Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38458 | |
Entity Registrant Name | LEVEL ONE BANCORP, INC. | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 71-1015624 | |
Entity Address, Address Line One | 32991 Hamilton Court | |
Entity Address, City or Town | Farmington Hills, | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48334 | |
City Area Code | 248 | |
Local Phone Number | 737-0300 | |
Entity Information [Line Items] | ||
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,734,322 | |
Entity Central Index Key | 0001412707 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | LEVL | |
Security Exchange Name | NASDAQ | |
Depositary Shares, each representing a 1/100th interest in a share of 7.50% Non-Cumulative Perpetual Preferred Stock, Series B | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/100th interest in a share of 7.50% Non-Cumulative Perpetual Preferred Stock, Series B | |
Trading Symbol | LEVLP | |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 176,486 | $ 103,930 |
Securities available-for-sale | 253,527 | 180,905 |
Other investments | 14,398 | 11,475 |
Mortgage loans held for sale, at fair value | 60,635 | 13,889 |
Loans: | ||
Total loans | 1,843,888 | 1,227,609 |
Less: Allowance for loan losses | (21,254) | (12,674) |
Net loans | 1,822,634 | 1,214,935 |
Premises and equipment, net | 15,646 | 13,838 |
Goodwill | 35,554 | 9,387 |
Other intangible assets, net | 5,581 | 383 |
Other real estate owned | 0 | 921 |
Bank-owned life insurance | 18,083 | 12,167 |
Income tax benefit | 3,791 | 1,217 |
Interest receivable and other assets | 40,112 | 21,852 |
Total assets | 2,446,447 | 1,584,899 |
Deposits: | ||
Noninterest-bearing demand deposits | 632,427 | 325,885 |
Interest-bearing demand deposits | 115,395 | 62,586 |
Money market and savings deposits | 595,471 | 313,885 |
Time deposits | 600,142 | 433,072 |
Total deposits | 1,943,435 | 1,135,428 |
Borrowings | 216,809 | 212,225 |
Subordinated notes | 44,555 | 44,440 |
Other liabilities | 32,180 | 22,103 |
Total liabilities | 2,236,979 | 1,414,196 |
Shareholders' equity | ||
Preferred stock, no par value per share; authorized—50,000 shares; issued and outstanding—10,000 shares, with a liquidation preference of $2,500 per share, at September 30, 2020 and 0 shares at December 31, 2019 | 23,370 | 0 |
Common stock, no par value per share; authorized—20,000,000 shares; issued and outstanding—7,734,322 shares at September 30, 2020 and 7,715,491 shares at December 31, 2019 | 89,409 | 89,345 |
Retained earnings | 88,646 | 77,766 |
Accumulated other comprehensive income, net of tax | 8,043 | 3,592 |
Total shareholders' equity | 209,468 | 170,703 |
Total liabilities and shareholders' equity | 2,446,447 | 1,584,899 |
Originated loans | ||
Loans: | ||
Total loans | 1,603,893 | 1,158,138 |
Acquired loans | ||
Loans: | ||
Total loans | $ 239,995 | $ 69,471 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 50,000 | 50,000 |
Preferred stock, shares issued (in shares) | 10,000 | 0 |
Preferred stock, shares outstanding (in shares) | 10,000 | 0 |
Preferred stock, liquidation preference (in dollars per share) | $ 2,500 | |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 7,734,322 | 7,715,491 |
Common stock, shares outstanding (in shares) | 7,734,322 | 7,715,491 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Securities: | ||||
Taxable | $ 652 | $ 857 | $ 1,930 | $ 2,773 |
Tax-exempt | 613 | 588 | 1,894 | 1,728 |
Federal funds sold and other investments | 250 | 404 | 817 | 1,034 |
Total interest income | 20,245 | 17,983 | 60,458 | 53,082 |
Interest Expense | ||||
Deposits | 2,323 | 4,478 | 9,039 | 13,216 |
Borrowed funds | 693 | 261 | 1,866 | 960 |
Subordinated notes | 632 | 256 | 1,903 | 759 |
Total interest expense | 3,648 | 4,995 | 12,808 | 14,935 |
Net interest income | 16,597 | 12,988 | 47,650 | 38,147 |
Provision expense (benefit) for loan losses | 4,270 | (16) | 10,334 | 835 |
Net interest income after provision for loan losses | 12,327 | 13,004 | 37,316 | 37,312 |
Noninterest income | ||||
Service charges on deposits | 616 | 627 | 1,798 | 1,914 |
Net gain on sales of securities | 434 | 151 | 1,862 | 151 |
Mortgage banking activities | 7,108 | 2,352 | 15,380 | 5,788 |
Other charges and fees | 967 | 728 | 2,564 | 1,768 |
Total noninterest income | 9,125 | 3,858 | 21,604 | 9,621 |
Noninterest expense | ||||
Salary and employee benefits | 9,862 | 7,536 | 28,090 | 21,642 |
Occupancy and equipment expense | 1,678 | 1,203 | 4,773 | 3,575 |
Professional service fees | 808 | 465 | 2,141 | 1,212 |
Acquisition and due diligence fees | 17 | 319 | 1,664 | 319 |
Marketing expense | 257 | 379 | 709 | 843 |
Printing and supplies expense | 89 | 78 | 398 | 250 |
Data processing expense | 844 | 661 | 2,601 | 1,862 |
Core deposit premium amortization | 192 | 29 | 576 | 117 |
Other expense | 1,379 | 869 | 3,819 | 3,254 |
Noninterest expense | 15,126 | 11,539 | 44,771 | 33,074 |
Income before income taxes | 6,326 | 5,323 | 14,149 | 13,859 |
Income tax provision | 1,117 | 914 | 2,109 | 2,428 |
Net income | $ 5,209 | $ 4,409 | $ 12,040 | $ 11,431 |
Per common share data: | ||||
Basic earnings per common share (in dollars per share) | $ 0.68 | $ 0.57 | $ 1.56 | $ 1.48 |
Diluted earnings per common share (in dollars per share) | 0.67 | 0.56 | 1.55 | 1.46 |
Cash dividends declared per common share (in dollars per share) | $ 0.05 | $ 0.04 | $ 0.15 | $ 0.12 |
Weighted average common shares outstanding—basic (in shares) | 7,675 | 7,721 | 7,640 | 7,738 |
Weighted average common shares outstanding - diluted (in shares) | 7,712 | 7,752 | 7,701 | 7,776 |
Originated | ||||
Interest income | ||||
Loans, including fees | $ 15,274 | $ 14,633 | $ 44,630 | $ 42,652 |
Acquired | ||||
Interest income | ||||
Loans, including fees | $ 3,456 | $ 1,501 | $ 11,187 | $ 4,895 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 5,209 | $ 4,409 | $ 12,040 | $ 11,431 | |
Other comprehensive income: | |||||
Unrealized gains on securities available-for-sale | 1,425 | 1,414 | 7,497 | 8,861 | |
Reclassification adjustment for gains included in income | (434) | 151 | (1,862) | 151 | |
Tax effect | [1] | (208) | (327) | (1,184) | (1,892) |
Net unrealized gains on securities available-for-sale, net of tax | 783 | 1,238 | 4,451 | 7,120 | |
Total comprehensive income, net of tax | 5,992 | 5,647 | 16,491 | 18,551 | |
Tax expense (benefit) related to reclassification | $ (91) | $ 32 | $ (391) | $ 32 | |
[1] | Includes $(91) thousand and $32 thousand of tax expense (benefit) related to reclassification adjustment for gains (losses) included in income for the three months ended September 30, 2020 and 2019, respectively. There was $(391) thousand and $32 thousand tax expense (benefit) related to reclassification for the nine months ended September 30, 2020 and 2019, respectively. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - (UNAUDITED) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income |
Beginning 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 declared | (928) | (928) | |||
Exercise of stock options | 219 | 219 | |||
Stock-based compensation expense, net of tax impact | 474 | 474 | |||
Ending balance at Sep. 30, 2019 | 167,968 | 89,206 | 73,394 | 5,368 | |
Beginning 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 declared | (310) | (310) | |||
Exercise of stock options | 63 | 63 | |||
Stock-based compensation expense, net of tax impact | 189 | 189 | |||
Ending balance at Sep. 30, 2019 | 167,968 | 89,206 | 73,394 | 5,368 | |
Beginning balance at Dec. 31, 2019 | 170,703 | $ 0 | 89,345 | 77,766 | 3,592 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 12,040 | 12,040 | |||
Other comprehensive income (loss) | 4,451 | 4,451 | |||
Redeemed stock | (620) | (620) | |||
Preferred stock offering, net of issuance costs | 23,370 | 23,370 | |||
Common stock dividends declared | (1,160) | (1,160) | |||
Exercise of stock options | 95 | 95 | |||
Stock-based compensation expense, net of tax impact | 589 | 589 | |||
Ending balance at Sep. 30, 2020 | 209,468 | 23,370 | 89,409 | 88,646 | 8,043 |
Beginning balance at Jun. 30, 2020 | 180,259 | 0 | 89,175 | 83,824 | 7,260 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,209 | 5,209 | |||
Other comprehensive income (loss) | 783 | 783 | |||
Preferred stock offering, net of issuance costs | 23,370 | 23,370 | |||
Common stock dividends declared | (387) | (387) | |||
Stock-based compensation expense, net of tax impact | 234 | 234 | |||
Ending balance at Sep. 30, 2020 | $ 209,468 | $ 23,370 | $ 89,409 | $ 88,646 | $ 8,043 |
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, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Redeemed stock (in shares) | 20,530 | 25,256 | 88,457 |
Cash dividend declared (in dollars per share) | $ 0.04 | $ 0.15 | $ 0.12 |
Exercise of stock options (in shares) | 6,250 | 10,000 | 21,550 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Cash flows from operating activities | ||
Net income | $ 12,040 | $ 11,431 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of fixed assets | 1,259 | 986 |
Amortization of core deposit intangibles | 576 | 117 |
Stock-based compensation expense | 653 | 517 |
Provision expense for loan losses | 10,334 | 835 |
Net securities premium amortization | 1,526 | 1,277 |
Net gain on sales of securities | (1,862) | (151) |
Originations of loans held for sale | (409,312) | (196,616) |
Proceeds from sales of loans | 377,238 | 179,350 |
Net gain on sales of loans | (15,373) | (5,788) |
Accretion on acquired purchase credit impaired loans | (1,350) | (1,772) |
Gain on sale of other real estate owned and repossessed assets | (263) | 0 |
Increase in cash surrender value of life insurance | (353) | (214) |
Amortization of debt issuance costs | 115 | 43 |
Deferred income tax benefit | (3,758) | 0 |
Net increase in accrued interest receivable and other assets | (13,433) | (14,127) |
Net increase in accrued interest payable and other liabilities | 2,490 | 4,065 |
Net cash used by operating activities | (39,473) | (20,047) |
Cash flows from investing activities | ||
Net increase in loans | (393,154) | (39,007) |
Principal payments on securities available-for-sale | 21,295 | 11,730 |
Purchases of securities available-for-sale | (83,170) | (51,373) |
Purchases of other investments | (2,000) | 0 |
Additions to premises and equipment | (665) | (1,269) |
Proceeds from: | ||
Sale of securities available-for-sale | 42,640 | 46,545 |
Sale of other real estate owned and repossessed assets | 2,356 | 0 |
Net cash used in acquisition | (29,464) | 0 |
Net cash used in investing activities | (442,162) | (33,374) |
Cash flows from financing activities | ||
Net increase in deposits | 543,187 | 59,907 |
Change in short-term borrowings | (65,664) | (87,584) |
Issuances of FRB borrowings related to Paycheck Protection Program | 34,098 | 0 |
Issuances of long-term FHLB advances | 20,923 | 100,000 |
Net proceeds from issuance of preferred stock | 23,370 | 0 |
Change in secured borrowing | (52) | (53) |
Share buyback - redeemed stock | (620) | (2,108) |
Common stock dividends paid | (1,082) | (852) |
Proceeds from exercised stock options | 95 | 219 |
Payments related to tax-withholding for share based compensation awards | (64) | (43) |
Net cash provided by financing activities | 554,191 | 69,486 |
Net change in cash and cash equivalents | 72,556 | 16,065 |
Beginning cash and cash equivalents | 103,930 | 33,296 |
Ending cash and cash equivalents | 176,486 | 49,361 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 12,117 | 14,109 |
Taxes paid | 6,909 | 2,071 |
Transfer from loans held for sale to loans held for investment | 2,284 | 1,895 |
Transfer from loans to other real estate owned | 1,172 | $ 373 |
Ann Arbor Bancorp, Inc | ||
Increase in assets and liabilities in acquisitions: | ||
Assets acquired—Ann Arbor State Bank | 325,303 | |
Liabilities assumed—Ann Arbor State Bank | $ 283,526 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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,” “Level One,” “we,” “our,” or “us”) is a financial holding company headquartered in Farmington Hills, Michigan. In addition to the Company headquarters, as of September 30, 2020, its wholly owned bank subsidiary, Level One Bank (the "Bank"), had 17 offices, including 11 banking centers (our full service branches) in Metro Detroit, one banking center in Grand Rapids, one banking center in Jackson, three banking centers in Ann Arbor 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. During the third quarte r of 2020, it was determined that Hamilton Court Insurance Company will exit the pool resources relationship to which it was previously a member and will dissolve, which is expected to occur in the fourth quarter of 2020 or the first quarter of 2021. Preferred Stock Public Offering: On August 10, 2020, the Company sold 1,000,000 depositary shares, each representing 1/100th interest in a share of 7.50% Non-Cumulative Perpetual Preferred Stock, Series B, with a liquidation preference of $2,500 per share of Preferred Stock (equivalent to $25 per depositary share). The aggregate offering price for the shares sold by the Company was $25.0 million, and after deducting $1.6 million of underwriting discounts and offering expenses paid to third parties, the Company received total net proceeds of $23.4 million. Merger with Ann Arbor Bancorp, Inc.: On January 2, 2020, the Company completed its previously announced acquisition of Ann Arbor Bancorp, Inc. (“AAB”) and its wholly owned subsidiary, Ann Arbor State Bank. The transaction was completed pursuant to a merger of the Company’s wholly owned merger subsidiary (“Merger Sub”) with and into AAB, pursuant to the Agreement and Plan of Merger, dated as of August 12, 2019, among the Company, Merger Sub and AAB. The Company paid aggregate consideration of approximately $67.9 million in cash. See "Note 2 - Business Combinations" for more information. 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, 2019, included in our Annual Form 10-K, filed with the SEC on March 13, 2020. 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. These estimates and assumptions are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, the effects of the Coronavirus Disease 2019 (“COVID-19”) pandemic, its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state and local government laws, regulations and orders in connection with the pandemic. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020, which provides a variety of provisions, including, among other things, a small business lending program to originate paycheck protection loans, temporary relief for the community bank leverage ratio, and temporary relief for financial institutions related to troubled debt restructurings. Actual results may differ from those estimates. 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 Adopted 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 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. The adoption of this guidance does not result in changes to how revenue is recognized or the timing of recognition from our method prior to adoption. Revenue is recognized when obligations, under the terms of a contract with our customer, are satisfied, which generally occurs when services are performed. Revenue is measured as the amount of consideration we expect to receive in exchange for providing services. 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. Service fees on deposit accounts - The fees are generated from a depositor’s option to purchase services offered under the contract and are only considered a contract when the depositor exercises their option to purchase these services. Therefore we deem the term of our contracts with depositors to be day-to-day and do not extend beyond the services already provided. Debit card interchange fees - We collect interchange fee income when debit cards that we have issued to our customers are used in merchant transactions. Our performance obligation is satisfied and revenue is recognized at the point we initiate the payment of funds from a customer’s account to a merchant account. Merchant processing fees - We receive referral fees for referring our customers to a merchant servicer. Fees are immaterial and recognized as received. Gain (loss) on sale of other real estate owned - The Company records income or expense only upon consummation of the sale of the real estate. 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 became effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, and was to be applied prospectively with a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company adopted ASU 2016-01 and related issues on January 1, 2019 and determined that the implementation of this standard did not have a material impact to our consolidated financial statements. Impact of Recently Issued Accounting Standards: 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 is effective for the Company for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, and is to be applied under an optional transition method. The Company is planning to adopt this new guidance within the time frame noted above. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements but does not expect that the adoption will have a material impact. Additionally, the Company does not expect to significantly change operating lease agreements prior to adoption. 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. The guidance is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating 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 frame noted above. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS On January 2, 2020, the Company completed its previously announced acquisition of Ann Arbor Bancorp, Inc. and its wholly owned subsidiary, Ann Arbor State Bank. The Company paid an aggregate consideration of approximately $67.9 million in cash. AAB's results of operations were included in the Company’s results beginning January 2, 2020. Acquisition-related costs of $1.7 million are included in the Company’s income statement for the nine months ended September 30, 2020. Goodwill of $26.2 million arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. The goodwill arising from the acquisition of AAB is not deductible for tax purposes. The following table summarizes the amounts of assets acquired and liabilities assumed recognized at the acquisition date. (Dollars in thousands) Consideration paid: Cash $ 67,944 Fair value of assets acquired: Cash and cash equivalents 38,480 Investment securities 47,416 Federal Home Loan Bank stock 923 Loans held for sale 1,703 Loans held for investment 222,356 Premises and equipment 2,404 Core deposit intangibles 3,663 Other assets 8,358 Total assets acquired 325,303 Fair value of liabilities assumed: Deposits 264,820 Federal Home Loan Bank advances 15,279 Other liabilities 3,427 Total liabilities assumed 283,526 Total identifiable net assets 41,777 Goodwill recognized in the acquisition $ 26,167 Loans acquired in the acquisition were initially recorded at fair value with no separate allowance for loan losses. The Company reviewed the loans at acquisition to determine which should be considered purchased credit impaired loans (i.e. loans accounted for under ASC 310-30) defining impaired loans as those that were either not accruing interest or exhibited credit risk factors consistent with nonaccrual loans at the acquisition date. Fair values for purchased loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of the loan and whether or not the loan was amortizing, and a discount rate reflecting the Company's assessment of risk inherent in the cash flow estimates. The Company accounts for purchased credit impaired loans in accordance with the provisions of ASC 310-30. The cash flows expected to be collected on purchased loans are estimated based upon the expected remaining life of the underlying loans, which includes the effects of estimated prepayments. Purchased loans are considered credit impaired if there is evidence of credit deterioration at the date of purchase and if it is probable that not all contractually required payments will be collected. Interest income, through accretion of the difference between the carrying value of the loans and the expected cash flows is recognized on the acquired loans accounted for under ASC 310-30. Purchased loans outside the scope of ASC 310-30 are accounted for under ASC 310-20. Premiums and discounts created when the loans were recorded at their fair values at acquisition are amortized over the remaining terms of the loans as an adjustment to the related loan's yield. (Dollars in thousands) Accounted for under ASC 310-30: Contractual cash flows $ 1,018 Contractual cash flows not expected to be collected (nonaccretable difference) 82 Expected cash flows 936 Interest component of expected cash flows (accretable yield) 35 Fair value at acquisition 901 Accounted for under ASC 310-20: Unpaid principal and interest balance 221,061 Fair value premium 394 Fair value at acquisition 221,455 Total fair value at acquisition $ 222,356 The pro forma table below presents information as if the acquisition had occurred on January 1, 2019. The pro forma information includes adjustments to give the effects to any changes in interest income due to the accretion (amortization) of the discount (premium) associated with the fair value adjustments to acquired loans, any changes in interest expense due to estimated premium amortization/discount accretion associated with the fair value adjustments to acquired time deposits and borrowings and other debt, amortization of core deposit intangibles that would have resulted had the deposits been acquired as of January 1, 2019, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date . Due diligence, professional fees, and other expenses related to the merger were incurred by the Company and AAB during the three and nine months ended September 30, 2020, but the pro forma condensed combined statement of income is not adjusted to exclude these costs. Three months ended September 30, Nine months ended September 30, (Dollars in thousands, except per share data) 2020 2019 2020 2019 Net interest income $ 16,593 $ 16,036 $ 47,709 $ 46,217 Noninterest income 9,125 4,486 21,604 11,228 Noninterest expense 15,143 13,742 44,822 38,879 Net income 5,211 4,865 12,062 13,188 Net income per diluted share 0.67 0.62 1.55 1.68 |
Securities
Securities | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and December 31, 2019 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss). (Dollars in thousands) Amortized Gross Gross Fair September 30, 2020 U.S. government sponsored entities & agencies $ 27,092 $ 126 $ (19) $ 27,199 State and political subdivision 109,498 8,140 (88) 117,550 Mortgage-backed securities: residential 19,237 255 — 19,492 Mortgage-backed securities: commercial 8,025 630 — 8,655 Collateralized mortgage obligations: residential 14,177 169 (13) 14,333 Collateralized mortgage obligations: commercial 31,659 1,344 — 33,003 U.S. Treasury 1,000 3 — 1,003 SBA 18,869 63 (124) 18,808 Asset backed securities 10,298 — (344) 9,954 Corporate bonds 3,491 39 — 3,530 Total available-for-sale $ 243,346 $ 10,769 $ (588) $ 253,527 December 31, 2019 State and political subdivision $ 89,304 $ 4,463 $ (20) $ 93,747 Mortgage-backed securities: residential 10,609 82 (126) 10,565 Mortgage-backed securities: commercial 8,567 224 (12) 8,779 Collateralized mortgage obligations: residential 8,541 39 (51) 8,529 Collateralized mortgage obligations: commercial 22,891 300 (10) 23,181 U.S. Treasury 1,976 23 — 1,999 SBA 22,051 87 (154) 21,984 Asset backed securities 10,390 — (306) 10,084 Corporate bonds 2,030 20 (13) 2,037 Total available-for-sale $ 176,359 $ 5,238 $ (692) $ 180,905 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) 2020 2019 2020 2019 Proceeds $ 5,051 $ 11,080 $ 42,640 $ 46,545 Gross gains 434 202 1,871 543 Gross losses — (51) (9) (392) 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, 2020 (Dollars in thousands) Amortized Fair Within one year $ 11,141 $ 11,228 One to five years 27,530 28,494 Five to ten years 70,259 73,165 Beyond ten years 134,416 140,640 Total $ 243,346 $ 253,527 Securities pledged at September 30, 2020 and December 31, 2019 had a carrying amount of $97.2 million and $27.3 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, 2020, the Bank held 66 tax-exempt state and local municipal securities totaling $48.9 million backed by the Michigan School Bond Loan Fund. Other than the aforementioned investments, at September 30, 2020 and December 31, 2019, 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, 2020 and December 31, 2019 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 Unrealized Fair Unrealized Fair Unrealized September 30, 2020 Available-for-sale U.S. government sponsored entities & agencies $ 14,981 $ (19) $ — $ — $ 14,981 $ (19) State and political subdivision 1,858 (88) — — 1,858 (88) Collateralized mortgage obligations: residential — — 1,136 (13) 1,136 (13) SBA — — 13,190 (124) 13,190 (124) Asset backed securities — — 9,954 (344) 9,954 (344) Total available-for-sale $ 16,839 $ (107) $ 24,280 $ (481) $ 41,119 $ (588) December 31, 2019 Available-for-sale State and political subdivision $ 5,109 $ (20) $ 305 $ — $ 5,414 $ (20) Mortgage-backed securities: residential 4,022 (39) 3,982 (87) 8,004 (126) Mortgage-backed securities: commercial 1,769 (11) 430 (1) 2,199 (12) Collateralized mortgage obligations: residential 770 (1) 4,631 (50) 5,401 (51) Collateralized mortgage obligations: commercial — — 1,716 (10) 1,716 (10) SBA 3,961 (13) 12,405 (141) 16,366 (154) Asset backed securities 8,220 (232) 1,864 (74) 10,084 (306) Corporate bonds 489 (13) — — 489 (13) Total available-for-sale $ 24,340 $ (329) $ 25,333 $ (363) $ 49,673 $ (692) As of September 30, 2020, the Company's investment portfolio consisted of 306 securities, 29 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, 2020. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Loans | LOANS The following table presents the recorded investment in loans at September 30, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2020 Commercial real estate $ 593,156 $ 137,033 $ 730,189 Commercial and industrial 748,913 59,010 807,923 Residential real estate 261,153 42,935 304,088 Consumer 671 1,017 1,688 Total $ 1,603,893 $ 239,995 $ 1,843,888 December 31, 2019 Commercial real estate $ 551,565 $ 53,081 $ 604,646 Commercial and industrial 403,922 6,306 410,228 Residential real estate 201,787 10,052 211,839 Consumer 864 32 896 Total $ 1,158,138 $ 69,471 $ 1,227,609 At September 30, 2020 and December 31, 2019, the Company had residential loans held for sale, which were originated with the intent to sell, totaling $60.6 million and $13.9 million, respectively. During the three months ended September 30, 2020 and 2019, the Company sold residential real estate loans with proceeds totaling $157.2 million and $86.4 million, respectively, and $377.2 million and $179.4 million, during the nine months ended September 30, 2020 and 2019, respectively. Nonperforming Assets Nonperforming assets consist of loans for which the accrual of interest has been discontinued and other real estate owned obtained through foreclosure and other repossessed assets. Loans outside of those accounted for under ASC 310-30 are classified as nonaccrual when, in the opinion of management, it is probable that the Company will be unable to collect all the contractual interest and principal payments as scheduled in the loan agreement. The accrual of interest is discontinued when a loan is placed in nonaccrual status and any payments received reduce the carrying value of the loan. A loan may be placed back on accrual status if all contractual payments have been received and collection of future principal and interest payments is no longer doubtful. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming because these loans are recorded at their net realizable value based on the principal and interest the Company expects to collect on these loans. There were $6 thousand and $1.2 million in commitments to lend additional funds to borrowers whose loans were classified as nonaccrual as of September 30, 2020 and December 31, 2019, respectively. Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2020 December 31, 2019 Nonaccrual loans: Commercial real estate $ 7,022 $ 4,832 Commercial and industrial 8,078 11,112 Residential real estate 4,151 2,569 Consumer 15 16 Total nonaccrual loans 19,266 18,529 Other real estate owned — 921 Total nonperforming assets $ 19,266 $ 19,450 Loans 90 days or more past due and still accruing $ 552 $ 157 At September 30, 2020 and December 31, 2019, the loans that were 90 days or more past due and still accruing comprised of either PCI loans or loans that were well-secured and in the process of collection. 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, 2020 Commercial real estate $ 726,018 $ 3,934 $ 237 $ — $ 730,189 Commercial and industrial 802,363 3,598 1,962 — 807,923 Residential real estate 294,478 4,067 2,133 3,410 304,088 Consumer 1,684 2 2 — 1,688 Total $ 1,824,543 $ 11,601 $ 4,334 $ 3,410 $ 1,843,888 December 31, 2019 Commercial real estate $ 597,892 $ 3,630 $ 1,286 $ 1,838 $ 604,646 Commercial and industrial 407,692 377 1,275 884 410,228 Residential real estate 206,002 3,286 1,429 1,122 211,839 Consumer 892 4 — — 896 Total $ 1,212,478 $ 7,297 $ 3,990 $ 3,844 $ 1,227,609 Impaired Loans: Information as to impaired loans, excluding purchased credit impaired loans, was as follows: (Dollars in thousands) September 30, 2020 December 31, 2019 Nonaccrual loans $ 19,266 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 550 547 Residential real estate 599 359 Total performing troubled debt restructurings 1,149 906 Total impaired loans, excluding purchase credit impaired loans $ 20,415 $ 19,435 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. The CARES Act was signed into law on March 27, 2020, which provides a variety of provisions, including, among other things, a small business lending program to originate paycheck protection loans, temporary relief for the community bank leverage ratio, and temporary relief for financial institutions related to troubled debt restructurings. As a result of the COVID-19 pandemic, the Company is currently working with borrowers to provide short-term payment modifications. Any short-term modifications made on a good-faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief are not considered TDRs based on interagency guidance. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program was implemented. The Company’s modification programs are designed to provide temporary relief for current borrowers affected by the COVID-19 pandemic. The Company has presumed that borrowers that are current on payments are not experiencing financial difficulties at the time of the modification for purposes of determining TDR status, and thus no further TDR analysis is required for each loan modification in the program. As of September 30, 2020 and December 31, 2019, the Company had a recorded investment in troubled debt restructurings of $3.6 million and $3.9 million, respectively. The Company allocated a specific reserve of $235 thousand for those loans at September 30, 2020 and a specific reserve of $384 thousand for those loans at December 31, 2019. The Company has not committed to lend additional amounts to borrowers whose loans have been modified. As of September 30, 2020, there were $2.4 million of nonperforming TDRs and $1.2 million of performing TDRs included in impaired loans. As of December 31, 2019, there were $3.0 million of nonperforming TDRs and $906 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 three and nine months ended September 30, 2020 and nine months ended September 30, 2019, by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2019. 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 Three months ended September 30, 2020 Commercial and industrial $ — $ — $ 148 1 $ 148 $ — $ — Total $ — $ — $ 148 1 $ 148 $ — $ — Nine months ended September 30, 2020 Commercial and industrial $ — $ — $ 148 1 $ 148 $ — $ — Residential real estate — 75 — 1 75 — — Total $ — $ 75 $ 148 2 $ 223 $ — $ — Nine months ended September 30, 2019 Commercial and industrial $ — $ — $ 351 2 $ 351 $ — $ 174 Total $ — $ — $ 351 2 $ 351 $ — $ 174 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. There were no loans modified as TDRs during the twelve months ending September 30, 2020 and 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. 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 Substandard Doubtful Total September 30, 2020 Commercial real estate $ 703,241 $ 19,686 $ 6,723 $ 539 $ 730,189 Commercial and industrial 773,242 17,874 12,260 4,547 807,923 Total $ 1,476,483 $ 37,560 $ 18,983 $ 5,086 $ 1,538,112 December 31, 2019 Commercial real estate $ 591,419 $ 8,325 $ 4,042 $ 860 $ 604,646 Commercial and industrial 383,756 8,967 16,527 978 410,228 Total $ 975,175 $ 17,292 $ 20,569 $ 1,838 $ 1,014,874 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, 2020 Residential real estate $ 299,937 $ 4,151 $ 304,088 Consumer 1,673 15 1,688 Total $ 301,610 $ 4,166 $ 305,776 December 31, 2019 Residential real estate $ 209,270 $ 2,569 $ 211,839 Consumer 880 16 896 Total $ 210,150 $ 2,585 $ 212,735 Purchased Credit Impaired Loans: As part of the Company's previous five 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, 2020 Commercial real estate $ 6,304 $ 2,841 Commercial and industrial 683 281 Residential real estate 4,048 2,945 Total PCI loans $ 11,035 $ 6,067 December 31, 2019 Commercial real estate $ 6,597 $ 2,884 Commercial and industrial 556 135 Residential real estate 4,215 2,954 Total PCI loans $ 11,368 $ 5,973 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) 2020 2019 2020 2019 Accretable yield at beginning of period $ 8,374 $ 10,194 $ 9,141 $ 10,947 Additions due to acquisitions — — 35 — Accretion of income (482) (597) (1,350) (1,772) Adjustments to accretable yield — — 66 422 Accretable yield at end of period $ 7,892 $ 9,597 $ 7,892 $ 9,597 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. Commitments to extend credit are agreements to provide credit to a customer, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used and the total commitment amounts do not necessarily represent future cash flow requirements. Standby letters of credit and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, while commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. These financial standby letters of credit irrevocably obligate the Company to pay a third-party beneficiary when a customer fails to repay an outstanding loan or debt instrument. 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. We maintain an allowance to cover probable losses inherent in our financial instruments with off-balance sheet risk. At September 30, 2020, the allowance for off-balance sheet risk was $498 thousand, compared to $318 thousand at December 31, 2019, and was included in "Other liabilities" on our consolidated balance sheets. A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2020 December 31, 2019 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 5,302 $ 5,295 $ 16,276 $ 20,128 Unused lines of credit 30,496 361,749 28,723 288,086 Unused standby letters of credit and commercial letters of credit 3,705 2,028 4,895 — Commitments to make loans are generally made for periods of 90 days 15 years |
Allowance for Loan Losses
Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020, the Company had six PCI loan pools and 13 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 Recorded investment Total Contractual Related September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,022 $ — $ 7,022 $ 7,355 $ — Commercial and industrial 4,465 4,717 9,182 10,031 798 Residential real estate 2,942 266 3,208 3,459 26 Total $ 14,429 $ 4,983 $ 19,412 $ 20,845 $ 824 December 31, 2019 Individually evaluated impaired loans: Commercial real estate $ 4,832 $ — $ 4,832 $ 5,156 $ — Commercial and industrial 10,739 913 11,652 12,521 363 Residential real estate 1,197 189 1,386 1,570 22 Total $ 16,768 $ 1,102 $ 17,870 $ 19,247 $ 385 (Dollars in thousands) Average Interest Cash Basis For the three months ended September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,139 $ — $ — Commercial and industrial 8,960 12 — Residential real estate 3,265 7 — Total $ 19,364 $ 19 $ — For the nine months ended September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,433 $ — $ — Commercial and industrial 13,086 34 84 Residential real estate 3,266 26 — Total $ 23,785 $ 60 $ 84 For the three months ended September 30, 2019 Individually evaluated impaired loans: 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: 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 Activity in the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total For the three months ended September 30, 2020 Allowance for loan losses: Beginning balance $ 7,987 $ 6,496 $ 2,565 $ 15 $ 17,063 Provision (benefit) for loan losses 1,820 1,679 781 (10) 4,270 Gross chargeoffs — (10) (110) (4) (124) Recoveries 12 15 10 8 45 Net (chargeoffs) recoveries 12 5 (100) 4 (79) Ending allowance for loan losses $ 9,819 $ 8,180 $ 3,246 $ 9 $ 21,254 For the nine months ended September 30, 2020 Allowance for loan losses: Beginning balance $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 Provision for loan losses 4,034 4,347 1,921 32 10,334 Gross chargeoffs — (1,729) (110) (47) (1,886) Recoveries 12 47 51 22 132 Net (chargeoffs) recoveries 12 (1,682) (59) (25) (1,754) Ending allowance for loan losses $ 9,819 $ 8,180 $ 3,246 $ 9 $ 21,254 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 Allocation of the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total September 30, 2020 Allowance for loan losses: Individually evaluated for impairment $ — $ 798 $ 26 $ — $ 824 Collectively evaluated for impairment 9,109 7,352 3,023 9 19,493 Acquired with deteriorated credit quality 710 30 197 — 937 Ending allowance for loan losses $ 9,819 $ 8,180 $ 3,246 $ 9 $ 21,254 Balance of loans: Individually evaluated for impairment $ 7,022 $ 9,182 $ 3,208 $ — $ 19,412 Collectively evaluated for impairment 720,326 798,460 297,935 1,688 1,818,409 Acquired with deteriorated credit quality 2,841 281 2,945 — 6,067 Total loans $ 730,189 $ 807,923 $ 304,088 $ 1,688 $ 1,843,888 December 31, 2019 Allowance for loan losses: Individually evaluated for impairment $ — $ 363 $ 22 $ — $ 385 Collectively evaluated for impairment 5,062 5,124 1,339 2 11,527 Acquired with deteriorated credit quality 711 28 23 — 762 Ending allowance for loan losses $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 Balance of loans: Individually evaluated for impairment $ 4,832 $ 11,652 $ 1,386 $ — $ 17,870 Collectively evaluated for impairment 596,930 398,441 207,499 896 1,203,766 Acquired with deteriorated credit quality 2,884 135 2,954 — 5,973 Total loans $ 604,646 $ 410,228 $ 211,839 $ 896 $ 1,227,609 |
Premises and Equipment
Premises and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | PREMISES AND EQUIPMENT Premises and equipment were as follows at September 30, 2020 and December 31, 2019: (Dollars in thousands) September 30, 2020 December 31, 2019 Land $ 3,514 $ 2,254 Buildings 10,656 9,825 Leasehold improvements 2,993 2,714 Furniture, fixtures and equipment 7,231 6,539 Total premises and equipment $ 24,394 $ 21,332 Less: Accumulated depreciation 8,748 7,494 Net premises and equipment $ 15,646 $ 13,838 Depreciation expense was $426 thousand and $326 thousand for the three months ended September 30, 2020 and 2019, and $1.3 million and $986 thousand for the nine months ended September 30, 2020 and 2019, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill: The Company has acquired three banks, Lotus Bank in March 2015, Bank of Michigan in March 2016, and Ann Arbor State Bank in January 2020, which resulted in the recognition of goodwill of $4.6 million, $4.8 million, and $26.2 million, respectively. Total goodwill was $35.6 million at September 30, 2020 and $9.4 million at December 31, 2019. Goodwill is not amortized but is evaluated annually for impairment and on an interim basis if events or changes in circumstances indicate that goodwill might be impaired. The goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge would be recognized for any amount by which the carrying amount exceeds the reporting unit's fair value. The Company's most recent annual goodwill impairment review as of October 1, 2019 did not indicate that an impairment existed. As a result of the unprecedented decline in economic conditions triggered by the COVID-19 pandemic, the market valuations, including our stock price, saw a significant decline in March 2020, which then continued into second quarter of 2020. These events indicated that goodwill may be impaired and resulted in management performing a qualitative goodwill impairment assessment in the second quarter of 2020. As a result of the analysis, we concluded that it was more-likely-than-not that the fair value of the reporting unit could be greater than its carrying amount. Since the price of our stock did not fully recover during the third quarter of 2020, the Company concluded to engage a reputable, third-party valuation firm to perform a quantitative analysis of goodwill as of August 31, 2020 ("the valuation date"). In deriving at the fair value of the reporting unit (the Bank), the third-party firm assessed general economic conditions and outlook; industry and market considerations and outlook; the impact of recent events to financial performance; the market price of our common stock and other relevant events. In addition, the valuation relied on financial projections through 2023 and growth rates prepared by management. Based on the valuation prepared, it was determined that the Company's estimated fair value of the reporting unit at August 31, 2020 was greater than its book value and impairment of goodwill was not required. Furthermore, management noted that despite the market capitalization declining from December 2019 to September 2020 as a result of the COVID-19 pandemic, the Bank’s financial performance has remained positive. This is evidenced by the strong financial indicators for the Bank, solid credit quality ratios, as well as the strong capital position of the Bank. In addition, third quarter 2020 revenue reflected significant and continuing growth in our residential mortgage banking business, as well as net SBA fees related to Paycheck Protection Program ("PPP") loans funded during second and third quarters of 2020. Management concurred with the conclusion derived from the quantitative goodwill analysis as of August 31, 2020 and determined that there were no material changes between the valuation date and September 30, 2020. As such, management concluded that it is more likely than not that there was no goodwill impairment as of September 30, 2020. Intangible Assets : The Company 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, 2020 December 31, 2019 Gross carrying amount $ 5,708 $ 2,045 Accumulated amortization (2,320) (1,744) Net Intangible $ 3,388 $ 301 Amortization expense for the CDIs was $191 thousand and $29 thousand for the three months ended September 30, 2020 and 2019, and $576 thousand and $117 thousand for the nine months ended September 30, 2020 and 2019, respectively. Mortgage Servicing Rights ("MSRs") : The Company has recorded MSRs for loans that are sold with servicing retained. MSRs are carried at the lower of the initial capitalized amount, net of accumulated amortization or estimated fair value. MSRs are amortized in proportion to and over the period of estimated net servicing income. The Company serviced residential mortgage loans for others with unpaid principal balances of approximately $211.0 million and $9.0 million as of September 30, 2020 and December 31, 2019, respectively. Changes in our mortgage servicing rights were as follows for the three and nine months ended September 30, 2020 . The Com pany had $1 thousand in mortgage servicing rights as of September 30, 2019: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2020 2020 Mortgage servicing rights: Balance, beginning of period $ 1,213 $ 76 Originated servicing 1,073 2,250 Amortization (93) (133) Balance, end of period 2,193 2,193 Fair value: At beginning of period $ 1,256 $ 87 At end of period 2,567 2,567 |
Borrowings and Subordinated Deb
Borrowings and Subordinated Debt | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 December 31, 2019 (Dollars in thousands) Amount Weighted (1) Amount Weighted (1) Short-term borrowings: FHLB Advances $ — — % $ 60,000 1.61 % Securities sold under agreements to repurchase 187 0.30 851 0.30 Federal funds purchased — — 5,000 1.90 Total short-term borrowings 187 0.30 65,851 1.62 Long-term debt: Secured borrowing due in 2022 1,322 1.00 1,374 1.00 FHLB advances due in 2022 to 2029 (2) 181,202 1.09 145,000 1.06 FRB borrowings (3) 34,098 0.35 — — Subordinated notes due in 2025 and 2029 (4) 44,555 5.29 44,440 5.29 Total long-term debt 261,177 1.71 190,814 2.04 Total short-term and long-term borrowings $ 261,364 1.71 % $ 256,665 1.93 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) At September 30, 2020, the long-term FHLB advances consisted of 0.42% - 2.93% fixed rate notes and can be called through 2024 without penalty by the issuer. The September 30, 2020 balance includes FHLB advances of $181.0 million and purchase accounting premiums of $202 thousand. (3) The September 30, 2020 balance of FRB borrowings consisted of 0.35% fixed rate notes utilized to fund the PPP loans. The FRB borrowings have a maturity date equal to the maturity date of the respective PPP loans pledged to secure the borrowings, which is two years after the origination date of the PPP loans. (4) The September 30, 2020 balance includes subordinated notes of $45.0 million and debt issuance costs of $445 thousand. The December 31, 2019 balance includes subordinated notes of $45.0 million and debt issuance costs of $560 thousand. At September 30, 2020, the Company had $34.1 million of debt outstanding with the Federal Reserve Bank. These borrowings reflected the Company's efforts to help facilitate the funding of the PPP loans that were approved by the SBA during the quarter ended September 30, 2020. The FRB borrowings bear a 0.35% fixed interest rate and mature two years after the origination date of the respective PPP loans that have been pledged to secure them. 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 $181.0 million of long-term FHLB advances as of September 30, 2020 were secured by a blanket lien on $510.6 million of real estate-related loans. Based on this collateral and the Company's holdings of FHLB stock, the Company was eligible to borrow up to an additional $211.1 million from the FHLB at September 30, 2020. In addition, the Bank can borrow up to $122.5 million through the unsecured lines of credit it has established with other correspondent banks, as well as $5.3 million through a secured line with the Federal Reserve Bank. The Bank had no outstanding federal funds purchased as of September 30, 2020 and $5.0 million outstanding federal funds purchased as of December 31, 2019. At September 30, 2020, the Company had $187 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 $1.9 million at September 30, 2020. The Company had a secured borrowing of $1.3 million as of September 30, 2020 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. At September 30, 2020, the Company had $45.0 million outstanding subordinated notes and $445 thousand of debt issuance costs. The debt issuance costs 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, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company and its subsidiaries are subject to U.S. federal income tax. In the ordinary course of business, we are routinely subject to audit by Internal Revenue Service. Currently, the Company is subject to examination by taxing authorities for the 2016 tax return year and forward. A reconciliation of expected income tax expense using the federal statutory rate of 21% as of September 30, 2020 and 2019 and actual income tax expense is as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2020 2019 2020 2019 Income tax expense based on federal corporate tax rate $ 1,328 $ 1,118 $ 2,970 $ 2,911 Changes resulting from: Tax-exempt income (154) (142) (469) (398) Net operating loss carryback due to CARES Act — — (290) — Disqualified dispositions from stock options — — (175) — Other, net (57) (62) 73 (85) Income tax expense $ 1,117 $ 914 $ 2,109 $ 2,428 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
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 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 such awards are no longer outstanding. The Company has reserved 250,000 shares of common stock for issuance under the 2018 Plan. During the nine months ended September 30, 2020 and 2019, the Company issued 38,170 and 35,633 restricted stock awards, respectively, under the 2018 Plan. There were 165,597 shares available for issuance as of September 30, 2020. Stock Options As of September 30, 2020, 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 years 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. There were no stock options granted during the nine months ended September 30, 2020 or September 30, 2019. The summary of our stock option activity for the nine months ended September 30, 2020 is as follows: Shares Weighted Average Weighted Average Remaining Contractual Options outstanding, beginning of period 355,218 $ 16.63 5.0 Exercised (10,000) 9.57 Options outstanding, end of period 345,218 16.83 4.4 Options exercisable 335,216 $ 16.59 4.3 The aggregate intrinsic value was $516 thousand for both options outstanding and exercisable as of September 30, 2020. As of September 30, 2020, there was $17 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 0.38 years. Share-based compensation expense charged against income was $11 thousand and $12 thousand for the three months ended September 30, 2020 and 2019, respectively, and $33 thousand and $43 thousand for the nine months ended September 30, 2020 and 2019, respectively. Restricted Stock Awards A summary of changes in the Company's nonvested shares for the nine months ended September 30, 2020 is as follows: Nonvested Shares Shares Weighted Average Nonvested at January 1, 2020 80,370 $ 24.28 Granted 38,170 24.90 Vested (19,850) 23.10 Forfeited (1,400) 24.46 Nonvested at September 30, 2020 97,290 $ 24.76 As of September 30, 2020, there was $1.2 million 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 1.88 years. The total fair value of shares vested during the nine months ended September 30, 2020 was $459 thousand. |
Off- Balance Sheet Activities
Off- Balance Sheet Activities | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Off- Balance Sheet Activities | LOANS The following table presents the recorded investment in loans at September 30, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2020 Commercial real estate $ 593,156 $ 137,033 $ 730,189 Commercial and industrial 748,913 59,010 807,923 Residential real estate 261,153 42,935 304,088 Consumer 671 1,017 1,688 Total $ 1,603,893 $ 239,995 $ 1,843,888 December 31, 2019 Commercial real estate $ 551,565 $ 53,081 $ 604,646 Commercial and industrial 403,922 6,306 410,228 Residential real estate 201,787 10,052 211,839 Consumer 864 32 896 Total $ 1,158,138 $ 69,471 $ 1,227,609 At September 30, 2020 and December 31, 2019, the Company had residential loans held for sale, which were originated with the intent to sell, totaling $60.6 million and $13.9 million, respectively. During the three months ended September 30, 2020 and 2019, the Company sold residential real estate loans with proceeds totaling $157.2 million and $86.4 million, respectively, and $377.2 million and $179.4 million, during the nine months ended September 30, 2020 and 2019, respectively. Nonperforming Assets Nonperforming assets consist of loans for which the accrual of interest has been discontinued and other real estate owned obtained through foreclosure and other repossessed assets. Loans outside of those accounted for under ASC 310-30 are classified as nonaccrual when, in the opinion of management, it is probable that the Company will be unable to collect all the contractual interest and principal payments as scheduled in the loan agreement. The accrual of interest is discontinued when a loan is placed in nonaccrual status and any payments received reduce the carrying value of the loan. A loan may be placed back on accrual status if all contractual payments have been received and collection of future principal and interest payments is no longer doubtful. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming because these loans are recorded at their net realizable value based on the principal and interest the Company expects to collect on these loans. There were $6 thousand and $1.2 million in commitments to lend additional funds to borrowers whose loans were classified as nonaccrual as of September 30, 2020 and December 31, 2019, respectively. Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2020 December 31, 2019 Nonaccrual loans: Commercial real estate $ 7,022 $ 4,832 Commercial and industrial 8,078 11,112 Residential real estate 4,151 2,569 Consumer 15 16 Total nonaccrual loans 19,266 18,529 Other real estate owned — 921 Total nonperforming assets $ 19,266 $ 19,450 Loans 90 days or more past due and still accruing $ 552 $ 157 At September 30, 2020 and December 31, 2019, the loans that were 90 days or more past due and still accruing comprised of either PCI loans or loans that were well-secured and in the process of collection. 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, 2020 Commercial real estate $ 726,018 $ 3,934 $ 237 $ — $ 730,189 Commercial and industrial 802,363 3,598 1,962 — 807,923 Residential real estate 294,478 4,067 2,133 3,410 304,088 Consumer 1,684 2 2 — 1,688 Total $ 1,824,543 $ 11,601 $ 4,334 $ 3,410 $ 1,843,888 December 31, 2019 Commercial real estate $ 597,892 $ 3,630 $ 1,286 $ 1,838 $ 604,646 Commercial and industrial 407,692 377 1,275 884 410,228 Residential real estate 206,002 3,286 1,429 1,122 211,839 Consumer 892 4 — — 896 Total $ 1,212,478 $ 7,297 $ 3,990 $ 3,844 $ 1,227,609 Impaired Loans: Information as to impaired loans, excluding purchased credit impaired loans, was as follows: (Dollars in thousands) September 30, 2020 December 31, 2019 Nonaccrual loans $ 19,266 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 550 547 Residential real estate 599 359 Total performing troubled debt restructurings 1,149 906 Total impaired loans, excluding purchase credit impaired loans $ 20,415 $ 19,435 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. The CARES Act was signed into law on March 27, 2020, which provides a variety of provisions, including, among other things, a small business lending program to originate paycheck protection loans, temporary relief for the community bank leverage ratio, and temporary relief for financial institutions related to troubled debt restructurings. As a result of the COVID-19 pandemic, the Company is currently working with borrowers to provide short-term payment modifications. Any short-term modifications made on a good-faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief are not considered TDRs based on interagency guidance. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program was implemented. The Company’s modification programs are designed to provide temporary relief for current borrowers affected by the COVID-19 pandemic. The Company has presumed that borrowers that are current on payments are not experiencing financial difficulties at the time of the modification for purposes of determining TDR status, and thus no further TDR analysis is required for each loan modification in the program. As of September 30, 2020 and December 31, 2019, the Company had a recorded investment in troubled debt restructurings of $3.6 million and $3.9 million, respectively. The Company allocated a specific reserve of $235 thousand for those loans at September 30, 2020 and a specific reserve of $384 thousand for those loans at December 31, 2019. The Company has not committed to lend additional amounts to borrowers whose loans have been modified. As of September 30, 2020, there were $2.4 million of nonperforming TDRs and $1.2 million of performing TDRs included in impaired loans. As of December 31, 2019, there were $3.0 million of nonperforming TDRs and $906 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 three and nine months ended September 30, 2020 and nine months ended September 30, 2019, by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2019. 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 Three months ended September 30, 2020 Commercial and industrial $ — $ — $ 148 1 $ 148 $ — $ — Total $ — $ — $ 148 1 $ 148 $ — $ — Nine months ended September 30, 2020 Commercial and industrial $ — $ — $ 148 1 $ 148 $ — $ — Residential real estate — 75 — 1 75 — — Total $ — $ 75 $ 148 2 $ 223 $ — $ — Nine months ended September 30, 2019 Commercial and industrial $ — $ — $ 351 2 $ 351 $ — $ 174 Total $ — $ — $ 351 2 $ 351 $ — $ 174 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. There were no loans modified as TDRs during the twelve months ending September 30, 2020 and 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. 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 Substandard Doubtful Total September 30, 2020 Commercial real estate $ 703,241 $ 19,686 $ 6,723 $ 539 $ 730,189 Commercial and industrial 773,242 17,874 12,260 4,547 807,923 Total $ 1,476,483 $ 37,560 $ 18,983 $ 5,086 $ 1,538,112 December 31, 2019 Commercial real estate $ 591,419 $ 8,325 $ 4,042 $ 860 $ 604,646 Commercial and industrial 383,756 8,967 16,527 978 410,228 Total $ 975,175 $ 17,292 $ 20,569 $ 1,838 $ 1,014,874 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, 2020 Residential real estate $ 299,937 $ 4,151 $ 304,088 Consumer 1,673 15 1,688 Total $ 301,610 $ 4,166 $ 305,776 December 31, 2019 Residential real estate $ 209,270 $ 2,569 $ 211,839 Consumer 880 16 896 Total $ 210,150 $ 2,585 $ 212,735 Purchased Credit Impaired Loans: As part of the Company's previous five 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, 2020 Commercial real estate $ 6,304 $ 2,841 Commercial and industrial 683 281 Residential real estate 4,048 2,945 Total PCI loans $ 11,035 $ 6,067 December 31, 2019 Commercial real estate $ 6,597 $ 2,884 Commercial and industrial 556 135 Residential real estate 4,215 2,954 Total PCI loans $ 11,368 $ 5,973 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) 2020 2019 2020 2019 Accretable yield at beginning of period $ 8,374 $ 10,194 $ 9,141 $ 10,947 Additions due to acquisitions — — 35 — Accretion of income (482) (597) (1,350) (1,772) Adjustments to accretable yield — — 66 422 Accretable yield at end of period $ 7,892 $ 9,597 $ 7,892 $ 9,597 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. Commitments to extend credit are agreements to provide credit to a customer, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used and the total commitment amounts do not necessarily represent future cash flow requirements. Standby letters of credit and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, while commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. These financial standby letters of credit irrevocably obligate the Company to pay a third-party beneficiary when a customer fails to repay an outstanding loan or debt instrument. 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. We maintain an allowance to cover probable losses inherent in our financial instruments with off-balance sheet risk. At September 30, 2020, the allowance for off-balance sheet risk was $498 thousand, compared to $318 thousand at December 31, 2019, and was included in "Other liabilities" on our consolidated balance sheets. A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2020 December 31, 2019 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 5,302 $ 5,295 $ 16,276 $ 20,128 Unused lines of credit 30,496 361,749 28,723 288,086 Unused standby letters of credit and commercial letters of credit 3,705 2,028 4,895 — Commitments to make loans are generally made for periods of 90 days 15 years |
Regulatory Capital Matters
Regulatory Capital Matters | 9 Months Ended |
Sep. 30, 2020 | |
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 that as of September 30, 2020, 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 greater than 2.5% above the minimum risk-weighted assets ratios, which is the fully phased-in amount of the capital conservation buffer. 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, 2020 and December 31, 2019, the Bank's capital ratios were in excess of the requirement to be "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 For Capital Adequacy Well Capitalized Under Prompt Corrective (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2020 Common equity tier 1 to risk-weighted assets: Consolidated $ 139,067 8.83 % $ 70,875 4.50 % $ 110,250 7.00 % Bank 176,593 11.23 % 70,760 4.50 % 110,070 7.00 % $ 102,208 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 162,437 10.31 % $ 94,500 6.00 % $ 133,875 8.50 % Bank 176,593 11.23 % 94,346 6.00 % 133,657 8.50 % $ 125,795 8.00 % Total capital to risk-weighted assets: Consolidated $ 226,679 14.39 % $ 126,000 8.00 % $ 165,375 10.50 % Bank 196,274 12.48 % 125,795 8.00 % 165,106 10.50 % $ 157,244 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 162,437 7.17 % $ 90,664 4.00 % $ 90,664 4.00 % Bank 176,593 7.83 % 90,220 4.00 % 90,220 4.00 % $ 112,776 5.00 % December 31, 2019 Common equity tier 1 to risk-weighted assets: Consolidated $ 157,659 11.72 % $ 60,533 4.50 % $ 94,163 7.00 % Bank 165,199 12.27 % 60,568 4.50 % 94,217 7.00 % $ 87,487 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 157,659 11.72 % $ 80,711 6.00 % $ 114,341 8.50 % Bank 165,199 12.27 % 80,757 6.00 % 114,406 8.50 % $ 107,676 8.00 % Total capital to risk-weighted assets: Consolidated $ 215,091 15.99 % $ 107,615 8.00 % $ 141,244 10.50 % Bank 178,191 13.24 % 107,676 8.00 % 141,325 10.50 % $ 134,595 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 157,659 10.41 % $ 60,580 4.00 % $ 60,580 4.00 % Bank 165,199 10.96 % 60,276 4.00 % 60,276 4.00 % $ 75,345 5.00 % _______________________________________________________________________________ (1) Reflects the capital conservation buffer of 2.5%. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2020 | |
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). For securities where pricing on similar securities is not available, a third party is engaged to calculate the fair value using the Municipal Market Data curve (Level 3). 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 from loans held for sale. Due to the adjustments made, the Company classifies the loans transferred from loans held for sale as recurring Level 3. Mortgage Servicing Rights ("MSRs") : In accordance with GAAP, the Company must record impairment charges on mortgage servicing rights on a non-recurring basis when the carrying value exceeds the estimated fair value. The fair value of our MSRs is obtained from a third-party valuation company that uses a discounted cash flow valuation model which calculates the present value of estimated future net servicing cash flows, taking into consideration expected mortgage loan prepayment rates, discount rates, costs to service, contractual servicing fee income, ancillary income, late fees, replacement reserves and other economic factors that are determined based on current market conditions. The reliance on Level 3 inputs to derive at the fair value of MSRs results in a Level 3 classification. 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, 2020 Securities available for sale: U.S. government sponsored entities and agencies $ 27,199 $ — $ 27,199 $ — State and political subdivision 117,550 — 115,838 1,712 Mortgage-backed securities: residential 19,492 — 19,492 — Mortgage-backed securities: commercial 8,655 — 8,655 — Collateralized mortgage obligations: residential 14,333 — 14,333 — Collateralized mortgage obligations: commercial 33,003 — 33,003 — U.S. Treasury 1,003 — 1,003 — SBA 18,808 — 18,808 — Asset backed securities 9,954 — 9,954 — Corporate bonds 3,530 — 3,530 — Total securities available for sale 253,527 — 251,815 1,712 Loans held for sale 60,635 — 60,635 — Loans measured at fair value: Residential real estate 5,080 — — 5,080 Derivative assets: Customer-initiated derivatives 14,422 — 14,422 — Forward contracts related to mortgage loans to be delivered for sale 117 — 117 — Interest rate lock commitments 2,068 — 2,068 — Total assets at fair value $ 335,849 $ — $ 329,057 $ 6,792 Derivative liabilities: Customer-initiated derivatives 14,422 — 14,422 — Forward contracts related to mortgage loans to be delivered for sale 441 — 441 — Interest rate lock commitments 4 — 4 — Total liabilities at fair value $ 14,867 $ — $ 14,867 $ — (Dollars in thousands) Total Quoted Prices Significant Other Significant December 31, 2019 Securities available for sale: State and political subdivision $ 93,747 $ — $ 93,747 $ — Mortgage-backed securities: residential 10,565 — 10,565 — Mortgage-backed securities: commercial 8,779 — 8,779 — Collateralized mortgage obligations: residential 8,529 — 8,529 — Collateralized mortgage obligations: commercial 23,181 — 23,181 — U.S. Treasury 1,999 — 1,999 — SBA 21,984 — 21,984 — Asset backed securities 10,084 — 10,084 — Corporate bonds 2,037 — 2,037 — Total securities available for sale $ 180,905 $ — $ 180,905 $ — Loans held for sale 13,889 — 13,889 — Loans measured at fair value: Residential real estate 4,063 — — 4,063 Derivative assets: Customer-initiated derivatives 4,684 — 4,684 — Forward contracts related to mortgage loans to be delivered for sale 34 — 34 — Interest rate lock commitments 256 — 256 — Total assets at fair value $ 203,831 $ — $ 199,768 $ 4,063 Derivative liabilities: Customer-initiated derivatives 4,684 — 4,684 — Forward contracts related to mortgage loans to be delivered for sale 33 — 33 — Total liabilities at fair value $ 4,717 $ — $ 4,717 $ — There were no transfers between levels within the fair value hierarchy, within a specific category, during the nine months ended September 30, 2020 or during the year ended December 31, 2019. The level 3 investment securities disclosed as of September 30, 2020 were acquired from Ann Arbor State Bank during the first quarter of 2020. 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) 2020 2019 2020 2019 Loans held for investment Beginning balance $ 4,056 $ 5,624 $ 4,063 $ 4,571 Transfers from loans held for sale 1,468 466 2,284 1,895 Gains (losses): Recorded in "Mortgage banking activities" 65 (9) 62 151 Repayments (509) (1,191) (1,329) (1,727) Ending balance $ 5,080 $ 4,890 $ 5,080 $ 4,890 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, 2020 or December 31, 2019. As of September 30, 2020 and December 31, 2019, 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, 2020 December 31, 2019 Aggregate fair value $ 60,635 $ 13,889 Contractual balance 59,055 13,510 Unrealized gain 1,580 379 The total amount of gains as a result of changes in fair value of loans held for sale included in "Mortgage banking activities" for three and nine months ended September 30, 2020 and 2019 were as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2020 2019 2020 2019 Change in fair value $ 556 $ (98) $ 1,201 $ 352 Assets measured at fair value on a non-recurring basis are summarized below: (Dollars in thousands) Total Significant Unobservable Inputs September 30, 2020 Impaired loans: Residential real estate $ 1,305 $ 1,305 Commercial and industrial 761 761 Mortgage servicing rights 2,567 2,567 Total $ 4,633 $ 4,633 December 31, 2019 Impaired loans: Commercial real estate $ 265 $ 265 Commercial and industrial 261 261 Mortgage servicing rights 87 87 Other real estate owned 921 921 Total $ 1,534 $ 1,534 The Company recorded specific reserves of $91 thousand and $161 thousand to reduce the value of these loans at September 30, 2020 and December 31, 2019, respectively, based on the estimated fair value of the underlying collateral. The Company also recorded chargeoffs of $364 thousand during the nine months ended September 30, 2020 related to the impaired loans at fair value. There were chargeoffs of $298 thousand related to impaired loans at fair value during the year ended December 31, 2019. The Company recorded a valuation allowance of $17 thousand related to mortgage servicing rights during the first quarter of 2020, which was then reversed during the second quarter of 2020 as a result of the fair value at June 30, 2020 being higher than book value, and the fair value remained higher as of September 30, 2020. There was no valuation allowance related to mortgage servicing rights during the year ended December 31, 2019. There were no write downs recorded in other real estate owned during the three and nine months ended September 30, 2020 or the year ended December 31, 2019. The table below presents quantitative information about the significant unobservable inputs for assets measured at fair value on a nonrecurring basis at September 30, 2020 and December 31, 2019: (Dollars in thousands) Fair value at Valuation Significant Discount % Range/Amount Impaired loans $ 2,066 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10.00-80.00% Mortgage servicing rights 2,567 Discounted cash flow Prepayment speed 9.40 % Discount rate 7.75 % (Dollars in thousands) Fair value at Valuation Significant Discount % Range/Amount Impaired loans $ 526 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10.00-50.00% Mortgage servicing rights 87 Discounted cash flow Prepayment speed 13.42 % Discount rate 8.50 % Other real estate owned 921 Appraisal of property Discounted appraisal value 18.00-36.00% The carrying amounts and estimated fair values of financial instruments, excluding those previously presented unless otherwise noted, at September 30, 2020 and December 31, 2019 are noted in the table below. Estimated Fair Value (Dollars in thousands) Carrying Value Quoted Prices in Significant Significant Total September 30, 2020 Financial assets: Cash and cash equivalents $ 176,486 $ 31,080 $ 145,406 $ — $ 176,486 Other investments 14,398 N/A N/A N/A N/A Net loans 1,822,634 — — 1,863,805 1,863,805 Accrued interest receivable 8,541 — 1,966 6,575 8,541 Financial liabilities: Deposits 1,943,435 — 2,008,494 — 2,008,494 Borrowings 216,809 — 224,511 — 224,511 Subordinated notes 44,555 — 44,795 — 44,795 Accrued interest payable 2,265 — 2,265 — 2,265 December 31, 2019 Financial assets: Cash and cash equivalents $ 103,930 $ 19,990 $ 83,940 $ — $ 103,930 Other investments 11,475 N/A N/A N/A N/A Net loans 1,214,935 — — 1,203,639 1,203,639 Accrued interest receivable 4,403 — 1,236 3,167 4,403 Financial liabilities: Deposits 1,135,428 — 1,138,202 — 1,138,202 Borrowings 212,225 — 212,125 — 212,125 Subordinated notes 44,440 — 47,100 — 47,100 Accrued interest payable 1,574 — 1,574 — 1,574 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) Other Investments It is not practical to determine the fair value of FHLB stock and Arctaris investment bond 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 valued at the lower of cost or fair value as described previously. (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, 2020 | |
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, 2020 December 31, 2019 (Dollars in thousands) Notional Amount Fair Value Notional Amount Fair Value Included in other assets: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 135,462 $ 14,422 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 38,840 117 6,018 34 Interest rate lock commitments 110,179 2,068 25,519 256 Total derivatives included in other assets $ 284,481 $ 16,607 $ 135,478 $ 4,974 Included in other liabilities: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 135,462 $ 14,422 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 99,697 441 20,633 33 Interest rate lock commitments 4,053 4 928 — Total derivatives included in other liabilities $ 239,212 $ 14,867 $ 125,502 $ 4,717 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) 2020 2019 2020 2019 Forward contracts related to mortgage loans to be delivered for sale Mortgage banking activities $ (1,207) $ (26) $ (3,996) $ (417) Interest rate lock commitments Mortgage banking activities 391 (48) 1,808 156 Total loss recognized in income $ (816) $ (74) $ (2,188) $ (261) 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, 2020 Offsetting derivative assets: Customer initiated derivatives $ 14,422 $ — $ 14,422 $ — $ — $ 14,422 Offsetting derivative liabilities: Customer initiated derivatives 14,422 — 14,422 — 15,383 (961) December 31, 2019 Offsetting derivative assets: Customer initiated derivatives $ 4,684 $ — $ 4,684 $ — $ — $ 4,684 Offsetting derivative liabilities: Customer initiated derivatives 4,684 — 4,684 — 4,375 309 |
Parent Company Financial Statem
Parent Company Financial Statements | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Statements | PARENT COMPANY FINANCIAL STATEMENTS Balance Sheets—Parent Company (Dollars in thousands) September 30, 2020 December 31, 2019 Assets Cash and cash equivalents $ 29,105 $ 35,210 Investment in banking subsidiary 223,624 178,240 Investment in captive insurance subsidiary 2,306 1,668 Income tax benefit 158 520 Other assets 41 99 Total assets $ 255,234 $ 215,737 Liabilities Subordinated notes $ 44,555 $ 44,440 Accrued expenses and other liabilities 1,211 594 Total liabilities 45,766 45,034 Shareholders' equity 209,468 170,703 Total liabilities and shareholders' equity $ 255,234 $ 215,737 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) 2020 2019 2020 2019 Income Dividend income from bank subsidiary $ 5,000 $ — $ 41,500 $ — Total income $ 5,000 $ — $ 41,500 $ — Expenses Interest on borrowed funds 11 — 33 — Interest on subordinated notes 632 256 1,903 759 Other expenses 302 516 1,017 902 Total expenses $ 945 $ 772 $ 2,953 $ 1,661 Income (loss) before income taxes and equity in (overdistributed) undistributed net earnings of subsidiaries 4,055 (772) 38,547 (1,661) Income tax benefit 228 181 383 272 Equity in (overdistributed) undistributed earnings of subsidiaries 926 5,000 (26,890) 12,820 Net income $ 5,209 $ 4,409 $ 12,040 $ 11,431 Other comprehensive income 783 1,238 4,451 7,120 Total comprehensive income, net of tax $ 5,992 $ 5,647 $ 16,491 $ 18,551 Statements of Cash Flows—Parent Company For the nine months ended September 30, (Dollars in thousands) 2020 2019 Cash flows from operating activities Net income $ 12,040 $ 11,431 Adjustments to reconcile net income to net cash provided by operating activities: Equity in over (under) distributed earnings of subsidiaries 26,890 (12,820) Stock based compensation expense 72 54 (Increase) Decrease in other assets, net 420 (115) Increase in other liabilities, net 654 411 Net cash provided by (used in) operating activities 40,076 (1,039) Cash flows from investing activities Cash used in acquisitions (67,944) — Net cash used in investing activities (67,944) — Cash flows from financing activities Preferred stock offering, net of issuance costs 23,370 — Share buyback - redeemed stock (620) (2,108) Common stock dividends paid (1,082) (852) Proceeds from exercised stock options 95 219 Net cash provided by (used in) financing activities 21,763 (2,741) Net decrease in cash and cash equivalents (6,105) (3,780) Beginning cash and cash equivalents 35,210 9,690 Ending cash and cash equivalents $ 29,105 $ 5,910 |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | EARNINGS PER COMMON SHARE The two-class method is used in the calculation of basic and diluted earnings per common 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 the periods noted below was as follows: For the three months ended September 30, For the nine months ended September 30, (In thousands, except per share data) 2020 2019 2020 2019 Net income $ 5,209 $ 4,409 $ 12,040 $ 11,431 Net income allocated to participating securities 40 45 140 110 Net income allocated to common shareholders (1) $ 5,169 $ 4,364 $ 11,900 $ 11,321 Weighted average common shares - issued 7,734 7,721 7,730 7,738 Average unvested restricted share awards (59) (80) (90) (76) Weighted average common shares outstanding - basic 7,675 7,641 7,640 7,662 Effect of dilutive securities: Weighted average common stock equivalents 37 111 61 114 Weighted average common shares outstanding - diluted 7,712 7,752 7,701 $ 7,776 EPS available to common shareholders Basic earnings per common share $ 0.68 $ 0.57 $ 1.56 $ 1.48 Diluted earnings per common share $ 0.67 $ 0.56 $ 1.55 $ 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. Stock options for 214,668 and 30,000 shares of common stock were not considered in computing diluted earnings per common share for the three months ended September 30, 2020 and 2019, respectively, and 117,334 and 30,000 of common stock were not considered in computing diluted earnings per common share for the nine months ended September 30, 2020 and |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2019, included in our Annual Form 10-K, filed with the SEC on March 13, 2020.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. |
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, 2019, included in our Annual Form 10-K, filed with the SEC on March 13, 2020.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 | 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 Adopted Accounting Standards and Impact of Recently Issued Accounting Standards | Impact of Recently Adopted 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 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. The adoption of this guidance does not result in changes to how revenue is recognized or the timing of recognition from our method prior to adoption. Revenue is recognized when obligations, under the terms of a contract with our customer, are satisfied, which generally occurs when services are performed. Revenue is measured as the amount of consideration we expect to receive in exchange for providing services. 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. Service fees on deposit accounts - The fees are generated from a depositor’s option to purchase services offered under the contract and are only considered a contract when the depositor exercises their option to purchase these services. Therefore we deem the term of our contracts with depositors to be day-to-day and do not extend beyond the services already provided. Debit card interchange fees - We collect interchange fee income when debit cards that we have issued to our customers are used in merchant transactions. Our performance obligation is satisfied and revenue is recognized at the point we initiate the payment of funds from a customer’s account to a merchant account. Merchant processing fees - We receive referral fees for referring our customers to a merchant servicer. Fees are immaterial and recognized as received. Gain (loss) on sale of other real estate owned - The Company records income or expense only upon consummation of the sale of the real estate. 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 became effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, and was to be applied prospectively with a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company adopted ASU 2016-01 and related issues on January 1, 2019 and determined that the implementation of this standard did not have a material impact to our consolidated financial statements. Impact of Recently Issued Accounting Standards: 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 is effective for the Company for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, and is to be applied under an optional transition method. The Company is planning to adopt this new guidance within the time frame noted above. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements but does not expect that the adoption will have a material impact. Additionally, the Company does not expect to significantly change operating lease agreements prior to adoption. 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. The guidance is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating 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 frame noted above. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed | The following table summarizes the amounts of assets acquired and liabilities assumed recognized at the acquisition date. (Dollars in thousands) Consideration paid: Cash $ 67,944 Fair value of assets acquired: Cash and cash equivalents 38,480 Investment securities 47,416 Federal Home Loan Bank stock 923 Loans held for sale 1,703 Loans held for investment 222,356 Premises and equipment 2,404 Core deposit intangibles 3,663 Other assets 8,358 Total assets acquired 325,303 Fair value of liabilities assumed: Deposits 264,820 Federal Home Loan Bank advances 15,279 Other liabilities 3,427 Total liabilities assumed 283,526 Total identifiable net assets 41,777 Goodwill recognized in the acquisition $ 26,167 |
Purchased Loans Accounted for Under and Excluded from ASC 310-30 | Purchased loans outside the scope of ASC 310-30 are accounted for under ASC 310-20. Premiums and discounts created when the loans were recorded at their fair values at acquisition are amortized over the remaining terms of the loans as an adjustment to the related loan's yield. (Dollars in thousands) Accounted for under ASC 310-30: Contractual cash flows $ 1,018 Contractual cash flows not expected to be collected (nonaccretable difference) 82 Expected cash flows 936 Interest component of expected cash flows (accretable yield) 35 Fair value at acquisition 901 Accounted for under ASC 310-20: Unpaid principal and interest balance 221,061 Fair value premium 394 Fair value at acquisition 221,455 Total fair value at acquisition $ 222,356 |
Business Acquisition, Pro Forma Information | The pro forma table below presents information as if the acquisition had occurred on January 1, 2019. The pro forma information includes adjustments to give the effects to any changes in interest income due to the accretion (amortization) of the discount (premium) associated with the fair value adjustments to acquired loans, any changes in interest expense due to estimated premium amortization/discount accretion associated with the fair value adjustments to acquired time deposits and borrowings and other debt, amortization of core deposit intangibles that would have resulted had the deposits been acquired as of January 1, 2019, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date . Due diligence, professional fees, and other expenses related to the merger were incurred by the Company and AAB during the three and nine months ended September 30, 2020, but the pro forma condensed combined statement of income is not adjusted to exclude these costs. Three months ended September 30, Nine months ended September 30, (Dollars in thousands, except per share data) 2020 2019 2020 2019 Net interest income $ 16,593 $ 16,036 $ 47,709 $ 46,217 Noninterest income 9,125 4,486 21,604 11,228 Noninterest expense 15,143 13,742 44,822 38,879 Net income 5,211 4,865 12,062 13,188 Net income per diluted share 0.67 0.62 1.55 1.68 |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and December 31, 2019 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss). (Dollars in thousands) Amortized Gross Gross Fair September 30, 2020 U.S. government sponsored entities & agencies $ 27,092 $ 126 $ (19) $ 27,199 State and political subdivision 109,498 8,140 (88) 117,550 Mortgage-backed securities: residential 19,237 255 — 19,492 Mortgage-backed securities: commercial 8,025 630 — 8,655 Collateralized mortgage obligations: residential 14,177 169 (13) 14,333 Collateralized mortgage obligations: commercial 31,659 1,344 — 33,003 U.S. Treasury 1,000 3 — 1,003 SBA 18,869 63 (124) 18,808 Asset backed securities 10,298 — (344) 9,954 Corporate bonds 3,491 39 — 3,530 Total available-for-sale $ 243,346 $ 10,769 $ (588) $ 253,527 December 31, 2019 State and political subdivision $ 89,304 $ 4,463 $ (20) $ 93,747 Mortgage-backed securities: residential 10,609 82 (126) 10,565 Mortgage-backed securities: commercial 8,567 224 (12) 8,779 Collateralized mortgage obligations: residential 8,541 39 (51) 8,529 Collateralized mortgage obligations: commercial 22,891 300 (10) 23,181 U.S. Treasury 1,976 23 — 1,999 SBA 22,051 87 (154) 21,984 Asset backed securities 10,390 — (306) 10,084 Corporate bonds 2,030 20 (13) 2,037 Total available-for-sale $ 176,359 $ 5,238 $ (692) $ 180,905 |
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) 2020 2019 2020 2019 Proceeds $ 5,051 $ 11,080 $ 42,640 $ 46,545 Gross gains 434 202 1,871 543 Gross losses — (51) (9) (392) |
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, 2020 (Dollars in thousands) Amortized Fair Within one year $ 11,141 $ 11,228 One to five years 27,530 28,494 Five to ten years 70,259 73,165 Beyond ten years 134,416 140,640 Total $ 243,346 $ 253,527 |
Securities with Unrealized Losses | The following table summarizes securities with unrealized losses at September 30, 2020 and December 31, 2019 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 Unrealized Fair Unrealized Fair Unrealized September 30, 2020 Available-for-sale U.S. government sponsored entities & agencies $ 14,981 $ (19) $ — $ — $ 14,981 $ (19) State and political subdivision 1,858 (88) — — 1,858 (88) Collateralized mortgage obligations: residential — — 1,136 (13) 1,136 (13) SBA — — 13,190 (124) 13,190 (124) Asset backed securities — — 9,954 (344) 9,954 (344) Total available-for-sale $ 16,839 $ (107) $ 24,280 $ (481) $ 41,119 $ (588) December 31, 2019 Available-for-sale State and political subdivision $ 5,109 $ (20) $ 305 $ — $ 5,414 $ (20) Mortgage-backed securities: residential 4,022 (39) 3,982 (87) 8,004 (126) Mortgage-backed securities: commercial 1,769 (11) 430 (1) 2,199 (12) Collateralized mortgage obligations: residential 770 (1) 4,631 (50) 5,401 (51) Collateralized mortgage obligations: commercial — — 1,716 (10) 1,716 (10) SBA 3,961 (13) 12,405 (141) 16,366 (154) Asset backed securities 8,220 (232) 1,864 (74) 10,084 (306) Corporate bonds 489 (13) — — 489 (13) Total available-for-sale $ 24,340 $ (329) $ 25,333 $ (363) $ 49,673 $ (692) |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Recorded Investment in Loans | The following table presents the recorded investment in loans at September 30, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2020 Commercial real estate $ 593,156 $ 137,033 $ 730,189 Commercial and industrial 748,913 59,010 807,923 Residential real estate 261,153 42,935 304,088 Consumer 671 1,017 1,688 Total $ 1,603,893 $ 239,995 $ 1,843,888 December 31, 2019 Commercial real estate $ 551,565 $ 53,081 $ 604,646 Commercial and industrial 403,922 6,306 410,228 Residential real estate 201,787 10,052 211,839 Consumer 864 32 896 Total $ 1,158,138 $ 69,471 $ 1,227,609 |
Information as to Nonperforming Assets | Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2020 December 31, 2019 Nonaccrual loans: Commercial real estate $ 7,022 $ 4,832 Commercial and industrial 8,078 11,112 Residential real estate 4,151 2,569 Consumer 15 16 Total nonaccrual loans 19,266 18,529 Other real estate owned — 921 Total nonperforming assets $ 19,266 $ 19,450 Loans 90 days or more past due and still accruing $ 552 $ 157 |
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, 2020 Commercial real estate $ 726,018 $ 3,934 $ 237 $ — $ 730,189 Commercial and industrial 802,363 3,598 1,962 — 807,923 Residential real estate 294,478 4,067 2,133 3,410 304,088 Consumer 1,684 2 2 — 1,688 Total $ 1,824,543 $ 11,601 $ 4,334 $ 3,410 $ 1,843,888 December 31, 2019 Commercial real estate $ 597,892 $ 3,630 $ 1,286 $ 1,838 $ 604,646 Commercial and industrial 407,692 377 1,275 884 410,228 Residential real estate 206,002 3,286 1,429 1,122 211,839 Consumer 892 4 — — 896 Total $ 1,212,478 $ 7,297 $ 3,990 $ 3,844 $ 1,227,609 |
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, 2020 December 31, 2019 Nonaccrual loans $ 19,266 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 550 547 Residential real estate 599 359 Total performing troubled debt restructurings 1,149 906 Total impaired loans, excluding purchase credit impaired loans $ 20,415 $ 19,435 (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2020 Commercial real estate $ 6,304 $ 2,841 Commercial and industrial 683 281 Residential real estate 4,048 2,945 Total PCI loans $ 11,035 $ 6,067 December 31, 2019 Commercial real estate $ 6,597 $ 2,884 Commercial and industrial 556 135 Residential real estate 4,215 2,954 Total PCI loans $ 11,368 $ 5,973 Loans individually evaluated for impairment are presented below. (Dollars in thousands) Recorded investment with Recorded investment Total Contractual Related September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,022 $ — $ 7,022 $ 7,355 $ — Commercial and industrial 4,465 4,717 9,182 10,031 798 Residential real estate 2,942 266 3,208 3,459 26 Total $ 14,429 $ 4,983 $ 19,412 $ 20,845 $ 824 December 31, 2019 Individually evaluated impaired loans: Commercial real estate $ 4,832 $ — $ 4,832 $ 5,156 $ — Commercial and industrial 10,739 913 11,652 12,521 363 Residential real estate 1,197 189 1,386 1,570 22 Total $ 16,768 $ 1,102 $ 17,870 $ 19,247 $ 385 (Dollars in thousands) Average Interest Cash Basis For the three months ended September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,139 $ — $ — Commercial and industrial 8,960 12 — Residential real estate 3,265 7 — Total $ 19,364 $ 19 $ — For the nine months ended September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,433 $ — $ — Commercial and industrial 13,086 34 84 Residential real estate 3,266 26 — Total $ 23,785 $ 60 $ 84 For the three months ended September 30, 2019 Individually evaluated impaired loans: 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: 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 |
Summary of Recorded Investment of Loans Modified in TDRs | The following table presents the recorded investment of loans modified as TDRs during the three and nine months ended September 30, 2020 and nine months ended September 30, 2019, by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2019. 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 Three months ended September 30, 2020 Commercial and industrial $ — $ — $ 148 1 $ 148 $ — $ — Total $ — $ — $ 148 1 $ 148 $ — $ — Nine months ended September 30, 2020 Commercial and industrial $ — $ — $ 148 1 $ 148 $ — $ — Residential real estate — 75 — 1 75 — — Total $ — $ 75 $ 148 2 $ 223 $ — $ — Nine months ended September 30, 2019 Commercial and industrial $ — $ — $ 351 2 $ 351 $ — $ 174 Total $ — $ — $ 351 2 $ 351 $ — $ 174 |
Risk Category of Loans by Class of Loans | Based on the most recent analysis performed, the risk category of loans by class of loans was as follows: (Dollars in thousands) Pass Special Substandard Doubtful Total September 30, 2020 Commercial real estate $ 703,241 $ 19,686 $ 6,723 $ 539 $ 730,189 Commercial and industrial 773,242 17,874 12,260 4,547 807,923 Total $ 1,476,483 $ 37,560 $ 18,983 $ 5,086 $ 1,538,112 December 31, 2019 Commercial real estate $ 591,419 $ 8,325 $ 4,042 $ 860 $ 604,646 Commercial and industrial 383,756 8,967 16,527 978 410,228 Total $ 975,175 $ 17,292 $ 20,569 $ 1,838 $ 1,014,874 The following presents residential real estate and consumer loans by credit quality: (Dollars in thousands) Performing Nonperforming Total September 30, 2020 Residential real estate $ 299,937 $ 4,151 $ 304,088 Consumer 1,673 15 1,688 Total $ 301,610 $ 4,166 $ 305,776 December 31, 2019 Residential real estate $ 209,270 $ 2,569 $ 211,839 Consumer 880 16 896 Total $ 210,150 $ 2,585 $ 212,735 |
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) 2020 2019 2020 2019 Accretable yield at beginning of period $ 8,374 $ 10,194 $ 9,141 $ 10,947 Additions due to acquisitions — — 35 — Accretion of income (482) (597) (1,350) (1,772) Adjustments to accretable yield — — 66 422 Accretable yield at end of period $ 7,892 $ 9,597 $ 7,892 $ 9,597 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 December 31, 2019 Nonaccrual loans $ 19,266 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 550 547 Residential real estate 599 359 Total performing troubled debt restructurings 1,149 906 Total impaired loans, excluding purchase credit impaired loans $ 20,415 $ 19,435 (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2020 Commercial real estate $ 6,304 $ 2,841 Commercial and industrial 683 281 Residential real estate 4,048 2,945 Total PCI loans $ 11,035 $ 6,067 December 31, 2019 Commercial real estate $ 6,597 $ 2,884 Commercial and industrial 556 135 Residential real estate 4,215 2,954 Total PCI loans $ 11,368 $ 5,973 Loans individually evaluated for impairment are presented below. (Dollars in thousands) Recorded investment with Recorded investment Total Contractual Related September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,022 $ — $ 7,022 $ 7,355 $ — Commercial and industrial 4,465 4,717 9,182 10,031 798 Residential real estate 2,942 266 3,208 3,459 26 Total $ 14,429 $ 4,983 $ 19,412 $ 20,845 $ 824 December 31, 2019 Individually evaluated impaired loans: Commercial real estate $ 4,832 $ — $ 4,832 $ 5,156 $ — Commercial and industrial 10,739 913 11,652 12,521 363 Residential real estate 1,197 189 1,386 1,570 22 Total $ 16,768 $ 1,102 $ 17,870 $ 19,247 $ 385 (Dollars in thousands) Average Interest Cash Basis For the three months ended September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,139 $ — $ — Commercial and industrial 8,960 12 — Residential real estate 3,265 7 — Total $ 19,364 $ 19 $ — For the nine months ended September 30, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,433 $ — $ — Commercial and industrial 13,086 34 84 Residential real estate 3,266 26 — Total $ 23,785 $ 60 $ 84 For the three months ended September 30, 2019 Individually evaluated impaired loans: 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: 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 |
Activity in the Allowance for Loan Losses and Allocation of the Allowance for Loans | Activity in the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total For the three months ended September 30, 2020 Allowance for loan losses: Beginning balance $ 7,987 $ 6,496 $ 2,565 $ 15 $ 17,063 Provision (benefit) for loan losses 1,820 1,679 781 (10) 4,270 Gross chargeoffs — (10) (110) (4) (124) Recoveries 12 15 10 8 45 Net (chargeoffs) recoveries 12 5 (100) 4 (79) Ending allowance for loan losses $ 9,819 $ 8,180 $ 3,246 $ 9 $ 21,254 For the nine months ended September 30, 2020 Allowance for loan losses: Beginning balance $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 Provision for loan losses 4,034 4,347 1,921 32 10,334 Gross chargeoffs — (1,729) (110) (47) (1,886) Recoveries 12 47 51 22 132 Net (chargeoffs) recoveries 12 (1,682) (59) (25) (1,754) Ending allowance for loan losses $ 9,819 $ 8,180 $ 3,246 $ 9 $ 21,254 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 Allocation of the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total September 30, 2020 Allowance for loan losses: Individually evaluated for impairment $ — $ 798 $ 26 $ — $ 824 Collectively evaluated for impairment 9,109 7,352 3,023 9 19,493 Acquired with deteriorated credit quality 710 30 197 — 937 Ending allowance for loan losses $ 9,819 $ 8,180 $ 3,246 $ 9 $ 21,254 Balance of loans: Individually evaluated for impairment $ 7,022 $ 9,182 $ 3,208 $ — $ 19,412 Collectively evaluated for impairment 720,326 798,460 297,935 1,688 1,818,409 Acquired with deteriorated credit quality 2,841 281 2,945 — 6,067 Total loans $ 730,189 $ 807,923 $ 304,088 $ 1,688 $ 1,843,888 December 31, 2019 Allowance for loan losses: Individually evaluated for impairment $ — $ 363 $ 22 $ — $ 385 Collectively evaluated for impairment 5,062 5,124 1,339 2 11,527 Acquired with deteriorated credit quality 711 28 23 — 762 Ending allowance for loan losses $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 Balance of loans: Individually evaluated for impairment $ 4,832 $ 11,652 $ 1,386 $ — $ 17,870 Collectively evaluated for impairment 596,930 398,441 207,499 896 1,203,766 Acquired with deteriorated credit quality 2,884 135 2,954 — 5,973 Total loans $ 604,646 $ 410,228 $ 211,839 $ 896 $ 1,227,609 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment were as follows at September 30, 2020 and December 31, 2019: (Dollars in thousands) September 30, 2020 December 31, 2019 Land $ 3,514 $ 2,254 Buildings 10,656 9,825 Leasehold improvements 2,993 2,714 Furniture, fixtures and equipment 7,231 6,539 Total premises and equipment $ 24,394 $ 21,332 Less: Accumulated depreciation 8,748 7,494 Net premises and equipment $ 15,646 $ 13,838 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 December 31, 2019 Gross carrying amount $ 5,708 $ 2,045 Accumulated amortization (2,320) (1,744) Net Intangible $ 3,388 $ 301 |
Schedule of Changes in Mortgage Servicing Rights | Changes in our mortgage servicing rights were as follows for the three and nine months ended September 30, 2020 . The Com pany had $1 thousand in mortgage servicing rights as of September 30, 2019: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2020 2020 Mortgage servicing rights: Balance, beginning of period $ 1,213 $ 76 Originated servicing 1,073 2,250 Amortization (93) (133) Balance, end of period 2,193 2,193 Fair value: At beginning of period $ 1,256 $ 87 At end of period 2,567 2,567 |
Borrowings and Subordinated D_2
Borrowings and Subordinated Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 December 31, 2019 (Dollars in thousands) Amount Weighted (1) Amount Weighted (1) Short-term borrowings: FHLB Advances $ — — % $ 60,000 1.61 % Securities sold under agreements to repurchase 187 0.30 851 0.30 Federal funds purchased — — 5,000 1.90 Total short-term borrowings 187 0.30 65,851 1.62 Long-term debt: Secured borrowing due in 2022 1,322 1.00 1,374 1.00 FHLB advances due in 2022 to 2029 (2) 181,202 1.09 145,000 1.06 FRB borrowings (3) 34,098 0.35 — — Subordinated notes due in 2025 and 2029 (4) 44,555 5.29 44,440 5.29 Total long-term debt 261,177 1.71 190,814 2.04 Total short-term and long-term borrowings $ 261,364 1.71 % $ 256,665 1.93 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) At September 30, 2020, the long-term FHLB advances consisted of 0.42% - 2.93% fixed rate notes and can be called through 2024 without penalty by the issuer. The September 30, 2020 balance includes FHLB advances of $181.0 million and purchase accounting premiums of $202 thousand. (3) The September 30, 2020 balance of FRB borrowings consisted of 0.35% fixed rate notes utilized to fund the PPP loans. The FRB borrowings have a maturity date equal to the maturity date of the respective PPP loans pledged to secure the borrowings, which is two years after the origination date of the PPP loans. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Expected Income Tax Expense | A reconciliation of expected income tax expense using the federal statutory rate of 21% as of September 30, 2020 and 2019 and actual income tax expense is as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2020 2019 2020 2019 Income tax expense based on federal corporate tax rate $ 1,328 $ 1,118 $ 2,970 $ 2,911 Changes resulting from: Tax-exempt income (154) (142) (469) (398) Net operating loss carryback due to CARES Act — — (290) — Disqualified dispositions from stock options — — (175) — Other, net (57) (62) 73 (85) Income tax expense $ 1,117 $ 914 $ 2,109 $ 2,428 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Employee Stock Option Activity | The summary of our stock option activity for the nine months ended September 30, 2020 is as follows: Shares Weighted Average Weighted Average Remaining Contractual Options outstanding, beginning of period 355,218 $ 16.63 5.0 Exercised (10,000) 9.57 Options outstanding, end of period 345,218 16.83 4.4 Options exercisable 335,216 $ 16.59 4.3 |
Summary of Changes in Nonvested Shares | A summary of changes in the Company's nonvested shares for the nine months ended September 30, 2020 is as follows: Nonvested Shares Shares Weighted Average Nonvested at January 1, 2020 80,370 $ 24.28 Granted 38,170 24.90 Vested (19,850) 23.10 Forfeited (1,400) 24.46 Nonvested at September 30, 2020 97,290 $ 24.76 |
Off- Balance Sheet Activities (
Off- Balance Sheet Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 December 31, 2019 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 5,302 $ 5,295 $ 16,276 $ 20,128 Unused lines of credit 30,496 361,749 28,723 288,086 Unused standby letters of credit and commercial letters of credit 3,705 2,028 4,895 — |
Regulatory Capital Matters (Tab
Regulatory Capital Matters (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 For Capital Adequacy Well Capitalized Under Prompt Corrective (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2020 Common equity tier 1 to risk-weighted assets: Consolidated $ 139,067 8.83 % $ 70,875 4.50 % $ 110,250 7.00 % Bank 176,593 11.23 % 70,760 4.50 % 110,070 7.00 % $ 102,208 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 162,437 10.31 % $ 94,500 6.00 % $ 133,875 8.50 % Bank 176,593 11.23 % 94,346 6.00 % 133,657 8.50 % $ 125,795 8.00 % Total capital to risk-weighted assets: Consolidated $ 226,679 14.39 % $ 126,000 8.00 % $ 165,375 10.50 % Bank 196,274 12.48 % 125,795 8.00 % 165,106 10.50 % $ 157,244 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 162,437 7.17 % $ 90,664 4.00 % $ 90,664 4.00 % Bank 176,593 7.83 % 90,220 4.00 % 90,220 4.00 % $ 112,776 5.00 % December 31, 2019 Common equity tier 1 to risk-weighted assets: Consolidated $ 157,659 11.72 % $ 60,533 4.50 % $ 94,163 7.00 % Bank 165,199 12.27 % 60,568 4.50 % 94,217 7.00 % $ 87,487 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 157,659 11.72 % $ 80,711 6.00 % $ 114,341 8.50 % Bank 165,199 12.27 % 80,757 6.00 % 114,406 8.50 % $ 107,676 8.00 % Total capital to risk-weighted assets: Consolidated $ 215,091 15.99 % $ 107,615 8.00 % $ 141,244 10.50 % Bank 178,191 13.24 % 107,676 8.00 % 141,325 10.50 % $ 134,595 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 157,659 10.41 % $ 60,580 4.00 % $ 60,580 4.00 % Bank 165,199 10.96 % 60,276 4.00 % 60,276 4.00 % $ 75,345 5.00 % _______________________________________________________________________________ (1) Reflects the capital conservation buffer of 2.5%. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 Securities available for sale: U.S. government sponsored entities and agencies $ 27,199 $ — $ 27,199 $ — State and political subdivision 117,550 — 115,838 1,712 Mortgage-backed securities: residential 19,492 — 19,492 — Mortgage-backed securities: commercial 8,655 — 8,655 — Collateralized mortgage obligations: residential 14,333 — 14,333 — Collateralized mortgage obligations: commercial 33,003 — 33,003 — U.S. Treasury 1,003 — 1,003 — SBA 18,808 — 18,808 — Asset backed securities 9,954 — 9,954 — Corporate bonds 3,530 — 3,530 — Total securities available for sale 253,527 — 251,815 1,712 Loans held for sale 60,635 — 60,635 — Loans measured at fair value: Residential real estate 5,080 — — 5,080 Derivative assets: Customer-initiated derivatives 14,422 — 14,422 — Forward contracts related to mortgage loans to be delivered for sale 117 — 117 — Interest rate lock commitments 2,068 — 2,068 — Total assets at fair value $ 335,849 $ — $ 329,057 $ 6,792 Derivative liabilities: Customer-initiated derivatives 14,422 — 14,422 — Forward contracts related to mortgage loans to be delivered for sale 441 — 441 — Interest rate lock commitments 4 — 4 — Total liabilities at fair value $ 14,867 $ — $ 14,867 $ — (Dollars in thousands) Total Quoted Prices Significant Other Significant December 31, 2019 Securities available for sale: State and political subdivision $ 93,747 $ — $ 93,747 $ — Mortgage-backed securities: residential 10,565 — 10,565 — Mortgage-backed securities: commercial 8,779 — 8,779 — Collateralized mortgage obligations: residential 8,529 — 8,529 — Collateralized mortgage obligations: commercial 23,181 — 23,181 — U.S. Treasury 1,999 — 1,999 — SBA 21,984 — 21,984 — Asset backed securities 10,084 — 10,084 — Corporate bonds 2,037 — 2,037 — Total securities available for sale $ 180,905 $ — $ 180,905 $ — Loans held for sale 13,889 — 13,889 — Loans measured at fair value: Residential real estate 4,063 — — 4,063 Derivative assets: Customer-initiated derivatives 4,684 — 4,684 — Forward contracts related to mortgage loans to be delivered for sale 34 — 34 — Interest rate lock commitments 256 — 256 — Total assets at fair value $ 203,831 $ — $ 199,768 $ 4,063 Derivative liabilities: Customer-initiated derivatives 4,684 — 4,684 — Forward contracts related to mortgage loans to be delivered for sale 33 — 33 — Total liabilities at fair value $ 4,717 $ — $ 4,717 $ — |
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) 2020 2019 2020 2019 Loans held for investment Beginning balance $ 4,056 $ 5,624 $ 4,063 $ 4,571 Transfers from loans held for sale 1,468 466 2,284 1,895 Gains (losses): Recorded in "Mortgage banking activities" 65 (9) 62 151 Repayments (509) (1,191) (1,329) (1,727) Ending balance $ 5,080 $ 4,890 $ 5,080 $ 4,890 |
Information for Loans Held for Sale Carried at Fair Value | As of September 30, 2020 and December 31, 2019, 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, 2020 December 31, 2019 Aggregate fair value $ 60,635 $ 13,889 Contractual balance 59,055 13,510 Unrealized gain 1,580 379 The total amount of gains as a result of changes in fair value of loans held for sale included in "Mortgage banking activities" for three and nine months ended September 30, 2020 and 2019 were as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2020 2019 2020 2019 Change in fair value $ 556 $ (98) $ 1,201 $ 352 |
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, 2020 Impaired loans: Residential real estate $ 1,305 $ 1,305 Commercial and industrial 761 761 Mortgage servicing rights 2,567 2,567 Total $ 4,633 $ 4,633 December 31, 2019 Impaired loans: Commercial real estate $ 265 $ 265 Commercial and industrial 261 261 Mortgage servicing rights 87 87 Other real estate owned 921 921 Total $ 1,534 $ 1,534 |
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, 2020 and December 31, 2019: (Dollars in thousands) Fair value at Valuation Significant Discount % Range/Amount Impaired loans $ 2,066 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10.00-80.00% Mortgage servicing rights 2,567 Discounted cash flow Prepayment speed 9.40 % Discount rate 7.75 % (Dollars in thousands) Fair value at Valuation Significant Discount % Range/Amount Impaired loans $ 526 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10.00-50.00% Mortgage servicing rights 87 Discounted cash flow Prepayment speed 13.42 % Discount rate 8.50 % Other real estate owned 921 Appraisal of property Discounted appraisal value 18.00-36.00% |
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, 2020 and December 31, 2019 are noted in the table below. Estimated Fair Value (Dollars in thousands) Carrying Value Quoted Prices in Significant Significant Total September 30, 2020 Financial assets: Cash and cash equivalents $ 176,486 $ 31,080 $ 145,406 $ — $ 176,486 Other investments 14,398 N/A N/A N/A N/A Net loans 1,822,634 — — 1,863,805 1,863,805 Accrued interest receivable 8,541 — 1,966 6,575 8,541 Financial liabilities: Deposits 1,943,435 — 2,008,494 — 2,008,494 Borrowings 216,809 — 224,511 — 224,511 Subordinated notes 44,555 — 44,795 — 44,795 Accrued interest payable 2,265 — 2,265 — 2,265 December 31, 2019 Financial assets: Cash and cash equivalents $ 103,930 $ 19,990 $ 83,940 $ — $ 103,930 Other investments 11,475 N/A N/A N/A N/A Net loans 1,214,935 — — 1,203,639 1,203,639 Accrued interest receivable 4,403 — 1,236 3,167 4,403 Financial liabilities: Deposits 1,135,428 — 1,138,202 — 1,138,202 Borrowings 212,225 — 212,125 — 212,125 Subordinated notes 44,440 — 47,100 — 47,100 Accrued interest payable 1,574 — 1,574 — 1,574 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 December 31, 2019 (Dollars in thousands) Notional Amount Fair Value Notional Amount Fair Value Included in other assets: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 135,462 $ 14,422 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 38,840 117 6,018 34 Interest rate lock commitments 110,179 2,068 25,519 256 Total derivatives included in other assets $ 284,481 $ 16,607 $ 135,478 $ 4,974 Included in other liabilities: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 135,462 $ 14,422 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 99,697 441 20,633 33 Interest rate lock commitments 4,053 4 928 — Total derivatives included in other liabilities $ 239,212 $ 14,867 $ 125,502 $ 4,717 |
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) 2020 2019 2020 2019 Forward contracts related to mortgage loans to be delivered for sale Mortgage banking activities $ (1,207) $ (26) $ (3,996) $ (417) Interest rate lock commitments Mortgage banking activities 391 (48) 1,808 156 Total loss recognized in income $ (816) $ (74) $ (2,188) $ (261) |
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, 2020 Offsetting derivative assets: Customer initiated derivatives $ 14,422 $ — $ 14,422 $ — $ — $ 14,422 Offsetting derivative liabilities: Customer initiated derivatives 14,422 — 14,422 — 15,383 (961) December 31, 2019 Offsetting derivative assets: Customer initiated derivatives $ 4,684 $ — $ 4,684 $ — $ — $ 4,684 Offsetting derivative liabilities: Customer initiated derivatives 4,684 — 4,684 — 4,375 309 |
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, 2020 Offsetting derivative assets: Customer initiated derivatives $ 14,422 $ — $ 14,422 $ — $ — $ 14,422 Offsetting derivative liabilities: Customer initiated derivatives 14,422 — 14,422 — 15,383 (961) December 31, 2019 Offsetting derivative assets: Customer initiated derivatives $ 4,684 $ — $ 4,684 $ — $ — $ 4,684 Offsetting derivative liabilities: Customer initiated derivatives 4,684 — 4,684 — 4,375 309 |
Parent Company Financial Stat_2
Parent Company Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Condensed Balance Sheet | Balance Sheets—Parent Company (Dollars in thousands) September 30, 2020 December 31, 2019 Assets Cash and cash equivalents $ 29,105 $ 35,210 Investment in banking subsidiary 223,624 178,240 Investment in captive insurance subsidiary 2,306 1,668 Income tax benefit 158 520 Other assets 41 99 Total assets $ 255,234 $ 215,737 Liabilities Subordinated notes $ 44,555 $ 44,440 Accrued expenses and other liabilities 1,211 594 Total liabilities 45,766 45,034 Shareholders' equity 209,468 170,703 Total liabilities and shareholders' equity $ 255,234 $ 215,737 |
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) 2020 2019 2020 2019 Income Dividend income from bank subsidiary $ 5,000 $ — $ 41,500 $ — Total income $ 5,000 $ — $ 41,500 $ — Expenses Interest on borrowed funds 11 — 33 — Interest on subordinated notes 632 256 1,903 759 Other expenses 302 516 1,017 902 Total expenses $ 945 $ 772 $ 2,953 $ 1,661 Income (loss) before income taxes and equity in (overdistributed) undistributed net earnings of subsidiaries 4,055 (772) 38,547 (1,661) Income tax benefit 228 181 383 272 Equity in (overdistributed) undistributed earnings of subsidiaries 926 5,000 (26,890) 12,820 Net income $ 5,209 $ 4,409 $ 12,040 $ 11,431 Other comprehensive income 783 1,238 4,451 7,120 Total comprehensive income, net of tax $ 5,992 $ 5,647 $ 16,491 $ 18,551 |
Schedule of Condensed Statements of Cash Flows | Statements of Cash Flows—Parent Company For the nine months ended September 30, (Dollars in thousands) 2020 2019 Cash flows from operating activities Net income $ 12,040 $ 11,431 Adjustments to reconcile net income to net cash provided by operating activities: Equity in over (under) distributed earnings of subsidiaries 26,890 (12,820) Stock based compensation expense 72 54 (Increase) Decrease in other assets, net 420 (115) Increase in other liabilities, net 654 411 Net cash provided by (used in) operating activities 40,076 (1,039) Cash flows from investing activities Cash used in acquisitions (67,944) — Net cash used in investing activities (67,944) — Cash flows from financing activities Preferred stock offering, net of issuance costs 23,370 — Share buyback - redeemed stock (620) (2,108) Common stock dividends paid (1,082) (852) Proceeds from exercised stock options 95 219 Net cash provided by (used in) financing activities 21,763 (2,741) Net decrease in cash and cash equivalents (6,105) (3,780) Beginning cash and cash equivalents 35,210 9,690 Ending cash and cash equivalents $ 29,105 $ 5,910 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 the periods noted below was as follows: For the three months ended September 30, For the nine months ended September 30, (In thousands, except per share data) 2020 2019 2020 2019 Net income $ 5,209 $ 4,409 $ 12,040 $ 11,431 Net income allocated to participating securities 40 45 140 110 Net income allocated to common shareholders (1) $ 5,169 $ 4,364 $ 11,900 $ 11,321 Weighted average common shares - issued 7,734 7,721 7,730 7,738 Average unvested restricted share awards (59) (80) (90) (76) Weighted average common shares outstanding - basic 7,675 7,641 7,640 7,662 Effect of dilutive securities: Weighted average common stock equivalents 37 111 61 114 Weighted average common shares outstanding - diluted 7,712 7,752 7,701 $ 7,776 EPS available to common shareholders Basic earnings per common share $ 0.68 $ 0.57 $ 1.56 $ 1.48 Diluted earnings per common share $ 0.67 $ 0.56 $ 1.55 $ 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. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Aug. 10, 2020USD ($)$ / sharesshares | Jan. 02, 2020USD ($) | Sep. 30, 2020USD ($)centeroffice$ / shares | Sep. 30, 2019USD ($) |
Business Acquisition [Line Items] | ||||
Number of offices | office | 17 | |||
Number of mortgage loan production office | center | 1 | |||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 2,500 | |||
Net proceeds from issuance of preferred stock | $ | $ 23,370 | $ 0 | ||
Series B Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Preferred stock, interest rate | 7.50% | |||
Depositary Shares | ||||
Business Acquisition [Line Items] | ||||
Sale of stock, number of shares issued (in shares) | shares | 1,000,000 | |||
Percentage of interest in a share of perpetual preferred stock | 1.00% | |||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 25 | |||
Sale of stock, consideration received on transaction | $ | $ 25,000 | |||
Sale of stock, underwriting discounts and offering expenses | $ | 1,600 | |||
Net proceeds from issuance of preferred stock | $ | $ 23,400 | |||
Metro Detroit | ||||
Business Acquisition [Line Items] | ||||
Number of banking centers | center | 11 | |||
Grand Rapids | ||||
Business Acquisition [Line Items] | ||||
Number of banking centers | center | 1 | |||
Jackson | ||||
Business Acquisition [Line Items] | ||||
Number of banking centers | center | 1 | |||
Ann Arbor | ||||
Business Acquisition [Line Items] | ||||
Number of banking centers | center | 3 | |||
Ann Arbor Bancorp, Inc | ||||
Business Acquisition [Line Items] | ||||
Consideration from business acquisition | $ | $ 67,900 |
Business Combinations (Addition
Business Combinations (Additional Information) (Details) - USD ($) $ in Thousands | Jan. 02, 2020 | Jan. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Business Acquisition [Line Items] | ||||||
Acquisition and due diligence fees | $ 17 | $ 319 | $ 1,664 | $ 319 | ||
Ann Arbor Bancorp, Inc | ||||||
Business Acquisition [Line Items] | ||||||
Total cash consideration | $ 67,900 | |||||
Acquisition and due diligence fees | $ 1,700 | |||||
Goodwill acquired | $ 26,200 | $ 26,200 |
Business Combinations (Identifi
Business Combinations (Identifiable Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jan. 02, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill recognized in the acquisition | $ 35,554 | $ 9,387 | |
Ann Arbor Bancorp, Inc | |||
Business Acquisition [Line Items] | |||
Total cash consideration | $ 67,944 | ||
Cash and cash equivalents | 38,480 | ||
Investment securities | 47,416 | ||
Federal Home Loan Bank stock | 923 | ||
Loans held for sale | 1,703 | ||
Loans held for investment | 222,356 | ||
Premises and equipment | 2,404 | ||
Core deposit intangibles | 3,663 | ||
Other assets | 8,358 | ||
Total assets acquired | 325,303 | 325,303 | |
Deposits | 264,820 | ||
Federal Home Loan Bank advances | 15,279 | ||
Other liabilities | 3,427 | ||
Total liabilities assumed | $ 283,526 | 283,526 | |
Total identifiable net assets | 41,777 | ||
Goodwill recognized in the acquisition | $ 26,167 |
Business Combinations (Purchase
Business Combinations (Purchased Loans) (Details) - Ann Arbor Bancorp, Inc $ in Thousands | Jan. 02, 2020USD ($) |
Accounted for under ASC 310-30: | |
Contractual cash flows | $ 1,018 |
Contractual cash flows not expected to be collected (nonaccretable difference) | 82 |
Expected cash flows | 936 |
Interest component of expected cash flows (accretable yield) | 35 |
Fair value at acquisition | 901 |
Accounted for under ASC 310-20: | |
Unpaid principal and interest balance | 221,061 |
Fair value premium | 394 |
Fair value at acquisition | 221,455 |
Total fair value at acquisition | $ 222,356 |
Business Combinations (Pro Form
Business Combinations (Pro Forma Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Combinations [Abstract] | ||||
Net interest income | $ 16,593 | $ 16,036 | $ 47,709 | $ 46,217 |
Noninterest income | 9,125 | 4,486 | 21,604 | 11,228 |
Noninterest expense | 15,143 | 13,742 | 44,822 | 38,879 |
Net income | $ 5,211 | $ 4,865 | $ 12,062 | $ 13,188 |
Net income per diluted share (in dollars per share) | $ 0.67 | $ 0.62 | $ 1.55 | $ 1.68 |
Securities (Available-for-sale
Securities (Available-for-sale Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 243,346 | $ 176,359 |
Gross Unrealized Gains | 10,769 | 5,238 |
Gross Unrealized Losses | (588) | (692) |
Fair Value | 253,527 | 180,905 |
U.S. government sponsored entities & agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 27,092 | |
Gross Unrealized Gains | 126 | |
Gross Unrealized Losses | (19) | |
Fair Value | 27,199 | |
State and political subdivision | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 109,498 | 89,304 |
Gross Unrealized Gains | 8,140 | 4,463 |
Gross Unrealized Losses | (88) | (20) |
Fair Value | 117,550 | 93,747 |
Mortgage-backed securities: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 19,237 | 10,609 |
Gross Unrealized Gains | 255 | 82 |
Gross Unrealized Losses | 0 | (126) |
Fair Value | 19,492 | 10,565 |
Mortgage-backed securities: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,025 | 8,567 |
Gross Unrealized Gains | 630 | 224 |
Gross Unrealized Losses | 0 | (12) |
Fair Value | 8,655 | 8,779 |
Collateralized mortgage obligations: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 14,177 | 8,541 |
Gross Unrealized Gains | 169 | 39 |
Gross Unrealized Losses | (13) | (51) |
Fair Value | 14,333 | 8,529 |
Collateralized mortgage obligations: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 31,659 | 22,891 |
Gross Unrealized Gains | 1,344 | 300 |
Gross Unrealized Losses | 0 | (10) |
Fair Value | 33,003 | 23,181 |
U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,000 | 1,976 |
Gross Unrealized Gains | 3 | 23 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1,003 | 1,999 |
SBA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 18,869 | 22,051 |
Gross Unrealized Gains | 63 | 87 |
Gross Unrealized Losses | (124) | (154) |
Fair Value | 18,808 | 21,984 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,298 | 10,390 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (344) | (306) |
Fair Value | 9,954 | 10,084 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,491 | 2,030 |
Gross Unrealized Gains | 39 | 20 |
Gross Unrealized Losses | 0 | (13) |
Fair Value | $ 3,530 | $ 2,037 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds | $ 5,051 | $ 11,080 | $ 42,640 | $ 46,545 |
Gross gains | 434 | 202 | 1,871 | 543 |
Gross losses | $ 0 | $ (51) | $ (9) | $ (392) |
Securities (Maturity) (Details)
Securities (Maturity) (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Amortized Cost | |
Within one year | $ 11,141 |
One to five years | 27,530 |
Five to ten years | 70,259 |
Beyond ten years | 134,416 |
Amortized Cost | 243,346 |
Fair Value | |
Within one year | 11,228 |
One to five years | 28,494 |
Five to ten years | 73,165 |
Beyond ten years | 140,640 |
Fair Value | $ 253,527 |
Securities (Additional Informat
Securities (Additional Information) (Details) $ in Thousands | Sep. 30, 2020USD ($)security | Dec. 31, 2019USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Securities available-for-sale | $ | $ 253,527 | $ 180,905 |
Number of securities | security | 306 | |
Number of securities in an unrealized loss position | security | 29 | |
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 | security | 66 | |
Securities available-for-sale | $ | $ 48,900 | |
Collateral pledged | ||
Debt Securities, Available-for-sale [Line Items] | ||
Securities pledged | $ | $ 97,200 | $ 27,300 |
Securities (Securities with Unr
Securities (Securities with Unrealized Losses) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair value | ||
Less than 12 Months | $ 16,839 | $ 24,340 |
12 Months or Longer | 24,280 | 25,333 |
Total | 41,119 | 49,673 |
Unrealized Losses | ||
Less than 12 Months | (107) | (329) |
12 Months or Longer | (481) | (363) |
Total | (588) | (692) |
U.S. government sponsored entities & agencies | ||
Fair value | ||
Less than 12 Months | 14,981 | |
12 Months or Longer | 0 | |
Total | 14,981 | |
Unrealized Losses | ||
Less than 12 Months | (19) | |
12 Months or Longer | 0 | |
Total | (19) | |
State and political subdivision | ||
Fair value | ||
Less than 12 Months | 1,858 | 5,109 |
12 Months or Longer | 0 | 305 |
Total | 1,858 | 5,414 |
Unrealized Losses | ||
Less than 12 Months | (88) | (20) |
12 Months or Longer | 0 | 0 |
Total | (88) | (20) |
Mortgage-backed securities: residential | ||
Fair value | ||
Less than 12 Months | 4,022 | |
12 Months or Longer | 3,982 | |
Total | 8,004 | |
Unrealized Losses | ||
Less than 12 Months | (39) | |
12 Months or Longer | (87) | |
Total | (126) | |
Mortgage-backed securities: commercial | ||
Fair value | ||
Less than 12 Months | 1,769 | |
12 Months or Longer | 430 | |
Total | 2,199 | |
Unrealized Losses | ||
Less than 12 Months | (11) | |
12 Months or Longer | (1) | |
Total | (12) | |
Collateralized mortgage obligations: residential | ||
Fair value | ||
Less than 12 Months | 0 | 770 |
12 Months or Longer | 1,136 | 4,631 |
Total | 1,136 | 5,401 |
Unrealized Losses | ||
Less than 12 Months | 0 | (1) |
12 Months or Longer | (13) | (50) |
Total | (13) | (51) |
Collateralized mortgage obligations: commercial | ||
Fair value | ||
Less than 12 Months | 0 | |
12 Months or Longer | 1,716 | |
Total | 1,716 | |
Unrealized Losses | ||
Less than 12 Months | 0 | |
12 Months or Longer | (10) | |
Total | (10) | |
SBA | ||
Fair value | ||
Less than 12 Months | 0 | 3,961 |
12 Months or Longer | 13,190 | 12,405 |
Total | 13,190 | 16,366 |
Unrealized Losses | ||
Less than 12 Months | 0 | (13) |
12 Months or Longer | (124) | (141) |
Total | (124) | (154) |
Asset backed securities | ||
Fair value | ||
Less than 12 Months | 0 | 8,220 |
12 Months or Longer | 9,954 | 1,864 |
Total | 9,954 | 10,084 |
Unrealized Losses | ||
Less than 12 Months | 0 | (232) |
12 Months or Longer | (344) | (74) |
Total | $ (344) | (306) |
Corporate bonds | ||
Fair value | ||
Less than 12 Months | 489 | |
12 Months or Longer | 0 | |
Total | 489 | |
Unrealized Losses | ||
Less than 12 Months | (13) | |
12 Months or Longer | 0 | |
Total | $ (13) |
Loans (Recorded Investment in L
Loans (Recorded Investment in Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | $ 1,843,888 | $ 1,843,888 | $ 1,227,609 | ||
Residential loans held for sale | 60,635 | 60,635 | 13,889 | ||
Proceeds from sales of residential real estate loans | 377,238 | $ 179,350 | |||
Commercial real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 730,189 | 730,189 | 604,646 | ||
Commercial and industrial | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 807,923 | 807,923 | 410,228 | ||
Residential real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 304,088 | 304,088 | 211,839 | ||
Proceeds from sales of residential real estate loans | 157,200 | $ 86,400 | 377,200 | $ 179,400 | |
Consumer | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 1,688 | 1,688 | 896 | ||
Originated | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 1,603,893 | 1,603,893 | 1,158,138 | ||
Originated | Commercial real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 593,156 | 593,156 | 551,565 | ||
Originated | Commercial and industrial | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 748,913 | 748,913 | 403,922 | ||
Originated | Residential real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 261,153 | 261,153 | 201,787 | ||
Originated | Consumer | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 671 | 671 | 864 | ||
Acquired | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 239,995 | 239,995 | 69,471 | ||
Acquired | Commercial real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 137,033 | 137,033 | 53,081 | ||
Acquired | Commercial and industrial | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 59,010 | 59,010 | 6,306 | ||
Acquired | Residential real estate | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | 42,935 | 42,935 | 10,052 | ||
Acquired | Consumer | |||||
Loans and Leases Receivable Disclosure [Line Items] | |||||
Total loans | $ 1,017 | $ 1,017 | $ 32 |
Loans (Nonperforming Assets) (D
Loans (Nonperforming Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Loan commitment non accrual | $ 6 | $ 1,200 |
Financing Receivable, Past Due [Line Items] | ||
Other real estate owned | 0 | 921 |
Loans 90 days or more past due and still accruing | 552 | 157 |
Nonperforming | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 19,266 | 18,529 |
Other real estate owned | 0 | 921 |
Total nonperforming assets | 19,266 | 19,450 |
Nonperforming | Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 7,022 | 4,832 |
Nonperforming | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 8,078 | 11,112 |
Nonperforming | Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 4,151 | 2,569 |
Nonperforming | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | $ 15 | $ 16 |
Loans (Loan Delinquency) (Detai
Loans (Loan Delinquency) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Total loans | $ 1,843,888 | $ 1,227,609 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 1,824,543 | 1,212,478 |
30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 11,601 | 7,297 |
60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 4,334 | 3,990 |
90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 3,410 | 3,844 |
Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 730,189 | 604,646 |
Commercial real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 726,018 | 597,892 |
Commercial real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 3,934 | 3,630 |
Commercial real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 237 | 1,286 |
Commercial real estate | 90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 1,838 |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 807,923 | 410,228 |
Commercial and industrial | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 802,363 | 407,692 |
Commercial and industrial | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 3,598 | 377 |
Commercial and industrial | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 1,962 | 1,275 |
Commercial and industrial | 90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 0 | 884 |
Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 304,088 | 211,839 |
Residential real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 294,478 | 206,002 |
Residential real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 4,067 | 3,286 |
Residential real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 2,133 | 1,429 |
Residential real estate | 90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 3,410 | 1,122 |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 1,688 | 896 |
Consumer | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 1,684 | 892 |
Consumer | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 2 | 4 |
Consumer | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total loans | 2 | 0 |
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, 2020 | Dec. 31, 2019 |
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 3,600 | $ 3,900 |
Total recorded investment | 19,412 | 17,870 |
Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 1,200 | 906 |
Commercial and industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Total recorded investment | 9,182 | 11,652 |
Residential real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Total recorded investment | 3,208 | 1,386 |
Financial Asset, Excluding Purchased Credit Impaired Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Nonaccrual loans | 19,266 | 18,529 |
Total recorded investment | 20,415 | 19,435 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 1,149 | 906 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Commercial and industrial | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 550 | 547 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Residential real estate | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 599 | $ 359 |
Loans (Troubled Debt Restructur
Loans (Troubled Debt Restructuring Additional Information) (Details) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2020USD ($)loan | Sep. 30, 2019loan | Dec. 31, 2019USD ($) | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded investment in troubled debt restructurings | $ 3,600 | $ 3,900 | |
Recorded investment in troubled debt restructurings, reserve | $ 235 | 384 | |
Number of loans modified as TDRs subdequent default | loan | 0 | 0 | |
Nonperforming | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded investment in troubled debt restructurings | $ 2,400 | 3,000 | |
Performing | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded investment in troubled debt restructurings | $ 1,200 | $ 906 |
Loans (Recorded Investment of L
Loans (Recorded Investment of Loans Modified in TDRs) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)loan | Sep. 30, 2019loan | Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 148 | $ 223 | $ 351 | |
Total number of loans | loan | 1 | 0 | 2 | 2 |
Financial effects of modification, net charge-offs | $ 0 | $ 0 | $ 0 | |
Provision (benefit) for loan losses | 0 | 0 | 174 | |
Principal deferral | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 0 | 0 | |
Interest rate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 75 | 0 | |
Forbearance agreement | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 148 | 148 | 351 | |
Commercial and industrial | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 148 | $ 148 | $ 351 | |
Total number of loans | loan | 1 | 1 | 2 | |
Financial effects of modification, net charge-offs | $ 0 | $ 0 | $ 0 | |
Provision (benefit) for loan losses | 0 | 0 | 174 | |
Commercial and industrial | Principal deferral | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 0 | 0 | |
Commercial and industrial | Interest rate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | 0 | 0 | 0 | |
Commercial and industrial | Forbearance agreement | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 148 | 148 | $ 351 | |
Residential real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 75 | |||
Total number of loans | loan | 1 | |||
Financial effects of modification, net charge-offs | $ 0 | |||
Provision (benefit) for loan losses | 0 | |||
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 | 75 | |||
Residential real estate | Forbearance agreement | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total recorded investment | $ 0 |
Loans (Risk Category of Loans b
Loans (Risk Category of Loans by Class of Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 1,843,888 | $ 1,227,609 |
Residential real estate and Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 305,776 | 212,735 |
Residential real estate and Consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 301,610 | 210,150 |
Residential real estate and Consumer | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,166 | 2,585 |
Residential real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 304,088 | 211,839 |
Residential real estate | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 299,937 | 209,270 |
Residential real estate | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,151 | 2,569 |
Commercial real estate and Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,538,112 | 1,014,874 |
Commercial real estate and Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,476,483 | 975,175 |
Commercial real estate and Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 37,560 | 17,292 |
Commercial real estate and Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 18,983 | 20,569 |
Commercial real estate and Commercial and industrial | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 5,086 | 1,838 |
Commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 730,189 | 604,646 |
Commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 703,241 | 591,419 |
Commercial real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 19,686 | 8,325 |
Commercial real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 6,723 | 4,042 |
Commercial real estate | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 539 | 860 |
Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 807,923 | 410,228 |
Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 773,242 | 383,756 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 17,874 | 8,967 |
Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 12,260 | 16,527 |
Commercial and industrial | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,547 | 978 |
Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,688 | 896 |
Consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,673 | 880 |
Consumer | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 15 | $ 16 |
Loans (Purchased Credit Impaire
Loans (Purchased Credit Impaired Loans Additional Information) (Details) | Sep. 30, 2020acquisition |
Receivables [Abstract] | |
Number of previous acquisitions | 5 |
Loans (Total Balance of all Pur
Loans (Total Balance of all Purchase Credit Impaired Loans from Acquisitions) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | $ 19,412 | $ 17,870 |
Commercial real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | 7,022 | 4,832 |
Commercial and industrial | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | 9,182 | 11,652 |
Residential real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | 3,208 | 1,386 |
Acquired with deteriorated credit quality | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 11,035 | 11,368 |
Impaired loans | 6,067 | 5,973 |
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 | 6,304 | 6,597 |
Impaired loans | 2,841 | 2,884 |
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 | 683 | 556 |
Impaired loans | 281 | 135 |
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 | 4,048 | 4,215 |
Impaired loans | $ 2,945 | $ 2,954 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||||
Accretable yield at beginning of period | $ 8,374 | $ 10,194 | $ 9,141 | $ 10,947 |
Additions due to acquisitions | 0 | 0 | 35 | 0 |
Accretion of income | (482) | (597) | (1,350) | (1,772) |
Adjustments to accretable yield | 0 | 0 | 66 | 422 |
Accretable yield at end of period | $ 7,892 | $ 9,597 | $ 7,892 | $ 9,597 |
Allowance for Loan Losses (Addi
Allowance for Loan Losses (Additional Information) (Details) | Sep. 30, 2020loan_poolloan |
Receivables [Abstract] | |
Number of purchase credit impaired loan pools | loan_pool | 6 |
Number of non-pooled purchase credit impaired loans | loan | 13 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | $ 14,429 | $ 14,429 | $ 16,768 | ||
Recorded investment with related allowance | 4,983 | 4,983 | 1,102 | ||
Total recorded investment | 19,412 | 19,412 | 17,870 | ||
Contractual principal balance | 20,845 | 20,845 | 19,247 | ||
Related allowance | 824 | 824 | 385 | ||
Average Recorded Investment | 19,364 | $ 11,291 | 23,785 | $ 15,173 | |
Interest Income Recognized | 19 | 23 | 60 | 56 | |
Cash Basis Interest Recognized | 0 | 384 | 84 | 792 | |
Commercial real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | 7,022 | 7,022 | 4,832 | ||
Recorded investment with related allowance | 0 | 0 | 0 | ||
Total recorded investment | 7,022 | 7,022 | 4,832 | ||
Contractual principal balance | 7,355 | 7,355 | 5,156 | ||
Related allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 7,139 | 3,111 | 7,433 | 4,034 | |
Interest Income Recognized | 0 | 2 | 0 | 2 | |
Cash Basis Interest Recognized | 0 | 35 | 0 | 209 | |
Commercial and industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | 4,465 | 4,465 | 10,739 | ||
Recorded investment with related allowance | 4,717 | 4,717 | 913 | ||
Total recorded investment | 9,182 | 9,182 | 11,652 | ||
Contractual principal balance | 10,031 | 10,031 | 12,521 | ||
Related allowance | 798 | 798 | 363 | ||
Average Recorded Investment | 8,960 | 6,752 | 13,086 | 9,080 | |
Interest Income Recognized | 12 | 14 | 34 | 33 | |
Cash Basis Interest Recognized | 0 | 349 | 84 | 573 | |
Residential real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded investment with no related allowance | 2,942 | 2,942 | 1,197 | ||
Recorded investment with related allowance | 266 | 266 | 189 | ||
Total recorded investment | 3,208 | 3,208 | 1,386 | ||
Contractual principal balance | 3,459 | 3,459 | 1,570 | ||
Related allowance | 26 | 26 | $ 22 | ||
Average Recorded Investment | 3,265 | 1,428 | 3,266 | 2,059 | |
Interest Income Recognized | 7 | 7 | 26 | 21 | |
Cash Basis Interest Recognized | $ 0 | $ 0 | $ 0 | $ 10 |
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 | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | $ 17,063 | $ 12,353 | $ 12,674 | $ 11,566 | ||
Provision for loan losses | 4,270 | (16) | 10,334 | 835 | ||
Gross chargeoffs | (124) | (83) | (1,886) | (286) | ||
Recoveries | 45 | 53 | 132 | 192 | ||
Net (chargeoffs) recoveries | (79) | (30) | (1,754) | (94) | ||
Ending allowance for loan losses | 21,254 | 12,307 | 21,254 | 12,307 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | $ 824 | $ 385 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 19,493 | 11,527 | ||||
Ending Allowance for loan losses | 21,254 | 12,307 | 21,254 | 12,307 | 21,254 | 12,674 |
Balance of loans, individually evaluated for impairment | 19,412 | 17,870 | ||||
Balance of loans, collectively evaluated for impairment | 1,818,409 | 1,203,766 | ||||
Total loans | 1,843,888 | 1,227,609 | ||||
Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 762 | |||||
Ending allowance for loan losses | 937 | 937 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 937 | 762 | 937 | 762 | ||
Total loans | 6,067 | 5,973 | ||||
Commercial real estate | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 7,987 | 5,219 | 5,773 | 5,227 | ||
Provision for loan losses | 1,820 | 184 | 4,034 | 249 | ||
Gross chargeoffs | 0 | 0 | 0 | (74) | ||
Recoveries | 12 | 5 | 12 | 6 | ||
Net (chargeoffs) recoveries | 12 | 5 | 12 | (68) | ||
Ending allowance for loan losses | 9,819 | 5,408 | 9,819 | 5,408 | ||
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 | 9,109 | 5,062 | ||||
Ending Allowance for loan losses | 9,819 | 5,408 | 5,773 | 5,227 | 9,819 | 5,773 |
Balance of loans, individually evaluated for impairment | 7,022 | 4,832 | ||||
Balance of loans, collectively evaluated for impairment | 720,326 | 596,930 | ||||
Total loans | 730,189 | 604,646 | ||||
Commercial real estate | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 711 | |||||
Ending allowance for loan losses | 710 | 710 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 710 | 711 | 710 | 711 | ||
Total loans | 2,841 | 2,884 | ||||
Commercial and industrial | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 6,496 | 5,990 | 5,515 | 5,174 | ||
Provision for loan losses | 1,679 | (280) | 4,347 | 560 | ||
Gross chargeoffs | (10) | (49) | (1,729) | (164) | ||
Recoveries | 15 | 10 | 47 | 101 | ||
Net (chargeoffs) recoveries | 5 | (39) | (1,682) | (63) | ||
Ending allowance for loan losses | 8,180 | 5,671 | 8,180 | 5,671 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | 798 | 363 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 7,352 | 5,124 | ||||
Ending Allowance for loan losses | 8,180 | 5,671 | 8,180 | 5,174 | 8,180 | 5,515 |
Balance of loans, individually evaluated for impairment | 9,182 | 11,652 | ||||
Balance of loans, collectively evaluated for impairment | 798,460 | 398,441 | ||||
Total loans | 807,923 | 410,228 | ||||
Commercial and industrial | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 28 | |||||
Ending allowance for loan losses | 30 | 30 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 30 | 28 | 30 | 28 | ||
Total loans | 281 | 135 | ||||
Residential real estate | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 2,565 | 1,142 | 1,384 | 1,164 | ||
Provision for loan losses | 781 | 72 | 1,921 | 7 | ||
Gross chargeoffs | (110) | 0 | (110) | 0 | ||
Recoveries | 10 | 12 | 51 | 55 | ||
Net (chargeoffs) recoveries | (100) | 12 | (59) | 55 | ||
Ending allowance for loan losses | 3,246 | 1,226 | 3,246 | 1,226 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | 26 | 22 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 3,023 | 1,339 | ||||
Ending Allowance for loan losses | 3,246 | 1,226 | 1,384 | 1,164 | 3,246 | 1,384 |
Balance of loans, individually evaluated for impairment | 3,208 | 1,386 | ||||
Balance of loans, collectively evaluated for impairment | 297,935 | 207,499 | ||||
Total loans | 304,088 | 211,839 | ||||
Residential real estate | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 23 | |||||
Ending allowance for loan losses | 197 | 197 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 197 | 23 | 197 | 23 | ||
Total loans | 2,945 | 2,954 | ||||
Consumer | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 15 | 2 | 2 | 1 | ||
Provision for loan losses | (10) | 8 | 32 | 19 | ||
Gross chargeoffs | (4) | (34) | (47) | (48) | ||
Recoveries | 8 | 26 | 22 | 30 | ||
Net (chargeoffs) recoveries | 4 | (8) | (25) | (18) | ||
Ending allowance for loan losses | 9 | 2 | 9 | 2 | ||
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 | 9 | 2 | ||||
Ending Allowance for loan losses | 9 | $ 2 | 2 | $ 2 | 9 | 2 |
Balance of loans, individually evaluated for impairment | 0 | 0 | ||||
Balance of loans, collectively evaluated for impairment | 1,688 | 896 | ||||
Total loans | 1,688 | 896 | ||||
Consumer | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Ending allowance for loan losses | 0 | 0 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | $ 0 | $ 0 | 0 | 0 | ||
Total loans | $ 0 | $ 0 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 24,394 | $ 24,394 | $ 21,332 | ||
Less: Accumulated depreciation | 8,748 | 8,748 | 7,494 | ||
Net premises and equipment | 15,646 | 15,646 | 13,838 | ||
Depreciation expenses | 426 | $ 326 | 1,259 | $ 986 | |
Operating lease, rent expense | 450 | $ 307 | 1,400 | $ 840 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 3,514 | 3,514 | 2,254 | ||
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 10,656 | 10,656 | 9,825 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 2,993 | 2,993 | 2,714 | ||
Furniture, fixtures and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 7,231 | $ 7,231 | $ 6,539 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Additional Information) (Details) | Jan. 02, 2020USD ($) | Jan. 31, 2020USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jan. 31, 2020acquisition | Dec. 31, 2019USD ($) |
Goodwill [Line Items] | ||||||||||
Number of banks acquired | acquisition | 3 | |||||||||
Goodwill recognized in the acquisition | $ 35,554,000 | $ 35,554,000 | $ 9,387,000 | |||||||
Goodwill impairment | 0 | |||||||||
Amortization of core deposit intangibles | 576,000 | $ 117,000 | ||||||||
Serviced mortgage loans, unpaid principal balance | 211,000,000 | 211,000,000 | $ 9,000,000 | |||||||
Lotus Bank | ||||||||||
Goodwill [Line Items] | ||||||||||
Goodwill acquired | $ 4,600,000 | |||||||||
Bank of Michigan | ||||||||||
Goodwill [Line Items] | ||||||||||
Goodwill acquired | $ 4,800,000 | |||||||||
Ann Arbor Bancorp, Inc | ||||||||||
Goodwill [Line Items] | ||||||||||
Goodwill acquired | $ 26,200,000 | $ 26,200,000 | ||||||||
Goodwill recognized in the acquisition | $ 26,167,000 | |||||||||
Core Deposits | ||||||||||
Goodwill [Line Items] | ||||||||||
Amortization of core deposit intangibles | $ 191,000 | $ 29,000 | $ 576,000 | $ 117,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangible | $ 5,581 | $ 383 |
Core Deposits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 5,708 | 2,045 |
Accumulated amortization | (2,320) | (1,744) |
Net Intangible | $ 3,388 | $ 301 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Schedule of Changes in Mortgage Servicing Rights) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Mortgage servicing rights: | ||||
Balance, beginning of period | $ 1,213 | $ 76 | ||
Originated servicing | 1,073 | 2,250 | ||
Amortization | (93) | (133) | ||
Balance, end of period | 2,193 | 2,193 | ||
Mortgage servicing rights, fair value | $ 2,567 | $ 2,567 | $ 1,256 | $ 87 |
Borrowings and Subordinated D_3
Borrowings and Subordinated Debt (Components of Long-term Debt and Short-term Borrowings) (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 18, 2019 | Dec. 21, 2015 |
Short-term Debt [Line Items] | ||||
Total short-term borrowings | $ 187,000 | $ 65,851,000 | ||
Total short-term borrowings, weighted average rate | 0.30% | 1.62% | ||
Debt Instrument [Line Items] | ||||
Total long-term debt, amount | $ 261,177,000 | $ 190,814,000 | ||
Total long-term debt, weighted average rate | 1.71% | 2.04% | ||
Total short-term and long-term borrowings | $ 261,364,000 | $ 256,665,000 | ||
Total short-term and long-term borrowings, weighted average rate | 1.71% | 1.93% | ||
FHLB advances | $ 181,000,000 | |||
FHLB advances, purchase accounting premiums | 202,000 | |||
Secured borrowing due in 2022 | Secured borrowing due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, amount | $ 1,322,000 | $ 1,374,000 | ||
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 | $ 181,202,000 | $ 145,000,000 | ||
Total long-term debt, weighted average rate | 1.09% | 1.06% | ||
Unsecured Debt | FRB borrowings | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, amount | $ 34,098,000 | $ 0 | ||
Total long-term debt, weighted average rate | 0.35% | 0.00% | ||
Fixed interest rate | 0.35% | |||
Subordinated notes | ||||
Debt Instrument [Line Items] | ||||
Fixed interest rate | 4.75% | 6.375% | ||
Long-term debt gross | $ 30,000,000 | $ 15,000,000 | ||
Subordinated notes | Subordinated notes due in 2025 and 2029 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, amount | $ 44,555,000 | $ 44,440,000 | ||
Total long-term debt, weighted average rate | 5.29% | 5.29% | ||
Minimum | FHLB Advances | FHLB advances due in 2022 to 2029 | ||||
Debt Instrument [Line Items] | ||||
Fixed interest rate | 0.42% | |||
Maximum | FHLB Advances | FHLB advances due in 2022 to 2029 | ||||
Debt Instrument [Line Items] | ||||
Fixed interest rate | 2.93% | |||
FHLB Advances | ||||
Short-term Debt [Line Items] | ||||
Total short-term borrowings | $ 0 | $ 60,000,000 | ||
Total short-term borrowings, weighted average rate | 0.00% | 1.61% | ||
Securities sold under agreements to repurchase | ||||
Short-term Debt [Line Items] | ||||
Total short-term borrowings | $ 187,000 | $ 851,000 | ||
Total short-term borrowings, weighted average rate | 0.30% | 0.30% | ||
Federal funds purchased | ||||
Short-term Debt [Line Items] | ||||
Total short-term borrowings | $ 0 | $ 5,000,000 | ||
Total short-term borrowings, weighted average rate | 0.00% | 1.90% |
Borrowings and Subordinated D_4
Borrowings and Subordinated Debt (Additional Information) (Details) - USD ($) | Dec. 18, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 21, 2015 |
Short-term Debt [Line Items] | ||||
Total short-term borrowings | $ 187,000 | $ 65,851,000 | ||
Debt Instrument [Line Items] | ||||
Subordinated notes | 261,177,000 | 190,814,000 | ||
FHLB advances | 181,000,000 | |||
Federal Home Loan Bank, advances, collateral | 510,600,000 | |||
Federal Home Loan Bank, advances, maximum borrowing capacity | 211,100,000 | |||
Maturity overnight | ||||
Short-term Debt [Line Items] | ||||
Fair value of collateralized mortgage obligations | 1,900,000 | |||
FHLB line of credit | Unsecured borrowings | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 122,500,000 | |||
Secured borrowing due in 2022 | Secured borrowing due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Subordinated notes | $ 1,322,000 | 1,374,000 | ||
Fixed interest rate | 1.00% | |||
Subordinated notes | ||||
Debt Instrument [Line Items] | ||||
Fixed interest rate | 4.75% | 6.375% | ||
Long-term debt gross | $ 30,000,000 | $ 15,000,000 | ||
Subordinated notes | SOFR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 311.00% | |||
Subordinated notes | Subordinated notes due in 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt gross | $ 45,000,000 | 45,000,000 | ||
Debt issuance costs | $ 445,000 | 560,000 | ||
Subordinated notes | Subordinated notes due in 2025 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 477.00% | |||
Unsecured borrowings | FRB borrowings | ||||
Debt Instrument [Line Items] | ||||
Subordinated notes | $ 34,098,000 | 0 | ||
Fixed interest rate | 0.35% | |||
Federal funds purchased | ||||
Short-term Debt [Line Items] | ||||
Total short-term borrowings | $ 0 | 5,000,000 | ||
Securities sold under agreements to repurchase | ||||
Short-term Debt [Line Items] | ||||
Total short-term borrowings | 187,000 | $ 851,000 | ||
Securities sold under agreements to repurchase | Maturity overnight | ||||
Short-term Debt [Line Items] | ||||
Total short-term borrowings | 187,000 | |||
Federal Reserve Bank | FHLB line of credit | Secured borrowing due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 5,300,000 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Expected Income Tax Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense based on federal corporate tax rate | $ 1,328 | $ 1,118 | $ 2,970 | $ 2,911 | |
Changes resulting from: | |||||
Tax-exempt income | (154) | (142) | (469) | (398) | |
Net operating loss carryback due to CARES Act | 0 | $ (290) | 0 | (290) | 0 |
Disqualified dispositions from stock options | 0 | $ (175) | 0 | (175) | 0 |
Other, net | (57) | (62) | 73 | (85) | |
Total | $ 1,117 | $ 914 | $ 2,109 | $ 2,428 |
Income Taxes (Additional Inform
Income Taxes (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Operating loss carryforwards | $ 2,200 | ||||
Tax benefit from net operating loss carryback due to CARES Act | $ 0 | 290 | $ 0 | $ 290 | $ 0 |
Tax benefit from disqualified dispositions from stock options | $ 0 | $ 175 | $ 0 | $ 175 | $ 0 |
Stock Based Compensation (2018
Stock Based Compensation (2018 Equity Incentive Plan) (Details) - shares | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Apr. 17, 2018 | |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards granted (in shares) | 38,170 | ||
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) | 165,597 | ||
2018 Plan | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards granted (in shares) | 38,170 | 35,633 |
Stock Based Compensation (Stock
Stock Based Compensation (Stock Options Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted (in shares) | 0 | 0 | ||
Aggregate intrinsic value, stock options outstanding | $ 516 | $ 516 | ||
Aggregate intrinsic value, stock options exercisable | 516 | $ 516 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of options | ten | |||
Vesting period | 3 years | |||
Unrecognized compensation costs | 17 | $ 17 | ||
Weighted-average recognition period for unrecognized compensation costs | 4 months 17 days | |||
Share-based compensation expense | 11 | $ 12 | $ 33 | $ 43 |
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% | |||
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | 1,200 | $ 1,200 | ||
Weighted-average recognition period for unrecognized compensation costs | 1 year 10 months 17 days | |||
Share-based compensation expense | $ 223 | $ 177 | $ 620 | $ 474 |
Stock Based Compensation (Summa
Stock Based Compensation (Summary of Stock Option Activity) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Shares | ||||
Options outstanding, beginning of year (in shares) | 355,218 | 355,218 | ||
Exercised (in shares) | (6,250) | (10,000) | (21,550) | |
Options outstanding, end of year (in shares) | 345,218 | |||
Options Exercisable (in shares) | 335,216 | |||
Weighted Average Exercise Price | ||||
Options outstanding, beginning of year (in dollars per share) | $ 16.63 | $ 16.63 | ||
Exercised (in dollars per share) | 9.57 | |||
Options outstanding, end of year (in dollars per share) | 16.83 | |||
Options exercisable (in dollars per share) | $ 16.59 | |||
Weighted Average Remaining Contractual Term | ||||
Options outstanding | 5 years | 4 years 4 months 24 days | ||
Options exercisable | 4 years 3 months 18 days |
Stock Based Compensation (Restr
Stock Based Compensation (Restricted Stock Awards - Changes in Nonvested Shares) (Details) - Restricted Stock Awards | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Shares | |
Nonvested at January 1, 2020 (in shares) | shares | 80,370 |
Granted (in shares) | shares | 38,170 |
Vested (in shares) | shares | (19,850) |
Forfeited (in shares) | shares | (1,400) |
Nonvested at September 30, 2020 (in shares) | shares | 97,290 |
Weighted Average Grant-Date Fair Value | |
Nonvested at January 1, 2020 (in dollars per share) | $ / shares | $ 24.28 |
Granted (in dollars per share) | $ / shares | 24.90 |
Vested (in dollars per share) | $ / shares | 23.10 |
Forfeited (in dollars per share) | $ / shares | 24.46 |
Nonvested at September 30, 2020 (in dollars per share) | $ / shares | $ 24.76 |
Stock Based Compensation (Res_2
Stock Based Compensation (Restricted Stock Awards Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock redeemed to cover payroll taxes due at time of vesting | $ 64 | $ 43 | ||
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | $ 1,200 | $ 1,200 | ||
Weighted-average recognition period for unrecognized compensation costs | 1 year 10 months 17 days | |||
Fair value of shares vested during period | $ 459 | |||
Share-based compensation expense | 223 | $ 177 | 620 | 474 |
Restricted stock redeemed to cover payroll taxes due at time of vesting | 64 | 43 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | 17 | $ 17 | ||
Weighted-average recognition period for unrecognized compensation costs | 4 months 17 days | |||
Share-based compensation expense | $ 11 | $ 12 | $ 33 | $ 43 |
Off- Balance Sheet Activities_2
Off- Balance Sheet Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risk, allowance | $ 498 | $ 318 |
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 | $ 5,302 | 16,276 |
Off-balance sheet exposure, variable rates | 5,295 | 20,128 |
Unused lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | 30,496 | 28,723 |
Off-balance sheet exposure, variable rates | 361,749 | 288,086 |
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 | 3,705 | 4,895 |
Off-balance sheet exposure, variable rates | $ 2,028 | $ 0 |
Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 3.00% | |
Fixed rate loan commitments, maturity | 3 months | |
Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 5.50% | |
Fixed rate loan commitments, maturity | 15 years |
Regulatory Capital Matters (Det
Regulatory Capital Matters (Details) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 139,067,000 | $ 157,659,000 |
Actual capital, ratio | 0.0883 | 0.1172 |
Required capital adequacy, amount | $ 70,875,000 | $ 60,533,000 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 110,250,000 | $ 94,163,000 |
Required capital adequacy with capital conservation buffer, ratio | 7.00% | 7.00% |
Tier 1 capital to risk-weighted assets: | ||
Actual capital, amount | $ 162,437,000 | $ 157,659,000 |
Actual capital, ratio | 0.1031 | 0.1172 |
Required capital adequacy, amount | $ 94,500,000 | $ 80,711,000 |
Required capital adequacy, ratio | 0.0600 | 0.0600 |
Required capital adequacy with capital conservation buffer, amount | $ 133,875,000 | $ 114,341,000 |
Required capital adequacy, ratio | 8.50% | 8.50% |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 226,679,000 | $ 215,091,000 |
Actual capital, ratio | 0.1439 | 0.1599 |
Required capital adequacy, amount | $ 126,000,000 | $ 107,615,000 |
Required capital adequacy, ratio | 0.0800 | 0.0800 |
Required capital adequacy with capital conservation buffer, amount | $ 165,375,000 | $ 141,244,000 |
Required capital adequacy, ratio | 10.50% | 10.50% |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 162,437,000 | $ 157,659,000 |
Actual capital, ratio | 0.0717 | 0.1041 |
Required capital adequacy, amount | $ 90,664,000 | $ 60,580,000 |
Required capital adequacy, ratio | 0.0400 | 0.0400 |
Required capital adequacy with capital conservation buffer, amount | $ 90,664,000 | $ 60,580,000 |
Required capital adequacy with capital conservation buffer, ratio | 4.00% | 4.00% |
Capital conservation buffer, percentage | 2.50% | 2.50% |
Amount available for dividend payment without regulatory approval | $ 42,900,000 | |
Bank | ||
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 176,593,000 | $ 165,199,000 |
Actual capital, ratio | 0.1123 | 0.1227 |
Required capital adequacy, amount | $ 70,760,000 | $ 60,568,000 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 110,070,000 | $ 94,217,000 |
Required capital adequacy with capital conservation buffer, ratio | 7.00% | 7.00% |
Prompt corrective action provisions, amount | $ 102,208,000 | $ 87,487,000 |
Prompt corrective action provisions, ratio | 6.50% | 6.50% |
Tier 1 capital to risk-weighted assets: | ||
Actual capital, amount | $ 176,593,000 | $ 165,199,000 |
Actual capital, ratio | 0.1123 | 0.1227 |
Required capital adequacy, amount | $ 94,346,000 | $ 80,757,000 |
Required capital adequacy, ratio | 0.0600 | 0.0600 |
Required capital adequacy with capital conservation buffer, amount | $ 133,657,000 | $ 114,406,000 |
Required capital adequacy, ratio | 8.50% | 8.50% |
Prompt corrective action provisions, amount | $ 125,795,000 | $ 107,676,000 |
Prompt corrective action provisions, ratio | 0.0800 | 0.0800 |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 196,274,000 | $ 178,191,000 |
Actual capital, ratio | 0.1248 | 0.1324 |
Required capital adequacy, amount | $ 125,795,000 | $ 107,676,000 |
Required capital adequacy, ratio | 0.0800 | 0.0800 |
Required capital adequacy with capital conservation buffer, amount | $ 165,106,000 | $ 141,325,000 |
Required capital adequacy, ratio | 10.50% | 10.50% |
Prompt corrective action provisions, amount | $ 157,244,000 | $ 134,595,000 |
Prompt corrective action provisions, ratio | 0.1000 | 0.1000 |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 176,593,000 | $ 165,199,000 |
Actual capital, ratio | 0.0783 | 0.1096 |
Required capital adequacy, amount | $ 90,220,000 | $ 60,276,000 |
Required capital adequacy, ratio | 0.0400 | 0.0400 |
Required capital adequacy with capital conservation buffer, amount | $ 90,220,000 | $ 60,276,000 |
Required capital adequacy with capital conservation buffer, ratio | 4.00% | 4.00% |
Prompt corrective action provisions, amount | $ 112,776,000 | $ 75,345,000 |
Prompt corrective action provisions, ratio | 0.0500 | 0.0500 |
Fair Value (Fair Value Measurem
Fair Value (Fair Value Measurements of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Securities available-for-sale | $ 253,527 | $ 180,905 |
Recurring | ||
Financial assets: | ||
Securities available-for-sale | 253,527 | 180,905 |
Loans held for sale | 60,635 | 13,889 |
Total assets at fair value | 335,849 | 203,831 |
Total liabilities at fair value | 14,867 | |
Recurring | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 5,080 | 4,063 |
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 | 251,815 | 180,905 |
Loans held for sale | 60,635 | 13,889 |
Total assets at fair value | 329,057 | 199,768 |
Total liabilities at fair value | 14,867 | |
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 | 1,712 | 0 |
Loans held for sale | 0 | 0 |
Total assets at fair value | 6,792 | 4,063 |
Total liabilities at fair value | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 5,080 | 4,063 |
U.S. government sponsored entities & agencies | ||
Financial assets: | ||
Securities available-for-sale | 27,199 | |
U.S. government sponsored entities & agencies | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 27,199 | |
U.S. government sponsored entities & agencies | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
U.S. government sponsored entities & agencies | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 27,199 | |
U.S. government sponsored entities & agencies | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
State and political subdivision | ||
Financial assets: | ||
Securities available-for-sale | 117,550 | 93,747 |
State and political subdivision | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 117,550 | 93,747 |
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 | 115,838 | 93,747 |
State and political subdivision | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 1,712 | 0 |
Mortgage-backed securities: residential | ||
Financial assets: | ||
Securities available-for-sale | 19,492 | 10,565 |
Mortgage-backed securities: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 19,492 | 10,565 |
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 | 19,492 | 10,565 |
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 | 8,655 | 8,779 |
Mortgage-backed securities: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 8,655 | 8,779 |
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 | 8,655 | 8,779 |
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 | 14,333 | 8,529 |
Collateralized mortgage obligations: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 14,333 | 8,529 |
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 | 14,333 | 8,529 |
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 | 33,003 | 23,181 |
Collateralized mortgage obligations: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 33,003 | 23,181 |
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 | 33,003 | 23,181 |
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 | 1,003 | 1,999 |
U.S. Treasury | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 1,003 | 1,999 |
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 | 1,003 | 1,999 |
U.S. Treasury | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
SBA | ||
Financial assets: | ||
Securities available-for-sale | 18,808 | 21,984 |
SBA | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 18,808 | 21,984 |
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 | 18,808 | 21,984 |
SBA | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Asset backed securities | ||
Financial assets: | ||
Securities available-for-sale | 9,954 | 10,084 |
Asset backed securities | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 9,954 | 10,084 |
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 | 9,954 | 10,084 |
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 | 3,530 | 2,037 |
Corporate bonds | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 3,530 | 2,037 |
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 | 3,530 | 2,037 |
Corporate bonds | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Customer-initiated derivatives | Recurring | ||
Financial assets: | ||
Derivative asset | 14,422 | 4,684 |
Derivative liabilities | 14,422 | 4,684 |
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 | 14,422 | 4,684 |
Derivative liabilities | 14,422 | 4,684 |
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 | 117 | 34 |
Derivative liabilities | 441 | 33 |
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 | 117 | 34 |
Derivative liabilities | 441 | 33 |
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 | 2,068 | 256 |
Derivative liabilities | 4 | |
Total liabilities at fair value | 4,717 | |
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 | 2,068 | 256 |
Derivative liabilities | 4 | |
Total liabilities at fair value | 4,717 | |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||||
Beginning balance | $ 4,056 | $ 5,624 | $ 4,063 | $ 4,571 |
Transfers from loans held for sale | 1,468 | 466 | 2,284 | 1,895 |
Gains (losses): | ||||
Recorded in "Mortgage banking activities" | 65 | (9) | 62 | 151 |
Repayments | (509) | (1,191) | (1,329) | (1,727) |
Ending balance | $ 5,080 | $ 4,890 | $ 5,080 | $ 4,890 |
Fair Value (Contractual Obligat
Fair Value (Contractual Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Aggregate fair value | $ 60,635 | $ 13,889 |
Contractual balance | 59,055 | 13,510 |
Unrealized gain | $ 1,580 | $ 379 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | ||||
Change in fair value | $ 556 | $ (98) | $ 1,201 | $ 352 |
Fair Value (Assets Measured at
Fair Value (Assets Measured at Fair Value on a Non-Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgage servicing rights, fair value | $ 2,567 | $ 1,256 | $ 87 |
Other real estate owned | 0 | 921 | |
Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgage servicing rights, fair value | 2,567 | 87 | |
Other real estate owned | 921 | ||
Carrying Value | Non-recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgage servicing rights, fair value | 2,567 | 87 | |
Other real estate owned | 921 | ||
Total assets at fair value | 4,633 | 1,534 | |
Estimate of Fair Value Measurement | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgage servicing rights, fair value | 2,567 | 87 | |
Other real estate owned | 921 | ||
Total assets at fair value | 4,633 | 1,534 | |
Residential real estate | Carrying Value | Non-recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans | 1,305 | ||
Residential real estate | Estimate of Fair Value Measurement | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans | 1,305 | ||
Commercial and industrial | Carrying Value | Non-recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans | 761 | 261 | |
Commercial and industrial | Estimate of Fair Value Measurement | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans | $ 761 | 261 | |
Commercial real estate | Carrying Value | Non-recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans | 265 | ||
Commercial real estate | Estimate of Fair Value Measurement | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans | $ 265 |
Fair Value (Additional Informat
Fair Value (Additional Information) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Impaired loans, allowance allocation recorded | $ 21,254,000 | $ 12,307,000 | $ 21,254,000 | $ 12,307,000 | $ 12,674,000 | $ 17,063,000 | $ 12,353,000 | $ 11,566,000 | |
Chargeoffs to impaired loans | 79,000 | $ 30,000 | 1,754,000 | $ 94,000 | |||||
Valuation allowance related to mortgage servicing rights | 17,000 | $ 0 | |||||||
Write downs recorded in other real estate owned | 0 | 0 | 0 | ||||||
Carrying Value | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Impaired loans, allowance allocation recorded | $ 91,000 | 91,000 | $ 161,000 | ||||||
Chargeoffs to impaired loans | $ 298,000 | $ 364,000 | |||||||
Minimum | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Additional adjustment | 0.05% | 0.05% | |||||||
Maximum | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Additional adjustment | 0.75% | 0.75% |
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, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impaired loans | $ 19,412 | $ 17,870 | |
Mortgage servicing rights, fair value | 2,567 | $ 1,256 | 87 |
Other real estate owned | 0 | 921 | |
Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impaired loans | 2,066 | 526 | |
Mortgage servicing rights, fair value | $ 2,567 | 87 | |
Other real estate owned | $ 921 | ||
Minimum | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impaired loans, measurement input | 10.00% | 10.00% | |
Other real estate owned, measurement input | 18.00% | ||
Maximum | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impaired loans, measurement input | 80.00% | 50.00% | |
Other real estate owned, measurement input | 36.00% | ||
Prepayment speed | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Mortgage servicing rights, prepayment speed | 9.40% | 13.42% | |
Discount rate | Non-recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Mortgage servicing rights, prepayment speed | 7.75% | 8.50% |
Fair Value (Fair Value Measur_2
Fair Value (Fair Value Measurement of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Financial assets: | ||
Cash and cash equivalents | $ 176,486 | $ 103,930 |
Other investments | 14,398 | 11,475 |
Net loans | 1,822,634 | 1,214,935 |
Accrued interest receivable | 8,541 | 4,403 |
Financial liabilities: | ||
Deposits | 1,943,435 | 1,135,428 |
Borrowings | 216,809 | 212,225 |
Subordinated notes | 44,555 | 44,440 |
Accrued interest payable | 2,265 | 1,574 |
Estimate of Fair Value Measurement | ||
Financial assets: | ||
Cash and cash equivalents | 176,486 | 103,930 |
Net loans | 1,863,805 | 1,203,639 |
Accrued interest receivable | 8,541 | 4,403 |
Financial liabilities: | ||
Deposits | 2,008,494 | 1,138,202 |
Borrowings | 224,511 | 212,125 |
Subordinated notes | 44,795 | 47,100 |
Accrued interest payable | 2,265 | 1,574 |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 31,080 | 19,990 |
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 | 145,406 | 83,940 |
Net loans | 0 | 0 |
Accrued interest receivable | 1,966 | 1,236 |
Financial liabilities: | ||
Deposits | 2,008,494 | 1,138,202 |
Borrowings | 224,511 | 212,125 |
Subordinated notes | 44,795 | 47,100 |
Accrued interest payable | 2,265 | 1,574 |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Net loans | 1,863,805 | 1,203,639 |
Accrued interest receivable | 6,575 | 3,167 |
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, 2020 | Dec. 31, 2019 |
Other Assets | ||
Notional Amount | ||
Derivative asset | $ 284,481 | $ 135,478 |
Fair Value | ||
Derivative asset | 16,607 | 4,974 |
Other Liabilities | ||
Notional Amount | ||
Derivative liability | 239,212 | 125,502 |
Fair Value | ||
Derivative liability | 14,867 | 4,717 |
Customer-initiated derivatives | ||
Fair Value | ||
Derivative asset | 14,422 | 4,684 |
Derivative liability | 14,422 | 4,684 |
Customer-initiated derivatives | Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 135,462 | 103,941 |
Fair Value | ||
Derivative asset | 14,422 | 4,684 |
Customer-initiated derivatives | Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 135,462 | 103,941 |
Fair Value | ||
Derivative liability | 14,422 | 4,684 |
Forward contracts related to mortgage loans to be delivered for sale | Not Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 38,840 | 6,018 |
Fair Value | ||
Derivative asset | 117 | 34 |
Forward contracts related to mortgage loans to be delivered for sale | Not Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 99,697 | 20,633 |
Fair Value | ||
Derivative liability | 441 | 33 |
Interest rate lock commitments | Not Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 110,179 | 25,519 |
Fair Value | ||
Derivative asset | 2,068 | 256 |
Interest rate lock commitments | Not Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 4,053 | 928 |
Fair Value | ||
Derivative liability | $ 4 | $ 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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total loss recognized in income | $ (816) | $ (74) | $ (2,188) | $ (261) |
Forward contracts related to mortgage loans to be delivered for sale | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total loss recognized in income | (1,207) | (26) | (3,996) | (417) |
Interest rate lock commitments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total loss recognized in income | $ 391 | $ (48) | $ 1,808 | $ 156 |
Derivatives (Financial Instrume
Derivatives (Financial Instruments Eligible for Offset) (Details) - Customer-initiated derivatives - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Offsetting derivative assets: | ||
Gross amounts recognized | $ 14,422 | $ 4,684 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial condition | 14,422 | 4,684 |
Gross amounts not offset in the statements of financial position | ||
Financial instruments | 0 | 0 |
Collateral (received)/posted | 0 | 0 |
Net amount | 14,422 | 4,684 |
Offsetting derivative liabilities: | ||
Gross amounts recognized | 14,422 | 4,684 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial condition | 14,422 | 4,684 |
Gross amounts not offset in the statements of financial position | ||
Financial instruments | 0 | 0 |
Collateral (received)/posted | 15,383 | 4,375 |
Net amount | $ (961) | $ 309 |
Parent Company Financial Stat_3
Parent Company Financial Statements (Balance Sheets - Parent Company) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||||||
Cash and cash equivalents | $ 176,486 | $ 103,930 | ||||
Income tax benefit | 3,791 | 1,217 | ||||
Total assets | 2,446,447 | 1,584,899 | ||||
Liabilities | ||||||
Subordinated notes | 44,555 | 44,440 | ||||
Total liabilities | 2,236,979 | 1,414,196 | ||||
Shareholders' equity | 209,468 | $ 180,259 | 170,703 | $ 167,968 | $ 162,867 | $ 151,760 |
Total liabilities and shareholders' equity | 2,446,447 | 1,584,899 | ||||
Parent Company | ||||||
Assets | ||||||
Cash and cash equivalents | 29,105 | 35,210 | ||||
Investment in banking subsidiary | 223,624 | 178,240 | ||||
Investment in captive insurance subsidiary | 2,306 | 1,668 | ||||
Income tax benefit | 158 | 520 | ||||
Other assets | 41 | 99 | ||||
Total assets | 255,234 | 215,737 | ||||
Liabilities | ||||||
Subordinated notes | 44,555 | 44,440 | ||||
Accrued expenses and other liabilities | 1,211 | 594 | ||||
Total liabilities | 45,766 | 45,034 | ||||
Shareholders' equity | 209,468 | 170,703 | ||||
Total liabilities and shareholders' equity | $ 255,234 | $ 215,737 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Expenses | ||||
Interest on borrowed funds | $ 693 | $ 261 | $ 1,866 | $ 960 |
Interest on subordinated notes | 632 | 256 | 1,903 | 759 |
Income tax benefit | (1,117) | (914) | (2,109) | (2,428) |
Net income | 5,209 | 4,409 | 12,040 | 11,431 |
Other comprehensive income | 783 | 1,238 | 4,451 | 7,120 |
Total comprehensive income, net of tax | 5,992 | 5,647 | 16,491 | 18,551 |
Parent Company | ||||
Income | ||||
Dividend income from bank subsidiary | 5,000 | 0 | 41,500 | 0 |
Total income | 5,000 | 0 | 41,500 | 0 |
Expenses | ||||
Interest on borrowed funds | 11 | 0 | 33 | 0 |
Interest on subordinated notes | 632 | 256 | 1,903 | 759 |
Other expenses | 302 | 516 | 1,017 | 902 |
Total expenses | 945 | 772 | 2,953 | 1,661 |
Income (loss) before income taxes and equity in (overdistributed) undistributed net earnings of subsidiaries | 4,055 | (772) | 38,547 | (1,661) |
Income tax benefit | 228 | 181 | 383 | 272 |
Equity in (overdistributed) undistributed earnings of subsidiaries | 926 | 5,000 | (26,890) | 12,820 |
Net income | 5,209 | 4,409 | 12,040 | 11,431 |
Other comprehensive income | 783 | 1,238 | 4,451 | 7,120 |
Total comprehensive income, net of tax | $ 5,992 | $ 5,647 | $ 16,491 | $ 18,551 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||||
Net income | $ 5,209 | $ 4,409 | $ 12,040 | $ 11,431 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Stock based compensation expense | 653 | 517 | ||
Net cash used by operating activities | (39,473) | (20,047) | ||
Cash flows from investing activities | ||||
Cash used in acquisitions | (29,464) | 0 | ||
Net cash used in investing activities | (442,162) | (33,374) | ||
Cash flows from financing activities | ||||
Preferred stock offering, net of issuance costs | 23,370 | 0 | ||
Share buyback - redeemed stock | (620) | (2,108) | ||
Common stock dividends paid | (1,082) | (852) | ||
Proceeds from exercised stock options | 95 | 219 | ||
Net cash provided by financing activities | 554,191 | 69,486 | ||
Net change in cash and cash equivalents | 72,556 | 16,065 | ||
Beginning cash and cash equivalents | 103,930 | 33,296 | ||
Ending cash and cash equivalents | 176,486 | 49,361 | 176,486 | 49,361 |
Parent Company | ||||
Cash flows from operating activities | ||||
Net income | 5,209 | 4,409 | 12,040 | 11,431 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in over (under) distributed earnings of subsidiaries | (926) | (5,000) | 26,890 | (12,820) |
Stock based compensation expense | 72 | 54 | ||
(Increase) Decrease in other assets, net | 420 | (115) | ||
Increase in other liabilities, net | 654 | 411 | ||
Net cash used by operating activities | 40,076 | (1,039) | ||
Cash flows from investing activities | ||||
Cash used in acquisitions | (67,944) | 0 | ||
Net cash used in investing activities | (67,944) | 0 | ||
Cash flows from financing activities | ||||
Share buyback - redeemed stock | (620) | (2,108) | ||
Common stock dividends paid | (1,082) | (852) | ||
Proceeds from exercised stock options | 95 | 219 | ||
Net cash provided by financing activities | 21,763 | (2,741) | ||
Net change in cash and cash equivalents | (6,105) | (3,780) | ||
Beginning cash and cash equivalents | 35,210 | 9,690 | ||
Ending cash and cash equivalents | $ 29,105 | $ 5,910 | $ 29,105 | $ 5,910 |
Earnings Per Common Share (Calc
Earnings Per Common Share (Calculation of Basic and Diluted Earnings Per Share - Current Period) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | $ 5,209 | $ 4,409 | $ 12,040 | $ 11,431 |
Net income allocated to participating securities | 40 | 45 | 140 | 110 |
Net income | $ 5,169 | $ 4,364 | $ 11,900 | $ 11,321 |
Weighted average common shares outstanding - basic (in shares) | 7,675 | 7,721 | 7,640 | 7,738 |
Effect of dilutive securities: | ||||
Weighted average common shares outstanding - diluted (in shares) | 7,712 | 7,752 | 7,701 | 7,776 |
EPS available to common shareholders | ||||
Basic earnings per common share (in dollars per share) | $ 0.68 | $ 0.57 | $ 1.56 | $ 1.48 |
Diluted earnings per common share (in dollars per share) | $ 0.67 | $ 0.56 | $ 1.55 | $ 1.46 |
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) | 7,734 | 7,721 | 7,730 | 7,738 |
Average unvested restricted share awards (in shares) | (59) | (80) | (90) | (76) |
Weighted average common shares outstanding - basic (in shares) | 7,675 | 7,641 | 7,640 | 7,662 |
Effect of dilutive securities: | ||||
Weighted average common stock equivalents (in shares) | 37 | 111 | 61 | 114 |
Weighted average common shares outstanding - diluted (in shares) | 7,712 | 7,752 | 7,701 | 7,776 |
Earnings Per Common Share (Addi
Earnings Per Common Share (Additional Information) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from diluted earnings per share calculation (in shares) | 214,668 | 30,000 | 117,334 | 30,000 |
Uncategorized Items - levl-2020
Label | Element | Value |
Mortgage Servicing Rights, Gross | levl_MortgageServicingRightsGross | $ 1,000 |