Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38671 | |
Entity Registrant Name | CAPITAL BANCORP INC | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-2083046 | |
Entity Address, Address Line One | 2275 Research Boulevard | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Rockville | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20850 | |
City Area Code | 301 | |
Local Phone Number | 468-8848 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CBNK | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 13,820,223 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001419536 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 15,636,000 | $ 10,530,000 |
Interest bearing deposits at other financial institutions | 180,379,000 | 102,447,000 |
Federal funds sold | 3,698,000 | 1,847,000 |
Total cash and cash equivalents | 199,713,000 | 114,824,000 |
Investment securities available for sale | 56,796,000 | 60,828,000 |
Restricted investments | 4,085,000 | 3,966,000 |
Loans held for sale | 116,969,000 | 71,030,000 |
Small Business Administration Payroll Protection Program (“SBA-PPP”) loans receivable, net of fees | 229,646,000 | 0 |
Portfolio loans receivable, net of deferred fees and costs and net of allowance for loan losses of $18,680 and $13,301 at June 30, 2020 and December 31, 2019, respectively | 1,192,797,000 | 1,157,820,000 |
Premises and equipment, net | 5,544,000 | 6,092,000 |
Accrued interest receivable | 6,865,000 | 4,770,000 |
Deferred income taxes | 3,599,000 | 4,263,000 |
Foreclosed real estate | 3,326,000 | 2,384,000 |
Other assets | 3,025,000 | 2,518,000 |
Total assets | 1,822,365,000 | 1,428,495,000 |
Deposits | ||
Noninterest-bearing, including related party balances of $17,734 and $16,009 at June 30, 2020 and December 31, 2019, respectively | 563,995,000 | 291,777,000 |
Interest-bearing, including related party balances of $128,655 and $125,304 at June 30, 2020 and December 31, 2019, respectively | 1,044,731,000 | 933,644,000 |
Total deposits | 1,608,726,000 | 1,225,421,000 |
Federal Home Loan Bank advances | 25,556,000 | 32,222,000 |
Other borrowed funds | 17,392,000 | 15,423,000 |
Accrued interest payable | 1,284,000 | 1,801,000 |
Other liabilities | 27,299,000 | 20,297,000 |
Total liabilities | 1,680,257,000 | 1,295,164,000 |
Stockholders' equity | ||
Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued or outstanding at June 30, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $.01 par value; 49,000,000 shares authorized; 13,818,223 and 13,894,842 issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 138,000 | 139,000 |
Additional paid-in capital | 51,052,000 | 51,561,000 |
Retained earnings | 89,151,000 | 81,618,000 |
Accumulated other comprehensive income | 1,767,000 | 13,000 |
Total stockholders' equity | 142,108,000 | 133,331,000 |
Total liabilities and stockholders' equity | $ 1,822,365,000 | $ 1,428,495,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for loan losses | $ 18,680 | $ 13,301 |
Noninterest-bearing deposits, related party | 17,734 | 16,009 |
Interest-bearing deposits, related party | $ 128,655 | $ 125,304 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 49,000,000 | 49,000,000 |
Common stock, shares issued (in shares) | 13,818,223 | 13,894,842 |
Common stock, shares outstanding (in shares) | 13,818,223 | 13,894,842 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest income | ||||
Loans, including fees | $ 21,609 | $ 19,804 | $ 42,683 | $ 37,648 |
Investment securities available for sale | 316 | 234 | 656 | 492 |
Federal funds sold and other | 75 | 251 | 405 | 467 |
Total interest income | 22,000 | 20,289 | 43,744 | 38,607 |
Interest expense | ||||
Deposits, includes payments to related parties of $295 and $678 for the three and six months ended June 30, 2020, respectively, and $459 and $976 for the three and six months ended June 30, 2019, respectively. | 2,954 | 3,195 | 6,567 | 6,438 |
Borrowed funds | 422 | 563 | 866 | 894 |
Total interest expense | 3,376 | 3,758 | 7,433 | 7,332 |
Net interest income | 18,624 | 16,531 | 36,311 | 31,275 |
Provision for loan losses | 3,300 | 677 | 5,709 | 798 |
Net interest income after provision for loan losses | 15,324 | 15,854 | 30,602 | 30,477 |
Noninterest income | ||||
Gain on sale of investment securities available for sale | 0 | 26 | 0 | 26 |
Other fees and charges | 758 | 78 | 1,163 | 204 |
Total noninterest income | 13,899 | 5,927 | 20,479 | 10,019 |
Noninterest expenses | ||||
Salaries and employee benefits | 11,296 | 8,111 | 19,753 | 14,898 |
Occupancy and equipment | 1,152 | 1,102 | 2,330 | 2,196 |
Professional fees | 894 | 609 | 1,664 | 1,228 |
Data processing | 5,667 | 3,716 | 9,784 | 7,029 |
Advertising | 606 | 531 | 1,242 | 973 |
Loan processing | 740 | 340 | 1,187 | 645 |
Foreclosed real estate expenses, net | 82 | 28 | 128 | 50 |
Other operating | 2,266 | 1,773 | 4,459 | 3,521 |
Total noninterest expenses | 22,703 | 16,210 | 40,547 | 30,540 |
Income before income taxes | 6,520 | 5,571 | 10,534 | 9,956 |
Income tax expense | 1,759 | 1,548 | 2,839 | 2,614 |
Net income | $ 4,761 | $ 4,023 | $ 7,695 | $ 7,342 |
Basic earnings per share (in dollars per share) | $ 0.34 | $ 0.30 | $ 0.56 | $ 0.54 |
Diluted earnings per share (in dollars per share) | $ 0.34 | $ 0.29 | $ 0.55 | $ 0.53 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 13,817,349 | 13,718,665 | 13,846,889 | 13,707,631 |
Diluted (in shares) | 13,817,349 | 13,914,042 | 13,877,326 | 13,888,050 |
Service charges on deposits | ||||
Noninterest income | ||||
Noninterest income | $ 110 | $ 138 | $ 259 | $ 236 |
Credit card fees | ||||
Noninterest income | ||||
Noninterest income | 2,912 | 1,970 | 4,921 | 3,462 |
Mortgage banking revenue | ||||
Noninterest income | ||||
Noninterest income | $ 10,119 | $ 3,715 | $ 14,136 | $ 6,091 |
Consolidated Statements of In_2
Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Deposits, related party | $ 295 | $ 459 | $ 678 | $ 976 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,761 | $ 4,023 | $ 7,695 | $ 7,342 |
Other comprehensive income (loss) | ||||
Unrealized gain on investment securities available for sale | 1,380 | 440 | 2,421 | 810 |
Reclassification of realized gain on sale of investment securities available for sale | 0 | (26) | 0 | (26) |
Unrealized loss on cash flow hedging derivative | 0 | 0 | 0 | (5) |
Other comprehensive income (loss) | 1,380 | 414 | 2,421 | 779 |
Income tax expense relating to the items above | (380) | (114) | (667) | (214) |
Other comprehensive income | 1,000 | 300 | 1,754 | 565 |
Comprehensive income | $ 5,761 | $ 4,323 | $ 9,449 | $ 7,907 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings |
Beginning balance (in shares) at Dec. 31, 2018 | 13,672,479 | ||||||
Beginning balance at Dec. 31, 2018 | $ 114,564 | $ 137 | $ 49,321 | $ 65,701 | $ (595) | $ (54) | $ (54) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 3,319 | 3,319 | |||||
Unrealized gain on investment securities available for sale, net of income taxes | 270 | 270 | |||||
Unrealized loss on cash flow hedging derivative, net of income taxes | (5) | (5) | |||||
Stock options exercised (in shares) | 21,706 | ||||||
Stock options exercised | 107 | $ 0 | 155 | (48) | |||
Shares issued as compensation (in shares) | 18,380 | ||||||
Shares issued as compensation | 150 | $ 0 | 150 | ||||
Stock-based compensation | 199 | 199 | |||||
Ending balance (in shares) at Mar. 31, 2019 | 13,712,565 | ||||||
Ending balance at Mar. 31, 2019 | 118,550 | $ 137 | 49,825 | 68,918 | (330) | ||
Beginning balance (in shares) at Dec. 31, 2018 | 13,672,479 | ||||||
Beginning balance at Dec. 31, 2018 | 114,564 | $ 137 | 49,321 | 65,701 | (595) | $ (54) | $ (54) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 7,342 | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 13,718,665 | ||||||
Ending balance at Jun. 30, 2019 | 123,118 | $ 137 | 50,071 | 72,940 | (30) | ||
Beginning balance (in shares) at Mar. 31, 2019 | 13,712,565 | ||||||
Beginning balance at Mar. 31, 2019 | 118,550 | $ 137 | 49,825 | 68,918 | (330) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 4,023 | 4,023 | |||||
Unrealized gain on investment securities available for sale, net of income taxes | 300 | 300 | |||||
Stock options exercised (in shares) | 6,100 | ||||||
Stock options exercised | 46 | $ 0 | 47 | (1) | |||
Stock-based compensation | 199 | 199 | |||||
Ending balance (in shares) at Jun. 30, 2019 | 13,718,665 | ||||||
Ending balance at Jun. 30, 2019 | $ 123,118 | $ 137 | 50,071 | 72,940 | (30) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 13,894,842 | 13,894,842 | |||||
Beginning balance at Dec. 31, 2019 | $ 133,331 | $ 139 | 51,561 | 81,618 | 13 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 2,934 | 2,934 | |||||
Unrealized gain on investment securities available for sale, net of income taxes | 754 | 754 | |||||
Stock options exercised (in shares) | 34,015 | ||||||
Stock options exercised | 100 | $ 0 | 263 | (163) | |||
Stock-based compensation | 244 | 244 | |||||
Shares repurchased and retired (in shares) | (112,134) | ||||||
Shares repurchased and retired | (1,283) | $ (1) | (1,282) | ||||
Ending balance (in shares) at Mar. 31, 2020 | 13,816,723 | ||||||
Ending balance at Mar. 31, 2020 | $ 136,080 | $ 138 | 50,786 | 84,389 | 767 | ||
Beginning balance (in shares) at Dec. 31, 2019 | 13,894,842 | 13,894,842 | |||||
Beginning balance at Dec. 31, 2019 | $ 133,331 | $ 139 | 51,561 | 81,618 | 13 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 7,695 | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 13,818,223 | 13,818,223 | |||||
Ending balance at Jun. 30, 2020 | $ 142,108 | $ 138 | 51,052 | 89,151 | 1,767 | ||
Beginning balance (in shares) at Mar. 31, 2020 | 13,816,723 | ||||||
Beginning balance at Mar. 31, 2020 | 136,080 | $ 138 | 50,786 | 84,389 | 767 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 4,761 | 4,761 | |||||
Unrealized gain on investment securities available for sale, net of income taxes | 1,000 | 1,000 | |||||
Shares issued as compensation (in shares) | 3,000 | ||||||
Shares issued as compensation | 37 | $ 0 | 37 | ||||
Stock-based compensation | 244 | 243 | 1 | ||||
Shares repurchased and retired (in shares) | (1,500) | ||||||
Shares repurchased and retired | $ (14) | $ 0 | (14) | ||||
Ending balance (in shares) at Jun. 30, 2020 | 13,818,223 | 13,818,223 | |||||
Ending balance at Jun. 30, 2020 | $ 142,108 | $ 138 | $ 51,052 | $ 89,151 | $ 1,767 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 7,695,000 | $ 7,342,000 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Provision for loan losses | 5,709,000 | 798,000 |
Provision for losses on mortgage loans sold | 262,000 | 67,000 |
Provision for off balance sheet credit risk | 45,000 | 93,000 |
Net amortization on investments | 136,000 | 63,000 |
Depreciation and amortization | 878,000 | 569,000 |
Stock-based compensation expense | 488,000 | 398,000 |
Director and employee compensation paid in stock | 37,000 | 150,000 |
Deferred income tax benefit | (2,000) | (64,000) |
Amortization of debt issuance expense | 14,000 | 16,000 |
Gain on sale of securities available for sale | 0 | (26,000) |
Loss on sale of foreclosed real estate | 75,000 | 0 |
Mortgage banking revenue | (14,136,000) | (6,091,000) |
Proceeds from sales of loans held for sale | 463,783,000 | 186,305,000 |
Originations of loans held for sale | (495,586,000) | (209,432,000) |
Changes in assets and liabilities: | ||
Accrued interest receivable | (2,095,000) | (187,000) |
Prepaid income taxes and taxes payable | 0 | (178,000) |
Other assets | (507,000) | (1,351,000) |
Accrued interest payable | (517,000) | 474,000 |
Other liabilities | 6,695,000 | 1,357,000 |
Net cash used by operating activities | (27,026,000) | (19,697,000) |
Cash flows from investing activities | ||
Purchases of securities available for sale | 0 | (8,202,000) |
Maturities, calls and principal paydowns of securities available for sale | 6,316,000 | 13,444,000 |
Proceeds from sale of securities available for sale | 0 | 3,280,000 |
Purchases of restricted investments | (119,000) | (1,634,000) |
Net increase in SBA-PPP loans receivable, net | (229,646,000) | 0 |
Net increase in portfolio loans receivable, net | (41,703,000) | (56,272,000) |
Net disposals (purchases) of premises and equipment | (330,000) | 362,000 |
Proceeds from sales of foreclosed real estate | 0 | 50,000 |
Net cash used by investing activities | (265,482,000) | (48,972,000) |
Net increase (decrease) in: | ||
Noninterest-bearing deposits | 272,218,000 | 37,225,000 |
Interest-bearing deposits | 111,087,000 | 44,539,000 |
Securities sold under agreements to repurchase | 0 | (3,332,000) |
Federal funds purchased | 0 | (2,000,000) |
Federal Home Loan Bank advances, net | (6,666,000) | 36,889,000 |
Other borrowed funds | 1,955,000 | 0 |
Repurchase of common stock | (1,297,000) | 0 |
Proceeds from exercise of stock options | 100,000 | 153,000 |
Net cash provided by financing activities | 377,397,000 | 113,474,000 |
Net increase in cash and cash equivalents | 84,889,000 | 44,805,000 |
Cash and cash equivalents, beginning of year | 114,824,000 | 34,723,000 |
Cash and cash equivalents, end of period | 199,713,000 | 79,528,000 |
Noncash activities: | ||
Loans transferred to foreclosed real estate | 1,017,000 | 57,000 |
Change in unrealized gains on investments | 2,420,000 | 779,000 |
Change in fair value of cash flow hedging derivative | 0 | (5,000) |
Establishment of lease right-of-use asset | 0 | 5,158,000 |
Establishment of lease liability | 0 | 5,358,000 |
Cash paid during the period for: | ||
Taxes | 205,000 | 2,721,000 |
Interest | $ 7,950,000 | $ 6,858,000 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Business and Basis of Presentation | Capital Bancorp, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 1 - Nature of Business and Basis of Presentation Nature of operations: Capital Bancorp, Inc. is a Maryland corporation and bank holding company (the “Company”) for Capital Bank, N.A. (the “Bank”). The Company's primary operations are conducted by the Bank, which operates branches in Rockville, Columbia and North Bethesda, Maryland, Reston, Virginia, and the District of Columbia. The Bank is principally engaged in the business of investing in commercial, real estate, and credit card loans and attracting deposits. The Company originates residential mortgages for sale in the secondary market through Capital Bank Home Loans (“CBHL”), our residential mortgage banking arm, and issues credit cards through OpenSky ® , a secured, digitally-driven nationwide credit card platform. The Company formed Church Street Capital, LLC (“Church Street Capital”) in 2014 to provide short-term secured real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. In addition, the Company owns all of the stock of Capital Bancorp (MD) Statutory Trust I (the “Trust”). The Trust is a special purpose non-consolidated entity organized for the sole purpose of issuing trust preferred securities. Basis of presentation: The accompanying consolidated financial statements include the activity of the Company and its wholly-owned subsidiaries, the Bank and Church Street Capital. All intercompany transactions have been eliminated in consolidation. The Company reports its activities as four business segments. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and conform to general practices within the banking industry. Risks and Uncertainties The novel coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. In March 2020, the government and private sector responses to contain its spread began to significantly affect operations and continue to do so through the current period. It is likely operations will continue to be adversely affected, although such effects may vary significantly. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic which are most likely to affect future earnings, cash flows and financial condition in future quarters primarily include the nature and duration of the financial effects felt by our customers and the concomitant impact on the customers' ability to fulfill their financial obligations to the Company; as well as the potential decline of real estate values resulting from market disruption which may impair the values of collateral-dependent loans. Accordingly, estimates used in the preparation of the financial statements may be subject to significant adjustments in future periods. The greater the duration and severity of the pandemic, the more likely that estimates will be materially impacted by its effects. Significant Accounting Policies: The preparation of consolidated financial statements in accordance with GAAP requires estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The primary reference point for the estimates is historical experience and assumptions believed to be reasonable regarding the carrying value of certain assets and liabilities that are not readily available from other sources. Estimates are evaluated on an ongoing basis. Actual results may materially differ from these estimates under different assumptions or conditions. Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from financial institutions, interest bearing deposits with financial institutions and federal funds sold. Generally, federal funds are sold for one-day periods. Investment securities Investment securities are classified as available for sale and carried at fair value with unrealized gains and losses included in stockholders’ equity on an after-tax basis. Premiums and discounts on investment securities are amortized or accreted using the interest method. Changes in the fair value of debt securities available for sale are included in stockholders’ equity as unrealized gains and losses, net of the related tax effect. Unrealized losses are periodically reviewed to determine whether the loss represents an other than temporary impairment. Any unrealized losses judged to be other than a temporary impairment are charged to income. Loans held for sale Mortgage loans originated and intended for sale are recorded at fair value, determined individually, as of the balance sheet date. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method. The Company’s current practice is to sell residential mortgage loans on a servicing released basis, and, therefore, it has no servicing rights recorded for the value of such servicing. Interest on loans held for sale is credited to income based on the principal amounts outstanding. Upon sale and delivery, loans are legally isolated from the Company and the Company has no ability to restrict or constrain the ability of third‑party investors to pledge or exchange the mortgage loans. The Company does not have the entitlement or ability to repurchase the mortgage loans or unilaterally cause third‑party investors to put the mortgage loans back to the Company. Unrealized and realized gains on loan sales are determined using the specific-identification method and are recognized through mortgage banking activity in the Consolidated Statements of Income. The Company elected to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet. Small Business Administration Paycheck Protection Program The Small Business Administration Paycheck Protection Program (“SBA-PPP”) is one of the centerpieces of the Coronavirus Aid Relief and Economic Security Act (the “CARES Act”), which was passed on March 27, 2020 in response to the outbreak of coronavirus (“COVID-19”) and was supplemented with subsequent legislation. Overseen by the United States (“U.S.”) Treasury Department, the SBA-PPP offers cash-flow assistance to nonprofit and small business employers through guaranteed loans for expenses incurred between February 15, 2020, and August 8, 2020. Borrowers are eligible for forgiveness of principal and accrued interest on SBA-PPP loans to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period between eight and 24-weeks after the loan is made as long as the borrower retains its employees and their compensation levels. The CARES Act authorized the SBA to fully guarantee these loans. Due to the unique nature of these provisions, SBA-PPP loans have been disclosed as a separate balance sheet item. Origination fees received by the SBA are capitalized into the carrying amount of the loans. The deferred fee income, net of origination costs, is recognized over the life of the loan as an adjustment to yield using the effective interest method. SBA-PPP loans receivable as of June 30, 2020 totaled $236.3 million with $6.7 million in unearned fees and generated $1.0 million of interest income during the second quarter of 2020. Loans and the Allowance for Loan Losses Loans are stated at the principal amount outstanding, adjusted for deferred origination fees and costs, discounts on loans acquired, and the allowance for loan losses. Interest is accrued based on the loan principal balances and stated interest rates. Origination fees and costs are recognized as an adjustment to the related loan yield using approximate interest methods. The Company discontinues the accrual of interest when any portion of the principal and interest is 90 days past due and collateral is insufficient to discharge the debt in full. Generally, interest payments on nonaccrual loans are recorded as a reduction of the principal balance. Loans are considered impaired when, based on current information, management believes the Company will not collect all principal and interest payments according to contractual terms. Generally, loans are reviewed for impairment when the risk grade for a loan is downgraded to a classified asset category. The loans are evaluated for appropriate classification, accrual, impairment, and troubled debt restructure (“TDR”) status. If collection of principal is evaluated as doubtful, all payments are applied to principal. A modification of a loan is considered a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company may consider interest rate reductions, changes to payment terms, extensions of maturities and/or principal reductions. Loans are generally charged-off in part or in full when management determines the loan to be uncollectible. Factors for charge-off that may be considered include: repayments deemed to be projected beyond reasonable time frames, client bankruptcy and lack of assets, and/or collateral deficiencies. The allowance for loan losses is estimated to adequately provide for probable future losses on existing loans. The allowance consists of specific and general components. For loans that are classified as impaired, an allowance is established when the collateral value, if the loan is collateral dependent, or the discounted cash flows of the impaired loan is lower than the carrying value of that loan. The general component covers pools of nonclassified loans and is based on historical loss experience adjusted with qualitative factors such as: trends in volume and terms of loans; levels of, and trends in, delinquencies and non-accruals; effects of any changes in lending policies, experience, ability and depth of management; national and local economic trends and conditions (with a specific evaluation of COVID-19 impact); commitments and concentrations of credit; changes in the quality of the Company’s loan review system; and the volume of loans with identified incomplete financial documentation. Actual loan performance may differ materially from those estimates. A loss is recognized as a charge to the allowance when management believes that collection of the loan is unlikely. Collections of loans previously charged off are added to the allowance at the time of recovery. The Company determines the allowance for loan losses based on the accumulation of various components that are calculated independently in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 450 for pools of loans, and ASC 310 for TDRs and for individually evaluated loans. The process for determining an appropriate allowance for loan losses is based on a comprehensive and consistently applied analysis of the loan portfolio. The analysis considers all significant factors that affect the collectibility of the portfolio and supports the credit losses estimated by this process. It is important to recognize that the related process, methodology, and underlying assumptions require a substantial degree of judgment. Additional disclosure on the allowance for loan losses, qualitative factors, and the potential COVID-19 impact can be found in Part II, Item 1A - Risk Factors and Note 5 - Portfolio Loans Receivable . The allowance for loan losses for SBA-PPP loans were separately evaluated given the explicit government guarantee. This analysis, which incorporated historical experience with similar SBA guarantees and underwriting, concluded the likelihood of loss was remote and therefore no allowance for loan losses was assigned to these loans. Premises and equipment Premises and equipment are stated at cost less accumulated depreciation and amortization over two to seven years . Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related property. Leasehold improvements are amortized over the estimated useful lives of the improvements, approximately ten years , or the term of the lease, whichever is less. Expenditures for maintenance, repairs, and minor replacements are charged to noninterest expenses as incurred. Leases During the first quarter of 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 applies a right-of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected not to apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of 12 months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term. The Company is largely accounting for existing operating leases consistent with prior guidance except for the incremental balance sheet recognition for leases. The adoption of this standard resulted in the Company recognizing lease right-of-use assets and related lease liabilities totaling $5.5 million and $5.6 million , respectively, as of January 1, 2019. The difference between the lease assets and the lease liabilities was $146 thousand of deferred rent, which was reclassified to lease liabilities, and the remainder was recorded as an adjustment to retained earnings in the amount of $54 thousand . The adoption of this ASU did not have a significant impact on the Company’s consolidated statement of income. Additional information is included in Note 7 - Leases . Derivative Financial Instruments The Company enters into commitments to fund residential mortgage loans (interest rate locks) with the intention of selling them in the secondary market. The Company also enters into forward sales agreements for certain funded loans and loan commitments. The Company records unfunded commitments intended for loans held for sale and forward sales agreements at fair value with changes in fair value recorded as a component of mortgage banking revenue. Loans originated and intended for sale in the secondary market are carried at fair value. For pipeline loans which are not pre-sold to an investor, the Company endeavors to manage the interest rate risk on rate lock commitments by entering into forward sale contracts, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities, with changes in fair value recorded in mortgage banking revenue. The Company accounts for derivative instruments and hedging activities according to guidelines established in ASC 815-10, Accounting for Derivative Instruments and Hedging Activities , as amended. The Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income, net of deferred taxes. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value estimates, we endeavor to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines Level 1 valuations as those based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 valuations include inputs based on quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 valuations are based on at least one significant assumption not observable in the market, or significant management judgment or estimation, some of which may be internally developed. Financial assets that are recorded at fair value on a recurring basis include investment securities available for sale, loans held for sale, and derivative financial instruments. Financial liabilities that are recorded at fair value on a recurring basis are comprised of derivative financial instruments. Additional information is included in Note 8 - Fair Value . Income Taxes Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized when it is deemed more likely than not that the benefits of such deferred income taxes will be realized. Earnings per share: Earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for the dilutive effect of stock options and restricted stock using the treasury stock method. At June 30, 2020 and 2019 , there were 512,142 and 273,600 stock options, respectively, that were not included in the calculation as their effect would have been anti-dilutive. Comprehensive income: The Company reports as comprehensive income all changes in stockholders' equity during the year from sources other than stockholders. Other comprehensive income refers to all components (income, expenses, gains, and losses) of comprehensive income that are excluded from net income. The Company's only component of other comprehensive income is unrealized gains and losses on investment securities available for sale, net of income taxes. Information concerning the Company's accumulated other comprehensive income as of June 30, 2020 and December 31, 2019 is as follows: (in thousands) June 30, 2020 December 31, 2019 Unrealized gains on securities available for sale $ 2,438 $ 18 Deferred tax expense (671 ) (5 ) Total accumulated comprehensive income $ 1,767 $ 13 Recently issued accounting pronouncements: In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The FASB subsequently revised ASU 2019-10, which delayed implementation and the new standard is now effective for fiscal years beginning after December 15, 2022, including the interim periods within those fiscal years. The Company expects the provisions of this standard to impact the Company’s consolidated financial statements, in particular, the level of the reserve for credit losses. The Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor. In November 2019, the FASB issued guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies applying standards on current expected loan losses (“CECL”). The new effective dates will be fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. In addition, the FASB issued guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, “Financial Instruments-loan losses (Topic 326): Measurement of Loan Losses on Financial Instruments.” The amendments affect a variety of Topics in the Accounting Standards Codification. For entities that have not yet adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as an entity has adopted the amendments in ASU 2016-13. While the Company does not expect these amendments to have a material effect on its financial statements, the Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor. The Company will apply the ASU through a cumulative-effect adjustment to beginning retained earnings in the year of adoption. While early adoption has been permitted since first quarter 2019, the Company does not expect to early adopt. In addition to the allowance for loan losses, the Company will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. In April 2019, the FASB issued codification improvements to ASU Topic 326 - Financial Instruments - Credit Loss, Topic 815 - Derivatives and Hedging, and Subtopic 825-10 - Financial Instruments. This codification provides technical corrections and clarifies issues related to fair value hedges. The Company early adopted this guidance upon issuance, and it did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. 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.” This new ASU provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. This amended guidance and the ability to elect its temporary optional expedients and exceptions are effective for the Company as of March 12, 2020 through December 31, 2022. The adoption of ASU 2020-04 Topic 848 is not expected to have a material impact on the financial statements. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, (“agencies”) issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. Under ASC 310-40, “Receivables - Troubled Debt Restructurings by Creditors,” a restructuring of debt constitutes a TDR if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. Such modifications include short-term (e.g., six months) modifications that include payment deferrals of (i) principal and interest, (ii) interest only and (iii) principal only, fee waivers, extensions of repayment terms, or other delays in payment that are deemed insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. As of June 30, 2020 , the Company has offered payment deferrals for commercial and consumer customers for up to six months. The loan modifications offered to borrowers provided the borrower with payment relief in the form of reduced or deferred payments for up to 90 days (six months in selected instances) during which time interest is continuing to accrue. This interagency guidance may have a material impact on the Company’s financial statements; however, this impact cannot be quantified at this time. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows. Reclassifications: Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications had no material effect on net income or total stockholders' equity. Subsequent Events: Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 6 Months Ended |
Jun. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Cash and cash equivalents include cash and amounts due from banks, interest bearing deposits and federal funds sold. The Bank is required by regulations to maintain an average cash reserve balance based on a percentage of deposits. At June 30, 2020 and December 31, 2019 , the requirements were satisfied by amounts on deposit with the Federal Reserve Bank and cash on hand. |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The amortized cost and estimated fair value of investment securities at June 30, 2020 and December 31, 2019 are summarized as follows: Investment Securities Available for Sale (in thousands) June 30, 2020 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Available for sale Municipal 513 30 — 543 Corporate 2,260 21 (44 ) 2,237 Mortgage-backed securities 51,585 2,431 — 54,016 Total $ 54,358 $ 2,482 $ (44 ) $ 56,796 December 31, 2019 Available for sale U.S. government-sponsored enterprises $ 1,000 $ — $ (1 ) $ 999 Municipal 515 13 — 528 Corporate 2,542 46 (23 ) 2,565 Mortgage-backed securities 56,754 117 (135 ) 56,736 Total $ 60,811 $ 176 $ (159 ) $ 60,828 There were no securities sold during the six months ended June 30, 2020 . Proceeds from sales of securities sold during the six months ended June 30, 2019 were $3.3 million . The investment sales resulted in realized gains of $26 thousand for the three and six months ended June 30, 2019 . Information related to unrealized losses in the investment portfolio as of June 30, 2020 and December 31, 2019 is summarized as follows: Investment Securities Unrealized Losses (in thousands) Less than 12 months 12 months or longer Total June 30, 2020 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate 993 (7 ) 223 (37 ) 1,216 (44 ) Total $ 993 $ (7 ) $ 223 $ (37 ) $ 1,216 $ (44 ) December 31, 2019 U.S. government-sponsored enterprises $ — $ — $ 999 $ (1 ) $ 999 $ (1 ) Corporate — — 519 (23 ) 519 (23 ) Mortgage-backed securities 21,487 (78 ) 5,246 (57 ) 26,733 (135 ) Total $ 21,487 $ (78 ) $ 6,764 $ (81 ) $ 28,251 $ (159 ) At June 30, 2020 , there was one corporate security that had been in an unrealized loss position for greater than twelve months. At December 31, 2019 , there was one U.S. government-sponsored enterprises security, two corporate securities, and four mortgage-backed securities that had been in a loss position for greater than twelve months. Management believes that the unrealized loss at June 30, 2020 resulted from changes in the interest rates and current market conditions and not as a result of credit deterioration. Management has the ability and the intent to hold these investment securities until maturity or until they recover in value. A summary of pledged securities at June 30, 2020 and December 31, 2019 is shown below: Pledged Securities June 30, 2020 December 31, 2019 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Federal Home Loan Bank $ 52,098 $ 54,558 $ 1,508 $ 1,522 Contractual maturities of U.S. government-sponsored enterprises, municipals and corporate securities at June 30, 2020 and December 31, 2019 are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call premiums or prepayment penalties. Contractual Maturities June 30, 2020 December 31, 2019 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Within one year $ — $ — $ 1,542 $ 1,518 Over one to five years — — — — Over five to ten years 2,000 2,014 2,000 2,046 Over ten years 773 766 515 528 Mortgage-backed securities (1) 51,585 54,016 56,754 56,736 Total $ 54,358 $ 56,796 $ 60,811 $ 60,828 _______________ (1) Mortgage-backed securities contractually repay in monthly installments. |
SBA-PPP Loans Receivable
SBA-PPP Loans Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Loans and Leases Receivable Disclosure [Line Items] | |
SBA-PPP Loans Receivable | Major classifications of portfolio loans as are as follows: Portfolio Loan Categories (in thousands) June 30, 2020 December 31, 2019 Real estate: Residential $ 437,429 $ 427,926 Commercial 364,071 348,091 Construction 212,957 198,702 Commercial and Industrial 142,673 151,109 Credit card 54,732 46,412 Other consumer 947 1,285 Portfolio loans receivable, gross 1,212,809 1,173,525 Deferred origination fees, net (1,332 ) (2,404 ) Allowance for loan losses (18,680 ) (13,301 ) Portfolio loans receivable, net $ 1,192,797 $ 1,157,820 The Company makes loans to customers located primarily in the Washington, D.C. and Baltimore, Maryland metropolitan areas. Although the loan portfolio is diversified, its performance is influenced by the regional economy. The Company’s loan categories, excluding SBA-PPP loans, previously discussed in Note 4, are described below. Residential Real Estate Loans . One-to-four family mortgage loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor owned residences. Residential loans are originated through the commercial sales teams and Capital Bank Home Loans division. Residential loans also include home equity lines of credit. Owner-occupied residential real estate loans usually have fixed rates for five or seven years and adjust on an annual basis after the initial term based on a typical maturity of 30 years. Investor residential real estate loans are generally based on 25 -year terms with a balloon payment due after five years . Generally, the required minimum debt service coverage ratio is 115% . Residential real estate loans have represented a stable and growing portion of our loan portfolio. Commercial Real Estate Loans . Commercial real estate loans are originated on owner-occupied and non-owner-occupied properties. These loans may be more adversely affected by conditions in the real estate markets or in the general economy. Commercial loans that are secured by owner-occupied commercial real estate and primarily collateralized by operating cash flows are also included in this category of loans. As of June 30, 2020 , there were approximately $164.4 million of owner-occupied commercial real estate loans, representing approximately 45.1% of the commercial real estate portfolio. Commercial real estate loan terms are generally extended for 10 years or less and amortize generally over 25 years or less. The interest rates on commercial real estate loans generally have initial fixed rate terms that adjust typically at 5 years. Origination fees are routinely charged for services. Personal guarantees from the principal owners of the business are generally required, supported by a review of the principal owners’ personal financial statements and global debt service obligations. The properties securing the portfolio are somewhat diverse in terms and type. This diversity may help reduce the exposure to adverse economic events that affect any single industry. Construction Loans . Construction loans are offered within the Company’s Washington, D.C. and Baltimore, Maryland metropolitan operating areas to builders primarily for the construction of single-family homes and condominium and townhouse conversions or renovations and, to a lesser extent, to individuals. Construction loans typically have terms of 12 to 18 months. The Company frequently transitions the end purchaser to permanent financing or re-underwriting and sale into the secondary market through Capital Bank Home Loans. According to underwriting standards, the ratio of loan principal to collateral value, as established by an independent appraisal, cannot exceed 75% for investor-owned and 80% for owner-occupied properties. Exceptions are sometimes made. Semi-annual stress testing of the construction loan portfolio is conducted, and underlying real estate conditions are closely monitored as well as trends of sales outcomes versus underwriting valuations as part of ongoing risk management efforts. The borrowers’ progress in construction buildout is closely monitored and the original underwriting guidelines for construction milestones and completion timelines are strictly enforced. Commercial and Industrial . In addition to other loan products, general commercial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, letters of credit and other loan products are offered, primarily in target markets, and underwritten based on each borrower’s ability to service debt from income. These loans are primarily made based on the identified cash flows of the borrower and secondarily, on the underlying collateral provided by the borrower. Most commercial business loans are secured by a lien on general business assets including, among other things, available real estate, accounts receivable, promissory notes, inventory and equipment. Personal guaranties from the borrower or other principal are generally obtaine d. Credit Cards . Our OpenSky® credit card division provides credit cards on a nationwide basis to under-banked populations and those looking to rebuild their credit scores through a fully digital and mobile platform. Substantially all of the lines of credit are secured by a noninterest bearing demand account at the Bank in an amount equal to the full credit limit of the credit card. In addition, using a proprietary scoring model, which considers credit score and repayment history (typically a minimum of six months of on-time repayments, but ultimately determined on a case-by-case basis), the Bank has recently begun to offer certain customers an unsecured line in excess of their secured line of credit. Approximately $52.9 million and $43.3 million of the credit card balances were secured by savings deposits held by the Company as of June 30, 2020 and December 31, 2019 , respectively. Other Consumer Loans . To a limited extent and typically as an accommodation to existing customers, personal consumer loans such as term loans, car loans or boat loans are offered. Loans acquired through acquisitions are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan losses. In estimating the fair value of loans acquired, certain factors were considered, including the remaining lives of the acquired loans, payment history, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, and the net present value of cash flows expected. Discounts on loans that were not considered impaired at acquisition were recorded as an accretable discount, which will be recognized in interest income over the terms of the related loans. For loans considered to be impaired, the difference between the contractually required payments and expected cash flows was recorded as a nonaccretable discount. The remaining nonaccretable discounts on loans acquired was $285 thousand as of June 30, 2020 and December 31, 2019 . Loans with nonaccretable discounts had carrying values of $864 thousand as of June 30, 2020 and December 31, 2019 . Accretable discounts on loans acquired is summarized as follows: Accretable Discounts on Loans Acquired (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Accretable discount at beginning of period $ 233 $ 430 $ 429 $ 438 Less: Accretion and payoff of loans (3 ) (6 ) (199 ) (14 ) Accretable discount at end of period $ 230 $ 424 $ 230 $ 424 The following tables set forth the changes in the allowance for loan losses and an allocation of the allowance for loan losses by class for the three and six months ended June 30, 2020 and June 30, 2019 . Allowance for Loan Losses (in thousands) Beginning Provision for Charge-Offs Recoveries Ending Three Months Ended June 30, 2020 Real estate: Residential $ 4,971 $ 1,273 $ — $ — $ 6,244 Commercial 4,423 810 — — 5,233 Construction 3,032 920 — — 3,952 Commercial and Industrial 1,663 80 — — 1,743 Credit card 1,414 217 (144 ) 10 1,497 Other consumer 11 — — — 11 Total $ 15,514 $ 3,300 $ (144 ) $ 10 $ 18,680 Six Months Ended June 30, 2020 Real estate: Residential $ 4,135 $ 2,109 $ — $ — $ 6,244 Commercial 3,573 1,660 — — 5,233 Construction 2,668 1,284 — — 3,952 Commercial and Industrial 1,548 221 (26 ) — 1,743 Credit card 1,367 434 (323 ) 19 1,497 Other consumer 10 1 — — 11 Total $ 13,301 $ 5,709 $ (349 ) $ 19 $ 18,680 Allowance for Loan Losses (in thousands) Beginning Provision for Charge-Offs Recoveries Ending Three Months Ended June 30, 2019 Real estate: Residential $ 3,939 $ (24 ) $ — $ — $ 3,915 Commercial 2,894 217 — 5 3,116 Construction 2,062 142 — — 2,204 Commercial and Industrial 1,451 49 (28 ) — 1,472 Credit card 992 295 (90 ) 2 1,199 Other consumer 9 (2 ) — — 7 Total $ 11,347 $ 677 $ (118 ) $ 7 $ 11,913 Six Months Ended June 30, 2019 Real estate: Residential $ 3,541 $ 374 $ — $ — $ 3,915 Commercial 3,003 106 — 7 3,116 Construction 2,093 111 — — 2,204 Commercial and Industrial 1,578 (78 ) (28 ) — 1,472 Credit card 1,084 287 (183 ) 11 1,199 Other consumer 9 (2 ) — — 7 Total $ 11,308 $ 798 $ (211 ) $ 18 $ 11,913 The following tables present, by class and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for current economic factors. Allowance for Loan Loss Composition (in thousands) Allowance for Loan Losses Ending Balance Evaluated for Impairment: Outstanding Portfolio Loan Balances Evaluated for Impairment: June 30, 2020 Individually Collectively Individually Collectively Real estate: Residential $ — $ 6,244 $ 2,152 $ 435,277 Commercial — 5,233 974 363,097 Construction — 3,952 1,479 211,478 Commercial and Industrial 88 1,655 435 142,238 Credit card — 1,497 — 54,732 Other consumer — 11 — 947 Total $ 88 $ 18,592 $ 5,040 $ 1,207,769 December 31, 2019 Real estate: Residential $ — $ 4,135 $ 2,192 $ 425,734 Commercial — 3,572 1,433 346,658 Construction — 2,668 — 198,702 Commercial and Industrial 119 1,429 474 150,635 Credit card — 1,368 — 46,412 Other consumer — 10 — 1,285 Total $ 119 $ 13,182 $ 4,099 $ 1,169,426 Past due loans, segregated by age and class of loans, as of June 30, 2020 and December 31, 2019 were as follows: Portfolio Loans Past Due Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Current Loans Total Portfolio Loans Accruing Loans 90 or More Days Past Due Non-accrual Loans (in thousands) June 30, 2020 Real estate: Residential $ 4,640 $ 1,824 $ 6,464 $ 430,965 $ 437,429 $ 223 $ 2,152 Commercial 404 1,240 1,644 362,427 364,071 266 974 Construction 1,383 352 1,735 211,222 212,957 297 1,479 Commercial and Industrial 3,378 364 3,742 138,931 142,673 41 435 Credit card 2,313 3 2,316 52,416 54,732 3 — Other consumer — — — 947 947 — — Total $ 12,118 $ 3,783 $ 15,901 $ 1,196,908 $ 1,212,809 $ 830 $ 5,040 Acquired loans included in total above $ 119 $ 840 $ 959 $ 4,845 $ 5,804 $ 489 $ 400 December 31, 2019 Real estate: Residential $ 704 $ 2,436 $ 3,140 $ 424,786 $ 427,926 $ 374 $ 2,192 Commercial 275 1,671 1,946 346,145 348,091 237 1,433 Construction 756 — 756 197,946 198,702 — — Commercial and Industrial 172 353 525 150,584 151,109 — 474 Credit card 5,526 8 5,534 40,878 46,412 9 — Other consumer — — — 1,285 1,285 — — Total $ 7,433 $ 4,468 $ 11,901 $ 1,161,624 $ 1,173,525 $ 620 $ 4,099 Acquired loans included in total above $ 305 $ 1,243 $ 1,548 $ 4,873 $ 6,421 $ 464 $ 880 Loans secured by a one -to- four family residential property in the process of foreclosure at June 30, 2020 and December 31, 2019 was $12 thousand and $481 thousand , respectively. Impaired loans were as follows: Impaired Loans Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance (in thousands) June 30, 2020 Real estate: Residential $ 2,369 $ 2,152 $ — $ 2,152 $ — Commercial 1,099 974 — 974 — Construction 1,556 1,479 — 1,479 — Commercial and Industrial 581 201 234 435 88 Total $ 5,605 $ 4,806 $ 234 $ 5,040 $ 88 Acquired loans included above $ 555 $ 400 $ — $ 400 $ — December 31, 2019 Real estate: Residential $ 2,309 $ 2,192 $ — $ 2,192 $ — Commercial 1,477 1,433 — 1,433 — Commercial and Industrial 574 201 273 474 119 Total $ 4,360 $ 3,826 $ 273 $ 4,099 $ 119 Acquired loans included above $ 1,148 $ 880 $ — $ 880 $ — The following tables summarize interest recognized on impaired loans: Interest Recognized on Impaired Loans For the Three Months Ended June 30, 2020 For the Six Months Ended June 30, 2020 (in thousands) Average Interest Average Interest Real estate: Residential $ 2,373 $ 4 $ 2,376 $ 4 Commercial 1,122 — 1,123 3 Construction 1,556 — 1,556 9 Commercial and Industrial 746 — 747 — Total $ 5,797 $ 4 $ 5,802 $ 16 Interest Recognized on Impaired Loans For the Three Months Ended June 30, 2019 For the Six Months Ended June 30, 2019 (in thousands) Average Interest Average Interest Real estate: Residential $ 2,576 $ 3 $ 2,549 $ 3 Commercial 1,573 — 1,573 — Construction 2,175 1 2,175 1 Commercial and Industrial 1,517 1 1,517 1 Total $ 7,841 $ 5 $ 7,814 $ 5 Impaired loans include loans acquired on which management has recorded a nonaccretable discount. Credit quality indicators As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and the general economic conditions in the Company’s market. The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of loans characterized as classified is as follows: Special Mention A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers. Substandard A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans 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. Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management. Doubtful A doubtful loan has all the weaknesses inherent as a substandard loan 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. The following table presents the balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, and Doubtful loans: Portfolio Loan Classifications (in thousands) Pass (1) Special Mention Substandard Doubtful Total June 30, 2020 Real estate: Residential $ 429,307 $ 5,866 $ 2,256 $ — $ 437,429 Commercial 353,473 9,624 974 — 364,071 Construction 205,266 6,213 1,478 — 212,957 Commercial and Industrial 133,916 7,475 1,282 — 142,673 Credit card 54,732 — — — 54,732 Other consumer 947 — — — 947 Portfolio loans receivable, gross $ 1,177,641 $ 29,178 $ 5,990 $ — $ 1,212,809 December 31, 2019 Real estate: Residential $ 425,661 $ — $ 2,265 $ — $ 427,926 Commercial 340,313 6,345 1,433 — 348,091 Construction 198,702 — — — 198,702 Commercial and Industrial 145,178 4,505 1,426 — 151,109 Credit card 46,412 — — — 46,412 Other consumer 1,285 — — — 1,285 Portfolio loans receivable, gross $ 1,157,551 $ 10,850 $ 5,124 $ — $ 1,173,525 ________________________ (1) Category includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not graded. Impaired loans also include certain loans that have been modified in TDRs where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. The status of TDRs is as follows: Troubled Debt Restructurings (in thousands) Number of Contracts Recorded Investment June 30, 2020 Performing Nonperforming Total Real estate: Residential 3 $ — $ 145 $ 145 Commercial and Industrial 2 — 305 305 Total 5 $ — $ 450 $ 450 Acquired loans included in total above 3 $ — $ 145 $ 145 December 31, 2019 Real estate: Residential 3 $ — $ 145 $ 145 Commercial and Industrial 2 — 314 314 Total 5 $ — $ 459 $ 459 Acquired loans included in total above 3 $ — $ 145 $ 145 There were no new TDRs in the six months ended June 30, 2020 . The Company had no defaulted TDR loans over the last twelve months. Outstanding loan commitments were as follows: Loan Commitments (in thousands) June 30, 2020 December 31, 2019 Unused lines of credit Real Estate: Residential $ 13,320 $ 13,754 Residential - Home Equity 28,234 26,407 Commercial 16,806 31,411 Construction 92,734 114,999 Commercial and Industrial 57,479 36,442 Secured credit card 81,755 37,517 Personal 571 43 Total $ 290,899 $ 260,573 Commitments to originate residential loans held for sale $ 10,426 $ 2,646 Letters of credit $ 5,260 $ 5,305 Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a fee. The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments. The Company maintains an estimated reserve for off balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity for this account is as follows for the periods presented: Off Balance Sheet Reserve (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Balance at beginning of period $ 1,271 $ 1,043 $ 1,226 $ 1,053 Provision for off balance sheet credit commitments — 103 45 93 Balance at end of period $ 1,271 $ 1,146 $ 1,271 $ 1,146 The Company makes representations and warranties that loans sold to investors meet their program's guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program compliance, early payment default, and fraud or borrower misrepresentations. The Company maintains an estimated reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented: Mortgage Loan Put-back Reserve (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Balance at beginning of period $ 667 $ 515 $ 575 $ 501 Provision for mortgage loan put backs 156 43 262 67 Charge-offs — (31 ) (14 ) (41 ) Balance at end of period $ 823 $ 527 $ 823 $ 527 |
Paycheck Protection Program | |
Loans and Leases Receivable Disclosure [Line Items] | |
SBA-PPP Loans Receivable | Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), th e Small Business Administration’s Paycheck Protection Program provides forgivable loans to small businesses to enable them to maintain payroll, hire back employees who have been laid off, and cover applicable overhead. SBA-PPP loans have an interest rate of 1%, have 2 and 5 year terms, and carry a 100% guarantee of the SBA. The allowance for loan losses for SBA-PPP loans was separately evaluated given the explicit government guarantee. This analysis, which incorporated historical experience with similar SBA guarantees and underwriting, concluded the likelihood of loss was remote and therefore no allowance for loan losses was assigned to these loans. At June 30, 2020 , SBA-PPP loans receivable, which total $236.3 million , are all rated as pass credits, not past due, nonaccrual, TDR, or otherwise impaired. Unearned net fees associated with the SBA-PPP loans amount to $6.7 million . There were no outstanding commitments to extend additional SBA-PPP loans at June 30, 2020 . |
Portfolio Loans Receivable
Portfolio Loans Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Portfolio Loans Receivable | Major classifications of portfolio loans as are as follows: Portfolio Loan Categories (in thousands) June 30, 2020 December 31, 2019 Real estate: Residential $ 437,429 $ 427,926 Commercial 364,071 348,091 Construction 212,957 198,702 Commercial and Industrial 142,673 151,109 Credit card 54,732 46,412 Other consumer 947 1,285 Portfolio loans receivable, gross 1,212,809 1,173,525 Deferred origination fees, net (1,332 ) (2,404 ) Allowance for loan losses (18,680 ) (13,301 ) Portfolio loans receivable, net $ 1,192,797 $ 1,157,820 The Company makes loans to customers located primarily in the Washington, D.C. and Baltimore, Maryland metropolitan areas. Although the loan portfolio is diversified, its performance is influenced by the regional economy. The Company’s loan categories, excluding SBA-PPP loans, previously discussed in Note 4, are described below. Residential Real Estate Loans . One-to-four family mortgage loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor owned residences. Residential loans are originated through the commercial sales teams and Capital Bank Home Loans division. Residential loans also include home equity lines of credit. Owner-occupied residential real estate loans usually have fixed rates for five or seven years and adjust on an annual basis after the initial term based on a typical maturity of 30 years. Investor residential real estate loans are generally based on 25 -year terms with a balloon payment due after five years . Generally, the required minimum debt service coverage ratio is 115% . Residential real estate loans have represented a stable and growing portion of our loan portfolio. Commercial Real Estate Loans . Commercial real estate loans are originated on owner-occupied and non-owner-occupied properties. These loans may be more adversely affected by conditions in the real estate markets or in the general economy. Commercial loans that are secured by owner-occupied commercial real estate and primarily collateralized by operating cash flows are also included in this category of loans. As of June 30, 2020 , there were approximately $164.4 million of owner-occupied commercial real estate loans, representing approximately 45.1% of the commercial real estate portfolio. Commercial real estate loan terms are generally extended for 10 years or less and amortize generally over 25 years or less. The interest rates on commercial real estate loans generally have initial fixed rate terms that adjust typically at 5 years. Origination fees are routinely charged for services. Personal guarantees from the principal owners of the business are generally required, supported by a review of the principal owners’ personal financial statements and global debt service obligations. The properties securing the portfolio are somewhat diverse in terms and type. This diversity may help reduce the exposure to adverse economic events that affect any single industry. Construction Loans . Construction loans are offered within the Company’s Washington, D.C. and Baltimore, Maryland metropolitan operating areas to builders primarily for the construction of single-family homes and condominium and townhouse conversions or renovations and, to a lesser extent, to individuals. Construction loans typically have terms of 12 to 18 months. The Company frequently transitions the end purchaser to permanent financing or re-underwriting and sale into the secondary market through Capital Bank Home Loans. According to underwriting standards, the ratio of loan principal to collateral value, as established by an independent appraisal, cannot exceed 75% for investor-owned and 80% for owner-occupied properties. Exceptions are sometimes made. Semi-annual stress testing of the construction loan portfolio is conducted, and underlying real estate conditions are closely monitored as well as trends of sales outcomes versus underwriting valuations as part of ongoing risk management efforts. The borrowers’ progress in construction buildout is closely monitored and the original underwriting guidelines for construction milestones and completion timelines are strictly enforced. Commercial and Industrial . In addition to other loan products, general commercial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, letters of credit and other loan products are offered, primarily in target markets, and underwritten based on each borrower’s ability to service debt from income. These loans are primarily made based on the identified cash flows of the borrower and secondarily, on the underlying collateral provided by the borrower. Most commercial business loans are secured by a lien on general business assets including, among other things, available real estate, accounts receivable, promissory notes, inventory and equipment. Personal guaranties from the borrower or other principal are generally obtaine d. Credit Cards . Our OpenSky® credit card division provides credit cards on a nationwide basis to under-banked populations and those looking to rebuild their credit scores through a fully digital and mobile platform. Substantially all of the lines of credit are secured by a noninterest bearing demand account at the Bank in an amount equal to the full credit limit of the credit card. In addition, using a proprietary scoring model, which considers credit score and repayment history (typically a minimum of six months of on-time repayments, but ultimately determined on a case-by-case basis), the Bank has recently begun to offer certain customers an unsecured line in excess of their secured line of credit. Approximately $52.9 million and $43.3 million of the credit card balances were secured by savings deposits held by the Company as of June 30, 2020 and December 31, 2019 , respectively. Other Consumer Loans . To a limited extent and typically as an accommodation to existing customers, personal consumer loans such as term loans, car loans or boat loans are offered. Loans acquired through acquisitions are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan losses. In estimating the fair value of loans acquired, certain factors were considered, including the remaining lives of the acquired loans, payment history, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, and the net present value of cash flows expected. Discounts on loans that were not considered impaired at acquisition were recorded as an accretable discount, which will be recognized in interest income over the terms of the related loans. For loans considered to be impaired, the difference between the contractually required payments and expected cash flows was recorded as a nonaccretable discount. The remaining nonaccretable discounts on loans acquired was $285 thousand as of June 30, 2020 and December 31, 2019 . Loans with nonaccretable discounts had carrying values of $864 thousand as of June 30, 2020 and December 31, 2019 . Accretable discounts on loans acquired is summarized as follows: Accretable Discounts on Loans Acquired (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Accretable discount at beginning of period $ 233 $ 430 $ 429 $ 438 Less: Accretion and payoff of loans (3 ) (6 ) (199 ) (14 ) Accretable discount at end of period $ 230 $ 424 $ 230 $ 424 The following tables set forth the changes in the allowance for loan losses and an allocation of the allowance for loan losses by class for the three and six months ended June 30, 2020 and June 30, 2019 . Allowance for Loan Losses (in thousands) Beginning Provision for Charge-Offs Recoveries Ending Three Months Ended June 30, 2020 Real estate: Residential $ 4,971 $ 1,273 $ — $ — $ 6,244 Commercial 4,423 810 — — 5,233 Construction 3,032 920 — — 3,952 Commercial and Industrial 1,663 80 — — 1,743 Credit card 1,414 217 (144 ) 10 1,497 Other consumer 11 — — — 11 Total $ 15,514 $ 3,300 $ (144 ) $ 10 $ 18,680 Six Months Ended June 30, 2020 Real estate: Residential $ 4,135 $ 2,109 $ — $ — $ 6,244 Commercial 3,573 1,660 — — 5,233 Construction 2,668 1,284 — — 3,952 Commercial and Industrial 1,548 221 (26 ) — 1,743 Credit card 1,367 434 (323 ) 19 1,497 Other consumer 10 1 — — 11 Total $ 13,301 $ 5,709 $ (349 ) $ 19 $ 18,680 Allowance for Loan Losses (in thousands) Beginning Provision for Charge-Offs Recoveries Ending Three Months Ended June 30, 2019 Real estate: Residential $ 3,939 $ (24 ) $ — $ — $ 3,915 Commercial 2,894 217 — 5 3,116 Construction 2,062 142 — — 2,204 Commercial and Industrial 1,451 49 (28 ) — 1,472 Credit card 992 295 (90 ) 2 1,199 Other consumer 9 (2 ) — — 7 Total $ 11,347 $ 677 $ (118 ) $ 7 $ 11,913 Six Months Ended June 30, 2019 Real estate: Residential $ 3,541 $ 374 $ — $ — $ 3,915 Commercial 3,003 106 — 7 3,116 Construction 2,093 111 — — 2,204 Commercial and Industrial 1,578 (78 ) (28 ) — 1,472 Credit card 1,084 287 (183 ) 11 1,199 Other consumer 9 (2 ) — — 7 Total $ 11,308 $ 798 $ (211 ) $ 18 $ 11,913 The following tables present, by class and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for current economic factors. Allowance for Loan Loss Composition (in thousands) Allowance for Loan Losses Ending Balance Evaluated for Impairment: Outstanding Portfolio Loan Balances Evaluated for Impairment: June 30, 2020 Individually Collectively Individually Collectively Real estate: Residential $ — $ 6,244 $ 2,152 $ 435,277 Commercial — 5,233 974 363,097 Construction — 3,952 1,479 211,478 Commercial and Industrial 88 1,655 435 142,238 Credit card — 1,497 — 54,732 Other consumer — 11 — 947 Total $ 88 $ 18,592 $ 5,040 $ 1,207,769 December 31, 2019 Real estate: Residential $ — $ 4,135 $ 2,192 $ 425,734 Commercial — 3,572 1,433 346,658 Construction — 2,668 — 198,702 Commercial and Industrial 119 1,429 474 150,635 Credit card — 1,368 — 46,412 Other consumer — 10 — 1,285 Total $ 119 $ 13,182 $ 4,099 $ 1,169,426 Past due loans, segregated by age and class of loans, as of June 30, 2020 and December 31, 2019 were as follows: Portfolio Loans Past Due Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Current Loans Total Portfolio Loans Accruing Loans 90 or More Days Past Due Non-accrual Loans (in thousands) June 30, 2020 Real estate: Residential $ 4,640 $ 1,824 $ 6,464 $ 430,965 $ 437,429 $ 223 $ 2,152 Commercial 404 1,240 1,644 362,427 364,071 266 974 Construction 1,383 352 1,735 211,222 212,957 297 1,479 Commercial and Industrial 3,378 364 3,742 138,931 142,673 41 435 Credit card 2,313 3 2,316 52,416 54,732 3 — Other consumer — — — 947 947 — — Total $ 12,118 $ 3,783 $ 15,901 $ 1,196,908 $ 1,212,809 $ 830 $ 5,040 Acquired loans included in total above $ 119 $ 840 $ 959 $ 4,845 $ 5,804 $ 489 $ 400 December 31, 2019 Real estate: Residential $ 704 $ 2,436 $ 3,140 $ 424,786 $ 427,926 $ 374 $ 2,192 Commercial 275 1,671 1,946 346,145 348,091 237 1,433 Construction 756 — 756 197,946 198,702 — — Commercial and Industrial 172 353 525 150,584 151,109 — 474 Credit card 5,526 8 5,534 40,878 46,412 9 — Other consumer — — — 1,285 1,285 — — Total $ 7,433 $ 4,468 $ 11,901 $ 1,161,624 $ 1,173,525 $ 620 $ 4,099 Acquired loans included in total above $ 305 $ 1,243 $ 1,548 $ 4,873 $ 6,421 $ 464 $ 880 Loans secured by a one -to- four family residential property in the process of foreclosure at June 30, 2020 and December 31, 2019 was $12 thousand and $481 thousand , respectively. Impaired loans were as follows: Impaired Loans Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance (in thousands) June 30, 2020 Real estate: Residential $ 2,369 $ 2,152 $ — $ 2,152 $ — Commercial 1,099 974 — 974 — Construction 1,556 1,479 — 1,479 — Commercial and Industrial 581 201 234 435 88 Total $ 5,605 $ 4,806 $ 234 $ 5,040 $ 88 Acquired loans included above $ 555 $ 400 $ — $ 400 $ — December 31, 2019 Real estate: Residential $ 2,309 $ 2,192 $ — $ 2,192 $ — Commercial 1,477 1,433 — 1,433 — Commercial and Industrial 574 201 273 474 119 Total $ 4,360 $ 3,826 $ 273 $ 4,099 $ 119 Acquired loans included above $ 1,148 $ 880 $ — $ 880 $ — The following tables summarize interest recognized on impaired loans: Interest Recognized on Impaired Loans For the Three Months Ended June 30, 2020 For the Six Months Ended June 30, 2020 (in thousands) Average Interest Average Interest Real estate: Residential $ 2,373 $ 4 $ 2,376 $ 4 Commercial 1,122 — 1,123 3 Construction 1,556 — 1,556 9 Commercial and Industrial 746 — 747 — Total $ 5,797 $ 4 $ 5,802 $ 16 Interest Recognized on Impaired Loans For the Three Months Ended June 30, 2019 For the Six Months Ended June 30, 2019 (in thousands) Average Interest Average Interest Real estate: Residential $ 2,576 $ 3 $ 2,549 $ 3 Commercial 1,573 — 1,573 — Construction 2,175 1 2,175 1 Commercial and Industrial 1,517 1 1,517 1 Total $ 7,841 $ 5 $ 7,814 $ 5 Impaired loans include loans acquired on which management has recorded a nonaccretable discount. Credit quality indicators As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and the general economic conditions in the Company’s market. The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of loans characterized as classified is as follows: Special Mention A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers. Substandard A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans 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. Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management. Doubtful A doubtful loan has all the weaknesses inherent as a substandard loan 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. The following table presents the balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, and Doubtful loans: Portfolio Loan Classifications (in thousands) Pass (1) Special Mention Substandard Doubtful Total June 30, 2020 Real estate: Residential $ 429,307 $ 5,866 $ 2,256 $ — $ 437,429 Commercial 353,473 9,624 974 — 364,071 Construction 205,266 6,213 1,478 — 212,957 Commercial and Industrial 133,916 7,475 1,282 — 142,673 Credit card 54,732 — — — 54,732 Other consumer 947 — — — 947 Portfolio loans receivable, gross $ 1,177,641 $ 29,178 $ 5,990 $ — $ 1,212,809 December 31, 2019 Real estate: Residential $ 425,661 $ — $ 2,265 $ — $ 427,926 Commercial 340,313 6,345 1,433 — 348,091 Construction 198,702 — — — 198,702 Commercial and Industrial 145,178 4,505 1,426 — 151,109 Credit card 46,412 — — — 46,412 Other consumer 1,285 — — — 1,285 Portfolio loans receivable, gross $ 1,157,551 $ 10,850 $ 5,124 $ — $ 1,173,525 ________________________ (1) Category includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not graded. Impaired loans also include certain loans that have been modified in TDRs where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. The status of TDRs is as follows: Troubled Debt Restructurings (in thousands) Number of Contracts Recorded Investment June 30, 2020 Performing Nonperforming Total Real estate: Residential 3 $ — $ 145 $ 145 Commercial and Industrial 2 — 305 305 Total 5 $ — $ 450 $ 450 Acquired loans included in total above 3 $ — $ 145 $ 145 December 31, 2019 Real estate: Residential 3 $ — $ 145 $ 145 Commercial and Industrial 2 — 314 314 Total 5 $ — $ 459 $ 459 Acquired loans included in total above 3 $ — $ 145 $ 145 There were no new TDRs in the six months ended June 30, 2020 . The Company had no defaulted TDR loans over the last twelve months. Outstanding loan commitments were as follows: Loan Commitments (in thousands) June 30, 2020 December 31, 2019 Unused lines of credit Real Estate: Residential $ 13,320 $ 13,754 Residential - Home Equity 28,234 26,407 Commercial 16,806 31,411 Construction 92,734 114,999 Commercial and Industrial 57,479 36,442 Secured credit card 81,755 37,517 Personal 571 43 Total $ 290,899 $ 260,573 Commitments to originate residential loans held for sale $ 10,426 $ 2,646 Letters of credit $ 5,260 $ 5,305 Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a fee. The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments. The Company maintains an estimated reserve for off balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity for this account is as follows for the periods presented: Off Balance Sheet Reserve (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Balance at beginning of period $ 1,271 $ 1,043 $ 1,226 $ 1,053 Provision for off balance sheet credit commitments — 103 45 93 Balance at end of period $ 1,271 $ 1,146 $ 1,271 $ 1,146 The Company makes representations and warranties that loans sold to investors meet their program's guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program compliance, early payment default, and fraud or borrower misrepresentations. The Company maintains an estimated reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented: Mortgage Loan Put-back Reserve (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Balance at beginning of period $ 667 $ 515 $ 575 $ 501 Provision for mortgage loan put backs 156 43 262 67 Charge-offs — (31 ) (14 ) (41 ) Balance at end of period $ 823 $ 527 $ 823 $ 527 |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Company then either locks the loan and rate in with an investor and commits to deliver the loan if settlement occurs (Best Efforts) or commits to deliver the locked loan to an investor in a binding (Mandatory) delivery program. Certain loans under rate lock commitments are covered under forward sales contracts. Forward sales contracts are recorded at fair value with changes in fair value recorded in mortgage banking revenue. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments and delivery contracts by estimating the fair value of the underlying asset, which is impacted by current interest rates and takes into consideration the probability that the rate lock commitments will close or will be funded. The following table reports the commitment and fair value amounts on the outstanding derivatives: Derivatives (in thousands) June 30, 2020 December 31, 2019 Notional amount of open forward sales agreements $ 33,500 $ 61,000 Fair value of open forward delivery sales agreements (178 ) (125 ) Notional amount of open mandatory delivery commitments 2,082 22,888 Fair value of open mandatory delivery commitments 21 115 Notional amount of interest rate lock commitments 40,617 32,365 Fair value of interest rate lock commitments 227 122 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations and back office operations. As of January 1, 2019, the Company had leased five of its full service branches and five other locations for corporate/administration activities, operations, and loan production. All property leases under lease agreements have been been designated as operating leases. The Company does not have leases designated as finance leases. The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets are included in premises and equipment, and operating lease liabilities are included as other liabilities in the consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate used was 2.26% at June 30, 2020 and 2.24% at December 31, 2019 . The operating lease ROU asset also includes any lease pre-payments. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which the Company has elected to account for separately as the non-lease component amounts are readily determinable under most leases. As of June 30, 2020 , the Company’s lease ROU assets and related lease liabilities were $3.8 million and $4.2 million , respectively, compared to December 31, 2019 balances of $3.9 million of ROU assets and $4.3 million of lease liabilities, and have remaining terms ranging from 1 - 6 years , including extension options that the Company is reasonably certain will be exercised. As of June 30, 2020 , the Company had not entered into any material leases that have not yet commenced. The Company’s lease information is summarized as follows: Leases (in thousands) June 30, 2020 December 31, 2019 Lease Right of Use Asset: Lease asset $ 5,462 $ 5,158 Less: Accumulated amortization (1,655 ) (1,238 ) Net lease asset $ 3,807 $ 3,920 Lease Liability: Lease liability $ 4,163 $ 4,291 Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows: Lease Payment Obligations (in thousands) June 30, 2020 Amounts due in: 2020 $ 689 2021 1,408 2022 1,023 2023 777 2024 420 Total future lease payments 4,317 Discount of cash flows (154 ) Present value of net future lease payments $ 4,163 |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Generally accepted accounting principles define fair value, establish a framework for measuring fair value, recommend disclosures about fair value, and establish a hierarchy for determining fair value measurement. The hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities. The three levels are as follows: Level 1 - Inputs to the valuation method are quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 - Inputs to the valuation method include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and Level 3 - Inputs to the valuation method are unobservable and significant to the fair value measurement. Fair value measurements on a recurring basi s Investment securities available for sale - The fair values of the Company's investment securities available for sale are provided by an independent pricing service. The fair values of the Company's securities are determined based on quoted prices for similar securities under Level 2 inputs. Loans held for sale - The fair value of loans held for sale is determined using Level 2 inputs of quoted prices for a similar asset, adjusted for specific attributes of that loan. Derivative financial instruments - Derivative instruments used to hedge residential mortgage loans held for sale and the related interest rate lock commitments include forward commitments to sell mortgage loans and are reported at fair value utilizing Level 2 inputs. The fair values of derivative financial instruments are based on derivative market data inputs as of the valuation date and the underlying value of mortgage loans for rate lock commitments. The Company has categorized its financial instruments measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 as follows: Fair Value of Financial Instruments (in thousands) June 30, 2020 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs Investment securities available for sale Municipal 543 — 543 — Corporate 2,237 — 2,237 — Mortgage-backed securities 54,016 — 54,016 — Total $ 56,796 $ — $ 56,796 $ — Loans held for sale $ 116,969 $ — $ 116,969 $ — Derivative assets $ 248 $ — $ 248 $ — Derivative liabilities $ 178 $ — $ 178 $ — December 31, 2019 Investment securities available for sale U.S. government-sponsored enterprises $ 999 $ — $ 999 $ — Municipal 528 — 528 — Corporate 2,565 — 2,565 — Mortgage-backed securities 56,736 — 56,736 — Total $ 60,828 $ — $ 60,828 $ — Loans held for sale $ 71,030 $ — $ 71,030 $ — Derivative assets $ 237 $ — $ 237 $ — Derivative liabilities $ 125 $ — $ 125 $ — Financial instruments recorded using FASB ASC 825-10 Under FASB ASC 825-10, the Company may elect to report most financial instruments and certain other items at fair value on an instrument-by-instrument basis with changes in fair value reported in net income. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability or firm commitment or when certain specified reconsideration events occur. The fair value election, with respect to an item, may not be revoked once an election is made. The following table reflects the difference between the fair value carrying amount of loans held for sale, measured at fair value under FASB ASC 825-10, and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity: Fair Value of Loans Held for Sale (in thousands) June 30, 2020 December 31, 2019 Aggregate fair value $ 116,969 $ 71,030 Contractual principal 109,945 67,118 Difference $ 7,024 $ 3,912 The Company has elected to account for loans held for sale at fair value to eliminate the mismatch that would occur by recording changes in market value on derivative instruments used to hedge loans held for sale while carrying the loans at the lower of cost or market. Fair value measurements on a nonrecurring basis Impaired loans - The Company has measured impairment generally based on the fair value of the loan's collateral and discounted cash flow analysis. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values. As of June 30, 2020 and December 31, 2019 , the fair values consist of loan balances of $5.0 million and $4.1 million , with specific reserves of $88 thousand and $119 thousand , respectively. Foreclosed real estate - The Company's foreclosed real estate is measured at fair value less cost to sell. Fair value was determined based on offers and/or appraisals. Cost to sell the real estate was based on standard market factors. The Company has categorized its foreclosed real estate as Level 3. The Company has categorized its impaired loans and foreclosed real estate as follows: Fair Value of Impaired Loans and Foreclosed Real Estate (in thousands) June 30, 2020 December 31, 2019 Impaired loans Level 1 inputs $ — $ — Level 2 inputs — — Level 3 inputs 4,952 3,980 Total $ 4,952 $ 3,980 Foreclosed real estate Level 1 inputs $ — $ — Level 2 inputs — — Level 3 inputs 3,326 2,384 Total $ 3,326 $ 2,384 The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at June 30, 2020 and December 31, 2019 : Unobservable Inputs Valuation Technique Unobservable Inputs Range of Inputs Impaired Loans Appraised Value/Discounted Cash Flows Discounts to appraisals or cash flows for estimated holding and/or selling costs 11 to 25% Foreclosed Real Estate Appraised Value/Comparable Sales Discounts to appraisals for estimated holding and/or selling costs 11 to 25% Fair value of financial instruments Fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate the value is based upon the characteristics of the instruments and relevant market information. Financial instruments include cash, evidence of ownership in an entity, or contracts that convey or impose on an entity the contractual right or obligation to either receive or deliver cash for another financial instrument. The information used to determine fair value is highly subjective and judgmental in nature and, therefore, the results may not be precise. Subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality, and interest rates, all of which are subject to change. Since the fair value is estimated as of the balance sheet date, the amounts that will actually be realized or paid upon settlement or maturity on these various instruments could be significantly different. The fair value of the Company’s loan portfolio has always included a credit risk assumption in the determination of the fair value of its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company’s loan portfolio is initially fair valued using a segmented approach. The Company divides its loan portfolio into the following categories: variable rate loans, impaired loans, and all other loans. The results are then adjusted to account for credit risk as described above. However, under the new guidance, the Company believes a further credit risk discount must be applied through the use of a discounted cash flow model to compensate for illiquidity risk, based on certain assumptions included within the discounted cash flow model, primarily the use of discount rates that better capture inherent credit risk over the lifetime of a loan. This consideration of enhanced credit risk provides an estimated exit price for the Company’s loan portfolio. For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying values. Fair values for impaired loans are estimated using discounted cash flow models or based on the fair value of the underlying collateral. The fair value of cash and cash equivalents and investments in restricted stocks is the carrying amount. Restricted stock includes equity of the Federal Reserve and other banker’s banks. The fair value of noninterest bearing deposits and securities sold under agreements to repurchase is the carrying amount. The fair value of checking, savings, and money market deposits is the amount payable on demand at the reporting date. Fair value of fixed maturity term accounts and individual retirement accounts is estimated using rates currently offered for accounts of similar remaining maturities. The fair value of certificates of deposit in other financial institutions is estimated based on interest rates currently offered for deposits of similar remaining maturities. The fair value of borrowings is estimated by discounting the value of contractual cash flows using current market rates for borrowings with similar terms and remaining maturities. The fair value of outstanding loan commitments, unused lines of credit, and letters of credit are not included in the table since the carrying value generally approximates fair value. These instruments generate fees that approximate those currently charged to originate similar commitments. The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments. Fair Value of Selected Financial Instruments June 30, 2020 December 31, 2019 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Financial assets Level 1 Cash and due from banks $ 15,636 $ 15,636 $ 10,530 $ 10,530 Interest bearing deposits at other financial institutions 180,379 180,379 102,447 102,447 Federal funds sold 3,698 3,698 1,847 1,847 Level 3 Loans receivable, net (1) $ 1,422,443 $ 1,427,006 $ 1,157,820 $ 1,155,922 Restricted investments 4,085 4,085 3,966 3,966 Financial liabilities Level 1 Noninterest bearing deposits $ 563,995 $ 563,995 $ 291,777 $ 291,777 Level 3 Interest bearing deposits $ 1,044,731 $ 1,047,975 $ 933,644 $ 934,349 FHLB advances and other borrowed funds 42,948 42,974 47,645 47,678 ________________________ (1) Includes SBA-PPP loans and portfolio loans. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | The Company’s reportable segments represent product line divisions and are viewed separately for strategic planning purposes by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky ® (the Company’s credit card division) and the Corporate Office. The following schedule presents financial information for each reportable segment at June 30, 2020 . Segments For the Three Months Ended June 30, 2020 (in thousands) Commercial Bank CBHL OpenSky ® Corporate Eliminations Consolidated Interest income $ 16,345 $ 690 $ 4,375 $ 5,318 $ (4,728 ) $ 22,000 Interest expense 2,735 387 — 292 (38 ) 3,376 Net interest income 13,610 303 4,375 5,026 (4,690 ) 18,624 Provision for loan losses 3,083 — 217 — — 3,300 Net interest income after provision 10,527 303 4,158 5,026 (4,690 ) 15,324 Noninterest income 183 10,802 2,913 1 — 13,899 Noninterest expense 8,187 7,274 7,144 98 — 22,703 Net income before taxes $ 2,523 $ 3,831 $ (73 ) $ 4,929 $ (4,690 ) $ 6,520 Total assets $ 1,608,651 $ 118,026 $ 62,823 $ 164,459 $ (131,594 ) $ 1,822,365 For the Three Months Ended June 30, 2019 Interest income $ 14,521 $ 681 $ 4,593 $ 4,455 $ (3,961 ) $ 20,289 Interest expense 3,321 172 — 268 (3 ) 3,758 Net interest income 11,200 509 4,593 4,187 (3,958 ) 16,531 Provision for loan losses 488 — 189 — — 677 Net interest income after provision 10,712 509 4,404 4,187 (3,958 ) 15,854 Noninterest income 149 3,805 1,972 1 — 5,927 Noninterest expense 7,793 3,459 4,873 85 — 16,210 Net income before taxes $ 3,068 $ 855 $ 1,503 $ 4,103 $ (3,958 ) $ 5,571 Total assets $ 1,106,021 $ 49,157 $ 42,621 $ 142,831 $ (106,473 ) $ 1,234,157 Segments For the Six Months Ended June 30, 2020 (in thousands) Commercial Bank CBHL OpenSky ® Corporate Eliminations Consolidated Interest income $ 32,452 $ 1,055 $ 9,081 $ 8,780 $ (7,624 ) $ 43,744 Interest expense 6,322 596 — 570 (55 ) 7,433 Net interest income 26,130 459 9,081 8,210 (7,569 ) 36,311 Provision for loan losses 5,275 — 434 — — 5,709 Net interest income after provision 20,855 459 8,647 8,210 (7,569 ) 30,602 Noninterest income 409 15,147 4,921 2 — 20,479 Noninterest expense 16,891 10,722 12,726 208 — 40,547 Net income before taxes $ 4,373 $ 4,884 $ 842 $ 8,004 $ (7,569 ) $ 10,534 Total assets $ 1,608,651 $ 118,026 $ 62,823 $ 164,459 $ (131,594 ) $ 1,822,365 For the Six Months Ended June 30, 2019 Interest income $ 28,432 $ 1,032 $ 8,182 $ 8,264 (7,303 ) $ 38,607 Interest expense 6,563 243 — 529 (3 ) 7,332 Net interest income 21,869 789 8,182 7,735 (7,300 ) 31,275 Provision for loan losses 400 — 348 50 — 798 Net interest income after provision 21,469 789 7,834 7,685 (7,300 ) 30,477 Noninterest income 293 6,210 3,514 2 — 10,019 Noninterest expense 15,208 5,943 9,234 155 — 30,540 Net income before taxes $ 6,554 $ 1,056 $ 2,114 $ 7,532 $ (7,300 ) $ 9,956 Total assets $ 1,106,021 $ 49,157 $ 42,621 $ 142,831 $ (106,473 ) $ 1,234,157 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;padding-top:0px;text-align:left;padding-left:0px;text-indent:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Subsequent Events</font></div><div style="line-height:120%;padding-bottom:16px;padding-top:0px;text-align:justify;padding-left:0px;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;color:#000000;">Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.</font></div></div> |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of operations | Nature of operations: Capital Bancorp, Inc. is a Maryland corporation and bank holding company (the “Company”) for Capital Bank, N.A. (the “Bank”). The Company's primary operations are conducted by the Bank, which operates branches in Rockville, Columbia and North Bethesda, Maryland, Reston, Virginia, and the District of Columbia. The Bank is principally engaged in the business of investing in commercial, real estate, and credit card loans and attracting deposits. The Company originates residential mortgages for sale in the secondary market through Capital Bank Home Loans (“CBHL”), our residential mortgage banking arm, and issues credit cards through OpenSky ® , a secured, digitally-driven nationwide credit card platform. The Company formed Church Street Capital, LLC (“Church Street Capital”) in 2014 to provide short-term secured real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. In addition, the Company owns all of the stock of Capital Bancorp (MD) Statutory Trust I (the “Trust”). The Trust is a special purpose non-consolidated entity organized for the sole purpose of issuing trust preferred securities. |
Basis of presentation | Basis of presentation: The accompanying consolidated financial statements include the activity of the Company and its wholly-owned subsidiaries, the Bank and Church Street Capital. All intercompany transactions have been eliminated in consolidation. The Company reports its activities as four business segments. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and conform to general practices within the banking industry. Risks and Uncertainties The novel coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. In March 2020, the government and private sector responses to contain its spread began to significantly affect operations and continue to do so through the current period. It is likely operations will continue to be adversely affected, although such effects may vary significantly. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic which are most likely to affect future earnings, cash flows and financial condition in future quarters primarily include the nature and duration of the financial effects felt by our customers and the concomitant impact on the customers' ability to fulfill their financial obligations to the Company; as well as the potential decline of real estate values resulting from market disruption which may impair the values of collateral-dependent loans. Accordingly, estimates used in the preparation of the financial statements may be subject to significant adjustments in future periods. The greater the duration and severity of the pandemic, the more likely that estimates will be materially impacted by its effects. |
Cash and cash equivalents | Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from financial institutions, interest bearing deposits with financial institutions and federal funds sold. Generally, federal funds are sold for one-day periods. |
Investment securities | Investment securities Investment securities are classified as available for sale and carried at fair value with unrealized gains and losses included in stockholders’ equity on an after-tax basis. Premiums and discounts on investment securities are amortized or accreted using the interest method. Changes in the fair value of debt securities available for sale are included in stockholders’ equity as unrealized gains and losses, net of the related tax effect. Unrealized losses are periodically reviewed to determine whether the loss represents an other than temporary impairment. Any unrealized losses judged to be other than a temporary impairment are charged to income. |
Small Business Administration Paycheck Protection Program | Small Business Administration Paycheck Protection Program The Small Business Administration Paycheck Protection Program (“SBA-PPP”) is one of the centerpieces of the Coronavirus Aid Relief and Economic Security Act (the “CARES Act”), which was passed on March 27, 2020 in response to the outbreak of coronavirus (“COVID-19”) and was supplemented with subsequent legislation. Overseen by the United States (“U.S.”) Treasury Department, the SBA-PPP offers cash-flow assistance to nonprofit and small business employers through guaranteed loans for expenses incurred between February 15, 2020, and August 8, 2020. Borrowers are eligible for forgiveness of principal and accrued interest on SBA-PPP loans to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period between eight and 24-weeks after the loan is made as long as the borrower retains its employees and their compensation levels. The CARES Act authorized the SBA to fully guarantee these loans. |
Loans held for sale | Loans held for sale Mortgage loans originated and intended for sale are recorded at fair value, determined individually, as of the balance sheet date. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method. The Company’s current practice is to sell residential mortgage loans on a servicing released basis, and, therefore, it has no servicing rights recorded for the value of such servicing. Interest on loans held for sale is credited to income based on the principal amounts outstanding. Upon sale and delivery, loans are legally isolated from the Company and the Company has no ability to restrict or constrain the ability of third‑party investors to pledge or exchange the mortgage loans. The Company does not have the entitlement or ability to repurchase the mortgage loans or unilaterally cause third‑party investors to put the mortgage loans back to the Company. Unrealized and realized gains on loan sales are determined using the specific-identification method and are recognized through mortgage banking activity in the Consolidated Statements of Income. The Company elected to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet. |
Loans and Allowance for Loan Losses | Loans and the Allowance for Loan Losses Loans are stated at the principal amount outstanding, adjusted for deferred origination fees and costs, discounts on loans acquired, and the allowance for loan losses. Interest is accrued based on the loan principal balances and stated interest rates. Origination fees and costs are recognized as an adjustment to the related loan yield using approximate interest methods. The Company discontinues the accrual of interest when any portion of the principal and interest is 90 days past due and collateral is insufficient to discharge the debt in full. Generally, interest payments on nonaccrual loans are recorded as a reduction of the principal balance. Loans are considered impaired when, based on current information, management believes the Company will not collect all principal and interest payments according to contractual terms. Generally, loans are reviewed for impairment when the risk grade for a loan is downgraded to a classified asset category. The loans are evaluated for appropriate classification, accrual, impairment, and troubled debt restructure (“TDR”) status. If collection of principal is evaluated as doubtful, all payments are applied to principal. A modification of a loan is considered a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company may consider interest rate reductions, changes to payment terms, extensions of maturities and/or principal reductions. Loans are generally charged-off in part or in full when management determines the loan to be uncollectible. Factors for charge-off that may be considered include: repayments deemed to be projected beyond reasonable time frames, client bankruptcy and lack of assets, and/or collateral deficiencies. The allowance for loan losses is estimated to adequately provide for probable future losses on existing loans. The allowance consists of specific and general components. For loans that are classified as impaired, an allowance is established when the collateral value, if the loan is collateral dependent, or the discounted cash flows of the impaired loan is lower than the carrying value of that loan. The general component covers pools of nonclassified loans and is based on historical loss experience adjusted with qualitative factors such as: trends in volume and terms of loans; levels of, and trends in, delinquencies and non-accruals; effects of any changes in lending policies, experience, ability and depth of management; national and local economic trends and conditions (with a specific evaluation of COVID-19 impact); commitments and concentrations of credit; changes in the quality of the Company’s loan review system; and the volume of loans with identified incomplete financial documentation. Actual loan performance may differ materially from those estimates. A loss is recognized as a charge to the allowance when management believes that collection of the loan is unlikely. Collections of loans previously charged off are added to the allowance at the time of recovery. The Company determines the allowance for loan losses based on the accumulation of various components that are calculated independently in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 450 for pools of loans, and ASC 310 for TDRs and for |
Premises and equipment | Premises and equipment Premises and equipment are stated at cost less accumulated depreciation and amortization over two to seven years . Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related property. Leasehold improvements are amortized over the estimated useful lives of the improvements, approximately ten years , or the term of the lease, whichever is less. Expenditures for maintenance, repairs, and minor replacements are charged to noninterest expenses as incurred. |
Leases | Leases During the first quarter of 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 applies a right-of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected not to apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of 12 months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term. |
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into commitments to fund residential mortgage loans (interest rate locks) with the intention of selling them in the secondary market. The Company also enters into forward sales agreements for certain funded loans and loan commitments. The Company records unfunded commitments intended for loans held for sale and forward sales agreements at fair value with changes in fair value recorded as a component of mortgage banking revenue. Loans originated and intended for sale in the secondary market are carried at fair value. For pipeline loans which are not pre-sold to an investor, the Company endeavors to manage the interest rate risk on rate lock commitments by entering into forward sale contracts, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities, with changes in fair value recorded in mortgage banking revenue. The Company accounts for derivative instruments and hedging activities according to guidelines established in ASC 815-10, Accounting for Derivative Instruments and Hedging Activities , as amended. The Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income, net of deferred taxes. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value estimates, we endeavor to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines Level 1 valuations as those based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 valuations include inputs based on quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 valuations are based on at least one significant assumption not observable in the market, or significant management judgment or estimation, some of which may be internally developed. |
Income Taxes | Income Taxes |
Earnings per share | Earnings per share: Earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net income by |
Comprehensive income | Comprehensive income: The Company reports as comprehensive income all changes in stockholders' equity during the year from sources other than stockholders. Other comprehensive income refers to all components (income, expenses, gains, and losses) of comprehensive income that are excluded from net income. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements: In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The FASB subsequently revised ASU 2019-10, which delayed implementation and the new standard is now effective for fiscal years beginning after December 15, 2022, including the interim periods within those fiscal years. The Company expects the provisions of this standard to impact the Company’s consolidated financial statements, in particular, the level of the reserve for credit losses. The Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor. In November 2019, the FASB issued guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies applying standards on current expected loan losses (“CECL”). The new effective dates will be fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. In addition, the FASB issued guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, “Financial Instruments-loan losses (Topic 326): Measurement of Loan Losses on Financial Instruments.” The amendments affect a variety of Topics in the Accounting Standards Codification. For entities that have not yet adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as an entity has adopted the amendments in ASU 2016-13. While the Company does not expect these amendments to have a material effect on its financial statements, the Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor. The Company will apply the ASU through a cumulative-effect adjustment to beginning retained earnings in the year of adoption. While early adoption has been permitted since first quarter 2019, the Company does not expect to early adopt. In addition to the allowance for loan losses, the Company will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. In April 2019, the FASB issued codification improvements to ASU Topic 326 - Financial Instruments - Credit Loss, Topic 815 - Derivatives and Hedging, and Subtopic 825-10 - Financial Instruments. This codification provides technical corrections and clarifies issues related to fair value hedges. The Company early adopted this guidance upon issuance, and it did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. 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.” This new ASU provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. This amended guidance and the ability to elect its temporary optional expedients and exceptions are effective for the Company as of March 12, 2020 through December 31, 2022. The adoption of ASU 2020-04 Topic 848 is not expected to have a material impact on the financial statements. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, (“agencies”) issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. Under ASC 310-40, “Receivables - Troubled Debt Restructurings by Creditors,” a restructuring of debt constitutes a TDR if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. Such modifications include short-term (e.g., six months) modifications that include payment deferrals of (i) principal and interest, (ii) interest only and (iii) principal only, fee waivers, extensions of repayment terms, or other delays in payment that are deemed insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. As of June 30, 2020 , the Company has offered payment deferrals for commercial and consumer customers for up to six months. The loan modifications offered to borrowers provided the borrower with payment relief in the form of reduced or deferred payments for up to 90 days (six months in selected instances) during which time interest is continuing to accrue. This interagency guidance may have a material impact on the Company’s financial statements; however, this impact cannot be quantified at this time. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows. |
Reclassifications | Reclassifications: Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications had no material effect on net income or total stockholders' equity. |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Information concerning the Company's accumulated other comprehensive income as of June 30, 2020 and December 31, 2019 is as follows: (in thousands) June 30, 2020 December 31, 2019 Unrealized gains on securities available for sale $ 2,438 $ 18 Deferred tax expense (671 ) (5 ) Total accumulated comprehensive income $ 1,767 $ 13 |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Unrealized Gain (Loss) on Investments | The amortized cost and estimated fair value of investment securities at June 30, 2020 and December 31, 2019 are summarized as follows: Investment Securities Available for Sale (in thousands) June 30, 2020 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Available for sale Municipal 513 30 — 543 Corporate 2,260 21 (44 ) 2,237 Mortgage-backed securities 51,585 2,431 — 54,016 Total $ 54,358 $ 2,482 $ (44 ) $ 56,796 December 31, 2019 Available for sale U.S. government-sponsored enterprises $ 1,000 $ — $ (1 ) $ 999 Municipal 515 13 — 528 Corporate 2,542 46 (23 ) 2,565 Mortgage-backed securities 56,754 117 (135 ) 56,736 Total $ 60,811 $ 176 $ (159 ) $ 60,828 |
Schedule of Investment Portfolio in Continuous Unrealized Loss Position, Fair Value | Information related to unrealized losses in the investment portfolio as of June 30, 2020 and December 31, 2019 is summarized as follows: Investment Securities Unrealized Losses (in thousands) Less than 12 months 12 months or longer Total June 30, 2020 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate 993 (7 ) 223 (37 ) 1,216 (44 ) Total $ 993 $ (7 ) $ 223 $ (37 ) $ 1,216 $ (44 ) December 31, 2019 U.S. government-sponsored enterprises $ — $ — $ 999 $ (1 ) $ 999 $ (1 ) Corporate — — 519 (23 ) 519 (23 ) Mortgage-backed securities 21,487 (78 ) 5,246 (57 ) 26,733 (135 ) Total $ 21,487 $ (78 ) $ 6,764 $ (81 ) $ 28,251 $ (159 ) |
Schedule of Pledged Securities | A summary of pledged securities at June 30, 2020 and December 31, 2019 is shown below: Pledged Securities June 30, 2020 December 31, 2019 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Federal Home Loan Bank $ 52,098 $ 54,558 $ 1,508 $ 1,522 |
Investments Classified by Contractual Maturity Date | Contractual maturities of U.S. government-sponsored enterprises, municipals and corporate securities at June 30, 2020 and December 31, 2019 are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call premiums or prepayment penalties. Contractual Maturities June 30, 2020 December 31, 2019 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Within one year $ — $ — $ 1,542 $ 1,518 Over one to five years — — — — Over five to ten years 2,000 2,014 2,000 2,046 Over ten years 773 766 515 528 Mortgage-backed securities (1) 51,585 54,016 56,754 56,736 Total $ 54,358 $ 56,796 $ 60,811 $ 60,828 _______________ (1) Mortgage-backed securities contractually repay in monthly installments. |
Portfolio Loans Receivable (Tab
Portfolio Loans Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Loans Receivable | Major classifications of portfolio loans as are as follows: Portfolio Loan Categories (in thousands) June 30, 2020 December 31, 2019 Real estate: Residential $ 437,429 $ 427,926 Commercial 364,071 348,091 Construction 212,957 198,702 Commercial and Industrial 142,673 151,109 Credit card 54,732 46,412 Other consumer 947 1,285 Portfolio loans receivable, gross 1,212,809 1,173,525 Deferred origination fees, net (1,332 ) (2,404 ) Allowance for loan losses (18,680 ) (13,301 ) Portfolio loans receivable, net $ 1,192,797 $ 1,157,820 |
Schedule Of Activity In Accretable Discounts On Loans Acquired | Accretable discounts on loans acquired is summarized as follows: Accretable Discounts on Loans Acquired (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Accretable discount at beginning of period $ 233 $ 430 $ 429 $ 438 Less: Accretion and payoff of loans (3 ) (6 ) (199 ) (14 ) Accretable discount at end of period $ 230 $ 424 $ 230 $ 424 |
Allowance for Credit Losses on Loans Receivables | The following tables set forth the changes in the allowance for loan losses and an allocation of the allowance for loan losses by class for the three and six months ended June 30, 2020 and June 30, 2019 . Allowance for Loan Losses (in thousands) Beginning Provision for Charge-Offs Recoveries Ending Three Months Ended June 30, 2020 Real estate: Residential $ 4,971 $ 1,273 $ — $ — $ 6,244 Commercial 4,423 810 — — 5,233 Construction 3,032 920 — — 3,952 Commercial and Industrial 1,663 80 — — 1,743 Credit card 1,414 217 (144 ) 10 1,497 Other consumer 11 — — — 11 Total $ 15,514 $ 3,300 $ (144 ) $ 10 $ 18,680 Six Months Ended June 30, 2020 Real estate: Residential $ 4,135 $ 2,109 $ — $ — $ 6,244 Commercial 3,573 1,660 — — 5,233 Construction 2,668 1,284 — — 3,952 Commercial and Industrial 1,548 221 (26 ) — 1,743 Credit card 1,367 434 (323 ) 19 1,497 Other consumer 10 1 — — 11 Total $ 13,301 $ 5,709 $ (349 ) $ 19 $ 18,680 Allowance for Loan Losses (in thousands) Beginning Provision for Charge-Offs Recoveries Ending Three Months Ended June 30, 2019 Real estate: Residential $ 3,939 $ (24 ) $ — $ — $ 3,915 Commercial 2,894 217 — 5 3,116 Construction 2,062 142 — — 2,204 Commercial and Industrial 1,451 49 (28 ) — 1,472 Credit card 992 295 (90 ) 2 1,199 Other consumer 9 (2 ) — — 7 Total $ 11,347 $ 677 $ (118 ) $ 7 $ 11,913 Six Months Ended June 30, 2019 Real estate: Residential $ 3,541 $ 374 $ — $ — $ 3,915 Commercial 3,003 106 — 7 3,116 Construction 2,093 111 — — 2,204 Commercial and Industrial 1,578 (78 ) (28 ) — 1,472 Credit card 1,084 287 (183 ) 11 1,199 Other consumer 9 (2 ) — — 7 Total $ 11,308 $ 798 $ (211 ) $ 18 $ 11,913 The following tables present, by class and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for current economic factors. Allowance for Loan Loss Composition (in thousands) Allowance for Loan Losses Ending Balance Evaluated for Impairment: Outstanding Portfolio Loan Balances Evaluated for Impairment: June 30, 2020 Individually Collectively Individually Collectively Real estate: Residential $ — $ 6,244 $ 2,152 $ 435,277 Commercial — 5,233 974 363,097 Construction — 3,952 1,479 211,478 Commercial and Industrial 88 1,655 435 142,238 Credit card — 1,497 — 54,732 Other consumer — 11 — 947 Total $ 88 $ 18,592 $ 5,040 $ 1,207,769 December 31, 2019 Real estate: Residential $ — $ 4,135 $ 2,192 $ 425,734 Commercial — 3,572 1,433 346,658 Construction — 2,668 — 198,702 Commercial and Industrial 119 1,429 474 150,635 Credit card — 1,368 — 46,412 Other consumer — 10 — 1,285 Total $ 119 $ 13,182 $ 4,099 $ 1,169,426 |
Past Due Loans Receivables | Past due loans, segregated by age and class of loans, as of June 30, 2020 and December 31, 2019 were as follows: Portfolio Loans Past Due Loans 30-89 Days Past Due Loans 90 or More Days Past Due Total Past Due Loans Current Loans Total Portfolio Loans Accruing Loans 90 or More Days Past Due Non-accrual Loans (in thousands) June 30, 2020 Real estate: Residential $ 4,640 $ 1,824 $ 6,464 $ 430,965 $ 437,429 $ 223 $ 2,152 Commercial 404 1,240 1,644 362,427 364,071 266 974 Construction 1,383 352 1,735 211,222 212,957 297 1,479 Commercial and Industrial 3,378 364 3,742 138,931 142,673 41 435 Credit card 2,313 3 2,316 52,416 54,732 3 — Other consumer — — — 947 947 — — Total $ 12,118 $ 3,783 $ 15,901 $ 1,196,908 $ 1,212,809 $ 830 $ 5,040 Acquired loans included in total above $ 119 $ 840 $ 959 $ 4,845 $ 5,804 $ 489 $ 400 December 31, 2019 Real estate: Residential $ 704 $ 2,436 $ 3,140 $ 424,786 $ 427,926 $ 374 $ 2,192 Commercial 275 1,671 1,946 346,145 348,091 237 1,433 Construction 756 — 756 197,946 198,702 — — Commercial and Industrial 172 353 525 150,584 151,109 — 474 Credit card 5,526 8 5,534 40,878 46,412 9 — Other consumer — — — 1,285 1,285 — — Total $ 7,433 $ 4,468 $ 11,901 $ 1,161,624 $ 1,173,525 $ 620 $ 4,099 Acquired loans included in total above $ 305 $ 1,243 $ 1,548 $ 4,873 $ 6,421 $ 464 $ 880 |
Impaired Loans Receivables | Impaired loans were as follows: Impaired Loans Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance (in thousands) June 30, 2020 Real estate: Residential $ 2,369 $ 2,152 $ — $ 2,152 $ — Commercial 1,099 974 — 974 — Construction 1,556 1,479 — 1,479 — Commercial and Industrial 581 201 234 435 88 Total $ 5,605 $ 4,806 $ 234 $ 5,040 $ 88 Acquired loans included above $ 555 $ 400 $ — $ 400 $ — December 31, 2019 Real estate: Residential $ 2,309 $ 2,192 $ — $ 2,192 $ — Commercial 1,477 1,433 — 1,433 — Commercial and Industrial 574 201 273 474 119 Total $ 4,360 $ 3,826 $ 273 $ 4,099 $ 119 Acquired loans included above $ 1,148 $ 880 $ — $ 880 $ — The following tables summarize interest recognized on impaired loans: Interest Recognized on Impaired Loans For the Three Months Ended June 30, 2020 For the Six Months Ended June 30, 2020 (in thousands) Average Interest Average Interest Real estate: Residential $ 2,373 $ 4 $ 2,376 $ 4 Commercial 1,122 — 1,123 3 Construction 1,556 — 1,556 9 Commercial and Industrial 746 — 747 — Total $ 5,797 $ 4 $ 5,802 $ 16 Interest Recognized on Impaired Loans For the Three Months Ended June 30, 2019 For the Six Months Ended June 30, 2019 (in thousands) Average Interest Average Interest Real estate: Residential $ 2,576 $ 3 $ 2,549 $ 3 Commercial 1,573 — 1,573 — Construction 2,175 1 2,175 1 Commercial and Industrial 1,517 1 1,517 1 Total $ 7,841 $ 5 $ 7,814 $ 5 |
Loans Receivables Credit Quality Indicators | The following table presents the balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, and Doubtful loans: Portfolio Loan Classifications (in thousands) Pass (1) Special Mention Substandard Doubtful Total June 30, 2020 Real estate: Residential $ 429,307 $ 5,866 $ 2,256 $ — $ 437,429 Commercial 353,473 9,624 974 — 364,071 Construction 205,266 6,213 1,478 — 212,957 Commercial and Industrial 133,916 7,475 1,282 — 142,673 Credit card 54,732 — — — 54,732 Other consumer 947 — — — 947 Portfolio loans receivable, gross $ 1,177,641 $ 29,178 $ 5,990 $ — $ 1,212,809 December 31, 2019 Real estate: Residential $ 425,661 $ — $ 2,265 $ — $ 427,926 Commercial 340,313 6,345 1,433 — 348,091 Construction 198,702 — — — 198,702 Commercial and Industrial 145,178 4,505 1,426 — 151,109 Credit card 46,412 — — — 46,412 Other consumer 1,285 — — — 1,285 Portfolio loans receivable, gross $ 1,157,551 $ 10,850 $ 5,124 $ — $ 1,173,525 ________________________ (1) |
Troubled Debt Restructurings on Loans Receivables | The status of TDRs is as follows: Troubled Debt Restructurings (in thousands) Number of Contracts Recorded Investment June 30, 2020 Performing Nonperforming Total Real estate: Residential 3 $ — $ 145 $ 145 Commercial and Industrial 2 — 305 305 Total 5 $ — $ 450 $ 450 Acquired loans included in total above 3 $ — $ 145 $ 145 December 31, 2019 Real estate: Residential 3 $ — $ 145 $ 145 Commercial and Industrial 2 — 314 314 Total 5 $ — $ 459 $ 459 Acquired loans included in total above 3 $ — $ 145 $ 145 |
Schedule Of Outstanding Loan Commitments | Outstanding loan commitments were as follows: Loan Commitments (in thousands) June 30, 2020 December 31, 2019 Unused lines of credit Real Estate: Residential $ 13,320 $ 13,754 Residential - Home Equity 28,234 26,407 Commercial 16,806 31,411 Construction 92,734 114,999 Commercial and Industrial 57,479 36,442 Secured credit card 81,755 37,517 Personal 571 43 Total $ 290,899 $ 260,573 Commitments to originate residential loans held for sale $ 10,426 $ 2,646 Letters of credit $ 5,260 $ 5,305 |
Schedule of Credit Losses for Financing Receivables | The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments. The Company maintains an estimated reserve for off balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity for this account is as follows for the periods presented: Off Balance Sheet Reserve (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Balance at beginning of period $ 1,271 $ 1,043 $ 1,226 $ 1,053 Provision for off balance sheet credit commitments — 103 45 93 Balance at end of period $ 1,271 $ 1,146 $ 1,271 $ 1,146 The Company makes representations and warranties that loans sold to investors meet their program's guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program compliance, early payment default, and fraud or borrower misrepresentations. The Company maintains an estimated reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented: Mortgage Loan Put-back Reserve (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Balance at beginning of period $ 667 $ 515 $ 575 $ 501 Provision for mortgage loan put backs 156 43 262 67 Charge-offs — (31 ) (14 ) (41 ) Balance at end of period $ 823 $ 527 $ 823 $ 527 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table reports the commitment and fair value amounts on the outstanding derivatives: Derivatives (in thousands) June 30, 2020 December 31, 2019 Notional amount of open forward sales agreements $ 33,500 $ 61,000 Fair value of open forward delivery sales agreements (178 ) (125 ) Notional amount of open mandatory delivery commitments 2,082 22,888 Fair value of open mandatory delivery commitments 21 115 Notional amount of interest rate lock commitments 40,617 32,365 Fair value of interest rate lock commitments 227 122 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | The Company’s lease information is summarized as follows: Leases (in thousands) June 30, 2020 December 31, 2019 Lease Right of Use Asset: Lease asset $ 5,462 $ 5,158 Less: Accumulated amortization (1,655 ) (1,238 ) Net lease asset $ 3,807 $ 3,920 Lease Liability: Lease liability $ 4,163 $ 4,291 |
Lessee, Operating Lease, Liability, Maturity | Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows: Lease Payment Obligations (in thousands) June 30, 2020 Amounts due in: 2020 $ 689 2021 1,408 2022 1,023 2023 777 2024 420 Total future lease payments 4,317 Discount of cash flows (154 ) Present value of net future lease payments $ 4,163 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company has categorized its financial instruments measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 as follows: Fair Value of Financial Instruments (in thousands) June 30, 2020 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs Investment securities available for sale Municipal 543 — 543 — Corporate 2,237 — 2,237 — Mortgage-backed securities 54,016 — 54,016 — Total $ 56,796 $ — $ 56,796 $ — Loans held for sale $ 116,969 $ — $ 116,969 $ — Derivative assets $ 248 $ — $ 248 $ — Derivative liabilities $ 178 $ — $ 178 $ — December 31, 2019 Investment securities available for sale U.S. government-sponsored enterprises $ 999 $ — $ 999 $ — Municipal 528 — 528 — Corporate 2,565 — 2,565 — Mortgage-backed securities 56,736 — 56,736 — Total $ 60,828 $ — $ 60,828 $ — Loans held for sale $ 71,030 $ — $ 71,030 $ — Derivative assets $ 237 $ — $ 237 $ — Derivative liabilities $ 125 $ — $ 125 $ — |
Schedule of Fair Value of Loans Held For Sale | The following table reflects the difference between the fair value carrying amount of loans held for sale, measured at fair value under FASB ASC 825-10, and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity: Fair Value of Loans Held for Sale (in thousands) June 30, 2020 December 31, 2019 Aggregate fair value $ 116,969 $ 71,030 Contractual principal 109,945 67,118 Difference $ 7,024 $ 3,912 |
Fair Value Measurements, Nonrecurring | The Company has categorized its impaired loans and foreclosed real estate as follows: Fair Value of Impaired Loans and Foreclosed Real Estate (in thousands) June 30, 2020 December 31, 2019 Impaired loans Level 1 inputs $ — $ — Level 2 inputs — — Level 3 inputs 4,952 3,980 Total $ 4,952 $ 3,980 Foreclosed real estate Level 1 inputs $ — $ — Level 2 inputs — — Level 3 inputs 3,326 2,384 Total $ 3,326 $ 2,384 |
Fair Value Measurement Inputs and Valuation Techniques | The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at June 30, 2020 and December 31, 2019 : Unobservable Inputs Valuation Technique Unobservable Inputs Range of Inputs Impaired Loans Appraised Value/Discounted Cash Flows Discounts to appraisals or cash flows for estimated holding and/or selling costs 11 to 25% Foreclosed Real Estate Appraised Value/Comparable Sales Discounts to appraisals for estimated holding and/or selling costs 11 to 25% |
Fair Value Measurements, Recurring and Nonrecurring | The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments. Fair Value of Selected Financial Instruments June 30, 2020 December 31, 2019 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Financial assets Level 1 Cash and due from banks $ 15,636 $ 15,636 $ 10,530 $ 10,530 Interest bearing deposits at other financial institutions 180,379 180,379 102,447 102,447 Federal funds sold 3,698 3,698 1,847 1,847 Level 3 Loans receivable, net (1) $ 1,422,443 $ 1,427,006 $ 1,157,820 $ 1,155,922 Restricted investments 4,085 4,085 3,966 3,966 Financial liabilities Level 1 Noninterest bearing deposits $ 563,995 $ 563,995 $ 291,777 $ 291,777 Level 3 Interest bearing deposits $ 1,044,731 $ 1,047,975 $ 933,644 $ 934,349 FHLB advances and other borrowed funds 42,948 42,974 47,645 47,678 ________________________ (1) Includes SBA-PPP loans and portfolio loans. |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following schedule presents financial information for each reportable segment at June 30, 2020 . Segments For the Three Months Ended June 30, 2020 (in thousands) Commercial Bank CBHL OpenSky ® Corporate Eliminations Consolidated Interest income $ 16,345 $ 690 $ 4,375 $ 5,318 $ (4,728 ) $ 22,000 Interest expense 2,735 387 — 292 (38 ) 3,376 Net interest income 13,610 303 4,375 5,026 (4,690 ) 18,624 Provision for loan losses 3,083 — 217 — — 3,300 Net interest income after provision 10,527 303 4,158 5,026 (4,690 ) 15,324 Noninterest income 183 10,802 2,913 1 — 13,899 Noninterest expense 8,187 7,274 7,144 98 — 22,703 Net income before taxes $ 2,523 $ 3,831 $ (73 ) $ 4,929 $ (4,690 ) $ 6,520 Total assets $ 1,608,651 $ 118,026 $ 62,823 $ 164,459 $ (131,594 ) $ 1,822,365 For the Three Months Ended June 30, 2019 Interest income $ 14,521 $ 681 $ 4,593 $ 4,455 $ (3,961 ) $ 20,289 Interest expense 3,321 172 — 268 (3 ) 3,758 Net interest income 11,200 509 4,593 4,187 (3,958 ) 16,531 Provision for loan losses 488 — 189 — — 677 Net interest income after provision 10,712 509 4,404 4,187 (3,958 ) 15,854 Noninterest income 149 3,805 1,972 1 — 5,927 Noninterest expense 7,793 3,459 4,873 85 — 16,210 Net income before taxes $ 3,068 $ 855 $ 1,503 $ 4,103 $ (3,958 ) $ 5,571 Total assets $ 1,106,021 $ 49,157 $ 42,621 $ 142,831 $ (106,473 ) $ 1,234,157 Segments For the Six Months Ended June 30, 2020 (in thousands) Commercial Bank CBHL OpenSky ® Corporate Eliminations Consolidated Interest income $ 32,452 $ 1,055 $ 9,081 $ 8,780 $ (7,624 ) $ 43,744 Interest expense 6,322 596 — 570 (55 ) 7,433 Net interest income 26,130 459 9,081 8,210 (7,569 ) 36,311 Provision for loan losses 5,275 — 434 — — 5,709 Net interest income after provision 20,855 459 8,647 8,210 (7,569 ) 30,602 Noninterest income 409 15,147 4,921 2 — 20,479 Noninterest expense 16,891 10,722 12,726 208 — 40,547 Net income before taxes $ 4,373 $ 4,884 $ 842 $ 8,004 $ (7,569 ) $ 10,534 Total assets $ 1,608,651 $ 118,026 $ 62,823 $ 164,459 $ (131,594 ) $ 1,822,365 For the Six Months Ended June 30, 2019 Interest income $ 28,432 $ 1,032 $ 8,182 $ 8,264 (7,303 ) $ 38,607 Interest expense 6,563 243 — 529 (3 ) 7,332 Net interest income 21,869 789 8,182 7,735 (7,300 ) 31,275 Provision for loan losses 400 — 348 50 — 798 Net interest income after provision 21,469 789 7,834 7,685 (7,300 ) 30,477 Noninterest income 293 6,210 3,514 2 — 10,019 Noninterest expense 15,208 5,943 9,234 155 — 30,540 Net income before taxes $ 6,554 $ 1,056 $ 2,114 $ 7,532 $ (7,300 ) $ 9,956 Total assets $ 1,106,021 $ 49,157 $ 42,621 $ 142,831 $ (106,473 ) $ 1,234,157 |
Nature of Business and Basis _4
Nature of Business and Basis of Presentation - Basis of presentation (Details) - segment | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||
Number of reportable segments | 4 | 4 |
Nature of Business and Basis _5
Nature of Business and Basis of Presentation - SBA Paycheck Protection Program (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable, gross | $ 1,212,809 | $ 1,173,525 |
Commercial | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable, gross | 142,673 | $ 151,109 |
Commercial | Paycheck Protection Program | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable, gross | 236,300 | |
Unearned net fees | (6,700) | |
Interest income | $ 1,000 |
Nature of Business and Basis _6
Nature of Business and Basis of Presentation - Premises and equipment (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Premises and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Premises and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 7 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Nature of Business and Basis _7
Nature of Business and Basis of Presentation - Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use asset | $ 5,462 | $ 5,158 | |
Operating lease, liability | 4,163 | 4,291 | |
Adjustment to retained earnings | $ (89,151) | $ (81,618) | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use asset | $ 5,500 | ||
Operating lease, liability | 5,600 | ||
Accounting Standards Update 2016-02 | Revision of Prior Period, Accounting Standards Update, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Reclassification of deferred rent | 146 | ||
Adjustment to retained earnings | $ 54 |
Nature of Business and Basis _8
Nature of Business and Basis of Presentation - Earnings per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 512,142 | 273,600 |
Nature of Business and Basis _9
Nature of Business and Basis of Presentation - Comprehensive Income (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated comprehensive income | $ 1,767 | $ 13 |
Accumulated Net Investment Gain (Loss) Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss) before tax | 2,438 | 18 |
Deferred tax benefit (expense) | (671) | (5) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated comprehensive income | $ 1,767 | $ 13 |
Investment Securities - Amortiz
Investment Securities - Amortized cost to Estimated Fair Value (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | $ 54,358,000 | $ 54,358,000 | $ 60,811,000 | ||
Unrealized Gains | 2,482,000 | 2,482,000 | 176,000 | ||
Unrealized Losses | (44,000) | (44,000) | (159,000) | ||
Fair Value | 56,796,000 | 56,796,000 | 60,828,000 | ||
Proceeds from sales of securities sold | 0 | $ 3,280,000 | |||
Realized gains on investment sales | 0 | $ 26,000 | 0 | $ 26,000 | |
U.S. government-sponsored enterprises | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 1,000,000 | ||||
Unrealized Gains | 0 | ||||
Unrealized Losses | (1,000) | ||||
Fair Value | 999,000 | ||||
Municipal | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 513,000 | 513,000 | 515,000 | ||
Unrealized Gains | 30,000 | 30,000 | 13,000 | ||
Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 543,000 | 543,000 | 528,000 | ||
Corporate | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 2,260,000 | 2,260,000 | 2,542,000 | ||
Unrealized Gains | 21,000 | 21,000 | 46,000 | ||
Unrealized Losses | (44,000) | (44,000) | (23,000) | ||
Fair Value | 2,237,000 | 2,237,000 | 2,565,000 | ||
Mortgage-backed securities | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Amortized Cost | 51,585,000 | 51,585,000 | 56,754,000 | ||
Unrealized Gains | 2,431,000 | 2,431,000 | 117,000 | ||
Unrealized Losses | 0 | 0 | (135,000) | ||
Fair Value | $ 54,016,000 | $ 54,016,000 | $ 56,736,000 |
Investment Securities - Unreali
Investment Securities - Unrealized Losses (Details) $ in Thousands | Jun. 30, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Fair Value | ||
Less than 12 months | $ 993 | $ 21,487 |
12 months or longer | 223 | 6,764 |
Total | 1,216 | 28,251 |
Unrealized Losses | ||
Less than 12 months | (7) | (78) |
12 months or longer | (37) | (81) |
Total | (44) | (159) |
U.S. government-sponsored enterprises | ||
Fair Value | ||
Less than 12 months | 0 | |
12 months or longer | 999 | |
Total | 999 | |
Unrealized Losses | ||
Less than 12 months | 0 | |
12 months or longer | (1) | |
Total | $ (1) | |
Number of securities in a loss position for greater than twelve months | security | 1 | |
Corporate | ||
Fair Value | ||
Less than 12 months | 993 | $ 0 |
12 months or longer | 223 | 519 |
Total | 1,216 | 519 |
Unrealized Losses | ||
Less than 12 months | (7) | 0 |
12 months or longer | (37) | (23) |
Total | $ (44) | $ (23) |
Number of securities in a loss position for greater than twelve months | security | 1 | 2 |
Mortgage-backed securities | ||
Fair Value | ||
Less than 12 months | $ 21,487 | |
12 months or longer | 5,246 | |
Total | 26,733 | |
Unrealized Losses | ||
Less than 12 months | (78) | |
12 months or longer | (57) | |
Total | $ (135) | |
Number of securities in a loss position for greater than twelve months | security | 4 |
Investment Securities - Pledged
Investment Securities - Pledged Securities (Details) - Federal Home Loan Bank - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Securities pledged | $ 52,098 | $ 1,508 |
Fair Value | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Securities pledged | $ 54,558 | $ 1,522 |
Investment Securities - by Matu
Investment Securities - by Maturity Dates (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Within one year | $ 0 | $ 1,542 |
Over one to five years | 0 | 0 |
Over five to ten years | 2,000 | 2,000 |
Over ten years | 773 | 515 |
Amortized Cost | 54,358 | 60,811 |
Fair Value | ||
Within one year | 0 | 1,518 |
Over one to five years | 0 | 0 |
Over five to ten years | 2,014 | 2,046 |
Over ten years | 766 | 528 |
Fair Value | 56,796 | 60,828 |
Mortgage-backed securities | ||
Amortized Cost | ||
Amortized Cost | 51,585 | 56,754 |
Fair Value | ||
Fair Value | $ 54,016 | $ 56,736 |
SBA-PPP Loans Receivable (Detai
SBA-PPP Loans Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable, gross | $ 1,212,809 | $ 1,173,525 |
Commercial | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable, gross | 142,673 | $ 151,109 |
Commercial | Paycheck Protection Program | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable, gross | 236,300 | |
Unearned net fees | $ (6,700) |
Portfolio Loans Receivable - Cl
Portfolio Loans Receivable - Classification of Loans (Details) $ in Thousands | 6 Months Ended | |||||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | $ 1,212,809 | $ 1,173,525 | ||||
Deferred origination fees, net | (1,332) | (2,404) | ||||
Allowance for loan losses | (18,680) | $ (15,514) | (13,301) | $ (11,913) | $ (11,347) | $ (11,308) |
Portfolio loans receivable, net | 1,192,797 | 1,157,820 | ||||
Residential | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | 437,429 | 427,926 | ||||
Allowance for loan losses | (6,244) | (4,971) | (4,135) | (3,915) | (3,939) | (3,541) |
Commercial | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | 142,673 | 151,109 | ||||
Allowance for loan losses | (1,743) | (1,663) | (1,548) | (1,472) | (1,451) | (1,578) |
Commercial | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | 364,071 | 348,091 | ||||
Allowance for loan losses | $ (5,233) | (4,423) | (3,573) | (3,116) | (2,894) | (3,003) |
Fixed interest rate term | 5 years | |||||
Initial commitment term | 10 years | |||||
Amortization period | 25 years | |||||
Commercial | Paycheck Protection Program | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | $ 236,300 | |||||
Construction | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | 212,957 | 198,702 | ||||
Allowance for loan losses | (3,952) | (3,032) | (2,668) | (2,204) | (2,062) | (2,093) |
Consumer | Credit card | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | 54,732 | 46,412 | ||||
Allowance for loan losses | (1,497) | (1,414) | (1,367) | (1,199) | (992) | (1,084) |
Consumer | Credit card | Savings Deposits | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | $ 52,900 | 43,300 | ||||
Repayment history used for scoring model | 6 months | |||||
Consumer | Other consumer | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | $ 947 | 1,285 | ||||
Allowance for loan losses | $ (11) | $ (11) | $ (10) | $ (7) | $ (9) | $ (9) |
Minimum | Construction | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Initial commitment term | 12 months | |||||
Maximum | Construction | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Initial commitment term | 18 months | |||||
Owner Occupied Real Estate | Residential | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Initial commitment term | 30 years | |||||
Owner Occupied Real Estate | Commercial | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Loans receivable, gross | $ 164,400 | |||||
Percent of real estate portfolio | 45.10% | |||||
Owner Occupied Real Estate | Construction | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Principal to collateral value ratio, percent | 80.00% | |||||
Owner Occupied Real Estate | Minimum | Residential | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Fixed interest rate term | 5 years | |||||
Owner Occupied Real Estate | Maximum | Residential | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Fixed interest rate term | 7 years | |||||
Investor Real Estate | Residential | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Initial commitment term | 25 years | |||||
Balloon payment period | 5 years | |||||
Debt service coverage ratio | 1.15 | |||||
Investor Real Estate | Construction | Real estate: | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Principal to collateral value ratio, percent | 75.00% |
Portfolio Loans Receivable - Ac
Portfolio Loans Receivable - Accretable Discount (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Receivables [Abstract] | |||||
Remaining nonaccretable discounts on loans acquired | $ 285 | $ 285 | $ 285 | ||
Carrying value of loans with nonaccretable discounts | $ 864 | ||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||||
Accretable discount at beginning of period | 233 | $ 430 | 429 | $ 438 | |
Less: Accretion and payoff of loans | (3) | (6) | (199) | (14) | |
Accretable discount at end of period | $ 230 | $ 424 | $ 230 | $ 424 |
Portfolio Loans Receivable - Al
Portfolio Loans Receivable - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Balance at beginning of year | $ 15,514 | $ 11,347 | $ 13,301 | $ 11,308 | |
Provision for loan losses | 3,300 | 677 | 5,709 | 798 | |
Charge-Offs | (144) | (118) | (349) | (211) | |
Recoveries | 10 | 7 | 19 | 18 | |
Balance at end of year | 18,680 | 11,913 | 18,680 | 11,913 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 88 | 88 | $ 119 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 18,592 | 18,592 | 13,182 | ||
Outstanding Loan Balances Evaluated for Impairment: Individually | 5,040 | 5,040 | 4,099 | ||
Outstanding Loan Balances Evaluated for Impairment: Collectively | 1,207,769 | 1,207,769 | 1,169,426 | ||
Residential | Real estate: | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Balance at beginning of year | 4,971 | 3,939 | 4,135 | 3,541 | |
Provision for loan losses | 1,273 | (24) | 2,109 | 374 | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Balance at end of year | 6,244 | 3,915 | 6,244 | 3,915 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 6,244 | 6,244 | 4,135 | ||
Outstanding Loan Balances Evaluated for Impairment: Individually | 2,152 | 2,152 | 2,192 | ||
Outstanding Loan Balances Evaluated for Impairment: Collectively | 435,277 | 435,277 | 425,734 | ||
Commercial | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Balance at beginning of year | 1,663 | 1,451 | 1,548 | 1,578 | |
Provision for loan losses | 80 | 49 | 221 | (78) | |
Charge-Offs | 0 | (28) | (26) | (28) | |
Recoveries | 0 | 0 | 0 | 0 | |
Balance at end of year | 1,743 | 1,472 | 1,743 | 1,472 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 88 | 88 | 119 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 1,655 | 1,655 | 1,429 | ||
Outstanding Loan Balances Evaluated for Impairment: Individually | 435 | 435 | 474 | ||
Outstanding Loan Balances Evaluated for Impairment: Collectively | 142,238 | 142,238 | 150,635 | ||
Commercial | Real estate: | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Balance at beginning of year | 4,423 | 2,894 | 3,573 | 3,003 | |
Provision for loan losses | 810 | 217 | 1,660 | 106 | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 5 | 0 | 7 | |
Balance at end of year | 5,233 | 3,116 | 5,233 | 3,116 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 5,233 | 5,233 | 3,572 | ||
Outstanding Loan Balances Evaluated for Impairment: Individually | 974 | 974 | 1,433 | ||
Outstanding Loan Balances Evaluated for Impairment: Collectively | 363,097 | 363,097 | 346,658 | ||
Construction | Real estate: | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Balance at beginning of year | 3,032 | 2,062 | 2,668 | 2,093 | |
Provision for loan losses | 920 | 142 | 1,284 | 111 | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Balance at end of year | 3,952 | 2,204 | 3,952 | 2,204 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 3,952 | 3,952 | 2,668 | ||
Outstanding Loan Balances Evaluated for Impairment: Individually | 1,479 | 1,479 | 0 | ||
Outstanding Loan Balances Evaluated for Impairment: Collectively | 211,478 | 211,478 | 198,702 | ||
Consumer | Credit card | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Balance at beginning of year | 1,414 | 992 | 1,367 | 1,084 | |
Provision for loan losses | 217 | 295 | 434 | 287 | |
Charge-Offs | (144) | (90) | (323) | (183) | |
Recoveries | 10 | 2 | 19 | 11 | |
Balance at end of year | 1,497 | 1,199 | 1,497 | 1,199 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 1,497 | 1,497 | 1,368 | ||
Outstanding Loan Balances Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Outstanding Loan Balances Evaluated for Impairment: Collectively | 54,732 | 54,732 | 46,412 | ||
Consumer | Other consumer | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Balance at beginning of year | 11 | 9 | 10 | 9 | |
Provision for loan losses | 0 | (2) | 1 | (2) | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Balance at end of year | 11 | $ 7 | 11 | $ 7 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 11 | 11 | 10 | ||
Outstanding Loan Balances Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Outstanding Loan Balances Evaluated for Impairment: Collectively | $ 947 | $ 947 | $ 1,285 |
Portfolio Loans Receivable - Pa
Portfolio Loans Receivable - Past Due Financing Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | $ 15,901 | $ 11,901 |
Current Loans | 1,196,908 | 1,161,624 |
Total Portfolio Loans | 1,212,809 | 1,173,525 |
Accruing Loans 90 or More Days Past Due | 830 | 620 |
Non-accrual Loans | 5,040 | 4,099 |
Residential Real Estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Portfolio Loans | 12 | 481 |
Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 12,118 | 7,433 |
Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 3,783 | 4,468 |
Acquired loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 959 | 1,548 |
Current Loans | 4,845 | 4,873 |
Total Portfolio Loans | 5,804 | 6,421 |
Accruing Loans 90 or More Days Past Due | 489 | 464 |
Non-accrual Loans | 400 | 880 |
Acquired loans | Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 119 | 305 |
Acquired loans | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 840 | 1,243 |
Residential | Real estate: | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 6,464 | 3,140 |
Current Loans | 430,965 | 424,786 |
Total Portfolio Loans | 437,429 | 427,926 |
Accruing Loans 90 or More Days Past Due | 223 | 374 |
Non-accrual Loans | 2,152 | 2,192 |
Residential | Real estate: | Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 4,640 | 704 |
Residential | Real estate: | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 1,824 | 2,436 |
Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 3,742 | 525 |
Current Loans | 138,931 | 150,584 |
Total Portfolio Loans | 142,673 | 151,109 |
Accruing Loans 90 or More Days Past Due | 41 | 0 |
Non-accrual Loans | 435 | 474 |
Commercial | Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 3,378 | 172 |
Commercial | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 364 | 353 |
Commercial | Real estate: | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 1,644 | 1,946 |
Current Loans | 362,427 | 346,145 |
Total Portfolio Loans | 364,071 | 348,091 |
Accruing Loans 90 or More Days Past Due | 266 | 237 |
Non-accrual Loans | 974 | 1,433 |
Commercial | Real estate: | Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 404 | 275 |
Commercial | Real estate: | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 1,240 | 1,671 |
Construction | Real estate: | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 1,735 | 756 |
Current Loans | 211,222 | 197,946 |
Total Portfolio Loans | 212,957 | 198,702 |
Accruing Loans 90 or More Days Past Due | 297 | 0 |
Non-accrual Loans | 1,479 | 0 |
Construction | Real estate: | Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 1,383 | 756 |
Construction | Real estate: | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 352 | 0 |
Consumer | Credit card | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 2,316 | 5,534 |
Current Loans | 52,416 | 40,878 |
Total Portfolio Loans | 54,732 | 46,412 |
Accruing Loans 90 or More Days Past Due | 3 | 9 |
Non-accrual Loans | 0 | 0 |
Consumer | Credit card | Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 2,313 | 5,526 |
Consumer | Credit card | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 3 | 8 |
Consumer | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 0 | 0 |
Current Loans | 947 | 1,285 |
Total Portfolio Loans | 947 | 1,285 |
Accruing Loans 90 or More Days Past Due | 0 | 0 |
Non-accrual Loans | 0 | 0 |
Consumer | Other consumer | Loans 30-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | 0 | 0 |
Consumer | Other consumer | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio Loans Past Due | $ 0 | $ 0 |
Portfolio Loans Receivable - Im
Portfolio Loans Receivable - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Financing Receivable, Impaired [Line Items] | |||||
Unpaid Contractual Principal Balance | $ 5,605 | $ 5,605 | $ 4,360 | ||
Recorded Investment With No Allowance | 4,806 | 4,806 | 3,826 | ||
Recorded Investment With Allowance | 234 | 234 | 273 | ||
Total Recorded Investment | 5,040 | 5,040 | 4,099 | ||
Related Allowance | 88 | 88 | 119 | ||
Average Recorded Investment | 5,797 | $ 7,841 | 5,802 | $ 7,814 | |
Interest Recognized | 4 | 5 | 16 | 5 | |
Acquired loans | |||||
Financing Receivable, Impaired [Line Items] | |||||
Unpaid Contractual Principal Balance | 555 | 555 | 1,148 | ||
Recorded Investment With No Allowance | 400 | 400 | 880 | ||
Recorded Investment With Allowance | 0 | 0 | 0 | ||
Total Recorded Investment | 400 | 400 | 880 | ||
Related Allowance | 0 | 0 | 0 | ||
Residential | Real estate: | |||||
Financing Receivable, Impaired [Line Items] | |||||
Unpaid Contractual Principal Balance | 2,369 | 2,369 | 2,309 | ||
Recorded Investment With No Allowance | 2,152 | 2,152 | 2,192 | ||
Recorded Investment With Allowance | 0 | 0 | 0 | ||
Total Recorded Investment | 2,152 | 2,152 | 2,192 | ||
Related Allowance | 0 | 0 | 0 | ||
Average Recorded Investment | 2,373 | 2,576 | 2,376 | 2,549 | |
Interest Recognized | 4 | 3 | 4 | 3 | |
Commercial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Unpaid Contractual Principal Balance | 581 | 581 | 574 | ||
Recorded Investment With No Allowance | 201 | 201 | 201 | ||
Recorded Investment With Allowance | 234 | 234 | 273 | ||
Total Recorded Investment | 435 | 435 | 474 | ||
Related Allowance | 88 | 88 | 119 | ||
Average Recorded Investment | 746 | 1,517 | 747 | 1,517 | |
Interest Recognized | 0 | 1 | 0 | 1 | |
Commercial | Real estate: | |||||
Financing Receivable, Impaired [Line Items] | |||||
Unpaid Contractual Principal Balance | 1,099 | 1,099 | 1,477 | ||
Recorded Investment With No Allowance | 974 | 974 | 1,433 | ||
Recorded Investment With Allowance | 0 | 0 | 0 | ||
Total Recorded Investment | 974 | 974 | 1,433 | ||
Related Allowance | 0 | 0 | $ 0 | ||
Average Recorded Investment | 1,122 | 1,573 | 1,123 | 1,573 | |
Interest Recognized | 0 | 0 | 3 | 0 | |
Construction | Real estate: | |||||
Financing Receivable, Impaired [Line Items] | |||||
Unpaid Contractual Principal Balance | 1,556 | 1,556 | |||
Recorded Investment With No Allowance | 1,479 | 1,479 | |||
Recorded Investment With Allowance | 0 | 0 | |||
Total Recorded Investment | 1,479 | 1,479 | |||
Related Allowance | 0 | 0 | |||
Average Recorded Investment | 1,556 | 2,175 | 1,556 | 2,175 | |
Interest Recognized | $ 0 | $ 1 | $ 9 | $ 1 |
Portfolio Loans Receivable - Cr
Portfolio Loans Receivable - Credit Quality Indicators (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | $ 1,212,809 | $ 1,173,525 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 1,177,641 | 1,157,551 |
Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 29,178 | 10,850 |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 5,990 | 5,124 |
Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Residential | Real estate: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 437,429 | 427,926 |
Residential | Real estate: | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 429,307 | 425,661 |
Residential | Real estate: | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 5,866 | 0 |
Residential | Real estate: | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 2,256 | 2,265 |
Residential | Real estate: | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Commercial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 142,673 | 151,109 |
Commercial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 133,916 | 145,178 |
Commercial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 7,475 | 4,505 |
Commercial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 1,282 | 1,426 |
Commercial | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Commercial | Real estate: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 364,071 | 348,091 |
Commercial | Real estate: | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 353,473 | 340,313 |
Commercial | Real estate: | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 9,624 | 6,345 |
Commercial | Real estate: | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 974 | 1,433 |
Commercial | Real estate: | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Construction | Real estate: | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 212,957 | 198,702 |
Construction | Real estate: | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 205,266 | 198,702 |
Construction | Real estate: | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 6,213 | 0 |
Construction | Real estate: | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 1,478 | 0 |
Construction | Real estate: | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Consumer | Credit card | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 54,732 | 46,412 |
Consumer | Credit card | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 54,732 | 46,412 |
Consumer | Credit card | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Consumer | Credit card | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Consumer | Credit card | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Consumer | Other consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 947 | 1,285 |
Consumer | Other consumer | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 947 | 1,285 |
Consumer | Other consumer | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Consumer | Other consumer | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Consumer | Other consumer | Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively | $ 0 | $ 0 |
Portfolio Loans Receivable - Tr
Portfolio Loans Receivable - Trouble Debt Restructuring (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020USD ($)contract | Jun. 30, 2019contract | Dec. 31, 2019USD ($) | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Contracts | contract | 5 | 5 | |
Recorded Investment | $ 450 | $ 459 | |
Acquired loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Contracts | contract | 3 | 3 | |
Recorded Investment | $ 145 | 145 | |
Residential | Real estate: | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Contracts | contract | 3 | 3 | |
Recorded Investment | $ 145 | 145 | |
Commercial | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Contracts | contract | 2 | 2 | |
Recorded Investment | $ 305 | 314 | |
Performing | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | 0 | 0 | |
Performing | Acquired loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | 0 | 0 | |
Performing | Residential | Real estate: | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | 0 | 0 | |
Performing | Commercial | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | 0 | 0 | |
Nonperforming | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | 450 | 459 | |
Nonperforming | Acquired loans | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | 145 | 145 | |
Nonperforming | Residential | Real estate: | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | 145 | 145 | |
Nonperforming | Commercial | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded Investment | $ 305 | $ 314 |
Portfolio Loans Receivable - Ou
Portfolio Loans Receivable - Outstanding Loan Commitments (Details) - Commitments to Extend Credit - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | $ 290,899 | $ 260,573 |
Letters of credit | 5,260 | 5,305 |
Commercial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 57,479 | 36,442 |
Commercial real estate | Real estate: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 16,806 | 31,411 |
Commercial real estate | Construction commitments | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 92,734 | 114,999 |
Residential real estate | Real estate: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 13,320 | 13,754 |
Residential real estate | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 28,234 | 26,407 |
Residential real estate | Residential loans held for sale | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 10,426 | 2,646 |
Consumer | Secured credit card | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 81,755 | 37,517 |
Consumer | Personal | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | $ 571 | $ 43 |
Portfolio Loans Receivable - _2
Portfolio Loans Receivable - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of year | $ 15,514 | $ 11,347 | $ 13,301 | $ 11,308 |
Provision charged to operating expense | 3,300 | 677 | 5,709 | 798 |
Balance at end of year | 18,680 | 11,913 | 18,680 | 11,913 |
Off Balance Sheet Reserve | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of year | 1,271 | 1,043 | 1,226 | 1,053 |
Provision charged to operating expense | 0 | 103 | 45 | 93 |
Balance at end of year | 1,271 | 1,146 | 1,271 | 1,146 |
Mortgage Loan Put-back Reserve | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of year | 667 | 515 | 575 | 501 |
Provision charged to operating expense | 156 | 43 | 262 | 67 |
Charge-offs | 0 | (31) | (14) | (41) |
Balance at end of year | $ 823 | $ 527 | $ 823 | $ 527 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Open Forward Delivery Sales Agreements | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 33,500 | $ 61,000 |
Fair amounts, liabilities | (178) | (125) |
Open Mandatory Delivery Commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 2,082 | 22,888 |
Fair value amounts, assets | 21 | 115 |
Interest Rate Lock Commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 40,617 | 32,365 |
Fair value amounts, assets | $ 227 | $ 122 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020USD ($)branch | Dec. 31, 2019USD ($) | Jan. 01, 2019branch | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of full service branches | branch | 5 | ||
Number of locations | branch | 5 | ||
Weighted average discount rate | 2.26% | 2.24% | |
ROU assets | $ | $ 3,807 | $ 3,920 | |
Related lease liabilities | $ | $ 4,200 | $ 4,300 | |
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Remaining term of contract | 1 year | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Remaining term of contract | 6 years |
Leases - Assets and Liabilities
Leases - Assets and Liabilities and Lease Payment Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Lease asset | $ 5,462 | $ 5,158 |
Less: Accumulated amortization | (1,655) | (1,238) |
Net lease asset | 3,807 | 3,920 |
Operating lease, liability | $ 4,163 | 4,291 |
Operating lease, liability, statement of financial position [Extensible List] | us-gaap:OtherLiabilities | |
Amounts due in: | ||
2020 | $ 689 | |
2021 | 1,408 | |
2022 | 1,023 | |
2023 | 777 | |
2024 | 420 | |
Total future lease payments | 4,317 | |
Discount of cash flows | (154) | |
Present value of net future lease payments | $ 4,163 | $ 4,291 |
Fair Value - Financial Instrume
Fair Value - Financial Instruments Measured at FV on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | $ 56,796 | $ 60,828 |
Loans held for sale | 116,969 | 71,030 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 56,796 | 60,828 |
Loans held for sale | 116,969 | 71,030 |
Derivative assets | 248 | 237 |
Derivative liabilities | 178 | 125 |
Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 56,796 | 60,828 |
Loans held for sale | 116,969 | 71,030 |
Derivative assets | 248 | 237 |
Derivative liabilities | 178 | 125 |
Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
U.S. government-sponsored enterprises | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 999 | |
U.S. government-sponsored enterprises | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 999 | |
U.S. government-sponsored enterprises | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | |
U.S. government-sponsored enterprises | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 999 | |
U.S. government-sponsored enterprises | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | |
Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 543 | 528 |
Municipal | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 543 | 528 |
Municipal | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Municipal | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 543 | 528 |
Municipal | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 2,237 | 2,565 |
Corporate | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 2,237 | 2,565 |
Corporate | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Corporate | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 2,237 | 2,565 |
Corporate | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 54,016 | 56,736 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 54,016 | 56,736 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 54,016 | 56,736 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | $ 0 | $ 0 |
Fair Value - Loans Held For Sal
Fair Value - Loans Held For Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans Held for Sale | $ 116,969 | $ 71,030 |
Aggregate fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans Held for Sale | 116,969 | 71,030 |
Contractual principal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans Held for Sale | 109,945 | 67,118 |
Difference | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans Held for Sale | $ 7,024 | $ 3,912 |
Fair Value - Impaired Loans and
Fair Value - Impaired Loans and Foreclosed Real Estate (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans, net | $ 234 | $ 273 |
Impaired loans, valuation allowance | 88 | 119 |
Impaired loans | 5,040 | 4,099 |
Foreclosed real estate | 3,326 | 2,384 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 4,952 | 3,980 |
Foreclosed real estate | 3,326 | 2,384 |
Fair Value, Measurements, Nonrecurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Foreclosed real estate | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Foreclosed real estate | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans, net | 5,000 | 4,100 |
Impaired loans, valuation allowance | 88 | 119 |
Impaired loans | 4,952 | 3,980 |
Foreclosed real estate | $ 3,326 | $ 2,384 |
Minimum | Level 3 Inputs | Measurement Input, Cost to Sell | Valuation Technique, Discounted Cash Flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discounts to appraisals or cash flows for estimated holding and/or selling costs (percent) | 11.00% | |
Minimum | Level 3 Inputs | Measurement Input, Cost to Sell | Valuation Technique, Consensus Pricing Model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discounts to appraisals for estimated holding and/or selling costs (percent) | 11.00% | |
Maximum | Level 3 Inputs | Measurement Input, Cost to Sell | Valuation Technique, Discounted Cash Flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discounts to appraisals or cash flows for estimated holding and/or selling costs (percent) | 25.00% | |
Maximum | Level 3 Inputs | Measurement Input, Cost to Sell | Valuation Technique, Consensus Pricing Model | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discounts to appraisals for estimated holding and/or selling costs (percent) | 25.00% |
Fair Value - Financial Instru_2
Fair Value - Financial Instruments Carrying Amount, FV and Placement (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Financial assets | ||
Cash and due from banks | $ 15,636 | $ 10,530 |
Interest bearing deposits at other financial institutions | 180,379 | 102,447 |
Federal funds sold | 3,698 | 1,847 |
Carrying Amount | Level 1 | ||
Financial assets | ||
Cash and due from banks | 15,636 | 10,530 |
Interest bearing deposits at other financial institutions | 180,379 | 102,447 |
Federal funds sold | 3,698 | 1,847 |
Restricted investments | 4,085 | 3,966 |
Financial liabilities | ||
Noninterest bearing deposits | 563,995 | 291,777 |
Carrying Amount | Level 3 | ||
Financial assets | ||
Loans receivable, net (1) | 1,422,443 | 1,157,820 |
Financial liabilities | ||
Interest bearing deposits | 1,044,731 | 933,644 |
FHLB advances and other borrowed funds | 42,948 | 47,645 |
Fair Value | Level 1 | ||
Financial assets | ||
Cash and due from banks | 15,636 | 10,530 |
Interest bearing deposits at other financial institutions | 180,379 | 102,447 |
Federal funds sold | 3,698 | 1,847 |
Restricted investments | 4,085 | 3,966 |
Financial liabilities | ||
Noninterest bearing deposits | 563,995 | 291,777 |
Fair Value | Level 3 | ||
Financial assets | ||
Loans receivable, net (1) | 1,427,006 | 1,155,922 |
Financial liabilities | ||
Interest bearing deposits | 1,047,975 | 934,349 |
FHLB advances and other borrowed funds | $ 42,974 | $ 47,678 |
Segments (Details)
Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($)segment | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 4 | 4 | |||
Interest income | $ 22,000 | $ 20,289 | $ 43,744 | $ 38,607 | |
Interest expense | 3,376 | 3,758 | 7,433 | 7,332 | |
Net interest income | 18,624 | 16,531 | 36,311 | 31,275 | |
Provision charged to operating expense | 3,300 | 677 | 5,709 | 798 | |
Net interest income after provision for loan losses | 15,324 | 15,854 | 30,602 | 30,477 | |
Noninterest income | 13,899 | 5,927 | 20,479 | 10,019 | |
Noninterest expense | 22,703 | 16,210 | 40,547 | 30,540 | |
Income before income taxes | 6,520 | 5,571 | 10,534 | 9,956 | |
Total assets | 1,822,365 | 1,234,157 | 1,822,365 | 1,234,157 | $ 1,428,495 |
Operating Segments | Commercial Bank | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 16,345 | 14,521 | 32,452 | 28,432 | |
Interest expense | 2,735 | 3,321 | 6,322 | 6,563 | |
Net interest income | 13,610 | 11,200 | 26,130 | 21,869 | |
Provision charged to operating expense | 3,083 | 488 | 5,275 | 400 | |
Net interest income after provision for loan losses | 10,527 | 10,712 | 20,855 | 21,469 | |
Noninterest income | 183 | 149 | 409 | 293 | |
Noninterest expense | 8,187 | 7,793 | 16,891 | 15,208 | |
Income before income taxes | 2,523 | 3,068 | 4,373 | 6,554 | |
Total assets | 1,608,651 | 1,106,021 | 1,608,651 | 1,106,021 | |
Operating Segments | CBHL | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 690 | 681 | 1,055 | 1,032 | |
Interest expense | 387 | 172 | 596 | 243 | |
Net interest income | 303 | 509 | 459 | 789 | |
Provision charged to operating expense | 0 | 0 | 0 | 0 | |
Net interest income after provision for loan losses | 303 | 509 | 459 | 789 | |
Noninterest income | 10,802 | 3,805 | 15,147 | 6,210 | |
Noninterest expense | 7,274 | 3,459 | 10,722 | 5,943 | |
Income before income taxes | 3,831 | 855 | 4,884 | 1,056 | |
Total assets | 118,026 | 49,157 | 118,026 | 49,157 | |
Operating Segments | OpenSky® | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 4,375 | 4,593 | 9,081 | 8,182 | |
Interest expense | 0 | 0 | 0 | 0 | |
Net interest income | 4,375 | 4,593 | 9,081 | 8,182 | |
Provision charged to operating expense | 217 | 189 | 434 | 348 | |
Net interest income after provision for loan losses | 4,158 | 4,404 | 8,647 | 7,834 | |
Noninterest income | 2,913 | 1,972 | 4,921 | 3,514 | |
Noninterest expense | 7,144 | 4,873 | 12,726 | 9,234 | |
Income before income taxes | (73) | 1,503 | 842 | 2,114 | |
Total assets | 62,823 | 42,621 | 62,823 | 42,621 | |
Operating Segments | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 5,318 | 4,455 | 8,780 | 8,264 | |
Interest expense | 292 | 268 | 570 | 529 | |
Net interest income | 5,026 | 4,187 | 8,210 | 7,735 | |
Provision charged to operating expense | 0 | 0 | 0 | 50 | |
Net interest income after provision for loan losses | 5,026 | 4,187 | 8,210 | 7,685 | |
Noninterest income | 1 | 1 | 2 | 2 | |
Noninterest expense | 98 | 85 | 208 | 155 | |
Income before income taxes | 4,929 | 4,103 | 8,004 | 7,532 | |
Total assets | 164,459 | 142,831 | 164,459 | 142,831 | |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | (4,728) | (3,961) | (7,624) | (7,303) | |
Interest expense | (38) | (3) | (55) | (3) | |
Net interest income | (4,690) | (3,958) | (7,569) | (7,300) | |
Provision charged to operating expense | 0 | 0 | 0 | 0 | |
Net interest income after provision for loan losses | (4,690) | (3,958) | (7,569) | (7,300) | |
Noninterest income | 0 | 0 | 0 | 0 | |
Noninterest expense | 0 | 0 | 0 | 0 | |
Income before income taxes | (4,690) | (3,958) | (7,569) | (7,300) | |
Total assets | $ (131,594) | $ (106,473) | $ (131,594) | $ (106,473) |
Uncategorized Items - cbnk10-q.
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201811Member |