Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 05, 2021 | Jun. 30, 2020 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 84,468,885 | ||
Entity Common Stock, Shares Outstanding | 7,623,764 | ||
Documents Incorporated by Reference | Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held May 6, 2021, to be filed within 120 days after December 31, 2020, are incorporated by reference into Part III of this Form 10-K to the extent indicated in such Part. | ||
Entity Central Index Key | 0001412707 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
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 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 264,071 | $ 103,930 |
Securities available-for-sale | 302,732 | 180,905 |
Other investments | 14,398 | 11,475 |
Mortgage loans held for sale, at fair value | 43,482 | 13,889 |
Loans: | ||
Total loans | 1,723,537 | 1,227,609 |
Less: Allowance for loan losses | (22,297) | (12,674) |
Net loans | 1,701,240 | 1,214,935 |
Premises and equipment, net | 15,834 | 13,838 |
Goodwill | 35,554 | 9,387 |
Other intangible assets, net | 6,557 | 383 |
Other real estate owned | 0 | 921 |
Bank-owned life insurance | 18,200 | 12,167 |
Income tax benefit | 3,686 | 1,217 |
Interest receivable and other assets | 37,228 | 21,852 |
Total assets | 2,442,982 | 1,584,899 |
Deposits: | ||
Noninterest-bearing demand deposits | 618,677 | 325,885 |
Interest-bearing demand deposits | 127,920 | 62,586 |
Money market and savings deposits | 619,900 | 313,885 |
Time deposits | 596,815 | 433,072 |
Total deposits | 1,963,312 | 1,135,428 |
Borrowings | 185,684 | 212,225 |
Subordinated notes | 44,592 | 44,440 |
Other liabilities | 34,067 | 22,103 |
Total liabilities | 2,227,655 | 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 December 31, 2020 and 0 shares at December 31, 2019 | 23,372 | 0 |
Common stock, no par value per share; authorized—20,000,000 shares; issued and outstanding—7,633,780 shares at December 31, 2020 and 7,715,491 shares at December 31, 2019 | 87,615 | 89,345 |
Retained earnings | 96,158 | 77,766 |
Accumulated other comprehensive income, net of tax | 8,182 | 3,592 |
Total shareholders' equity | 215,327 | 170,703 |
Total liabilities and shareholders' equity | 2,442,982 | 1,584,899 |
Originated loans | ||
Loans: | ||
Total loans | 1,498,458 | 1,158,138 |
Acquired loans | ||
Loans: | ||
Total loans | $ 225,079 | $ 69,471 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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 | $ 2,500 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 7,633,780 | 7,715,491 |
Common stock, shares outstanding (in shares) | 7,633,780 | 7,715,491 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Securities: | |||
Taxable | $ 2,677 | $ 3,509 | $ 2,939 |
Tax-exempt | 2,486 | 2,305 | 1,657 |
Federal funds sold and other investments | 986 | 1,303 | 966 |
Total interest income | 82,639 | 70,448 | 63,824 |
Interest Expense | |||
Deposits | 10,993 | 16,941 | 11,055 |
Borrowed funds | 2,353 | 1,378 | 1,330 |
Subordinated notes | 2,537 | 1,074 | 1,015 |
Total interest expense | 15,883 | 19,393 | 13,400 |
Net interest income | 66,756 | 51,055 | 50,424 |
Provision for loan losses | 11,872 | 1,383 | 412 |
Net interest income after provision for loan losses | 54,884 | 49,672 | 50,012 |
Noninterest income | |||
Service charges on deposits | 2,446 | 2,547 | 2,556 |
Net gain (loss) on sales of securities | 1,862 | 1,174 | (71) |
Mortgage banking activities | 22,190 | 7,880 | 2,330 |
Other charges and fees | 3,216 | 2,610 | 2,240 |
Total noninterest income | 29,714 | 14,211 | 7,055 |
Noninterest expense | |||
Salary and employee benefits | 38,304 | 28,775 | 25,781 |
Occupancy and equipment expense | 6,549 | 4,939 | 4,425 |
Professional service fees | 2,935 | 1,808 | 1,672 |
Acquisition and due diligence fees | 1,654 | 539 | 0 |
FDIC premium expense | 1,119 | 310 | 657 |
Marketing expense | 956 | 1,107 | 1,033 |
Loan processing expense | 935 | 661 | 498 |
Data processing expense | 3,460 | 2,374 | 2,146 |
Core deposit premium amortization | 768 | 146 | 220 |
Other expense | 3,552 | 3,710 | 3,246 |
Noninterest expense | 60,232 | 44,369 | 39,678 |
Income before income taxes | 24,366 | 19,514 | 17,389 |
Income tax provision | 3,953 | 3,403 | 3,003 |
Net income | 20,413 | 16,111 | 14,386 |
Preferred stock dividends | 479 | 0 | 0 |
Net income available to common shareholders | $ 19,934 | $ 16,111 | $ 14,386 |
Per common share data: | |||
Basic earnings per common share (in dollars per share) | $ 2.58 | $ 2.08 | $ 1.95 |
Diluted earnings per common share (in dollars per share) | 2.57 | 2.05 | 1.91 |
Cash dividends declared per common share (in dollars per share) | $ 0.20 | $ 0.16 | $ 0.12 |
Weighted average common shares outstanding—basic (in shares) | 7,627,000 | 7,655,000 | 7,376,507 |
Weighted average common shares outstanding - diluted (in shares) | 7,686,000 | 7,770,000 | 7,523,918 |
Originated | |||
Interest income | |||
Loans, including fees | $ 62,069 | $ 56,956 | $ 49,076 |
Acquired | |||
Interest income | |||
Loans, including fees | $ 14,421 | $ 6,375 | $ 9,186 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 20,413 | $ 16,111 | $ 14,386 | |
Other comprehensive income: | ||||
Unrealized gains (losses) on securities available-for-sale | 7,673 | 7,939 | (1,085) | |
Reclassification adjustment for (gains) losses included in income | (1,862) | (1,174) | 71 | |
Tax effect | [1] | (1,221) | (1,421) | 213 |
Net unrealized gains (losses) on securities available-for-sale, net of tax | 4,590 | 5,344 | (801) | |
Total comprehensive income, net of tax | $ 25,003 | $ 21,455 | $ 13,585 | |
[1] | Includes $391 thousand, $247 thousand, and $(15) thousand tax expense (benefit) related to reclassification for the years ended December 31, 2020, 2019 and 2018, respectively. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Tax expense (benefit) related to reclassification | $ 391 | $ 247 | $ (15) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income |
Beginning balance at Dec. 31, 2017 | $ 107,960 | $ 59,511 | $ 49,232 | $ (783) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 14,386 | 14,386 | |||
Other comprehensive income (loss) | (801) | (801) | |||
Reclass of tax reform adjustments due to early adoption of ASU 2018-02 | 0 | 168 | (168) | ||
Stock issued during period, net of issuance costs | 29,030 | 29,030 | |||
Common stock dividends declared | (895) | (895) | |||
Exercise of stock options | 1,279 | 1,279 | |||
Stock-based compensation expense, net of tax impact | 801 | 801 | |||
Ending balance at Dec. 31, 2018 | 151,760 | 90,621 | 62,891 | (1,752) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 16,111 | 16,111 | |||
Other comprehensive income (loss) | 5,344 | 5,344 | |||
Redeemed stock | (2,165) | (2,165) | |||
Common stock dividends declared | (1,236) | (1,236) | |||
Exercise of stock options | 219 | 219 | |||
Stock-based compensation expense, net of tax impact | 670 | 670 | |||
Ending balance at Dec. 31, 2019 | 170,703 | $ 0 | 89,345 | 77,766 | 3,592 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 20,413 | 20,413 | |||
Other comprehensive income (loss) | 4,590 | 4,590 | |||
Redeemed stock | (2,648) | (2,648) | |||
Stock issued during period, net of issuance costs | 23,372 | 23,372 | |||
Dividends on 7.50% Series B Preferred Stock | (479) | (479) | |||
Common stock dividends declared | (1,542) | (1,542) | |||
Exercise of stock options | 95 | 95 | |||
Stock-based compensation expense, net of tax impact | 823 | 823 | |||
Ending balance at Dec. 31, 2020 | $ 215,327 | $ 23,372 | $ 87,615 | $ 96,158 | $ 8,182 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Initial public offering, shares of common stock (in shares) | 1,150,765 | ||
Cash dividend declared (in dollars per share) | $ 0.20 | $ 0.16 | $ 0.12 |
Exercise of stock options (in shares) | 10,000 | 21,550 | 127,494 |
Redeemed stock (in shares) | 125,798 | 90,816 | |
Preferred stock, interest rate | 7.50% |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net income | $ 20,413 | $ 16,111 | $ 14,386 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of fixed assets | 1,694 | 1,323 | 1,332 |
Amortization of core deposit intangibles | 768 | 146 | 220 |
Stock-based compensation expense | 887 | 713 | 815 |
Provision for loan losses | 11,872 | 1,383 | 412 |
Net securities premium amortization | 2,149 | 1,735 | 1,327 |
Net (gain)/loss on sales of securities | (1,862) | (1,174) | 71 |
Originations of loans held for sale | (557,078) | (272,714) | (90,361) |
Proceeds from sales of loans | 545,581 | 270,363 | 91,091 |
Net gain on sales of loans | (22,191) | (7,835) | (2,341) |
Accretion on acquired purchase credit impaired loans | (1,760) | (2,313) | (3,794) |
Gain on sale of other real estate owned and repossessed assets | (316) | 0 | (44) |
Increase in cash surrender value of life insurance | (470) | (301) | (324) |
Amortization of debt issuance costs | 152 | 62 | 47 |
Deferred expense (benefit) | (3,315) | (592) | 29 |
Net (increase) decrease in accrued interest receivable and other assets | (10,751) | (8,934) | 461 |
Net increase in accrued interest payable and other liabilities | 3,441 | 6,151 | 4,810 |
Net cash provided by (used in) operating activities | (10,786) | 4,124 | 18,137 |
Cash flows from investing activities | |||
Net increase in loans | (271,648) | (97,660) | (88,069) |
Principal payments on securities available-for-sale | 28,551 | 16,521 | 9,368 |
Purchases of securities available-for-sale | (140,078) | (56,810) | (68,694) |
Purchases of other investments | (2,000) | (3,150) | (22) |
Additions to premises and equipment | (1,289) | (2,019) | (1,159) |
Proceeds from: | |||
Sale of securities available-for-sale | 42,640 | 69,846 | 3,625 |
Sale of other real estate owned and repossessed assets | 4,164 | 0 | 822 |
Net cash used in acquisition | (29,464) | 0 | 0 |
Net cash used in investing activities | (369,124) | (73,272) | (144,129) |
Cash flows from financing activities | |||
Net increase in deposits | 563,064 | 793 | 14,253 |
Change in short-term borrowings | (62,647) | (32,278) | 61,810 |
Issuances of long-term borrowings | 291,334 | 145,000 | 0 |
Repayment of long-term borrowings | (270,437) | 0 | (10,000) |
Net proceeds from issuance of subordinated debt | 0 | 29,487 | 0 |
Net proceeds from issuance of preferred stock | 23,372 | 0 | 0 |
Change in secured borrowing | (70) | (71) | (69) |
Net proceeds from issuance of common stock related to initial public offering | 0 | 0 | 29,030 |
Share buyback - redeemed stock | (2,648) | (2,165) | 0 |
Preferred stock dividends paid | (479) | 0 | 0 |
Common stock dividends paid | (1,469) | (1,160) | (662) |
Proceeds from exercised stock options | 95 | 219 | 1,279 |
Payments related to tax-withholding for share based compensation awards | (64) | (43) | (14) |
Net cash provided by financing activities | 540,051 | 139,782 | 95,627 |
Net increase (decrease) in cash and cash equivalents | 160,141 | 70,634 | (30,365) |
Beginning cash and cash equivalents | 103,930 | 33,296 | 63,661 |
Ending cash and cash equivalents | 264,071 | 103,930 | 33,296 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 16,376 | 19,493 | 12,634 |
Taxes paid | 8,599 | 2,916 | 2,120 |
Transfer from loans held for sale to loans held for investment | 5,217 | 2,186 | 544 |
Transfer from loans to other real estate owned | 2,927 | 921 | 108 |
Transfer from premises and equipment to other assets | 0 | 0 | 18 |
Increase in assets and liabilities in acquisitions: | |||
Assets acquired—Ann Arbor State Bank | 325,303 | 0 | 0 |
Liabilities assumed—Ann Arbor State Bank | $ 283,526 | $ 0 | $ 0 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 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. Including the Company headquarters, as of December 31, 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"), was a wholly owned insurance subsidiary of the Company that provided 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 have been 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 was incorporated in Nevada. As of January 19, 2021, Hamilton Court exited the pool resources relationship and was dissolved. 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. Initial Public Offering: On April 24, 2018, the Company sold 1,150,765 shares of common stock in its initial public offering, including 180,000 shares of common stock pursuant to the exercise in full by the underwriters of their option to purchase additional shares. The aggregate offering price for the shares sold by the Company was $32.2 million, and after deducting $2.1 million of underwriting discounts and $1.1 million of offering expenses paid to third parties, the Company received total net proceeds of $29.0 million from the initial public offering. In addition, certain selling shareholders participated in the offering and sold an aggregate of 229,235 shares of our common stock at an aggregate offering price of $6.4 million. The Company did not receive any proceeds from the sales of shares by the selling shareholders. Basis of Presentation: The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. Management of the Company has made a number of estimates and assumptions related to the reporting of assets and liabilities to prepare the consolidated financial statements in conformity with GAAP. Actual results may differ from those estimates. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for annual periods presented herein, have been included. Some items in the prior year financial statements were reclassified to conform to the current presentation. Such items had no impact on net income or shareholder’s equity. Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank and Hamilton Court, after elimination of significant intercompany transactions and accounts. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest-bearing deposits with banks or other financial institutions and federal funds sold. Generally, federal funds are sold for one‑day periods, but not longer than 30 days. Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage-backed securities and non-agency mortgage-backed securities. Securities transactions are recorded on a trade date basis. Securities are classified as available for sale when the Company intends to sell them before maturity. Available-for-sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available-for-sale securities are included in other comprehensive income and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. On a quarterly basis, the Company makes an assessment to determine whether there have been any events or circumstances to indicate that a security for which there is an unrealized loss is impaired on an other than temporary basis. This determination requires significant judgment. A decline in the fair value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. In estimating other-than-temporary impairment (“OTTI”) losses, we consider the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; projected cash flows on covered non-agency mortgage-backed securities; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Management evaluates securities for other-than-temporary impairment more frequently when economic or market conditions warrant such an evaluation. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized on the level-yield method. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income. Other Investments The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank also invests in an equity security that does not have a readily determinable fair value because its ownership is restricted and lacks a market for trading. As a result, this security is carried at cost and is periodically evaluated for impairment. Loans Held for Sale Loans held for sale consist of loans originated with the intent to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. Fair value includes the servicing value of the loans as well as any accrued interest. The changes in the fair value of loans held for sale are reflected in mortgage banking activities on the consolidated statements of income . Loans held for sale are sold with either servicing rights released or servicing rights retained. In addition to the Small Business Administration and United States Department of Agriculture guaranteed loans, which are sold with servicing retained, the Company starting selling loans held for sale with servicing retained directly to FNMA during the third quarter of 2019. Refer to the mortgage servicing rights section below for further discussion. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unamortized deferred loan fees and costs and net of any purchase premiums and discounts. Interest income is recorded on the accrual basis, in accordance with the terms of the respective loan. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income without anticipating prepayments. Loans are considered delinquent when principal or interest payments are past due 30 days or more; delinquent loans may remain on accrual status between 30 days and 89 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Interest income on mortgage and commercial loans is discontinued when principal or interest payments are past due 90 days, unless the loan is well-secured and in process of collection. Consumer loans are typically charged off no later than 120 days past due. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Certain Purchased Loans The Company purchases individual loans and groups of loans, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired (“PCI”) loans are recorded at the amount paid or at fair value at acquisition in a business combination, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the provision for loan losses. These PCI loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as credit grade, loan type, and date of origination. The Company estimates the amount and timing of expected cash flows for each purchased loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool ( accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, an impairment loss is recognized by establishing an allocation for the loan or pool in the allowance for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized, prospectively, as loan interest income. Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Loans over $250 thousand are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings, are classified as impaired, regardless of size, and are measured for impairment based upon the present value of estimated future cash flows using the loan’s effective rate at inception or, if considered collateral dependent, based upon the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. An allowance for loan losses for purchased credit impaired loans is recorded when projected future cash flows decrease. The measurement of impairment on these loans or pools of loans is based upon the excess of the loan or pool’s carrying value over the present value of the projected future cash flows, discounted at the last accounting yield applicable to the loan or pool of loans. The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 36 months. The historical loss analysis incorporates and fully relies on the Bank’s own historical loss data. The historical loss estimates are established by loan type including commercial and industrial and commercial real estate. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: local and national economic conditions; trends in underwriting standards and lending policies; trends in portfolio volume, maturity and composition (impact of credit concentrations); experience, ability and depth of lending management and staff; trends in delinquencies and nonaccruals; results of independent loan review; change in value for collateral dependent loans; high loan growth; unseasoned bank portfolio; specialized financing; and other factors (legal, regulatory, competition). The following portfolio segments have been identified: Commercial real estate loans are secured by a mortgage lien on the real estate property. Owner-occupied real estate loans generally are considered to carry less risk than non-owner occupied real estate (properties) because the Company considers them to be less sensitive to the condition of the commercial real estate market. Repayment is based on the operations of the business. Investment real estate loans rely on rental income for loan repayment, which involves risk such as rent rollover, tenants going out of business, and competitive properties in the area. Construction and land development loans generally are considered the riskiest class of commercial real estate, due to possible cost overruns, contractor/lien issues, loss of tenant, etc. Risk of loss is managed by adherence to standard loan policies that establish certain levels of performance prior to the extension of a loan to the borrower. Commercial and Industrial loans have varying degrees of risk, but overall are considered to have less risk than commercial real estate. These loans are generally short-term in nature and are almost always backed by collateral. Unsecured commercial loans are supported by strong borrower(s)/guarantor(s) in terms of liquidity, net worth, cash flow, etc. Collateral security of these loans is relatively liquid (i.e., accounts receivable, inventory, equipment) and readily available to cover potential loan loss. Credit risk is managed through standardized loan policies, established and authorized credit limits, portfolio management and the diversification of industries. The PPP loans funded during the second and third quarters of 2020, which are guaranteed by the SBA, are reported within this loan category. Consumer and Residential Real Estate loan portfolios, unlike commercial, tend to be composed of many relatively homogeneous loans. Loan repayment is based on personal cash flow. To assess the risk of a consumer loan request, loan purpose, collateral, debt to income ratio, credit bureau report, and cash flow/employment verification are analyzed. A certain level of security is provided through liens on credits supported by collateral. Economic conditions that affect consumers in the Bank’s market have a direct impact on the credit quality of these loans. Higher levels of unemployment, lower levels of income growth and weaker economic growth are factors that may adversely impact consumer loan credit quality. The majority of residential real estate loans originated by the Bank conform to secondary market underwriting standards and are sold within a short timeframe to unaffiliated third parties, including the future servicing rights to the loans. The credit underwriting standards for these loans require a certain level of documentation, verifications, valuations, and overall credit performance of the borrower. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the life of the asset or the expected term of the lease. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount. Other Real Estate Owned ("OREO") and Repossessed Assets Other real estate owned and repossessed assets represent properties/assets acquired through acquisition, foreclosure, repossession process or other proceedings, and are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income, and expense from the operations of OREO and decreases in valuations are included in other expense in the consolidated statements of income. Goodwill and Core Deposit Intangible Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. Core deposit intangible represents the value of the acquired customer core deposit bases and is included as an asset on the consolidated balance sheets. The core deposit intangible has an estimated finite life, is amortized on an accelerated basis over a 120-month period and is subject to periodic impairment evaluation. Management will periodically review the carrying value of its long-lived and intangible assets to determine if any impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life, in which case an impairment charge would be recorded as an expense in the period of impairment. In making such determination, management evaluates whether there are any adverse qualitative factors indicating that an impairment may exist, as well as the performance, on an undiscounted basis, of the underlying operations or assets which give rise to the intangible. Mortgage Servicing Rights When loans are sold with servicing retained, the servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. The servicing rights are amortized in proportion to and over the period of estimated net servicing income. Servicing rights are evaluated for impairment on a quarterly basis based upon the fair value obtained from an independent third party valuation model requiring the incorporation of assumptions that market participants would use in estimating future net servicing income, which include estimates of prepayment speeds, discount rate, cost to service, contractual servicing fee income, ancillary income, late fees, replacement reserves and other economic factors that are determined based on current market conditions. Servicing fee income is recorded for fees earned for servicing loans and is based on contractual percentage of the outstanding principal or a fixed amount per loan. Servicing fees totaled $331 thousand, $43 thousand and $117 thousand for the years ended December 31, 2020, 2019 and 2018, respectively, most of which related to servicing fees earned on SBA loans sold with serving retained during the years ended December 31, 2019 and 2018. Servicing fees for the year ended December 31, 2020 were related to residential mortgage loans. Bank-owned Life Insurance The Bank has purchased life insurance policies on certain key executives and senior managers. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Derivatives All derivatives are recognized on the consolidated balance sheet as a component of other assets or other liabilities at their fair value. Customer-initiated derivatives refer to the Company utilizing interest rate derivatives to provide a service to certain qualifying customers to help facilitate their respective risk management strategies. Therefore, these derivatives are not used to manage interest rate risk in the Company's assets or liabilities. The Company generally takes offsetting positions with dealer counterparties to mitigate the valuation risk of the customer-initiated derivatives. Income primarily results in the spread between the customer derivatives and offsetting dealer positions. The gains or losses derived from changes in fair value are recognized in current earnings during the period of change in other non-interest income on the consolidated statements of income. 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 accounted for as freestanding derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in mortgage banking activities in the consolidated statements of income. Secured borrowing Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings. Accordingly, the related assets remain on the Company’s balance sheet and continue to be reported and accounted for as if the transfer had not occurred. Cash proceeds from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions. Loan Commitments and Related Financial Instruments Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any matters at this time that will have a material effect on the consolidated financial statements. Earnings per Share The Company's restricted stock awards that pay non-forfeitable common stock dividends meet the criteria of a participating security. Accordingly, beginning in 2019, earnings per share is calculated using the two-class method under which earnings are allocated to both common shares and participating securities. Debt Issuance Costs Costs associated with the issuance of debt are presented in the consolidated balance sheet as a direct reduction from the carrying value of that debt liability. The deferred issuance costs are amortized over the life the related debt instrument, and included within the debt’s interest expense. Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards as there is no market or performance metrics that must be met. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Additionally, the Company accounts for forfeitures as they occur. Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, net of taxes and reclassifications. Income Taxes Income tax expense or benefit is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Dividend Restriction Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company or by the holding company to shareholders. The total amount of dividends which may be paid out at any date is also generally limited to retained earnings. Operating Segments While chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating results are not reviewed by senior management |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 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. The Company engaged in this transaction with the expectation that it would be accretive to income and expand our footprint in the Ann Arbor and Jackson markets. 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 year ended December 31, 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 Core deposit intangibles of $3.7 million arising from the acquisition are being amortized over 10 years on an accelerated basis using the sum of the years digits method. 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 year ended December 31, 2020, but the pro forma condensed combined statement of income is not adjusted to exclude these costs. For the year ended December 31, (Dollars in thousands, except per share data) 2020 2019 Net interest income $ 66,796 $ 61,103 Noninterest income 29,714 17,206 Noninterest expense 60,300 53,174 Net income 20,433 17,647 Net income per diluted share 2.57 2.26 |
Securities
Securities | 12 Months Ended |
Dec. 31, 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 December 31, 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 December 31, 2020 U.S. government sponsored entities & agencies $ 26,575 $ 103 $ (320) $ 26,358 State and political subdivision 124,053 8,751 (81) 132,723 Mortgage-backed securities: residential 25,729 352 — 26,081 Mortgage-backed securities: commercial 11,434 484 — 11,918 Collateralized mortgage obligations: residential 13,320 138 (12) 13,446 Collateralized mortgage obligations: commercial 57,398 1,206 (92) 58,512 SBA 17,639 61 (107) 17,593 Asset backed securities 10,229 — (157) 10,072 Corporate bonds 5,998 34 (3) 6,029 Total available-for-sale $ 292,375 $ 11,129 $ (772) $ 302,732 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 year ended December 31, (Dollars in thousands) 2020 2019 2018 Proceeds $ 42,640 $ 69,846 $ 3,625 Gross gains 1,871 1,566 2 Gross losses (9) (392) (73) 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. December 31, 2020 (Dollars in thousands) Amortized Fair Within one year $ 10,717 $ 10,807 One to five years 24,573 25,421 Five to ten years 105,041 107,713 Beyond ten years 152,044 158,791 Total $ 292,375 $ 302,732 Securities pledged at December 31, 2020 and December 31, 2019 had a carrying amount of $98.7 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 December 31, 2020, the Bank held 66 tax-exempt state and local municipal securities totaling $49.0 million backed by the Michigan School Bond Loan Fund. Other than the aforementioned investments and the U.S. government and its agencies, at December 31, 2020 and December 31, 2019, there were no holdings of securities of any one issuer in an amount greater than 10% of shareholders' equity. The following table summarizes securities with unrealized losses at December 31, 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 December 31, 2020 Available-for-sale U.S. government sponsored entities & agencies $ 19,680 $ (320) $ — $ — $ 19,680 $ (320) State and political subdivision 4,880 (81) — — 4,880 (81) Collateralized mortgage obligations: residential — — 1,109 (12) 1,109 (12) Collateralized mortgage obligations: commercial 26,467 (92) — — 26,467 (92) SBA — — 12,206 (107) 12,206 (107) Asset backed securities — — 10,072 (157) 10,072 (157) Corporate bonds 2,497 (3) — — 2,497 (3) Total available-for-sale $ 53,534 $ (496) $ 23,390 $ (276) $ 76,924 $ (772) 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 December 31, 2020, the Company's investment portfolio consisted of 313 securities, 37 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 December 31, 2020. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Loans | LOANS The following table presents the recorded investment in loans at December 31, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total December 31, 2020 Commercial real estate $ 587,631 $ 133,201 $ 720,832 Commercial and industrial 629,434 56,070 685,504 Residential real estate 280,645 34,831 315,476 Consumer 748 977 1,725 Total $ 1,498,458 $ 225,079 $ 1,723,537 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 December 31, 2020 and December 31, 2019, the Company had residential loans held for sale, which were originated with the intent to sell, totaling $43.5 million and $13.9 million, respectively. During the years ended December 31, 2020 and 2019, the Company sold residential real estate loans with proceeds totaling $545.6 million and $270.4 million, respectively. At December 31, 2020, $290.1 million of PPP loans were included in the commercial and industrial loan balance. 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 $12 thousand and $1.2 million in commitments to lend additional funds to borrowers whose loans were classified as nonaccrual as of December 31, 2020 and December 31, 2019, respectively. Information as to nonperforming assets was as follows: (Dollars in thousands) December 31, 2020 December 31, 2019 Nonaccrual loans: Commercial real estate $ 7,320 $ 4,832 Commercial and industrial 7,490 11,112 Residential real estate 3,991 2,569 Consumer 15 16 Total nonaccrual loans 18,816 18,529 Other real estate owned — 921 Total nonperforming assets $ 18,816 $ 19,450 Loans 90 days or more past due and still accruing $ 269 $ 157 At December 31, 2020 and December 31, 2019, the loans that were 90 days or more past due and still accruing were PCI loans. Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total December 31, 2020 Commercial real estate $ 714,196 $ 4,863 $ 1,773 $ — $ 720,832 Commercial and industrial 681,106 893 3,505 — 685,504 Residential real estate 305,800 5,420 1,110 3,146 315,476 Consumer 1,723 — — 2 1,725 Total $ 1,702,825 $ 11,176 $ 6,388 $ 3,148 $ 1,723,537 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) December 31, 2020 December 31, 2019 Nonaccrual loans $ 18,816 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 546 547 Residential real estate 432 359 Total performing troubled debt restructurings 978 906 Total impaired loans, excluding purchase credit impaired loans $ 19,794 $ 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. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and extends the relief related to troubled debt restructurings to the earlier of January 1, 2022 or 60 days after the national emergency termination date. 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. As of December 31, 2020, we had $20.1 million of loans that remained on a COVID-related deferral of which $11.6 million of loans had payments deferred greater than six months. These loans were primarily commercial loans and represented 1.16% of our total loan portfolio. In addition, $2.5 million of those loans deferred greater than six months were moved to nonaccrual. 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 December 31, 2020 and December 31, 2019, the Company had a recorded investment in troubled debt restructurings of $4.8 million and $3.9 million, respectively. The Company allocated a specific reserve of $317 thousand and $384 thousand for those loans at December 31, 2020 and 2019, respectively. The Company had not committed to lend additional amounts to borrowers whose loans have been modified as of December 31, 2020 or December 31, 2019. As of December 31, 2020, there were $3.8 million of nonperforming TDRs and $978 thousand 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 years ended December 31, 2020, 2019 and 2018 by type of concession granted. 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 For the year ended December 31, 2020 Commercial real estate $ 1,654 $ — $ — 2 $ 1,654 $ — $ — Residential real estate — 74 — 1 74 — — Total $ 1,654 $ 74 $ — 3 $ 1,728 $ — $ — For the year ended December 31, 2019 Commercial and industrial $ — $ — $ 332 2 $ 332 $ — $ 174 Total $ — $ — $ 332 2 $ 332 $ — $ 174 For the year ended December 31, 2018 Commercial real estate $ 2,073 $ — $ — 4 $ 2,073 $ 101 $ — Commercial and industrial 1,031 106 — 4 1,137 — 14 Residential real estate 113 — — 2 113 — 5 Total $ 3,217 $ 106 $ — 10 $ 3,323 $ 101 $ 19 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. The following table presents the number of loans modified as TDRs during the twelve months ended December 31, 2020, 2019 and 2018 for which there was a subsequent payment default, including the recorded investment as of the period end. A payment on a TDR is considered to be in default once it is greater than 30 days past due. For the year ended December 31, 2020 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial real estate 1 $ 203 $ — Total 1 $ 203 $ — For the year ended December 31, 2019 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial and industrial 1 $ 42 $ 12 Total 1 $ 42 $ 12 For the year ended December 31, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,073 $ — Commercial and industrial 1 904 — Total 4 $ 2,977 $ — 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 December 31, 2020 Commercial real estate $ 685,690 $ 21,570 $ 13,045 $ 527 $ 720,832 Commercial and industrial 637,285 25,727 21,876 616 685,504 Total $ 1,322,975 $ 47,297 $ 34,921 $ 1,143 $ 1,406,336 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 December 31, 2020 Residential real estate $ 311,485 $ 3,991 $ 315,476 Consumer 1,710 15 1,725 Total $ 313,195 $ 4,006 $ 317,201 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 December 31, 2020 Commercial real estate $ 5,109 $ 1,773 Commercial and industrial 643 274 Residential real estate 4,017 2,949 Total PCI loans $ 9,769 $ 4,996 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 year ended December 31, (Dollars in thousands) 2020 2019 2018 Accretable yield at beginning of period $ 9,141 $ 10,947 $ 14,452 Additions due to acquisitions 35 — — Accretion of income (1,760) (2,313) (3,794) Adjustments to accretable yield (319) 507 304 Other activity, net — — (15) Accretable yield at end of period $ 7,097 $ 9,141 $ 10,947 "Additions due to acquisitions" represents the accretable yield added as a result of the AAB acquisition. "Accretion of income" represents the income earned on these loans for the year. For the years ended December 31, 2020 and 2019, allowance for loan losses on PCI loans decreased by $95 thousand and $158 thousand, respectively. Related Party Loans: We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. The aggregate loans outstanding to the directors, executive officers, principal shareholders and their affiliates as of December 31, 2020 and 2019 totaled approximately $8.9 million and $4.1 million, respectively. During 2020 and 2019, there were $6.6 million and $1.1 million, respectively, of new loans and other additions, while repayments and other reductions totaled $1.8 million and $924 thousand, respectively. 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 December 31, 2020, the allowance for off-balance sheet risk was $490 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: December 31, 2020 December 31, 2019 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 18,269 $ 17,058 $ 16,276 $ 20,128 Unused lines of credit 28,898 385,307 28,723 288,086 Unused standby letters of credit and commercial letters of credit 2,340 1,992 4,895 — Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments of $18.3 million as of December 31, 2020, had interest rates ranging from 3.5% to 4.26% and maturities ranging from 3 years to 30 years. |
Allowance for Loan Losses
Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 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 December 31, 2020, the Company had six PCI loan pools and 12 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 December 31, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,320 $ — $ 7,320 $ 7,720 $ — Commercial and industrial 7,964 630 8,594 9,208 307 Residential real estate 2,153 192 2,345 2,447 25 Total $ 17,437 $ 822 $ 18,259 $ 19,375 $ 332 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 year ended December 31, 2020 Individually evaluated impaired loans: (1) Commercial real estate $ 7,981 $ — $ 10 Commercial and industrial 14,008 46 87 Residential real estate 3,304 36 55 Total $ 25,293 $ 82 $ 152 For the year ended December 31, 2019 Individually evaluated impaired loans: (1) Commercial real estate $ 4,233 $ 2 $ 209 Commercial and industrial 8,514 43 573 Residential real estate 1,904 29 9 Total $ 14,651 $ 74 $ 791 For the year ended December 31, 2018 Individually evaluated impaired loans: (1) Commercial real estate $ 9,471 $ 1,622 $ 142 Commercial and industrial 7,673 91 112 Residential real estate 5,182 369 — Total $ 22,326 $ 2,082 $ 254 (1) December 31, 2018 individually evaluated impaired loans included PCI loans, whereas December 31, 2020 and 2019 individually evaluated impaired loans excluded PCI loans. Activity in the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total For the year ended December 31, 2020 Allowance for loan losses: Beginning balance $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 Provision for loan losses 4,190 5,302 2,343 37 11,872 Gross chargeoffs — (2,118) (285) (58) (2,461) Recoveries 12 87 85 28 212 Net (chargeoffs) recoveries 12 (2,031) (200) (30) (2,249) Ending allowance for loan losses $ 9,975 $ 8,786 $ 3,527 $ 9 $ 22,297 For the year ended December 31, 2019 Allowance for loan losses: Beginning balance $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Provision for loan losses 632 533 143 75 1,383 Gross chargeoffs (92) (438) — (106) (636) Recoveries 6 246 77 32 361 Net (chargeoffs) recoveries (86) (192) 77 (74) (275) Ending allowance for loan losses $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 For the year ended December 31, 2018 Allowance for loan losses: Beginning Balance $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Provision for loan losses 464 (269) 191 26 412 Gross chargeoffs (112) (1,283) (47) (35) (1,477) Recoveries 23 823 70 2 918 Net (chargeoffs) recoveries (89) (460) 23 (33) (559) Ending Allowance for loan losses $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Allocation of the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total December 31, 2020 Allowance for loan losses: Individually evaluated for impairment $ — $ 307 $ 25 $ — $ 332 Collectively evaluated for impairment 9,550 8,465 3,273 9 21,297 Acquired with deteriorated credit quality 425 14 229 — 668 Ending allowance for loan losses $ 9,975 $ 8,786 $ 3,527 $ 9 $ 22,297 Balance of loans: Individually evaluated for impairment $ 7,320 $ 8,594 $ 2,345 $ — $ 18,259 Collectively evaluated for impairment 711,739 676,636 310,182 1,725 1,700,282 Acquired with deteriorated credit quality 1,773 274 2,949 — 4,996 Total loans $ 720,832 $ 685,504 $ 315,476 $ 1,725 $ 1,723,537 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 | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | PREMISES AND EQUIPMENT Premises and equipment were as follows at December 31, 2020 and December 31, 2019: (Dollars in thousands) December 31, 2020 December 31, 2019 Land $ 3,514 $ 2,254 Buildings 10,656 9,825 Leasehold improvements 3,017 2,714 Furniture, fixtures and equipment 7,786 6,539 Total premises and equipment $ 24,973 $ 21,332 Less: Accumulated depreciation 9,139 7,494 Net premises and equipment $ 15,834 $ 13,838 Depreciation expense was $1.7 million, $1.3 million, and $1.3 million for the years ended December 31, 2020, 2019, and 2018, respectively. Most of the Company's branch facilities are rented under non-cancelable operating lease agreements. Total rent expense was $1.8 million, $1.2 million, and $1.1 million for the years ended December 31, 2020, 2019, and 2018, respectively. Rent commitments under non-cancelable operating leases (including renewal options that the Company will likely exercise) were as follows: (Dollars in thousands) As of December 31, 2020 2021 $ 1,731 2022 1,760 2023 1,718 2024 1,318 2025 1,191 Thereafter 3,775 Total lease commitments $ 11,493 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 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 December 31, 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. 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. The Company completed their annual goodwill impairment review as of October 1, 2020 noting 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 October 1, 2020. Management also determined that no triggering events have occurred that indicated impairment from the most recent valuation date through December 31, 2020 and that it is more likely than not that there was no goodwill impairment as of December 31, 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) December 31, 2020 December 31, 2019 Gross carrying amount $ 5,708 $ 2,045 Accumulated amortization (2,512) (1,744) Net Intangible $ 3,196 $ 301 Amortization expense for the CDIs was $768 thousand, $146 thousand, $220 thousand for the years ended December 31, 2020, 2019, and 2018, respectively. As of December 31, 2020, estimated amortization expense for each of the next five years is as follows: (Dollars in thousands) 2021 $ 667 2022 586 2023 506 2024 425 2025 344 |
Mortgage Servicing Rights, Net
Mortgage Servicing Rights, Net | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Banking [Abstract] | |
Mortgage Servicing Rights, Net | MORTGAGE SERVICING RIGHTS, NET The Company has recorded a mortgage servicing rights asset for residential real estate mortgage loans that are sold to the secondary market for which servicing has been retained. Residential real estate mortgage loans serviced for others are not included in the consolidated balance sheets. Mortgage servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization or estimated fair value. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income. The unpaid principal balance of these loans at December 31, 2020 and 2019 are as follows: (Dollars in thousands) December 31, 2020 December 31, 2019 Residential real estate mortgage loan portfolios serviced for: FNMA $ 320,467 $ 9,016 Custodial escrow balances maintained with these serviced loans were $1.9 million and $52 thousand at December 31, 2020 and 2019, respectively. Activity for mortgage servicing rights was as follows for the years ended December 31, 2020 and 2019: For the year ended December 31, (Dollars in thousands) 2020 2019 Mortgage servicing rights: Balance, beginning of period $ 76 $ — Originated servicing 3,540 77 Amortization (255) (1) Balance, end of period $ 3,361 $ 76 Servicing fee income, net of amortization of servicing rights and changes in the valuation allowance was $24 thousand for the year ended December 31, 2020. There was no servicing fee income for the years ended December 31, 2019 and 2018. 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 December 31, 2020. There was no valuation allowance related to mortgage servicing rights during the year ended December 31, 2019. The fair value of mortgage servicing rights was $4.0 million and $87 thousand at December 31, 2020 and 2019, respectively. The fair value of mortgage servicing rights is highly sensitive to changes in underlying assumptions. The fair value at December 31, 2020 was determined using a discount rate of 7.75% and prepayment speeds ranging from 8.44% to 10.41%, depending on the stratification of the specific rights. The fair value at December 31, 2019 was determined using a discount rate of 8.50% and prepayment speeds ranging from 12.12% to 14.73%, depending on the stratification of the specific right. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2020 | |
Banking and Thrift, Other Disclosures [Abstract] | |
Deposits | DEPOSITS Time deposits that met or exceeded the FDIC insurance limit of $250,000 were $380.3 million and $205.9 million at December 31, 2020 and 2019, respectively. At December 31, 2020, brokered deposits totaled $29.3 million, compared to $67.4 million at December 31, 2019. As of December 31, 2020, the scheduled maturities of total time deposits were as follows: (Dollars in thousands) December 31, 2020 Due in 2021 $ 437,211 Due in 2022 114,707 Due in 2023 39,052 Due in 2024 3,821 Due in 2025 2,024 Thereafter — Total $ 596,815 |
Borrowings and Subordinated Deb
Borrowings and Subordinated Debt | 12 Months Ended |
Dec. 31, 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. December 31, 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 3,204 0.30 851 0.30 Federal funds purchased — — 5,000 1.90 Total short-term borrowings 3,204 0.30 65,851 1.62 Long-term debt: Secured borrowing due in 2022 1,304 1.00 1,374 1.00 FHLB advances due in 2022 to 2029 (2) 181,176 1.09 145,000 1.06 Subordinated notes due in 2025 and 2029 (3) 44,592 5.29 44,440 5.29 Total long-term debt 227,072 1.91 190,814 2.04 Total short-term and long-term borrowings $ 230,276 1.89 % $ 256,665 1.93 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) At December 31, 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 December 31, 2020 balance includes FHLB advances of $181.0 million and purchase accounting premiums of $176 thousand. (3) The December 31, 2020 balance includes subordinated notes of $45.0 million and debt issuance costs of $408 thousand. The December 31, 2019 balance includes subordinated notes of $45.0 million and debt issuance costs of $560 thousand. The Bank is a member of the FHLB of Indianapolis, which provides short- and long-term funding collateralized by mortgage-related assets to its members. FHLB short-term borrowings bear interest at variable rates based on LIBOR. The $181.0 million of long-term FHLB advances as of December 31, 2020 were secured by a blanket lien on $512.3 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 $180.9 million from the FHLB at December 31, 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 December 31, 2020 and $5.0 million outstanding federal funds purchased as of December 31, 2019. At December 31, 2020, the Company had $3.2 million 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 $3.7 million at December 31, 2020. The Company had a secured borrowing of $1.3 million as of December 31, 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 December 31, 2020, the Company had $45.0 million outstanding subordinated notes and $408 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. The $15.0 million of subordinated notes issued on December 21, 2015 bear a fixed interest rate of 6.375% per annum, payable semiannually through December 15, 2020. As of December 15, 2020, the notes bear a floating interest rate of three-month LIBOR plus 477 basis points payable quarterly through maturity. The notes mature on December 15, 2025, and the Company has the option to redeem or prepay any or all of the subordinated notes without premium or penalty any time after December 15, 2020 or upon an occurrence of a Tier 2 capital event or tax event. The $30.0 million of subordinated notes issued on December 18, 2019 bear a fixed interest rate of 4.75% per annum, payable semiannually through December 18, 2024. The notes will bear a floating interest rate of three-month secured overnight financing rate (SOFR) plus 311 basis points payable quarterly after December 18, 2024 through maturity. The notes mature on December 18, 2029, and the Company has the option to redeem any or all of the subordinated notes without premium or penalty any time after December 18, 2024 or upon the occurrence of a Tier 2 capital event or tax event. The Company has a short term line of credit of $30.0 million with Comerica Bank with a fixed interest rate of 4.05% per annum and a commitment fee of 0.20% on the average daily balance of the unused portion of the line of credit. As of December 31, 2020, the Company had no balance on the Comerica Bank line of credit. The Company participates in the PPP and also has the ability to borrow from the Federal Reserve's special purpose Paycheck Protection Program Liquidity Facility ("PPPLF") for additional funding. At December 31, 2020, the Company had no borrowings from the PPPLF. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 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. The current and deferred components of the provision for income taxes were as follows: For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Current expense $ 7,268 $ 3,995 $ 2,974 Deferred expense (benefit) (3,315) (592) 29 Total $ 3,953 $ 3,403 $ 3,003 A reconciliation of expected income tax expense using the federal statutory rate of 21% as of December 31, 2020, 2019 and 2018 and actual income tax expense is as follows: For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Income tax expense based on federal corporate tax rate $ 5,117 $ 4,098 $ 3,651 Changes resulting from: Tax-exempt income (589) (538) (406) Captive insurance benefit (156) (182) (198) Net operating loss carryback due to CARES Act (290) — — Disqualified dispositions from stock options (178) (13) (23) Other, net 49 38 (21) Income tax expense $ 3,953 $ 3,403 $ 3,003 In March 2020, the United States government approved the CARES Act, allowing companies to carryback net operating losses generated in 2018 through 2020 for five years to periods in which the tax rate was higher. Ann Arbor State Bank had a net operating loss ("NOL") of approximately $2.2 million generated on its 2020 short tax return which resulted in an increase in value of the NOL (which is part of the deferred tax assets) and therefore a $290 thousand tax benefit to be recognized during the first quarter of 2020. Additionally, disqualified dispositions of Ann Arbor State Bank’s stock options generated a $175 thousand tax benefit. Upon exercise or vesting of a share-based award, if the tax deduction exceeds the compensation cost that was previously recorded for financial statement purposes, this will result in an excess tax benefit. A tax benefit of $189 thousand and $18 thousand was recorded during the years ended December 31, 2020 and 2019, respectively, as a result of share awards vesting/exercised during the year. The tax effects of temporary differences that resulted in the significant components of deferred tax assets and liabilities at December 31, 2020 and 2019 are as follows: For the years ended December 31, (Dollars in thousands) 2020 2019 Deferred tax assets: Allowance for loan losses $ 4,682 $ 2,662 Net operating loss 757 — Deferred compensation 215 142 Restricted stock awards 290 223 Stock options 126 117 Deferred loan fees 1,403 248 Nonaccrued interest 215 155 Accrued expenses 370 365 Other 63 65 Total gross deferred tax assets 8,121 3,977 Deferred tax liabilities: Unrealized gain—available for sale securities (2,175) (955) Depreciation (914) (808) Prepaid expenses (212) (239) Business combination adjustments (1,080) (369) Partnership investments (381) (366) Other (47) (23) Total gross deferred tax liabilities (4,809) (2,760) Net deferred tax assets $ 3,312 $ 1,217 Management has determined that a valuation allowance is not required for the deferred tax assets at December 31, 2020 because it is more likely than not that these assets could be realized through carry back to taxable income in prior years, future reversals of existing taxable temporary differences, tax planning strategies and future taxable income. This conclusion is based on the Company's historical earnings, its current level of earnings and prospects for continued growth and profitability. There were no unrecognized tax benefits at December 31, 2020, and the Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months. The Company recognizes interest and/or penalties related to income tax matters in income tax expense when applicable. The Company did not record any interest and penalties for 2020, 2019 and 2018. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 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 reserved 250,000 shares of common stock for issuance under the 2018 Plan. During the years ended December 31, 2020 and 2019, the Company issued 38,170 and 39,483 restricted stock awards, respectively, under the 2018 Plan. There were 165,597 shares available for issuance as of December 31, 2020. Stock Options As of December 31, 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 year period. The Company will use authorized, but unissued shares to satisfy share option exercises. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. Expected volatilities are based on historical volatilities of the Company's common stock. The Company assumes all awards will vest. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The fair value of the stock options granted during the year ended December 31, 2018 was determined using the weighted-average assumptions as of the grant date shown below. There were no stock options granted during the years ended December 31, 2020 or December 31, 2019. December 31, 2018 Risk Free Interest Rate 2.83% Expected Term (years) 7.0 Expected Volatility 0.04% Weighted average fair value of options granted $4.46 The summary of our stock option activity for the years ended December 31, 2020 and 2019 is as follows: 2020 2019 Shares Weighted Average Weighted Average Remaining Contractual Shares Weighted Average Weighted Average Remaining Contractual Options outstanding, beginning of period 355,218 $ 16.63 5.0 376,768 $ 16.26 5.8 Exercised (10,000) 9.57 (21,550) 10.16 Options outstanding, end of period 345,218 16.83 4.1 355,218 16.63 5.0 Options exercisable 335,216 $ 16.59 4.0 335,214 $ 16.14 4.8 The aggregate intrinsic value was $1.4 million for both options outstanding and exercisable as of December 31, 2020. The aggregate intrinsic value of both options outstanding and exercisable as of December 31, 2019 was $3.0 million. As of December 31, 2020, there was $6 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 0.13 years. The total intrinsic value and cash received from options exercised, including tax benefit, was $130 thousand and $96 thousand, respectively, for the year ended December 31, 2020, $295 thousand and $232 thousand, respectively for the year ended December 31, 2019, and $1.8 million and $1.4 million, respectively, for the year ended December 31, 2018. Share-based compensation expense charged against income was $45 thousand, $54 thousand and $155 thousand for the years ended December 31, 2020, 2019 and 2018, respectively. Restricted Stock Awards A summary of changes in the Company's nonvested shares for the year ended December 31, 2020 is as follows: Nonvested Shares Shares Weighted Average Nonvested at January 1, 2020 80,370 $ 24.28 Granted 38,170 24.90 Vested (23,870) 23.40 Forfeited (1,400) 24.46 Nonvested at December 31, 2020 93,270 $ 24.75 As of December 31, 2020, there was $973 thousand of total unrecognized compensation cost related to nonvested shares granted under the 2014 Plan and 2018 Plan. The cost is expected to be recognized over a weighted average period of 1.75 years. The total fair value of shares vested during the year ended December 31, 2020 was $559 thousand compared to a fair value of $211 thousand for the year ended December 31, 2019. |
Other Benefit Plans
Other Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Other Benefit Plans | OTHER BENEFIT PLANS 401(k) Plan : The Company sponsors a 401(k) plan in which substantially all employees are eligible to participate. The plan is a "safe harbor" plan in accordance with the Internal Revenue Code. In 2020, the Company updated the plan to provide a matching contribution equal to 100% of the first 3% and 50% of the next 2% of employee contributions for each eligible employee. In 2019 and earlier, the plan required the Company to make a 3% non-elective contribution for each eligible employee. Contributions to the plan were approximately $1.1 million, $690 thousand and $537 thousand for the years ended December 31, 2020, 2019 and 2018, respectively. Deferred Compensation Plan : The Company's deferred compensation plan, established in 2015, covers all executive officers. Under the plan, the Company pays each participant, or his or her beneficiary, the amount of contributions deferred into the plan plus adjustments for deemed investment experience. The Company accrues a liability for the obligation under the plan. The expense incurred for deferred compensation was $350 thousand, $261 thousand and $148 thousand for the years ended December 31, 2020, 2019 and 2018, respectively, which resulted in a deferred compensation liability of $1.0 million, $676 thousand and $415 thousand as of December 31, 2020, 2019 and 2018, respectively. |
Off- Balance Sheet Activities
Off- Balance Sheet Activities | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Off- Balance Sheet Activities | LOANS The following table presents the recorded investment in loans at December 31, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total December 31, 2020 Commercial real estate $ 587,631 $ 133,201 $ 720,832 Commercial and industrial 629,434 56,070 685,504 Residential real estate 280,645 34,831 315,476 Consumer 748 977 1,725 Total $ 1,498,458 $ 225,079 $ 1,723,537 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 December 31, 2020 and December 31, 2019, the Company had residential loans held for sale, which were originated with the intent to sell, totaling $43.5 million and $13.9 million, respectively. During the years ended December 31, 2020 and 2019, the Company sold residential real estate loans with proceeds totaling $545.6 million and $270.4 million, respectively. At December 31, 2020, $290.1 million of PPP loans were included in the commercial and industrial loan balance. 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 $12 thousand and $1.2 million in commitments to lend additional funds to borrowers whose loans were classified as nonaccrual as of December 31, 2020 and December 31, 2019, respectively. Information as to nonperforming assets was as follows: (Dollars in thousands) December 31, 2020 December 31, 2019 Nonaccrual loans: Commercial real estate $ 7,320 $ 4,832 Commercial and industrial 7,490 11,112 Residential real estate 3,991 2,569 Consumer 15 16 Total nonaccrual loans 18,816 18,529 Other real estate owned — 921 Total nonperforming assets $ 18,816 $ 19,450 Loans 90 days or more past due and still accruing $ 269 $ 157 At December 31, 2020 and December 31, 2019, the loans that were 90 days or more past due and still accruing were PCI loans. Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total December 31, 2020 Commercial real estate $ 714,196 $ 4,863 $ 1,773 $ — $ 720,832 Commercial and industrial 681,106 893 3,505 — 685,504 Residential real estate 305,800 5,420 1,110 3,146 315,476 Consumer 1,723 — — 2 1,725 Total $ 1,702,825 $ 11,176 $ 6,388 $ 3,148 $ 1,723,537 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) December 31, 2020 December 31, 2019 Nonaccrual loans $ 18,816 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 546 547 Residential real estate 432 359 Total performing troubled debt restructurings 978 906 Total impaired loans, excluding purchase credit impaired loans $ 19,794 $ 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. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and extends the relief related to troubled debt restructurings to the earlier of January 1, 2022 or 60 days after the national emergency termination date. 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. As of December 31, 2020, we had $20.1 million of loans that remained on a COVID-related deferral of which $11.6 million of loans had payments deferred greater than six months. These loans were primarily commercial loans and represented 1.16% of our total loan portfolio. In addition, $2.5 million of those loans deferred greater than six months were moved to nonaccrual. 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 December 31, 2020 and December 31, 2019, the Company had a recorded investment in troubled debt restructurings of $4.8 million and $3.9 million, respectively. The Company allocated a specific reserve of $317 thousand and $384 thousand for those loans at December 31, 2020 and 2019, respectively. The Company had not committed to lend additional amounts to borrowers whose loans have been modified as of December 31, 2020 or December 31, 2019. As of December 31, 2020, there were $3.8 million of nonperforming TDRs and $978 thousand 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 years ended December 31, 2020, 2019 and 2018 by type of concession granted. 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 For the year ended December 31, 2020 Commercial real estate $ 1,654 $ — $ — 2 $ 1,654 $ — $ — Residential real estate — 74 — 1 74 — — Total $ 1,654 $ 74 $ — 3 $ 1,728 $ — $ — For the year ended December 31, 2019 Commercial and industrial $ — $ — $ 332 2 $ 332 $ — $ 174 Total $ — $ — $ 332 2 $ 332 $ — $ 174 For the year ended December 31, 2018 Commercial real estate $ 2,073 $ — $ — 4 $ 2,073 $ 101 $ — Commercial and industrial 1,031 106 — 4 1,137 — 14 Residential real estate 113 — — 2 113 — 5 Total $ 3,217 $ 106 $ — 10 $ 3,323 $ 101 $ 19 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. The following table presents the number of loans modified as TDRs during the twelve months ended December 31, 2020, 2019 and 2018 for which there was a subsequent payment default, including the recorded investment as of the period end. A payment on a TDR is considered to be in default once it is greater than 30 days past due. For the year ended December 31, 2020 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial real estate 1 $ 203 $ — Total 1 $ 203 $ — For the year ended December 31, 2019 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial and industrial 1 $ 42 $ 12 Total 1 $ 42 $ 12 For the year ended December 31, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,073 $ — Commercial and industrial 1 904 — Total 4 $ 2,977 $ — 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 December 31, 2020 Commercial real estate $ 685,690 $ 21,570 $ 13,045 $ 527 $ 720,832 Commercial and industrial 637,285 25,727 21,876 616 685,504 Total $ 1,322,975 $ 47,297 $ 34,921 $ 1,143 $ 1,406,336 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 December 31, 2020 Residential real estate $ 311,485 $ 3,991 $ 315,476 Consumer 1,710 15 1,725 Total $ 313,195 $ 4,006 $ 317,201 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 December 31, 2020 Commercial real estate $ 5,109 $ 1,773 Commercial and industrial 643 274 Residential real estate 4,017 2,949 Total PCI loans $ 9,769 $ 4,996 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 year ended December 31, (Dollars in thousands) 2020 2019 2018 Accretable yield at beginning of period $ 9,141 $ 10,947 $ 14,452 Additions due to acquisitions 35 — — Accretion of income (1,760) (2,313) (3,794) Adjustments to accretable yield (319) 507 304 Other activity, net — — (15) Accretable yield at end of period $ 7,097 $ 9,141 $ 10,947 "Additions due to acquisitions" represents the accretable yield added as a result of the AAB acquisition. "Accretion of income" represents the income earned on these loans for the year. For the years ended December 31, 2020 and 2019, allowance for loan losses on PCI loans decreased by $95 thousand and $158 thousand, respectively. Related Party Loans: We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. The aggregate loans outstanding to the directors, executive officers, principal shareholders and their affiliates as of December 31, 2020 and 2019 totaled approximately $8.9 million and $4.1 million, respectively. During 2020 and 2019, there were $6.6 million and $1.1 million, respectively, of new loans and other additions, while repayments and other reductions totaled $1.8 million and $924 thousand, respectively. 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 December 31, 2020, the allowance for off-balance sheet risk was $490 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: December 31, 2020 December 31, 2019 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 18,269 $ 17,058 $ 16,276 $ 20,128 Unused lines of credit 28,898 385,307 28,723 288,086 Unused standby letters of credit and commercial letters of credit 2,340 1,992 4,895 — Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments of $18.3 million as of December 31, 2020, had interest rates ranging from 3.5% to 4.26% and maturities ranging from 3 years to 30 years. |
Regulatory Capital Matters
Regulatory Capital Matters | 12 Months Ended |
Dec. 31, 2020 | |
Regulated Operations [Abstract] | |
Regulatory Capital Matters | REGULATORY CAPITAL MATTERSBanks 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 December 31, 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 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 December 31, 2020 and December 31, 2019, the Company's and the Bank's capital ratios were in excess of the requirement to be "well capitalized" under regulatory guidelines. There are no conditions or events that management believes have changed the Company or 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 December 31, 2020 Common equity tier 1 to risk-weighted assets: Consolidated $ 144,938 9.30 % $ 70,141 4.50 % $ 109,108 7.00 % Bank 185,655 11.94 % 69,950 4.50 % 108,812 7.00 % $ 101,040 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 168,310 10.80 % $ 93,521 6.00 % $ 132,488 8.50 % Bank 185,655 11.94 % 93,267 6.00 % 132,129 8.50 % $ 124,356 8.00 % Total capital to risk-weighted assets: Consolidated $ 232,386 14.91 % $ 124,695 8.00 % $ 163,662 10.50 % Bank 205,127 13.20 % 124,356 8.00 % 163,218 10.50 % $ 155,446 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 168,310 6.93 % $ 97,200 4.00 % $ 97,200 4.00 % Bank 185,655 7.67 % 96,809 4.00 % 96,809 4.00 % $ 121,011 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 | 12 Months Ended |
Dec. 31, 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 December 31, 2020 Securities available for sale: U.S. government sponsored entities and agencies $ 26,358 $ — $ 26,358 $ — State and political subdivision 132,723 — 131,259 1,464 Mortgage-backed securities: residential 26,081 — 26,081 — Mortgage-backed securities: commercial 11,918 — 11,918 — Collateralized mortgage obligations: residential 13,446 — 13,446 — Collateralized mortgage obligations: commercial 58,512 — 58,512 — SBA 17,593 — 17,593 — Asset backed securities 10,072 — 10,072 — Corporate bonds 6,029 — 6,029 — Total securities available for sale 302,732 — 301,268 1,464 Loans held for sale 43,482 — 43,482 — Loans measured at fair value: Residential real estate 8,037 — — 8,037 Derivative assets: Customer-initiated derivatives 12,515 — 12,515 — Forward contracts related to mortgage loans to be delivered for sale 46 — 46 — Interest rate lock commitments 2,194 — 2,194 — Total assets at fair value $ 369,006 $ — $ 359,505 $ 9,501 Derivative liabilities: Customer-initiated derivatives 12,515 — 12,515 — Forward contracts related to mortgage loans to be delivered for sale 423 — 423 — Total liabilities at fair value $ 12,938 $ — $ 12,938 $ — (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 years ended December 31, 2020 or 2019. The level 3 investment securities disclosed as of December 31, 2020 were acquired from Ann Arbor State Bank during the first quarter of 2020. The following table summarizes the changes in Level 3 loans measured at fair value on a recurring basis. For the year ended December 31, (Dollars in thousands) 2020 2019 Loans held for investment Beginning balance $ 4,063 $ 4,571 Transfers from loans held for sale 5,217 2,186 Gains: Recorded in "Mortgage banking activities" 123 126 Repayments (1,366) (2,820) Ending balance $ 8,037 $ 4,063 There were $105 thousand loans held for investment measured at fair value that were on nonaccrual status or 90 days past due with a fair value of $109 thousand as of December 31, 2020. There were no loans held for investment that were on nonaccrual status or 90 days past due as of December 31, 2019. 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. 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. There were no loans held for sale that were on nonaccrual status or 90 days past due as of December 31, 2020 or December 31, 2019. As of December 31, 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) December 31, 2020 December 31, 2019 Aggregate fair value $ 43,482 $ 13,889 Contractual balance 41,808 13,510 Unrealized gain 1,674 379 The total amount of gains as a result of changes in fair value of loans held for sale included in "Mortgage banking activities" for the years ended December 31, 2020, 2019 and 2018 were as follows: For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Change in fair value $ 1,295 $ 296 $ 1 Assets measured at fair value on a non-recurring basis are summarized below: (Dollars in thousands) Total Significant Unobservable Inputs December 31, 2020 Impaired loans: Commercial and industrial $ 1,270 $ 1,270 Mortgage servicing rights 3,981 3,981 Total $ 5,251 $ 5,251 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 $95 thousand and $161 thousand to reduce the value of the impaired loans noted above at December 31, 2020 and December 31, 2019, respectively, based on the estimated fair value of the underlying collateral. The Company also recorded chargeoffs of $315 thousand during the year ended December 31, 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. There were no write downs recorded in other real estate owned during the year ended December 31, 2020 or 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 December 31, 2020 and December 31, 2019: (Dollars in thousands) Fair value at Valuation Significant Discount % Range/Amount Impaired loans $ 1,270 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10.00-90.00% Mortgage servicing rights 3,981 Discounted cash flow Prepayment speed 8.71 % 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 December 31, 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 December 31, 2020 Financial assets: Cash and cash equivalents $ 264,071 $ 25,245 $ 238,826 $ — $ 264,071 Other investments 14,398 N/A N/A N/A N/A Net loans 1,701,240 — — 1,740,093 1,740,093 Accrued interest receivable 7,511 — 1,460 6,051 7,511 Financial liabilities: Deposits 1,963,312 — 2,022,399 — 2,022,399 Borrowings 185,684 — 192,546 — 192,546 Subordinated notes 44,592 — 45,902 — 45,902 Accrued interest payable 1,081 — 1,081 — 1,081 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 their 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 | 12 Months Ended |
Dec. 31, 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: December 31, 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 $ 136,023 $ 12,515 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 10,191 46 6,018 34 Interest rate lock commitments 91,531 2,194 25,519 256 Total derivatives included in other assets $ 237,745 $ 14,755 $ 135,478 $ 4,974 Included in other liabilities: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 136,023 $ 12,515 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 92,899 423 20,633 33 Interest rate lock commitments — — 928 — Total derivatives included in other liabilities $ 228,922 $ 12,938 $ 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 year ended December 31, (Dollars in thousands) Location of Gain (Loss) 2020 2019 2018 Forward contracts related to mortgage loans to be delivered for sale Mortgage banking activities $ (5,011) $ (509) $ (69) Interest rate lock commitments Mortgage banking activities 1,938 58 142 Total loss recognized in income $ (3,073) $ (451) $ 73 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 December 31, 2020 Offsetting derivative assets: Customer initiated derivatives $ 12,515 $ — $ 12,515 $ — $ — $ 12,515 Offsetting derivative liabilities: Customer initiated derivatives 12,515 — 12,515 — 15,383 (2,868) 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 | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Statements | PARENT COMPANY FINANCIAL STATEMENTS Balance Sheets—Parent Company (Dollars in thousands) December 31, 2020 December 31, 2019 Assets Cash and cash equivalents $ 25,779 $ 35,210 Investment in banking subsidiary 232,671 178,240 Investment in captive insurance subsidiary 1,625 1,668 Income tax benefit 355 520 Other assets 63 99 Total assets $ 260,493 $ 215,737 Liabilities Subordinated notes $ 44,592 $ 44,440 Accrued expenses and other liabilities 574 594 Total liabilities 45,166 45,034 Shareholders' equity 215,327 170,703 Total liabilities and shareholders' equity $ 260,493 $ 215,737 Statements of Income and Comprehensive Income—Parent Company For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Income Dividend income from bank subsidiary $ 41,500 $ — $ — Dividend income from captive subsidiary 815 860 — Total income $ 42,315 $ 860 $ — Expenses Interest on borrowed funds 40 4.00 — Interest on subordinated notes 2,537 1,074 1,015 Other expenses 1,238 1,196 715 Total expenses $ 3,815 $ 2,274 $ 1,730 Income (loss) before income taxes and equity in (overdistributed) undistributed net earnings of subsidiaries 38,500 (1,414) (1,730) Income tax benefit 781 427 425 Equity in (overdistributed) undistributed earnings of subsidiaries (18,868) 17,098 15,691 Net income $ 20,413 $ 16,111 $ 14,386 Other comprehensive income 4,590 5,344 (801) Total comprehensive income, net of tax $ 25,003 $ 21,455 $ 13,585 Statements of Cash Flows—Parent Company For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Cash flows from operating activities Net income $ 20,413 $ 16,111 $ 14,386 Adjustments to reconcile net income to net cash provided by operating activities: Equity in over (under) distributed earnings of subsidiaries 18,868 (17,098) (15,691) Stock based compensation expense 101 74 314 (Increase) decrease in other assets, net 201 (205) (45) Increase (decrease) in other liabilities, net 59 257 (79) Net cash provided by (used in) operating activities 39,642 (861) (1,115) Cash flows from investing activities Cash used in acquisitions (67,944) — — Capital infusion to subsidiaries — — (20,000) Net cash used in investing activities (67,944) — (20,000) Cash flows from financing activities Net proceeds from issuance of common stock related to initial public offering — — 29,030 Preferred stock offering, net of issuance costs 23,372 — — Net proceeds from issuance of subordinated debt — 29,487 — Share buyback - redeemed stock (2,648) (2,165) — Common stock dividends paid (1,469) (1,160) (662) Preferred stock dividends paid (479) — — Proceeds from exercised stock options 95 219 1,279 Net cash provided by financing activities 18,871 26,381 29,647 Net increase (decrease) in cash and cash equivalents (9,431) 25,520 8,532 Beginning cash and cash equivalents 35,210 9,690 1,158 Ending cash and cash equivalents $ 25,779 $ 35,210 $ 9,690 |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | EARNINGS PER COMMON SHARE Beginning in the second quarter of 2019, the Company elected to prospectively use the two-class method in calculating earnings per share due to the unvested restricted stock awards qualifying as participating securities. 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 years ended December 31, 2020 and 2019 was as follows: For the year ended December 31, (In thousands, except per share data) 2020 2019 Net income $ 20,413 $ 16,111 Preferred stock dividends 479 — Net income available to common shareholders 19,934 16,111 Net income allocated to participating securities 244 159 Net income allocated to common shareholders (1) $ 19,690 $ 15,952 Weighted average common shares - issued 7,723 7,733 Average unvested restricted share awards (96) (78) Weighted average common shares outstanding - basic 7,627 7,655 Effect of dilutive securities: Weighted average common stock equivalents 59 115 Weighted average common shares outstanding - diluted 7,686 7,770 EPS available to common shareholders Basic earnings per common share $ 2.58 $ 2.08 Diluted earnings per common share $ 2.57 $ 2.05 (1) Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share. For the year ended December 31, 2018, the basic and diluted earnings per share were calculated using the treasury stock method, as disclosed in the table below. For the year ended December 31, (In thousands, except per share data) 2018 Basic: Net Income attributable to common shareholders $ 14,386 Weighted average common shares outstanding 7,376,507 Basic earnings per share $ 1.95 Diluted: Net Income attributable to common shareholders $ 14,386 Weighted average common shares outstanding 7,376,507 Add: Dilutive effects of assumed exercises of stock options 147,411 Weighted average common and dilutive potential common shares outstanding 7,523,918 Diluted earnings per common share $ 1.91 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | QUARTERLY FINANCIAL DATA (UNAUDITED) The following tables present the unaudited quarterly financial data for the years ended December 31, 2020 and 2019: For the year ended December 31, 2020 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 19,817 $ 20,396 $ 20,245 $ 22,181 Interest expense 4,997 4,163 3,648 3,075 Net interest income 14,820 16,233 16,597 19,106 Provision for loan losses 489 5,575 4,270 1,538 Net interest income after provision for loan losses 14,331 10,658 12,327 17,568 Noninterest income 4,690 7,789 9,125 8,110 Noninterest expense 14,562 15,083 15,126 15,461 Income before income taxes 4,459 3,364 6,326 10,217 Income tax provision 349 643 1,117 1,844 Net income 4,110 2,721 5,209 8,373 Preferred stock dividends — — — 479 Net income attributable to common shareholders $ 4,110 $ 2,721 $ 5,209 $ 7,894 Earnings per common share: Basic $ 0.53 $ 0.35 $ 0.68 $ 1.02 Diluted 0.53 0.35 0.67 1.02 Cash dividends declared per common share 0.05 0.05 0.05 0.05 For the year ended December 31, 2019 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 17,442 $ 17,657 $ 17,983 $ 17,366 Interest expense 4,724 5,216 4,995 4,458 Net interest income 12,718 12,441 12,988 12,908 Provision (benefit) for loan losses 422 429 (16) 548 Net interest income after provision (benefit) for loan losses 12,296 12,012 13,004 12,360 Noninterest income 2,286 3,477 3,858 4,590 Noninterest expense 10,368 11,167 11,539 11,295 Income before income taxes 4,214 4,322 5,323 5,655 Income tax provision 747 767 914 975 Net income $ 3,467 $ 3,555 $ 4,409 $ 4,680 Earnings per common share: Basic $ 0.45 $ 0.46 $ 0.57 $ 0.60 Diluted 0.44 0.45 0.56 0.60 Cash dividends declared per common share 0.04 0.04 0.04 0.04 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Captive dissolution As of January 19, 2021, Hamilton Court exited the pool resources relationship and was dissolved. The capital investment in Hamilton Court of $1.6 million was returned to the Company on January 20, 2021. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to predominant practices within the banking industry. Management of the Company has made a number of estimates and assumptions related to the reporting of assets and liabilities to prepare the consolidated financial statements in conformity with GAAP. Actual results may differ from |
Principles of Consolidation | Principles of Consolidation:The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank and Hamilton Court, after elimination of significant intercompany transactions and accounts. |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Under the acquisition method, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date. The Company includes the results of operations of the acquired companies in the consolidated statements of income from the date of acquisition. Transaction costs and costs to restructure the acquired company are expensed as incurred. Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired. If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, which includes amounts on deposit with the Federal Reserve, interest-bearing deposits with banks or other financial institutions and federal funds sold. Generally, federal funds are sold for one‑day periods, but not longer than 30 days. |
Investment Securities | Investment Securities Investment securities consist of debt securities of the U.S. Treasury, government sponsored entities, states, counties, municipalities, corporations, agency mortgage-backed securities and non-agency mortgage-backed securities. Securities transactions are recorded on a trade date basis. Securities are classified as available for sale when the Company intends to sell them before maturity. Available-for-sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available-for-sale securities are included in other comprehensive income and the related accumulated unrealized holding gains and losses are reported as a separate component of shareholders’ equity until realized. On a quarterly basis, the Company makes an assessment to determine whether there have been any events or circumstances to indicate that a security for which there is an unrealized loss is impaired on an other than temporary basis. This determination requires significant judgment. A decline in the fair value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. In estimating other-than-temporary impairment (“OTTI”) losses, we consider the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; projected cash flows on covered non-agency mortgage-backed securities; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. Management evaluates securities for other-than-temporary impairment more frequently when economic or market conditions warrant such an evaluation. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized on the level-yield method. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Also, when applicable, realized gains and losses are reported as a reclassification adjustment, net of tax, in other comprehensive income. |
Other Investments | Other Investments The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank also invests in an equity security that does not have a readily determinable fair value because its ownership is restricted and lacks a market for trading. As a result, this security is carried at cost and is periodically evaluated for impairment. |
Loans Held for Sale | Loans Held for Sale Loans held for sale consist of loans originated with the intent to sell. Loans held for sale are carried at fair value, determined individually, as of the balance sheet date. The Company believes the fair value method reflects the economic risks associated with these loans. Fair value measurements on loans held for sale are based on quoted market prices for similar loans in the secondary market, market quotes from anticipated sales contracts and commitments, or contract prices from firm sales commitments. Fair value includes the servicing value of the loans as well as any accrued interest. The changes in the fair value of loans held for sale are reflected in mortgage banking activities on the consolidated statements of income . |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unamortized deferred loan fees and costs and net of any purchase premiums and discounts. Interest income is recorded on the accrual basis, in accordance with the terms of the respective loan. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income without anticipating prepayments. Loans are considered delinquent when principal or interest payments are past due 30 days or more; delinquent loans may remain on accrual status between 30 days and 89 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Interest income on mortgage and commercial loans is discontinued when principal or interest payments are past due 90 days, unless the loan is well-secured and in process of collection. Consumer loans are typically charged off no later than 120 days past due. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Certain Purchased Loans | Certain Purchased Loans The Company purchases individual loans and groups of loans, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired (“PCI”) loans are recorded at the amount paid or at fair value at acquisition in a business combination, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the provision for loan losses. These PCI loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as credit grade, loan type, and date of origination. The Company estimates the amount and timing of expected cash flows for each purchased loan or pool, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan or pool ( accretable yield). The excess of the loan’s or pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan or pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, an impairment loss is recognized by establishing an allocation for the loan or pool in the allowance for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized, prospectively, as loan interest income. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Loans over $250 thousand are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings, are classified as impaired, regardless of size, and are measured for impairment based upon the present value of estimated future cash flows using the loan’s effective rate at inception or, if considered collateral dependent, based upon the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. An allowance for loan losses for purchased credit impaired loans is recorded when projected future cash flows decrease. The measurement of impairment on these loans or pools of loans is based upon the excess of the loan or pool’s carrying value over the present value of the projected future cash flows, discounted at the last accounting yield applicable to the loan or pool of loans. The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent 36 months. The historical loss analysis incorporates and fully relies on the Bank’s own historical loss data. The historical loss estimates are established by loan type including commercial and industrial and commercial real estate. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: local and national economic conditions; trends in underwriting standards and lending policies; trends in portfolio volume, maturity and composition (impact of credit concentrations); experience, ability and depth of lending management and staff; trends in delinquencies and nonaccruals; results of independent loan review; change in value for collateral dependent loans; high loan growth; unseasoned bank portfolio; specialized financing; and other factors (legal, regulatory, competition). The following portfolio segments have been identified: Commercial real estate loans are secured by a mortgage lien on the real estate property. Owner-occupied real estate loans generally are considered to carry less risk than non-owner occupied real estate (properties) because the Company considers them to be less sensitive to the condition of the commercial real estate market. Repayment is based on the operations of the business. Investment real estate loans rely on rental income for loan repayment, which involves risk such as rent rollover, tenants going out of business, and competitive properties in the area. Construction and land development loans generally are considered the riskiest class of commercial real estate, due to possible cost overruns, contractor/lien issues, loss of tenant, etc. Risk of loss is managed by adherence to standard loan policies that establish certain levels of performance prior to the extension of a loan to the borrower. Commercial and Industrial loans have varying degrees of risk, but overall are considered to have less risk than commercial real estate. These loans are generally short-term in nature and are almost always backed by collateral. Unsecured commercial loans are supported by strong borrower(s)/guarantor(s) in terms of liquidity, net worth, cash flow, etc. Collateral security of these loans is relatively liquid (i.e., accounts receivable, inventory, equipment) and readily available to cover potential loan loss. Credit risk is managed through standardized loan policies, established and authorized credit limits, portfolio management and the diversification of industries. The PPP loans funded during the second and third quarters of 2020, which are guaranteed by the SBA, are reported within this loan category. Consumer and Residential Real Estate loan portfolios, unlike commercial, tend to be composed of many relatively homogeneous loans. Loan repayment is based on personal cash flow. To assess the risk of a consumer loan request, loan purpose, collateral, debt to income ratio, credit bureau report, and cash flow/employment verification are analyzed. A certain level of security is provided through liens on credits supported by collateral. Economic conditions that affect consumers in the Bank’s market have a direct impact on the credit quality of these loans. Higher levels of unemployment, lower levels of income growth and weaker economic growth are factors that may adversely impact consumer loan credit quality. The majority of residential real estate loans originated by the Bank conform to secondary market underwriting standards and are sold within a short timeframe to unaffiliated third parties, including the future servicing rights to the loans. The credit underwriting standards for these loans require a certain level of documentation, verifications, valuations, and overall credit performance of the borrower. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the life of the asset or the expected term of the lease. We periodically review the carrying value of our long‑lived assets to determine if impairment has occurred or whether changes in circumstances have occurred that would require a revision to the remaining useful life. In making such determination, we evaluate the performance, on an undiscounted basis, of the underlying operations or assets which give rise to such amount. |
Other Real Estate Owned ("OREO") and Repossessed Assets | Other Real Estate Owned ("OREO") and Repossessed Assets Other real estate owned and repossessed assets represent properties/assets acquired through acquisition, foreclosure, repossession process or other proceedings, and are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Fair value for OREO is based on an appraisal performed upon foreclosure. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value. Revenue from the operations of OREO is included in other income in the consolidated statements of income, and expense from the operations of OREO and decreases in valuations are included in other expense in the consolidated statements of income. |
Goodwill and Core Deposit Intangible | Goodwill and Core Deposit Intangible Goodwill resulting from business combinations is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. |
Mortgage Servicing Rights | Mortgage Servicing Rights When loans are sold with servicing retained, the servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value. The servicing rights are amortized in proportion to and over the period of estimated net servicing income. Servicing rights are evaluated for impairment on a quarterly basis based upon the fair value obtained from an independent third party valuation model requiring the incorporation of assumptions that market participants would use in estimating future net servicing income, which include estimates of prepayment speeds, discount rate, cost to service, contractual servicing fee income, ancillary income, late fees, replacement reserves and other economic factors that are determined based on current market conditions. |
Bank-owned Life Insurance | Bank-owned Life Insurance The Bank has purchased life insurance policies on certain key executives and senior managers. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Derivatives | Derivatives All derivatives are recognized on the consolidated balance sheet as a component of other assets or other liabilities at their fair value. Customer-initiated derivatives refer to the Company utilizing interest rate derivatives to provide a service to certain qualifying customers to help facilitate their respective risk management strategies. Therefore, these derivatives are not used to manage interest rate risk in the Company's assets or liabilities. The Company generally takes offsetting positions with dealer counterparties to mitigate the valuation risk of the customer-initiated derivatives. Income primarily results in the spread between the customer derivatives and offsetting dealer positions. The gains or losses derived from changes in fair value are recognized in current earnings during the period of change in other non-interest income on the consolidated statements of income. 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 accounted for as freestanding derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in mortgage banking activities in the consolidated statements of income. |
Secured Borrowings and Transfers of Financial Assets | Secured borrowing Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings. Accordingly, the related assets remain on the Company’s balance sheet and continue to be reported and accounted for as if the transfer had not occurred. Cash proceeds from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any matters at this time that will have a material effect on the consolidated financial statements. |
Earnings per Share | Earnings per Share The Company's restricted stock awards that pay non-forfeitable common stock dividends meet the criteria of a participating security. Accordingly, beginning in 2019, earnings per share is calculated using the two-class method under which earnings are allocated to both common shares and participating securities. |
Debt Issuance Cost | Debt Issuance CostsCosts associated with the issuance of debt are presented in the consolidated balance sheet as a direct reduction from the carrying value of that debt liability. The deferred issuance costs are amortized over the life the related debt instrument, and included within the debt’s interest expense. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards as there is no market or performance metrics that must be met. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Additionally, the Company accounts for forfeitures as they occur. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, net of taxes and reclassifications. |
Income Taxes | Income Taxes Income tax expense or benefit is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. |
Dividend Restriction | Dividend Restriction Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company or by the holding company to shareholders. The total amount of dividends which may be paid out at any date is also generally limited to retained earnings. |
Operating Segments | Operating SegmentsWhile chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating results are not reviewed by senior management to make resource allocation or performance decisions. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. |
Impact of Recently Adopted and 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. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In response to concerns about structural risks of the cessation of LIBOR, the amendments in this ASU provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this ASU are elective and were effective March 12, 2020 for all entities. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 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 year ended December 31, 2020, but the pro forma condensed combined statement of income is not adjusted to exclude these costs. For the year ended December 31, (Dollars in thousands, except per share data) 2020 2019 Net interest income $ 66,796 $ 61,103 Noninterest income 29,714 17,206 Noninterest expense 60,300 53,174 Net income 20,433 17,647 Net income per diluted share 2.57 2.26 |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 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 December 31, 2020 U.S. government sponsored entities & agencies $ 26,575 $ 103 $ (320) $ 26,358 State and political subdivision 124,053 8,751 (81) 132,723 Mortgage-backed securities: residential 25,729 352 — 26,081 Mortgage-backed securities: commercial 11,434 484 — 11,918 Collateralized mortgage obligations: residential 13,320 138 (12) 13,446 Collateralized mortgage obligations: commercial 57,398 1,206 (92) 58,512 SBA 17,639 61 (107) 17,593 Asset backed securities 10,229 — (157) 10,072 Corporate bonds 5,998 34 (3) 6,029 Total available-for-sale $ 292,375 $ 11,129 $ (772) $ 302,732 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 year ended December 31, (Dollars in thousands) 2020 2019 2018 Proceeds $ 42,640 $ 69,846 $ 3,625 Gross gains 1,871 1,566 2 Gross losses (9) (392) (73) |
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. December 31, 2020 (Dollars in thousands) Amortized Fair Within one year $ 10,717 $ 10,807 One to five years 24,573 25,421 Five to ten years 105,041 107,713 Beyond ten years 152,044 158,791 Total $ 292,375 $ 302,732 |
Securities with Unrealized Losses | The following table summarizes securities with unrealized losses at December 31, 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 December 31, 2020 Available-for-sale U.S. government sponsored entities & agencies $ 19,680 $ (320) $ — $ — $ 19,680 $ (320) State and political subdivision 4,880 (81) — — 4,880 (81) Collateralized mortgage obligations: residential — — 1,109 (12) 1,109 (12) Collateralized mortgage obligations: commercial 26,467 (92) — — 26,467 (92) SBA — — 12,206 (107) 12,206 (107) Asset backed securities — — 10,072 (157) 10,072 (157) Corporate bonds 2,497 (3) — — 2,497 (3) Total available-for-sale $ 53,534 $ (496) $ 23,390 $ (276) $ 76,924 $ (772) 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) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Recorded Investment in Loans | The following table presents the recorded investment in loans at December 31, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total December 31, 2020 Commercial real estate $ 587,631 $ 133,201 $ 720,832 Commercial and industrial 629,434 56,070 685,504 Residential real estate 280,645 34,831 315,476 Consumer 748 977 1,725 Total $ 1,498,458 $ 225,079 $ 1,723,537 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) December 31, 2020 December 31, 2019 Nonaccrual loans: Commercial real estate $ 7,320 $ 4,832 Commercial and industrial 7,490 11,112 Residential real estate 3,991 2,569 Consumer 15 16 Total nonaccrual loans 18,816 18,529 Other real estate owned — 921 Total nonperforming assets $ 18,816 $ 19,450 Loans 90 days or more past due and still accruing $ 269 $ 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 December 31, 2020 Commercial real estate $ 714,196 $ 4,863 $ 1,773 $ — $ 720,832 Commercial and industrial 681,106 893 3,505 — 685,504 Residential real estate 305,800 5,420 1,110 3,146 315,476 Consumer 1,723 — — 2 1,725 Total $ 1,702,825 $ 11,176 $ 6,388 $ 3,148 $ 1,723,537 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 | Information as to impaired loans, excluding purchased credit impaired loans, was as follows: (Dollars in thousands) December 31, 2020 December 31, 2019 Nonaccrual loans $ 18,816 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 546 547 Residential real estate 432 359 Total performing troubled debt restructurings 978 906 Total impaired loans, excluding purchase credit impaired loans $ 19,794 $ 19,435 (Dollars in thousand) Unpaid Principal Balance Recorded Investment December 31, 2020 Commercial real estate $ 5,109 $ 1,773 Commercial and industrial 643 274 Residential real estate 4,017 2,949 Total PCI loans $ 9,769 $ 4,996 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 December 31, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,320 $ — $ 7,320 $ 7,720 $ — Commercial and industrial 7,964 630 8,594 9,208 307 Residential real estate 2,153 192 2,345 2,447 25 Total $ 17,437 $ 822 $ 18,259 $ 19,375 $ 332 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 year ended December 31, 2020 Individually evaluated impaired loans: (1) Commercial real estate $ 7,981 $ — $ 10 Commercial and industrial 14,008 46 87 Residential real estate 3,304 36 55 Total $ 25,293 $ 82 $ 152 For the year ended December 31, 2019 Individually evaluated impaired loans: (1) Commercial real estate $ 4,233 $ 2 $ 209 Commercial and industrial 8,514 43 573 Residential real estate 1,904 29 9 Total $ 14,651 $ 74 $ 791 For the year ended December 31, 2018 Individually evaluated impaired loans: (1) Commercial real estate $ 9,471 $ 1,622 $ 142 Commercial and industrial 7,673 91 112 Residential real estate 5,182 369 — Total $ 22,326 $ 2,082 $ 254 (1) December 31, 2018 individually evaluated impaired loans included PCI loans, whereas December 31, 2020 and 2019 individually evaluated impaired loans excluded PCI loans. |
Summary of Recorded Investment of Loans Modified in TDRs | The following table presents the recorded investment of loans modified as TDRs during the years ended December 31, 2020, 2019 and 2018 by type of concession granted. 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 For the year ended December 31, 2020 Commercial real estate $ 1,654 $ — $ — 2 $ 1,654 $ — $ — Residential real estate — 74 — 1 74 — — Total $ 1,654 $ 74 $ — 3 $ 1,728 $ — $ — For the year ended December 31, 2019 Commercial and industrial $ — $ — $ 332 2 $ 332 $ — $ 174 Total $ — $ — $ 332 2 $ 332 $ — $ 174 For the year ended December 31, 2018 Commercial real estate $ 2,073 $ — $ — 4 $ 2,073 $ 101 $ — Commercial and industrial 1,031 106 — 4 1,137 — 14 Residential real estate 113 — — 2 113 — 5 Total $ 3,217 $ 106 $ — 10 $ 3,323 $ 101 $ 19 For the year ended December 31, 2020 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial real estate 1 $ 203 $ — Total 1 $ 203 $ — For the year ended December 31, 2019 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial and industrial 1 $ 42 $ 12 Total 1 $ 42 $ 12 For the year ended December 31, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,073 $ — Commercial and industrial 1 904 — Total 4 $ 2,977 $ — |
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 December 31, 2020 Commercial real estate $ 685,690 $ 21,570 $ 13,045 $ 527 $ 720,832 Commercial and industrial 637,285 25,727 21,876 616 685,504 Total $ 1,322,975 $ 47,297 $ 34,921 $ 1,143 $ 1,406,336 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 December 31, 2020 Residential real estate $ 311,485 $ 3,991 $ 315,476 Consumer 1,710 15 1,725 Total $ 313,195 $ 4,006 $ 317,201 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 year ended December 31, (Dollars in thousands) 2020 2019 2018 Accretable yield at beginning of period $ 9,141 $ 10,947 $ 14,452 Additions due to acquisitions 35 — — Accretion of income (1,760) (2,313) (3,794) Adjustments to accretable yield (319) 507 304 Other activity, net — — (15) Accretable yield at end of period $ 7,097 $ 9,141 $ 10,947 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2020 December 31, 2019 Nonaccrual loans $ 18,816 $ 18,529 Performing troubled debt restructurings: Commercial and industrial 546 547 Residential real estate 432 359 Total performing troubled debt restructurings 978 906 Total impaired loans, excluding purchase credit impaired loans $ 19,794 $ 19,435 (Dollars in thousand) Unpaid Principal Balance Recorded Investment December 31, 2020 Commercial real estate $ 5,109 $ 1,773 Commercial and industrial 643 274 Residential real estate 4,017 2,949 Total PCI loans $ 9,769 $ 4,996 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 December 31, 2020 Individually evaluated impaired loans: Commercial real estate $ 7,320 $ — $ 7,320 $ 7,720 $ — Commercial and industrial 7,964 630 8,594 9,208 307 Residential real estate 2,153 192 2,345 2,447 25 Total $ 17,437 $ 822 $ 18,259 $ 19,375 $ 332 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 year ended December 31, 2020 Individually evaluated impaired loans: (1) Commercial real estate $ 7,981 $ — $ 10 Commercial and industrial 14,008 46 87 Residential real estate 3,304 36 55 Total $ 25,293 $ 82 $ 152 For the year ended December 31, 2019 Individually evaluated impaired loans: (1) Commercial real estate $ 4,233 $ 2 $ 209 Commercial and industrial 8,514 43 573 Residential real estate 1,904 29 9 Total $ 14,651 $ 74 $ 791 For the year ended December 31, 2018 Individually evaluated impaired loans: (1) Commercial real estate $ 9,471 $ 1,622 $ 142 Commercial and industrial 7,673 91 112 Residential real estate 5,182 369 — Total $ 22,326 $ 2,082 $ 254 (1) December 31, 2018 individually evaluated impaired loans included PCI loans, whereas December 31, 2020 and 2019 individually evaluated impaired loans excluded PCI loans. |
Activity in the Allowance for Loan Losses and Allocation of the Allowance for Loans | Activity in the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total For the year ended December 31, 2020 Allowance for loan losses: Beginning balance $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 Provision for loan losses 4,190 5,302 2,343 37 11,872 Gross chargeoffs — (2,118) (285) (58) (2,461) Recoveries 12 87 85 28 212 Net (chargeoffs) recoveries 12 (2,031) (200) (30) (2,249) Ending allowance for loan losses $ 9,975 $ 8,786 $ 3,527 $ 9 $ 22,297 For the year ended December 31, 2019 Allowance for loan losses: Beginning balance $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Provision for loan losses 632 533 143 75 1,383 Gross chargeoffs (92) (438) — (106) (636) Recoveries 6 246 77 32 361 Net (chargeoffs) recoveries (86) (192) 77 (74) (275) Ending allowance for loan losses $ 5,773 $ 5,515 $ 1,384 $ 2 $ 12,674 For the year ended December 31, 2018 Allowance for loan losses: Beginning Balance $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Provision for loan losses 464 (269) 191 26 412 Gross chargeoffs (112) (1,283) (47) (35) (1,477) Recoveries 23 823 70 2 918 Net (chargeoffs) recoveries (89) (460) 23 (33) (559) Ending Allowance for loan losses $ 5,227 $ 5,174 $ 1,164 $ 1 $ 11,566 Allocation of the allowance for loan losses is presented below: (Dollars in thousands) Commercial Commercial Residential Consumer Total December 31, 2020 Allowance for loan losses: Individually evaluated for impairment $ — $ 307 $ 25 $ — $ 332 Collectively evaluated for impairment 9,550 8,465 3,273 9 21,297 Acquired with deteriorated credit quality 425 14 229 — 668 Ending allowance for loan losses $ 9,975 $ 8,786 $ 3,527 $ 9 $ 22,297 Balance of loans: Individually evaluated for impairment $ 7,320 $ 8,594 $ 2,345 $ — $ 18,259 Collectively evaluated for impairment 711,739 676,636 310,182 1,725 1,700,282 Acquired with deteriorated credit quality 1,773 274 2,949 — 4,996 Total loans $ 720,832 $ 685,504 $ 315,476 $ 1,725 $ 1,723,537 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) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment were as follows at December 31, 2020 and December 31, 2019: (Dollars in thousands) December 31, 2020 December 31, 2019 Land $ 3,514 $ 2,254 Buildings 10,656 9,825 Leasehold improvements 3,017 2,714 Furniture, fixtures and equipment 7,786 6,539 Total premises and equipment $ 24,973 $ 21,332 Less: Accumulated depreciation 9,139 7,494 Net premises and equipment $ 15,834 $ 13,838 |
Schedule of Property Subject to or Available for Operating Lease | Rent commitments under non-cancelable operating leases (including renewal options that the Company will likely exercise) were as follows: (Dollars in thousands) As of December 31, 2020 2021 $ 1,731 2022 1,760 2023 1,718 2024 1,318 2025 1,191 Thereafter 3,775 Total lease commitments $ 11,493 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 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) December 31, 2020 December 31, 2019 Gross carrying amount $ 5,708 $ 2,045 Accumulated amortization (2,512) (1,744) Net Intangible $ 3,196 $ 301 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2020, estimated amortization expense for each of the next five years is as follows: (Dollars in thousands) 2021 $ 667 2022 586 2023 506 2024 425 2025 344 |
Mortgage Servicing Rights, Net
Mortgage Servicing Rights, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Mortgage Banking [Abstract] | |
Qualitative and Quantitative Information, Transferor's Continuing Involvement | The unpaid principal balance of these loans at December 31, 2020 and 2019 are as follows: (Dollars in thousands) December 31, 2020 December 31, 2019 Residential real estate mortgage loan portfolios serviced for: FNMA $ 320,467 $ 9,016 |
Servicing Asset at Amortized Cost | Activity for mortgage servicing rights was as follows for the years ended December 31, 2020 and 2019: For the year ended December 31, (Dollars in thousands) 2020 2019 Mortgage servicing rights: Balance, beginning of period $ 76 $ — Originated servicing 3,540 77 Amortization (255) (1) Balance, end of period $ 3,361 $ 76 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Banking and Thrift, Other Disclosures [Abstract] | |
Scheduled Maturities of Total Time Deposits | As of December 31, 2020, the scheduled maturities of total time deposits were as follows: (Dollars in thousands) December 31, 2020 Due in 2021 $ 437,211 Due in 2022 114,707 Due in 2023 39,052 Due in 2024 3,821 Due in 2025 2,024 Thereafter — Total $ 596,815 |
Borrowings and Subordinated D_2
Borrowings and Subordinated Debt (Tables) | 12 Months Ended |
Dec. 31, 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. December 31, 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 3,204 0.30 851 0.30 Federal funds purchased — — 5,000 1.90 Total short-term borrowings 3,204 0.30 65,851 1.62 Long-term debt: Secured borrowing due in 2022 1,304 1.00 1,374 1.00 FHLB advances due in 2022 to 2029 (2) 181,176 1.09 145,000 1.06 Subordinated notes due in 2025 and 2029 (3) 44,592 5.29 44,440 5.29 Total long-term debt 227,072 1.91 190,814 2.04 Total short-term and long-term borrowings $ 230,276 1.89 % $ 256,665 1.93 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) At December 31, 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 December 31, 2020 balance includes FHLB advances of $181.0 million and purchase accounting premiums of $176 thousand. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The current and deferred components of the provision for income taxes were as follows: For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Current expense $ 7,268 $ 3,995 $ 2,974 Deferred expense (benefit) (3,315) (592) 29 Total $ 3,953 $ 3,403 $ 3,003 |
Reconciliation of Expected Income Tax Expense | A reconciliation of expected income tax expense using the federal statutory rate of 21% as of December 31, 2020, 2019 and 2018 and actual income tax expense is as follows: For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Income tax expense based on federal corporate tax rate $ 5,117 $ 4,098 $ 3,651 Changes resulting from: Tax-exempt income (589) (538) (406) Captive insurance benefit (156) (182) (198) Net operating loss carryback due to CARES Act (290) — — Disqualified dispositions from stock options (178) (13) (23) Other, net 49 38 (21) Income tax expense $ 3,953 $ 3,403 $ 3,003 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that resulted in the significant components of deferred tax assets and liabilities at December 31, 2020 and 2019 are as follows: For the years ended December 31, (Dollars in thousands) 2020 2019 Deferred tax assets: Allowance for loan losses $ 4,682 $ 2,662 Net operating loss 757 — Deferred compensation 215 142 Restricted stock awards 290 223 Stock options 126 117 Deferred loan fees 1,403 248 Nonaccrued interest 215 155 Accrued expenses 370 365 Other 63 65 Total gross deferred tax assets 8,121 3,977 Deferred tax liabilities: Unrealized gain—available for sale securities (2,175) (955) Depreciation (914) (808) Prepaid expenses (212) (239) Business combination adjustments (1,080) (369) Partnership investments (381) (366) Other (47) (23) Total gross deferred tax liabilities (4,809) (2,760) Net deferred tax assets $ 3,312 $ 1,217 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the stock options granted during the year ended December 31, 2018 was determined using the weighted-average assumptions as of the grant date shown below. There were no stock options granted during the years ended December 31, 2020 or December 31, 2019. December 31, 2018 Risk Free Interest Rate 2.83% Expected Term (years) 7.0 Expected Volatility 0.04% Weighted average fair value of options granted $4.46 |
Summary of Employee Stock Option Activity | The summary of our stock option activity for the years ended December 31, 2020 and 2019 is as follows: 2020 2019 Shares Weighted Average Weighted Average Remaining Contractual Shares Weighted Average Weighted Average Remaining Contractual Options outstanding, beginning of period 355,218 $ 16.63 5.0 376,768 $ 16.26 5.8 Exercised (10,000) 9.57 (21,550) 10.16 Options outstanding, end of period 345,218 16.83 4.1 355,218 16.63 5.0 Options exercisable 335,216 $ 16.59 4.0 335,214 $ 16.14 4.8 |
Summary of Changes in Nonvested Shares | A summary of changes in the Company's nonvested shares for the year ended December 31, 2020 is as follows: Nonvested Shares Shares Weighted Average Nonvested at January 1, 2020 80,370 $ 24.28 Granted 38,170 24.90 Vested (23,870) 23.40 Forfeited (1,400) 24.46 Nonvested at December 31, 2020 93,270 $ 24.75 |
Off- Balance Sheet Activities (
Off- Balance Sheet Activities (Tables) | 12 Months Ended |
Dec. 31, 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: December 31, 2020 December 31, 2019 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 18,269 $ 17,058 $ 16,276 $ 20,128 Unused lines of credit 28,898 385,307 28,723 288,086 Unused standby letters of credit and commercial letters of credit 2,340 1,992 4,895 — |
Regulatory Capital Matters (Tab
Regulatory Capital Matters (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2020 Common equity tier 1 to risk-weighted assets: Consolidated $ 144,938 9.30 % $ 70,141 4.50 % $ 109,108 7.00 % Bank 185,655 11.94 % 69,950 4.50 % 108,812 7.00 % $ 101,040 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 168,310 10.80 % $ 93,521 6.00 % $ 132,488 8.50 % Bank 185,655 11.94 % 93,267 6.00 % 132,129 8.50 % $ 124,356 8.00 % Total capital to risk-weighted assets: Consolidated $ 232,386 14.91 % $ 124,695 8.00 % $ 163,662 10.50 % Bank 205,127 13.20 % 124,356 8.00 % 163,218 10.50 % $ 155,446 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 168,310 6.93 % $ 97,200 4.00 % $ 97,200 4.00 % Bank 185,655 7.67 % 96,809 4.00 % 96,809 4.00 % $ 121,011 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) | 12 Months Ended |
Dec. 31, 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 December 31, 2020 Securities available for sale: U.S. government sponsored entities and agencies $ 26,358 $ — $ 26,358 $ — State and political subdivision 132,723 — 131,259 1,464 Mortgage-backed securities: residential 26,081 — 26,081 — Mortgage-backed securities: commercial 11,918 — 11,918 — Collateralized mortgage obligations: residential 13,446 — 13,446 — Collateralized mortgage obligations: commercial 58,512 — 58,512 — SBA 17,593 — 17,593 — Asset backed securities 10,072 — 10,072 — Corporate bonds 6,029 — 6,029 — Total securities available for sale 302,732 — 301,268 1,464 Loans held for sale 43,482 — 43,482 — Loans measured at fair value: Residential real estate 8,037 — — 8,037 Derivative assets: Customer-initiated derivatives 12,515 — 12,515 — Forward contracts related to mortgage loans to be delivered for sale 46 — 46 — Interest rate lock commitments 2,194 — 2,194 — Total assets at fair value $ 369,006 $ — $ 359,505 $ 9,501 Derivative liabilities: Customer-initiated derivatives 12,515 — 12,515 — Forward contracts related to mortgage loans to be delivered for sale 423 — 423 — Total liabilities at fair value $ 12,938 $ — $ 12,938 $ — (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 loans measured at fair value on a recurring basis. For the year ended December 31, (Dollars in thousands) 2020 2019 Loans held for investment Beginning balance $ 4,063 $ 4,571 Transfers from loans held for sale 5,217 2,186 Gains: Recorded in "Mortgage banking activities" 123 126 Repayments (1,366) (2,820) Ending balance $ 8,037 $ 4,063 |
Information for Loans Held for Sale Carried at Fair Value | As of December 31, 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) December 31, 2020 December 31, 2019 Aggregate fair value $ 43,482 $ 13,889 Contractual balance 41,808 13,510 Unrealized gain 1,674 379 The total amount of gains as a result of changes in fair value of loans held for sale included in "Mortgage banking activities" for the years ended December 31, 2020, 2019 and 2018 were as follows: For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Change in fair value $ 1,295 $ 296 $ 1 |
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 December 31, 2020 Impaired loans: Commercial and industrial $ 1,270 $ 1,270 Mortgage servicing rights 3,981 3,981 Total $ 5,251 $ 5,251 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 December 31, 2020 and December 31, 2019: (Dollars in thousands) Fair value at Valuation Significant Discount % Range/Amount Impaired loans $ 1,270 Discounted appraisals; estimated net realizable value of collateral Collateral discounts 10.00-90.00% Mortgage servicing rights 3,981 Discounted cash flow Prepayment speed 8.71 % 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 December 31, 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 December 31, 2020 Financial assets: Cash and cash equivalents $ 264,071 $ 25,245 $ 238,826 $ — $ 264,071 Other investments 14,398 N/A N/A N/A N/A Net loans 1,701,240 — — 1,740,093 1,740,093 Accrued interest receivable 7,511 — 1,460 6,051 7,511 Financial liabilities: Deposits 1,963,312 — 2,022,399 — 2,022,399 Borrowings 185,684 — 192,546 — 192,546 Subordinated notes 44,592 — 45,902 — 45,902 Accrued interest payable 1,081 — 1,081 — 1,081 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) | 12 Months Ended |
Dec. 31, 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: December 31, 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 $ 136,023 $ 12,515 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 10,191 46 6,018 34 Interest rate lock commitments 91,531 2,194 25,519 256 Total derivatives included in other assets $ 237,745 $ 14,755 $ 135,478 $ 4,974 Included in other liabilities: Customer-initiated and mortgage banking derivatives: Customer-initiated derivatives $ 136,023 $ 12,515 $ 103,941 $ 4,684 Forward contracts related to mortgage loans to be delivered for sale 92,899 423 20,633 33 Interest rate lock commitments — — 928 — Total derivatives included in other liabilities $ 228,922 $ 12,938 $ 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 year ended December 31, (Dollars in thousands) Location of Gain (Loss) 2020 2019 2018 Forward contracts related to mortgage loans to be delivered for sale Mortgage banking activities $ (5,011) $ (509) $ (69) Interest rate lock commitments Mortgage banking activities 1,938 58 142 Total loss recognized in income $ (3,073) $ (451) $ 73 |
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 December 31, 2020 Offsetting derivative assets: Customer initiated derivatives $ 12,515 $ — $ 12,515 $ — $ — $ 12,515 Offsetting derivative liabilities: Customer initiated derivatives 12,515 — 12,515 — 15,383 (2,868) 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 December 31, 2020 Offsetting derivative assets: Customer initiated derivatives $ 12,515 $ — $ 12,515 $ — $ — $ 12,515 Offsetting derivative liabilities: Customer initiated derivatives 12,515 — 12,515 — 15,383 (2,868) 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) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Condensed Balance Sheet | Balance Sheets—Parent Company (Dollars in thousands) December 31, 2020 December 31, 2019 Assets Cash and cash equivalents $ 25,779 $ 35,210 Investment in banking subsidiary 232,671 178,240 Investment in captive insurance subsidiary 1,625 1,668 Income tax benefit 355 520 Other assets 63 99 Total assets $ 260,493 $ 215,737 Liabilities Subordinated notes $ 44,592 $ 44,440 Accrued expenses and other liabilities 574 594 Total liabilities 45,166 45,034 Shareholders' equity 215,327 170,703 Total liabilities and shareholders' equity $ 260,493 $ 215,737 |
Schedule of Condensed Income Statement and Comprehensive Income | Statements of Income and Comprehensive Income—Parent Company For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Income Dividend income from bank subsidiary $ 41,500 $ — $ — Dividend income from captive subsidiary 815 860 — Total income $ 42,315 $ 860 $ — Expenses Interest on borrowed funds 40 4.00 — Interest on subordinated notes 2,537 1,074 1,015 Other expenses 1,238 1,196 715 Total expenses $ 3,815 $ 2,274 $ 1,730 Income (loss) before income taxes and equity in (overdistributed) undistributed net earnings of subsidiaries 38,500 (1,414) (1,730) Income tax benefit 781 427 425 Equity in (overdistributed) undistributed earnings of subsidiaries (18,868) 17,098 15,691 Net income $ 20,413 $ 16,111 $ 14,386 Other comprehensive income 4,590 5,344 (801) Total comprehensive income, net of tax $ 25,003 $ 21,455 $ 13,585 |
Schedule of Condensed Statements of Cash Flows | Statements of Cash Flows—Parent Company For the year ended December 31, (Dollars in thousands) 2020 2019 2018 Cash flows from operating activities Net income $ 20,413 $ 16,111 $ 14,386 Adjustments to reconcile net income to net cash provided by operating activities: Equity in over (under) distributed earnings of subsidiaries 18,868 (17,098) (15,691) Stock based compensation expense 101 74 314 (Increase) decrease in other assets, net 201 (205) (45) Increase (decrease) in other liabilities, net 59 257 (79) Net cash provided by (used in) operating activities 39,642 (861) (1,115) Cash flows from investing activities Cash used in acquisitions (67,944) — — Capital infusion to subsidiaries — — (20,000) Net cash used in investing activities (67,944) — (20,000) Cash flows from financing activities Net proceeds from issuance of common stock related to initial public offering — — 29,030 Preferred stock offering, net of issuance costs 23,372 — — Net proceeds from issuance of subordinated debt — 29,487 — Share buyback - redeemed stock (2,648) (2,165) — Common stock dividends paid (1,469) (1,160) (662) Preferred stock dividends paid (479) — — Proceeds from exercised stock options 95 219 1,279 Net cash provided by financing activities 18,871 26,381 29,647 Net increase (decrease) in cash and cash equivalents (9,431) 25,520 8,532 Beginning cash and cash equivalents 35,210 9,690 1,158 Ending cash and cash equivalents $ 25,779 $ 35,210 $ 9,690 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2020 and 2019 was as follows: For the year ended December 31, (In thousands, except per share data) 2020 2019 Net income $ 20,413 $ 16,111 Preferred stock dividends 479 — Net income available to common shareholders 19,934 16,111 Net income allocated to participating securities 244 159 Net income allocated to common shareholders (1) $ 19,690 $ 15,952 Weighted average common shares - issued 7,723 7,733 Average unvested restricted share awards (96) (78) Weighted average common shares outstanding - basic 7,627 7,655 Effect of dilutive securities: Weighted average common stock equivalents 59 115 Weighted average common shares outstanding - diluted 7,686 7,770 EPS available to common shareholders Basic earnings per common share $ 2.58 $ 2.08 Diluted earnings per common share $ 2.57 $ 2.05 (1) Net income allocated to common shareholders for basic and diluted earnings per share may differ under the two-class method as a result of adding common share equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate net income to common shareholders and participating securities for the purposes of calculating diluted earnings per share. For the year ended December 31, 2018, the basic and diluted earnings per share were calculated using the treasury stock method, as disclosed in the table below. For the year ended December 31, (In thousands, except per share data) 2018 Basic: Net Income attributable to common shareholders $ 14,386 Weighted average common shares outstanding 7,376,507 Basic earnings per share $ 1.95 Diluted: Net Income attributable to common shareholders $ 14,386 Weighted average common shares outstanding 7,376,507 Add: Dilutive effects of assumed exercises of stock options 147,411 Weighted average common and dilutive potential common shares outstanding 7,523,918 Diluted earnings per common share $ 1.91 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Data | The following tables present the unaudited quarterly financial data for the years ended December 31, 2020 and 2019: For the year ended December 31, 2020 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 19,817 $ 20,396 $ 20,245 $ 22,181 Interest expense 4,997 4,163 3,648 3,075 Net interest income 14,820 16,233 16,597 19,106 Provision for loan losses 489 5,575 4,270 1,538 Net interest income after provision for loan losses 14,331 10,658 12,327 17,568 Noninterest income 4,690 7,789 9,125 8,110 Noninterest expense 14,562 15,083 15,126 15,461 Income before income taxes 4,459 3,364 6,326 10,217 Income tax provision 349 643 1,117 1,844 Net income 4,110 2,721 5,209 8,373 Preferred stock dividends — — — 479 Net income attributable to common shareholders $ 4,110 $ 2,721 $ 5,209 $ 7,894 Earnings per common share: Basic $ 0.53 $ 0.35 $ 0.68 $ 1.02 Diluted 0.53 0.35 0.67 1.02 Cash dividends declared per common share 0.05 0.05 0.05 0.05 For the year ended December 31, 2019 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Interest income $ 17,442 $ 17,657 $ 17,983 $ 17,366 Interest expense 4,724 5,216 4,995 4,458 Net interest income 12,718 12,441 12,988 12,908 Provision (benefit) for loan losses 422 429 (16) 548 Net interest income after provision (benefit) for loan losses 12,296 12,012 13,004 12,360 Noninterest income 2,286 3,477 3,858 4,590 Noninterest expense 10,368 11,167 11,539 11,295 Income before income taxes 4,214 4,322 5,323 5,655 Income tax provision 747 767 914 975 Net income $ 3,467 $ 3,555 $ 4,409 $ 4,680 Earnings per common share: Basic $ 0.45 $ 0.46 $ 0.57 $ 0.60 Diluted 0.44 0.45 0.56 0.60 Cash dividends declared per common share 0.04 0.04 0.04 0.04 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) | Aug. 10, 2020USD ($)$ / sharesshares | Jan. 02, 2020USD ($) | Apr. 24, 2018USD ($)shares | Dec. 31, 2020USD ($)segmentcenteroffice$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||||
Number of offices | office | 17 | |||||
Number of mortgage loan production offices | center | 1 | |||||
Preferred stock, interest rate | 7.50% | |||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 2,500 | $ 2,500 | $ 2,500 | |||
Net proceeds from issuance of preferred stock | $ 23,372,000 | $ 0 | $ 0 | |||
Servicing fees | $ 331,000 | $ 43,000 | $ 117,000 | |||
Number of reportable segments | segment | 1 | |||||
IPO | ||||||
Business Acquisition [Line Items] | ||||||
Sale of stock, number of shares issued (in shares) | shares | 1,150,765 | |||||
Sale of stock, consideration received on transaction | $ 29,000,000 | |||||
Sale of stock, underwriting discounts and offering expenses | 1,100,000 | |||||
Sale of stock, consideration received per transaction | 32,200,000 | |||||
Underwriting discounts | $ 2,100,000 | |||||
Over-Allotment Option | ||||||
Business Acquisition [Line Items] | ||||||
Sale of stock, number of shares issued (in shares) | shares | 180,000 | |||||
IPO Shares From Existing Shareholders Member | ||||||
Business Acquisition [Line Items] | ||||||
Sale of stock, number of shares issued (in shares) | shares | 229,235 | |||||
Sale of stock, consideration received on transaction | $ 0 | |||||
Sale of stock, consideration received per transaction | $ 6,400,000 | |||||
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 | $ 25,000,000 | |||||
Sale of stock, underwriting discounts and offering expenses | 1,600,000 | |||||
Net proceeds from issuance of preferred stock | $ 23,400,000 | |||||
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 | $ 67,900,000 |
Business Combinations (Addition
Business Combinations (Additional Information) (Details) - USD ($) $ in Thousands | Jan. 02, 2020 | Jan. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Acquisition and due diligence fees | $ 1,654 | $ 539 | $ 0 | ||
Core Deposits | |||||
Business Acquisition [Line Items] | |||||
Core deposit intangibles | $ 3,700 | ||||
Core deposit intangibles, useful life (in years) | 10 years | ||||
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 | Dec. 31, 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] | |||
Cash | $ 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 | ||
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 |
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 | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Business Combinations [Abstract] | ||
Net interest income | $ 66,796 | $ 61,103 |
Noninterest income | 29,714 | 17,206 |
Noninterest expense | 60,300 | 53,174 |
Net income | $ 20,433 | $ 17,647 |
Net income per diluted share (in dollars per share) | $ 2.57 | $ 2.26 |
Securities (Available-for-sale
Securities (Available-for-sale Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 292,375 | $ 176,359 |
Gross Unrealized Gains | 11,129 | 5,238 |
Gross Unrealized Losses | (772) | (692) |
Fair Value | 302,732 | 180,905 |
U.S. government sponsored entities & agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 26,575 | |
Gross Unrealized Gains | 103 | |
Gross Unrealized Losses | (320) | |
Fair Value | 26,358 | |
State and political subdivision | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 124,053 | 89,304 |
Gross Unrealized Gains | 8,751 | 4,463 |
Gross Unrealized Losses | (81) | (20) |
Fair Value | 132,723 | 93,747 |
Mortgage-backed securities: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 25,729 | 10,609 |
Gross Unrealized Gains | 352 | 82 |
Gross Unrealized Losses | 0 | (126) |
Fair Value | 26,081 | 10,565 |
Mortgage-backed securities: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 11,434 | 8,567 |
Gross Unrealized Gains | 484 | 224 |
Gross Unrealized Losses | 0 | (12) |
Fair Value | 11,918 | 8,779 |
Collateralized mortgage obligations: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,320 | 8,541 |
Gross Unrealized Gains | 138 | 39 |
Gross Unrealized Losses | (12) | (51) |
Fair Value | 13,446 | 8,529 |
Collateralized mortgage obligations: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 57,398 | 22,891 |
Gross Unrealized Gains | 1,206 | 300 |
Gross Unrealized Losses | (92) | (10) |
Fair Value | 58,512 | 23,181 |
U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,976 | |
Gross Unrealized Gains | 23 | |
Gross Unrealized Losses | 0 | |
Fair Value | 1,999 | |
SBA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 17,639 | 22,051 |
Gross Unrealized Gains | 61 | 87 |
Gross Unrealized Losses | (107) | (154) |
Fair Value | 17,593 | 21,984 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,229 | 10,390 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (157) | (306) |
Fair Value | 10,072 | 10,084 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,998 | 2,030 |
Gross Unrealized Gains | 34 | 20 |
Gross Unrealized Losses | (3) | (13) |
Fair Value | $ 6,029 | $ 2,037 |
Securities (Proceeds from Sales
Securities (Proceeds from Sales of Securities and Gains and Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds | $ 42,640 | $ 69,846 | $ 3,625 |
Gross gains | 1,871 | 1,566 | 2 |
Gross losses | $ (9) | $ (392) | $ (73) |
Securities (Maturity) (Details)
Securities (Maturity) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Amortized Cost | |
Within one year | $ 10,717 |
One to five years | 24,573 |
Five to ten years | 105,041 |
Beyond ten years | 152,044 |
Amortized Cost | 292,375 |
Fair Value | |
Within one year | 10,807 |
One to five years | 25,421 |
Five to ten years | 107,713 |
Beyond ten years | 158,791 |
Fair Value | $ 302,732 |
Securities (Additional Informat
Securities (Additional Information) (Details) $ in Thousands | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Securities available-for-sale | $ | $ 302,732 | $ 180,905 |
Number of securities | security | 313 | |
Number of securities in an unrealized loss position | security | 37 | |
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 | $ | $ 49,000 | |
Collateral pledged | ||
Debt Securities, Available-for-sale [Line Items] | ||
Securities pledged | $ | $ 98,700 | $ 27,300 |
Securities (Securities with Unr
Securities (Securities with Unrealized Losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value | ||
Less than 12 Months | $ 53,534 | $ 24,340 |
12 Months or Longer | 23,390 | 25,333 |
Total | 76,924 | 49,673 |
Unrealized Losses | ||
Less than 12 Months | (496) | (329) |
12 Months or Longer | (276) | (363) |
Total | (772) | (692) |
U.S. government sponsored entities & agencies | ||
Fair value | ||
Less than 12 Months | 19,680 | |
12 Months or Longer | 0 | |
Total | 19,680 | |
Unrealized Losses | ||
Less than 12 Months | (320) | |
12 Months or Longer | 0 | |
Total | (320) | |
State and political subdivision | ||
Fair value | ||
Less than 12 Months | 4,880 | 5,109 |
12 Months or Longer | 0 | 305 |
Total | 4,880 | 5,414 |
Unrealized Losses | ||
Less than 12 Months | (81) | (20) |
12 Months or Longer | 0 | 0 |
Total | (81) | (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 | 1,109 | 4,631 |
Total | 1,109 | 5,401 |
Unrealized Losses | ||
Less than 12 Months | 0 | (1) |
12 Months or Longer | (12) | (50) |
Total | (12) | (51) |
Collateralized mortgage obligations: commercial | ||
Fair value | ||
Less than 12 Months | 26,467 | 0 |
12 Months or Longer | 0 | 1,716 |
Total | 26,467 | 1,716 |
Unrealized Losses | ||
Less than 12 Months | (92) | 0 |
12 Months or Longer | 0 | (10) |
Total | (92) | (10) |
SBA | ||
Fair value | ||
Less than 12 Months | 0 | 3,961 |
12 Months or Longer | 12,206 | 12,405 |
Total | 12,206 | 16,366 |
Unrealized Losses | ||
Less than 12 Months | 0 | (13) |
12 Months or Longer | (107) | (141) |
Total | (107) | (154) |
Asset backed securities | ||
Fair value | ||
Less than 12 Months | 0 | 8,220 |
12 Months or Longer | 10,072 | 1,864 |
Total | 10,072 | 10,084 |
Unrealized Losses | ||
Less than 12 Months | 0 | (232) |
12 Months or Longer | (157) | (74) |
Total | (157) | (306) |
Corporate bonds | ||
Fair value | ||
Less than 12 Months | 2,497 | 489 |
12 Months or Longer | 0 | 0 |
Total | 2,497 | 489 |
Unrealized Losses | ||
Less than 12 Months | (3) | (13) |
12 Months or Longer | 0 | 0 |
Total | $ (3) | $ (13) |
Loans (Recorded Investment in L
Loans (Recorded Investment in Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | $ 1,723,537 | $ 1,227,609 | |
Residential loans held for sale | 43,482 | 13,889 | |
Proceeds from sales of residential real estate loans | 545,581 | 270,363 | $ 91,091 |
Commercial real estate | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 720,832 | 604,646 | |
Commercial and industrial | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 685,504 | 410,228 | |
Commercial and industrial | Paycheck Protection Program, CARES Act | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 290,100 | ||
Residential real estate | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 315,476 | 211,839 | |
Proceeds from sales of residential real estate loans | 545,600 | 270,400 | |
Consumer | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 1,725 | 896 | |
Originated | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 1,498,458 | 1,158,138 | |
Originated | Commercial real estate | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 587,631 | 551,565 | |
Originated | Commercial and industrial | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 629,434 | 403,922 | |
Originated | Residential real estate | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 280,645 | 201,787 | |
Originated | Consumer | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 748 | 864 | |
Acquired | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 225,079 | 69,471 | |
Acquired | Commercial real estate | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 133,201 | 53,081 | |
Acquired | Commercial and industrial | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 56,070 | 6,306 | |
Acquired | Residential real estate | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | 34,831 | 10,052 | |
Acquired | Consumer | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Total loans | $ 977 | $ 32 |
Loans (Nonperforming Assets) (D
Loans (Nonperforming Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Loan commitment non accrual | $ 12 | $ 1,200 |
Financing Receivable, Past Due [Line Items] | ||
Other real estate owned | 0 | 921 |
Loans 90 days or more past due and still accruing | 269 | 157 |
Nonperforming | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 18,816 | 18,529 |
Other real estate owned | 0 | 921 |
Total nonperforming assets | 18,816 | 19,450 |
Nonperforming | Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 7,320 | 4,832 |
Nonperforming | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 7,490 | 11,112 |
Nonperforming | Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total nonaccrual loans | 3,991 | 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 | Dec. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Current | $ 1,702,825 | $ 1,212,478 |
Total loans | 1,723,537 | 1,227,609 |
30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 11,176 | 7,297 |
60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 6,388 | 3,990 |
90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 3,148 | 3,844 |
Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 714,196 | 597,892 |
Total loans | 720,832 | 604,646 |
Commercial real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 4,863 | 3,630 |
Commercial real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 1,773 | 1,286 |
Commercial real estate | 90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 0 | 1,838 |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 681,106 | 407,692 |
Total loans | 685,504 | 410,228 |
Commercial and industrial | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 893 | 377 |
Commercial and industrial | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 3,505 | 1,275 |
Commercial and industrial | 90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 0 | 884 |
Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 305,800 | 206,002 |
Total loans | 315,476 | 211,839 |
Residential real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 5,420 | 3,286 |
Residential real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 1,110 | 1,429 |
Residential real estate | 90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 3,146 | 1,122 |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 1,723 | 892 |
Total loans | 1,725 | 896 |
Consumer | 30 - 59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 0 | 4 |
Consumer | 60 - 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | 0 | 0 |
Consumer | 90+ Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due | $ 2 | $ 0 |
Loans (Information as to Impair
Loans (Information as to Impaired Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 4,800 | $ 3,900 |
Total recorded investment | 18,259 | 17,870 |
Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 978 | 906 |
Commercial and industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Total recorded investment | 8,594 | 11,652 |
Residential real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Total recorded investment | 2,345 | 1,386 |
Financial Asset, Excluding Purchased Credit Impaired Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Nonaccrual loans | 18,816 | 18,529 |
Total recorded investment | 19,794 | 19,435 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 978 | 906 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Commercial and industrial | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 546 | 547 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Residential real estate | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 432 | $ 359 |
Loans (Troubled Debt Restructur
Loans (Troubled Debt Restructuring Additional Information) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Financing Receivable, Short Term Modification, Percentage Of All Loans | 0.0116 | |
Recorded investment in troubled debt restructurings | $ 4,800 | $ 3,900 |
Recorded investment in troubled debt restructurings, reserve | 317 | 384 |
Principal deferral | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Loans on COVID-related deferral | 20,100 | |
Payment Deferral Greater Than Six Months | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Loans on COVID-related deferral | 11,600 | |
Loans reclassified as nonaccrual | 2,500 | |
Nonperforming | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Recorded investment in troubled debt restructurings | 3,800 | 3,000 |
Performing | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Recorded investment in troubled debt restructurings | $ 978 | $ 906 |
Loans (Recorded Investment of L
Loans (Recorded Investment of Loans Modified in TDRs) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | $ 1,728 | $ 332 | $ 3,323 |
Total number of loans | loan | 3 | 2 | 10 |
Financial effects of modification, net charge-offs | $ 0 | $ 0 | $ 101 |
Provision for loan losses | 0 | 174 | 19 |
Principal deferral | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 1,654 | 0 | 3,217 |
Interest rate | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 74 | 0 | 106 |
Forbearance agreement | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 0 | 332 | 0 |
Commercial real estate | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | $ 1,654 | $ 2,073 | |
Total number of loans | loan | 2 | 4 | |
Financial effects of modification, net charge-offs | $ 0 | $ 101 | |
Provision for loan losses | 0 | 0 | |
Commercial real estate | Principal deferral | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 1,654 | 2,073 | |
Commercial real estate | Interest rate | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 0 | 0 | |
Commercial real estate | Forbearance agreement | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 0 | 0 | |
Commercial and industrial | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | $ 332 | $ 1,137 | |
Total number of loans | loan | 2 | 4 | |
Financial effects of modification, net charge-offs | $ 0 | $ 0 | |
Provision for loan losses | 174 | 14 | |
Commercial and industrial | Principal deferral | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 0 | 1,031 | |
Commercial and industrial | Interest rate | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 0 | 106 | |
Commercial and industrial | Forbearance agreement | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | $ 332 | 0 | |
Residential real estate | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | $ 74 | $ 113 | |
Total number of loans | loan | 1 | 2 | |
Financial effects of modification, net charge-offs | $ 0 | $ 0 | |
Provision for loan losses | 0 | 5 | |
Residential real estate | Principal deferral | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 0 | 113 | |
Residential real estate | Interest rate | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | 74 | 0 | |
Residential real estate | Forbearance agreement | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total recorded investment | $ 0 | $ 0 |
Loans (Number of Loans Modified
Loans (Number of Loans Modified as TDR) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total number of loans | loan | 1 | 1 | 4 |
Total recorded investment | $ 203 | $ 42 | $ 2,977 |
Provision for loan losses following a subsequent default | $ 0 | $ 12 | $ 0 |
Commercial real estate | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total number of loans | loan | 1 | 3 | |
Total recorded investment | $ 203 | $ 2,073 | |
Provision for loan losses following a subsequent default | $ 0 | $ 0 | |
Commercial and industrial | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Total number of loans | loan | 1 | 1 | |
Total recorded investment | $ 42 | $ 904 | |
Provision for loan losses following a subsequent default | $ 12 | $ 0 |
Loans (Risk Category of Loans b
Loans (Risk Category of Loans by Class of Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 1,723,537 | $ 1,227,609 |
Residential real estate and Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 317,201 | 212,735 |
Residential real estate and Consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 313,195 | 210,150 |
Residential real estate and Consumer | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 4,006 | 2,585 |
Residential real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 315,476 | 211,839 |
Residential real estate | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 311,485 | 209,270 |
Residential real estate | Nonperforming | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 3,991 | 2,569 |
Commercial real estate and Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,406,336 | 1,014,874 |
Commercial real estate and Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,322,975 | 975,175 |
Commercial real estate and Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 47,297 | 17,292 |
Commercial real estate and Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 34,921 | 20,569 |
Commercial real estate and Commercial and industrial | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,143 | 1,838 |
Commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 720,832 | 604,646 |
Commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 685,690 | 591,419 |
Commercial real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 21,570 | 8,325 |
Commercial real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 13,045 | 4,042 |
Commercial real estate | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 527 | 860 |
Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 685,504 | 410,228 |
Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 637,285 | 383,756 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 25,727 | 8,967 |
Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 21,876 | 16,527 |
Commercial and industrial | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 616 | 978 |
Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,725 | 896 |
Consumer | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 1,710 | 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) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)acquisition | Dec. 31, 2019USD ($) | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Number of previous acquisitions | acquisition | 5 | |
Acquired with deteriorated credit quality | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Decrease in allowance for loan losses on PCI loans | $ | $ (95) | $ (158) |
Loans (Total Balance of all Pur
Loans (Total Balance of all Purchase Credit Impaired Loans from Acquisitions) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | $ 18,259 | $ 17,870 |
Commercial real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | 7,320 | 4,832 |
Commercial and industrial | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | 8,594 | 11,652 |
Residential real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Impaired loans | 2,345 | 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 | 9,769 | 11,368 |
Impaired loans | 4,996 | 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 | 5,109 | 6,597 |
Impaired loans | 1,773 | 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 | 643 | 556 |
Impaired loans | 274 | 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 | 4,017 | 4,215 |
Impaired loans | $ 2,949 | $ 2,954 |
Loans (Activity in the Accretab
Loans (Activity in the Accretable Yield of PCI Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Accretable yield at beginning of period | $ 9,141 | $ 10,947 | $ 14,452 |
Additions due to acquisitions | 35 | 0 | 0 |
Accretion of income | (1,760) | (2,313) | (3,794) |
Adjustments to accretable yield | (319) | 507 | 304 |
Other activity, net | 0 | 0 | (15) |
Accretable yield at end of period | $ 7,097 | $ 9,141 | $ 10,947 |
Loans (Related Party Loans) (De
Loans (Related Party Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Aggregate loans outstanding from related parties | $ 8,900 | $ 4,100 |
Additions to aggregate loans outstanding form related parties | 6,600 | 1,100 |
Repayments and reductions to aggregate loans outstanding form related parties | $ 1,800 | $ 924 |
Allowance for Loan Losses (Addi
Allowance for Loan Losses (Additional Information) (Details) | Dec. 31, 2020loanloanPool |
Receivables [Abstract] | |
Number of purchase credit impaired loan pools | loanPool | 6 |
Number of non-pooled purchase credit impaired loans | loan | 12 |
Allowance for Loan Losses (Loan
Allowance for Loan Losses (Loans Individually Evaluated for Impairment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Financing Receivable, Impaired [Line Items] | |||
Recorded investment with no related allowance | $ 16,768 | $ 17,437 | |
Recorded investment with related allowance | 1,102 | 822 | |
Total recorded investment | 17,870 | 18,259 | |
Contractual principal balance | 19,247 | 19,375 | |
Related allowance | 385 | 332 | |
Average Recorded Investment | 14,651 | 25,293 | $ 22,326 |
Interest Income Recognized | 74 | 82 | 2,082 |
Cash Basis Interest Recognized | 791 | 152 | 254 |
Commercial real estate | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded investment with no related allowance | 4,832 | 7,320 | |
Recorded investment with related allowance | 0 | 0 | |
Total recorded investment | 4,832 | 7,320 | |
Contractual principal balance | 5,156 | 7,720 | |
Related allowance | 0 | 0 | |
Average Recorded Investment | 4,233 | 7,981 | 9,471 |
Interest Income Recognized | 2 | 0 | 1,622 |
Cash Basis Interest Recognized | 209 | 10 | 142 |
Commercial and industrial | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded investment with no related allowance | 10,739 | 7,964 | |
Recorded investment with related allowance | 913 | 630 | |
Total recorded investment | 11,652 | 8,594 | |
Contractual principal balance | 12,521 | 9,208 | |
Related allowance | 363 | 307 | |
Average Recorded Investment | 8,514 | 14,008 | 7,673 |
Interest Income Recognized | 43 | 46 | 91 |
Cash Basis Interest Recognized | 573 | 87 | 112 |
Residential real estate | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded investment with no related allowance | 1,197 | 2,153 | |
Recorded investment with related allowance | 189 | 192 | |
Total recorded investment | 1,386 | 2,345 | |
Contractual principal balance | 1,570 | 2,447 | |
Related allowance | 22 | 25 | |
Average Recorded Investment | 1,904 | 3,304 | 5,182 |
Interest Income Recognized | 29 | 36 | 369 |
Cash Basis Interest Recognized | $ 9 | $ 55 | $ 0 |
Allowance for Loan Losses (Acti
Allowance for Loan Losses (Activity in Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | $ 12,674 | $ 11,566 | $ 12,674 | $ 11,566 | $ 11,713 | ||||||||
Provision (benefit) for loan losses | $ 1,538 | $ 4,270 | $ 5,575 | 489 | $ 548 | $ (16) | $ 429 | 422 | 11,872 | 1,383 | 412 | ||
Gross chargeoffs | (2,461) | (636) | (1,477) | ||||||||||
Recoveries | 212 | 361 | 918 | ||||||||||
Net (chargeoffs) recoveries | (2,249) | (275) | (559) | ||||||||||
Ending allowance for loan losses | 22,297 | 12,674 | 22,297 | 12,674 | 11,566 | ||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Allowance for loan losses, individually evaluated for impairment | $ 332 | $ 385 | |||||||||||
Allowance for loan losses, Collectively evaluated for impairment | 21,297 | 11,527 | |||||||||||
Ending Allowance for loan losses | 22,297 | 12,674 | 12,674 | 11,566 | 12,674 | 11,566 | 11,566 | 22,297 | 12,674 | ||||
Balance of loans, individually evaluated for impairment | 18,259 | 17,870 | |||||||||||
Balance of loans, collectively evaluated for impairment | 1,700,282 | 1,203,766 | |||||||||||
Total loans | 1,723,537 | 1,227,609 | |||||||||||
Acquired with deteriorated credit quality | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 762 | 762 | |||||||||||
Ending allowance for loan losses | 668 | 762 | 668 | 762 | |||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Ending Allowance for loan losses | 668 | 762 | 762 | 762 | 762 | 668 | 762 | ||||||
Total loans | 4,996 | 5,973 | |||||||||||
Commercial real estate | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 5,773 | 5,227 | 5,773 | 5,227 | 4,852 | ||||||||
Provision (benefit) for loan losses | 4,190 | 632 | 464 | ||||||||||
Gross chargeoffs | 0 | (92) | (112) | ||||||||||
Recoveries | 12 | 6 | 23 | ||||||||||
Net (chargeoffs) recoveries | 12 | (86) | (89) | ||||||||||
Ending allowance for loan losses | 9,975 | 5,773 | 9,975 | 5,773 | 5,227 | ||||||||
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 | 9,550 | 5,062 | |||||||||||
Ending Allowance for loan losses | 9,975 | 5,773 | 5,773 | 5,227 | 9,975 | 5,227 | 5,227 | 9,975 | 5,773 | ||||
Balance of loans, individually evaluated for impairment | 7,320 | 4,832 | |||||||||||
Balance of loans, collectively evaluated for impairment | 711,739 | 596,930 | |||||||||||
Total loans | 720,832 | 604,646 | |||||||||||
Commercial real estate | Acquired with deteriorated credit quality | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 711 | 711 | |||||||||||
Ending allowance for loan losses | 425 | 711 | 425 | 711 | |||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Ending Allowance for loan losses | 425 | 711 | 711 | 711 | 711 | 425 | 711 | ||||||
Total loans | 1,773 | 2,884 | |||||||||||
Commercial and industrial | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 5,515 | 5,174 | 5,515 | 5,174 | 5,903 | ||||||||
Provision (benefit) for loan losses | 5,302 | 533 | (269) | ||||||||||
Gross chargeoffs | (2,118) | (438) | (1,283) | ||||||||||
Recoveries | 87 | 246 | 823 | ||||||||||
Net (chargeoffs) recoveries | (2,031) | (192) | (460) | ||||||||||
Ending allowance for loan losses | 8,786 | 5,515 | 8,786 | 5,515 | 5,174 | ||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Allowance for loan losses, individually evaluated for impairment | 307 | 363 | |||||||||||
Allowance for loan losses, Collectively evaluated for impairment | 8,465 | 5,124 | |||||||||||
Ending Allowance for loan losses | 8,786 | 5,515 | 5,515 | 5,174 | 5,515 | 5,515 | 5,174 | 8,786 | 5,515 | ||||
Balance of loans, individually evaluated for impairment | 8,594 | 11,652 | |||||||||||
Balance of loans, collectively evaluated for impairment | 676,636 | 398,441 | |||||||||||
Total loans | 685,504 | 410,228 | |||||||||||
Commercial and industrial | Acquired with deteriorated credit quality | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 28 | 28 | |||||||||||
Ending allowance for loan losses | 14 | 28 | 14 | 28 | |||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Ending Allowance for loan losses | 14 | 28 | 28 | 28 | 28 | 14 | 28 | ||||||
Total loans | 274 | 135 | |||||||||||
Residential real estate | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 1,384 | 1,164 | 1,384 | 1,164 | 950 | ||||||||
Provision (benefit) for loan losses | 2,343 | 143 | 191 | ||||||||||
Gross chargeoffs | (285) | 0 | (47) | ||||||||||
Recoveries | 85 | 77 | 70 | ||||||||||
Net (chargeoffs) recoveries | (200) | 77 | 23 | ||||||||||
Ending allowance for loan losses | 3,527 | 1,384 | 3,527 | 1,384 | 1,164 | ||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Allowance for loan losses, individually evaluated for impairment | 25 | 22 | |||||||||||
Allowance for loan losses, Collectively evaluated for impairment | 3,273 | 1,339 | |||||||||||
Ending Allowance for loan losses | 3,527 | 1,384 | 1,384 | 1,164 | 3,527 | 1,164 | 950 | 3,527 | 1,384 | ||||
Balance of loans, individually evaluated for impairment | 2,345 | 1,386 | |||||||||||
Balance of loans, collectively evaluated for impairment | 310,182 | 207,499 | |||||||||||
Total loans | 315,476 | 211,839 | |||||||||||
Residential real estate | Acquired with deteriorated credit quality | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 23 | 23 | |||||||||||
Ending allowance for loan losses | 229 | 23 | 229 | 23 | |||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Ending Allowance for loan losses | 229 | 23 | 23 | 23 | 23 | 229 | 23 | ||||||
Total loans | 2,949 | 2,954 | |||||||||||
Consumer | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 2 | 1 | 2 | 1 | 8 | ||||||||
Provision (benefit) for loan losses | 37 | 75 | 26 | ||||||||||
Gross chargeoffs | (58) | (106) | (35) | ||||||||||
Recoveries | 28 | 32 | 2 | ||||||||||
Net (chargeoffs) recoveries | (30) | (74) | (33) | ||||||||||
Ending allowance for loan losses | 9 | 2 | 9 | 2 | 1 | ||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Allowance for loan losses, individually evaluated for impairment | 0 | 0 | |||||||||||
Allowance for loan losses, Collectively evaluated for impairment | 9 | 2 | |||||||||||
Ending Allowance for loan losses | 9 | 2 | 2 | $ 1 | 2 | 1 | $ 1 | 9 | 2 | ||||
Balance of loans, individually evaluated for impairment | 0 | 0 | |||||||||||
Balance of loans, collectively evaluated for impairment | 1,725 | 896 | |||||||||||
Total loans | 1,725 | 896 | |||||||||||
Consumer | Acquired with deteriorated credit quality | |||||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||||
Beginning balance | 0 | 0 | |||||||||||
Ending allowance for loan losses | 0 | 0 | 0 | 0 | |||||||||
Allowance for loan losses and Balance of loans | |||||||||||||
Ending Allowance for loan losses | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 0 | ||||||
Total loans | $ 0 | $ 0 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | $ 24,973 | $ 21,332 | |
Less: Accumulated depreciation | 9,139 | 7,494 | |
Net premises and equipment | 15,834 | 13,838 | |
Depreciation expenses | 1,694 | 1,323 | $ 1,332 |
Operating leases, rent expense | 1,800 | 1,200 | $ 1,100 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | 3,514 | 2,254 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | 10,656 | 9,825 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | 3,017 | 2,714 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total premises and equipment | $ 7,786 | $ 6,539 |
Premises and Equipment (Rent Co
Premises and Equipment (Rent Commitments under Non-cancelable Operating Leases) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Property, Plant and Equipment [Abstract] | |
2021 | $ 1,731 |
2022 | 1,760 |
2023 | 1,718 |
2024 | 1,318 |
2025 | 1,191 |
Thereafter | 3,775 |
Total lease commitments | $ 11,493 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Additional Information) (Details) | Jan. 02, 2020USD ($) | Jan. 31, 2020USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 31, 2020acquisition |
Goodwill [Line Items] | ||||||||
Number of banks acquired | acquisition | 3 | |||||||
Goodwill recognized in the acquisition | $ 35,554,000 | $ 9,387,000 | ||||||
Goodwill impairment | 0 | |||||||
Amortization of core deposit intangibles | 768,000 | 146,000 | $ 220,000 | |||||
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 | $ 768,000 | $ 146,000 | $ 220,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangible | $ 6,557 | $ 383 |
Core Deposits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 5,708 | 2,045 |
Accumulated amortization | (2,512) | (1,744) |
Net Intangible | $ 3,196 | $ 301 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Estimated Amortization Expense) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 667 |
2022 | 586 |
2023 | 506 |
2024 | 425 |
2025 | $ 344 |
Mortgage Servicing Rights, Ne_2
Mortgage Servicing Rights, Net (Unpaid Principal Balance) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Mortgage Banking [Abstract] | ||
FNMA | $ 320,467 | $ 9,016 |
Mortgage Servicing Rights, Ne_3
Mortgage Servicing Rights, Net (Schedule of Mortgage Servicing Rights) (Details) - Residential Mortgage - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Mortgage servicing rights: | ||
Balance, beginning of period | $ 76 | $ 0 |
Originated servicing | 3,540 | 77 |
Amortization | (255) | (1) |
Balance, end of period | $ 3,361 | $ 76 |
Mortgage Servicing Rights, Ne_4
Mortgage Servicing Rights, Net (Additional Information) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Mortgage Servicing Loan Inputs and Valuation Techniques [Line Items] | ||||
Custodial escrow balances | $ 52,000 | $ 1,900,000 | ||
Mortgage servicing rights, servicing fee, net of allowances | 0 | 24,000 | $ 0 | |
Valuation allowance related to mortgage servicing rights | $ 17,000 | 0 | ||
Mortgage servicing rights, fair value | $ 87,000 | $ 4,000,000 | ||
Discount rate | Valuation Technique, Discounted Cash Flow | ||||
Mortgage Servicing Loan Inputs and Valuation Techniques [Line Items] | ||||
Mortgage servicing rights, measurement input percentage | 8.50% | 7.75% | ||
Significant Unobservable Inputs (Level 3) | Non-recurring | ||||
Mortgage Servicing Loan Inputs and Valuation Techniques [Line Items] | ||||
Mortgage servicing rights, fair value | $ 87,000 | $ 3,981,000 | ||
Significant Unobservable Inputs (Level 3) | Non-recurring | Discount rate | ||||
Mortgage Servicing Loan Inputs and Valuation Techniques [Line Items] | ||||
Mortgage servicing rights, measurement input percentage | 8.50% | 7.75% | ||
Significant Unobservable Inputs (Level 3) | Non-recurring | Prepayment speed | ||||
Mortgage Servicing Loan Inputs and Valuation Techniques [Line Items] | ||||
Mortgage servicing rights, measurement input percentage | 13.42% | 8.71% | ||
Minimum | Prepayment speed | Valuation Technique, Discounted Cash Flow | ||||
Mortgage Servicing Loan Inputs and Valuation Techniques [Line Items] | ||||
Mortgage servicing rights, measurement input percentage | 12.12% | 8.44% | ||
Maximum | Prepayment speed | Valuation Technique, Discounted Cash Flow | ||||
Mortgage Servicing Loan Inputs and Valuation Techniques [Line Items] | ||||
Mortgage servicing rights, measurement input percentage | 14.73% | 10.41% |
Deposits (Narrative) (Details)
Deposits (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Banking and Thrift, Other Disclosures [Abstract] | ||
Time deposits, exceeding FDIC insurance limit, $250,000 | $ 380.3 | $ 205.9 |
Brokered deposits | 29.3 | 67.4 |
Related party deposits | $ 112 | $ 31.3 |
Deposits (Scheduled Maturities
Deposits (Scheduled Maturities of Total Time Deposits) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Banking and Thrift, Other Disclosures [Abstract] | ||
Due in 2021 | $ 437,211 | |
Due in 2022 | 114,707 | |
Due in 2023 | 39,052 | |
Due in 2024 | 3,821 | |
Due in 2025 | 2,024 | |
Thereafter | 0 | |
Total | $ 596,815 | $ 433,072 |
Borrowings and Subordinated D_3
Borrowings and Subordinated Debt (Components of Long-term Debt and Short-term Borrowings) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 18, 2019 | Dec. 21, 2015 |
Short-term Debt [Line Items] | ||||
Total short-term borrowings | $ 3,204,000 | $ 65,851,000 | ||
Total short-term borrowings, weighted average rate | 0.30% | 1.62% | ||
Debt Instrument [Line Items] | ||||
Total long-term debt, amount | $ 227,072,000 | $ 190,814,000 | ||
Total long-term debt, weighted average rate | 1.91% | 2.04% | ||
Total short-term and long-term borrowings | $ 230,276,000 | $ 256,665,000 | ||
Total short-term and long-term borrowings, weighted average rate | 1.89% | 1.93% | ||
FHLB advances | $ 181,000,000 | |||
FHLB advances, purchase accounting premiums | 176,000 | |||
Secured borrowing due in 2022 | Secured borrowing due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt, amount | $ 1,304,000 | $ 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 | $ 181,176,000 | $ 145,000,000 | ||
Total long-term debt, weighted average rate | 1.09% | 1.06% | ||
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 | $ 44,592,000 | $ 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 | $ 3,204,000 | $ 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. 15, 2020 | Dec. 18, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 21, 2015 |
Debt Instrument [Line Items] | |||||
FHLB advances | $ 181,000,000 | ||||
Federal Home Loan Bank, advances, collateral | 512,300,000 | ||||
Federal Home Loan Bank, advances, maximum borrowing capacity | 180,900,000 | ||||
Total short-term borrowings | 3,204,000 | $ 65,851,000 | |||
Subordinated notes | 227,072,000 | 190,814,000 | |||
Secured borrowing due in 2022 | Secured borrowing due in 2022 | |||||
Debt Instrument [Line Items] | |||||
Subordinated notes | $ 1,304,000 | 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 | 3.11% | ||||
Subordinated notes | Subordinated notes due in 2025 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt gross | $ 45,000,000 | 45,000,000 | |||
Debt issuance costs | 408,000 | 560,000 | |||
Subordinated notes | Subordinated notes due in 2025 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 4.77% | ||||
Line of credit | Unsecured borrowings | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 122,500,000 | ||||
Federal Reserve Bank | Line of credit | Secured borrowing due in 2022 | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 5,300,000 | ||||
Federal funds purchased | |||||
Debt Instrument [Line Items] | |||||
Total short-term borrowings | 0 | 5,000,000 | |||
Securities sold under agreements to repurchase | |||||
Debt Instrument [Line Items] | |||||
Total short-term borrowings | 3,204,000 | $ 851,000 | |||
Line of credit | Comerica Bank | Comerica Bank short term line of credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 30,000,000 | ||||
Fixed interest rate | 4.05% | ||||
Unused capacity commitment fee percentage | 0.20% | ||||
Outstanding balance | $ 0 | ||||
Federal Reserve Bank Advances | Paycheck Protection Program Liquidity Facility | |||||
Debt Instrument [Line Items] | |||||
Total short-term borrowings | 0 | ||||
Maturity overnight | |||||
Debt Instrument [Line Items] | |||||
Fair value of collateralized mortgage obligations | 3,700,000 | ||||
Maturity overnight | Securities sold under agreements to repurchase | |||||
Debt Instrument [Line Items] | |||||
Total short-term borrowings | $ 3,200,000 |
Income Taxes (Current and Defer
Income Taxes (Current and Deferred Components of the Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||||||||
Current expense | $ 7,268 | $ 3,995 | $ 2,974 | ||||||||
Deferred expense (benefit) | (3,315) | (592) | 29 | ||||||||
Total | $ 1,844 | $ 1,117 | $ 643 | $ 349 | $ 975 | $ 914 | $ 767 | $ 747 | $ 3,953 | $ 3,403 | $ 3,003 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Expected Income Tax Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense based on federal corporate tax rate | $ 5,117 | $ 4,098 | $ 3,651 | ||||||||
Changes resulting from: | |||||||||||
Tax-exempt income | (589) | (538) | (406) | ||||||||
Captive insurance benefit | (156) | (182) | (198) | ||||||||
Net operating loss carryback due to CARES Act | $ (290) | (290) | 0 | 0 | |||||||
Disqualified dispositions from stock options | (175) | (178) | (13) | (23) | |||||||
Other, net | 49 | 38 | (21) | ||||||||
Total | $ 1,844 | $ 1,117 | $ 643 | $ 349 | $ 975 | $ 914 | $ 767 | $ 747 | $ 3,953 | $ 3,403 | $ 3,003 |
Income Taxes (Additional Inform
Income Taxes (Additional Information) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Operating loss carryforwards | $ 2,200,000 | |||
Tax benefit from net operating loss carryback due to CARES Act | 290,000 | $ 290,000 | $ 0 | $ 0 |
Tax benefit from disqualified dispositions from stock options | $ 175,000 | 178,000 | 13,000 | 23,000 |
Tax benefit, share awards vesting/exercised during period | 189,000 | 18,000 | ||
Unrecognized tax benefits | 0 | |||
Interest and penalties expense | $ 0 | $ 0 | $ 0 |
Income Taxes (Tax Effects of Te
Income Taxes (Tax Effects of Temporary Differences) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Allowance for loan losses | $ 4,682 | $ 2,662 |
Net operating loss | 757 | 0 |
Deferred compensation | 215 | 142 |
Restricted stock awards | 290 | 223 |
Stock options | 126 | 117 |
Deferred loan fees | 1,403 | 248 |
Nonaccrued interest | 215 | 155 |
Accrued expenses | 370 | 365 |
Other | 63 | 65 |
Total gross deferred tax assets | 8,121 | 3,977 |
Deferred tax liabilities: | ||
Unrealized gain—available for sale securities | (2,175) | (955) |
Depreciation | (914) | (808) |
Prepaid expenses | (212) | (239) |
Business combination adjustments | (1,080) | (369) |
Partnership investments | (381) | (366) |
Other | (47) | (23) |
Total gross deferred tax liabilities | (4,809) | (2,760) |
Net deferred tax assets | $ 3,312 | $ 1,217 |
Stock Based Compensation (2018
Stock Based Compensation (2018 Equity Incentive Plan) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 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 | 39,483 |
Stock Based Compensation (Stock
Stock Based Compensation (Stock Options Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (in shares) | 0 | 0 | |
Aggregate intrinsic value, stock options outstanding | $ 1,400 | $ 3,000 | |
Aggregate intrinsic value, stock options exercisable | 1,400 | 3,000 | |
Intrinsic value from options exercised | 130 | 295 | $ 1,800 |
Cash received from options exercised, including tax benefit | $ 96 | 232 | 1,400 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of options (in years) | ten years | ||
Vesting period (in years) | 3 years | ||
Unrecognized compensation costs | $ 6 | ||
Weighted-average recognition period for unrecognized compensation costs (in years) | 1 month 17 days | ||
Share-based compensation expense | $ 45 | $ 54 | $ 155 |
Stock Options | Tranche 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% | ||
Stock Options | Tranche 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% | ||
Stock Options | Tranche 3 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33.33% |
Stock Based Compensation (Weigh
Stock Based Compensation (Weighted-Average Assumptions) (Details) - Stock Options | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk free interest rate (as a percent) | 2.83% |
Expected Term (years) | 7 years |
Expected volatility rate (as a percent) | 0.04% |
Weighted average fair value of options granted (in dollars per share) | $ 4.46 |
Stock Based Compensation (Summa
Stock Based Compensation (Summary of Stock Option Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | |||
Options outstanding, beginning of year (in shares) | 355,218 | 376,768 | |
Exercised (in shares) | (10,000) | (21,550) | (127,494) |
Options outstanding, end of year (in shares) | 345,218 | 355,218 | 376,768 |
Options Exercisable (in shares) | 335,216 | 335,214 | |
Weighted Average Exercise Price | |||
Options outstanding, beginning of year (in dollars per share) | $ 16.63 | $ 16.26 | |
Exercised (in dollars per share) | 9.57 | 10.16 | |
Options outstanding, end of year (in dollars per share) | 16.83 | 16.63 | $ 16.26 |
Options exercisable (in dollars per share) | $ 16.59 | $ 16.14 | |
Weighted Average Remaining Contractual Term | |||
Options outstanding (in years) | 4 years 1 month 6 days | 5 years | 5 years 9 months 18 days |
Options exercisable (in years) | 4 years | 4 years 9 months 18 days |
Stock Based Compensation (Restr
Stock Based Compensation (Restricted Stock Awards - Changes in Nonvested Shares) (Details) - Restricted Stock Awards | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Shares | |
Nonvested at January 1, 2020 (in shares) | shares | 80,370 |
Granted (in shares) | shares | 38,170 |
Vested (in shares) | shares | (23,870) |
Forfeited (in shares) | shares | (1,400) |
Nonvested at December 31, 2020 (in shares) | shares | 93,270 |
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 | 23.40 |
Forfeited (in dollars per share) | $ / shares | 24.46 |
Nonvested at December 31, 2020 (in dollars per share) | $ / shares | $ 24.75 |
Stock Based Compensation (Res_2
Stock Based Compensation (Restricted Stock Awards Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | $ 14 |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs | $ 973 | ||
Weighted-average recognition period for unrecognized compensation costs (in years) | 1 year 9 months | ||
Fair value of shares vested during period | $ 559 | 211 | |
Share-based compensation expense | 842 | 659 | 660 |
Restricted stock redeemed to cover payroll taxes due at time of vesting | $ 64 | $ 43 | $ 14 |
Other Benefit Plans (Details)
Other Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
401 (k) plan, safe harbor, non-elective contribution percentage | 3.00% | ||
401 (k) plan, contributions | $ 1,100 | $ 690 | $ 537 |
Executive Officers | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Deferred compensation plan, expenses incurred | 350 | 261 | 148 |
Deferred compensation plan, deferred compensation liability | $ 1,000 | $ 676 | $ 415 |
First 3% contribution | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Company match percentage | 100.00% | ||
Matching contribution percentage of employee pay | 3.00% | ||
Next 2% contribution | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Company match percentage | 50.00% | ||
Matching contribution percentage of employee pay | 2.00% |
Off- Balance Sheet Activities_2
Off- Balance Sheet Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet risk, allowance | $ 490 | $ 318 |
Commitment to make loans, maximum term (in days) | 90 days | |
Commitments to make loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | $ 18,269 | 16,276 |
Off-balance sheet exposure, variable rates | 17,058 | 20,128 |
Unused lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | 28,898 | 28,723 |
Off-balance sheet exposure, variable rates | 385,307 | 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 | 2,340 | 4,895 |
Off-balance sheet exposure, variable rates | $ 1,992 | $ 0 |
Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 3.50% | |
Fixed rate loan commitments, maturity (in years) | 3 years | |
Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 4.26% | |
Fixed rate loan commitments, maturity (in years) | 30 years |
Regulatory Capital Matters (Det
Regulatory Capital Matters (Details) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 144,938,000 | $ 157,659,000 |
Actual capital, ratio | 0.0930 | 0.1172 |
Required capital adequacy, amount | $ 70,141,000 | $ 60,533,000 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 109,108,000 | $ 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 | $ 168,310,000 | $ 157,659,000 |
Actual capital, ratio | 0.1080 | 0.1172 |
Required capital adequacy, amount | $ 93,521,000 | $ 80,711,000 |
Required capital adequacy, ratio | 0.0600 | 0.0600 |
Required capital adequacy with capital conservation buffer, amount | $ 132,488,000 | $ 114,341,000 |
Required capital adequacy, ratio | 8.50% | 8.50% |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 232,386,000 | $ 215,091,000 |
Actual capital, ratio | 0.1491 | 0.1599 |
Required capital adequacy, amount | $ 124,695,000 | $ 107,615,000 |
Required capital adequacy, ratio | 0.0800 | 0.0800 |
Required capital adequacy with capital conservation buffer, amount | $ 163,662,000 | $ 141,244,000 |
Required capital adequacy, ratio | 10.50% | 10.50% |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 168,310,000 | $ 157,659,000 |
Actual capital, ratio | 0.0693 | 0.1041 |
Required capital adequacy, amount | $ 97,200,000 | $ 60,580,000 |
Required capital adequacy, ratio | 0.0400 | 0.0400 |
Required capital adequacy with capital conservation buffer, amount | $ 97,200,000 | $ 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 | $ 41,900,000 | |
Bank | ||
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 185,655,000 | $ 165,199,000 |
Actual capital, ratio | 0.1194 | 0.1227 |
Required capital adequacy, amount | $ 69,950,000 | $ 60,568,000 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 108,812,000 | $ 94,217,000 |
Required capital adequacy with capital conservation buffer, ratio | 7.00% | 7.00% |
Prompt corrective action provisions, amount | $ 101,040,000 | $ 87,487,000 |
Prompt corrective action provisions, ratio | 6.50% | 6.50% |
Tier 1 capital to risk-weighted assets: | ||
Actual capital, amount | $ 185,655,000 | $ 165,199,000 |
Actual capital, ratio | 0.1194 | 0.1227 |
Required capital adequacy, amount | $ 93,267,000 | $ 80,757,000 |
Required capital adequacy, ratio | 0.0600 | 0.0600 |
Required capital adequacy with capital conservation buffer, amount | $ 132,129,000 | $ 114,406,000 |
Required capital adequacy, ratio | 8.50% | 8.50% |
Prompt corrective action provisions, amount | $ 124,356,000 | $ 107,676,000 |
Prompt corrective action provisions, ratio | 0.0800 | 0.0800 |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 205,127,000 | $ 178,191,000 |
Actual capital, ratio | 0.1320 | 0.1324 |
Required capital adequacy, amount | $ 124,356,000 | $ 107,676,000 |
Required capital adequacy, ratio | 0.0800 | 0.0800 |
Required capital adequacy with capital conservation buffer, amount | $ 163,218,000 | $ 141,325,000 |
Required capital adequacy, ratio | 10.50% | 10.50% |
Prompt corrective action provisions, amount | $ 155,446,000 | $ 134,595,000 |
Prompt corrective action provisions, ratio | 0.1000 | 0.1000 |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 185,655,000 | $ 165,199,000 |
Actual capital, ratio | 0.0767 | 0.1096 |
Required capital adequacy, amount | $ 96,809,000 | $ 60,276,000 |
Required capital adequacy, ratio | 0.0400 | 0.0400 |
Required capital adequacy with capital conservation buffer, amount | $ 96,809,000 | $ 60,276,000 |
Required capital adequacy with capital conservation buffer, ratio | 4.00% | 4.00% |
Prompt corrective action provisions, amount | $ 121,011,000 | $ 75,345,000 |
Prompt corrective action provisions, ratio | 0.0500 | 0.0500 |
Fair Value (Additional Informat
Fair Value (Additional Information) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of nonaccrual loans held for investment | $ 105,000 | $ 0 | ||
Fair value of loans 90 days past due | 109,000 | |||
Impaired loans, allowance allocation recorded | 22,297,000 | 12,674,000 | $ 11,566,000 | $ 11,713,000 |
Chargeoffs related to impaired loans to loans at fair value | 2,249,000 | 275,000 | $ 559,000 | |
Write downs recorded in other real estate owned | 0 | 0 | ||
Carrying Value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impaired loans, allowance allocation recorded | 95,000 | 161,000 | ||
Chargeoffs related to impaired loans to loans at fair value | $ 315,000 | $ 298,000 | ||
Minimum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Additional adjustment percentage | 0.05% | |||
Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Additional adjustment percentage | 0.75% |
Fair Value (Fair Value Measurem
Fair Value (Fair Value Measurements of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Securities available-for-sale | $ 302,732 | $ 180,905 |
Recurring | ||
Financial assets: | ||
Securities available-for-sale | 302,732 | 180,905 |
Loans held for sale | 43,482 | 13,889 |
Total assets at fair value | 369,006 | 203,831 |
Total liabilities at fair value | 12,938 | |
Recurring | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 8,037 | 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 | 301,268 | 180,905 |
Loans held for sale | 43,482 | 13,889 |
Total assets at fair value | 359,505 | 199,768 |
Total liabilities at fair value | 12,938 | |
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 | 1,464 | 0 |
Loans held for sale | 0 | 0 |
Total assets at fair value | 9,501 | 4,063 |
Total liabilities at fair value | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 8,037 | 4,063 |
U.S. government sponsored entities & agencies | ||
Financial assets: | ||
Securities available-for-sale | 26,358 | |
U.S. government sponsored entities & agencies | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 26,358 | |
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 | 26,358 | |
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 | 132,723 | 93,747 |
State and political subdivision | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 132,723 | 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 | 131,259 | 93,747 |
State and political subdivision | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 1,464 | 0 |
Mortgage-backed securities: residential | ||
Financial assets: | ||
Securities available-for-sale | 26,081 | 10,565 |
Mortgage-backed securities: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 26,081 | 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 | 26,081 | 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 | 11,918 | 8,779 |
Mortgage-backed securities: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 11,918 | 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 | 11,918 | 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 | 13,446 | 8,529 |
Collateralized mortgage obligations: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 13,446 | 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 | 13,446 | 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 | 58,512 | 23,181 |
Collateralized mortgage obligations: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 58,512 | 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 | 58,512 | 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 | 1,999 | |
U.S. Treasury | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 1,999 | |
U.S. Treasury | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
U.S. Treasury | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 1,999 | |
U.S. Treasury | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
SBA | ||
Financial assets: | ||
Securities available-for-sale | 17,593 | 21,984 |
SBA | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 17,593 | 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 | 17,593 | 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 | 10,072 | 10,084 |
Asset backed securities | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 10,072 | 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 | 10,072 | 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 | 6,029 | 2,037 |
Corporate bonds | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 6,029 | 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 | 6,029 | 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 | 12,515 | 4,684 |
Derivative liabilities | 12,515 | 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 | 12,515 | 4,684 |
Derivative liabilities | 12,515 | 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 | 46 | 34 |
Derivative liabilities | 423 | 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 | 46 | 34 |
Derivative liabilities | 423 | 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 | 2,194 | 256 |
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 |
Total liabilities at fair value | 0 | |
Interest rate lock commitments | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Derivative asset | 2,194 | 256 |
Total liabilities at fair value | 4,717 | |
Interest rate lock commitments | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Derivative asset | $ 0 | 0 |
Total liabilities at fair value | $ 0 |
Fair Value (Level 3 Assets Roll
Fair Value (Level 3 Assets Rollforward) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | $ 4,063 | $ 4,571 |
Transfers from loans held for sale | 5,217 | 2,186 |
Gains: | ||
Recorded in "Mortgage banking activities" | 123 | 126 |
Repayments | (1,366) | (2,820) |
Ending balance | $ 8,037 | $ 4,063 |
Fair Value (Contractual Obligat
Fair Value (Contractual Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Aggregate fair value | $ 43,482 | $ 13,889 |
Contractual balance | 41,808 | 13,510 |
Unrealized gain | $ 1,674 | $ 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 | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |||
Change in fair value | $ 1,295 | $ 296 | $ 1 |
Fair Value (Assets Measured at
Fair Value (Assets Measured at Fair Value on a Non-Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage servicing rights, fair value | $ 4,000 | $ 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 | 3,981 | 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 | 3,981 | 87 |
Other real estate owned | 921 | |
Total assets at fair value | 5,251 | 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 | 3,981 | 87 |
Other real estate owned | 921 | |
Total assets at fair value | 5,251 | 1,534 |
Commercial and industrial | Carrying Value | Non-recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 1,270 | 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 | $ 1,270 | 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 (Quantitative Inform
Fair Value (Quantitative Information About Significant Unobservable Inputs for Assets Measured at Fair Value on a Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 18,259 | $ 17,870 |
Mortgage servicing rights, fair value | 4,000 | 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 | 1,270 | 526 |
Mortgage servicing rights, fair value | $ 3,981 | 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 percentage | 10.00% | 10.00% |
Other real estate owned, measurement input percentage | 18.00% | |
Maximum | Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, measurement input percentage | 90.00% | 50.00% |
Other real estate owned, measurement input percentage | 36.00% | |
Prepayment speed | Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage servicing rights, measurement input percentage | 8.71% | 13.42% |
Discount rate | Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Mortgage servicing rights, measurement input percentage | 7.75% | 8.50% |
Fair Value (Fair Value Measur_2
Fair Value (Fair Value Measurement of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Financial assets: | ||
Cash and cash equivalents | $ 264,071 | $ 103,930 |
Other investments | 14,398 | 11,475 |
Net loans | 1,701,240 | 1,214,935 |
Accrued interest receivable | 7,511 | 4,403 |
Financial liabilities: | ||
Deposits | 1,963,312 | 1,135,428 |
Borrowings | 185,684 | 212,225 |
Subordinated notes | 44,592 | 44,440 |
Accrued interest payable | 1,081 | 1,574 |
Estimate of Fair Value Measurement | ||
Financial assets: | ||
Cash and cash equivalents | 264,071 | 103,930 |
Net loans | 1,740,093 | 1,203,639 |
Accrued interest receivable | 7,511 | 4,403 |
Financial liabilities: | ||
Deposits | 2,022,399 | 1,138,202 |
Borrowings | 192,546 | 212,125 |
Subordinated notes | 45,902 | 47,100 |
Accrued interest payable | 1,081 | 1,574 |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 25,245 | 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 | 238,826 | 83,940 |
Net loans | 0 | 0 |
Accrued interest receivable | 1,460 | 1,236 |
Financial liabilities: | ||
Deposits | 2,022,399 | 1,138,202 |
Borrowings | 192,546 | 212,125 |
Subordinated notes | 45,902 | 47,100 |
Accrued interest payable | 1,081 | 1,574 |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Net loans | 1,740,093 | 1,203,639 |
Accrued interest receivable | 6,051 | 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 | Dec. 31, 2020 | Dec. 31, 2019 |
Other Assets | ||
Notional Amount | ||
Derivative asset | $ 237,745 | $ 135,478 |
Fair Value | ||
Derivative asset | 14,755 | 4,974 |
Other Liabilities | ||
Notional Amount | ||
Derivative liability | 228,922 | 125,502 |
Fair Value | ||
Derivative liability | 12,938 | 4,717 |
Customer-initiated derivatives | ||
Fair Value | ||
Derivative asset | 12,515 | 4,684 |
Derivative liability | 12,515 | 4,684 |
Customer-initiated derivatives | Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 136,023 | 103,941 |
Fair Value | ||
Derivative asset | 12,515 | 4,684 |
Customer-initiated derivatives | Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 136,023 | 103,941 |
Fair Value | ||
Derivative liability | 12,515 | 4,684 |
Forward contracts related to mortgage loans to be delivered for sale | Not Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 10,191 | 6,018 |
Fair Value | ||
Derivative asset | 46 | 34 |
Forward contracts related to mortgage loans to be delivered for sale | Not Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 92,899 | 20,633 |
Fair Value | ||
Derivative liability | 423 | 33 |
Interest rate lock commitments | Not Designated as Hedging Instrument | Other Assets | ||
Notional Amount | ||
Derivative asset | 91,531 | 25,519 |
Fair Value | ||
Derivative asset | 2,194 | 256 |
Interest rate lock commitments | Not Designated as Hedging Instrument | Other Liabilities | ||
Notional Amount | ||
Derivative liability | 0 | 928 |
Fair Value | ||
Derivative liability | $ 0 | $ 0 |
Derivatives (Gains (Losses) Rel
Derivatives (Gains (Losses) Related to Derivative Instruments) (Details) - Mortgage banking activities - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total loss recognized in income | $ (3,073) | $ (451) | $ 73 |
Forward contracts related to mortgage loans to be delivered for sale | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total loss recognized in income | (5,011) | (509) | (69) |
Interest rate lock commitments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total loss recognized in income | $ 1,938 | $ 58 | $ 142 |
Derivatives (Financial Instrume
Derivatives (Financial Instruments Eligible for Offset) (Details) - Customer-initiated derivatives - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Offsetting derivative assets: | ||
Gross amounts recognized | $ 12,515 | $ 4,684 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial condition | 12,515 | 4,684 |
Gross amounts not offset in the statements of financial position | ||
Financial instruments | 0 | 0 |
Collateral (received)/posted | 0 | 0 |
Net amount | 12,515 | 4,684 |
Offsetting derivative liabilities: | ||
Gross amounts recognized | 12,515 | 4,684 |
Gross amounts offset in the statements of financial condition | 0 | 0 |
Net amounts presented in the statements of financial condition | 12,515 | 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 | $ (2,868) | $ 309 |
Parent Company Financial Stat_3
Parent Company Financial Statements (Balance Sheets - Parent Company) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||||
Cash and cash equivalents | $ 264,071 | $ 103,930 | ||
Income tax benefit | 3,686 | 1,217 | ||
Total assets | 2,442,982 | 1,584,899 | ||
Liabilities | ||||
Subordinated notes | 44,592 | 44,440 | ||
Total liabilities | 2,227,655 | 1,414,196 | ||
Shareholders' equity | 215,327 | 170,703 | $ 151,760 | $ 107,960 |
Total liabilities and shareholders' equity | 2,442,982 | 1,584,899 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 25,779 | 35,210 | ||
Investment in banking subsidiary | 232,671 | 178,240 | ||
Investment in captive insurance subsidiary | 1,625 | 1,668 | ||
Income tax benefit | 355 | 520 | ||
Other assets | 63 | 99 | ||
Total assets | 260,493 | 215,737 | ||
Liabilities | ||||
Subordinated notes | 44,592 | 44,440 | ||
Accrued expenses and other liabilities | 574 | 594 | ||
Total liabilities | 45,166 | 45,034 | ||
Shareholders' equity | 215,327 | 170,703 | ||
Total liabilities and shareholders' equity | $ 260,493 | $ 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 | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Expenses | |||||||||||
Interest on borrowed funds | $ 2,353 | $ 1,378 | $ 1,330 | ||||||||
Interest on subordinated notes | 2,537 | 1,074 | 1,015 | ||||||||
Income tax benefit | $ (1,844) | $ (1,117) | $ (643) | $ (349) | $ (975) | $ (914) | $ (767) | $ (747) | (3,953) | (3,403) | (3,003) |
Net income | $ 8,373 | $ 5,209 | $ 2,721 | $ 4,110 | $ 4,680 | $ 4,409 | $ 3,555 | $ 3,467 | 20,413 | 16,111 | 14,386 |
Other comprehensive income | 4,590 | 5,344 | (801) | ||||||||
Total comprehensive income, net of tax | 25,003 | 21,455 | 13,585 | ||||||||
Parent Company | |||||||||||
Income | |||||||||||
Dividend income from bank subsidiary | 41,500 | 0 | 0 | ||||||||
Dividend income from captive subsidiary | 815 | 860 | 0 | ||||||||
Total income | 42,315 | 860 | 0 | ||||||||
Expenses | |||||||||||
Interest on borrowed funds | 40 | 4 | 0 | ||||||||
Interest on subordinated notes | 2,537 | 1,074 | 1,015 | ||||||||
Other expenses | 1,238 | 1,196 | 715 | ||||||||
Total expenses | 3,815 | 2,274 | 1,730 | ||||||||
Income (loss) before income taxes and equity in (overdistributed) undistributed net earnings of subsidiaries | 38,500 | (1,414) | (1,730) | ||||||||
Income tax benefit | 781 | 427 | 425 | ||||||||
Equity in (overdistributed) undistributed earnings of subsidiaries | (18,868) | 17,098 | 15,691 | ||||||||
Net income | 20,413 | 16,111 | 14,386 | ||||||||
Other comprehensive income | 4,590 | 5,344 | (801) | ||||||||
Total comprehensive income, net of tax | $ 25,003 | $ 21,455 | $ 13,585 |
Parent Company Financial Stat_5
Parent Company Financial Statements (Statements of Cash Flows - Parent Company) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||||||||||
Net income | $ 8,373 | $ 5,209 | $ 2,721 | $ 4,110 | $ 4,680 | $ 4,409 | $ 3,555 | $ 3,467 | $ 20,413 | $ 16,111 | $ 14,386 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Stock based compensation expense | 887 | 713 | 815 | ||||||||
Net cash provided by (used in) operating activities | (10,786) | 4,124 | 18,137 | ||||||||
Cash flows from investing activities | |||||||||||
Cash used in acquisitions | (29,464) | 0 | 0 | ||||||||
Net cash used in investing activities | (369,124) | (73,272) | (144,129) | ||||||||
Cash flows from financing activities | |||||||||||
Net proceeds from issuance of common stock related to initial public offering | 0 | 0 | 29,030 | ||||||||
Preferred stock offering, net of issuance costs | 23,372 | 0 | 0 | ||||||||
Net proceeds from issuance of subordinated debt | 0 | 29,487 | 0 | ||||||||
Share buyback - redeemed stock | (2,648) | (2,165) | 0 | ||||||||
Common stock dividends paid | (1,469) | (1,160) | (662) | ||||||||
Preferred stock dividends paid | (479) | 0 | 0 | ||||||||
Proceeds from exercised stock options | 95 | 219 | 1,279 | ||||||||
Net cash provided by financing activities | 540,051 | 139,782 | 95,627 | ||||||||
Net increase (decrease) in cash and cash equivalents | 160,141 | 70,634 | (30,365) | ||||||||
Beginning cash and cash equivalents | 103,930 | 33,296 | 103,930 | 33,296 | 63,661 | ||||||
Ending cash and cash equivalents | 264,071 | 103,930 | 264,071 | 103,930 | 33,296 | ||||||
Parent Company | |||||||||||
Cash flows from operating activities | |||||||||||
Net income | 20,413 | 16,111 | 14,386 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Equity in over (under) distributed earnings of subsidiaries | 18,868 | (17,098) | (15,691) | ||||||||
Stock based compensation expense | 101 | 74 | 314 | ||||||||
(Increase) decrease in other assets, net | 201 | (205) | (45) | ||||||||
Increase (decrease) in other liabilities, net | 59 | 257 | (79) | ||||||||
Net cash provided by (used in) operating activities | 39,642 | (861) | (1,115) | ||||||||
Cash flows from investing activities | |||||||||||
Cash used in acquisitions | (67,944) | 0 | 0 | ||||||||
Capital infusion to subsidiaries | 0 | 0 | (20,000) | ||||||||
Net cash used in investing activities | (67,944) | 0 | (20,000) | ||||||||
Cash flows from financing activities | |||||||||||
Net proceeds from issuance of common stock related to initial public offering | 0 | 0 | 29,030 | ||||||||
Preferred stock offering, net of issuance costs | 23,372 | 0 | 0 | ||||||||
Net proceeds from issuance of subordinated debt | 0 | 29,487 | 0 | ||||||||
Share buyback - redeemed stock | (2,648) | (2,165) | 0 | ||||||||
Common stock dividends paid | (1,469) | (1,160) | (662) | ||||||||
Preferred stock dividends paid | (479) | 0 | 0 | ||||||||
Proceeds from exercised stock options | 95 | 219 | 1,279 | ||||||||
Net cash provided by financing activities | 18,871 | 26,381 | 29,647 | ||||||||
Net increase (decrease) in cash and cash equivalents | (9,431) | 25,520 | 8,532 | ||||||||
Beginning cash and cash equivalents | $ 35,210 | $ 9,690 | 35,210 | 9,690 | 1,158 | ||||||
Ending cash and cash equivalents | $ 25,779 | $ 35,210 | $ 25,779 | $ 35,210 | $ 9,690 |
Earnings Per Common Share (Calc
Earnings Per Common Share (Calculation of Basic and Diluted Earnings Per Share - Current Period) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net income | $ 8,373 | $ 5,209 | $ 2,721 | $ 4,110 | $ 4,680 | $ 4,409 | $ 3,555 | $ 3,467 | $ 20,413 | $ 16,111 | $ 14,386 |
Preferred stock dividends | 479 | 0 | 0 | 0 | 479 | 0 | 0 | ||||
Net income available to common shareholders | $ 7,894 | $ 5,209 | $ 2,721 | $ 4,110 | 19,934 | 16,111 | $ 14,386 | ||||
Net income allocated to participating securities | 244 | 159 | |||||||||
Net income allocated to common shareholders | $ 19,690 | $ 15,952 | |||||||||
Weighted average common shares outstanding - basic (in shares) | 7,627,000 | 7,655,000 | 7,376,507 | ||||||||
Effect of dilutive securities: | |||||||||||
Weighted average common stock equivalents (in shares) | 147,411 | ||||||||||
Weighted average common shares outstanding - diluted (in shares) | 7,686,000 | 7,770,000 | 7,523,918 | ||||||||
EPS available to common shareholders | |||||||||||
Basic earnings per common share (in dollars per share) | $ 1.02 | $ 0.68 | $ 0.35 | $ 0.53 | $ 0.60 | $ 0.57 | $ 0.46 | $ 0.45 | $ 2.58 | $ 2.08 | $ 1.95 |
Diluted earnings per common share (in dollars per share) | $ 1.02 | $ 0.67 | $ 0.35 | $ 0.53 | $ 0.60 | $ 0.56 | $ 0.45 | $ 0.44 | $ 2.57 | $ 2.05 | $ 1.91 |
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) | 7,723,000 | 7,733,000 | |||||||||
Average unvested restricted share awards (in shares) | (96,000) | (78,000) | |||||||||
Weighted average common shares outstanding - basic (in shares) | 7,627,000 | 7,655,000 | |||||||||
Effect of dilutive securities: | |||||||||||
Weighted average common stock equivalents (in shares) | 59,000 | 115,000 | |||||||||
Weighted average common shares outstanding - diluted (in shares) | 7,686,000 | 7,770,000 |
Earnings Per Common Share (Ca_2
Earnings Per Common Share (Calculation of Basic and Diluted Earnings Per Share - Prior Period) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic: | |||||||||||
Net Income attributable to common shareholders | $ 8,373 | $ 5,209 | $ 2,721 | $ 4,110 | $ 4,680 | $ 4,409 | $ 3,555 | $ 3,467 | $ 20,413 | $ 16,111 | $ 14,386 |
Weighted average common shares outstanding - basic (in shares) | 7,627,000 | 7,655,000 | 7,376,507 | ||||||||
Basic earnings per common share (in dollars per share) | $ 1.02 | $ 0.68 | $ 0.35 | $ 0.53 | $ 0.60 | $ 0.57 | $ 0.46 | $ 0.45 | $ 2.58 | $ 2.08 | $ 1.95 |
Diluted: | |||||||||||
Net Income attributable to common shareholders | $ 8,373 | $ 5,209 | $ 2,721 | $ 4,110 | $ 4,680 | $ 4,409 | $ 3,555 | $ 3,467 | $ 20,413 | $ 16,111 | $ 14,386 |
Weighted average common shares outstanding (in shares) | 7,627,000 | 7,655,000 | 7,376,507 | ||||||||
Add: Dilutive effects of assumed exercises of stock options (in shares) | 147,411 | ||||||||||
Weighted average common shares outstanding - diluted (in shares) | 7,686,000 | 7,770,000 | 7,523,918 | ||||||||
Diluted earnings per common share (in dollars per share) | $ 1.02 | $ 0.67 | $ 0.35 | $ 0.53 | $ 0.60 | $ 0.56 | $ 0.45 | $ 0.44 | $ 2.57 | $ 2.05 | $ 1.91 |
Earnings Per Common Share (Addi
Earnings Per Common Share (Additional Information) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive shares excluded from diluted earnings per share calculation (in shares) | 117,334 | 30,000 | 26,301 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 22,181 | $ 20,245 | $ 20,396 | $ 19,817 | $ 17,366 | $ 17,983 | $ 17,657 | $ 17,442 | $ 82,639 | $ 70,448 | $ 63,824 |
Interest expense | 3,075 | 3,648 | 4,163 | 4,997 | 4,458 | 4,995 | 5,216 | 4,724 | 15,883 | 19,393 | 13,400 |
Net interest income | 19,106 | 16,597 | 16,233 | 14,820 | 12,908 | 12,988 | 12,441 | 12,718 | 66,756 | 51,055 | 50,424 |
Provision for loan losses | 1,538 | 4,270 | 5,575 | 489 | 548 | (16) | 429 | 422 | 11,872 | 1,383 | 412 |
Net interest income after provision for loan losses | 17,568 | 12,327 | 10,658 | 14,331 | 12,360 | 13,004 | 12,012 | 12,296 | 54,884 | 49,672 | 50,012 |
Noninterest income | 8,110 | 9,125 | 7,789 | 4,690 | 4,590 | 3,858 | 3,477 | 2,286 | 29,714 | 14,211 | 7,055 |
Noninterest expense | 15,461 | 15,126 | 15,083 | 14,562 | 11,295 | 11,539 | 11,167 | 10,368 | 60,232 | 44,369 | 39,678 |
Income before income taxes | 10,217 | 6,326 | 3,364 | 4,459 | 5,655 | 5,323 | 4,322 | 4,214 | 24,366 | 19,514 | 17,389 |
Income tax provision | 1,844 | 1,117 | 643 | 349 | 975 | 914 | 767 | 747 | 3,953 | 3,403 | 3,003 |
Net income | 8,373 | 5,209 | 2,721 | 4,110 | $ 4,680 | $ 4,409 | $ 3,555 | $ 3,467 | 20,413 | 16,111 | 14,386 |
Preferred stock dividends | 479 | 0 | 0 | 0 | 479 | 0 | 0 | ||||
Net income available to common shareholders | $ 7,894 | $ 5,209 | $ 2,721 | $ 4,110 | $ 19,934 | $ 16,111 | $ 14,386 | ||||
Per common share data: | |||||||||||
Basic (in dollars per share) | $ 1.02 | $ 0.68 | $ 0.35 | $ 0.53 | $ 0.60 | $ 0.57 | $ 0.46 | $ 0.45 | $ 2.58 | $ 2.08 | $ 1.95 |
Diluted (in dollars per share) | 1.02 | 0.67 | 0.35 | 0.53 | 0.60 | 0.56 | 0.45 | 0.44 | 2.57 | 2.05 | 1.91 |
Cash dividend declared (in dollars per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.20 | $ 0.16 | $ 0.12 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Jan. 20, 2021USD ($) |
Subsidiaries | Subsequent Event | |
Subsequent Event [Line Items] | |
Net assets | $ 1.6 |