 2018 Aggregate fair value $ 26,864 $ 5,595 Contractual balance 26,429 5,512 Unrealized gain 435 83 The total amount of gains as a result of changes in fair value of loans held for sale included in "Mortgage banking activities" for the three and nine months ended September 30, 2019 and 2018 were as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Change in fair value $ (98 ) $ 69 $ 352 $ 100 |
Assets Measured at Fair Value on a Non-recurring Basis | Assets measured at fair value on a non-recurring basis are summarized below: (Dollars in thousands) Total Significant Unobservable Inputs September 30, 2019 Impaired loans: Commercial real estate $ 897 $ 897 Commercial and industrial 1,291 1,291 Other real estate owned 373 373 Total $ 2,561 $ 2,561 December 31, 2018 Impaired loans: Commercial and industrial $ 3,337 $ 3,337 Total $ 3,337 $ 3,337 |
Inputs for Assets Measured at Fair Value on a Nonrecurring Basis | The table below presents quantitative information about the significant unobservable inputs for assets measured at fair value on a nonrecurring basis at September 30, 2019 and December 31, 2018 : (Dollars in thousands) Fair value at September 30, 2019 Valuation Technique(s) Significant Unobservable Input(s) Discount % Range Impaired loans $ 2,188 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10-50% Other real estate owned 373 Appraisal of property Discounted appraisal value 36 % (Dollars in thousands) Fair value at Valuation Significant Discount % Range Impaired loans $ 3,337 Discounted appraisals Collateral discounts 17-50% |
Carrying Amounts and Estimated Fair Values of Financial Instruments | The carrying amounts and estimated fair values of financial instruments, excluding those previously presented unless otherwise noted, at September 30, 2019 and December 31, 2018 were as follows: Estimated Fair Value (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total September 30, 2019 Financial assets: Cash and cash equivalents $ 49,361 $ 32,400 $ 16,961 $ — $ 49,361 Federal Home Loan Bank stock 8,325 NA NA NA NA Net loans 1,156,616 — — 1,164,984 1,164,984 Accrued interest receivable 5,280 — 1,916 3,364 5,280 Financial liabilities: Deposits 1,194,542 — 1,197,718 — 1,197,718 Borrowings 111,937 — 111,729 — 111,729 Subordinated notes 14,934 — 15,405 — 15,405 Accrued interest payable 2,500 — 2,500 — 2,500 December 31, 2018 Financial assets: Cash and cash equivalents $ 33,296 $ 27,072 $ 6,224 $ — $ 33,296 Federal Home Loan Bank stock 8,325 NA NA NA NA Net loans 1,114,999 — — 1,113,648 1,113,648 Accrued interest receivable 4,207 — 1,210 2,997 4,207 Financial liabilities: Deposits 1,134,635 — 1,137,575 — 1,137,575 Borrowings 99,574 — 100,602 — 100,602 Subordinated notes 14,891 — 15,450 — 15,450 Accrued interest payable 1,674 — 1,674 — 1,674 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value Hedges Included in the Consolidated Balance Sheets | The following table presents the notional amount and fair value of the Company's derivative instruments held or issued in connection with customer initiated and mortgage banking activities: September 30, 2019 December 31, 2018 (Dollars in thousands) Notional Amount Fair Value Notional Amount Fair Value Included in other assets: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 73,512 $ 5,628 $ 35,733 $ 1,126 Forward contracts related to mortgage loans to be delivered for sale 34,459 185 5,241 22 Interest rate lock commitments 42,091 359 18,375 198 Total derivatives included in other assets $ 150,062 $ 6,172 $ 59,349 $ 1,346 Included in other liabilities: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 73,512 $ 5,628 $ 35,733 $ 1,126 Forward contracts related to mortgage loans to be delivered for sale 19,148 56 11,195 43 Interest rate lock commitments 2,296 5 — — Total derivatives included in other liabilities $ 94,956 $ 5,689 $ 46,928 $ 1,169 |
Gains (Losses) Related to Derivative Instruments | The following table presents the gains (losses) related to derivative instruments reflecting the changes in fair value: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) Location of Gain (Loss) 2019 2018 2019 2018 Forward contracts related to mortgage loans to be delivered for sale Mortgage Banking Activities $ (26 ) $ 20 $ (417 ) $ 14 Interest rate lock commitments Mortgage Banking Activities (48 ) 65 156 149 Total gain (loss) recognized in income $ (74 ) $ 85 $ (261 ) $ 163 |
Offsetting Assets | The table below presents information about the Company's financial instruments that are eligible for offset. Gross amounts not offset in the statements of financial position (Dollars in thousands) Gross amounts recognized Gross amounts offset in the statements of financial condition Net amounts presented in the statements of financial condition Financial instruments Collateral (received)/posted Net amount September 30, 2019 Offsetting derivative assets: Customer initiated derivatives $ 5,628 $ — $ 5,628 $ — $ — $ 5,628 Offsetting derivative liabilities: Customer initiated derivatives 5,628 — 5,628 — 6,527 (899 ) December 31, 2018 Offsetting derivative assets: Customer initiated derivatives $ 1,126 $ — $ 1,126 $ — $ — $ 1,126 Offsetting derivative liabilities: Customer initiated derivatives 1,126 — 1,126 — 1,020 106 |
Offsetting Liabilities | The table below presents information about the Company's financial instruments that are eligible for offset. Gross amounts not offset in the statements of financial position (Dollars in thousands) Gross amounts recognized Gross amounts offset in the statements of financial condition Net amounts presented in the statements of financial condition Financial instruments Collateral (received)/posted Net amount September 30, 2019 Offsetting derivative assets: Customer initiated derivatives $ 5,628 $ — $ 5,628 $ — $ — $ 5,628 Offsetting derivative liabilities: Customer initiated derivatives 5,628 — 5,628 — 6,527 (899 ) December 31, 2018 Offsetting derivative assets: Customer initiated derivatives $ 1,126 $ — $ 1,126 $ — $ — $ 1,126 Offsetting derivative liabilities: Customer initiated derivatives 1,126 — 1,126 — 1,020 106 |
Parent Company Financial Stat_2
Parent Company Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheet | Balance Sheets—Parent Company (Dollars in thousands) September 30, 2019 December 31, 2018 Assets Cash and cash equivalents $ 5,910 $ 9,690 Investment in banking subsidiary 174,966 155,248 Investment in captive insurance subsidiary 2,264 1,622 Income tax benefit 456 393 Other assets 73 21 Total assets $ 183,669 $ 166,974 Liabilities Subordinated notes $ 14,934 $ 14,891 Accrued expenses and other liabilities 767 323 Total liabilities 15,701 15,214 Shareholders' equity 167,968 151,760 Total liabilities and shareholders' equity $ 183,669 $ 166,974 |
Schedule of condensed income statement and comprehensive income | Statements of Income and Comprehensive Income—Parent Company For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2019 2018 2019 2018 Expenses Interest on subordinated notes $ 256 $ 256 $ 759 $ 759 Other expenses 516 151 902 480 Total expenses 772 407 1,661 1,239 Loss before income taxes and equity in undistributed net earnings of subsidiaries (772 ) (407 ) (1,661 ) (1,239 ) Income tax (benefit) expense 181 (2 ) 272 201 Equity in undistributed earnings of subsidiaries 5,000 3,664 12,820 11,473 Net income $ 4,409 $ 3,255 $ 11,431 $ 10,435 Other comprehensive income (loss) 1,238 (986 ) 7,120 (3,174 ) Total comprehensive income, net of tax $ 5,647 $ 2,269 $ 18,551 $ 7,261 |
Schedule of condensed statements of cash flows | Statements of Cash Flows—Parent Company For the nine months ended September 30, (Dollars in thousands) 2019 2018 Cash flows from operating activities Net income $ 11,431 $ 10,435 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (12,820 ) (11,473 ) Stock based compensation expense 54 242 (Increase) decrease in other assets, net (115 ) 33 Increase in other liabilities, net 411 135 Net cash used in operating activities (1,039 ) (628 ) Cash flows from investing activities Capital infusion to subsidiaries — (20,000 ) Net cash used in investing activities — (20,000 ) Cash flows from financing activities Net proceeds from issuance of common stock related to initial public offering — 29,030 Share buyback - redeemed stock (2,108 ) — Common stock dividends paid (852 ) (430 ) Proceeds from exercised stock options 219 1,269 Net cash provided by (used in) financing activities (2,741 ) 29,869 Net increase (decrease) in cash and cash equivalents (3,780 ) 9,241 Beginning cash and cash equivalents 9,690 1,158 Ending cash and cash equivalents $ 5,910 $ 10,399 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The calculation of basic and diluted earnings per share using the two-class method for each period noted below was as follows: (Dollars in thousands, except per share data) For the three months ended September 30, 2019 For the nine months ended September 30, 2019 Net income $ 4,409 $ 11,431 Net income allocated to participating securities 45 110 Net income allocated to common shareholders (1) $ 4,364 $ 11,321 Weighted average common shares - issued 7,721 7,738 Average unvested restricted share awards (80 ) (76 ) Weighted average common shares outstanding - basic 7,641 7,662 Effect of dilutive securities Weighted average common stock equivalents 111 114 Weighted average common shares outstanding - diluted 7,752 7,776 EPS available to common shareholders Basic earnings per common share $ 0.57 $ 1.48 Diluted earnings per common share $ 0.56 $ 1.46 (1) Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share. For the three and nine months ended September 30, 2018, the basic and diluted earnings per share were calculated using the treasury stock method, as disclosed in the table below. (Dollars in thousands, except per share data) For the three months ended September 30, 2018 For the nine months ended September 30, 2018 Basic: Net Income attributable to common shareholders $ 3,255 $ 10,435 Weighted average common shares outstanding 7,749,047 7,264,494 Basic earnings per share $ 0.42 $ 1.44 Diluted: Net Income attributable to common shareholders $ 3,255 $ 10,435 Weighted average common shares outstanding 7,749,047 7,264,494 Add: Dilutive effects of assumed exercises of stock options 152,062 149,182 Weighted average common and dilutive potential common shares outstanding 7,901,109 7,413,676 Diluted earnings per common share $ 0.41 $ 1.41 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Additional Information) (Details) | Apr. 24, 2018USD ($)shares | Mar. 31, 2018USD ($) | Sep. 30, 2019office | Sep. 30, 2018USD ($) |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of offices | office | 13 | |||
Retained Earnings | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Reclassifications of tax effects from retained earnings to AOCI | $ (168,000) | $ (168,000) | ||
Accumulated Other Comprehensive (Loss) Income | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Reclassifications of tax effects from retained earnings to AOCI | $ 168,000 | $ 168,000 | ||
IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares of common stock sold (in shares) | shares | 1,150,765 | |||
Proceeds from sale of stock | $ 32,200,000 | |||
Underwriting discounts | 2,100,000 | |||
Offering expenses paid to third parties | 1,100,000 | |||
Proceeds from the initial public offering | $ 29,000,000 | |||
Over - Allotment Option | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares of common stock sold (in shares) | shares | 180,000 | |||
IPO - Shares From Existing Shareholders | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares of common stock sold (in shares) | shares | 229,235 | |||
Proceeds from sale of stock | $ 6,400,000 | |||
Proceeds from the initial public offering | $ 0 |
Securities (Available-for-sale
Securities (Available-for-sale Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 198,449 | $ 206,477 |
Gross Unrealized Gains | 7,354 | 849 |
Gross Unrealized Losses | (561) | (3,068) |
Fair Value | 205,242 | 204,258 |
U.S. government sponsored entities & agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,422 | 2,404 |
Gross Unrealized Gains | 75 | 4 |
Gross Unrealized Losses | 0 | (11) |
Fair Value | 1,497 | 2,397 |
State and political subdivision | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 85,845 | 75,093 |
Gross Unrealized Gains | 4,892 | 657 |
Gross Unrealized Losses | (4) | (604) |
Fair Value | 90,733 | 75,146 |
Mortgage-backed securities: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,389 | 10,114 |
Gross Unrealized Gains | 93 | 4 |
Gross Unrealized Losses | (92) | (379) |
Fair Value | 9,390 | 9,739 |
Mortgage-backed securities: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 19,985 | 12,594 |
Gross Unrealized Gains | 1,067 | 17 |
Gross Unrealized Losses | (3) | (229) |
Fair Value | 21,049 | 12,382 |
Collateralized mortgage obligations: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,128 | 18,916 |
Gross Unrealized Gains | 43 | 51 |
Gross Unrealized Losses | (102) | (296) |
Fair Value | 9,069 | 18,671 |
Collateralized mortgage obligations: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 30,747 | 32,390 |
Gross Unrealized Gains | 862 | 98 |
Gross Unrealized Losses | (11) | (500) |
Fair Value | 31,598 | 31,988 |
U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,974 | 21,232 |
Gross Unrealized Gains | 27 | 0 |
Gross Unrealized Losses | 0 | (751) |
Fair Value | 2,001 | 20,481 |
SBA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,583 | 15,856 |
Gross Unrealized Gains | 104 | 0 |
Gross Unrealized Losses | (151) | (168) |
Fair Value | 23,536 | 15,688 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,384 | 3,872 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (197) | (30) |
Fair Value | 10,187 | 3,842 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,992 | 14,006 |
Gross Unrealized Gains | 191 | 18 |
Gross Unrealized Losses | (1) | (100) |
Fair Value | $ 6,182 | $ 13,924 |
Securities (Proceeds from Sales
Securities (Proceeds from Sales of Securities and Gains and Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds | $ 11,080 | $ 704 | $ 46,545 | $ 704 |
Gross gains | 202 | 2 | 543 | 2 |
Gross losses | $ (51) | $ (2) | $ (392) | $ (2) |
Securities (Maturity) (Details)
Securities (Maturity) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Amortized Cost | |
Within one year | $ 2,683 |
One to five years | 24,918 |
Five to ten years | 52,715 |
Beyond ten years | 118,133 |
Amortized Cost | 198,449 |
Fair Value | |
Within one year | 2,684 |
One to five years | 25,353 |
Five to ten years | 54,997 |
Beyond ten years | 122,208 |
Fair Value | $ 205,242 |
Securities (Additional Informat
Securities (Additional Information) (Details) $ in Thousands | Sep. 30, 2019USD ($)securities | Dec. 31, 2018USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Securities available-for-sale | $ | $ 205,242 | $ 204,258 |
Number of securities | securities | 240 | |
Number of securities in an unrealized loss position | securities | 46 | |
Credit Concentration Risk | Securities | Tax-exempt securities backed by the Michigan School Bond Loan Fund | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of securities | securities | 56 | |
Securities available-for-sale | $ | $ 41,100 | |
Collateral pledged | ||
Debt Securities, Available-for-sale [Line Items] | ||
Securities pledged | $ | $ 36,700 | $ 22,700 |
Securities (Securities with Unr
Securities (Securities with Unrealized Losses) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair value | ||
Less than 12 Months | $ 16,194 | $ 38,263 |
12 Months or Longer | 28,127 | 96,600 |
Total | 44,321 | 134,863 |
Unrealized Losses | ||
Less than 12 Months | (213) | (224) |
12 Months or Longer | (348) | (2,844) |
Total | (561) | (3,068) |
U.S. government sponsored entities & agencies | ||
Fair value | ||
Less than 12 Months | 978 | |
12 Months or Longer | 0 | |
Total | 978 | |
Unrealized Losses | ||
Less than 12 Months | (11) | |
12 Months or Longer | 0 | |
Total | (11) | |
State and political subdivision | ||
Fair value | ||
Less than 12 Months | 1,051 | 5,121 |
12 Months or Longer | 304 | 27,667 |
Total | 1,355 | 32,788 |
Unrealized Losses | ||
Less than 12 Months | (2) | (25) |
12 Months or Longer | (2) | (579) |
Total | (4) | (604) |
Mortgage-backed securities: residential | ||
Fair value | ||
Less than 12 Months | 0 | 2,595 |
12 Months or Longer | 5,570 | 6,393 |
Total | 5,570 | 8,988 |
Unrealized Losses | ||
Less than 12 Months | 0 | (4) |
12 Months or Longer | (92) | (375) |
Total | (92) | (379) |
Mortgage-backed securities: commercial | ||
Fair value | ||
Less than 12 Months | 898 | 1,967 |
12 Months or Longer | 434 | 8,944 |
Total | 1,332 | 10,911 |
Unrealized Losses | ||
Less than 12 Months | (2) | (8) |
12 Months or Longer | (1) | (221) |
Total | (3) | (229) |
Collateralized mortgage obligations: residential | ||
Fair value | ||
Less than 12 Months | 0 | 3,814 |
12 Months or Longer | 5,799 | 8,958 |
Total | 5,799 | 12,772 |
Unrealized Losses | ||
Less than 12 Months | 0 | (27) |
12 Months or Longer | (102) | (269) |
Total | (102) | (296) |
Collateralized mortgage obligations: commercial | ||
Fair value | ||
Less than 12 Months | 0 | 0 |
12 Months or Longer | 1,730 | 17,939 |
Total | 1,730 | 17,939 |
Unrealized Losses | ||
Less than 12 Months | 0 | 0 |
12 Months or Longer | (11) | (500) |
Total | (11) | (500) |
U.S. Treasury | ||
Fair value | ||
Less than 12 Months | 0 | 0 |
12 Months or Longer | 0 | 20,481 |
Total | 0 | 20,481 |
Unrealized Losses | ||
Less than 12 Months | 0 | 0 |
12 Months or Longer | 0 | (751) |
Total | 0 | (751) |
SBA | ||
Fair value | ||
Less than 12 Months | 4,058 | 12,420 |
12 Months or Longer | 13,286 | 3,268 |
Total | 17,344 | 15,688 |
Unrealized Losses | ||
Less than 12 Months | (12) | (91) |
12 Months or Longer | (139) | (77) |
Total | (151) | (168) |
Asset backed securities | ||
Fair value | ||
Less than 12 Months | 10,187 | 3,842 |
12 Months or Longer | 0 | 0 |
Total | 10,187 | 3,842 |
Unrealized Losses | ||
Less than 12 Months | (197) | (30) |
12 Months or Longer | 0 | 0 |
Total | (197) | (30) |
Corporate bonds | ||
Fair value | ||
Less than 12 Months | 0 | 7,526 |
12 Months or Longer | 1,004 | 2,950 |
Total | 1,004 | 10,476 |
Unrealized Losses | ||
Less than 12 Months | 0 | (28) |
12 Months or Longer | (1) | (72) |
Total | $ (1) | $ (100) |
Loans (Recorded Investment in L
Loans (Recorded Investment in Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | $ 1,168,923 | $ 1,168,923 | $ 1,126,565 | ||
Residential loans held for sale | 26,864 | 26,864 | 5,595 | ||
Proceeds from sales of residential real estate loans | 86,400 | $ 25,100 | 179,350 | $ 50,160 | |
Commercial real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 565,781 | 565,781 | 562,093 | ||
Commercial and industrial | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 404,130 | 404,130 | 383,455 | ||
Residential real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 198,277 | 198,277 | 180,018 | ||
Consumer | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 735 | 735 | 999 | ||
Originated | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 1,093,694 | 1,093,694 | 1,041,898 | ||
Originated | Commercial real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 509,704 | 509,704 | 500,809 | ||
Originated | Commercial and industrial | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 395,804 | 395,804 | 375,130 | ||
Originated | Residential real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 187,485 | 187,485 | 165,015 | ||
Originated | Consumer | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 701 | 701 | 944 | ||
Acquired | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 75,229 | 75,229 | 84,667 | ||
Acquired | Commercial real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 56,077 | 56,077 | 61,284 | ||
Acquired | Commercial and industrial | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 8,326 | 8,326 | 8,325 | ||
Acquired | Residential real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 10,792 | 10,792 | 15,003 | ||
Acquired | Consumer | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | $ 34 | $ 34 | $ 55 |
Loans (Nonperforming Assets) (D
Loans (Nonperforming Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Past Due [Line Items] | ||
Loans 90 days or more past due and still accruing | $ 157 | $ 243 |
Nonperforming | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 11,453 | 18,447 |
Other real estate owned | 373 | 0 |
Total nonperforming assets | 11,826 | 18,447 |
Nonperforming | Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 5,043 | 5,927 |
Nonperforming | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 4,071 | 9,605 |
Nonperforming | Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | $ 2,339 | $ 2,915 |
Loans (Loan Delinquency) (Detai
Loans (Loan Delinquency) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Past Due [Line Items] | ||
Total loans | $ 1,168,923 | $ 1,126,565 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 1,160,584 | 1,116,776 |
30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 6,008 | 3,660 |
60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 787 | 1,397 |
90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 1,544 | 4,732 |
Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 565,781 | 562,093 |
Commercial real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 561,062 | 559,523 |
Commercial real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 4,288 | 497 |
Commercial real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Commercial real estate | 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 431 | 2,073 |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 404,130 | 383,455 |
Commercial and industrial | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 403,065 | 381,424 |
Commercial and industrial | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 918 | 664 |
Commercial and industrial | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 26 | 82 |
Commercial and industrial | 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 121 | 1,285 |
Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 198,277 | 180,018 |
Residential real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 195,740 | 174,831 |
Residential real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 802 | 2,499 |
Residential real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 743 | 1,314 |
Residential real estate | 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 992 | 1,374 |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 735 | 999 |
Consumer | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 717 | 998 |
Consumer | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Consumer | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 18 | 1 |
Consumer | 90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | $ 0 | $ 0 |
Loans (Information as to Impair
Loans (Information as to Impaired Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 4,100 | $ 5,900 |
Total recorded investment | 10,782 | 24,761 |
Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 914 | 931 |
Commercial and industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Total recorded investment | 4,343 | 9,951 |
Residential real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Total recorded investment | 1,396 | 4,921 |
Financial Asset, Excluding Purchased Credit Impaired Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Nonaccrual loans | 11,453 | 18,447 |
Total recorded investment | 12,367 | 19,378 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 914 | 931 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Commercial and industrial | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 553 | 568 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Residential real estate | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 361 | $ 363 |
Loans (Troubled Debt Restructur
Loans (Troubled Debt Restructuring Additional Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Recorded investment in troubled debt restructurings | $ 4,100 | $ 5,900 |
Recorded investment in troubled debt restructurings, reserve | 498 | 258 |
Nonperforming | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Recorded investment in troubled debt restructurings | 3,200 | 5,000 |
Performing | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Recorded investment in troubled debt restructurings | $ 914 | $ 931 |
Loans (Recorded Investment of L
Loans (Recorded Investment of Loans Modified in TDRs) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019loan | Sep. 30, 2018loan | Sep. 30, 2019USD ($)loan | Sep. 30, 2018USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 351 | $ 3,322 | ||
Total number of loans | loan | 0 | 0 | 2 | 9 |
Financial effects of modification, net charge offs | $ 0 | $ 101 | ||
Financial effects of modification, provision for loan losses | 174 | 5 | ||
Principal deferral | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 133 | ||
Interest rate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 0 | ||
Forbearance agreement | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 351 | 3,189 | ||
Commercial real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 2,087 | |||
Total number of loans | loan | 4 | |||
Financial effects of modification, net charge offs | $ 101 | |||
Financial effects of modification, provision for loan losses | 0 | |||
Commercial real estate | Principal deferral | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | |||
Commercial real estate | Interest rate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | |||
Commercial real estate | Forbearance agreement | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 2,087 | |||
Commercial and industrial | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 351 | $ 1,123 | ||
Total number of loans | loan | 2 | 3 | ||
Financial effects of modification, net charge offs | $ 0 | $ 0 | ||
Financial effects of modification, provision for loan losses | 174 | 0 | ||
Commercial and industrial | Principal deferral | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 133 | ||
Commercial and industrial | Interest rate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 0 | ||
Commercial and industrial | Forbearance agreement | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 351 | 990 | ||
Residential real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 112 | |||
Total number of loans | loan | 2 | |||
Financial effects of modification, net charge offs | $ 0 | |||
Financial effects of modification, provision for loan losses | 5 | |||
Residential real estate | Principal deferral | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | |||
Residential real estate | Interest rate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | |||
Residential real estate | Forbearance agreement | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 112 |
Loans (Number of Loans Modified
Loans (Number of Loans Modified in TDRs During Previous 12 Months For Which There Was Payment Default) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($)loan | Sep. 30, 2018USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Total number of loans | loan | 5 | 7 |
Total recorded investment | $ 3,269 | $ 3,514 |
Provision for loan losses following a subsequent default | $ 0 | $ 0 |
Commercial real estate | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Total number of loans | loan | 3 | 3 |
Total recorded investment | $ 2,087 | $ 2,087 |
Provision for loan losses following a subsequent default | $ 0 | $ 0 |
Commercial and industrial | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Total number of loans | loan | 2 | 3 |
Total recorded investment | $ 1,182 | $ 1,316 |
Provision for loan losses following a subsequent default | $ 0 | $ 0 |
Residential real estate | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Total number of loans | loan | 0 | 1 |
Total recorded investment | $ 0 | $ 111 |
Provision for loan losses following a subsequent default | $ 0 | $ 0 |
Loans (Risk Category of Loans b
Loans (Risk Category of Loans by Class of Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 1,168,923 | $ 1,126,565 |
Commercial real estate and Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 969,911 | 945,548 |
Commercial real estate and Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 935,700 | 914,032 |
Commercial real estate and Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 22,612 | 13,081 |
Commercial real estate and Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 11,093 | 18,391 |
Commercial real estate and Commercial and industrial | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 506 | 44 |
Commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 565,781 | 562,093 |
Commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 552,320 | 545,843 |
Commercial real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 8,342 | 10,240 |
Commercial real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,653 | 5,966 |
Commercial real estate | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 466 | 44 |
Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 404,130 | 383,455 |
Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 383,380 | 368,189 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 14,270 | 2,841 |
Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 6,440 | 12,425 |
Commercial and industrial | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 40 | 0 |
Residential real estate and Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 199,012 | 181,017 |
Residential real estate and Consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 196,673 | 178,102 |
Residential real estate and Consumer | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,339 | 2,915 |
Residential real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 198,277 | 180,018 |
Residential real estate | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 195,938 | 177,103 |
Residential real estate | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 2,339 | 2,915 |
Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 735 | 999 |
Consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 735 | 999 |
Consumer | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 0 | $ 0 |
Loans (Purchased Credit Impaire
Loans (Purchased Credit Impaired Loans Additional Information) (Details) | Sep. 30, 2019acquisition |
Receivables [Abstract] | |
Number of previous acquisitions | 4 |
Loans (Total Balance of all Pur
Loans (Total Balance of all Purchase Credit Impaired Loans from Acquisitions) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | $ 10,782 | $ 24,761 |
Commercial real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | 5,043 | 9,889 |
Commercial and industrial | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | 4,343 | 9,951 |
Residential real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | 1,396 | 4,921 |
Acquired with deteriorated credit quality | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 10,787 | 12,557 |
Recorded Investment | 6,883 | 7,875 |
Acquired with deteriorated credit quality | Commercial real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 6,190 | 7,406 |
Recorded Investment | 3,640 | 4,344 |
Acquired with deteriorated credit quality | Commercial and industrial | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 280 | 177 |
Recorded Investment | 162 | 122 |
Acquired with deteriorated credit quality | Residential real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 4,317 | 4,974 |
Recorded Investment | $ 3,081 | $ 3,409 |
Loans (Activity in the Accretab
Loans (Activity in the Accretable Yield of PCI Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||||
Accretable yield at beginning of period | $ 10,194 | $ 12,390 | $ 10,947 | $ 14,452 |
Accretion of income | (597) | (1,167) | (1,772) | (3,076) |
Adjustments to accretable yield | 0 | 0 | 422 | (159) |
Other activity, net | 0 | 0 | 0 | 6 |
Accretable yield at end of period | $ 9,597 | $ 11,223 | $ 9,597 | $ 11,223 |
Allowance for Loan Losses (Addi
Allowance for Loan Losses (Additional Information) (Details) | Sep. 30, 2019loan_poolloan |
Receivables [Abstract] | |
Number of purchase credit impaired loan pools | loan_pool | 6 |
Number of non-pooled purchase credit impaired loans | loan | 11 |
Allowance for Loan Losses (Loan
Allowance for Loan Losses (Loans Individually Evaluated for Impairment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | $ 7,978 | $ 7,978 | $ 13,456 | ||
Recorded investment with related allowance | 2,804 | 2,804 | 11,305 | ||
Total recorded investment | 10,782 | 10,782 | 24,761 | ||
Contractual principal balance | 11,393 | 11,393 | 30,091 | ||
Related allowance | 498 | 498 | 1,442 | ||
Average Recorded Investment | 11,291 | $ 21,300 | 15,173 | $ 22,250 | |
Interest Income Recognized | 23 | 542 | 56 | 1,623 | |
Cash Basis Interest Recognized | 384 | 142 | 792 | 254 | |
Commercial real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | 4,479 | 4,479 | 5,898 | ||
Recorded investment with related allowance | 564 | 564 | 3,991 | ||
Total recorded investment | 5,043 | 5,043 | 9,889 | ||
Contractual principal balance | 5,244 | 5,244 | 13,076 | ||
Related allowance | 37 | 37 | 815 | ||
Average Recorded Investment | 3,111 | 9,524 | 4,034 | 9,258 | |
Interest Income Recognized | 2 | 430 | 2 | 1,275 | |
Cash Basis Interest Recognized | 35 | 142 | 209 | 142 | |
Commercial and industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | 2,292 | 2,292 | 5,892 | ||
Recorded investment with related allowance | 2,051 | 2,051 | 4,059 | ||
Total recorded investment | 4,343 | 4,343 | 9,951 | ||
Contractual principal balance | 4,608 | 4,608 | 10,411 | ||
Related allowance | 443 | 443 | 526 | ||
Average Recorded Investment | 6,752 | 6,559 | 9,080 | 7,736 | |
Interest Income Recognized | 14 | 22 | 33 | 71 | |
Cash Basis Interest Recognized | 349 | 0 | 573 | 112 | |
Residential real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | 1,207 | 1,207 | 1,666 | ||
Recorded investment with related allowance | 189 | 189 | 3,255 | ||
Total recorded investment | 1,396 | 1,396 | 4,921 | ||
Contractual principal balance | 1,541 | 1,541 | 6,604 | ||
Related allowance | 18 | 18 | 101 | ||
Average Recorded Investment | 1,428 | 5,217 | 2,059 | 5,256 | |
Interest Income Recognized | 7 | 90 | 21 | 277 | |
Cash Basis Interest Recognized | 0 | $ 0 | 10 | $ 0 | |
PCI Loans | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with related allowance | 7,200 | ||||
Total recorded investment | 6,883 | 6,883 | 7,875 | ||
Related allowance | 920 | ||||
PCI Loans | Commercial real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment | 3,640 | 3,640 | 4,344 | ||
PCI Loans | Commercial and industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment | 162 | 162 | 122 | ||
PCI Loans | Residential real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total recorded investment | $ 3,081 | $ 3,081 | $ 3,409 |
Allowance for Loan Losses (Acti
Allowance for Loan Losses (Activity in Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | $ 12,353 | $ 11,465 | $ 11,566 | $ 11,713 | $ 11,713 | ||
Provision (benefit) for loan losses | (16) | 619 | 835 | 463 | |||
Gross chargeoffs | (83) | (245) | (286) | (1,177) | |||
Recoveries | 53 | 51 | 192 | 891 | |||
Net (chargeoffs) recoveries | (30) | (194) | (94) | (286) | |||
Ending allowance for loan losses | 12,307 | 11,890 | 12,307 | 11,890 | 11,566 | ||
Allowance for loan losses and Balance of loans | |||||||
Allowance for loan losses, individually evaluated for impairment | $ 498 | $ 522 | |||||
Allowance for loan losses, Collectively evaluated for impairment | 11,005 | 10,124 | |||||
Ending Allowance for loan losses | 12,353 | 11,465 | 11,566 | 11,713 | 11,713 | 12,307 | 11,566 |
Balance of loans, individually evaluated for impairment | 10,782 | 17,581 | |||||
Balance of loans, collectively evaluated for impairment | 1,151,258 | 1,101,109 | |||||
Total loans | 1,168,923 | 1,126,565 | |||||
Acquired with deteriorated credit quality | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 920 | ||||||
Ending allowance for loan losses | 804 | 804 | 920 | ||||
Allowance for loan losses and Balance of loans | |||||||
Ending Allowance for loan losses | 804 | 920 | 920 | 804 | 920 | ||
Total loans | 6,883 | 7,875 | |||||
Commercial real estate | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 5,219 | 5,060 | 5,227 | 4,852 | 4,852 | ||
Provision (benefit) for loan losses | 184 | 34 | 249 | 352 | |||
Gross chargeoffs | 0 | 0 | (74) | (112) | |||
Recoveries | 5 | 23 | 6 | 25 | |||
Net (chargeoffs) recoveries | 5 | 23 | (68) | (87) | |||
Ending allowance for loan losses | 5,408 | 5,117 | 5,408 | 5,117 | 5,227 | ||
Allowance for loan losses and Balance of loans | |||||||
Allowance for loan losses, individually evaluated for impairment | 37 | 0 | |||||
Allowance for loan losses, Collectively evaluated for impairment | 4,619 | 4,412 | |||||
Ending Allowance for loan losses | 5,219 | 5,060 | 5,227 | 4,852 | 4,852 | 5,408 | 5,227 |
Balance of loans, individually evaluated for impairment | 5,043 | 5,898 | |||||
Balance of loans, collectively evaluated for impairment | 557,098 | 551,851 | |||||
Total loans | 565,781 | 562,093 | |||||
Commercial real estate | Acquired with deteriorated credit quality | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 815 | ||||||
Ending allowance for loan losses | 752 | 752 | 815 | ||||
Allowance for loan losses and Balance of loans | |||||||
Ending Allowance for loan losses | 752 | 815 | 815 | 752 | 815 | ||
Total loans | 3,640 | 4,344 | |||||
Commercial and industrial | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 5,990 | 5,423 | 5,174 | 5,903 | 5,903 | ||
Provision (benefit) for loan losses | (280) | 475 | 560 | (53) | |||
Gross chargeoffs | (49) | (237) | (164) | (995) | |||
Recoveries | 10 | 8 | 101 | 814 | |||
Net (chargeoffs) recoveries | (39) | (229) | (63) | (181) | |||
Ending allowance for loan losses | 5,671 | 5,669 | 5,671 | 5,669 | 5,174 | ||
Allowance for loan losses and Balance of loans | |||||||
Allowance for loan losses, individually evaluated for impairment | 443 | 504 | |||||
Allowance for loan losses, Collectively evaluated for impairment | 5,189 | 4,648 | |||||
Ending Allowance for loan losses | 5,990 | 5,423 | 5,174 | 5,903 | 5,903 | 5,671 | 5,174 |
Balance of loans, individually evaluated for impairment | 4,343 | 9,829 | |||||
Balance of loans, collectively evaluated for impairment | 399,625 | 373,504 | |||||
Total loans | 404,130 | 383,455 | |||||
Commercial and industrial | Acquired with deteriorated credit quality | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 22 | ||||||
Ending allowance for loan losses | 39 | 39 | 22 | ||||
Allowance for loan losses and Balance of loans | |||||||
Ending Allowance for loan losses | 39 | 22 | 22 | 39 | 22 | ||
Total loans | 162 | 122 | |||||
Residential real estate | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 1,142 | 977 | 1,164 | 950 | 950 | ||
Provision (benefit) for loan losses | 72 | 101 | 7 | 143 | |||
Gross chargeoffs | 0 | 0 | 0 | (47) | |||
Recoveries | 12 | 19 | 55 | 51 | |||
Net (chargeoffs) recoveries | 12 | 19 | 55 | 4 | |||
Ending allowance for loan losses | 1,226 | 1,097 | 1,226 | 1,097 | 1,164 | ||
Allowance for loan losses and Balance of loans | |||||||
Allowance for loan losses, individually evaluated for impairment | 18 | 18 | |||||
Allowance for loan losses, Collectively evaluated for impairment | 1,195 | 1,063 | |||||
Ending Allowance for loan losses | 1,142 | 977 | 1,164 | 950 | 950 | 1,226 | 1,164 |
Balance of loans, individually evaluated for impairment | 1,396 | 1,854 | |||||
Balance of loans, collectively evaluated for impairment | 193,800 | 174,755 | |||||
Total loans | 198,277 | 180,018 | |||||
Residential real estate | Acquired with deteriorated credit quality | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 83 | ||||||
Ending allowance for loan losses | 13 | 13 | 83 | ||||
Allowance for loan losses and Balance of loans | |||||||
Ending Allowance for loan losses | 13 | 83 | 83 | 13 | 83 | ||
Total loans | 3,081 | 3,409 | |||||
Consumer | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 2 | 5 | 1 | 8 | 8 | ||
Provision (benefit) for loan losses | 8 | 9 | 19 | 21 | |||
Gross chargeoffs | (34) | (8) | (48) | (23) | |||
Recoveries | 26 | 1 | 30 | 1 | |||
Net (chargeoffs) recoveries | (8) | (7) | (18) | (22) | |||
Ending allowance for loan losses | 2 | 7 | 2 | 7 | 1 | ||
Allowance for loan losses and Balance of loans | |||||||
Allowance for loan losses, individually evaluated for impairment | 0 | 0 | |||||
Allowance for loan losses, Collectively evaluated for impairment | 2 | 1 | |||||
Ending Allowance for loan losses | 2 | $ 5 | 1 | $ 8 | 8 | 2 | 1 |
Balance of loans, individually evaluated for impairment | 0 | 0 | |||||
Balance of loans, collectively evaluated for impairment | 735 | 999 | |||||
Total loans | 735 | 999 | |||||
Consumer | Acquired with deteriorated credit quality | |||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||
Beginning balance | 0 | ||||||
Ending allowance for loan losses | 0 | 0 | 0 | ||||
Allowance for loan losses and Balance of loans | |||||||
Ending Allowance for loan losses | $ 0 | $ 0 | $ 0 | 0 | 0 | ||
Total loans | $ 0 | $ 0 |
Premises and Equipment (Additio
Premises and Equipment (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 20,592 | $ 20,592 | $ 19,675 | ||
Less: Accumulated depreciation | 7,165 | 7,165 | 6,433 | ||
Net premises and equipment | 13,427 | 13,427 | 13,242 | ||
Depreciation of fixed assets | 326 | $ 345 | 986 | $ 1,008 | |
Operating lease, rent expense | 307 | $ 285 | 840 | $ 790 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 2,253 | 2,253 | 2,197 | ||
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 9,825 | 9,825 | 9,746 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 2,192 | 2,192 | 1,708 | ||
Furniture, fixtures and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 6,322 | $ 6,322 | $ 6,024 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Additional Information) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 13 Months Ended | ||||
Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2016acquisition | Dec. 31, 2018USD ($) | |
Goodwill [Line Items] | ||||||||
Number of banks acquired | acquisition | 2 | |||||||
Goodwill | $ 9,387 | $ 9,387 | $ 9,387 | |||||
Amortization of core deposit intangibles | 117 | $ 165 | ||||||
Lotus Bank | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill acquired | $ 4,600 | |||||||
Bank of Michigan | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill acquired | $ 4,800 | |||||||
Core Deposits | ||||||||
Goodwill [Line Items] | ||||||||
Amortization of core deposit intangibles | $ 29 | $ 55 | $ 117 | $ 165 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ 331 | $ 447 |
Core Deposits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 2,045 | 2,045 |
Accumulated amortization | (1,715) | (1,598) |
Accumulated amortization | $ 330 | $ 447 |
Borrowings and Subordinated D_3
Borrowings and Subordinated Debt (Components of Long-term Debt and Short-term Borrowings) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 10,545 | $ 98,129 |
Total short-term borrowings, weighted average rate | 1.82% | 2.53% |
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 116,326 | $ 16,336 |
Total long-term debt, weighted average rate | 1.79% | 5.90% |
Total short-term and long-term borrowings | $ 126,871 | $ 114,465 |
Total short-term and long-term borrowings, weighted average rate | 1.79% | 3.01% |
Secured borrowings | Secured borrowing due in 2022 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 1,392 | $ 1,445 |
Total long-term debt, weighted average rate | 1.00% | 1.00% |
Fixed interest rate | 1.00% | |
FHLB Advances | FHLB advances due in 2022 to 2029 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 100,000 | $ 0 |
Total long-term debt, weighted average rate | 1.11% | 0.00% |
Subordinated notes | Subordinated notes due in 2025 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 14,934 | $ 14,891 |
Total long-term debt, weighted average rate | 6.38% | 6.38% |
Fixed interest rate | 6.375% | |
Long-term debt gross | $ 15,000 | $ 15,000 |
Debt issuance costs | $ 66 | 109 |
Minimum | FHLB Advances | FHLB advances due in 2022 to 2029 | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 0.66% | |
Maximum | FHLB Advances | FHLB advances due in 2022 to 2029 | ||
Debt Instrument [Line Items] | ||
Fixed interest rate | 2.35% | |
FHLB Advances | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 0 | $ 90,000 |
Total short-term borrowings, weighted average rate | 0.00% | 2.54% |
Securities sold under agreements to repurchase | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 545 | $ 609 |
Total short-term borrowings, weighted average rate | 0.30% | 0.30% |
FHLB line of credit | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 0 | $ 2,520 |
Total short-term borrowings, weighted average rate | 0.00% | 2.87% |
Federal funds purchased | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 10,000 | $ 5,000 |
Total short-term borrowings, weighted average rate | 1.90% | 2.50% |
Borrowings and Subordinated D_4
Borrowings and Subordinated Debt (Additional Information) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 10,545,000 | $ 98,129,000 |
Debt Instrument [Line Items] | ||
Federal Home Loan Bank, advances, collateral | 419,600,000 | |
Federal Home Loan Bank, advances, maximum borrowing capacity | 144,900,000 | |
Subordinated notes | 116,326,000 | 16,336,000 |
Maturity overnight | ||
Short-term Debt [Line Items] | ||
Fair value of collateralized mortgage obligations | 1,200,000 | |
FHLB line of credit | Unsecured borrowings | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 130,000,000 | |
Secured borrowings | Secured borrowing due in 2022 | ||
Debt Instrument [Line Items] | ||
Subordinated notes | $ 1,392,000 | 1,445,000 |
Fixed interest rate | 1.00% | |
Subordinated notes | Subordinated notes due in 2025 | ||
Debt Instrument [Line Items] | ||
Subordinated notes | $ 14,934,000 | 14,891,000 |
Fixed interest rate | 6.375% | |
Long-term debt gross | $ 15,000,000 | 15,000,000 |
Debt issuance costs | $ 66,000 | 109,000 |
Subordinated notes | Subordinated notes due in 2025 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.77% | |
Federal funds purchased | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 10,000,000 | 5,000,000 |
Securities sold under agreements to repurchase | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | 545,000 | $ 609,000 |
Securities sold under agreements to repurchase | Maturity overnight | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | 545,000 | |
Federal Reserve Bank | FHLB line of credit | Secured borrowings | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 4,900,000 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Expected Income Tax Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate | 21.00% | 21.00% | 21.00% | 21.00% |
Income tax expense based on federal corporate tax rate | $ 1,118 | $ 823 | $ 2,911 | $ 2,646 |
Changes resulting from: | ||||
Tax-exempt income | (142) | (104) | (398) | (289) |
Other, net | (62) | (54) | (85) | (190) |
Income tax expense | $ 914 | $ 665 | $ 2,428 | $ 2,167 |
Stock Based Compensation (2018
Stock Based Compensation (2018 Equity Incentive Plan) (Details) - shares | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Apr. 17, 2018 | |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards granted (in shares) | 35,633 | ||
2018 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares of common stock reserved for issuance (in shares) | 250,000 | ||
Share available to be granted (in shares) | 207,617 | ||
2018 Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 0 | ||
2018 Plan | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards granted (in shares) | 35,633 | ||
2014 Equity Incentive Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 30,000 | ||
2014 Equity Incentive Plan | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards granted (in shares) | 30,271 |
Stock Based Compensation (Stock
Stock Based Compensation (Stock Options Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of options | 10 years | |||
Aggregate intrinsic value, stock options outstanding | $ 2,682 | $ 2,682 | ||
Aggregate intrinsic value, stock options exercisable | 2,700 | $ 2,700 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unrecognized compensation costs | 61 | $ 61 | ||
Weighted-average recognition period for unrecognized compensation costs | 1 year 1 month | |||
Share-based compensation expense | $ 12 | $ 38 | $ 43 | $ 128 |
Stock Options | Tranche 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Stock Options | Tranche 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Stock Options | Tranche 3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% |
Stock Based Compensation (Weigh
Stock Based Compensation (Weighted-Average Assumptions) (Details) - Stock Options | 9 Months Ended |
Sep. 30, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk Free Interest Rate | 2.83% |
Expected Term | 7 years |
Expected Volatility | 0.04% |
Weighted average fair value of options granted (in dollars per share) | $ 4.46 |
Stock Based Compensation (Summa
Stock Based Compensation (Summary of Stock Option Activity) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Shares | |||||
Options outstanding at January 1, 2019 (in shares) | 376,768 | ||||
Exercised (in shares) | (6,250) | (1,100) | (21,550) | (126,494) | |
Options outstanding at September 30, 2019 (in shares) | 355,218 | 355,218 | 376,768 | ||
Options Exercisable at September 30, 2019 (in shares) | 335,214 | 335,214 | |||
Weighted Average Exercise Price | |||||
Options outstanding at January 1, 2019 (in dollars per share) | $ 16.26 | ||||
Exercised (in dollars per share) | 10.16 | ||||
Options outstanding at September 30, 2019 (in dollars per share) | $ 16.63 | 16.63 | $ 16.26 | ||
Options exercisable at September 30, 2019 (in dollars per share) | $ 16.14 | $ 16.14 | |||
Weighted Average Remaining Contractual Term | |||||
Options outstanding | 5 years 3 months 1 day | 5 years 8 months 35 days | |||
Options exercisable at September 30, 2019 | 5 years 1 month 1 day |
Stock Based Compensation (Restr
Stock Based Compensation (Restricted Stock Awards - Changes in Nonvested Shares) (Details) - Restricted Stock Awards | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Shares | |
Nonvested at January 1, 2019 (in shares) | shares | 53,770 |
Granted (in shares) | shares | 35,633 |
Vested (in shares) | shares | (6,700) |
Forfeited (in shares) | shares | (3,150) |
Nonvested at September 30, 2019 (in shares) | shares | 79,553 |
Weighted Average Grant-Date Fair Value | |
Nonvested at January 1, 2019 (in dollars per share) | $ / shares | $ 24.14 |
Granted (in dollars per share) | $ / shares | 23.76 |
Vested (in dollars per share) | $ / shares | 20.75 |
Forfeited (in dollars per share) | $ / shares | 23.99 |
Nonvested at September 30, 2019 (in dollars per share) | $ / shares | $ 24.26 |
Stock Based Compensation (Res_2
Stock Based Compensation (Restricted Stock Awards Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock redeemed to cover payroll taxes due at time of vesting | $ 43 | $ 14 | ||
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | $ 990 | $ 990 | ||
Weighted-average recognition period for unrecognized compensation costs | 1 year 10 months 15 days | |||
Fair value of shares vested during period | $ 139 | |||
Share-based compensation expense | $ 177 | $ 175 | $ 474 | $ 487 |
Off- Balance Sheet Activities_2
Off- Balance Sheet Activities (Additional Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitment to make loans, maximum term | 90 days | |
Commitments to make loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | $ 16,252 | $ 8,608 |
Off-balance sheet exposure, variable rates | 22,769 | 10,900 |
Unused lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | 19,544 | 18,672 |
Off-balance sheet exposure, variable rates | 289,779 | 229,490 |
Unused standby letters of credit and commercial letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | 4,195 | 3,861 |
Off-balance sheet exposure, variable rates | $ 0 | $ 232 |
Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 3.63% | |
Fixed rate loan commitments, maturity | 2 years | |
Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 7.80% | |
Fixed rate loan commitments, maturity | 30 years |
Regulatory Capital Matters (Add
Regulatory Capital Matters (Additional Information) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 153,143,000 | $ 144,008,000 |
Actual capital, ratio | 11.73% | 11.82% |
Required capital adequacy, amount | $ 58,754,000 | $ 54,803,000 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 91,396,000 | $ 77,699,000 |
Required capital adequacy with capital conservation buffer, ratio | 7.00% | 6.38% |
Tier 1 capital to risk-weighted assets: | ||
Actual capital, amount | $ 153,143,000 | $ 144,008,000 |
Actual capital, ratio | 11.73% | 11.82% |
Required capital adequacy, amount | $ 78,339,000 | $ 73,071,000 |
Required capital adequacy, ratio | 6.00% | 6.00% |
Required capital adequacy with capital conservation buffer, amount | $ 110,980,000 | $ 95,967,000 |
Required capital adequacy, ratio | 8.50% | 7.88% |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 180,711,000 | $ 170,503,000 |
Actual capital, ratio | 13.84% | 14.00% |
Required capital adequacy, amount | $ 104,452,000 | $ 97,428,000 |
Required capital adequacy, ratio | 8.00% | 8.00% |
Required capital adequacy with capital conservation buffer, amount | $ 137,093,000 | $ 120,324,000 |
Required capital adequacy, ratio | 10.50% | 9.88% |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 153,143,000 | $ 144,008,000 |
Actual capital, ratio | 10.12% | 10.21% |
Required capital adequacy, amount | $ 60,503,000 | $ 56,411,000 |
Required capital adequacy, ratio | 4.00% | 4.00% |
Required capital adequacy with capital conservation buffer, amount | $ 60,503,000 | $ 56,411,000 |
Required capital adequacy with capital conservation buffer, ratio | 4.00% | 4.00% |
Amount available for dividend payment without regulatory approval | $ 35,600,000 | |
Bank | ||
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 160,141,000 | $ 147,495,000 |
Actual capital, ratio | 12.25% | 12.12% |
Required capital adequacy, amount | $ 58,804,000 | $ 54,780,000 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 91,472,000 | $ 77,666,000 |
Required capital adequacy with capital conservation buffer, ratio | 7.00% | 6.38% |
Prompt corrective action provisions, amount | $ 84,939,000 | $ 79,126,000 |
Prompt corrective action provisions, ratio | 6.50% | 6.50% |
Tier 1 capital to risk-weighted assets: | ||
Actual capital, amount | $ 160,141,000 | $ 147,495,000 |
Actual capital, ratio | 12.25% | 12.12% |
Required capital adequacy, amount | $ 78,405,000 | $ 73,040,000 |
Required capital adequacy, ratio | 6.00% | 6.00% |
Required capital adequacy with capital conservation buffer, amount | $ 111,074,000 | $ 95,926,000 |
Required capital adequacy, ratio | 8.50% | 7.88% |
Prompt corrective action provisions, amount | $ 104,540,000 | $ 97,386,000 |
Prompt corrective action provisions, ratio | 8.00% | 8.00% |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 172,774,000 | $ 159,100,000 |
Actual capital, ratio | 13.22% | 13.07% |
Required capital adequacy, amount | $ 104,540,000 | $ 97,386,000 |
Required capital adequacy, ratio | 8.00% | 8.00% |
Required capital adequacy with capital conservation buffer, amount | $ 137,209,000 | $ 120,272,000 |
Required capital adequacy, ratio | 10.50% | 9.88% |
Prompt corrective action provisions, amount | $ 130,675,000 | $ 121,733,000 |
Prompt corrective action provisions, ratio | 10.00% | 10.00% |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 160,141,000 | $ 147,495,000 |
Actual capital, ratio | 10.64% | 10.48% |
Required capital adequacy, amount | $ 60,191,000 | $ 56,309,000 |
Required capital adequacy, ratio | 4.00% | 4.00% |
Required capital adequacy with capital conservation buffer, amount | $ 60,191,000 | $ 56,309,000 |
Required capital adequacy with capital conservation buffer, ratio | 4.00% | 4.00% |
Prompt corrective action provisions, amount | $ 75,238,000 | $ 70,386,000 |
Prompt corrective action provisions, ratio | 5.00% | 5.00% |
Fair Value (Fair Value Measurem
Fair Value (Fair Value Measurements of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial assets: | ||
Securities available-for-sale | $ 205,242 | $ 204,258 |
Recurring | ||
Financial assets: | ||
Securities available-for-sale | 205,242 | 204,258 |
Loans held for sale | 26,864 | 5,595 |
Total assets at fair value | 243,168 | 215,770 |
Total liabilities at fair value | 5,689 | |
Recurring | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 4,890 | 4,571 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Total assets at fair value | 0 | 0 |
Total liabilities at fair value | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 205,242 | 204,258 |
Loans held for sale | 26,864 | 5,595 |
Total assets at fair value | 238,278 | 211,199 |
Total liabilities at fair value | 5,689 | |
Recurring | Significant Other Observable Inputs (Level 2) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Total assets at fair value | 4,890 | 4,571 |
Total liabilities at fair value | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 4,890 | 4,571 |
U.S. government sponsored entities & agencies | ||
Financial assets: | ||
Securities available-for-sale | 1,497 | 2,397 |
U.S. government sponsored entities & agencies | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 1,497 | 2,397 |
U.S. government sponsored entities & agencies | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
U.S. government sponsored entities & agencies | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 1,497 | 2,397 |
U.S. government sponsored entities & agencies | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
State and political subdivision | ||
Financial assets: | ||
Securities available-for-sale | 90,733 | 75,146 |
State and political subdivision | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 90,733 | 75,146 |
State and political subdivision | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
State and political subdivision | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 90,733 | 75,146 |
State and political subdivision | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: residential | ||
Financial assets: | ||
Securities available-for-sale | 9,390 | 9,739 |
Mortgage-backed securities: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 9,390 | 9,739 |
Mortgage-backed securities: residential | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: residential | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 9,390 | 9,739 |
Mortgage-backed securities: residential | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: commercial | ||
Financial assets: | ||
Securities available-for-sale | 21,049 | 12,382 |
Mortgage-backed securities: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 21,049 | 12,382 |
Mortgage-backed securities: commercial | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: commercial | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 21,049 | 12,382 |
Mortgage-backed securities: commercial | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Collateralized mortgage obligations: residential | ||
Financial assets: | ||
Securities available-for-sale | 9,069 | 18,671 |
Collateralized mortgage obligations: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 9,069 | 18,671 |
Collateralized mortgage obligations: residential | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Collateralized mortgage obligations: residential | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 9,069 | 18,671 |
Collateralized mortgage obligations: residential | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Collateralized mortgage obligations: commercial | ||
Financial assets: | ||
Securities available-for-sale | 31,598 | 31,988 |
Collateralized mortgage obligations: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 31,598 | 31,988 |
Collateralized mortgage obligations: commercial | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Collateralized mortgage obligations: commercial | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 31,598 | 31,988 |
Collateralized mortgage obligations: commercial | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
U.S. Treasury | ||
Financial assets: | ||
Securities available-for-sale | 2,001 | 20,481 |
U.S. Treasury | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 2,001 | 20,481 |
U.S. Treasury | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
U.S. Treasury | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 2,001 | 20,481 |
U.S. Treasury | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
SBA | ||
Financial assets: | ||
Securities available-for-sale | 23,536 | 15,688 |
SBA | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 23,536 | 15,688 |
SBA | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
SBA | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 23,536 | 15,688 |
SBA | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Asset backed securities | ||
Financial assets: | ||
Securities available-for-sale | 10,187 | 3,842 |
Asset backed securities | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 10,187 | 3,842 |
Asset backed securities | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Asset backed securities | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 10,187 | 3,842 |
Asset backed securities | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Corporate bonds | ||
Financial assets: | ||
Securities available-for-sale | 6,182 | 13,924 |
Corporate bonds | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 6,182 | 13,924 |
Corporate bonds | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Corporate bonds | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 6,182 | 13,924 |
Corporate bonds | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Customer-initiated derivatives | Recurring | ||
Financial assets: | ||
Derivative asset | 5,628 | 1,126 |
Derivative liabilities | 5,628 | 1,126 |
Customer-initiated derivatives | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Derivative liabilities | 0 | 0 |
Customer-initiated derivatives | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Derivative asset | 5,628 | 1,126 |
Derivative liabilities | 5,628 | 1,126 |
Customer-initiated derivatives | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Derivative liabilities | 0 | 0 |
Forward contracts related to mortgage loans to be delivered for sale | Recurring | ||
Financial assets: | ||
Derivative asset | 185 | 22 |
Derivative liabilities | 56 | 43 |
Forward contracts related to mortgage loans to be delivered for sale | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Derivative liabilities | 0 | 0 |
Forward contracts related to mortgage loans to be delivered for sale | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Derivative asset | 185 | 22 |
Derivative liabilities | 56 | 43 |
Forward contracts related to mortgage loans to be delivered for sale | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Derivative liabilities | 0 | 0 |
Interest rate lock commitments | Recurring | ||
Financial assets: | ||
Derivative asset | 359 | 198 |
Derivative liabilities | 5 | |
Total liabilities at fair value | 1,169 | |
Interest rate lock commitments | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Derivative liabilities | 0 | |
Total liabilities at fair value | 0 | |
Interest rate lock commitments | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Derivative asset | 359 | 198 |
Derivative liabilities | 5 | |
Total liabilities at fair value | 1,169 | |
Interest rate lock commitments | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Derivative liabilities | $ 0 | |
Total liabilities at fair value | $ 0 |
Fair Value (Level 3 Assets Roll
Fair Value (Level 3 Assets Rollforward) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||||
Beginning balance | $ 5,624 | $ 4,414 | $ 4,571 | $ 4,291 |
Transfers from loans held for sale | 466 | 149 | 1,895 | 453 |
Gains (losses): | ||||
Recorded in Mortgage banking activities | (9) | (32) | 151 | (144) |
Repayments | (1,191) | (44) | (1,727) | (113) |
Ending balance | $ 4,890 | $ 4,487 | $ 4,890 | $ 4,487 |
Fair Value (Contractual Obligat
Fair Value (Contractual Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Aggregate fair value | $ 26,864 | $ 5,595 |
Loans held for sale, contractual balance | 26,429 | 5,512 |
Loans held for sale, unrealized gain | $ 435 | $ 83 |
Fair Value (Total Amount of Gai
Fair Value (Total Amount of Gains (Losses) from Changes in Fair Value of Loans Held For Sale) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||||
Total amount of gains (losses) from changes in fair value of loans held for sale | $ (98) | $ 69 | $ 352 | $ 100 |
Fair Value (Assets Measured at
Fair Value (Assets Measured at Fair Value on a Non-Recurring Basis) (Details) - Non-recurring - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | $ 373,000 | |
Contractual balance | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | 373,000 | $ 0 |
Total assets at fair value | 2,561,000 | |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | 373,000 | |
Total assets at fair value | 2,561,000 | |
Commercial real estate | Contractual balance | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 897,000 | |
Commercial real estate | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 897,000 | |
Commercial and industrial | Contractual balance | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 1,291,000 | 3,337,000 |
Commercial and industrial | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 1,291,000 | $ 3,337,000 |
Fair Value (Additional Informat
Fair Value (Additional Information) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Impaired loans, allowance allocation recorded | $ 12,307,000 | $ 11,890,000 | $ 12,307,000 | $ 11,890,000 | $ 11,566,000 | $ 12,353,000 | $ 11,465,000 | $ 11,713,000 |
Chargeoffs to impaired loans | 30,000 | $ 194,000 | 94,000 | $ 286,000 | ||||
Write downs recorded in other real estate owned | 0 | 0 | ||||||
Contractual balance | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Impaired loans, allowance allocation recorded | 246,000 | 246,000 | 278,000 | |||||
Chargeoffs to impaired loans | 74,000 | 0 | ||||||
Contractual balance | Non-recurring | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Other real estate owned | $ 373,000 | $ 373,000 | $ 0 |
Fair Value (Quantitative Inform
Fair Value (Quantitative Information About Significant Unobservable Inputs for Assets Measured at Fair Value on a Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 10,782 | $ 24,761 |
Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 2,188 | $ 3,337 |
Other real estate owned | $ 373 | |
Other real estate owned, measurement input | 36.00% | |
Minimum | Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, measurement input | 10.00% | 17.00% |
Maximum | Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, measurement input | 50.00% | 50.00% |
Fair Value (Fair Value Measur_2
Fair Value (Fair Value Measurement of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Contractual balance | ||
Financial assets: | ||
Cash and cash equivalents | $ 49,361 | $ 33,296 |
Federal Home Loan Bank stock | 8,325 | 8,325 |
Net loans | 1,156,616 | 1,114,999 |
Accrued interest receivable | 5,280 | 4,207 |
Financial liabilities: | ||
Deposits | 1,194,542 | 1,134,635 |
Borrowings | 111,937 | 99,574 |
Subordinated notes | 14,934 | 14,891 |
Accrued interest payable | 2,500 | 1,674 |
Estimate of Fair Value Measurement | ||
Financial assets: | ||
Cash and cash equivalents | 49,361 | 33,296 |
Net loans | 1,164,984 | 1,113,648 |
Accrued interest receivable | 5,280 | 4,207 |
Financial liabilities: | ||
Deposits | 1,197,718 | 1,137,575 |
Borrowings | 111,729 | 100,602 |
Subordinated notes | 15,405 | 15,450 |
Accrued interest payable | 2,500 | 1,674 |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 32,400 | 27,072 |
Net loans | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Borrowings | 0 | 0 |
Subordinated notes | 0 | 0 |
Accrued interest payable | 0 | 0 |
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Cash and cash equivalents | 16,961 | 6,224 |
Net loans | 0 | 0 |
Accrued interest receivable | 1,916 | 1,210 |
Financial liabilities: | ||
Deposits | 1,197,718 | 1,137,575 |
Borrowings | 111,729 | 100,602 |
Subordinated notes | 15,405 | 15,450 |
Accrued interest payable | 2,500 | 1,674 |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Net loans | 1,164,984 | 1,113,648 |
Accrued interest receivable | 3,364 | 2,997 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Borrowings | 0 | 0 |
Subordinated notes | 0 | 0 |
Accrued interest payable | $ 0 | $ 0 |
Derivatives (Notional Amount an
Derivatives (Notional Amount and Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other Assets | ||
Notional Amount | ||
Derivative asset | $ 150,062 | $ 59,349 |
Fair Value | ||
Derivative asset | 6,172 | 1,346 |
Other Liabilities | ||
Notional Amount | ||
Derivative liability | 94,956 | 46,928 |
Fair Value | ||
Derivative liability | 5,689 | 1,169 |
Customer-initiated derivatives | ||
Fair Value | ||
Derivative asset | 5,628 | 1,126 |
Derivative liability | 5,628 | 1,126 |
Customer-initiated derivatives | Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 73,512 | 35,733 |
Fair Value | ||
Derivative asset | 5,628 | 1,126 |
Customer-initiated derivatives | Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 73,512 | 35,733 |
Fair Value | ||
Derivative liability | 5,628 | 1,126 |
Forward contracts related to mortgage loans to be delivered for sale | Not Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 34,459 | 5,241 |
Fair Value | ||
Derivative asset | 185 | 22 |
Forward contracts related to mortgage loans to be delivered for sale | Not Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 19,148 | 11,195 |
Fair Value | ||
Derivative liability | 56 | 43 |
Interest rate lock commitments | Not Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 42,091 | 18,375 |
Derivative liability | 2,296 | 0 |
Fair Value | ||
Derivative asset | 359 | 198 |
Derivative liability | $ 5 | $ 0 |
Derivatives (Gains (Losses) Rel
Derivatives (Gains (Losses) Related to Derivative Instruments) (Details) - Mortgage Banking Activities - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) recognized in income | $ (74) | $ 85 | $ (261) | $ 163 |
Forward contracts related to mortgage loans to be delivered for sale | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) recognized in income | (26) | 20 | (417) | 14 |
Interest rate lock commitments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) recognized in income | $ (48) | $ 65 | $ 156 | $ 149 |
Derivatives (Financial Instrume
Derivatives (Financial Instruments Eligible for Offset) (Details) - Customer-initiated derivatives - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Offsetting derivative assets: | ||
Gross amounts recognized | $ 5,628 | $ 1,126 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial condition | 5,628 | 1,126 |
Gross amounts not offset in the statements of financial position | ||
Financial instruments | 0 | 0 |
Collateral (received)/posted | 0 | 0 |
Net amount | 5,628 | 1,126 |
Offsetting derivative liabilities: | ||
Gross amounts recognized | 5,628 | 1,126 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial condition | 5,628 | 1,126 |
Gross amounts not offset in the statements of financial position | ||
Financial instruments | 0 | 0 |
Collateral (received)/posted | 6,527 | 1,020 |
Net amount | $ (899) | $ 106 |
Parent Company Financial Stat_3
Parent Company Financial Statements (Balance Sheets - Parent Company) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||||||
Cash and cash equivalents | $ 49,361 | $ 33,296 | ||||
Income tax benefit | 469 | 2,467 | ||||
Other assets | 27,361 | 12,333 | ||||
Total assets | 1,509,463 | 1,416,215 | ||||
Liabilities | ||||||
Subordinated notes | 14,934 | 14,891 | ||||
Total liabilities | 1,341,495 | 1,264,455 | ||||
Shareholders' equity | 167,968 | $ 162,867 | 151,760 | $ 145,459 | $ 143,445 | $ 107,960 |
Total liabilities and shareholders' equity | 1,509,463 | 1,416,215 | ||||
Parent Company | ||||||
Assets | ||||||
Cash and cash equivalents | 5,910 | 9,690 | $ 10,399 | $ 1,158 | ||
Investment in banking subsidiary | 174,966 | 155,248 | ||||
Investment in captive insurance subsidiary | 2,264 | 1,622 | ||||
Income tax benefit | 456 | 393 | ||||
Other assets | 73 | 21 | ||||
Total assets | 183,669 | 166,974 | ||||
Liabilities | ||||||
Subordinated notes | 14,934 | 14,891 | ||||
Accrued expenses and other liabilities | 767 | 323 | ||||
Total liabilities | 15,701 | 15,214 | ||||
Shareholders' equity | 167,968 | 151,760 | ||||
Total liabilities and shareholders' equity | $ 183,669 | $ 166,974 |
Parent Company Financial Stat_4
Parent Company Financial Statements (Statements of Income and Comprehensive Income - Parent Company) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Expenses | ||||
Interest on subordinated notes | $ 256 | $ 256 | $ 759 | $ 759 |
Income tax (benefit) expense | (914) | (665) | (2,428) | (2,167) |
Net income | 4,409 | 3,255 | 11,431 | 10,435 |
Other comprehensive income (loss) | 1,238 | (986) | 7,120 | (3,174) |
Total comprehensive income, net of tax | 5,647 | 2,269 | 18,551 | 7,261 |
Parent Company | ||||
Expenses | ||||
Interest on subordinated notes | 256 | 256 | 759 | 759 |
Other expenses | 516 | 151 | 902 | 480 |
Total expenses | 772 | 407 | 1,661 | 1,239 |
Loss before income taxes and equity in undistributed net earnings of subsidiaries | (772) | (407) | (1,661) | (1,239) |
Income tax (benefit) expense | 181 | (2) | 272 | 201 |
Equity in undistributed earnings of subsidiaries | 5,000 | 3,664 | 12,820 | 11,473 |
Net income | 4,409 | 3,255 | 11,431 | 10,435 |
Other comprehensive income (loss) | 1,238 | (986) | 7,120 | (3,174) |
Total comprehensive income, net of tax | $ 5,647 | $ 2,269 | $ 18,551 | $ 7,261 |
Parent Company Financial Stat_5
Parent Company Financial Statements (Statements of Cash Flows - Parent Company) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||||
Net income | $ 4,409 | $ 3,255 | $ 11,431 | $ 10,435 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Stock-based compensation expense | 517 | 615 | ||
Net cash (used in) provided by operating activities | (20,047) | 6,086 | ||
Cash flows from investing activities | ||||
Net cash used in investing activities | (33,374) | (130,344) | ||
Cash flows from financing activities | ||||
Net proceeds from issuance of common stock related to initial public offering | 0 | 29,030 | ||
Share buyback - redeemed stock | (2,108) | 0 | ||
Common stock dividends paid | (852) | (430) | ||
Proceeds from exercised stock options | 219 | 1,269 | ||
Net cash provided by financing activities | 69,486 | 138,434 | ||
Beginning cash and cash equivalents | 33,296 | |||
Ending cash and cash equivalents | 49,361 | 49,361 | ||
Parent Company | ||||
Cash flows from operating activities | ||||
Net income | 4,409 | 3,255 | 11,431 | 10,435 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in undistributed earnings of subsidiaries | (5,000) | (3,664) | (12,820) | (11,473) |
Stock-based compensation expense | 54 | 242 | ||
(Increase) decrease in other assets, net | (115) | 33 | ||
Increase in other liabilities, net | 411 | 135 | ||
Net cash (used in) provided by operating activities | (1,039) | (628) | ||
Cash flows from investing activities | ||||
Capital infusion to subsidiaries | 0 | (20,000) | ||
Net cash used in investing activities | 0 | (20,000) | ||
Cash flows from financing activities | ||||
Net proceeds from issuance of common stock related to initial public offering | 0 | 29,030 | ||
Share buyback - redeemed stock | (2,108) | 0 | ||
Common stock dividends paid | (852) | (430) | ||
Proceeds from exercised stock options | 219 | 1,269 | ||
Net cash provided by financing activities | (2,741) | 29,869 | ||
Net change in cash and cash equivalents | (3,780) | 9,241 | ||
Beginning cash and cash equivalents | 9,690 | 1,158 | ||
Ending cash and cash equivalents | $ 5,910 | $ 10,399 | $ 5,910 | $ 10,399 |
Earnings Per Share (Calculation
Earnings Per Share (Calculation of Basic and Diluted Earnings Per Share - Current Period) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | $ 4,409 | $ 3,255 | $ 11,431 | $ 10,435 |
Net income allocated to participating securities | 45 | 110 | ||
Net income allocated to common shareholders | $ 4,364 | $ 11,321 | ||
Weighted average common shares outstanding—basic (in shares) | 7,721,000 | 7,749,047 | 7,738,000 | 7,264,494 |
Effect of dilutive securities | ||||
Weighted average common shares outstanding—diluted (in shares) | 7,752,000 | 7,901,109 | 7,776,000 | 7,413,676 |
EPS available to common shareholders | ||||
Basic earnings per share (in dollars per share) | $ 0.57 | $ 0.42 | $ 1.48 | $ 1.44 |
Diluted earnings per common share (in dollars per share) | $ 0.56 | $ 0.41 | $ 1.46 | $ 1.41 |
Earnings per share calculation under two-class method | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Weighted average common shares - issued (in shares) | 7,721,000 | 7,738,000 | ||
Average unvested restricted share awards (in shares) | (80,000) | (76,000) | ||
Weighted average common shares outstanding—basic (in shares) | 7,641,000 | 7,662,000 | ||
Effect of dilutive securities | ||||
Weighted average common stock equivalents (in shares) | 111,000 | 114,000 | ||
Weighted average common shares outstanding—diluted (in shares) | 7,752,000 | 7,776,000 |
Earnings Per Share (Calculati_2
Earnings Per Share (Calculation of Basic and Diluted Earnings Per Share - Prior Period) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Basic: | ||||
Net Income attributable to common shareholders | $ 4,409 | $ 3,255 | $ 11,431 | $ 10,435 |
Weighted average common shares outstanding (in shares) | 7,721,000 | 7,749,047 | 7,738,000 | 7,264,494 |
Basic earnings per share (in dollars per share) | $ 0.57 | $ 0.42 | $ 1.48 | $ 1.44 |
Diluted: | ||||
Net Income attributable to common shareholders | $ 4,409 | $ 3,255 | $ 11,431 | $ 10,435 |
Weighted average common shares outstanding (in shares) | 7,721,000 | 7,749,047 | 7,738,000 | 7,264,494 |
Add: Dilutive effects of assumed exercises of stock options (in shares) | 152,062 | 149,182 | ||
Weighted average common shares outstanding—diluted (in shares) | 7,752,000 | 7,901,109 | 7,776,000 | 7,413,676 |
Diluted earnings per common share (in dollars per share) | $ 0.56 | $ 0.41 | $ 1.46 | $ 1.41 |
Earnings Per Share (Additional
Earnings Per Share (Additional Information) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from diluted earnings per share calculation (in shares) | 30,000 | 30,000 | 30,000 | 25,055 |