Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 09, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | ENTEGRA FINANCIAL CORP. | ||
Entity Central Index Key | 1,522,327 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 141,900 | ||
Entity Common Stock, Shares Outstanding | 6,888,415 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and due from banks | $ 15,534 | $ 10,709 |
Interest-earning deposits | 93,933 | 32,585 |
Cash and cash equivalents | 109,467 | 43,294 |
Investments - trading | 6,095 | 5,211 |
Investments - available for sale | 342,863 | 398,291 |
Other investments, at cost | 12,386 | 15,261 |
Loans held for sale | 3,845 | 4,584 |
Loans receivable, net | 1,005,139 | 744,361 |
Allowance for loan losses | (10,887) | (9,305) |
Fixed assets, net | 24,113 | 20,209 |
Real estate owned | 2,568 | 4,226 |
Accrued interest receivable | 5,405 | 5,012 |
Bank owned life insurance | 32,150 | 31,347 |
Small Business Investment Company Holdings, at cost | 3,491 | 1,655 |
Net deferred tax asset | 8,831 | 18,985 |
Loan servicing rights | 2,756 | 2,603 |
Goodwill | 23,903 | 2,065 |
Core deposit intangible | 4,269 | 979 |
Other assets | 5,055 | 4,099 |
Total assets | 1,581,449 | 1,292,877 |
Liabilities: | ||
Deposits | 1,162,177 | 830,013 |
Federal Home Loan Bank advances | 223,500 | 298,500 |
Junior subordinated notes | 14,433 | 14,433 |
Other borrowings | 8,623 | 2,725 |
Post employment benefits | 10,174 | 10,211 |
Accrued interest payable | 935 | 254 |
Other liabilities | 10,294 | 3,673 |
Total liabilities | 1,430,136 | 1,159,809 |
Commitments and contingencies (Notes 7 and 24) | ||
Equity: | ||
Preferred stock - no par value, 10,000,000 shares authorized; none issued and outstanding | ||
Common stock - no par value, 50,000,000 shares authorized; 6,879,191 and 6,467,550 shares issued and outstanding as of December 31, 2017 and 2016, respectively | ||
Common stock held by Rabbi Trust, at cost; 17,672 and 14,000 shares at December 31, 2017 and 2016, respectively | (379) | (279) |
Additional paid in capital | 72,997 | 62,664 |
Retained earnings | 78,718 | 76,139 |
Accumulated other comprehensive loss | (23) | (5,456) |
Total shareholders' equity | 151,313 | 133,068 |
Total liabilities and shareholders' equity | $ 1,581,449 | $ 1,292,877 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,879,191 | 6,467,550 |
Common stock, shares outstanding | 6,879,191 | 6,467,550 |
Common Stock held by Rabbi Trust | 17,672 | 14,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest income: | |||
Interest and fees on loans | $ 38,712 | $ 32,324 | $ 27,027 |
Interest on tax exempt loans | 380 | 337 | 141 |
Taxable securities | 7,025 | 5,628 | 5,223 |
Tax-exempt securities | 3,117 | 1,510 | 379 |
Interest-earning deposits | 676 | 210 | 75 |
Other | 619 | 511 | 299 |
Total interest and dividend income | 50,529 | 40,520 | 33,144 |
Interest expense: | |||
Deposits | 4,474 | 3,964 | 4,334 |
Federal Home Loan Bank advances | 2,443 | 1,419 | 826 |
Junior subordinated notes | 557 | 532 | 458 |
Other borrowings | 210 | 117 | 105 |
Total interest expense | 7,684 | 6,032 | 5,723 |
Net interest income | 42,845 | 34,488 | 27,421 |
Provision for loan losses | 1,897 | 274 | (1,500) |
Net interest income after provision for loan losses | 40,948 | 34,214 | 28,921 |
Noninterest income: | |||
Servicing income, net | 401 | 487 | 341 |
Mortgage banking | 1,118 | 904 | 774 |
Gain on sale of SBA loans | 546 | 928 | 823 |
Gain (loss) on sale of investments, net | (1,102) | 1,216 | 403 |
Other than temporary impairment on cost method investment | (757) | (3) | |
Trading securities gains | 686 | 328 | |
Service charges on deposit accounts | 1,672 | 1,537 | 1,269 |
Interchange fees | 1,864 | 1,507 | 1,278 |
Bank owned life insurance | 803 | 489 | 457 |
Other | 726 | 450 | 453 |
Total noninterest income | 5,957 | 7,846 | 5,795 |
Noninterest expenses: | |||
Compensation and employee benefits | 20,168 | 17,164 | 14,625 |
Net occupancy | 4,089 | 3,534 | 2,986 |
Federal Home Loan Bank prepayment penalties | 118 | 1,762 | |
Marketing and advertising | 953 | 1,070 | 535 |
Federal deposit insurance | 513 | 562 | 905 |
Professional and advisory | 1,237 | 959 | 1,005 |
Data processing | 1,684 | 1,554 | 1,213 |
Merger-related expenses | 3,086 | 2,197 | 329 |
Net cost of operation of real estate owned | 213 | 730 | 505 |
Other | 4,855 | 4,301 | 3,765 |
Total noninterest expenses | 36,798 | 32,189 | 27,630 |
Income before taxes | 10,107 | 9,871 | 7,086 |
Income tax expense (benefit) | 7,528 | 3,495 | (16,739) |
Net income (loss) | $ 2,579 | $ 6,376 | $ 23,825 |
Earnings per common share: | |||
Earnings per share - basic | $ 0.39 | $ 0.98 | $ 3.64 |
Earnings per share - diluted | $ 0.39 | $ 0.98 | $ 3.64 |
Weighted average common shares outstanding: | |||
Common shares outstanding - Basic | 6,561,699 | 6,477,284 | 6,546,375 |
Common shares outstanding - Diluted | 6,658,614 | 6,489,931 | 6,546,375 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 2,579 | $ 6,376 | $ 23,825 |
Other comprehensive income (loss): | |||
Change in unrealized holding gains and losses on securities available for sale | 6,347 | (6,652) | (166) |
Reclassification adjustment for securities losses (gains) realized in net income | 1,102 | (1,216) | (403) |
Amortization of unrealized loss on securities transferred to held to maturity | 578 | 984 | |
Reclassification adjustment for other then temporary impairment of securities available for sale | 757 | ||
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | 325 | ||
Change in deferred tax valuation allowance attributable to unrealized gains and losses on investment securities available for sale | 202 | 377 | 289 |
Change in unrealized holding gains and losses on cash flow hedge | 99 | 444 | |
Reclassification adjustment for cash flow hedge effectiveness | (14) | 32 | |
Other comprehensive income (loss), before tax | 8,493 | (6,112) | 704 |
Income tax effect related to items of other comprehensive income (loss) | (3,060) | 2,392 | (171) |
Other comprehensive income (loss), after tax | 5,433 | (3,720) | 533 |
Comprehensive income (loss) | $ 8,012 | $ 2,656 | $ 24,358 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock held by Rabbi Trust | Total |
Beginning Balance at Dec. 31, 2014 | $ 63,651 | $ 45,937 | $ (2,269) | $ 107,319 | ||
Beginning Balance (in shares) at Dec. 31, 2014 | 6,546,375 | |||||
Net income (loss) | 23,825 | 23,825 | ||||
Other comprehensive income, net of tax | 533 | 533 | ||||
Stock compensation expense | 71 | 71 | ||||
Repurchase of common stock | ||||||
Purchase of stock to fund Rabbi Trust | (279) | (279) | ||||
Ending Balance at Dec. 31, 2015 | 63,722 | 69,763 | (1,736) | (279) | 131,469 | |
Ending Balance (in shares) at Dec. 31, 2015 | 6,546,375 | |||||
Net income (loss) | 6,376 | 6,376 | ||||
Other comprehensive income, net of tax | (3,720) | (3,720) | ||||
Stock compensation expense | 864 | 864 | ||||
Vesting of restricted stock units, net shares surrendered | (87) | (87) | ||||
Vesting of restricted stock units (in shares) | 25,743 | |||||
Repurchase of common stock | (1,835) | (1,922) | ||||
Repurchase of common stock (in shares) | (104,568) | |||||
Purchase of stock to fund Rabbi Trust | ||||||
Ending Balance at Dec. 31, 2016 | 62,664 | 76,139 | (5,456) | (279) | 133,068 | |
Ending Balance (in shares) at Dec. 31, 2016 | 6,467,550 | |||||
Net income (loss) | 2,579 | 2,579 | ||||
Other comprehensive income, net of tax | 5,433 | 5,433 | ||||
Stock compensation expense | 917 | 917 | ||||
Common stock issued for acquisition | 9,872 | 9,872 | ||||
Common stock issued for acquisition (in shares) | 395,666 | |||||
Transfer of Rabbi Trust investments to common stock | (100) | (100) | ||||
Stock options exercised | (6) | (6) | ||||
Stock options exercised,net of shares surrendered (in shares) | 476 | |||||
Vesting of restricted stock units, net shares surrendered | (149) | (149) | ||||
Vesting of restricted stock units (in shares) | 28,499 | |||||
Repurchase of common stock | (301) | (301) | ||||
Repurchase of common stock (in shares) | (13,000) | |||||
Purchase of stock to fund Rabbi Trust | ||||||
Ending Balance at Dec. 31, 2017 | $ 72,997 | $ 78,718 | $ (23) | $ (379) | $ 151,313 | |
Ending Balance (in shares) at Dec. 31, 2017 | 6,879,191 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 2,579 | $ 6,376 | $ 23,825 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, amortization and accretion | (547) | 631 | 695 |
Investment amortization, net | 4,613 | 2,445 | 2,046 |
Trading account income | (686) | (328) | |
Provision for loan losses | 1,897 | 274 | (1,500) |
Provision for real estate owned | 292 | 655 | 250 |
Share-based compensation expense | 917 | 864 | 71 |
Change in net deferred tax asset | 7,097 | 2,922 | (16,437) |
Loss (gain) on sales of securities available for sale | 1,102 | (1,216) | (403) |
Other than temporary impairment on investments | 757 | 3 | |
Loss on disposal of fixed assets | 3 | ||
Income on bank owned life insurance, net | (803) | (489) | (441) |
Mortgage banking income, net | (1,118) | (904) | (774) |
Gain on sales of SBA loans | (546) | (928) | (823) |
Net realized gain on sale of real estate owned | (268) | (222) | (71) |
Loans originated for sale | (50,644) | (40,288) | (35,649) |
Proceeds from sale of loans originated for sale | 51,904 | 45,884 | 39,659 |
Net change in operating assets and liabilities: | |||
Interest receivable | 32 | (906) | (629) |
Loan servicing rights | (153) | (259) | (157) |
Other assets | 675 | 2,053 | (1,056) |
Postemployment benefits | (37) | (13) | 465 |
Accrued interest payable | 276 | 11 | (110) |
Other liabilities | 486 | 628 | (973) |
Net cash provided by operating activities | 17,825 | 17,190 | 7,994 |
Activity for investment securities: | |||
Purchases | (153,612) | (267,263) | (129,960) |
Maturities/calls and principal repayments | 43,646 | 46,246 | 56,638 |
Sales | 169,146 | 124,823 | 39,022 |
Purchase of trading securities | (4,714) | ||
Net increase in loans | (100,015) | (56,829) | (59,002) |
Purchased loans | (25,189) | ||
Proceeds from sale of real estate owned | 1,528 | 2,173 | 1,495 |
Proceeds from sale of fixed assets | 64 | ||
Real estate cost capitalized | (83) | ||
Purchase of fixed assets | (729) | (357) | (3,556) |
Disposal of real estate held for investments | 2,430 | ||
Purchase of Small Business Investment Company Holdings, at cost | (1,836) | (553) | (383) |
Purchase of other investments, at cost | (425) | (5,873) | (4,076) |
Redemptions of other investments, at cost | 3,478 | 150 | |
Net cash received (paid) in business combination | 143,927 | (5,913) | 31,878 |
Purchase of bank owned life insurance | (10,000) | ||
Net cash provided by (used in) investing activities | 105,172 | (173,546) | (95,350) |
Cash flows from financing activities: | |||
Net increase (decrease) in deposits | 12,501 | 24,973 | (26,372) |
Net increase (decrease) in escrow deposits | 234 | (26) | (23) |
Proceeds from FHLB advances | 979,501 | 795,600 | 245,600 |
Repayment of FHLB advances | (1,054,501) | (659,625) | (152,100) |
Net increase in other borrowings | 5,897 | 527 | 2,198 |
Purchase of common stock for Rabbi Trust | (279) | ||
Proceeds from sale of common stock | (155) | ||
Repurchase of common stock | (301) | (1,922) | |
Net cash provided by financing activities | (56,824) | 159,527 | 69,024 |
Increase (decrease) in cash and cash equivalents | 66,173 | 2,644 | (18,332) |
Cash and cash equivalents, beginning of period | 43,294 | 40,650 | 58,982 |
Cash and cash equivalents, end of period | 109,467 | 43,294 | 40,650 |
Cash paid during the year for: | |||
Interest on deposits and other borrowings | 7,407 | 6,021 | 5,833 |
Income taxes | 208 | 150 | |
Noncash investing and financing activities: | |||
Real estate acquired in satisfaction of mortgage loans | 958 | 748 | 3,350 |
Loans originated for disposition of real estate owned | 1,001 | 208 | 3,260 |
Purchased loans and investments to be settled | 2,020 | 532 | |
Transfer held to maturity investment securities to available for sale investment securities | 30,368 | ||
Transfer of Rabbi Trust investments to Company stock | 100 | ||
Acquisitions | |||
Assets acquired | 193,191 | 110,010 | |
Liabilities assumed | 325,138 | 97,878 | |
Net assets/(liabilities) | (131,947) | 12,132 | |
Common stock issued in acquisitions | $ 9,872 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Entegra Financial Corp. (the “Company”) was incorporated on May 31, 2011 and became the holding company for Entegra Bank (the “Bank”) on September 30, 2014 upon the completion of Macon Bancorp’s merger with and into Entegra Financial Corp., pursuant to which Macon Bancorp converted from the mutual to stock form of organization. The Company’s primary operation is its investment in the Bank. The Company also owns 100% of the common stock of Macon Capital Trust I (the “Trust”), a Delaware statutory trust formed in 2003 to facilitate the issuance of trust preferred securities. The Bank is a North Carolina state-chartered commercial bank and has a wholly owned subsidiary, Entegra Services, Inc., which holds investment securities, but was inactive as of December 31, 2017. The consolidated financials are presented in these financial statements. The Bank operates as a community-focused retail bank, originating primarily real estate based mortgage, consumer and commercial loans and accepting deposits from consumers and small businesses. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the Company conform, in all material respects, to U.S. generally accepted accounting principles, or GAAP, and to general practices within the banking industry. The following summarizes the more significant of these policies and practices. Estimates Material estimates that are particularly susceptible to significant change, in the near term, relate to the determination of the allowance for loan losses, the valuation of acquired loans, separately identifiable intangible assets associated with mergers and acquisitions, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, and the valuation of deferred tax assets. Principles of Consolidation Reclassification Business Combinations All identifiable intangible assets that are acquired in a business combination are recognized at fair value on the acquisition date. Identifiable intangible assets are recognized separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred, licensed, rented, or exchanged separately from the entity). Deposit liabilities and the related depositor relationship intangible assets may be exchanged in observable exchange transactions. As a result, the depositor relationship intangible asset is considered identifiable, because the separability criterion has been met. In addition, acquisition-related costs and restructuring costs are recognized as period expenses as incurred. Cash and Cash Equivalents Trading Assets Investment Securities Held-to-maturity (“HTM”) securities represent those securities that we have the positive intent and ability to hold to maturity and are carried at amortized cost. Realized gains and losses on the sale of securities and other-than-temporary impairment (“OTTI”) charges are recorded as a component of noninterest income in the Consolidated Statements of Operations. Realized gains and losses on the sale of securities are determined using the specific-identification method. Bond premiums are amortized to the call date and bond discounts are accreted to the maturity date, both on a level yield basis. We perform a quarterly review of our securities to identify those that may indicate OTTI. Our policy for OTTI within the debt securities portfolio is based upon a number of factors, including, but not limited to, the length of time and extent to which the estimated fair value has been less than cost, the financial condition of the underlying issuer and the ability of the issuer to meet contractual obligations. Other factors include the likelihood of the security’s ability to recover any decline in its estimated fair value and whether management intends to sell the security, or if it is more likely than not that management will be required to sell the investment security prior to the security’s recovery. The Company reclassified certain of its securities from available-for-sale to held-to-maturity during the years ended December 31, 2014 and 2013 in an effort to minimize the impact of future interest rate changes on Accumulated Other Comprehensive Income (Loss). The difference between the book values and fair values at the date of the transfer was reported in a separate component of Accumulated Other Comprehensive Income (Loss), and amortized into income over the remaining life of the securities as an adjustment of yield in a manner consistent with the amortization of a premium. Concurrently, the revised book values of the transferred securities (represented by the market value on the date of transfer) are amortized back to their par values over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of a discount. In the third quarter of 2016, the Company transferred its HTM investment portfolio to AFS in order to provide more flexibility managing its investment portfolio. As a result, the Company is prohibited from classifying any investment securities as HTM for two years from the date of the transfer. Loans Held for Sale We generally sell the guaranteed portion of SBA loans in the secondary market and retain the unguaranteed portion in our portfolio. Upon sale of the guaranteed portion of an SBA loan, we recognize a portion of the gain on sale into income and defer a portion of the gain related to the relative fair value of the unguaranteed loan balance we retain. The deferred gain is amortized into income over the remaining life of the loan Gains and losses on sales of loans held for sale are included in the Consolidated Statements of Operations in Mortgage Banking income for residential loans and Gains on sale of SBA loans for SBA loans. Net unrealized losses are recognized by charges to Mortgage Banking income. Loans Receivable Generally, consumer loans are charged down to their estimated collateral value after reaching 90 days past due. The number of days past due is determined by the amount of time when the payment was due based on contractual terms. Commercial loans are charged off as management becomes aware of facts and circumstances that raise doubt as to the collectability of all or a portion of the principal and when we believe a confirmed loss exists. The Company originates and sells the guaranteed portion of SBA loans into the secondary market. When the Company retains the right to service a sold SBA loan, the previous carrying amount is allocated between the guaranteed portion of the loan sold, the unguaranteed portion of the loan retained and the retained SBA servicing right based on their relative fair values on the date of transfer. Nonaccrual Loans For loans modified in a troubled debt restructuring, the loan is generally placed on non-accrual until there is a period of satisfactory payment performance by the borrower (either immediately before or after the restructuring), generally defined as six months, and the ultimate collectability of all amounts contractually due is not in doubt. Troubled Debt Restructurings (“TDR”) All TDRs are considered to be impaired loans and will be reported as an impaired loan for the remaining life of the loan, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the original principal and interest will be collected according to the restructured agreement. We may also remove a loan from TDR and impaired status if the TDR is subsequently restructured and at the time of the subsequent restructuring the borrower is not experiencing financial difficulties and, under the terms of the subsequent restructuring agreement, no concession has been granted to the borrower. Allowance for Loan Losses (“ALL”) A loan is considered impaired when it is probable that we will be unable to collect all principal and interest payments due according to the original contractual terms of the loan agreement. We individually evaluate all loans classified as substandard or nonaccrual greater than $350,000 for impairment. If the impaired loan is considered collateral dependent, a charge-off is taken based upon the appraised value of the property (less an estimate of selling costs if foreclosure is anticipated). If the impaired loan is not collateral dependent, a specific reserve is established based upon an estimate of the future discounted cash flows after consideration of modifications and the likelihood of future default and prepayment. The allowance for non-impaired loans consists of a base historical loss reserve and a qualitative reserve. The loss rates for the base loss reserve are segmented into 13 loan categories and contain loss rates ranging from approximately 0.5% to 0.74%. The qualitative reserve adjusts the average loss rates utilized in the base loss reserve for trends in the following internal and external factors: · Non-accrual and classified loans · Collateral values · Loan concentrations and loan growth · Economic conditions – including unemployment rates, housing prices and sales, and regional economic outlooks. Qualitative reserve adjustment factors are decreased for favorable trends and increased for unfavorable trends. These factors are subject to further adjustment as economic and other conditions change. Fixed Assets Real Estate Owned Subsequent to foreclosure, real estate owned is recorded at the lower of carrying amount or fair value less estimated costs to sell. Valuations are periodically performed by management, but not less than every eighteen months, and an additional allowance for losses is established by a charge to Net Cost of Operation of Real Estate Owned in the Consolidated Statements of Operations, if necessary. Other Investments, at cost FHLB stock is carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. The Company has evaluated its FHLB stock and concluded that it is not impaired because the FHLB Atlanta is currently paying cash dividends and redeeming stock at par. The FHLB requires members to purchase and hold a specified level of stock based upon on the members asset value, level of borrowings and participation in other programs offered. Stock in the FHLB is non-marketable and is redeemable at the discretion of the FHLB. Members do not purchase stock in the FHLB for the same reasons that traditional equity investors acquire stock in an investor-owned enterprise. Rather, members purchase stock to obtain access to the low-cost products and services offered by the FHLB. Unlike equity securities of traditional for-profit enterprises, the stock of the FHLB does not provide its holders with an opportunity for capital appreciation because, by regulation, FHLB stock can only be purchased, redeemed and transferred at par value. Both cash and stock dividends are reported as Other interest income in the Consolidated Statements of Operations. Bank Owned Life Insurance (“BOLI”) Loan Servicing Rights (“LSR”) Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal (generally 25 basis points for residential mortgage loans and 100 basis points for SBA loans) or a fixed amount per loan, and are recorded as income when earned. Changes in fair value of LSRs are netted against loan servicing fee income and reported as Servicing income, net in the Consolidated Statements of Operations. Goodwill and Other Intangible Assets Core deposit intangibles are amortized over the estimated useful lives of the deposit accounts acquired (generally seven years on a straight line basis). Derivative Financial Instruments and Hedging Activities – Interest Rate Lock Commitments and Forward Sale Contracts Our interest rate risk management strategy incorporates the use of derivative instruments to minimize fluctuations in net income that are caused by interest rate volatility. The goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain balance sheet assets and liabilities so that net interest revenue is not, on a material basis, adversely affected by movements in interest rates. We view this strategy as a prudent management of interest rate risk, such that net income is not exposed to undue risk presented by changes in interest rates. In carrying out this part of its interest rate risk management strategy, we use interest rate derivative contracts; primarily interest rate swaps. Interest rate swaps generally involve the exchange of fixed- and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date. We classify our derivative financial instruments as either (1) a hedge of an exposure to changes in the fair value of a recorded asset or liability (“fair value hedge”), (2) a hedge of an exposure to changes in the cash flows of a recognized asset, liability or forecasted transaction (“cash flow hedge”), or (3) derivatives not designated as accounting hedges. Changes in the fair value of derivatives not designated as hedges are recognized in current period earnings. Our interest rate swaps are classified as cash flow hedges and as such, adjustments to fair value are recorded in Accumulated Other Comprehensive Income. Small Business Investment Company Holdings Advertising Expense Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability method and are reported net in the Consolidated Balance Sheets. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities and recognizes enacted changes in tax rate and laws. When deferred tax assets are recognized, they are subject to a valuation allowance based on management’s judgment as to whether realization is more likely than not. In determining the need for a valuation allowance, the Company considers the following sources of taxable income: · Future reversals of existing taxable temporary differences · Future taxable income exclusive of reversing temporary differences and carry forwards · Taxable income in prior carryback years · Tax planning strategies that would, if necessary, be implemented As a result of the analysis above, the Company concluded that a valuation allowance was not necessary as of December 31, 2017 and 2016. Accrued taxes represent the net estimated amount due to or from taxing jurisdictions and are reported in other assets or other liabilities, as appropriate, in the Consolidated Balance Sheets. We evaluate and assess the relative risks and appropriate tax treatment of transactions and filing positions after considering statutes, regulations, judicial precedent and other information and maintain tax accruals consistent with the evaluation of these relative risks and merits. Changes to the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by taxing authorities and changes to statutory, judicial and regulatory guidance. These changes, when they occur, can affect deferred taxes and accrued taxes, as well as the current period’s income tax expense and can be significant to our operating results. As a result of the Tax Cuts and Jobs Act of 2017, the Company realized deferred tax expense of $4.9 million upon the revaluation of its deferred assets and deferred liabilities at the newly enacted Federal tax rate of 21%. Tax positions are recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 percent likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Allowance for Unfunded Commitments Junior Subordinated Notes Stock- based We account for stock-based compensation in accordance with Accounting Standard Codification (“ASC”) 718, Compensation-Stock Compensation. Under ASC 718, stock-based compensation expense reflects the fair value of stock-based awards measured at grant date, is recognized over the relevant vesting period on a straight-line basis, and adjusts each period for anticipated forfeitures. Stock-based compensation is recognized only for awards that vest, and our periodic accrual of compensation cost is based on the estimated number of awards expected to vest. We measure the fair value of compensation cost related to restricted stock awards based on the closing market price of our common stock on the grant date. Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded through the income statement as income tax benefit. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded through the income statement as income tax expense. Segments Subsequent Events Recently Issued Accounting Standards In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02 Income Statement – Reporting Comprehensive Income (Topic 220: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In March 2017, the FASB issued amendments to ASU 2017-08 Receivables –Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization of Purchased Callable Debt Securities. In March 2017, the FASB issued amendments to ASU 2017-07 Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension cost and Net Periodic Postretirement Benefit Cost. In January 2017, the FASB issued amendments to ASU 2017-04 Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued amendments to ASU 2017-01 Business Combinations (Topic 80): Clarifying the Definition of a Business. In January 2016, the FASB issued amendments to ASU 2016-01 Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In March 2016, the FASB issued amendments to ASU 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to provide In June 2016, the FASB issued amendments to Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2016, the FASB issued ASU No. 2016-15 , “Classification of Certain Cash Receipts and Cash Payments.” In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). 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. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 3. ACQUISITIONS The Company has determined that the acquisitions described below constitute a business combination as defined in ASC Topic 805, Business Combinations Fair Value Measurements Chattahoochee Bank of Georgia On October 1, 2017, the Bank acquired Chattahoochee Bank of Georgia (“Chattahoochee”) in Gainesville, Georgia. In connection with the acquisition, the Bank acquired $189.2 million of assets and assumed $170.6 million of liabilities. Total consideration transferred was $25.4 million of cash and 395,666 shares of the Company’s common stock valued at $9.9 million. The fair value of consideration paid exceeded the fair value of the identifiable assets and liabilities acquired and resulted in the establishment of goodwill in the amount of $16.8 million which is deductible over 15 years for tax purposes. There were no loans purchased with evidence of credit impairment. The purchased assets and assumed liabilities were recorded at their acquisition date fair values and are summarized in the table below: As Recorded by Fair Value As Recorded by (Dollars in thousands) Chattahoochee Adjustments the Company Assets Cash and cash equivalents $ 22,625 $ — $ 22,625 Loans 159,540 (570 ) 158,970 Fixed assets 3,945 (408 ) 3,537 Accrued interest receivable 421 — 421 Core deposit intangible — 2,070 2,070 Deferred tax asset 751 (751 ) — Other assets 1,579 (8 ) 1,571 Total assets acquired $ 188,861 $ 333 $ 189,194 Liabilities Deposits $ 165,624 $ 472 $ 166,096 Accrued Interest payable 102 (14 ) 88 Other liabilities 7,790 (3,341 ) 4,449 Total liabilities assumed 173,516 (2,883 ) 170,633 Excess of assets acquired over liabilities assumed $ 15,345 $ 3,216 $ 18,561 Consideration transferred Cash $ 25,448 Common stock issued (395,666 shares) 9,872 Total fair value of consideration transferred 35,320 Goodwill $ 16,759 During March 2018, the Company discovered that the structure of its acquisition of Chattahoochee had resulted in a Federal and state tax liability of approximately $5.7 million. This adjustment has been reflected as an adjustment of goodwill and income taxes receivable and payable as of December 31, 2017. Comparative and Pro Forma Financial Information for Chattahoochee in 2017 The adjusted results of the Company for the year ended December 31, 2017, include the adjusted results of the acquired assets and assumed liabilities for the 274 days subsequent to the acquisition date of April 1, 2017 related to the Stearns Bank, N.A. branch acquisition and for the 91 days subsequent to the Chattahoochee acquisition date of October 1, 2017. Merger-related charges of $3.1 million are recorded in the consolidated statement of income and include incremental costs related to closing of the acquisitions, including legal, accounting and auditing, investment banker cost, termination of certain employment related contracts, system conversion cost, travel costs, printing, supplies and other costs. The following table discloses the impact of the Chattahoochee merger (excluding the impact of merger-related expenses and the of the revaluation of the net deferred tax asset due to the Tax Reform) since the acquisition on October 1, 2017 through December 31, 2017. The table also presents certainpro forma information as if Chattahoochee had been acquired on January 1, 2017, and January 1, 2016. These results combine the historical results of Chattahoochee in the Company’s consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity, they are not indicative of what would have occurred had the acquisition taken place on January 1, 2017, or January 1, 2016. Merger-related costs of $2.4 million from the Chattahoochee acquisition were incurred during the year ended December 31, 2017, and were excluded from pro forma information below. In addition, no adjustments have been made to the pro formas to eliminate the provision for loan losses for the years ended December 31, 2017, and 2016 in the amounts of $0.1 million and $0.2 million, respectively. No adjustments have been made to reflect the impact of any investment securities sold that was recognized by Chattahoochee in either years ended December 31, 2017, or 2016. The pro forma net adjusted income available to the common shareholder for December 31, 2017 includes the Company’s $4.9 million of income tax expense recorded as a result of the revaluation of the Company’s net deferred tax asset in connection with the Tax Reform signed into law during 2017. Expenses related to the Chattahoochee system conversion and other costs of integration are expected to be recorded during 2018. The Company expects to achieve further operating cost savings and other business synergies as a result of the Chattahoochee acquisition which are not reflected in the pro forma amounts below: Actual Pro Forma Pro Forma Since Acquisition October 1, 2017 through Year Ended Year Ended (Dollars in thousands) December 31, 2017 December 31, 2017 December 31, 2016 Total revenues ( net interest income and noninterest income $ 2,509 $ 54,618 $ 49,542 Net income $ 1,194 $ 7,079 $ 8,159 Stearns Bank, N.A. On February 24, 2017, the Bank completed its acquisition of two branches from Stearns Bank, N.A. (“Stearns”). In connection with the acquisition, the Bank acquired the bank facilities and certain other assets and assumed $154.2 million of deposits. In consideration of the purchased assets and assumed liabilities, the Bank paid (1) the book value, or approximately $1.0 million, for the branch facilities and certain assets, and (2) a deposit premium of $5.7 million, equal to 3.65% of the average daily deposits for the 30- day period ending the tenth (10 th The purchased assets and assumed liabilities were recorded at their acquisition date fair values and are summarized in the table below: (Dollars in thousands) As Recorded Fair Value As Recorded by Assets Cash and cash equivalents $ 1,258 $ — $ 1,258 Loans 7 — 7 Premises and equipment 950 132 1,082 Core deposit intangible — 1,650 1,650 Total assets acquired 2,215 1,782 3,997 Liabilities Deposits $ 153,122 $ 1,062 $ 154,184 Other liabilities 321 — 321 Total liabilities assumed 153,443 1,062 154,505 Excess of liabilities assumed over assets acquired $ 151,228 $ 720 $ 150,508 Cash received to settle the acquisition 145,492 Goodwill $ 5,016 Pro forma disclosures are not significant and not meaningful. Old Town Bank On April 1, 2016, the Bank acquired Old Town Bank of Waynesville, North Carolina. In connection with the acquisition, the Bank acquired $110.0 million of assets and assumed $97.9 million of liabilities. Total consideration transferred was $13.5 million of cash. The fair value of consideration paid exceeded the fair value of the identifiable assets and liabilities acquired and resulted in the establishment of goodwill in the amount of $1.4 million, none of which is deductible for tax purposes. Loans purchased with evidence of credit impairment were not material. The purchased assets and assumed liabilities were recorded at their acquisition date fair values and are summarized in the table below: As Recorded by Fair Value As Recorded by (Dollars in thousands) Old Town Bank Adjustments the Company Assets Cash and cash equivalents $ 7,573 $ — $ 7,573 Investments 30,882 246 31,128 Loans 64,573 272 64,845 Fixed assets 3,414 (22 ) 3,392 Interest receivable 552 — 552 Core deposit intangible — 530 530 Other real estate owned 880 (21 ) 859 Deferred tax asset 259 207 466 Other assets 938 (336 ) 602 Total assets acquired $ 109,071 $ 876 $ 109,947 Liabilities Deposits $ 88,059 $ 648 $ 88,707 FHLB advances 9,000 25 9,025 Accrued Interest payable 30 — 30 Other liabilities 125 (9 ) 116 Total liabilities assumed 97,214 664 97,878 Excess of assets acquired over liabilities assumed $ 11,857 $ 213 $ 12,069 Purchase price 13,486 Goodwill $ 1,417 Fair values are subject to refinement for a period not to exceed one year after the closing date of an acquisition as information relative to closing date fair values becomes available. In particular, the fair value of collateral dependent loans and other real estate owned may change to the extent that the Company receives updated appraisals indicating changes in valuation assumptions at acquisition. Pro forma disclosures are not significant and not meaningful. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | NOTE 4. INVESTMENT SECURITIES The following table presents the holdings of our trading account as of December 31, 2017 and December 31, 2016: December 31, 2017 2016 (Dollars in thousands) Mutual funds $ 6,095 $ 5,211 The trading account is held in a Rabbi Trust and seeks to generate returns that will fund the cost of certain deferred compensation agreements. There were $0.7 million and $0.3 million of realized gains for the years ended December 31, 2017 and 2016, respectively. The Company’s HTM investment portfolio was transferred to AFS during the third quarter of 2016 in order to provide the Company more flexibility managing its investment portfolio. As a result of the transfer, the Company is prohibited from classifying any investment securities as HTM for two years from the date of the transfer. On April 28, 2017, the Louisiana Office of Financial Institutions closed First NBC Bank and appointed the FDIC as receiver. The Bank owned $0.7 million par value of subordinated debt issued by the holding company of First NBC Bank with an unrealized loss of $0.1 million prior to the impairment. The Company concluded the investment to be other than temporarily impaired. As such, the financial information for the year ended December 31, 2017 includes OTTI of $0.7 million before tax. The Company sold approximately $45.0 million of tax exempt municipal securities in December 2017, realizing a net loss of $1.1 million, in response to the Tax Cuts and Jobs Act of 2017. One tax exempt municipal security that had been identified for sale did not execute until January 2018 resulting in OTTI of $0.1 million based on the established fair value. The amortized cost and estimated fair values of securities classified as AFS are summarized as follows: December 31, 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 19,519 $ 7 $ (8 ) $ 19,518 Municipal Securities 94,259 975 (371 ) 94,863 Mortgage-backed Securities - Guaranteed 141,301 112 (1,653 ) 139,760 Mortgage-backed Securities - Non Guaranteed 63,279 323 (327 ) 63,275 Collateralized Loan Obligations 5,555 6 (22 ) 5,539 Corporate bonds 18,925 409 (43 ) 19,291 Mutual funds 629 — (12 ) 617 $ 343,467 $ 1,832 $ (2,436 ) $ 342,863 December 31, 2016 Gross Gross Estima ted Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 14,577 $ 46 $ (2 ) $ 14,621 Municipal Securities 152,208 337 (5,774 ) 146,771 Mortgage-backed Securities - Guaranteed 162,379 134 (2,332 ) 160,181 Mortgage-backed Securities - Non Guaranteed 58,967 2 (1,213 ) 57,756 Corporate bonds 18,354 171 (167 ) 18,358 Mutual funds 616 — (12 ) 604 $ 407,101 $ 690 $ (9,500 ) $ 398,291 Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: December 31, 2017 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (Dollars in thousands) Available-for-Sale: U.S. Treasury & Government Agencies $ 8,939 $ 6 $ 998 $ 2 $ 9,937 $ 8 Municipal Securities 12,047 66 22,982 305 35,029 371 Mortgage-backed Securities - Guaranteed 56,731 513 53,800 1,140 110,531 1,653 Mortgage-backed Securities - Non Guaranteed 24,455 216 10,654 111 35,109 327 Collateralized loan obligations 3,520 22 — — 3,520 22 Corporate bonds 1,304 9 1,044 34 2,348 43 Mutual funds — — 617 12 617 12 $ 106,996 $ 832 $ 90,095 $ 1,604 $ 197,091 $ 2,436 December 31, 2016 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (Dollars in thousands) Available-for-Sale: U.S. Treasury & Government Agencies $ 1,000 $ 2 $ — $ — $ 1,000 $ 2 Municipal Securities 122,468 5,759 331 15 122,799 5,774 Mortgage-backed Securities - Guaranteed 115,539 2,035 17,594 297 133,133 2,332 Mortgage-backed Securities - Non Guaranteed 54,555 1,213 — — 54,555 1,213 Corporate bonds 6,741 167 — — 6,741 167 Mutual funds 616 12 — — 616 12 $ 300,919 $ 9,188 $ 17,925 $ 312 $ 318,844 $ 9,500 Information pertaining to the number of securities with unrealized losses is detailed in the table below. Management of the Company believes all unrealized losses as of December 31, 2017 and 2016 represent temporary impairment. The unrealized losses have resulted from temporary changes in the interest rate market and not as a result of credit deterioration. We do not intend to sell and it is not likely that we will be required to sell any of the securities referenced in the table below before recovery of their amortized cost. December 31, 2017 Less Than More Than Total U.S. Treasury & Government Agencies 5 1 6 Municipal Securities 12 22 34 Mortgage-backed Securities - Guaranteed 45 37 82 Mortgage-backed Securities - Non Guaranteed 15 8 23 Collateralized loan obligation 2 — 2 Corporate bonds 2 1 3 Mutual funds — 1 1 81 70 151 December 31, 2016 Less Than More Than Total U.S. Treasury & Government Agencies 1 — 1 Municipal Securities 129 1 130 Mortgage-backed Securities - Guaranteed 77 13 90 Mortgage-backed Securities - Non Guaranteed 24 1 25 Corporate bonds 8 — 8 Mutual funds 1 — 1 240 15 255 The Company received proceeds from sales of securities classified as AFS and corresponding gross realized gains and losses as follows: For the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Gross proceeds $ 169,146 $ 124,823 $ 39,022 Gross realized gains 558 1,261 423 Gross realized losses 1,660 45 20 The Company had securities pledged against deposits and borrowings of approximately $143.3 million and $237.1 million at December 31, 2017 and 2016, respectively. The amortized cost and estimated fair value of investments in debt securities at December 31, 2017, by contractual maturity, is shown below. Mortgage-backed securities have not been scheduled because expected maturities will differ from contractual maturities when borrowers have the right to prepay the obligations. Available for Sale Amortized Fair Value (Dollars in thousands) Less than 1 year $ 1,630 $ 1,615 Over 1 year through 5 years 4,738 4,766 After 5 years through 10 years 28,113 28,458 Over 10 years 104,407 104,989 138,888 139,828 Mortgage-backed securities 204,579 203,035 Total $ 343,467 $ 342,863 |
LOANS RECEIVABLE
LOANS RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
LOANS RECEIVABLE | NOTE 5. LOANS RECEIVABLE Loans receivable balances are summarized as follows: December 31, 2017 2016 (Dollars in thousands) Real estate mortgage loans: One-to four-family residential $ 304,107 $ 278,437 Commercial real estate 453,725 292,879 Home equity loans and lines of credit 49,877 50,334 Residential construction 37,108 18,531 Other construction and land 101,447 60,605 Total real estate loans 946,264 700,786 Commercial and industrial 56,939 41,306 Consumer 5,700 4,594 Total commercial and consumer 62,639 45,900 Loans receivable, gross 1,008,903 746,686 Less: Net deferred loan fees (1,431 ) (923 ) Fair value discount (2,012 ) (857 ) Unamortized premium 389 605 Unamortized discount (710 ) (1,150 ) Loans receivable, net of deferred fees $ 1,005,139 $ 744,361 The Bank had $231.8 million and $144.3 million of loans pledged as collateral to secure funding with FHLB at December 31, 2017 and 2016, respectively. The Bank also had $108.3 million and $89.1 million of loans pledged as collateral to secure funding with the FRB Discount Window at December 31, 2017 and 2016, respectively. Included in loans receivable and other borrowings at December 31, 2017 and 2016 are $3.6 million and $2.7 million in participated loans, respectively, that did not qualify for sale accounting. Interest expense on the other borrowings accrues at the same rate as the interest income recognized on the loans receivable, resulting in no effect to net income. The following table presents the activity related to the discount on individually purchased loans: For the Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Discount on purchased loans, beginning of period $ 1,150 $ 1,366 $ 1,487 Additional discount from new purchases — — 485 Accretion (440 ) (216 ) (311 ) Discount applied to charge-offs — — (295 ) Discount on purchased loans, end of period $ 710 $ 1,150 $ 1,366 The following table presents the activity related to the fair value discount on acquired loans: For the Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Fair value discount, beginning of period $ 857 $ 72 $ — Additional discount from acquisitions 2,479 960 72 Accretion (1,324 ) (175 ) — Discount on acquired loans, end of period $ 2,012 $ 857 $ 72 There were no purchase credit impaired loans as of December 31, 2017, or 2016. The aggregate principal amounts outstanding to executive officers and directors of the Company made in the ordinary course of business as of and for the years ended December 31 is detailed in the table below: December 31, 2017 2016 Beginning of year $ 8,222 $ 8,930 New loans 428 51 Repayments (536 ) (759 ) End of year $ 8,114 $ 8,222 |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
ALLOWANCE FOR LOAN LOSSES | NOTE 6. ALLOWANCE FOR LOAN LOSSES The following tables present, by portfolio segment, the activity in the allowance for loan losses: Year Ended December 31, 2017 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Provision 1,181 503 201 118 318 (53 ) (371 ) 1,897 Charge-offs (93 ) (193 ) (268 ) — (289 ) (68 ) (60 ) (971 ) Recoveries 118 75 6 — 148 25 284 656 Ending balance $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Year Ended December 31, 2016 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Provision 413 1,016 (486 ) (125 ) (122 ) (85 ) (337 ) 274 Charge-offs (133 ) (431 ) (158 ) — (560 ) (63 ) (201 ) (1,546 ) Recoveries 77 173 224 32 130 144 336 1,116 Ending balance $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Year Ended December 31, 2015 One-to four Commercial Home Equity Residential Construction Other Construction Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,983 $ 2,717 $ 1,333 $ 510 $ 2,936 $ 308 $ 285 $ 11,072 Provision (251 ) 388 200 (235 ) (1,741 ) 272 (133 ) (1,500 ) Charge-offs (536 ) (52 ) (540 ) — (137 ) (9 ) (48 ) $ (1,322 ) Recoveries 259 168 104 3 342 32 303 1,211 Ending balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the recorded investment in loans: December 31, 2017 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 185 $ 56 $ — $ — $ 66 $ 15 $ — $ 322 Collectively evaluated for impairment 3,833 4,308 616 303 959 488 58 10,565 $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Loans Receivable Individually evaluated for impairment $ 3,873 $ 5,714 $ 313 $ — $ 1,443 $ 291 $ — $ 11,634 Collectively evaluated for impairment 299,111 445,315 49,648 37,144 99,725 56,785 5,777 993,505 $ 302,984 $ 451,029 $ 49,961 $ 37,144 $ 101,168 $ 57,076 $ 5,777 $ 1,005,139 December 31, 2016 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 201 $ 178 $ 2 $ — $ 175 $ 28 $ — $ 584 Collectively evaluated for impairment 2,611 3,801 675 185 673 571 205 8,721 $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Loans Receivable Individually evaluated for impairment $ 3,769 $ 7,601 $ 313 $ — $ 1,682 $ 306 $ — $ 13,671 Collectively evaluated for impairment 273,169 284,502 50,087 18,439 58,444 41,397 4,652 730,690 $ 276,938 $ 292,103 $ 50,400 $ 18,439 $ 60,126 $ 41,703 $ 4,652 $ 744,361 Portfolio Quality Indicators The Company’s portfolio grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. The Company’s internal credit risk grading system is based on experiences with similarly graded loans, industry best practices, and regulatory guidance. Credit risk grades are refreshed each quarter, at which time management analyzes the resulting information, as well as other external statistics and factors, to track loan performance. The Company’s internally assigned grades pursuant to the Board-approved lending policy are as follows: · Pass (1-5) – Acceptable loans with any identifiable weaknesses appropriately mitigated. · Special Mention (6) – Potential weakness or identifiable weakness present without appropriate mitigating factors; however, loan continues to perform satisfactorily with no material delinquency noted. This may include some deterioration in repayment capacity and/or loan-to-value of securing collateral. · Substandard (7) – Significant weakness that remains unmitigated, most likely due to diminished repayment capacity, serious delinquency, and/or marginal performance based upon restructured loan terms. · Doubtful (8) – Significant weakness that remains unmitigated and collection in full is highly questionable or improbable. · Loss (9) – Collectability is unlikely resulting in immediate charge-off. We do not risk grade consumer purposed loans within all categories for which the individual loan balance is less than $417,000. These loan types provide limited credit information subsequent to origination and therefore may not be properly risk graded within our standard risk grading system. All of our consumer purposed loans are now considered ungraded and will be analyzed on a performing versus non-performing basis. The non-performing ungraded loans will be deemed substandard when determining our classified assets. Consumer purposed loans may include residential loans, home equity loans and lines of credit, residential lot loans, and other consumer loans. This change in risk grading methodology did not have any material impact on our allowance for loan losses calculation. Description of segment and class risks Each of our portfolio segments and the classes within those segments are subject to risks that could have an adverse impact on the credit quality of our loan portfolio. Management has identified the most significant risks as described below which are generally similar among our segments and classes. While the list in not exhaustive, it provides a description of the risks that management has determined are the most significant. One-to-four family residential We centrally underwrite each of our one-to-four family residential loans using credit scoring and analytical tools consistent with the Board-approved lending policy and internal procedures based upon industry best practices and regulatory directives. Loans to be sold to secondary market investors must also adhere to investor guidelines. We also evaluate the value and marketability of that collateral. Common risks to each class of non-commercial loans, including one-to-four family residential, include risks that are not specific to individual transactions such as general economic conditions within our markets, particularly unemployment and potential declines in real estate values. Personal events such as death, disability or change in marital status also add risk to non-commercial loans. Commercial real estate Commercial mortgage loans are primarily dependent on the ability of our customers to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a customer’s business results are significantly unfavorable versus the original projections, the ability for our loan to be serviced on a basis consistent with the contractual terms may be at risk. While these loans are secured by real property and possibly other business assets such as inventory or accounts receivable, it is possible that the liquidation of the collateral will not fully satisfy the obligation. Other commercial real estate loans consist primarily of loans secured by multifamily housing and agricultural loans. The primary risk associated with multifamily loans is the ability of the income-producing property that collateralizes the loan to produce adequate cash flow to service the debt. High unemployment or generally weak economic conditions may result in our customer having to provide rental rate concessions to achieve adequate occupancy rates. The performance of agricultural loans are highly dependent on favorable weather, reasonable costs for seed and fertilizer, and the ability to successfully market the product at a profitable margin. The demand for these products is also dependent on macroeconomic conditions that are beyond the control of the borrower. Home equity and lines of credit Home equity loans are often secured by first or second liens on residential real estate, thereby making such loans particularly susceptible to declining collateral values. A substantial decline in collateral value could render our second lien position to be effectively unsecured. Additional risks include lien perfection inaccuracies and disputes with first lienholders that may further weaken our collateral position. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. Residential construction and other construction and land Residential mortgage construction loans are typically secured by undeveloped or partially developed land with funds to be disbursed as home construction is completed contingent upon receipt and satisfactory review of invoices and inspections. Declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the collateral’s current market value. Non-commercial construction and land development loans can experience delays in completion and/or cost overruns that exceed the borrower’s financial ability to complete the project. Cost overruns can result in foreclosure of partially completed collateral with unrealized value and diminished marketability. Commercial construction and land development loans are dependent on the supply and demand for commercial real estate in the markets we serve as well as the demand for newly constructed residential homes and building lots. Deterioration in demand could result in significant decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for our customers. Commercial We centrally underwrite each of our commercial loans based primarily upon the customer’s ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. We strive to gain a complete understanding of our borrower’s businesses including the experience and background of the principals. To the extent that the loan is secured by collateral, which is a predominant feature of the majority of our commercial loans, or other assets including accounts receivable and inventory, we gain an understanding of the likely value of the collateral and what level of strength it brings to the loan transaction. To the extent that the principals or other parties are obligated under the note or guaranty agreements, we analyze the relative financial strength and liquidity of each guarantor. Common risks to each class of commercial loans include risks that are not specific to individual transactions such as general economic conditions within our markets, as well as risks that are specific to each transaction including volatility or seasonality of cash flows, changing demand for products and services, personal events such as death, disability or change in marital status, and reductions in the value of our collateral. Consumer The consumer loan portfolio includes loans secured by personal property such as automobiles, marketable securities, other titled recreational vehicles including boats and motorcycles, as well as unsecured consumer debt. The value of underlying collateral within this class is especially volatile due to potential rapid depreciation in values since date of loan origination in excess of principal repayment. The following tables present the recorded investment in loans by loan grade: December 31, 2017 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 9,086 $ — $ — $ — $ 1,665 $ 11 $ 10,762 2 1,164 12,360 — — 904 1,272 — 15,700 3 34,593 78,485 5,312 7,262 9,207 15,117 377 150,353 4 99,816 249,103 3,901 16,294 57,065 25,137 523 451,839 5 22,639 87,745 943 3,111 18,806 13,064 8 146,316 6 1,741 8,623 — — 2,055 306 — 12,725 7 2,112 5,371 — — 425 474 — 8,382 $ 162,065 $ 450,773 $ 10,156 $ 26,667 $ 88,462 $ 57,035 $ 919 $ 796,077 Ungraded Loan Exposure: Performing $ 140,013 $ 256 $ 39,685 $ 10,477 $ 12,623 $ 41 $ 4,846 $ 207,941 Nonperforming 906 — 120 — 83 — 12 1,121 Subtotal $ 140,919 $ 256 $ 39,805 $ 10,477 $ 12,706 $ 41 $ 4,858 $ 209,062 Total $ 302,984 $ 451,029 $ 49,961 $ 37,144 $ 101,168 $ 57,076 $ 5,777 $ 1,005,139 December 31, 2016 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 10,203 $ — $ — $ — $ 431 $ — $ 10,634 2 — 4,287 — — — 1,465 — 5,752 3 27,975 24,626 1,814 586 2,164 2,803 — 59,968 4 75,246 130,857 3,363 10,646 22,293 21,942 51 264,398 5 26,306 95,408 3,476 2,347 17,930 11,344 324 157,135 6 2,587 11,501 — 284 2,470 270 — 17,112 7 1,713 6,686 — — 869 421 — 9,689 $ 133,827 $ 283,568 $ 8,653 $ 13,863 $ 45,726 $ 38,676 $ 375 $ 524,688 Ungraded Loan Exposure: Performing $ 142,222 $ 8,535 $ 41,497 $ 4,576 $ 14,149 $ 3,027 $ 4,230 $ 218,236 Nonperforming 889 — 250 — 251 — 47 1,437 Subtotal $ 143,111 $ 8,535 $ 41,747 $ 4,576 $ 14,400 $ 3,027 $ 4,277 $ 219,673 Total $ 276,938 $ 292,103 $ 50,400 $ 18,439 $ 60,126 $ 41,703 $ 4,652 $ 744,361 Delinquency Analysis of Loans by Class The following tables include an aging analysis of the recorded investment of past-due financing receivables by class. The Company does not accrue interest on loans greater than 90 days past due. December 31, 2017 30-59 Days Past 60-89 Days Past 90 Days and Over Total Past Due Current Total Loans (Dollars in thousands) One-to-four family residential $ 3,941 $ 591 $ 562 $ 5,094 $ 297,890 $ 302,984 Commercial real estate 2,093 308 683 3,084 447,945 451,029 Home equity and lines of credit 308 27 120 455 49,506 49,961 Residential construction 501 — — 501 36,643 37,144 Other construction and land 1,711 21 93 1,825 99,343 101,168 Commercial 488 1 95 584 56,492 57,076 Consumer 27 25 10 62 5,715 5,777 Total $ 9,069 $ 973 $ 1,563 $ 11,605 $ 993,534 $ 1,005,139 December 31, 2016 30-59 Days Past 60-89 Days 90 Days and Over Total Past Due Current Total Loans (Dollars in thousands) One-to-four family residential $ 4,917 $ 1,108 $ 427 $ 6,452 $ 270,486 $ 276,938 Commercial real estate 1,382 1,800 1,638 4,820 287,283 292,103 Home equity and lines of credit 126 44 231 401 49,999 50,400 Residential construction 180 — — 180 18,259 18,439 Other construction and land 468 — 794 1,262 58,864 60,126 Commercial 368 — — 368 41,335 41,703 Consumer 62 1 — 63 4,589 4,652 Total $ 7,503 $ 2,953 $ 3,090 $ 13,546 $ 730,815 $ 744,361 Impaired Loans The following table presents investments in loans considered to be impaired and related information on those impaired loans: December 31, 2017 December 31, 2016 Recorded Balance Unpaid Principal Specific Recorded Balance Unpaid Principal Specific (Dollars in thousands) Loans without a valuation allowance One-to four-family residential $ 2,266 $ 2,376 $ — $ 2,625 $ 2,723 $ — Commercial real estate 4,050 6,119 — 5,526 7,710 — Home equity and lines of credit 313 428 — 213 328 — Other construction and land 571 678 — 771 911 — $ 7,200 $ 9,601 $ — $ 9,135 $ 11,672 $ — Loans with a valuation allowance One-to four-family residential $ 1,607 $ 1,607 $ 185 $ 1,144 $ 1,144 $ 201 Commercial real estate 1,664 1,664 56 2,075 2,075 178 Home equity and lines of credit — — — 100 100 2 Other construction and land 872 872 66 911 911 175 Commercial 291 291 15 306 306 28 $ 4,434 $ 4,434 $ 322 $ 4,536 $ 4,536 $ 584 Total One-to four-family residential $ 3,873 $ 3,983 $ 185 $ 3,769 $ 3,867 $ 201 Commercial real estate 5,714 7,783 56 7,601 9,785 178 Home equity and lines of credit 313 428 — 313 428 2 Other construction and land 1,443 1,550 66 1,682 1,822 175 Commercial 291 291 15 306 306 28 $ 11,634 $ 14,035 $ 322 $ 13,671 $ 16,208 $ 584 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated: For the Year Ended December 31, 2017 2016 2015 Average Interest Average Interest Average Interest (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 2,415 $ 116 $ 2,758 $ 117 $ 6,072 $ 174 Commercial real estate 6,188 128 7,834 116 7,999 299 Home equity and lines of credit 428 55 328 10 213 9 Other construction and land 686 20 923 27 668 30 $ 9,717 $ 319 $ 11,843 $ 270 $ 14,952 $ 512 Loans with a valuation allowance One-to-four family residential $ 1,642 $ 75 $ 1,162 $ 48 $ 2,056 $ 88 Commercial real estate 1,685 87 2,098 82 1,808 82 Home equity and lines of credit — — 100 4 100 4 Other construction and land 908 38 1,027 37 1,502 37 Commercial 299 21 312 19 323 19 $ 4,534 $ 221 $ 4,699 $ 190 $ 5,789 $ 230 Total One-to-four family residential $ 4,057 $ 191 $ 3,920 $ 165 $ 8,128 $ 262 Commercial real estate 7,873 215 9,932 198 9,807 381 Home equity and lines of credit 428 55 428 14 313 13 Other construction and land 1,594 58 1,950 64 2,170 67 Commercial 299 21 312 19 323 19 $ 14,251 $ 540 $ 16,542 $ 460 $ 20,741 $ 742 Nonperforming Loans The following table summarizes the balances of nonperforming loans. Certain loans classified as Troubled Debt Restructurings (“TDRs”) and impaired loans may be on non-accrual status even though they are not contractually delinquent. December 31, 2017 2016 (Dollars in thousands) One-to-four family residential $ 1,421 $ 1,125 Commercial real estate 2,666 3,536 Home equity loans and lines of credit 120 250 Other construction and land 464 1,042 Commercial 95 41 Consumer 12 47 Non-performing loans $ 4,778 $ 6,041 Troubled Debt Restructurings (TDRs) The following tables summarize TDRs as of the dates indicated: December 31, 2017 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 3,452 $ — $ 3,452 Commercial real estate 3,805 1,438 5,243 Home equity and lines of credit 313 — 313 Other construction and land 1,091 370 1,461 Commercial 291 — 291 $ 8,952 $ 1,808 $ 10,760 December 31, 2016 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 3,560 $ 210 $ 3,770 Commercial real estate 4,327 2,366 6,693 Home equity and lines of credit 313 — 313 Other construction and land 1,377 206 1,583 Commercial 305 — 305 $ 9,882 $ 2,782 $ 12,664 Loan modifications that were deemed TDRs at the time of the modification during the period presented are summarized in the table below: For the Year Ended December 31, 2017 (Dollars in thousands) Number of Pre-modification Post-modification Forgiveness of principal: Other construction and land 1 $ 242 $ 166 1 $ 242 $ 166 There were no loan modifications that were deemed TDRs at the time of modification during the year ended December 31, 2016. There were no TDRs that defaulted during the years ending December 31, 2017 or December 31, 2016 and which were modified as TDRs within the previous 12 months. |
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF CREDIT RISK | NOTE 7. CONCENTRATIONS OF CREDIT RISK A substantial portion of the Company’s loan portfolio is represented by loans in western North Carolina, northern Georgia, and Upstate South Carolina. The capacity and willingness of the Company’s debtors to honor their contractual obligations is dependent upon general economic conditions and the health of the real estate market within its general lending area. The majority of the Company’s loans, commitments, and lines of credit have been granted to customers in its primary market area and substantially all of these instruments are collateralized by real estate or other assets. The Company, as a matter of policy, does not extend credit to any single borrower or group of related borrowers in excess of its legal lending limit which was $22.1 million at December 31, 2017 and $22.2 million at December 31, 2016. The Company’s loans were concentrated in the following categories: December 31, 2017 2016 Real estate loans: One- to four-family residential 30.1 % 37.3 % Commercial 45.0 39.2 Home equity loans and lines of credit 4.9 6.7 Residential construction 3.7 2.5 Other construction and land 10.1 8.1 Commercial 5.6 5.5 Consumer 0.6 0.7 Total loans, gross 100 % 100 % |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 8. FIXED ASSETS Fixed assets are summarized as follows: December 31, 2017 2016 (Dollars in thousands) Land and improvements $ 10,054 $ 9,201 Buildings 22,452 18,696 Furniture, fixtures, and equipment 8,767 8,429 Construction in process 52 — Total fixed assets $ 41,325 36,326 Less accumulated depreciation (17,212 ) (16,117 ) Fixed assets, net $ 24,113 $ 20,209 Depreciation and leasehold amortization expense was $1.4 million, $1.2 million, and $1.0 million for the years ended December 31, 2017, 2016, and 2015, respectively. The Bank has entered into operating leases in connection with its retail branch operations. These leases expire at various dates through May 2022. Total rental expense was approximately $0.2 million for the years ended December 31, 2017, and approximately $0.1 million for each year ended December 31, 2016 and 2015. Following is a schedule of approximate annual future minimum lease payments under operating leases that have initial or remaining lease terms in excess of one year (in thousands): 2018 $ 168 2019 143 2020 69 2021 53 2022 18 Total minimum lease commitments $ 451 |
REAL ESTATE OWNED
REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
REAL ESTATE OWNED | NOTE 9. REAL ESTATE OWNED The following tables summarizes real estate owned and changes in the valuation allowance for real estate owned as of and for the periods indicated: As of December 31, (Dollars in thousands) 2017 2016 Real estate owned, gross $ 3,585 $ 5,650 Less: Valuation allowance 1,017 1,424 Real estate owned, net $ 2,568 $ 4,226 Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Valuation allowance, beginning $ 1,424 $ 1,372 $ 1,760 Provision charged to expense 292 655 171 Reduction due to disposal (699 ) (603 ) (559 ) Valuation allowance, ending $ 1,017 $ 1,424 $ 1,372 As of December 31, 2017, the Company had $0.5 million in loans secured by residential real estate properties for which formal foreclosure proceedings were in process. As of December 31, 2017, the Company had $0.3 million of residential real estate properties included in real estate owned. |
BANK OWNED LIFE INSURANCE (BOLI
BANK OWNED LIFE INSURANCE (BOLI) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
BANK OWNED LIFE INSURANCE (BOLI) | NOTE 10. BANK OWNED LIFE INSURANCE (“BOLI”) The following table summarizes the composition of our BOLI: December 31, 2017 2016 (Dollars in thousands) Separate account $ 2,504 $ 12,548 General account 18,491 17,944 Hybrid 11,155 855 Total $ 32,150 $ 31,347 The assets of the separate account are invested in the PIMCO Mortgage-backed Securities Account which is composed primarily of Treasury and Agency mortgage-backed securities with a rating of Aaa and repurchase agreements with a rating of P-1. The assets of the general account are invested in six different insurance carriers with ratings ranging from A+ to A++. The assets of the hybrid account are invested in two different insurance carriers with ratings ranging from A+ to A++. Certain BOLI holdings were reallocated during 2017 from the separate account to the higher yielding hybrid account as allowed by the individual policies. |
LOAN SERVICING
LOAN SERVICING | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
LOAN SERVICING | NOTE 11. LOAN SERVICING Loans serviced for others are not included in the accompanying consolidated balance sheets with the exception of $3.6 million, $2.7 million, and $2.2 million as of December 31, 2017, 2016, and 2015, respectively, for which loan sale accounting did not apply. The unpaid principal balances of mortgage and SBA loans serviced for others is detailed below. December 31, 2017 2016 2015 (Dollars in thousands) $ 276,782 $ 264,264 $ 251,492 The following summarizes the activity in the balance of loan servicing rights: December 31, 2017 2016 2015 (Dollars in thousands) Loan servicing rights, beginning of period $ 2,603 $ 2,344 $ 2,187 Capitalization from loans sold 618 604 544 Fair value adjustment (465 ) (345 ) (387 ) Loan servicing rights, end of period $ 2,756 $ 2,603 $ 2,344 The Company held custodial escrow deposits of $0.5 million and $0.4 million for loan servicing accounts at December 31, 2017 and 2016, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 12. GOODWILL AND OTHER INTANGIBLE ASSETS The Company had $23.9 million and $2.1 million of goodwill as of December 31, 2017 and 2016, respectively. The following is a summary of changes in the carrying amounts of goodwill: Year Ended December 31, 2017 2016 Dollars in thousands Balance at beginning of period $ 2,065 $ 711 Additions: Prior acquisitions measurement period adjustments 63 — Goodwill from current year acquisitions 21,775 1,354 Balance at end of period $ 23,903 $ 2,065 The Company had $4.3 million and $1.0 million of core deposit intangibles as of December 31, 2017 and 2016, respectively. The following is a summary of gross carrying amounts and accumulated amortization of core deposit intangibles: Years Ended December 31, 2017 2016 Dollars in thousands Gross balance at beginning of period $ 1,120 $ 590 Additions from acquisitions 3,720 530 Gross balance at end of period 4,840 1,120 Less accumulated amortization (571 ) (141 ) Core deposit intangible, net $ 4,269 $ 979 Core deposit intangibles are amortized using the straight-line method over their estimated useful lives of seven years. Estimated amortization expense for core deposit intangibles for each of the next five years is $0.7 million per year. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposure to business and operational risks through management of its core business activities. The Company manages interest rate risk primarily by managing the amount, sources, and duration of its investment securities portfolio and borrowings and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Derivative financial instruments are used to manage differences in the amount, timing, and duration of known or expected cash receipts or payments principally related to loans and borrowings. The table below presents the fair value of the Company’s derivative financial instruments as of the dates indicated as well as their classification on the consolidated balance sheet (in thousands). Fair Value Balance Sheet Location December 31, December 31, Designated as hedges: Cash flow hedge of borrowings - interest rate swap Other assets $ 561 $ 476 Total $ 561 $ 476 Not designated as hedges: Mortgage banking - loan commitment Other assets $ 45 $ 41 Mortgage banking - forward sales commitment Other assets 28 19 Total $ 73 $ 60 Derivative contracts that are not accounted for as hedging instruments under ASC 815, Derivatives and Hedging The Company’s objectives in using interest rate derivatives are to add stability to net interest revenue and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. The structure of the swap agreements is described in the table below: Underlyings Designation Notional Payment Provision Life of Swap Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 0.958%/Receive 3 month LIBOR 4 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 15,000 Pay 1.054%/Receive 3 month LIBOR 2 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 20,500 Pay 1.354%/Receive 3 month LIBOR 2 yrs The swap contracts involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments without exchange of the underlying notional amounts. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffectiveness of the cash flow hedge is recognized through earnings. There was no ineffectiveness in 2017 or 2016. The table below presents the effect of the Company’s cash flow hedge on the Consolidated Statement of Income (in thousands). Amount of Gain(Loss) Recognized in Accumulated Gain(Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) December 31, December 31, 2017 2016 Location 2017 2016 Interest rate swap $ 432 $ 300 Interest Expense $ (14 ) $ 32 The Company may be exposed to credit risk in the event of non-performance by the counterparties to its interest rate derivative agreements. The Company assesses the credit risk of its financial institution counterparties by monitoring publicly available credit rating and financial information. The Company manages dealer credit risk by entering into interest rate derivatives only with primary and highly rated counterparties, the use of ISDA master agreements and counterparty limits. The agreements contain collateral arrangements with the amount of collateral to be posted generally governed by the settlement value of outstanding swaps. The Company does not currently anticipate any losses from failure of interest rate derivative counterparties to honor their obligations. The Company has agreements with its derivative counterparties that contain a provision in which if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Company could also be declared in default on its derivative obligations. Furthermore, certain agreements covering the Company’s derivative instruments contain provisions that require the Company to maintain its status as a well / adequately capitalized institution. These provisions enable the counterparties to the derivative instruments to request immediate payment or require the Company to post additional collateral. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
DEPOSITS | NOTE 14. DEPOSITS The following table summarizes deposit balances and the related interest expense by type of deposit: As of and for the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Balance Interest Balance Interest Balance Interest Noninterest-bearing demand $ 179,457 $ — $ 139,136 $ — $ 121,062 $ — Interest-bearing demand 226,718 228 122,271 160 103,198 136 Money market 308,767 1,022 239,387 770 180,377 558 Savings 50,500 53 40,014 49 35,838 33 Time deposits 396,735 3,171 289,205 2,985 276,142 3,607 $ 1,162,177 $ 4,474 $ 830,013 $ 3,964 $ 716,617 $ 4,334 Contractual maturities of time deposit accounts are summarized as follows: December 31, 2017 (Dollars in thousands) 2018 $ 218,382 2019 66,023 2020 47,942 2021 34,469 2022 16,081 Thereafter 13,838 $ 396,735 The following table presents the activity related to the fair value premium on acquired time deposits: For the Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Time deposit premium, beginning of period $ 420 $ 30 $ — Additional premium for acquisitions 1,534 648 30 Accretion (852 ) (258 ) — Time deposit premium, end of period $ 1,102 $ 420 $ 30 The Company had time deposit accounts in amounts of $250 thousand or more totaling $55.8 million and $46.9 million at December 31, 2017 and 2016, respectively. The Company held brokered deposits of approximately $30.8 million and $14.8 million at December 31, 2017 and 2016, respectively. The Company had deposits from related parties of $1.6 million and $2.2 million at December 31, 2017 and 2016, respectively. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
BORROWINGS | NOTE 15. BORROWINGS The Company has total credit availability with the FHLB of up to 30% of assets, subject to the availability of qualified collateral. As collateral for these borrowings, the Company pledges certain investment securities, its FHLB stock, and its entire loan portfolio of qualifying mortgages (as defined) under a blanket collateral agreement with the FHLB. At December 31, 2017, the Company had unused borrowing capacity with the FHLB of $13.9 million based on collateral pledged at that date. The Company has total additional credit availability with FHLB of $202.2 million as of December 31, 2017, if additional collateral was available and pledged. The following tables summarize the outstanding FHLB advances as of the dates indicated: December 31, 2017 Balance Type Rate Maturity (Dollars in thousands) $ 5,000 Fixed Rate 1.29 % 1/5/2018 20,000 Fixed Rate 1.37 % 2/8/2018 20,500 Adjustable rate 1.48 % 5/24/2018 15,000 Adjustable rate 1.60 % 3/29/2018 5,000 Fixed Rate 1.29 % 4/2/2018 20,000 Fixed Rate 1.37 % 4/16/2018 25,000 Fixed Rate 1.36 % 5/7/2018 50,000 Fixed Rate 1.59 % 5/24/2018 5,000 Fixed Rate 1.26 % 6/5/2018 5,000 Fixed Rate 1.39 % 6/6/2018 10,000 Fixed Rate 0.84 % 6/29/2018 5,000 Fixed Rate 1.40 % 7/2/2018 5,000 Fixed Rate 1.38 % 7/2/2018 10,000 Fixed Rate 1.52 % 9/28/2018 5,000 Fixed Rate 1.51 % 12/31/2018 1,000 Fixed Rate 1.62 % 5/13/2019 2,000 Fixed Rate 1.53 % 6/12/2019 10,000 Fixed Rate 2.12 % 12/30/2019 5,000 Fixed Rate 2.12 % 12/30/2019 $ 223,500 1.48 % December 31, 2016 Balance Type Rate Maturity (Dollars in thousands) $ 5,000 Fixed Rate 0.58 % 1/3/2017 5,000 Fixed Rate 0.44 % 1/3/2017 50,000 Fixed Rate 0.49 % 1/5/2017 30,000 Fixed Rate 0.64 % 1/15/2017 15,000 Fixed Rate 0.63 % 1/17/2017 25,000 Fixed Rate 0.64 % 1/23/2017 20,000 Fixed Rate 0.56 % 2/7/2017 5,000 Fixed Rate 0.58 % 3/28/2017 15,000 Adjustable Rate 0.56 % 3/29/2017 5,000 Fixed Rate 0.80 % 3/31/2017 5,000 Fixed Rate 0.60 % 4/3/2017 10,000 Fixed Rate 0.60 % 4/6/2017 1,000 Fixed Rate 0.87 % 5/11/2017 20,500 Adjustable Rate 0.73 % 5/23/2017 5,000 Fixed Rate 0.82 % 6/6/2017 2,000 Fixed Rate 1.02 % 6/12/2017 5,000 Fixed Rate 0.76 % 6/30/2017 25,000 Fixed Rate 0.77 % 8/7/2017 10,000 Fixed Rate 0.82 % 9/28/2017 10,000 Fixed Rate 0.77 % 12/29/2017 5,000 Fixed Rate 0.78 % 12/30/2017 5,000 Fixed Rate 1.26 % 6/5/2018 10,000 Fixed Rate 0.84 % 6/29/2018 5,000 Fixed Rate 1.40 % 7/1/2018 5,000 Fixed Rate 1.51 % 12/31/2018 $ 298,500 0.68 % To add stability to net interest revenue and manage our exposure to interest rate movement on our adjustable rate advances, we entered into two FHLB advance interest rate swaps in 2016. The swap contracts involve the payment of fixed-rate amounts to a counterparty in exchange for our receipt of variable-rate payments over the two year lives of the contracts. The effective interest rates were 0.96% and 1.36% at December 31, 2017 for the adjustable rate advances maturing March 29, 2018 and May 24, 2018, respectively. The scheduled annual maturities of FHLB advances and respective weighted average rates are as follows: December 31, 2017 Year Balance Weighted (Dollars in thousands) 2018 205,500 1.43 % 2019 18,000 2.02 % $ 223,500 1.48 % The Company also maintained approximately $48.3 million and $48.9 million in borrowing capacity with the FRB discount window as of December 31, 2017 and 2016, respectively. The Company had no FRB discount window borrowings outstanding at December 31, 2017 or 2016. The rate charged on discount window borrowings is currently the Fed Funds target rate plus 0.50% (i.e., 2.00% as of December 31, 2017). On September 15, 2017, the Company established a $15.0 million revolving credit loan facility with NexBank SSB. The loan facility, which is secured by Entegra Bank stock, bears interest at LIBOR plus 350 basis points and is intended to be used for general corporate purposes. Unless extended, the loan will mature on September 15, 2020. The Company had drawn $5.0 million on the revolving credit loan facility as of December 31, 2017. The Company also had other borrowings of $3.6 million and $2.7 million at December 31, 2017, and 2016, respectively, which is comprised of participated loans that did not qualify for sale accounting. Interest expense on the other borrowings accrues at the same rate as the interest income recognized on the loans receivable, resulting in no effect to net income. |
JUNIOR SUBORDINATED DEBT
JUNIOR SUBORDINATED DEBT | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
JUNIOR SUBORDINATED DEBT | NOTE 16. JUNIOR SUBORDINATED DEBT The Company issued $14.4 million of junior subordinated notes to its wholly owned subsidiary, Macon Capital Trust I, to fully and unconditionally guarantee the trust preferred securities issued by the Trust. These notes qualify as Tier I capital for the Company. The notes accrue interest quarterly at 2.80% above the 90-day LIBOR, adjusted quarterly. To add stability to net interest revenue and manage our exposure to interest rate movement, we entered into an interest rate swap in June 2016. The swap contract involves the payment of fixed-rate amounts to a counterparty in exchange for our receipt of variable-rate payments over the four year life of the contract. The effective interest rate was 3.76% at December 31, 2017 and 2016. The notes mature on March 30, 2034. The Company has the right to redeem the notes, in whole or in part, on or after March 30, 2009 at a price equal to 100% of the principal amount plus accrued and unpaid interest. In addition, the Company may redeem the notes in whole (but not in part) upon the occurrence of a capital disqualification event, an investment company event, or a tax event at a specified redemption price as defined in the indenture. The Company also may, at its option, defer the payment of interest on the notes for a period up to 20 consecutive quarters, provided that interest will also accrue on the deferred payments of interest. As of December 31, 2017, the Company was current on all interest payments due. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 17. EMPLOYEE BENEFIT PLANS The Company maintains an employee savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all full-time employees who have attained the age of 21. Employees may contribute a percentage of their annual gross salary as limited by the federal tax laws. The Company matches employee contributions based on the plan guidelines. The Company contribution totaled $0.6 million, $0.5 million, and $0.4 million for the years ended December 31, 2017, 2016, and 2015. The Company has a compensated expense policy that allows employees to accrue paid time off for vacation, sick or other unexcused absences up to a specified number of days each year. Employees may sell back a limited amount of unused time at the end of each year or convert the time to an accrued sick time account which is forfeited if unused at termination, but no carry-over or payout of unused time is permitted. |
POST-EMPLOYMENT BENEFITS
POST-EMPLOYMENT BENEFITS | 12 Months Ended |
Dec. 31, 2017 | |
Postemployment Benefits [Abstract] | |
POST-EMPLOYMENT BENEFITS | NOTE 18. POST-EMPLOYMENT BENEFITS The Company has established several nonqualified deferred compensation and post-employment programs providing benefits to certain directors and key management employees. No new participants have been admitted to any of the plans since 2009 and existing benefit levels have been frozen. A summary of the key terms and accounting for each plan are as follows: · Supplemental Executive Retirement Plan (“SERP”) – provides a post-retirement income stream to several current and former executives. The estimated present value of the future benefits to be paid during a post-retirement period of 216 months is accrued over the period from the effective date of the agreement to the expected date of retirement. The SERP is an unfunded plan and is considered a general contractual obligation of the Company. The Company recorded expense related to the SERP utilizing a discount rate of 4.0% for the years ended December 31, 2017, 2016, and 2015. · CAP Equity Plan – provides a post-retirement benefit payable in cash to several current and former officers and directors. During 2015, the Company funded a Rabbi Trust to seek to generate returns that will fund the cost of certain deferred compensation agreements associated with the Plan. Some Plan participants elected to have their benefits tied to the value of specific assets, including, for example, the Company’s common stock. The remaining participants elected to continue receiving interest of 8% which is accrued on such participant’s unpaid balance after termination from the Company, subject to the terms of the Plan. The Plan was frozen in 2009, and no additional deferrals are allowed. · Director Consultation Plan – provides a post-retirement monthly benefit for continuing to provide consulting services as needed. The gross amounts of the future payments are accrued. · Life Insurance Plan – provides an endorsement split dollar benefit to several current and former executives, under which the Company has agreed to maintain an insurance policy during the executive’s retirement and to provide the executive with a death benefit. The estimated cost of insurance for the portion of the policy expected to be paid as a split dollar death benefit in each post-retirement year is measured for the period between expected retirement age and the earlier of (a) expected mortality and (b) age 95. The resulting amount is then allocated on a present value basis to the period ending on the participant’s full eligibility date. A discount rate of 4% and life expectancy based on the 2001 Valuation Basic Table has been assumed. The following table summarizes the liabilities for each plan as of the dates indicated: December 31, 2017 2016 (Dollars in thousands) SERP $ 4,288 $ 4,417 CAP Equity 4,708 4,718 Director Consultation 246 252 Life Insurance 932 824 $ 10,174 $ 10,211 The expense related to the plans noted above totaled $0.6 million, $0.8 million, and $1.4 million for the years ended December 31, 2017, 2016, and 2015, respectively. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 19. SHARE-BASED COMPENSATION The Company provides stock-based awards through its 2015 Long-Term Stock Incentive Plan which provides for awards of restricted stock, restricted stock units, stock options, and performance units to directors, officers, and employees. The cost of equity-based awards under the 2015 Long-Term Stock Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the plan is 654,637, including 458,246 for stock options and 196,391 for awards of restricted stock and restricted stock units. Shares of common stock awarded under the 2015 Long-Term Stock Incentive Plan may be issued from authorized but unissued shares or shares purchased on the open market. Share-based compensation expense related to stock options and restricted stock units recognized was $0.9 million for the years ended December 31, 2017 and 2016, and $0.1 million for the year ended December 31, 2015. The table below presents stock option activity and related information: Restricted Stock Options (Dollars in thousands, Shares Weighted Options Weighted Weighted Aggregate December 31, 2015 157,100 $ 18.55 366,000 $ 18.55 Granted 26,300 17.49 57,400 17.52 Vested/Exercised (30,220 ) 18.55 — — Forfeited (7,600 ) 18.55 (16,200 ) 18.55 December 31, 2016 145,580 18.36 407,200 18.41 Granted 18,600 25.76 40,900 25.92 Vested/Exercised (33,780 ) 18.39 (3,600 ) 18.55 Forfeited (5,200 ) 18.55 (11,200 ) 18.55 December 31, 2017 125,200 19.44 433,300 19.11 8.16 $ 4,409 Vested/Exercisable at December 31, 2017 — $ — 145,480 $ 18.47 7.97 $ 1,568 The following is a summary of stock options outstanding at December 31, 2017: Options Outstanding Options Exercisable Shares Range Wtd Ave Price Ave Remaining Life Shares Wtd Ave Price Ave Remaining Life 5,000 $ 16.00-17.00 $ 16.75 8.14 1,000 $ 16.75 8.14 40,500 17.01-18.00 17.45 8.41 8,100 17.45 8.41 346,900 18.01-18.55 18.54 7.95 136,380 18.54 7.94 29,000 18.56-25.00 24.02 9.55 — — — 11,900 25.01-30.55 30.55 9.98 — — — 433,300 19.11 8.16 145,480 18.47 7.97 The weighted average fair value of options granted in 2017 and 2016 was $5.30 and $3.02, respectively. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model. The risk-free interest rate is based on a U.S. Treasury instrument with a life that is similar to the expected life of the option grant. The Company is a newly public company as defined by Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 110. As such, the expected term of the options is based on a calculated average life using the “simplified method.” The following table illustrates the assumptions for the Black-Scholes model used in determining the fair value of options granted: 2017 2016 Fair value per option $ 5.30 $ 3.02 Expected life (years) 6.5 years 6.5 years Expected stock price volatility 13 % 12 % Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 2.19 % 1.57 % Expected forfeiture rate 0.00 % 0.00 % At December 31, 2017, the Company had $3.3 million of unrecognized compensation expense related to stock options and restricted stock. The remaining period over which compensation cost related to unvested stock options and restricted stock is expected to be recognized is 3.26 years at December 31, 2017. All unexercised options expire ten years after the grant date. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 20. INCOME TAXES On December 22, 2017, the President of the United States signed into law the Tax Reform. The Tax Reform includes a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. The Company recognized the income tax effects of the Tax Reform in its 2017 financial statements in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”), which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes Income tax expense (benefit) is summarized as follows: For the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Current Federal $ 365 $ 549 $ (150 ) State 66 24 — Deferred Federal 6,729 2,370 2,252 State 368 552 109 Change in valuation allowance — — (18,950 ) Total income tax expense (benefit) $ 7,528 $ 3,495 $ (16,739 ) The differences between actual income tax expense and the amount computed by applying the federal statutory income tax rate of 35% to income before income taxes for the periods indicated is reconciled as follows: For the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Computed income tax expense $ 3,537 $ 3,455 $ 2,480 Deferred tax valuation allowance — — (18,950 ) State income tax, net of federal benefit 282 218 165 Nontaxable municipal security income (1,036 ) (544 ) (126 ) Nontaxable BOLI income (243 ) (107 ) (160 ) Change in federal and state rates applied to deferreds 4,871 353 — Low income housing tax credit investments (44 ) — — Other 161 120 (148 ) Actual income tax expense (benefit) $ 7,528 $ 3,495 $ (16,739 ) Effective tax rate 74.5 % 35.4 % -236.2 % The components of net deferred taxes as of the periods indicated are summarized as follows: As of December 31, 2017 2016 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,356 $ 3,245 Deferred compensation and post employment benefits 1,993 3,365 Non-accrual interest 204 375 Valuation reserve for other real estate 346 693 North Carolina NOL carryover 475 557 Federal NOL carryover 3,507 8,560 AMT credit carryforward 645 414 Unrealized losses on securities 149 3,255 Loan basis differences 77 238 Deposit premium 104 155 Fixed assets 63 — Other 1,009 966 Total deferred tax assets 10,928 21,823 Deferred tax liabilities: Fixed assets — 263 Loan servicing rights 620 962 Goodwill 126 18 Core deposit intangible 37 158 Deferred loan costs 757 1,002 Prepaid expenses 31 57 Unrealized gains on securities 377 201 Derivative instruments 128 176 Other 21 1 Total deferred tax liabilities 2,097 2,838 Net deferred tax asset $ 8,831 $ 18,985 The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 35 percent to 21 percent, resulting in a $4.9 million increase in income tax expense for the year ended December 31, 2017 and a corresponding $4.9 million decrease in net deferred tax assets as of December 31, 2017. In addition, the Company recognized reductions in its net deferred tax assets of approximately $0.1 and $0.4 million during both the years ended December 31, 2017 and 2016 as a result of a reduction in the expected North Carolina income tax rate from 3.0% to 2.5% and from 4.0% to 3.0%, respectively. During 2015, the Company completed an analysis of all positive and negative evidence in assessing the need to maintain the valuation allowance against its net deferred tax asset. As a result of this analysis, the Company determined that significant positive evidence existed that would support the reversal of the valuation allowance including the following: · A pattern of sustained profitability, excluding non-recurring items, since the first quarter of 2014; · A three year cumulative profit; · Forecasted earnings sufficient to utilize all remaining net operating losses prior to expiration beginning in 2024 for North Carolina and 2027 for federal; · Significant improvements in asset quality; · Resolution of all remaining regulatory orders; and · A strong capital position enabling future earnings investments. As of December 31, 2016, $0.2 million in valuation allowance related to net deferred tax assets on investment securities remained in accumulated other comprehensive income. This valuation allowance was recognized as tax expense upon the sale or maturity of the individual securities and was fully recognized as of December 31, 2017. The following table summarizes the amount and expiration dates of the Company’s unused net operating losses: As of December 31, 2017 (Dollars in thousands) Amount Expiration Federal $ 16,702 2031-2034 North Carolina $ 24,060 2026-2029 The Company is subject to examination for federal and state purposes for the tax years 2014 through 2017. As of December 31, 2017 and 2016, the Company does not have any material unrecognized tax positions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 21. EARNINGS PER SHARE The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock: For the Year Ended December 31, (Dollars in thousands, except per share amounts) 2017 2016 Numerator: Net income $ 2,579 $ 6,376 Denominator: Weighted-average common shares outstanding - basic 6,561,699 6,477,284 Effect of dilutive stock options 54,248 — Effect of dilutive restricted stock units 42,667 12,647 Weighted-average common shares outstanding - diluted 6,658,614 6,489,931 Earnings per share - basic $ 0.39 $ 0.98 Earnings per share - diluted $ 0.39 $ 0.98 The average market price used in calculating the assumed number of dilutive shares issued related to stock options for the years ended December 31, 2017 and 2016 was $24.30 and $17.93, respectively. The average stock price was less than the exercise price for 11,900 options in the year ended December 31, 2017. As a result, these stock options are not deemed dilutive in calculating diluted earnings per share for the periods. All stock options in the year ended December 31, 2016, had exercise prices in excess of the average stock price. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 22. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the components of accumulated other comprehensive income (loss) and changes in those components as of and for the years ended December 31: (Dollars in thousands) Available for Held to Maturity Deferred Tax Cash Flow Total Balance, December 31, 2014 $ (236 ) $ (1,165 ) $ (868 ) $ — $ (2,269 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 289 — 289 Change in unrealized holding gains/losses on securities available for sale (166 ) — — — (166 ) Reclassification adjustment for net securities gains included in net income (403 ) — — — (403 ) Amortization of unrealized losses on securities transferred to held to maturity — 984 — — 984 Income tax expense (benefit) 211 (382 ) — — (171 ) Balance, December 31, 2015 $ (594 ) $ (563 ) $ (579 ) $ — $ (1,736 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 377 — 377 Change in unrealized holding gains/losses on securities available for sale (6,652 ) — — — (6,652 ) Reclassification adjustment for net securities gains included in net income (1,216 ) — — — (1,216 ) Amortization of unrealized losses on securities transferred to held to maturity — 578 — — 578 Reduction in unrealized losses related to held to maturity securities transferred to available-for-sale — 325 — — 325 Change in unrealized holding gains/losses on cash flow hedge — — — 444 444 Reclassification adjustment for cash flow hedge effectiveness — — — 32 32 Income tax expense (benefit) 2,908 (340 ) — (176 ) 2,392 Balance, December 31, 2016 $ (5,554 ) $ — $ (202 ) $ 300 $ (5,456 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 202 — 202 Change in unrealized holding gains/losses on securities available for sale 6,347 — — — 6,347 Reclassification adjustment for net securities losses included in net income 1,102 — — — 1,102 Reclassification adjustment for other than temporary impairment of securities available for sale 757 — — — 757 Change in unrealized holding gains on cash flow hedge — — — 99 99 Reclassification adjustment for cash flow hedge effectiveness — (14 ) (14 ) Income tax expense (benefit) (3,107 ) — — 47 (3,060 ) Balance, December 31, 2017 $ (455 ) $ — $ — $ 432 $ (23 ) The following table shows the line items in the Consolidated Statements of Operations affected by amounts reclassified from accumulated other comprehensive income (loss): Year Ended December 31, Income Statement (Dollars in thousands) 2017 2016 2015 Line Item Affected Available-for-sale securities Gains(losses) recognized $ (1,102 ) $ 1,216 $ 403 Gain (loss) on sale of investments, net Other than temporary impairment (757 ) Other than temporary impairment on investments Income tax effect 678 (449 ) (152 ) Income tax expense (benefit) Reclassified out of AOCI, net of tax (1,181 ) 767 251 Net income Held-to-maturity securities Amortization of unrealized losses — (578 ) (984 ) Interest income - taxable securities Increase related to transfer from AFS — — — Interest income - taxable securities Reduction related to transfer to AFS — (325 ) — Interest income - taxable securities Income tax effect — 340 382 Income tax expense Reclassified out of AOCI, net of tax — (563 ) (602 ) Net income Cash flow hedge Interest expense - effective portion (20 ) (16 ) — Interest expense - FHLB advances Interest expense - effective portion 34 (16 ) — Interest expense - Junior subordinated notes Income tax effect 5 12 — Income tax expense Reclassified out of AOCI, net of tax 19 (20 ) — Net income Deferred tax valuation allowance Recognition of reversal of valuation allowance 202 377 289 Income tax expense Total reclassified out of AOCI, net of tax $ (960 ) $ 561 $ (62 ) Net income |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
REGULATORY MATTERS | NOTE 23. REGULATORY MATTERS The Company and the Bank are subject to various regulatory capital requirements administered by their respective federal and state banking regulators. Failure to satisfy minimum capital requirements may result in certain mandatory and additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital to average assets (as defined). In July 2013, federal bank regulatory agencies issued final rules to revise their risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act (“Basel III”). On January 1, 2015, the Basel III rules became effective and include transition provisions which implement certain portions of the rules through January 1, 2019. The rule also includes changes in what constitutes regulatory capital, some of which are subject to a transition period. These changes include the phasing-out of certain instruments as qualifying capital. In addition, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of common stock are required to be deducted from capital, subject to a transition period. Finally, common equity Tier 1 capital includes accumulated other comprehensive income (which includes all unrealized gains and losses on available-for-sale debt and equity securities), subject to a transition period and a one-time opt-out election. The Bank elected to opt-out of this provision. As such, accumulated comprehensive income is not included in the Bank’s Tier 1 capital. The Bank is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based guidelines and framework under prompt corrective action provisions include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. When Basel III is fully phased in on January 1, 2019, the Company and the Bank will be required to maintain a 2.5% capital conservation buffer which is designed to absorb losses during periods of economic distress. This capital conservation buffer is comprised entirely of Common Equity Tier 1 Capital and is in addition to minimum risk-weighted asset ratios. The tables below summarize capital ratios and related information in accordance with Basel III as measured at December 31, 2017 and December 31, 2016. Following are the required and actual capital amounts and ratios for the Bank: Actual For Capital Adequacy Purposes To Be Well-Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio (1) Amount Ratio As of December 31, 2017: Tier 1 Leverage Capital $ 136,280 8.79 % $ 61,994 > $ 77,492 > Common Equity Tier 1 Capital $ 136,280 11.92 % $ 65,729 > $ 74,303 > Tier 1 Risk-based Capital $ 136,280 11.92 % $ 82,876 > $ 91,450 > Total Risk-based Capital $ 147,266 12.88 % $ 105,739 > $ 114,312 > As of December 31, 2016: Tier 1 Leverage Capital $ 138,402 11.06 % $ 50,034 > $ 62,542 > Common Equity Tier 1 Capital $ 138,402 16.33 % $ 38,150 > $ 55,106 > Tier 1 Risk-based Capital $ 138,402 16.33 % $ 50,867 > $ 67,823 > Total Risk-based Capital $ 147,807 17.43 % $ 67,823 > $ 84,778 > (1) – As of December 31, 2017, includes capital conservation buffer of 1.25%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. Following are the required and actual capital amounts and ratios for the Company: Actual For Capital Adequacy Purposes (Dollars in thousands) Amount Ratio Amount Ratio (1) As of December 31, 2017: Tier I Leverage Capital $ 134,470 8.68 % $ 61,967 > Common Equity Tier 1 Capital $ 120,861 10.57 % $ 65,775 > Tier I Risk-based Capital $ 134,470 11.76 % $ 82,934 > Total Risk Based Capital $ 145,457 12.72 % $ 105,812 > As of December 31, 2016: Tier I Leverage Capital $ 141,013 11.28 % $ 50,200 > Common Equity Tier 1 Capital $ 130,079 15.33 % $ 38,188 > Tier I Risk-based Capital $ 141,013 16.62 % $ 50,918 > Total Risk Based Capital $ 150,418 17.72 % $ 67,891 > (1) – As of December 31, 2017, includes capital conservation buffer of 1.25%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 24. COMMITMENTS AND CONTINGENCIES To accommodate the financial needs of its customers, the Company makes commitments under various terms to lend funds. These commitments include revolving credit agreements, term loan commitments and short-term borrowing agreements. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held includes first and second mortgages on one-to-four family dwellings, accounts receivable, inventory, and commercial real estate. Certain lines of credit are unsecured. The following summarizes the Company’s approximate commitments to extend credit: December 31, 2017 (Dollars in thousands) Lines of credit $ 139,974 Standby letters of credit 1,677 $ 141,651 The Company had outstanding commitments to originate loans as follows: December 31, 2017 Amount Range of Rates (Dollar in thousands) Fixed $ 47,184 3.10% to 6.99% Variable 11,686 3.99% to 7.00% $ 58,870 The allowance for unfunded commitments was $0.1 million at December 31, 2017 and 2016. The Company is exposed to loss as a result of its obligation for representations and warranties on loans sold to Fannie Mae and maintained a reserve of $0.3 million as of December 31, 2017 and 2016. In the normal course of business, the Company is periodically involved in litigation. In the opinion of the Company’s management, none of this litigation is expected to have a material adverse effect on the accompanying consolidated financial statements. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 25. FAIR VALUE DISCLOSURES We use fair value measurements when recording and disclosing certain financial assets and liabilities. Securities classified as AFS, loan servicing rights and mortgage derivatives are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record other assets at fair value on a nonrecurring basis, such as loans held for sale, impaired loans and real estate owned. 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 in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. In determining fair value, we use various valuation approaches, including market, income and cost approaches. The fair value standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, which is developed, based on market data we have obtained from independent sources. Unobservable inputs reflect our estimate of assumptions that market participants would use in pricing an asset or liability, which are developed based on the best information available in the circumstances. The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: · Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets. · Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data. · Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Fair value estimates are made at a specific point of time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale the Company’s entire holdings of a particular financial instrument. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, current interest rates and prepayment trends, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in any of these assumptions used in calculating fair value also would affect significantly the estimates. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. Following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring basis: Investment Securities We obtain fair values for debt securities from a third-party pricing service, which utilizes several sources for valuing fixed-income securities. The market evaluation sources for debt securities available-for-sale include observable inputs rather than significant unobservable inputs and are classified as Level 2. The service provider utilizes pricing models that vary by asset class and include available trade, bid and other market information. Generally, the methodologies include broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs. Included in securities are investments in an exchange traded bond fund and U.S. Treasury bonds which are valued by reference to quoted market prices and considered a Level 1 security. Also included in securities are corporate bonds which are valued using significant unobservable inputs and are classified as Level 2 or Level 3 based on market information available during the period. Trading securities represent investments in exchange traded mutual funds which are valued by reference to quoted market prices and considered a Level 1 security. Loan Servicing Rights Loan servicing rights are carried at fair value as determined by a third party valuation firm. The valuation model utilizes a discounted cash flow analysis using discount rates and prepayment speed assumptions used by market participants. The Company classifies loan servicing rights fair value measurements as Level 3. Derivative Instruments Derivative instruments include interest rate lock commitments, forward sale commitments, and interest rate swaps. Interest rate lock commitments and forward sale commitments are valued based on the change in the value of the underlying loan between the commitment date and the end of the period. The Company classifies these instruments as Level 3. Interest rate swaps are valued by a third party using significant assumptions that are observable in the market and can be corroborated by market data. The Company classifies interest rate swaps as Level 2. Following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a nonrecurring basis: Loans Held for Sale Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. Loans held for sale carried at fair value are classified as Level 2. Impaired Loans Impaired loans are carried at the lower of recorded investment or fair value. The fair value of collateral dependent impaired loans is estimated using the value of the collateral less selling costs if repayment is expected from liquidation of the collateral. Appraisals may be discounted based on our historical knowledge, changes in market conditions from the time of appraisal or our knowledge of the borrower and the borrower’s business. Impaired loans carried at fair value are classified as Level 3. Impaired loans measured using the present value of expected future cash flows are not deemed to be measured at fair value. Real Estate Owned Real estate owned, obtained in partial or total satisfaction of a loan is recorded at the lower of recorded investment in the loan or fair value less cost to sell. Subsequent to foreclosure, these assets are carried at the lower of the amount recorded at acquisition date or fair value less cost to sell. Accordingly, it may be necessary to record nonrecurring fair value adjustments. Fair value, when recorded, is generally based upon appraisals by approved, independent, state certified appraisers. Like impaired loans, appraisals may be discounted based on our historical knowledge, changes in market conditions from the time of appraisal or other information available to us. Real estate owned carried at fair value is classified as Level 3. Small Business Investment Company Holdings Small Business Investment Company holdings (SBIC) are carried at the lower of cost or fair value. From time to time impairment of SBIC is evident as a result of underlying financial review and a valuation allowance for other-than-temporary impairment is established. SBIC carried at fair value is classified as Level 3. In addition to financial instruments recorded at fair value in our financial statements, fair value accounting guidance requires disclosure of the fair value of all of an entity’s assets and liabilities that are considered financial instruments. The majority of our assets and liabilities are considered financial instruments. Many of these instruments lack an available trading market as characterized by a willing buyer and willing seller engaged in an exchange transaction. Also, it is our general practice and intent to hold our financial instruments to maturity and to not engage in trading or sales activities. For fair value disclosure purposes, we substantially utilize the fair value measurement criteria as required and explained above. In cases where quoted fair values are not available, we use present value methods to determine the fair value of our financial instruments. Following is a description of valuation methodologies used for the disclosure of the fair value of financial instruments not carried at fair value: Cash and Cash Equivalents The carrying amount of such instruments is deemed to be a reasonable estimate of fair value. Loans The fair value of variable rate performing loans is based on carrying values adjusted for credit risk. The fair value of fixed rate performing loans is estimated using discounted cash flow analyses, utilizing interest rates currently being offered for loans with similar terms, adjusted for credit risk. The fair value of nonperforming loans is based on their carrying values less any specific reserve. A prepayment assumption is used to estimate the portion of loans that will be repaid prior to their scheduled maturity. No adjustment has been made for the illiquidity in the market for loans as there is no active market for many of the Company’s loans on which to reasonably base this estimate. BOLI Fair values approximate net cash surrender values. Other Investments, at cost No ready market exists for this stock and it has no quoted market value. However, redemption of this stock has historically been at par value. Accordingly, the carrying amount is deemed to be a reasonable estimate of fair value. Deposits The fair values disclosed for demand deposits are equal to the amounts payable on demand at the reporting date. The fair value of certificates of deposit are estimated by discounting the amounts payable at the certificate rates using the rates currently offered for deposits of similar remaining maturities. Advances from the FHLB The fair values disclosed for fixed rate long-term borrowings are determined by discounting their contractual cash flows using current interest rates for long-term borrowings of similar remaining maturities. The carrying amounts of variable rate long-term borrowings approximate their fair values. Junior Subordinated Notes The carrying amount approximates fair value because the debt is variable rate tied to LIBOR. Other Borrowings The fair values disclosed for fixed rate long-term borrowings are determined by discounting their contractual cash flows using current interest rates for long-term borrowings of similar remaining maturities. Accrued Interest Receivable and Payable Since these financial instruments will typically be received or paid within three months, the carrying amounts of such instruments are deemed to be a reasonable estimate of fair value. Loan Commitments Estimates of the fair value of these off-balance sheet items are not made because of the short-term nature of these arrangements and the credit standing of the counterparties. Assets and Liabilities Recorded at Fair Value on a Recurring Basis Below is a table that presents information about certain assets and liabilities measured at fair value on a recurring basis: December 31, 2017 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 6,095 $ — $ — $ 6,095 Securities available for sale: U.S. Treasury & Government Agencies 2,496 17,022 — 19,518 Municipal Securities — 94,863 — 94,863 Mortgage-backed Securities - Guaranteed — 139,760 — 139,760 Mortgage-backed Securities - Non Guaranteed — 63,275 — 63,275 Collateralized Loan Obligations — 5,539 — 5,539 Corporate bonds — 18,799 492 19,291 Mutual funds 617 — — 617 Total securities available for sale 3,113 339,258 492 342,863 Loan servicing rights — — 2,756 2,756 Derivative assets — 561 — 561 Forward sales commitments — — 28 28 Interest rate lock commitments — — 45 45 Total assets $ 9,208 $ 339,819 $ 3,321 $ 352,348 December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 5,211 $ — $ — $ 5,211 Securities available for sale: U.S. Treasury & Government Agencies 2,514 12,107 — 14,621 Municipal Securities — 146,771 — 146,771 Mortgage-backed Securities - Guaranteed — 160,181 — 160,181 Mortgage-backed Securities - Non Guaranteed — 57,756 — 57,756 Corporate bonds — 16,214 2,144 18,358 Mutual funds 604 — — 604 Total securities available for sale 3,118 393,029 2,144 398,291 Loan servicing rights — — 2,603 2,603 Derivative assets — 476 — 476 Forward sales commitments — — 19 19 Interest rate lock commitments — — 41 41 Total assets $ 8,329 $ 393,505 $ 4,807 $ 406,641 There were no liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016. The following table presents the changes in assets measured at fair value on a recurring basis for which we have utilized Level 3 inputs to determine fair value: Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Balance at beginning of year $ 4,807 $ 2,390 $ 2,248 Corporate bonds Fair value adjustment 1 — — Transfers from HTM — 2,144 — Transfer to Level 2 (1,087 ) — — Sold (566 ) — — Loan servicing right activity, included in servicing income, net Capitalization from loans sold 618 604 544 Fair value adjustment (465 ) (345 ) (387 ) Mortgage derivative gains (losses) included in other income 13 14 (15 ) Balance at end of year $ 3,321 $ 4,807 $ 2,390 Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The table below presents information about certain assets and liabilities measured at fair value on a nonrecurring basis. There were no loans held for sale carried at fair value at either December 31, 2017 or 2016. December 31, 2017 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,266 $ 2,266 Commercial real estate — — 4,050 4,050 Home equity loans and lines of credit — — 313 313 Other construction and land — — 571 571 Real estate owned: One-to four family residential — — 288 288 Commercial real estate — — 544 544 Other construction and land — — 1,736 1,736 Total assets $ — $ — $ 9,768 $ 9,768 December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,205 $ 2,205 Commercial real estate — — 6,329 6,329 Home equity loans and lines of credit — — 213 213 Other construction and land — — 809 809 Real estate owned: One-to four family residential — — 1,336 1,336 Commercial real estate — — 722 722 Other construction and land — — 2,168 2,168 Total assets $ — $ — $ 13,782 $ 13,782 There were no liabilities measured at fair value on a nonrecurring basis as of December 31, 2017 or 2016. Impaired loans totaling $4.4 million at December 31, 2017 and $4.6 million at December 31, 2016, were measured using the present value of expected future cash flows. These impaired loans were not deemed to be measured at fair value on a nonrecurring basis. The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2017. Valuation Technique Unobservable Input General Range Impaired loans Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Real estate owned Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Corporate bonds Discounted Cash Flows Recent trade pricing 0-8% Loan servicing rights Discounted Cash Flows Prepayment speed 5 – 35% Discount rate 12-14% SBIC Indicative value provided by fund Current operations and financial condition 0%-13% The approximate carrying and estimated fair value of financial instruments are summarized below: Fair Value Measurements at December 31, 2017 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 109,467 $ 109,467 $ 109,467 $ — $ — Trading securities 6,095 6,095 6,095 — — Securities available for sale 342,863 342,863 3,113 339,258 492 Loans held for sale 3,845 4,211 — 4,211 — Loans receivable, net 1,005,139 992,993 — — 992,993 Other investments, at cost 12,386 12,386 — 12,386 — Accrued interest receivable 5,405 5,405 — 5,405 — BOLI 32,150 32,150 — 32,150 — Loan servicing rights 2,756 2,756 — — 2,756 Forward sales commitments 28 28 — — 28 Interest rate lock commitments 45 45 — — 45 Derivative asset 561 561 — 561 — SBIC investments 3,491 3,491 — — 3,491 Liabilities: Demand deposits $ 765,442 $ 765,442 $ — $ 765,442 $ — Time deposits 396,735 390,806 — — 390,806 FHLB advances 223,500 223,627 — 223,627 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 8,623 8,620 — 8,620 — Accrued interest payable 935 935 — 935 — Fair Value Measurements at December 31, 2016 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 43,294 $ 43,294 $ 43,294 $ — $ — Trading securities 5,211 5,211 5,211 — — Securities available for sale 398,291 398,291 3,118 393,029 2,144 Loans held for sale 4,584 5,093 — 5,093 — Loans receivable, net 744,361 741,612 — — 741,612 Other investments, at cost 15,261 15,261 — 15,261 — Accrued interest receivable 5,012 5,012 — 5,012 — Bank owned life insurance 31,347 31,347 — 31,347 — Loan servicing rights 2,603 2,603 — — 2,603 Forward sales commitments 19 19 — — 19 Interest rate lock commitments 41 41 — — 41 Derivative asset 476 476 — 476 — SBIC investments 1,655 1,655 — — 1,655 Liabilities: Demand deposits $ 540,808 $ 540,808 $ — $ 540,808 $ — Time deposits 289,205 286,611 — — 286,611 Federal Home Loan Bank advances 298,500 298,667 — 298,667 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 2,725 2,907 — 2,907 — Accrued interest payable 254 254 — 254 — |
SHARE REPURCHASES
SHARE REPURCHASES | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
SHARE REPURCHASES | NOTE 26. SHARE REPURCHASES On January 28, 2016, the Company announced that the Board of Directors had authorized the repurchase of up to 327,318 shares of the Company’s common stock. On February 24, 2017, the Company announced the extension of the stock repurchase program through February 23, 2018. As of March 15, 2018, the stock repurchase program has not been further extended. The following table summarizes share repurchase activity through December 31, 2017: Period Total Number Average Price Total Number of Shares Maximum Number of January 1, 2017 to January 31, 2017 — $ — — 222,750 February 1, 2017 to February 28, 2017 — $ — — 222,750 March 1, 2017 to March 31, 2017 13,000 $ 23.12 13,000 209,750 April 1, 2017 to June 30, 2017 — $ — — 209,750 July 1, 2017 to September 30, 2017 — $ — — 209,750 October 1, 2017 to December 31, 2017 — $ — — 209,750 Total year-to-date 2017 13,000 $ 23.12 13,000 209,750 |
PARENT COMPANY FINANCIAL INFORM
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
PARENT COMPANY FINANCIAL INFORMATION | NOTE 27. PARENT COMPANY FINANCIAL INFORMATION Following is condensed financial information of Entegra Financial Corp. (parent company only): Condensed Balance Sheets December 31, 2017 2016 (Dollars in thousands) Assets Cash $ 3,244 $ 3,137 Equity investment in subsidiary 167,252 144,011 Equity investment in trust 433 433 Other assets 624 508 Total assets $ 171,553 $ 148,089 Liabilities and Shareholders’ Equity Junior subordinated debentures $ 14,433 $ 14,433 Other borrowings 5,000 — Other liabilities 807 588 Shareholders’ equity 151,313 133,068 Total liabilities and shareholders’ equity $ 171,553 $ 148,089 Condensed Statements of Operations Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Income Interest income $ 56 $ 81 $ 190 Dividends from subsidiary 20,630 510 114 20,686 591 304 Expenses Interest 626 532 458 Other 361 358 259 987 890 717 Income (loss) before income taxes and equity in undistributed income of subsidiary 19,699 (299 ) (413 ) Income tax benefit allocated from consolidated income tax return 326 283 180 Income (loss) before equity in undistributed income (loss) of subsidiary 20,025 (16 ) (233 ) Equity in undistributed income (loss) of subsidiary (17,446 ) 6,392 24,058 Net income $ 2,579 $ 6,376 $ 23,825 Condensed Statements of Cash Flows Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Operating activities: Net income $ 2,579 $ 6,376 $ 23,825 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed (earnings) loss of subsidiary 17,446 (6,392 ) (24,058 ) (Increase) decrease in other assets (97 ) 55 (19 ) Increase in other liabilities 166 97 354 Net cash provided by operating activities $ 20,094 $ 136 $ 102 Investing activities: Investment in subsidiary $ (25,448 ) $ (13,486 ) $ — Net cash used in investing activities $ (25,448 ) $ (13,486 ) $ — Financing activities: Proceeds from other borrowings $ 5,000 $ — $ — Cash paid to tax authorities for shares surrendered upon vesting of restricted stock units (149 ) (87 ) — Cash paid to tax authorities for shares surrendered upon exercise of stock options (6 ) — — Repurchase of stock (301 ) (1,835 ) — Purchase of common stock for Rabbi Trust — — (279 ) Reimbursement from bank subsidiary for share-based compensation 917 864 70 Net cash provided by (used in) financing activities $ 5,461 $ (1,058 ) $ (209 ) Increase (decrease) in cash and cash equivalents 107 (14,408 ) (107 ) Cash and cash equivalents, beginning of year 3,137 17,545 17,652 Cash and cash equivalents, end of year $ 3,244 $ 3,137 $ 17,545 Noncash investing and financing activities: Transfer of Rabbi Trust investments to Company stock $ 100 $ — $ — Common stock issued in acquisitions $ 9,872 $ — $ — |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary Of Significant Accounting Policies Policies | |
Estimates | Estimates Material estimates that are particularly susceptible to significant change, in the near term, relate to the determination of the allowance for loan losses, the valuation of acquired loans, separately identifiable intangible assets associated with mergers and acquisitions, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, and the valuation of deferred tax assets. |
Principles of Consolidation | Principles of Consolidation |
Reclassification | Reclassification |
Business Combinations | Business Combinations All identifiable intangible assets that are acquired in a business combination are recognized at fair value on the acquisition date. Identifiable intangible assets are recognized separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred, licensed, rented, or exchanged separately from the entity). Deposit liabilities and the related depositor relationship intangible assets may be exchanged in observable exchange transactions. As a result, the depositor relationship intangible asset is considered identifiable, because the separability criterion has been met. In addition, acquisition-related costs and restructuring costs are recognized as period expenses as incurred. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Trading Assets | Trading Assets |
Investment Securities | Investment Securities Held-to-maturity (“HTM”) securities represent those securities that we have the positive intent and ability to hold to maturity and are carried at amortized cost. Realized gains and losses on the sale of securities and other-than-temporary impairment (“OTTI”) charges are recorded as a component of noninterest income in the Consolidated Statements of Operations. Realized gains and losses on the sale of securities are determined using the specific-identification method. Bond premiums are amortized to the call date and bond discounts are accreted to the maturity date, both on a level yield basis. We perform a quarterly review of our securities to identify those that may indicate OTTI. Our policy for OTTI within the debt securities portfolio is based upon a number of factors, including, but not limited to, the length of time and extent to which the estimated fair value has been less than cost, the financial condition of the underlying issuer and the ability of the issuer to meet contractual obligations. Other factors include the likelihood of the security’s ability to recover any decline in its estimated fair value and whether management intends to sell the security, or if it is more likely than not that management will be required to sell the investment security prior to the security’s recovery. The Company reclassified certain of its securities from available-for-sale to held-to-maturity during the years ended December 31, 2014 and 2013 in an effort to minimize the impact of future interest rate changes on Accumulated Other Comprehensive Income (Loss). The difference between the book values and fair values at the date of the transfer was reported in a separate component of Accumulated Other Comprehensive Income (Loss), and amortized into income over the remaining life of the securities as an adjustment of yield in a manner consistent with the amortization of a premium. Concurrently, the revised book values of the transferred securities (represented by the market value on the date of transfer) are amortized back to their par values over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of a discount. In the third quarter of 2016, the Company transferred its HTM investment portfolio to AFS in order to provide more flexibility managing its investment portfolio. As a result, the Company is prohibited from classifying any investment securities as HTM for two years from the date of the transfer. |
Loans Held for Sale | Loans Held for Sale We generally sell the guaranteed portion of SBA loans in the secondary market and retain the unguaranteed portion in our portfolio. Upon sale of the guaranteed portion of an SBA loan, we recognize a portion of the gain on sale into income and defer a portion of the gain related to the relative fair value of the unguaranteed loan balance we retain. The deferred gain is amortized into income over the remaining life of the loan Gains and losses on sales of loans held for sale are included in the Consolidated Statements of Operations in Mortgage Banking income for residential loans and Gains on sale of SBA loans for SBA loans. Net unrealized losses are recognized by charges to Mortgage Banking income. |
Loans Receivable | Loans Receivable Generally, consumer loans are charged down to their estimated collateral value after reaching 90 days past due. The number of days past due is determined by the amount of time when the payment was due based on contractual terms. Commercial loans are charged off as management becomes aware of facts and circumstances that raise doubt as to the collectability of all or a portion of the principal and when we believe a confirmed loss exists. The Company originates and sells the guaranteed portion of SBA loans into the secondary market. When the Company retains the right to service a sold SBA loan, the previous carrying amount is allocated between the guaranteed portion of the loan sold, the unguaranteed portion of the loan retained and the retained SBA servicing right based on their relative fair values on the date of transfer. |
Nonaccrual Loans | Nonaccrual Loans For loans modified in a troubled debt restructuring, the loan is generally placed on non-accrual until there is a period of satisfactory payment performance by the borrower (either immediately before or after the restructuring), generally defined as six months, and the ultimate collectability of all amounts contractually due is not in doubt. |
Troubled Debt Restructurings (TDR) | Troubled Debt Restructurings (“TDR”) All TDRs are considered to be impaired loans and will be reported as an impaired loan for the remaining life of the loan, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the original principal and interest will be collected according to the restructured agreement. We may also remove a loan from TDR and impaired status if the TDR is subsequently restructured and at the time of the subsequent restructuring the borrower is not experiencing financial difficulties and, under the terms of the subsequent restructuring agreement, no concession has been granted to the borrower. |
Allowance for Loan Losses (ALL) | Allowance for Loan Losses (“ALL”) A loan is considered impaired when it is probable that we will be unable to collect all principal and interest payments due according to the original contractual terms of the loan agreement. We individually evaluate all loans classified as substandard or nonaccrual greater than $350,000 for impairment. If the impaired loan is considered collateral dependent, a charge-off is taken based upon the appraised value of the property (less an estimate of selling costs if foreclosure is anticipated). If the impaired loan is not collateral dependent, a specific reserve is established based upon an estimate of the future discounted cash flows after consideration of modifications and the likelihood of future default and prepayment. The allowance for non-impaired loans consists of a base historical loss reserve and a qualitative reserve. The loss rates for the base loss reserve are segmented into 13 loan categories and contain loss rates ranging from approximately 0.5% to 0.74%. The qualitative reserve adjusts the average loss rates utilized in the base loss reserve for trends in the following internal and external factors: · Non-accrual and classified loans · Collateral values · Loan concentrations and loan growth · Economic conditions – including unemployment rates, housing prices and sales, and regional economic outlooks. Qualitative reserve adjustment factors are decreased for favorable trends and increased for unfavorable trends. These factors are subject to further adjustment as economic and other conditions change. |
Fixed Assets | Fixed Assets |
Real Estate Owned | Real Estate Owned Subsequent to foreclosure, real estate owned is recorded at the lower of carrying amount or fair value less estimated costs to sell. Valuations are periodically performed by management, but not less than every eighteen months, and an additional allowance for losses is established by a charge to Net Cost of Operation of Real Estate Owned in the Consolidated Statements of Operations, if necessary. |
Other Investments, at cost | Other Investments, at cost FHLB stock is carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. The Company has evaluated its FHLB stock and concluded that it is not impaired because the FHLB Atlanta is currently paying cash dividends and redeeming stock at par. The FHLB requires members to purchase and hold a specified level of stock based upon on the members asset value, level of borrowings and participation in other programs offered. Stock in the FHLB is non-marketable and is redeemable at the discretion of the FHLB. Members do not purchase stock in the FHLB for the same reasons that traditional equity investors acquire stock in an investor-owned enterprise. Rather, members purchase stock to obtain access to the low-cost products and services offered by the FHLB. Unlike equity securities of traditional for-profit enterprises, the stock of the FHLB does not provide its holders with an opportunity for capital appreciation because, by regulation, FHLB stock can only be purchased, redeemed and transferred at par value. Both cash and stock dividends are reported as Other interest income in the Consolidated Statements of Operations. |
Bank Owned Life Insurance (BOLI) | Bank Owned Life Insurance (“BOLI”) |
Loan Servicing Rights (LSR) | Loan Servicing Rights (“LSR”) Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal (generally 25 basis points for residential mortgage loans and 100 basis points for SBA loans) or a fixed amount per loan, and are recorded as income when earned. Changes in fair value of LSRs are netted against loan servicing fee income and reported as Servicing income, net in the Consolidated Statements of Operations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Core deposit intangibles are amortized over the estimated useful lives of the deposit accounts acquired (generally seven years on a straight line basis). |
Derivative Financial Instruments - Interest Rate Lock Commitments and Forward Sale Contracts | Derivative Financial Instruments and Hedging Activities – Interest Rate Lock Commitments and Forward Sale Contracts Our interest rate risk management strategy incorporates the use of derivative instruments to minimize fluctuations in net income that are caused by interest rate volatility. The goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain balance sheet assets and liabilities so that net interest revenue is not, on a material basis, adversely affected by movements in interest rates. We view this strategy as a prudent management of interest rate risk, such that net income is not exposed to undue risk presented by changes in interest rates. In carrying out this part of its interest rate risk management strategy, we use interest rate derivative contracts; primarily interest rate swaps. Interest rate swaps generally involve the exchange of fixed- and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date. We classify our derivative financial instruments as either (1) a hedge of an exposure to changes in the fair value of a recorded asset or liability (“fair value hedge”), (2) a hedge of an exposure to changes in the cash flows of a recognized asset, liability or forecasted transaction (“cash flow hedge”), or (3) derivatives not designated as accounting hedges. Changes in the fair value of derivatives not designated as hedges are recognized in current period earnings. Our interest rate swaps are classified as cash flow hedges and as such, adjustments to fair value are recorded in Accumulated Other Comprehensive Income. |
Small Business Investment Company Investments | Small Business Investment Company Holdings |
Advertising Expense | Advertising Expense |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability method and are reported net in the Consolidated Balance Sheets. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities and recognizes enacted changes in tax rate and laws. When deferred tax assets are recognized, they are subject to a valuation allowance based on management’s judgment as to whether realization is more likely than not. In determining the need for a valuation allowance, the Company considers the following sources of taxable income: · Future reversals of existing taxable temporary differences · Future taxable income exclusive of reversing temporary differences and carry forwards · Taxable income in prior carryback years · Tax planning strategies that would, if necessary, be implemented As a result of the analysis above, the Company concluded that a valuation allowance was not necessary as of December 31, 2017 and 2016. Accrued taxes represent the net estimated amount due to or from taxing jurisdictions and are reported in other assets or other liabilities, as appropriate, in the Consolidated Balance Sheets. We evaluate and assess the relative risks and appropriate tax treatment of transactions and filing positions after considering statutes, regulations, judicial precedent and other information and maintain tax accruals consistent with the evaluation of these relative risks and merits. Changes to the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by taxing authorities and changes to statutory, judicial and regulatory guidance. These changes, when they occur, can affect deferred taxes and accrued taxes, as well as the current period’s income tax expense and can be significant to our operating results. As a result of the Tax Cuts and Jobs Act of 2017, the Company realized deferred tax expense of $4.9 million upon the revaluation of its deferred assets and deferred liabilities at the newly enacted Federal tax rate of 21%. Tax positions are recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 percent likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. |
Allowance for Unfunded Commitments | Allowance for Unfunded Commitments |
Junior Subordinated Notes | Junior Subordinated Notes |
Stock-based Compensation | Stock- based We account for stock-based compensation in accordance with Accounting Standard Codification (“ASC”) 718, Compensation-Stock Compensation. Under ASC 718, stock-based compensation expense reflects the fair value of stock-based awards measured at grant date, is recognized over the relevant vesting period on a straight-line basis, and adjusts each period for anticipated forfeitures. Stock-based compensation is recognized only for awards that vest, and our periodic accrual of compensation cost is based on the estimated number of awards expected to vest. We measure the fair value of compensation cost related to restricted stock awards based on the closing market price of our common stock on the grant date. Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded through the income statement as income tax benefit. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded through the income statement as income tax expense. |
Segments | Segments |
Subsequent Events | Subsequent Events |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02 Income Statement – Reporting Comprehensive Income (Topic 220: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In March 2017, the FASB issued amendments to ASU 2017-08 Receivables –Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization of Purchased Callable Debt Securities. In March 2017, the FASB issued amendments to ASU 2017-07 Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension cost and Net Periodic Postretirement Benefit Cost. In January 2017, the FASB issued amendments to ASU 2017-04 Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued amendments to ASU 2017-01 Business Combinations (Topic 80): Clarifying the Definition of a Business. In January 2016, the FASB issued amendments to ASU 2016-01 Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In March 2016, the FASB issued amendments to ASU 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to provide In June 2016, the FASB issued amendments to Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2016, the FASB issued ASU No. 2016-15 , “Classification of Certain Cash Receipts and Cash Payments.” In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). 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. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
As Recorded by Chattahoochee [Member] | |
Schedule of Assets and Liabilities assumed at the date of acquisition and their initial fair values | The purchased assets and assumed liabilities were recorded at their acquisition date fair values and are summarized in the table below: As Recorded by Fair Value As Recorded by (Dollars in thousands) Chattahoochee Adjustments the Company Assets Cash and cash equivalents $ 22,625 $ — $ 22,625 Loans 159,540 (570 ) 158,970 Fixed assets 3,945 (408 ) 3,537 Accrued interest receivable 421 — 421 Core deposit intangible — 2,070 2,070 Deferred tax asset 751 (751 ) — Other assets 1,579 (8 ) 1,571 Total assets acquired $ 188,861 $ 333 $ 189,194 Liabilities Deposits $ 165,624 $ 472 $ 166,096 Accrued Interest payable 102 (14 ) 88 Other liabilities 7,790 (3,341 ) 4,449 Total liabilities assumed 173,516 (2,883 ) 170,633 Excess of assets acquired over liabilities assumed $ 15,345 $ 3,216 $ 18,561 Consideration transferred Cash $ 25,448 Common stock issued (395,666 shares) 9,872 Total fair value of consideration transferred 35,320 Goodwill $ 16,759 |
Schedule of Impact of Merger and Pro Forma Information | The Company expects to achieve further operating cost savings and other business synergies as a result of the Chattahoochee acquisition which are not reflected in the pro forma amounts below: Actual Pro Forma Pro Forma Since Acquisition October 1, 2017 through Year Ended Year Ended (Dollars in thousands) December 31, 2017 December 31, 2017 December 31, 2016 Total revenues ( net interest income and noninterest income $ 2,509 $ 54,618 $ 49,542 Net income $ 1,194 $ 7,079 $ 8,159 |
As Recorded by Stearns [Member] | |
Schedule of Assets and Liabilities assumed at the date of acquisition and their initial fair values | The purchased assets and assumed liabilities were recorded at their acquisition date fair values and are summarized in the table below: (Dollars in thousands) As Recorded Fair Value As Recorded by Assets Cash and cash equivalents $ 1,258 $ — $ 1,258 Loans 7 — 7 Premises and equipment 950 132 1,082 Core deposit intangible — 1,650 1,650 Total assets acquired 2,215 1,782 3,997 Liabilities Deposits $ 153,122 $ 1,062 $ 154,184 Other liabilities 321 — 321 Total liabilities assumed 153,443 1,062 154,505 Excess of liabilities assumed over assets acquired $ 151,228 $ 720 $ 150,508 Cash received to settle the acquisition 145,492 Goodwill $ 5,016 |
As Recorded by Old Bank Town [Member] | |
Schedule of Assets and Liabilities assumed at the date of acquisition and their initial fair values | The purchased assets and assumed liabilities were recorded at their acquisition date fair values and are summarized in the table below: As Recorded by Fair Value As Recorded by (Dollars in thousands) Old Town Bank Adjustments the Company Assets Cash and cash equivalents $ 7,573 $ — $ 7,573 Investments 30,882 246 31,128 Loans 64,573 272 64,845 Fixed assets 3,414 (22 ) 3,392 Interest receivable 552 — 552 Core deposit intangible — 530 530 Other real estate owned 880 (21 ) 859 Deferred tax asset 259 207 466 Other assets 938 (336 ) 602 Total assets acquired $ 109,071 $ 876 $ 109,947 Liabilities Deposits $ 88,059 $ 648 $ 88,707 FHLB advances 9,000 25 9,025 Accrued Interest payable 30 — 30 Other liabilities 125 (9 ) 116 Total liabilities assumed 97,214 664 97,878 Excess of assets acquired over liabilities assumed $ 11,857 $ 213 $ 12,069 Purchase price 13,486 Goodwill $ 1,417 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investment Securities Tables | |
Schedule of holdings of our trading account | The following table presents the holdings of our trading account as of December 31, 2017 and December 31, 2016: December 31, 2017 2016 (Dollars in thousands) Mutual funds $ 6,095 $ 5,211 |
Schedule of investment securities available for sale | The amortized cost and estimated fair values of securities classified as AFS are summarized as follows: December 31, 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 19,519 $ 7 $ (8 ) $ 19,518 Municipal Securities 94,259 975 (371 ) 94,863 Mortgage-backed Securities - Guaranteed 141,301 112 (1,653 ) 139,760 Mortgage-backed Securities - Non Guaranteed 63,279 323 (327 ) 63,275 Collateralized Loan Obligations 5,555 6 (22 ) 5,539 Corporate bonds 18,925 409 (43 ) 19,291 Mutual funds 629 — (12 ) 617 $ 343,467 $ 1,832 $ (2,436 ) $ 342,863 December 31, 2016 Gross Gross Estima ted Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 14,577 $ 46 $ (2 ) $ 14,621 Municipal Securities 152,208 337 (5,774 ) 146,771 Mortgage-backed Securities - Guaranteed 162,379 134 (2,332 ) 160,181 Mortgage-backed Securities - Non Guaranteed 58,967 2 (1,213 ) 57,756 Corporate bonds 18,354 171 (167 ) 18,358 Mutual funds 616 — (12 ) 604 $ 407,101 $ 690 $ (9,500 ) $ 398,291 |
Unrealized Losses Related to Held to Maturity Securities Previously Recognized in Other Comprehensive Income | Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: December 31, 2017 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (Dollars in thousands) Available-for-Sale: U.S. Treasury & Government Agencies $ 8,939 $ 6 $ 998 $ 2 $ 9,937 $ 8 Municipal Securities 12,047 66 22,982 305 35,029 371 Mortgage-backed Securities - Guaranteed 56,731 513 53,800 1,140 110,531 1,653 Mortgage-backed Securities - Non Guaranteed 24,455 216 10,654 111 35,109 327 Collateralized loan obligations 3,520 22 — — 3,520 22 Corporate bonds 1,304 9 1,044 34 2,348 43 Mutual funds — — 617 12 617 12 $ 106,996 $ 832 $ 90,095 $ 1,604 $ 197,091 $ 2,436 December 31, 2016 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (Dollars in thousands) Available-for-Sale: U.S. Treasury & Government Agencies $ 1,000 $ 2 $ — $ — $ 1,000 $ 2 Municipal Securities 122,468 5,759 331 15 122,799 5,774 Mortgage-backed Securities - Guaranteed 115,539 2,035 17,594 297 133,133 2,332 Mortgage-backed Securities - Non Guaranteed 54,555 1,213 — — 54,555 1,213 Corporate bonds 6,741 167 — — 6,741 167 Mutual funds 616 12 — — 616 12 $ 300,919 $ 9,188 $ 17,925 $ 312 $ 318,844 $ 9,500 |
Securities Gross Unrealized Losses Position | December 31, 2017 Less Than More Than Total U.S. Treasury & Government Agencies 5 1 6 Municipal Securities 12 22 34 Mortgage-backed Securities - Guaranteed 45 37 82 Mortgage-backed Securities - Non Guaranteed 15 8 23 Collateralized loan obligation 2 — 2 Corporate bonds 2 1 3 Mutual funds — 1 1 81 70 151 December 31, 2016 Less Than More Than Total U.S. Treasury & Government Agencies 1 — 1 Municipal Securities 129 1 130 Mortgage-backed Securities - Guaranteed 77 13 90 Mortgage-backed Securities - Non Guaranteed 24 1 25 Corporate bonds 8 — 8 Mutual funds 1 — 1 240 15 255 |
Proceeds from Sales of Securities Available For Sale and Their Corresponding Gross Realized Gains and Losses | The Company received proceeds from sales of securities classified as AFS and corresponding gross realized gains and losses as follows: For the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Gross proceeds $ 169,146 $ 124,823 $ 39,022 Gross realized gains 558 1,261 423 Gross realized losses 1,660 45 20 |
Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity | The amortized cost and estimated fair value of investments in debt securities at December 31, 2017, by contractual maturity, is shown below. Mortgage-backed securities have not been scheduled because expected maturities will differ from contractual maturities when borrowers have the right to prepay the obligations. Available for Sale Amortized Fair Value (Dollars in thousands) Less than 1 year $ 1,630 $ 1,615 Over 1 year through 5 years 4,738 4,766 After 5 years through 10 years 28,113 28,458 Over 10 years 104,407 104,989 138,888 139,828 Mortgage-backed securities 204,579 203,035 Total $ 343,467 $ 342,863 |
LOANS RECEIVABLE (Tables)
LOANS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loans Receivable Tables | |
Loan Receivable | Loans receivable balances are summarized as follows: December 31, 2017 2016 (Dollars in thousands) Real estate mortgage loans: One-to four-family residential $ 304,107 $ 278,437 Commercial real estate 453,725 292,879 Home equity loans and lines of credit 49,877 50,334 Residential construction 37,108 18,531 Other construction and land 101,447 60,605 Total real estate loans 946,264 700,786 Commercial and industrial 56,939 41,306 Consumer 5,700 4,594 Total commercial and consumer 62,639 45,900 Loans receivable, gross 1,008,903 746,686 Less: Net deferred loan fees (1,431 ) (923 ) Fair value discount (2,012 ) (857 ) Unamortized premium 389 605 Unamortized discount (710 ) (1,150 ) Loans receivable, net of deferred fees $ 1,005,139 $ 744,361 |
Activity Related to Discount on Purchased Loans | Included in loans receivable and other borrowings at December 31, 2017 and 2016 are $3.6 million and $2.7 million in participated loans, respectively, that did not qualify for sale accounting. Interest expense on the other borrowings accrues at the same rate as the interest income recognized on the loans receivable, resulting in no effect to net income. The following table presents the activity related to the discount on individually purchased loans: For the Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Discount on purchased loans, beginning of period $ 1,150 $ 1,366 $ 1,487 Additional discount from new purchases — — 485 Accretion (440 ) (216 ) (311 ) Discount applied to charge-offs — — (295 ) Discount on purchased loans, end of period $ 710 $ 1,150 $ 1,366 The following table presents the activity related to the fair value discount on acquired loans: For the Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Fair value discount, beginning of period $ 857 $ 72 $ — Additional discount from acquisitions 2,479 960 72 Accretion (1,324 ) (175 ) — Discount on acquired loans, end of period $ 2,012 $ 857 $ 72 |
Aggregate amount of extensions of credit to executive officers and directors | The aggregate principal amounts outstanding to executive officers and directors of the Company made in the ordinary course of business as of and for the years ended December 31 is detailed in the table below: December 31, 2017 2016 Beginning of year $ 8,222 $ 8,930 New loans 428 51 Repayments (536 ) (759 ) End of year $ 8,114 $ 8,222 |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Allowance For Loan Losses Tables | |
Changes in Allowance for Loan Losses | The following tables present, by portfolio segment, the activity in the allowance for loan losses: Year Ended December 31, 2017 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Provision 1,181 503 201 118 318 (53 ) (371 ) 1,897 Charge-offs (93 ) (193 ) (268 ) — (289 ) (68 ) (60 ) (971 ) Recoveries 118 75 6 — 148 25 284 656 Ending balance $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Year Ended December 31, 2016 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Provision 413 1,016 (486 ) (125 ) (122 ) (85 ) (337 ) 274 Charge-offs (133 ) (431 ) (158 ) — (560 ) (63 ) (201 ) (1,546 ) Recoveries 77 173 224 32 130 144 336 1,116 Ending balance $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Year Ended December 31, 2015 One-to four Commercial Home Equity Residential Construction Other Construction Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,983 $ 2,717 $ 1,333 $ 510 $ 2,936 $ 308 $ 285 $ 11,072 Provision (251 ) 388 200 (235 ) (1,741 ) 272 (133 ) (1,500 ) Charge-offs (536 ) (52 ) (540 ) — (137 ) (9 ) (48 ) $ (1,322 ) Recoveries 259 168 104 3 342 32 303 1,211 Ending balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 |
Investment in Loans by Portfolio Segment | The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the recorded investment in loans: December 31, 2017 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 185 $ 56 $ — $ — $ 66 $ 15 $ — $ 322 Collectively evaluated for impairment 3,833 4,308 616 303 959 488 58 10,565 $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Loans Receivable Individually evaluated for impairment $ 3,873 $ 5,714 $ 313 $ — $ 1,443 $ 291 $ — $ 11,634 Collectively evaluated for impairment 299,111 445,315 49,648 37,144 99,725 56,785 5,777 993,505 $ 302,984 $ 451,029 $ 49,961 $ 37,144 $ 101,168 $ 57,076 $ 5,777 $ 1,005,139 December 31, 2016 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 201 $ 178 $ 2 $ — $ 175 $ 28 $ — $ 584 Collectively evaluated for impairment 2,611 3,801 675 185 673 571 205 8,721 $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Loans Receivable Individually evaluated for impairment $ 3,769 $ 7,601 $ 313 $ — $ 1,682 $ 306 $ — $ 13,671 Collectively evaluated for impairment 273,169 284,502 50,087 18,439 58,444 41,397 4,652 730,690 $ 276,938 $ 292,103 $ 50,400 $ 18,439 $ 60,126 $ 41,703 $ 4,652 $ 744,361 |
Credit Risk Profile by Rating | The following tables present the recorded investment in loans by loan grade: December 31, 2017 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 9,086 $ — $ — $ — $ 1,665 $ 11 $ 10,762 2 1,164 12,360 — — 904 1,272 — 15,700 3 34,593 78,485 5,312 7,262 9,207 15,117 377 150,353 4 99,816 249,103 3,901 16,294 57,065 25,137 523 451,839 5 22,639 87,745 943 3,111 18,806 13,064 8 146,316 6 1,741 8,623 — — 2,055 306 — 12,725 7 2,112 5,371 — — 425 474 — 8,382 $ 162,065 $ 450,773 $ 10,156 $ 26,667 $ 88,462 $ 57,035 $ 919 $ 796,077 Ungraded Loan Exposure: Performing $ 140,013 $ 256 $ 39,685 $ 10,477 $ 12,623 $ 41 $ 4,846 $ 207,941 Nonperforming 906 — 120 — 83 — 12 1,121 Subtotal $ 140,919 $ 256 $ 39,805 $ 10,477 $ 12,706 $ 41 $ 4,858 $ 209,062 Total $ 302,984 $ 451,029 $ 49,961 $ 37,144 $ 101,168 $ 57,076 $ 5,777 $ 1,005,139 December 31, 2016 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 10,203 $ — $ — $ — $ 431 $ — $ 10,634 2 — 4,287 — — — 1,465 — 5,752 3 27,975 24,626 1,814 586 2,164 2,803 — 59,968 4 75,246 130,857 3,363 10,646 22,293 21,942 51 264,398 5 26,306 95,408 3,476 2,347 17,930 11,344 324 157,135 6 2,587 11,501 — 284 2,470 270 — 17,112 7 1,713 6,686 — — 869 421 — 9,689 $ 133,827 $ 283,568 $ 8,653 $ 13,863 $ 45,726 $ 38,676 $ 375 $ 524,688 Ungraded Loan Exposure: Performing $ 142,222 $ 8,535 $ 41,497 $ 4,576 $ 14,149 $ 3,027 $ 4,230 $ 218,236 Nonperforming 889 — 250 — 251 — 47 1,437 Subtotal $ 143,111 $ 8,535 $ 41,747 $ 4,576 $ 14,400 $ 3,027 $ 4,277 $ 219,673 Total $ 276,938 $ 292,103 $ 50,400 $ 18,439 $ 60,126 $ 41,703 $ 4,652 $ 744,361 |
Aging Analysis of Recorded Investment of Past-Due Financing Receivables | The following tables include an aging analysis of the recorded investment of past-due financing receivables by class. The Company does not accrue interest on loans greater than 90 days past due. December 31, 2017 30-59 Days Past 60-89 Days Past 90 Days and Over Total Past Due Current Total Loans (Dollars in thousands) One-to-four family residential $ 3,941 $ 591 $ 562 $ 5,094 $ 297,890 $ 302,984 Commercial real estate 2,093 308 683 3,084 447,945 451,029 Home equity and lines of credit 308 27 120 455 49,506 49,961 Residential construction 501 — — 501 36,643 37,144 Other construction and land 1,711 21 93 1,825 99,343 101,168 Commercial 488 1 95 584 56,492 57,076 Consumer 27 25 10 62 5,715 5,777 Total $ 9,069 $ 973 $ 1,563 $ 11,605 $ 993,534 $ 1,005,139 December 31, 2016 30-59 Days Past 60-89 Days 90 Days and Over Total Past Due Current Total Loans (Dollars in thousands) One-to-four family residential $ 4,917 $ 1,108 $ 427 $ 6,452 $ 270,486 $ 276,938 Commercial real estate 1,382 1,800 1,638 4,820 287,283 292,103 Home equity and lines of credit 126 44 231 401 49,999 50,400 Residential construction 180 — — 180 18,259 18,439 Other construction and land 468 — 794 1,262 58,864 60,126 Commercial 368 — — 368 41,335 41,703 Consumer 62 1 — 63 4,589 4,652 Total $ 7,503 $ 2,953 $ 3,090 $ 13,546 $ 730,815 $ 744,361 |
Summary of Average Impaired Loans | The following table presents investments in loans considered to be impaired and related information on those impaired loans: December 31, 2017 December 31, 2016 Recorded Balance Unpaid Principal Specific Recorded Balance Unpaid Principal Specific (Dollars in thousands) Loans without a valuation allowance One-to four-family residential $ 2,266 $ 2,376 $ — $ 2,625 $ 2,723 $ — Commercial real estate 4,050 6,119 — 5,526 7,710 — Home equity and lines of credit 313 428 — 213 328 — Other construction and land 571 678 — 771 911 — $ 7,200 $ 9,601 $ — $ 9,135 $ 11,672 $ — Loans with a valuation allowance One-to four-family residential $ 1,607 $ 1,607 $ 185 $ 1,144 $ 1,144 $ 201 Commercial real estate 1,664 1,664 56 2,075 2,075 178 Home equity and lines of credit — — — 100 100 2 Other construction and land 872 872 66 911 911 175 Commercial 291 291 15 306 306 28 $ 4,434 $ 4,434 $ 322 $ 4,536 $ 4,536 $ 584 Total One-to four-family residential $ 3,873 $ 3,983 $ 185 $ 3,769 $ 3,867 $ 201 Commercial real estate 5,714 7,783 56 7,601 9,785 178 Home equity and lines of credit 313 428 — 313 428 2 Other construction and land 1,443 1,550 66 1,682 1,822 175 Commercial 291 291 15 306 306 28 $ 11,634 $ 14,035 $ 322 $ 13,671 $ 16,208 $ 584 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated: For the Year Ended December 31, 2017 2016 2015 Average Interest Average Interest Average Interest (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 2,415 $ 116 $ 2,758 $ 117 $ 6,072 $ 174 Commercial real estate 6,188 128 7,834 116 7,999 299 Home equity and lines of credit 428 55 328 10 213 9 Other construction and land 686 20 923 27 668 30 $ 9,717 $ 319 $ 11,843 $ 270 $ 14,952 $ 512 Loans with a valuation allowance One-to-four family residential $ 1,642 $ 75 $ 1,162 $ 48 $ 2,056 $ 88 Commercial real estate 1,685 87 2,098 82 1,808 82 Home equity and lines of credit — — 100 4 100 4 Other construction and land 908 38 1,027 37 1,502 37 Commercial 299 21 312 19 323 19 $ 4,534 $ 221 $ 4,699 $ 190 $ 5,789 $ 230 Total One-to-four family residential $ 4,057 $ 191 $ 3,920 $ 165 $ 8,128 $ 262 Commercial real estate 7,873 215 9,932 198 9,807 381 Home equity and lines of credit 428 55 428 14 313 13 Other construction and land 1,594 58 1,950 64 2,170 67 Commercial 299 21 312 19 323 19 $ 14,251 $ 540 $ 16,542 $ 460 $ 20,741 $ 742 |
Financing Receivables on Nonaccrual Status | The following table summarizes the balances of nonperforming loans. Certain loans classified as Troubled Debt Restructurings (“TDRs”) and impaired loans may be on non-accrual status even though they are not contractually delinquent. December 31, 2017 2016 (Dollars in thousands) One-to-four family residential $ 1,421 $ 1,125 Commercial real estate 2,666 3,536 Home equity loans and lines of credit 120 250 Other construction and land 464 1,042 Commercial 95 41 Consumer 12 47 Non-performing loans $ 4,778 $ 6,041 |
Summary of TDR Loans | The following tables summarize TDRs as of the dates indicated: December 31, 2017 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 3,452 $ — $ 3,452 Commercial real estate 3,805 1,438 5,243 Home equity and lines of credit 313 — 313 Other construction and land 1,091 370 1,461 Commercial 291 — 291 $ 8,952 $ 1,808 $ 10,760 December 31, 2016 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 3,560 $ 210 $ 3,770 Commercial real estate 4,327 2,366 6,693 Home equity and lines of credit 313 — 313 Other construction and land 1,377 206 1,583 Commercial 305 — 305 $ 9,882 $ 2,782 $ 12,664 Loan modifications that were deemed TDRs at the time of the modification during the period presented are summarized in the table below: For the Year Ended December 31, 2017 (Dollars in thousands) Number of Pre-modification Post-modification Forgiveness of principal: Other construction and land 1 $ 242 $ 166 1 $ 242 $ 166 |
CONCENTRATIONS OF CREDIT RISK (
CONCENTRATIONS OF CREDIT RISK (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Concentrations Of Credit Risk Tables | |
Concentration of Company loan | The Company’s loans were concentrated in the following categories: December 31, 2017 2016 Real estate loans: One- to four-family residential 30.1 % 37.3 % Commercial 45.0 39.2 Home equity loans and lines of credit 4.9 6.7 Residential construction 3.7 2.5 Other construction and land 10.1 8.1 Commercial 5.6 5.5 Consumer 0.6 0.7 Total loans, gross 100 % 100 % |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fixed Assets Tables | |
Schedule of Fixed Assets | Fixed assets are summarized as follows: December 31, 2017 2016 (Dollars in thousands) Land and improvements $ 10,054 $ 9,201 Buildings 22,452 18,696 Furniture, fixtures, and equipment 8,767 8,429 Construction in process 52 — Total fixed assets $ 41,325 36,326 Less accumulated depreciation (17,212 ) (16,117 ) Fixed assets, net $ 24,113 $ 20,209 |
Schedule of Future Minimum Rental Payments for Operating Leases | Following is a schedule of approximate annual future minimum lease payments under operating leases that have initial or remaining lease terms in excess of one year (in thousands): 2018 $ 168 2019 143 2020 69 2021 53 2022 18 Total minimum lease commitments $ 451 |
REAL ESTATE OWNED (Tables)
REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate Owned Tables | |
Summary of Real Estate Owned and Changes in the Valuation Allowances | The following tables summarizes real estate owned and changes in the valuation allowance for real estate owned as of and for the periods indicated: As of December 31, (Dollars in thousands) 2017 2016 Real estate owned, gross $ 3,585 $ 5,650 Less: Valuation allowance 1,017 1,424 Real estate owned, net $ 2,568 $ 4,226 Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Valuation allowance, beginning $ 1,424 $ 1,372 $ 1,760 Provision charged to expense 292 655 171 Reduction due to disposal (699 ) (603 ) (559 ) Valuation allowance, ending $ 1,017 $ 1,424 $ 1,372 |
BANK OWNED LIFE INSURANCE (BO43
BANK OWNED LIFE INSURANCE (BOLI) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Bank Owned Life Insurance Boli Tables | |
Schedule of composition of Bank Owned Life Insurance | The following table summarizes the composition of our BOLI: December 31, 2017 2016 (Dollars in thousands) Separate account $ 2,504 $ 12,548 General account 18,491 17,944 Hybrid 11,155 855 Total $ 32,150 $ 31,347 |
LOAN SERVICING (Tables)
LOAN SERVICING (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loan Servicing Tables | |
Summary of Unpaid Principal Mortgage and Other Loans | The unpaid principal balances of mortgage and SBA loans serviced for others is detailed below. December 31, 2017 2016 2015 (Dollars in thousands) $ 276,782 $ 264,264 $ 251,492 |
Loan Servicing Rights | The following summarizes the activity in the balance of loan servicing rights: December 31, 2017 2016 2015 (Dollars in thousands) Loan servicing rights, beginning of period $ 2,603 $ 2,344 $ 2,187 Capitalization from loans sold 618 604 544 Fair value adjustment (465 ) (345 ) (387 ) Loan servicing rights, end of period $ 2,756 $ 2,603 $ 2,344 |
GOODWILL AND OTHER INTANGIBLE45
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amounts of goodwill | The following is a summary of changes in the carrying amounts of goodwill: Year Ended December 31, 2017 2016 Dollars in thousands Balance at beginning of period $ 2,065 $ 711 Additions: Prior acquisitions measurement period adjustments 63 — Goodwill from current year acquisitions 21,775 1,354 Balance at end of period $ 23,903 $ 2,065 |
Schedule of gross carrying amounts and accumulated amortization of core deposit intangibles | The following is a summary of gross carrying amounts and accumulated amortization of core deposit intangibles: Years Ended December 31, 2017 2016 Dollars in thousands Gross balance at beginning of period $ 1,120 $ 590 Additions from acquisitions 3,720 530 Gross balance at end of period 4,840 1,120 Less accumulated amortization (571 ) (141 ) Core deposit intangible, net $ 4,269 $ 979 |
DERIVATIVE FINANCIAL INSTRUME46
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of the Company's derivative financial instruments | The table below presents the fair value of the Company’s derivative financial instruments as of the dates indicated as well as their classification on the consolidated balance sheet (in thousands). Fair Value Balance Sheet Location December 31, December 31, Designated as hedges: Cash flow hedge of borrowings - interest rate swap Other assets $ 561 $ 476 Total $ 561 $ 476 Not designated as hedges: Mortgage banking - loan commitment Other assets $ 45 $ 41 Mortgage banking - forward sales commitment Other assets 28 19 Total $ 73 $ 60 |
Schedule of Structure of the Swap Agreements | The structure of the swap agreements is described in the table below: Underlyings Designation Notional Payment Provision Life of Swap Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 0.958%/Receive 3 month LIBOR 4 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 15,000 Pay 1.054%/Receive 3 month LIBOR 2 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 20,500 Pay 1.354%/Receive 3 month LIBOR 2 yrs |
Schedule of Cash Flow Hedges Included in Statement of Income | The table below presents the effect of the Company’s cash flow hedge on the Consolidated Statement of Income (in thousands). Amount of Gain(Loss) Recognized in Accumulated Gain(Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) December 31, December 31, 2017 2016 Location 2017 2016 Interest rate swap $ 432 $ 300 Interest Expense $ (14 ) $ 32 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits Tables | |
Summary of Deposit Balances and Interest Expenses | The following table summarizes deposit balances and the related interest expense by type of deposit: As of and for the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Balance Interest Balance Interest Balance Interest Noninterest-bearing demand $ 179,457 $ — $ 139,136 $ — $ 121,062 $ — Interest-bearing demand 226,718 228 122,271 160 103,198 136 Money market 308,767 1,022 239,387 770 180,377 558 Savings 50,500 53 40,014 49 35,838 33 Time deposits 396,735 3,171 289,205 2,985 276,142 3,607 $ 1,162,177 $ 4,474 $ 830,013 $ 3,964 $ 716,617 $ 4,334 |
Schedule Of Certificates Of Deposit, By Contractual Maturity | Contractual maturities of time deposit accounts are summarized as follows: December 31, 2017 (Dollars in thousands) 2018 $ 218,382 2019 66,023 2020 47,942 2021 34,469 2022 16,081 Thereafter 13,838 $ 396,735 |
Schedule of activity related to the fair value premium on acquired time deposits | The following table presents the activity related to the fair value premium on acquired time deposits: For the Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Time deposit premium, beginning of period $ 420 $ 30 $ — Additional premium for acquisitions 1,534 648 30 Accretion (852 ) (258 ) — Time deposit premium, end of period $ 1,102 $ 420 $ 30 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Borrowings Tables | |
Schedule of Outstanding FHLB advances | The following tables summarize the outstanding FHLB advances as of the dates indicated: December 31, 2017 Balance Type Rate Maturity (Dollars in thousands) $ 5,000 Fixed Rate 1.29 % 1/5/2018 20,000 Fixed Rate 1.37 % 2/8/2018 20,500 Adjustable rate 1.48 % 5/24/2018 15,000 Adjustable rate 1.60 % 3/29/2018 5,000 Fixed Rate 1.29 % 4/2/2018 20,000 Fixed Rate 1.37 % 4/16/2018 25,000 Fixed Rate 1.36 % 5/7/2018 50,000 Fixed Rate 1.59 % 5/24/2018 5,000 Fixed Rate 1.26 % 6/5/2018 5,000 Fixed Rate 1.39 % 6/6/2018 10,000 Fixed Rate 0.84 % 6/29/2018 5,000 Fixed Rate 1.40 % 7/2/2018 5,000 Fixed Rate 1.38 % 7/2/2018 10,000 Fixed Rate 1.52 % 9/28/2018 5,000 Fixed Rate 1.51 % 12/31/2018 1,000 Fixed Rate 1.62 % 5/13/2019 2,000 Fixed Rate 1.53 % 6/12/2019 10,000 Fixed Rate 2.12 % 12/30/2019 5,000 Fixed Rate 2.12 % 12/30/2019 $ 223,500 1.48 % December 31, 2016 Balance Type Rate Maturity (Dollars in thousands) $ 5,000 Fixed Rate 0.58 % 1/3/2017 5,000 Fixed Rate 0.44 % 1/3/2017 50,000 Fixed Rate 0.49 % 1/5/2017 30,000 Fixed Rate 0.64 % 1/15/2017 15,000 Fixed Rate 0.63 % 1/17/2017 25,000 Fixed Rate 0.64 % 1/23/2017 20,000 Fixed Rate 0.56 % 2/7/2017 5,000 Fixed Rate 0.58 % 3/28/2017 15,000 Adjustable Rate 0.56 % 3/29/2017 5,000 Fixed Rate 0.80 % 3/31/2017 5,000 Fixed Rate 0.60 % 4/3/2017 10,000 Fixed Rate 0.60 % 4/6/2017 1,000 Fixed Rate 0.87 % 5/11/2017 20,500 Adjustable Rate 0.73 % 5/23/2017 5,000 Fixed Rate 0.82 % 6/6/2017 2,000 Fixed Rate 1.02 % 6/12/2017 5,000 Fixed Rate 0.76 % 6/30/2017 25,000 Fixed Rate 0.77 % 8/7/2017 10,000 Fixed Rate 0.82 % 9/28/2017 10,000 Fixed Rate 0.77 % 12/29/2017 5,000 Fixed Rate 0.78 % 12/30/2017 5,000 Fixed Rate 1.26 % 6/5/2018 10,000 Fixed Rate 0.84 % 6/29/2018 5,000 Fixed Rate 1.40 % 7/1/2018 5,000 Fixed Rate 1.51 % 12/31/2018 $ 298,500 0.68 % |
Scheduled maturities of FHLB advances and respective weighted average rates | The scheduled annual maturities of FHLB advances and respective weighted average rates are as follows: December 31, 2017 Year Balance Weighted (Dollars in thousands) 2018 205,500 1.43 % 2019 18,000 2.02 % $ 223,500 1.48 % |
POST-EMPLOYMENT BENEFITS (Table
POST-EMPLOYMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Post-employment Benefits Tables | |
Schedule of liabilities for each plan | The following table summarizes the liabilities for each plan as of the dates indicated: December 31, 2017 2016 (Dollars in thousands) SERP $ 4,288 $ 4,417 CAP Equity 4,708 4,718 Director Consultation 246 252 Life Insurance 932 824 $ 10,174 $ 10,211 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | The table below presents stock option activity and related information: Restricted Stock Options (Dollars in thousands, Shares Weighted Options Weighted Weighted Aggregate December 31, 2015 157,100 $ 18.55 366,000 $ 18.55 Granted 26,300 17.49 57,400 17.52 Vested/Exercised (30,220 ) 18.55 — — Forfeited (7,600 ) 18.55 (16,200 ) 18.55 December 31, 2016 145,580 18.36 407,200 18.41 Granted 18,600 25.76 40,900 25.92 Vested/Exercised (33,780 ) 18.39 (3,600 ) 18.55 Forfeited (5,200 ) 18.55 (11,200 ) 18.55 December 31, 2017 125,200 19.44 433,300 19.11 8.16 $ 4,409 Vested/Exercisable at December 31, 2017 — $ — 145,480 $ 18.47 7.97 $ 1,568 |
Schedule of fair value of options granted Black-Scholes model | The following is a summary of stock options outstanding at December 31, 2017: Options Outstanding Options Exercisable Shares Range Wtd Ave Price Ave Remaining Life Shares Wtd Ave Price Ave Remaining Life 5,000 $ 16.00-17.00 $ 16.75 8.14 1,000 $ 16.75 8.14 40,500 17.01-18.00 17.45 8.41 8,100 17.45 8.41 346,900 18.01-18.55 18.54 7.95 136,380 18.54 7.94 29,000 18.56-25.00 24.02 9.55 — — — 11,900 25.01-30.55 30.55 9.98 — — — 433,300 19.11 8.16 145,480 18.47 7.97 |
Schedule of Restricted stock unit activity | The following table illustrates the assumptions for the Black-Scholes model used in determining the fair value of options granted: 2017 2016 Fair value per option $ 5.30 $ 3.02 Expected life (years) 6.5 years 6.5 years Expected stock price volatility 13 % 12 % Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 2.19 % 1.57 % Expected forfeiture rate 0.00 % 0.00 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes Tables | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) is summarized as follows: For the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Current Federal $ 365 $ 549 $ (150 ) State 66 24 — Deferred Federal 6,729 2,370 2,252 State 368 552 109 Change in valuation allowance — — (18,950 ) Total income tax expense (benefit) $ 7,528 $ 3,495 $ (16,739 ) |
Schedule of Effective Income Tax Rate Reconciliation | The differences between actual income tax expense and the amount computed by applying the federal statutory income tax rate of 35% to income before income taxes for the periods indicated is reconciled as follows: For the Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Computed income tax expense $ 3,537 $ 3,455 $ 2,480 Deferred tax valuation allowance — — (18,950 ) State income tax, net of federal benefit 282 218 165 Nontaxable municipal security income (1,036 ) (544 ) (126 ) Nontaxable BOLI income (243 ) (107 ) (160 ) Change in federal and state rates applied to deferreds 4,871 353 — Low income housing tax credit investments (44 ) — — Other 161 120 (148 ) Actual income tax expense (benefit) $ 7,528 $ 3,495 $ (16,739 ) Effective tax rate 74.5 % 35.4 % -236.2 % |
Schedule of Deferred Tax Assets and Liabilities | The components of net deferred taxes as of the periods indicated are summarized as follows: As of December 31, 2017 2016 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,356 $ 3,245 Deferred compensation and post employment benefits 1,993 3,365 Non-accrual interest 204 375 Valuation reserve for other real estate 346 693 North Carolina NOL carryover 475 557 Federal NOL carryover 3,507 8,560 AMT credit carryforward 645 414 Unrealized losses on securities 149 3,255 Loan basis differences 77 238 Deposit premium 104 155 Fixed assets 63 — Other 1,009 966 Total deferred tax assets 10,928 21,823 Deferred tax liabilities: Fixed assets — 263 Loan servicing rights 620 962 Goodwill 126 18 Core deposit intangible 37 158 Deferred loan costs 757 1,002 Prepaid expenses 31 57 Unrealized gains on securities 377 201 Derivative instruments 128 176 Other 21 1 Total deferred tax liabilities 2,097 2,838 Net deferred tax asset $ 8,831 $ 18,985 |
Schedule of Unused net operating losses and expiration dates | The following table summarizes the amount and expiration dates of the Company’s unused net operating losses: As of December 31, 2017 (Dollars in thousands) Amount Expiration Federal $ 16,702 2031-2034 North Carolina $ 24,060 2026-2029 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share Tables | |
Schedule of reconciliation of average shares outstanding | The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock: For the Year Ended December 31, (Dollars in thousands, except per share amounts) 2017 2016 Numerator: Net income $ 2,579 $ 6,376 Denominator: Weighted-average common shares outstanding - basic 6,561,699 6,477,284 Effect of dilutive stock options 54,248 — Effect of dilutive restricted stock units 42,667 12,647 Weighted-average common shares outstanding - diluted 6,658,614 6,489,931 Earnings per share - basic $ 0.39 $ 0.98 Earnings per share - diluted $ 0.39 $ 0.98 |
ACCUMULATED OTHER COMPREHENSI53
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss Tables | |
Schedule of Accumulated other comprehensive income (loss) | The following table summarizes the components of accumulated other comprehensive income (loss) and changes in those components as of and for the years ended December 31: (Dollars in thousands) Available for Held to Maturity Deferred Tax Cash Flow Total Balance, December 31, 2014 $ (236 ) $ (1,165 ) $ (868 ) $ — $ (2,269 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 289 — 289 Change in unrealized holding gains/losses on securities available for sale (166 ) — — — (166 ) Reclassification adjustment for net securities gains included in net income (403 ) — — — (403 ) Amortization of unrealized losses on securities transferred to held to maturity — 984 — — 984 Income tax expense (benefit) 211 (382 ) — — (171 ) Balance, December 31, 2015 $ (594 ) $ (563 ) $ (579 ) $ — $ (1,736 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 377 — 377 Change in unrealized holding gains/losses on securities available for sale (6,652 ) — — — (6,652 ) Reclassification adjustment for net securities gains included in net income (1,216 ) — — — (1,216 ) Amortization of unrealized losses on securities transferred to held to maturity — 578 — — 578 Reduction in unrealized losses related to held to maturity securities transferred to available-for-sale — 325 — — 325 Change in unrealized holding gains/losses on cash flow hedge — — — 444 444 Reclassification adjustment for cash flow hedge effectiveness — — — 32 32 Income tax expense (benefit) 2,908 (340 ) — (176 ) 2,392 Balance, December 31, 2016 $ (5,554 ) $ — $ (202 ) $ 300 $ (5,456 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 202 — 202 Change in unrealized holding gains/losses on securities available for sale 6,347 — — — 6,347 Reclassification adjustment for net securities losses included in net income 1,102 — — — 1,102 Reclassification adjustment for other than temporary impairment of securities available for sale 757 — — — 757 Change in unrealized holding gains on cash flow hedge — — — 99 99 Reclassification adjustment for cash flow hedge effectiveness — (14 ) (14 ) Income tax expense (benefit) (3,107 ) — — 47 (3,060 ) Balance, December 31, 2017 $ (455 ) $ — $ — $ 432 $ (23 ) |
Schedule of Consolidated Statements of Operations affected by amounts reclassified from accumulated other comprehensive income (loss) | The following table shows the line items in the Consolidated Statements of Operations affected by amounts reclassified from accumulated other comprehensive income (loss): Year Ended December 31, Income Statement (Dollars in thousands) 2017 2016 2015 Line Item Affected Available-for-sale securities Gains(losses) recognized $ (1,102 ) $ 1,216 $ 403 Gain (loss) on sale of investments, net Other than temporary impairment (757 ) Other than temporary impairment on investments Income tax effect 678 (449 ) (152 ) Income tax expense (benefit) Reclassified out of AOCI, net of tax (1,181 ) 767 251 Net income Held-to-maturity securities Amortization of unrealized losses — (578 ) (984 ) Interest income - taxable securities Increase related to transfer from AFS — — — Interest income - taxable securities Reduction related to transfer to AFS — (325 ) — Interest income - taxable securities Income tax effect — 340 382 Income tax expense Reclassified out of AOCI, net of tax — (563 ) (602 ) Net income Cash flow hedge Interest expense - effective portion (20 ) (16 ) — Interest expense - FHLB advances Interest expense - effective portion 34 (16 ) — Interest expense - Junior subordinated notes Income tax effect 5 12 — Income tax expense Reclassified out of AOCI, net of tax 19 (20 ) — Net income Deferred tax valuation allowance Recognition of reversal of valuation allowance 202 377 289 Income tax expense Total reclassified out of AOCI, net of tax $ (960 ) $ 561 $ (62 ) Net income |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Matters Tables | |
Schedule of actual and required capital amounts and ratios | Following are the required and actual capital amounts and ratios for the Bank: Actual For Capital Adequacy Purposes To Be Well-Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio (1) Amount Ratio As of December 31, 2017: Tier 1 Leverage Capital $ 136,280 8.79 % $ 61,994 > $ 77,492 > Common Equity Tier 1 Capital $ 136,280 11.92 % $ 65,729 > $ 74,303 > Tier 1 Risk-based Capital $ 136,280 11.92 % $ 82,876 > $ 91,450 > Total Risk-based Capital $ 147,266 12.88 % $ 105,739 > $ 114,312 > As of December 31, 2016: Tier 1 Leverage Capital $ 138,402 11.06 % $ 50,034 > $ 62,542 > Common Equity Tier 1 Capital $ 138,402 16.33 % $ 38,150 > $ 55,106 > Tier 1 Risk-based Capital $ 138,402 16.33 % $ 50,867 > $ 67,823 > Total Risk-based Capital $ 147,807 17.43 % $ 67,823 > $ 84,778 > (1) – As of December 31, 2017, includes capital conservation buffer of 1.25%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. Following are the required and actual capital amounts and ratios for the Company: Actual For Capital Adequacy Purposes (Dollars in thousands) Amount Ratio Amount Ratio (1) As of December 31, 2017: Tier I Leverage Capital $ 134,470 8.68 % $ 6 1,967 > Common Equity Tier 1 Capital $ 120,861 10.57 % $ 65,775 > Tier I Risk-based Capital $ 134,470 11.76 % $ 82,934 > Total Risk Based Capital $ 145,457 12.72 % $ 105,812 > As of December 31, 2016: Tier I Leverage Capital $ 141,013 11.28 % $ 50,200 > Common Equity Tier 1 Capital $ 130,079 15.33 % $ 38,188 > Tier I Risk-based Capital $ 141,013 16.62 % $ 50,918 > Total Risk Based Capital $ 150,418 17.72 % $ 67,891 > (1) – As of December 31, 2017, includes capital conservation buffer of 1.25%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Tables | |
Schedule of commitments to fund lines of credit | The following summarizes the Company’s approximate commitments to extend credit: December 31, 2017 (Dollars in thousands) Lines of credit $ 139,974 Standby letters of credit 1,677 $ 141,651 |
Schedule of Outstanding commitments to originate mortgage loans | The Company had outstanding commitments to originate loans as follows: December 31, 2017 Amount Range of Rates (Dollar in thousands) Fixed $ 47,184 3.10% to 6.99% Variable 11,686 3.99% to 7.00% $ 58,870 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures Tables | |
Summary of assets and liabilities measured at fair value on a recurring basis | Below is a table that presents information about certain assets and liabilities measured at fair value on a recurring basis: December 31, 2017 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 6,095 $ — $ — $ 6,095 Securities available for sale: U.S. Treasury & Government Agencies 2,496 17,022 — 19,518 Municipal Securities — 94,863 — 94,863 Mortgage-backed Securities - Guaranteed — 139,760 — 139,760 Mortgage-backed Securities - Non Guaranteed — 63,275 — 63,275 Collateralized Loan Obligations — 5,539 — 5,539 Corporate bonds — 18,799 492 19,291 Mutual funds 617 — — 617 Total securities available for sale 3,113 339,258 492 342,863 Loan servicing rights — — 2,756 2,756 Derivative assets — 561 — 561 Forward sales commitments — — 28 28 Interest rate lock commitments — — 45 45 Total assets $ 9,208 $ 339,819 $ 3,321 $ 352,348 December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 5,211 $ — $ — $ 5,211 Securities available for sale: U.S. Treasury & Government Agencies 2,514 12,107 — 14,621 Municipal Securities — 146,771 — 146,771 Mortgage-backed Securities - Guaranteed — 160,181 — 160,181 Mortgage-backed Securities - Non Guaranteed — 57,756 — 57,756 Corporate bonds — 16,214 2,144 18,358 Mutual funds 604 — — 604 Total securities available for sale 3,118 393,029 2,144 398,291 Loan servicing rights — — 2,603 2,603 Derivative assets — 476 — 476 Forward sales commitments — — 19 19 Interest rate lock commitments — — 41 41 Total assets $ 8,329 $ 393,505 $ 4,807 $ 406,641 |
Schedule of changes in assets measured at fair value on a recurring basis | The following table presents the changes in assets measured at fair value on a recurring basis for which we have utilized Level 3 inputs to determine fair value: Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Balance at beginning of year $ 4,807 $ 2,390 $ 2,248 Corporate bonds Fair value adjustment 1 — — Transfers from HTM — 2,144 — Transfer to Level 2 (1,087 ) — — Sold (566 ) — — Loan servicing right activity, included in servicing income, net Capitalization from loans sold 618 604 544 Fair value adjustment (465 ) (345 ) (387 ) Mortgage derivative gains (losses) included in other income 13 14 (15 ) Balance at end of year $ 3,321 $ 4,807 $ 2,390 |
Summary of assets and liabilities measured at a fair value on a nonrecurring basis | The table below presents information about certain assets and liabilities measured at fair value on a nonrecurring basis. There were no loans held for sale carried at fair value at either December 31, 2017 or 2016. December 31, 2017 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,266 $ 2,266 Commercial real estate — — 4,050 4,050 Home equity loans and lines of credit — — 313 313 Other construction and land — — 571 571 Real estate owned: One-to four family residential — — 288 288 Commercial real estate — — 544 544 Other construction and land — — 1,736 1,736 Total assets $ — $ — $ 9,768 $ 9,768 December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,205 $ 2,205 Commercial real estate — — 6,329 6,329 Home equity loans and lines of credit — — 213 213 Other construction and land — — 809 809 Real estate owned: One-to four family residential — — 1,336 1,336 Commercial real estate — — 722 722 Other construction and land — — 2,168 2,168 Total assets $ — $ — $ 13,782 $ 13,782 |
Schedule of significant unobservable inputs used in the fair value measurements | The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2017. Valuation Technique Unobservable Input General Range Impaired loans Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Real estate owned Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Corporate bonds Discounted Cash Flows Recent trade pricing 0-8% Loan servicing rights Discounted Cash Flows Prepayment speed 5 – 35% Discount rate 12-14% SBIC Indicative value provided by fund Current operations and financial condition 0%-13% |
Schedule of carrying amount and estimated fair value of the Company's financial instruments | The approximate carrying and estimated fair value of financial instruments are summarized below: Fair Value Measurements at December 31, 2017 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 109,467 $ 109,467 $ 109,467 $ — $ — Trading securities 6,095 6,095 6,095 — — Securities available for sale 342,863 342,863 3,113 339,258 492 Loans held for sale 3,845 4,211 — 4,211 — Loans receivable, net 1,005,139 992,993 — — 992,993 Other investments, at cost 12,386 12,386 — 12,386 — Accrued interest receivable 5,405 5,405 — 5,405 — BOLI 32,150 32,150 — 32,150 — Loan servicing rights 2,756 2,756 — — 2,756 Forward sales commitments 28 28 — — 28 Interest rate lock commitments 45 45 — — 45 Derivative asset 561 561 — 561 — SBIC investments 3,491 3,491 — — 3,491 Liabilities: Demand deposits $ 765,442 $ 765,442 $ — $ 765,442 $ — Time deposits 396,735 390,806 — — 390,806 FHLB advances 223,500 223,627 — 223,627 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 8,623 8,620 — 8,620 — Accrued interest payable 935 935 — 935 — Fair Value Measurements at December 31, 2016 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 43,294 $ 43,294 $ 43,294 $ — $ — Trading securities 5,211 5,211 5,211 — — Securities available for sale 398,291 398,291 3,118 393,029 2,144 Loans held for sale 4,584 5,093 — 5,093 — Loans receivable, net 744,361 741,612 — — 741,612 Other investments, at cost 15,261 15,261 — 15,261 — Accrued interest receivable 5,012 5,012 — 5,012 — Bank owned life insurance 31,347 31,347 — 31,347 — Loan servicing rights 2,603 2,603 — — 2,603 Forward sales commitments 19 19 — — 19 Interest rate lock commitments 41 41 — — 41 Derivative asset 476 476 — 476 — SBIC investments 1,655 1,655 — — 1,655 Liabilities: Demand deposits $ 540,808 $ 540,808 $ — $ 540,808 $ — Time deposits 289,205 286,611 — — 286,611 Federal Home Loan Bank advances 298,500 298,667 — 298,667 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 2,725 2,907 — 2,907 — Accrued interest payable 254 254 — 254 — |
SHARE REPURCHASES (Tables)
SHARE REPURCHASES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
Schedule of Share Repurchase Activity | The following table summarizes share repurchase activity through December 31, 2017: Period Total Number Average Price Total Number of Shares Maximum Number of January 1, 2017 to January 31, 2017 — $ — — 222,750 February 1, 2017 to February 28, 2017 — $ — — 222,750 March 1, 2017 to March 31, 2017 13,000 $ 23.12 13,000 209,750 April 1, 2017 to June 30, 2017 — $ — — 209,750 July 1, 2017 to September 30, 2017 — $ — — 209,750 October 1, 2017 to December 31, 2017 — $ — — 209,750 Total year-to-date 2017 13,000 $ 23.12 13,000 209,750 |
PARENT COMPANY FINANCIAL INFO58
PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Parent Company Financial Information Tables | |
Schedule of Condensed Balance Sheet | Condensed Balance Sheets December 31, 2017 2016 (Dollars in thousands) Assets Cash $ 3,244 $ 3,137 Equity investment in subsidiary 167,252 144,011 Equity investment in trust 433 433 Other assets 624 508 Total assets $ 171,553 $ 148,089 Liabilities and Shareholders’ Equity Junior subordinated debentures $ 14,433 $ 14,433 Other borrowings 5,000 — Other liabilities 807 588 Shareholders’ equity 151,313 133,068 Total liabilities and shareholders’ equity $ 171,553 $ 148,089 |
Schedule of Condensed Income Statement | Condensed Statements of Operations Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Income Interest income $ 56 $ 81 $ 190 Dividends from subsidiary 20,630 510 114 20,686 591 304 Expenses Interest 626 532 458 Other 361 358 259 987 890 717 Income (loss) before income taxes and equity in undistributed income of subsidiary 19,699 (299 ) (413 ) Income tax benefit allocated from consolidated income tax return 326 283 180 Income (loss) before equity in undistributed income (loss) of subsidiary 20,025 (16 ) (233 ) Equity in undistributed income (loss) of subsidiary (17,446 ) 6,392 24,058 Net income $ 2,579 $ 6,376 $ 23,825 |
Schedule of Condensed Cash Flow Statement | Condensed Statements of Cash Flows Year Ended December 31, 2017 2016 2015 (Dollars in thousands) Operating activities: Net income $ 2,579 $ 6,376 $ 23,825 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed (earnings) loss of subsidiary 17,446 (6,392 ) (24,058 ) (Increase) decrease in other assets (97 ) 55 (19 ) Increase in other liabilities 166 97 354 Net cash provided by operating activities $ 20,094 $ 136 $ 102 Investing activities: Investment in subsidiary $ (25,448 ) $ (13,486 ) $ — Net cash used in investing activities $ (25,448 ) $ (13,486 ) $ — Financing activities: Proceeds from other borrowings $ 5,000 $ — $ — Cash paid to tax authorities for shares surrendered upon vesting of restricted stock units (149 ) (87 ) — Cash paid to tax authorities for shares surrendered upon exercise of stock options (6 ) — — Repurchase of stock (301 ) (1,835 ) — Purchase of common stock for Rabbi Trust — — (279 ) Reimbursement from bank subsidiary for share-based compensation 917 864 70 Net cash provided by (used in) financing activities $ 5,461 $ (1,058 ) $ (209 ) Increase (decrease) in cash and cash equivalents 107 (14,408 ) (107 ) Cash and cash equivalents, beginning of year 3,137 17,545 17,652 Cash and cash equivalents, end of year $ 3,244 $ 3,137 $ 17,545 Noncash investing and financing activities: Transfer of Rabbi Trust investments to Company stock $ 100 $ — $ — Common stock issued in acquisitions $ 9,872 $ — $ — |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) | Dec. 31, 2017 |
Organization Details Narrative | |
Ownership percentage in Macon Capital Trust I | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN60
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Advertising Expenses | $ 1,000 | $ 1,100 | $ 500 |
Debt issuance costs of the Junior Subordinated Notes | $ 100 | $ 100 | $ 100 |
Minimum [Member] | |||
Estimated useful lives of the assets | 4 years | ||
Maximum [Member] | |||
Estimated useful lives of the assets | 30 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Oct. 02, 2017 | Dec. 31, 2017 | Apr. 02, 2017 | Feb. 24, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Liabilities | ||||||
Goodwill | $ 23,903 | $ 2,065 | $ 711 | |||
As Recorded by Stearns [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | $ 1,258 | |||||
Loans | 7 | |||||
Premises and equipment | 950 | |||||
Core deposit intangible | ||||||
Total assets acquired | 2,215 | |||||
Liabilities | ||||||
Deposits | 153,122 | |||||
Other liabilities | 321 | |||||
Total liabilities assumed | 153,443 | |||||
Excess of assets acquired over liabilities assumed | 151,228 | |||||
Fair Value Adjustments [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | ||||||
Loans | (570) | 272 | ||||
Fixed assets | (408) | (22) | ||||
Accrued interest receivable | ||||||
Premises and equipment | 132 | |||||
Core deposit intangible | 2,070 | 530 | 1,650 | |||
Deferred tax asset | (751) | 207 | ||||
Other assets | (8) | (337) | ||||
Total assets acquired | 333 | 1,782 | ||||
Liabilities | ||||||
Deposits | 472 | 1,062 | ||||
Accrued interest payable | (14) | |||||
Other liabilities | (3,341) | (9) | ||||
Total liabilities assumed | (2,883) | 664 | 1,062 | |||
Excess of assets acquired over liabilities assumed | 3,216 | 275 | 720 | |||
As recorded by the Company [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | 22,625 | 7,573 | 1,258 | |||
Loans | 158,970 | 64,845 | 7 | |||
Fixed assets | 3,537 | 3,392 | ||||
Accrued interest receivable | 421 | 552 | ||||
Premises and equipment | 1,082 | |||||
Core deposit intangible | 2,070 | 530 | 1,650 | |||
Deferred tax asset | 466 | |||||
Other assets | 1,571 | 601 | ||||
Total assets acquired | 189,194 | 3,997 | ||||
Liabilities | ||||||
Deposits | 166,096 | 154,184 | ||||
Accrued interest payable | 88 | 30 | ||||
Other liabilities | 4,449 | 116 | 321 | |||
Total liabilities assumed | 170,633 | 97,878 | 154,505 | |||
Excess of assets acquired over liabilities assumed | 18,561 | 12,132 | 150,508 | |||
Cash received to settle the acquisition | 13,486 | 145,492 | ||||
Goodwill | 16,759 | $ 1,354 | $ 5,016 | |||
Chattahoochee Bank of Georgia [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | 22,625 | |||||
Loans | 159,540 | |||||
Fixed assets | 3,945 | |||||
Deferred tax asset | 751 | |||||
Other assets | 1,579 | |||||
Total assets acquired | 188,861 | |||||
Liabilities | ||||||
Deposits | 165,624 | |||||
Accrued interest payable | 102 | |||||
Other liabilities | 7,790 | |||||
Total liabilities assumed | 173,516 | |||||
Excess of assets acquired over liabilities assumed | 15,345 | |||||
Cash paid for merger | $ 25,448 | |||||
Equity consideration (in shares) | 9,872 | |||||
Aggregate Merger Consideration | $ 35,320 |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Oct. 02, 2017 | Apr. 02, 2017 | Feb. 24, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Liabilities | ||||||
Goodwill | $ 23,903 | $ 2,065 | $ 711 | |||
As recorded by Old Town Bank [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | $ 7,573 | |||||
Investments | 30,882 | |||||
Loans | 64,573 | |||||
Fixed assets | 3,414 | |||||
Interest receivable | 552 | |||||
Core deposit intangible | ||||||
Other real estate owned | 880 | |||||
Deferred tax asset | 259 | |||||
Other assets | 938 | |||||
Total asset acquired | 109,071 | |||||
Liabilities | ||||||
Deposits | 88,059 | |||||
FHLB advances | 9,000 | |||||
Accrued interest payable | 30 | |||||
Other liabilities | 125 | |||||
Total liabilities assumed | 97,214 | |||||
Excess of assets acquired over liabilities assumed | 11,857 | |||||
Fair Value Adjustments [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | ||||||
Investments | 246 | |||||
Loans | (570) | 272 | ||||
Fixed assets | (408) | (22) | ||||
Interest receivable | ||||||
Core deposit intangible | 2,070 | 530 | 1,650 | |||
Other real estate owned | 43 | |||||
Deferred tax asset | (751) | 207 | ||||
Other assets | (8) | (337) | ||||
Total asset acquired | 939 | |||||
Liabilities | ||||||
Deposits | 648 | |||||
FHLB advances | 25 | |||||
Accrued interest payable | (14) | |||||
Other liabilities | (3,341) | (9) | ||||
Total liabilities assumed | (2,883) | 664 | 1,062 | |||
Excess of assets acquired over liabilities assumed | 3,216 | 275 | 720 | |||
As recorded by the Company [Member] | ||||||
Assets | ||||||
Cash and cash equivalents | 22,625 | 7,573 | 1,258 | |||
Investments | 31,128 | |||||
Loans | 158,970 | 64,845 | 7 | |||
Fixed assets | 3,537 | 3,392 | ||||
Interest receivable | 421 | 552 | ||||
Core deposit intangible | 2,070 | 530 | 1,650 | |||
Other real estate owned | 923 | |||||
Deferred tax asset | 466 | |||||
Other assets | 1,571 | 601 | ||||
Total asset acquired | 110,010 | |||||
Liabilities | ||||||
Deposits | 88,707 | |||||
FHLB advances | 9,025 | |||||
Accrued interest payable | 88 | 30 | ||||
Other liabilities | 4,449 | 116 | 321 | |||
Total liabilities assumed | 170,633 | 97,878 | 154,505 | |||
Excess of assets acquired over liabilities assumed | 18,561 | 12,132 | 150,508 | |||
Purchase price | 13,486 | 145,492 | ||||
Goodwill | $ 16,759 | $ 1,354 | $ 5,016 |
ACQUISITIONS (Details 3)
ACQUISITIONS (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net income | $ 2,579 | $ 6,376 | $ 23,825 | |
Actual [Member] | ||||
Total revenues | $ 2,509 | |||
Net income | $ 1,194 | |||
ProForma [Member] | ||||
Total revenues | 54,618 | 49,542 | ||
Net income | $ 7,079 | $ 8,159 |
ACQUISTIONS (Details Narrative)
ACQUISTIONS (Details Narrative) $ in Thousands | Oct. 02, 2017USD ($) |
Acquistions Details Narrative | |
Merger-related charges related to the Cornerstone acquisition | $ 2,400 |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Trading Securities Cash | $ 6,095 | $ 5,211 |
Amortized Cost | 343,467 | 407,101 |
Gross Unrealized Gains | 1,832 | 690 |
Gross Unrealized Losses | (2,436) | (9,500) |
Estimated fair value | 342,863 | 398,291 |
U.S. Government Agencies [Member] | ||
Amortized Cost | 19,519 | 14,577 |
Gross Unrealized Gains | 7 | 46 |
Gross Unrealized Losses | (8) | (2) |
Estimated fair value | 19,518 | 14,621 |
Municipal Securities [Member] | ||
Amortized Cost | 94,259 | 152,208 |
Gross Unrealized Gains | 975 | 337 |
Gross Unrealized Losses | (371) | (5,774) |
Estimated fair value | 94,863 | 146,771 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Amortized Cost | 141,301 | 162,379 |
Gross Unrealized Gains | 112 | 134 |
Gross Unrealized Losses | (1,653) | (2,332) |
Estimated fair value | 139,760 | 160,181 |
Mortgage-backed Securities, SBA securities [Member] | ||
Amortized Cost | 63,279 | 58,967 |
Gross Unrealized Gains | 323 | 2 |
Gross Unrealized Losses | (327) | (1,213) |
Estimated fair value | 63,275 | 57,756 |
Mortgage-backed Securities, Collateralized mortgage obligations [Member] | ||
Amortized Cost | 5,555 | 18,354 |
Gross Unrealized Gains | 6 | 171 |
Gross Unrealized Losses | (22) | (167) |
Estimated fair value | 5,539 | 18,358 |
Corporate debt securities [Member] | ||
Amortized Cost | 18,925 | |
Gross Unrealized Gains | 409 | |
Gross Unrealized Losses | (43) | |
Estimated fair value | 19,291 | |
Mutual Funds [Member] | ||
Amortized Cost | 629 | 616 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (12) | (12) |
Estimated fair value | $ 617 | $ 604 |
INVESTMENT SECURITIES (Details
INVESTMENT SECURITIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Held to maturity, Less Than 12 Months Unrealized Losses | $ 81 | $ 240 |
Held to maturity, Over 12 Months Unrealized Losses | 70 | 15 |
Held to maturity, Unrealized Losses | 151 | 255 |
Available for sale, Less Than 12 Months Fair Value | 106,996 | 300,919 |
Available for sale, Less Than 12 Months Unrealized Losses | 832 | 9,188 |
Available for sale, Over 12 Months Fair Value | 90,095 | 17,925 |
Available for sale, Over 12 Months Unrealized Losses | 1,604 | 312 |
Available for sale, Fair Value | 197,091 | 318,844 |
Available for sale, Unrealized Losses | 2,436 | 9,500 |
U.S. Government Agencies [Member] | ||
Held to maturity, Less Than 12 Months Unrealized Losses | 5 | 1 |
Held to maturity, Over 12 Months Unrealized Losses | 1 | |
Held to maturity, Unrealized Losses | 6 | 1 |
Available for sale, Less Than 12 Months Fair Value | 8,939 | 1,000 |
Available for sale, Less Than 12 Months Unrealized Losses | 6 | 2 |
Available for sale, Over 12 Months Fair Value | 998 | |
Available for sale, Over 12 Months Unrealized Losses | 2 | |
Available for sale, Fair Value | 9,937 | 1,000 |
Available for sale, Unrealized Losses | 8 | 2 |
Municipal Securities [Member] | ||
Held to maturity, Less Than 12 Months Unrealized Losses | 12 | 129 |
Held to maturity, Over 12 Months Unrealized Losses | 22 | 1 |
Held to maturity, Unrealized Losses | 34 | 130 |
Available for sale, Less Than 12 Months Fair Value | 12,047 | 122,468 |
Available for sale, Less Than 12 Months Unrealized Losses | 66 | 5,759 |
Available for sale, Over 12 Months Fair Value | 22,982 | 331 |
Available for sale, Over 12 Months Unrealized Losses | 305 | 15 |
Available for sale, Fair Value | 35,029 | 122,799 |
Available for sale, Unrealized Losses | 371 | 5,774 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Held to maturity, Less Than 12 Months Unrealized Losses | 45 | 77 |
Held to maturity, Over 12 Months Unrealized Losses | 37 | 13 |
Held to maturity, Unrealized Losses | 82 | 90 |
Available for sale, Less Than 12 Months Fair Value | 56,731 | 115,539 |
Available for sale, Less Than 12 Months Unrealized Losses | 513 | 2,035 |
Available for sale, Over 12 Months Fair Value | 53,800 | 17,594 |
Available for sale, Over 12 Months Unrealized Losses | 1,140 | 297 |
Available for sale, Fair Value | 110,531 | 133,133 |
Available for sale, Unrealized Losses | 1,653 | 2,332 |
Mortgage-backed Securities, SBA securities [Member] | ||
Held to maturity, Less Than 12 Months Unrealized Losses | 15 | 24 |
Held to maturity, Over 12 Months Unrealized Losses | 8 | 1 |
Held to maturity, Unrealized Losses | 23 | 25 |
Available for sale, Less Than 12 Months Fair Value | 24,455 | 54,555 |
Available for sale, Less Than 12 Months Unrealized Losses | 216 | 1,213 |
Available for sale, Over 12 Months Fair Value | 10,654 | |
Available for sale, Over 12 Months Unrealized Losses | 111 | |
Available for sale, Fair Value | 35,109 | 54,555 |
Available for sale, Unrealized Losses | 327 | 1,213 |
Mortgage-backed Securities, Collateralized mortgage obligations [Member] | ||
Held to maturity, Less Than 12 Months Unrealized Losses | 2 | |
Held to maturity, Over 12 Months Unrealized Losses | ||
Held to maturity, Unrealized Losses | 2 | |
Available for sale, Less Than 12 Months Fair Value | 3,520 | |
Available for sale, Less Than 12 Months Unrealized Losses | 22 | |
Available for sale, Over 12 Months Fair Value | ||
Available for sale, Over 12 Months Unrealized Losses | ||
Available for sale, Fair Value | 3,520 | |
Available for sale, Unrealized Losses | 22 | |
Corporate debt securities [Member] | ||
Held to maturity, Less Than 12 Months Unrealized Losses | 2 | 8 |
Held to maturity, Over 12 Months Unrealized Losses | 1 | |
Held to maturity, Unrealized Losses | 3 | 8 |
Available for sale, Less Than 12 Months Fair Value | 1,304 | 6,741 |
Available for sale, Less Than 12 Months Unrealized Losses | 9 | 167 |
Available for sale, Over 12 Months Fair Value | 1,044 | |
Available for sale, Over 12 Months Unrealized Losses | 34 | |
Available for sale, Fair Value | 2,348 | 6,741 |
Available for sale, Unrealized Losses | 43 | 167 |
Mutual Funds [Member] | ||
Held to maturity, Less Than 12 Months Unrealized Losses | 1 | |
Held to maturity, Over 12 Months Unrealized Losses | 1 | |
Held to maturity, Unrealized Losses | 1 | 1 |
Available for sale, Less Than 12 Months Fair Value | 616 | |
Available for sale, Less Than 12 Months Unrealized Losses | 12 | |
Available for sale, Over 12 Months Fair Value | 617 | |
Available for sale, Over 12 Months Unrealized Losses | 12 | |
Available for sale, Fair Value | 617 | 616 |
Available for sale, Unrealized Losses | $ 12 | $ 12 |
INVESTMENT SECURITIES (Detail67
INVESTMENT SECURITIES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investment Securities Details 3 | |||
Gross proceeds | $ 169,146 | $ 124,823 | $ 39,022 |
Gross realized gains | 558 | 1,261 | 423 |
Gross realized losses | 1,660 | 45 | $ 20 |
Securities pledged against deposits | $ 143,300 | $ 237,100 |
INVESTMENT SECURITIES (Detail68
INVESTMENT SECURITIES (Details 4) $ in Thousands | Dec. 31, 2017USD ($) |
Investment Securities Details 3 | |
Available for sale, Less than 1 year, Amortized Cost | $ 1,630 |
Available for sale, Over 1 year through 5 years, Amortized Cost | 4,738 |
Available for sale, After 5 years through 10 years, Amortized Cost | 28,113 |
Available for sale, Over 10 years, Amortized Cost | 104,407 |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Amortized Cost | 138,888 |
Available for sale, Mortgage-backed securities, Amortized Cost | 204,579 |
Available for sale, Total, Amortized Cost | 343,467 |
Available for Sale, Less than 1 year, Fair Value | 1,615 |
Available for Sale, Over 1 year through 5 years, Fair Value | 4,766 |
Available for Sale, After 5 years through 10 years, Fair Value | 28,458 |
Available for Sale, Over 10 years, Fair Value | 104,989 |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Fair Value | 139,828 |
Available for Sale, Mortgage-backed securities, Fair Value | 203,035 |
Available for Sale, Total, Fair Value | $ 342,863 |
LOANS RECEIVABLE (Details)
LOANS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | $ 1,008,903 | $ 746,686 | ||
Less: Net deferred loan fees | (1,431) | (923) | ||
Fair value discount | 2,012 | 857 | $ 72 | |
Unamortized premium | 389 | 557 | ||
Unamortized discount | (710) | (1,366) | ||
Loans receivable, net | 1,005,139 | 744,361 | ||
One To Four Family Residential [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 304,107 | 278,437 | ||
Loans receivable, net | 302,984 | 276,938 | ||
Commercial Real Estate Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 453,725 | 292,879 | ||
Loans receivable, net | 451,029 | 292,103 | ||
Home Equity Line of Credit [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 49,877 | 50,334 | ||
Loans receivable, net | 49,961 | 50,400 | ||
Residential Construction [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 37,108 | 18,531 | ||
Loans receivable, net | 37,144 | 18,439 | ||
Other Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 101,447 | 60,605 | ||
Loans receivable, net | 101,168 | 60,126 | ||
Real Estate Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 946,264 | 700,786 | ||
Commercial Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 56,939 | 41,306 | ||
Loans receivable, net | 57,076 | 41,703 | ||
Consumer Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 5,700 | 4,594 | ||
Loans receivable, net | 5,777 | 4,652 | ||
Commercial and Consumer Loan [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | $ 62,639 | $ 45,900 |
LOANS RECEIVABLE (Detail Narrat
LOANS RECEIVABLE (Detail Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Restructuring of loan | $ 10,760 | $ 12,664 |
Federal Reserve Bank Advances [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans pledged as collateral to secure funding amount | 108,300 | 89,100 |
Federal Home Loan Bank of Atlanta [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans pledged as collateral to secure funding amount | $ 231,800 | $ 144,300 |
LOANS RECEIVABLE (Details 2)
LOANS RECEIVABLE (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Discount on purchased loans, beginning of period | $ 923 | ||
Discount on purchased loans, end of period | 1,431 | $ 923 | |
Fair value discount, beginning of year | 857 | 72 | |
Additional discount for acquisitions | 2,479 | 960 | 72 |
Accretion | (1,324) | (175) | |
Discount on purchased loans, end of period | 2,012 | 857 | 72 |
Federal Deposit Insurance Corporation [Member] | |||
Discount on purchased loans, beginning of period | 1,150 | 1,366 | 1,487 |
Additional discount for new purchases | 485 | ||
Accretion | (440) | (216) | (311) |
Discount applied to charge-offs | (295) | ||
Discount on purchased loans, end of period | $ 710 | $ 1,150 | $ 1,366 |
LOANS RECEIVABLE (Details 3)
LOANS RECEIVABLE (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loans Receivable Details 3 | ||
Balance at beginning of year | $ 8,222 | $ 8,930 |
New loans | 428 | 51 |
Repayments | (536) | (759) |
Balance at end of year | $ 8,114 | $ 8,222 |
ALLOWANCE FOR LOAN LOSSES (Deta
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | $ 9,305 | $ 9,461 | $ 11,072 |
Provision | 1,897 | 274 | (1,500) |
Charge-offs | (971) | (1,546) | (1,322) |
Recoveries | 656 | 1,116 | 1,211 |
Balance, end of period | 10,887 | 9,305 | 9,461 |
One To Four Family Residential [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 2,812 | 2,455 | 2,983 |
Provision | 1,181 | 413 | (251) |
Charge-offs | (93) | (133) | (536) |
Recoveries | 118 | 77 | 259 |
Balance, end of period | 4,018 | 2,812 | 2,455 |
Commercial Real Estate Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 3,979 | 3,221 | 2,717 |
Provision | 503 | 1,016 | 388 |
Charge-offs | (193) | (431) | (52) |
Recoveries | 75 | 173 | 168 |
Balance, end of period | 4,364 | 3,979 | 3,221 |
Home Equity Line of Credit [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 677 | 1,097 | 1,333 |
Provision | 201 | (486) | 200 |
Charge-offs | (268) | (158) | (540) |
Recoveries | 6 | 224 | 104 |
Balance, end of period | 616 | 677 | 1,097 |
Residential Construction [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 185 | 278 | 510 |
Provision | 118 | (125) | (235) |
Charge-offs | |||
Recoveries | 32 | 3 | |
Balance, end of period | 303 | 185 | 278 |
Other Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 848 | 1,400 | 2,936 |
Provision | 318 | (122) | (1,741) |
Charge-offs | (289) | (560) | (137) |
Recoveries | 148 | 130 | 342 |
Balance, end of period | 1,025 | 848 | 1,400 |
Commercial Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 599 | 603 | 308 |
Provision | (53) | (85) | 272 |
Charge-offs | (68) | (63) | (9) |
Recoveries | 25 | 144 | 32 |
Balance, end of period | 503 | 599 | 603 |
Consumer Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 205 | 407 | 285 |
Provision | (371) | (337) | (133) |
Charge-offs | (60) | (201) | (48) |
Recoveries | 284 | 336 | 303 |
Balance, end of period | $ 58 | $ 205 | $ 407 |
ALLOWANCE FOR LOAN LOSSES (De74
ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for loan losses | ||||
Individually evaluated for impairment | $ 322 | $ 584 | ||
Collectively evaluated for impairment | 10,565 | 8,721 | ||
Balance, end of period | 10,887 | 9,305 | $ 9,461 | $ 11,072 |
Loans Receivable | ||||
Individually evaluated for impairment | 11,634 | 13,671 | ||
Collectively evaluated for impairment | 993,505 | 730,690 | ||
Total Loans Receivable | 1,005,139 | 744,361 | ||
One To Four Family Residential [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 185 | 201 | ||
Collectively evaluated for impairment | 3,833 | 2,611 | ||
Balance, end of period | 4,018 | 2,812 | 2,455 | 2,983 |
Loans Receivable | ||||
Individually evaluated for impairment | 3,873 | 3,769 | ||
Collectively evaluated for impairment | 299,111 | 273,169 | ||
Total Loans Receivable | 302,984 | 276,938 | ||
Commercial Real Estate Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 56 | 178 | ||
Collectively evaluated for impairment | 4,308 | 3,801 | ||
Balance, end of period | 4,364 | 3,979 | 3,221 | 2,717 |
Loans Receivable | ||||
Individually evaluated for impairment | 5,714 | 7,601 | ||
Collectively evaluated for impairment | 445,315 | 284,502 | ||
Total Loans Receivable | 451,029 | 292,103 | ||
Home Equity Line of Credit [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 2 | |||
Collectively evaluated for impairment | 616 | 675 | ||
Balance, end of period | 616 | 677 | 1,097 | 1,333 |
Loans Receivable | ||||
Individually evaluated for impairment | 313 | 313 | ||
Collectively evaluated for impairment | 49,648 | 50,087 | ||
Total Loans Receivable | 49,961 | 50,400 | ||
Residential Construction [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 303 | 185 | ||
Balance, end of period | 303 | 185 | 278 | 510 |
Loans Receivable | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 37,144 | 18,439 | ||
Total Loans Receivable | 37,144 | 18,439 | ||
Other Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 66 | 175 | ||
Collectively evaluated for impairment | 959 | 673 | ||
Balance, end of period | 1,025 | 848 | 1,400 | 2,936 |
Loans Receivable | ||||
Individually evaluated for impairment | 1,443 | 1,682 | ||
Collectively evaluated for impairment | 99,725 | 58,444 | ||
Total Loans Receivable | 101,168 | 60,126 | ||
Commercial Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 15 | 28 | ||
Collectively evaluated for impairment | 488 | 571 | ||
Balance, end of period | 503 | 599 | 603 | 308 |
Loans Receivable | ||||
Individually evaluated for impairment | 291 | 306 | ||
Collectively evaluated for impairment | 56,785 | 41,397 | ||
Total Loans Receivable | 57,076 | 41,703 | ||
Consumer Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 58 | 205 | ||
Balance, end of period | 58 | 205 | $ 407 | $ 285 |
Loans Receivable | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 5,777 | 4,652 | ||
Total Loans Receivable | $ 5,777 | $ 4,652 |
ALLOWANCE FOR LOAN LOSSES (De75
ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Loans Reported amount | $ 1,005,139 | $ 744,361 |
One To Four Family Residential [Member] | ||
Loans Reported amount | 302,984 | 276,938 |
Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 57,076 | 41,703 |
Home Equity Line of Credit [Member] | ||
Loans Reported amount | 49,961 | 50,400 |
Residential Construction [Member] | ||
Loans Reported amount | 37,144 | 18,439 |
Other Portfolio Segment [Member] | ||
Loans Reported amount | 101,168 | 60,126 |
Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 451,029 | 292,103 |
Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 5,777 | 4,652 |
Graded Loan [Member] | ||
Loans Reported amount | 796,077 | 524,688 |
Graded Loan [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 162,065 | 133,827 |
Graded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 57,035 | 38,676 |
Graded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 10,156 | 8,653 |
Graded Loan [Member] | Residential Construction [Member] | ||
Loans Reported amount | 26,667 | 13,863 |
Graded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 88,462 | |
Graded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 450,773 | 283,568 |
Graded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 919 | 375 |
Graded Loan [Member] | Loan Grade One [Member] | ||
Loans Reported amount | 10,762 | 10,634 |
Graded Loan [Member] | Loan Grade One [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 1,665 | 431 |
Graded Loan [Member] | Loan Grade One [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 9,086 | 10,203 |
Graded Loan [Member] | Loan Grade One [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 11 | |
Graded Loan [Member] | Loan Grade Two [Member] | ||
Loans Reported amount | 15,700 | 5,752 |
Graded Loan [Member] | Loan Grade Two [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 1,164 | |
Graded Loan [Member] | Loan Grade Two [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 1,272 | 1,465 |
Graded Loan [Member] | Loan Grade Two [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Two [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Two [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 904 | 2,164 |
Graded Loan [Member] | Loan Grade Two [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 12,360 | 4,287 |
Graded Loan [Member] | Loan Grade Two [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Three [Member] | ||
Loans Reported amount | 150,353 | 59,968 |
Graded Loan [Member] | Loan Grade Three [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 34,593 | 27,975 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 15,117 | 2,803 |
Graded Loan [Member] | Loan Grade Three [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 5,312 | 1,814 |
Graded Loan [Member] | Loan Grade Three [Member] | Residential Construction [Member] | ||
Loans Reported amount | 7,262 | 586 |
Graded Loan [Member] | Loan Grade Three [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 9,207 | 22,293 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 78,485 | 24,626 |
Graded Loan [Member] | Loan Grade Three [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 377 | |
Graded Loan [Member] | Loan Grade Four [Member] | ||
Loans Reported amount | 451,839 | 264,398 |
Graded Loan [Member] | Loan Grade Four [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 99,816 | 75,246 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 25,137 | 21,942 |
Graded Loan [Member] | Loan Grade Four [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 3,901 | 3,363 |
Graded Loan [Member] | Loan Grade Four [Member] | Residential Construction [Member] | ||
Loans Reported amount | 16,294 | 10,646 |
Graded Loan [Member] | Loan Grade Four [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 57,065 | 17,930 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 249,103 | 130,857 |
Graded Loan [Member] | Loan Grade Four [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 523 | 51 |
Graded Loan [Member] | Loan Grade Five [Member] | ||
Loans Reported amount | 146,316 | 157,135 |
Graded Loan [Member] | Loan Grade Five [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 22,639 | 26,306 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 13,064 | 11,344 |
Graded Loan [Member] | Loan Grade Five [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 943 | 3,476 |
Graded Loan [Member] | Loan Grade Five [Member] | Residential Construction [Member] | ||
Loans Reported amount | 3,111 | 2,347 |
Graded Loan [Member] | Loan Grade Five [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 18,806 | 2,470 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 87,745 | 95,408 |
Graded Loan [Member] | Loan Grade Five [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 8 | 324 |
Graded Loan [Member] | Loan Grade Six [Member] | ||
Loans Reported amount | 12,725 | 17,112 |
Graded Loan [Member] | Loan Grade Six [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 1,741 | 2,587 |
Graded Loan [Member] | Loan Grade Six [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 306 | 270 |
Graded Loan [Member] | Loan Grade Six [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Six [Member] | Residential Construction [Member] | ||
Loans Reported amount | 284 | |
Graded Loan [Member] | Loan Grade Six [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 2,055 | 869 |
Graded Loan [Member] | Loan Grade Six [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 8,623 | 11,501 |
Graded Loan [Member] | Loan Grade Six [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Seven [Member] | ||
Loans Reported amount | 8,382 | 9,689 |
Graded Loan [Member] | Loan Grade Seven [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 2,112 | 1,713 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 474 | 421 |
Graded Loan [Member] | Loan Grade Seven [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Seven [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Seven [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 425 | 45,726 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 5,371 | 6,686 |
Graded Loan [Member] | Loan Grade Seven [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | ||
Loans Reported amount | 209,062 | 219,673 |
UnGraded Loan [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 140,919 | 143,111 |
UnGraded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 41 | 3,027 |
UnGraded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 39,805 | 41,747 |
UnGraded Loan [Member] | Residential Construction [Member] | ||
Loans Reported amount | 10,477 | 4,576 |
UnGraded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 12,706 | 14,400 |
UnGraded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 256 | 8,535 |
UnGraded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 4,858 | 4,277 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | ||
Loans Reported amount | 1,121 | 1,437 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 906 | 889 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 120 | 250 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 83 | 251 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 12 | 47 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | ||
Loans Reported amount | 207,941 | 218,236 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 140,013 | 142,222 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 41 | 3,027 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 39,685 | 41,497 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Residential Construction [Member] | ||
Loans Reported amount | 10,477 | 4,576 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 12,623 | 14,149 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 256 | 8,535 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | $ 4,846 | $ 4,230 |
ALLOWANCE FOR LOAN LOSSES (De76
ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | $ 9,069 | $ 7,503 |
60-89 Days Past | 973 | 2,953 |
90 Days and Over Past Due | 1,563 | 3,090 |
Total Past Due | 11,605 | 13,546 |
Current | 993,534 | 730,815 |
Total Loans Receivable | 1,005,139 | 744,361 |
One To Four Family Residential [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 3,941 | 4,917 |
60-89 Days Past | 591 | 1,108 |
90 Days and Over Past Due | 562 | 427 |
Total Past Due | 5,094 | 6,452 |
Current | 297,890 | 270,486 |
Total Loans Receivable | 302,984 | 276,938 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 2,093 | 1,382 |
60-89 Days Past | 308 | 1,800 |
90 Days and Over Past Due | 683 | 1,638 |
Total Past Due | 3,084 | 4,820 |
Current | 447,945 | 287,283 |
Total Loans Receivable | 451,029 | 292,103 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 308 | 126 |
60-89 Days Past | 27 | 44 |
90 Days and Over Past Due | 120 | 231 |
Total Past Due | 455 | 401 |
Current | 49,506 | 49,999 |
Total Loans Receivable | 49,961 | 50,400 |
Residential Construction [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 501 | 180 |
60-89 Days Past | ||
90 Days and Over Past Due | ||
Total Past Due | 501 | 180 |
Current | 36,643 | 18,259 |
Total Loans Receivable | 37,144 | 18,439 |
Other Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 1,711 | 468 |
60-89 Days Past | 21 | |
90 Days and Over Past Due | 93 | 794 |
Total Past Due | 1,825 | 1,262 |
Current | 99,343 | 58,864 |
Total Loans Receivable | 101,168 | 60,126 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 488 | 368 |
60-89 Days Past | 1 | |
90 Days and Over Past Due | 95 | |
Total Past Due | 584 | 368 |
Current | 56,492 | 41,335 |
Total Loans Receivable | 57,076 | 41,703 |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 27 | 62 |
60-89 Days Past | 25 | 1 |
90 Days and Over Past Due | 10 | |
Total Past Due | 62 | 63 |
Current | 5,715 | 4,589 |
Total Loans Receivable | $ 5,777 | $ 4,652 |
ALLOWANCE FOR LOAN LOSSES (De77
ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | $ 7,200 | $ 9,135 |
Unpaid Principal Balance, without a valuation allowance | 9,601 | 11,672 |
Recorded Balance, Recorded Balance, with a valuation allowance | 4,434 | 4,536 |
Unpaid Principal Balance, with a valuation allowance | 4,434 | 4,536 |
Recorded Balance | 11,634 | 13,671 |
Unpaid Principal Balance | 14,035 | 16,208 |
Specific Allowance | 322 | 584 |
One To Four Family Residential [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 2,266 | 2,625 |
Unpaid Principal Balance, without a valuation allowance | 2,376 | 2,723 |
Recorded Balance, Recorded Balance, with a valuation allowance | 1,607 | 1,144 |
Unpaid Principal Balance, with a valuation allowance | 1,607 | 1,144 |
Recorded Balance | 3,873 | 3,769 |
Unpaid Principal Balance | 3,983 | 3,867 |
Specific Allowance | 185 | 201 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 4,050 | 5,526 |
Unpaid Principal Balance, without a valuation allowance | 6,119 | 7,710 |
Recorded Balance, Recorded Balance, with a valuation allowance | 1,664 | 2,075 |
Unpaid Principal Balance, with a valuation allowance | 1,664 | 2,075 |
Recorded Balance | 5,714 | 7,601 |
Unpaid Principal Balance | 7,783 | 9,785 |
Specific Allowance | 56 | 178 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 313 | 213 |
Unpaid Principal Balance, without a valuation allowance | 428 | 328 |
Recorded Balance, Recorded Balance, with a valuation allowance | 100 | |
Unpaid Principal Balance, with a valuation allowance | 100 | |
Recorded Balance | 313 | 313 |
Unpaid Principal Balance | 428 | 428 |
Specific Allowance | 2 | |
Other Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 571 | 771 |
Unpaid Principal Balance, without a valuation allowance | 678 | 911 |
Recorded Balance, Recorded Balance, with a valuation allowance | 872 | 911 |
Unpaid Principal Balance, with a valuation allowance | 872 | 911 |
Recorded Balance | 1,443 | 1,682 |
Unpaid Principal Balance | 1,550 | 1,822 |
Specific Allowance | 66 | 175 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, Recorded Balance, with a valuation allowance | 291 | 306 |
Unpaid Principal Balance, with a valuation allowance | 291 | 306 |
Recorded Balance | 291 | 306 |
Unpaid Principal Balance | 291 | 306 |
Specific Allowance | $ 15 | $ 28 |
ALLOWANCE FOR LOAN LOSSES (De78
ALLOWANCE FOR LOAN LOSSES (Details 6) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Average Investment in Impaired Loans, without a valuation allowance | $ 9,717 | $ 11,843 | $ 14,952 |
Interest Income Recognized, without a valuation allowance | 319 | 270 | 512 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 4,534 | 4,699 | 5,789 |
Interest Income Recognized, with a valuation allowance | 221 | 190 | 230 |
Average Investment in Impaired Loans | 14,251 | 16,542 | 20,741 |
Interest Income Recognized | 540 | 460 | 742 |
One To Four Family Residential [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 2,415 | 2,758 | 6,072 |
Interest Income Recognized, without a valuation allowance | 116 | 117 | 174 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 1,642 | 1,162 | 2,056 |
Interest Income Recognized, with a valuation allowance | 75 | 48 | 88 |
Average Investment in Impaired Loans | 4,057 | 3,920 | 8,128 |
Interest Income Recognized | 191 | 165 | 262 |
Commercial Real Estate Portfolio Segment [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 6,188 | 7,999 | 7,834 |
Interest Income Recognized, without a valuation allowance | 128 | 299 | 116 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 1,685 | 1,808 | 2,098 |
Interest Income Recognized, with a valuation allowance | 87 | 82 | 82 |
Average Investment in Impaired Loans | 7,873 | 9,807 | 9,932 |
Interest Income Recognized | 215 | 381 | 198 |
Home Equity Line of Credit [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 428 | 328 | 213 |
Interest Income Recognized, without a valuation allowance | 55 | 10 | 9 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 100 | 100 | |
Interest Income Recognized, with a valuation allowance | 4 | 4 | |
Average Investment in Impaired Loans | 428 | 428 | 313 |
Interest Income Recognized | 55 | 14 | 13 |
Other Portfolio Segment [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 686 | 923 | 668 |
Interest Income Recognized, without a valuation allowance | 20 | 27 | 30 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 908 | 1,027 | 1,502 |
Interest Income Recognized, with a valuation allowance | 38 | 37 | 37 |
Average Investment in Impaired Loans | 1,594 | 1,950 | 2,170 |
Interest Income Recognized | 58 | 64 | 67 |
Commercial Portfolio Segment [Member] | |||
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 299 | 312 | 323 |
Interest Income Recognized, with a valuation allowance | 21 | 19 | 19 |
Average Investment in Impaired Loans | 299 | 312 | 323 |
Interest Income Recognized | $ 21 | $ 19 | $ 19 |
ALLOWANCE FOR LOAN LOSSES (De79
ALLOWANCE FOR LOAN LOSSES (Details 7) - Nonperforming Financing Receivable [Member] - Loans [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | $ 4,778 | $ 6,041 |
One To Four Family Residential [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 1,421 | 1,125 |
Commercial Real Estate Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 2,666 | 3,536 |
Home Equity Line of Credit [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 120 | 250 |
Other Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 464 | 1,042 |
Commercial Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 95 | 41 |
Consumer Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | $ 12 | $ 47 |
ALLOWANCE FOR LOAN LOSSES (De80
ALLOWANCE FOR LOAN LOSSES (Details 8) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Modifications [Line Items] | ||
TDR loans | $ 10,760 | $ 12,664 |
Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 8,952 | 9,882 |
Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,808 | 2,782 |
One To Four Family Residential [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 3,452 | 3,770 |
One To Four Family Residential [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 3,452 | 3,560 |
One To Four Family Residential [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 210 | |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 5,243 | 6,693 |
Commercial Real Estate Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 3,805 | 4,327 |
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,438 | 2,366 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 313 | 313 |
Home Equity Line of Credit [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 313 | 313 |
Home Equity Line of Credit [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | ||
Other Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,461 | 1,583 |
Other Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,091 | 1,377 |
Other Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 370 | 206 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 291 | 305 |
Commercial Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 291 | 305 |
Commercial Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans |
ALLOWANCE FOR LOAN LOSSES (De81
ALLOWANCE FOR LOAN LOSSES (Details 9) - Extended Payment Term [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)LoansModifications | |
Number of Loans | LoansModifications | 1 |
Pre-modification Outstanding Recorded Investment | $ 242 |
Post-modification Outstanding Recorded Investment | $ 166 |
Commercial Real Estate Portfolio Segment [Member] | |
Number of Loans | LoansModifications | 1 |
Pre-modification Outstanding Recorded Investment | $ 242 |
Post-modification Outstanding Recorded Investment | $ 166 |
CONCENTRATIONS OF CREDIT RISK82
CONCENTRATIONS OF CREDIT RISK (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Maximum legal lending limits | $ 22,100 | $ 22,200 |
Percentage of Total Loan | 1.00% | 100.00% |
One To Four Family Residential [Member] | ||
Percentage of Total Loan | 30.10% | 37.30% |
Commercial Real Estate Portfolio Segment [Member] | ||
Percentage of Total Loan | 45.00% | 39.20% |
Home Equity Line of Credit [Member] | ||
Percentage of Total Loan | 4.90% | 6.70% |
Residential Construction [Member] | ||
Percentage of Total Loan | 3.70% | 2.50% |
Other Portfolio Segment [Member] | ||
Percentage of Total Loan | 10.10% | 8.10% |
Commercial Portfolio Segment [Member] | ||
Percentage of Total Loan | 5.60% | 5.50% |
Consumer Portfolio Segment [Member] | ||
Percentage of Total Loan | 0.60% | 0.07% |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total premises and equipment | $ 41,325 | $ 36,326 | |
Less: Accumulated depreciation | (17,212) | (16,117) | |
Premises and equipment, net | 24,113 | 20,209 | |
Depreciation and leasehold amortization expense | 1,400 | 1,200 | $ 1,000 |
Land [Member] | |||
Total premises and equipment | 10,054 | 9,201 | |
Building [Member] | |||
Total premises and equipment | 22,452 | 18,696 | |
Furniture and Fixtures [Member] | |||
Total premises and equipment | 8,767 | 8,429 | |
Construction in Progress [Member] | |||
Total premises and equipment | $ 52 |
FIXED ASSETS (Details 2)
FIXED ASSETS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fixed Assets Details 2 | |||
2,018 | $ 168 | ||
2,019 | 143 | ||
2,020 | 69 | ||
2,021 | 53 | ||
2,022 | 18 | ||
Total minimum lease commitments | 451 | ||
Rental Expense | $ 200 | $ 100 | $ 100 |
REAL ESTATE OWNED (Details)
REAL ESTATE OWNED (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Real Estate Owned Details | ||||
Real estate owned, gross | $ 3,585 | $ 5,650 | ||
Less: Valuation allowance | 1,017 | 1,424 | $ 1,372 | $ 1,760 |
Real estate owned, net | $ 2,568 | $ 4,226 |
REAL ESTATE OWNED (Details 2)
REAL ESTATE OWNED (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Real Estate Owned Valuation Allowance [Roll Forward] | |||
Valuation allowance, beginning | $ 1,424 | $ 1,372 | $ 1,760 |
Provision charged to expense | 292 | 655 | 171 |
Reduction due to disposal | (699) | (603) | (599) |
Valuation allowance, ending | 1,017 | 1,424 | $ 1,372 |
Real estate acquired through foreclosure | 3,585 | $ 5,650 | |
Residential Real Estate [Member] | |||
Real Estate Owned Valuation Allowance [Roll Forward] | |||
Real estate acquired through foreclosure | 500 | ||
Other real estate | $ 300 |
BANK OWNED LIFE INSURANCE (BO87
BANK OWNED LIFE INSURANCE (BOLI) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Bank Owned Life Insurance Boli Details | ||
Separate account | $ 2,504 | $ 12,548 |
General account | 18,491 | 17,944 |
Hybrid | 11,155 | 855 |
Bank owned life insurance | $ 32,150 | $ 31,347 |
LOAN SERVICING (Details)
LOAN SERVICING (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Loan Servicing Details | |||
Unpaid principal balance of mortgage loans serviced for others | $ 276,782 | $ 264,264 | $ 251,492 |
LOAN SERVICING (Details 2)
LOAN SERVICING (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loan Servicing Details 2 | |||
Loan servicing rights, beginning of period | $ 2,603 | $ 2,344 | $ 2,187 |
Capitalization from loans sold | 618 | 604 | 544 |
Fair value adjustment | (465) | (345) | (387) |
Loan servicing rights, end of period | 2,756 | 2,603 | $ 2,344 |
Escrow deposits | $ 500 | $ 400 |
GOODWILL AND OTHER INTANGIBLE90
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance at beginning of period | $ 2,065 | $ 711 |
Prior acquisitions measurement period adjustments | 63 | |
Goodwill from current year acquisitions | 21,775 | 1,354 |
Balance at end of period | $ 23,903 | $ 2,065 |
GOODWILL AND OTHER INTANGIBLE91
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount at beginning of period | $ 1,120 | $ 590 |
Additions from acquisitions during the period | 3,720 | 530 |
Gross balance at end of period | 4,840 | 1,120 |
Accumulated amortization | (571) | (141) |
Finite Lived Core Deposits Net | 4,269 | $ 979 |
Amortization expense | $ 700 |
DERIVATIVE FINANCIAL INSTRUME92
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest rate swap | $ (23) | $ (5,456) | $ (1,736) | $ (2,269) |
Interest Expense | 7,684 | 6,032 | $ 5,723 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Interest Expense | (14) | 32 | ||
Cash Flow Hedge [Member] | ||||
Interest rate swap | 432 | 300 | ||
Designated as Hedging Instrument [Member] | ||||
Asset derivatives, Fair value | 561 | 476 | ||
Designated as Hedging Instrument [Member] | Interest rate swaps [Member] | ||||
Asset derivatives, Fair value | 561 | 476 | ||
Not Designated as Hedging Instrument [Member] | ||||
Asset derivatives, Fair value | 73 | 60 | ||
Not Designated as Hedging Instrument [Member] | Mortgage banking - loan commitment [Member] | ||||
Asset derivatives, Fair value | 45 | 41 | ||
Not Designated as Hedging Instrument [Member] | Mortgage loan forward sales commitments [Member] | ||||
Asset derivatives, Fair value | $ 28 | $ 19 |
DERIVATIVE FINANCIAL INSTRUME93
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Junior Subordinated Debt [Member] | |
Notional Amount | $ 14 |
Fixed Interest Rate | 0.958% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 4 years |
FHLB Variable Rate Advance [Member] | |
Notional Amount | $ 15 |
Fixed Interest Rate | 1.054% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 2 years |
FHLB Variable Rate Advance 1 [Member] | |
Notional Amount | $ 21 |
Fixed Interest Rate | 1.354% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 2 years |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deposits By Type [Line Items] | |||
Balance | $ 1,162,177 | $ 830,013 | $ 716,617 |
Interest Expense | 4,474 | 3,964 | 4,334 |
Noninterest-bearing demand [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 179,457 | 139,136 | 121,062 |
Interest Expense | |||
Interest-bearing Deposits [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 226,718 | 122,271 | 103,198 |
Interest Expense | 228 | 160 | 136 |
Money Market Funds [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 308,767 | 239,387 | 180,377 |
Interest Expense | 1,022 | 770 | 558 |
Savings Deposits [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 50,500 | 40,014 | 35,838 |
Interest Expense | 53 | 49 | 33 |
Time deposit [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 396,735 | 289,205 | 276,142 |
Interest Expense | $ 3,171 | $ 2,985 | $ 3,607 |
DEPOSITS (Details 2)
DEPOSITS (Details 2) $ in Thousands | Dec. 31, 2017USD ($) |
Deposits Details 2 | |
2,018 | $ 218,382 |
2,019 | 66,023 |
2,020 | 47,942 |
2,021 | 34,469 |
2,022 | 16,081 |
Thereafter | 13,838 |
Deposits | $ 396,735 |
DEPOSITS (Details 3)
DEPOSITS (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deposits Details 3 | |||
Time deposit premium, beginning of period | $ 420 | $ 30 | |
Additional premium for acquisitions | 1,534 | 648 | 30 |
Accretion | (852) | (258) | |
Time deposit premium, end of period | $ 1,102 | $ 420 | $ 30 |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deposits Details 3 | ||
Time Deposits, $250,000 or More | $ 55,800 | $ 46,900 |
Brokered Deposits | 30,800 | 14,800 |
Deposits from Related Parties | $ 1,600 | $ 2,200 |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance | $ 223,500 | $ 298,500 |
Rate | 1.48% | 0.68% |
Maturity 01/03/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.58% | |
Maturity 01/03/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.44% | |
Maturity 01/05/2017 [Member] | ||
Balance | $ 50,000 | |
Type | Fixed | |
Rate | 0.49% | |
Maturity 01/15/2017 [Member] | ||
Balance | $ 30,000 | |
Type | Fixed | |
Rate | 0.64% | |
Maturity 01/17/2017 [Member] | ||
Balance | $ 15,000 | |
Type | Fixed | |
Rate | 0.63% | |
Maturity 01/23/2017 [Member] | ||
Balance | $ 25,000 | |
Type | Fixed | |
Rate | 0.64% | |
Maturity 02/07/2017 [Member] | ||
Balance | $ 20,000 | |
Type | Fixed | |
Rate | 0.56% | |
Maturity 03/28/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.58% | |
Maturity 03/29/2017 [Member] | ||
Balance | $ 15,000 | |
Type | Floating | |
Rate | 0.56% | |
Maturity 03/31/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.80% | |
Maturity 04/03/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.60% | |
Maturity 04/06/2017 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.60% | |
Maturity 05/11/2017 [Member] | ||
Balance | $ 1,000 | |
Type | Fixed | |
Rate | 0.87% | |
Maturity 05/23/2017 [Member] | ||
Balance | $ 20,500 | |
Type | Floating | |
Rate | 0.73% | |
Maturity 06/06/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.82% | |
Maturity 06/12/2017 [Member] | ||
Balance | $ 2,000 | |
Type | Fixed | |
Rate | 1.02% | |
Maturity 06/30/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.76% | |
Maturity 08/07/2017 [Member] | ||
Balance | $ 25,000 | |
Type | Fixed | |
Rate | 0.77% | |
Maturity 09/28/2017 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.82% | |
Maturity 12/29/2017 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.77% | |
Maturity 12/30/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.78% | |
Maturity 06/05/2018 [Member] | ||
Balance | $ 5,000 | $ 5,000 |
Type | Fixed | Fixed |
Rate | 1.26% | 1.26% |
Maturity 06/29/2018 [Member] | ||
Balance | $ 10,000 | $ 10,000 |
Type | Fixed | Fixed |
Rate | 0.84% | 0.84% |
Maturity 07/01/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.40% | |
Maturity 12/31/2018 [Member] | ||
Balance | $ 5,000 | $ 5,000 |
Type | Fixed | Fixed |
Rate | 1.51% | 1.51% |
Maturity 01/05/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.29% | |
Maturity 02/08/2018 [Member] | ||
Balance | $ 20,000 | |
Type | Fixed | |
Rate | 1.37% | |
Maturity 05/24/2018 [Member] | ||
Balance | $ 20,500 | |
Type | Floating | |
Rate | 1.48% | |
Maturity 03/29/2018 [Member] | ||
Balance | $ 15,000 | |
Type | Floating | |
Rate | 1.60% | |
Maturity 04/02/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.29% | |
Maturity 04/16/2018 [Member] | ||
Balance | $ 20,000 | |
Type | Fixed | |
Rate | 1.37% | |
Maturity 05/07/2018 [Member] | ||
Balance | $ 25,000 | |
Type | Fixed | |
Rate | 1.36% | |
Maturity 05/24/2018 [Member] | ||
Balance | $ 50,000 | |
Type | Fixed | |
Rate | 1.59% | |
Maturity 06/06/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.39% | |
Maturity 07/02/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.40% | |
Maturity 07/02/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.38% | |
Maturity 09/28/2018 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 1.52% | |
Maturity 05/13/2019 [Member] | ||
Balance | $ 1,000 | |
Type | Fixed | |
Rate | 1.62% | |
Maturity 06/12/2019 [Member] | ||
Balance | $ 2,000 | |
Type | Fixed | |
Rate | 1.53% | |
Maturity 12/30/2019 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 2.12% | |
Maturity 12/30/2019 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 2.12% |
BORROWINGS (Details 2)
BORROWINGS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Federal Home Loan Bank, Advances [Abstract] | ||
2,018 | $ 205,500 | |
2,019 | 18,000 | |
Total | $ 223,500 | $ 298,500 |
Federal Home Loan Bank, Advances, Weighted Average Rate [Abstract] | ||
2,018 | 1.43% | |
2,019 | 2.02% | |
Total | 1.48% | 0.68% |
Federal Reserve Bank Advances [Member] | ||
Federal Home Loan Bank, Advances, Weighted Average Rate [Abstract] | ||
Borrowing Capacity with the Federal Reserve Discount Window | $ 48,300 | $ 48,900 |
JUNIOR SUBORDINATED DEBT (Detai
JUNIOR SUBORDINATED DEBT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Junior subordinated notes | $ 14,433 | $ 14,433 |
Junior Subordinated Debt [Member] | ||
Debt Instrument [Line Items] | ||
Junior subordinated notes | $ 14,433 | |
Debt instrument, interest rate | 3.76% | 3.76% |
Debt instrument, maturity date | Mar. 30, 2034 | |
Debt redemption price percentage | 100.00% | |
Junior Subordinated Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 2.80% |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Benefit Plans Details Narrative | |||
Defined Contribution Plan, Contributions by Employer | $ 600 | $ 500 | $ 400 |
POST-EMPLOYMENT BENEFITS (Detai
POST-EMPLOYMENT BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Liabilities | $ 10,174 | $ 10,211 | |
Expense related to Defined Benefit Plan | 600 | 800 | $ 1,400 |
Supplemental Employee Retirement Plan [Member] | |||
Defined Benefit Plan, Liabilities | 4,288 | 4,417 | |
Cap Equity [Member] | |||
Defined Benefit Plan, Liabilities | 4,708 | 4,718 | |
Director Consultation [Member] | |||
Defined Benefit Plan, Liabilities | 246 | 252 | |
Life Insurance [Member] | |||
Defined Benefit Plan, Liabilities | $ 932 | $ 824 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Share-based Compensation Arrangement Options, Outstanding | 433,300 | |
Option Exercisable | 136,380 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price of Options Outstanding | $ 19.11 | |
Weighted Average Exercise Price of Options Exercisable | $ 18.47 | |
Weighted Avg. Remaining Years Contractual Life (in years) | 8 years 2 months 8 days | |
Restricted Stock [Member] | ||
Maximum number of shares to be awarded under plan | 196,391 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Share-based Compensation Arrangement Options, Outstanding | 145,580 | 157,100 |
Granted | 18,600 | 26,300 |
Exercised | (33,780) | (30,220) |
Forfeited or expired | (5,200) | (7,600) |
Share-based Compensation Arrangement Options, Outstanding | 125,200 | 145,580 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price of Options Outstanding | $ 18.36 | $ 18.55 |
Granted | 25.76 | 17.49 |
Exercised | 18.39 | 18.55 |
Forfeited, exchanged or expired | 18.55 | 18.55 |
Weighted Average Exercise Price of Options Outstanding | $ 19.44 | $ 18.36 |
Employee Stock Option [Member] | ||
Maximum number of shares to be awarded under plan | 458,246 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Share-based Compensation Arrangement Options, Outstanding | 407,200 | 366,000 |
Granted | 40,900 | 57,400 |
Exercised | (3,600) | |
Forfeited or expired | (11,200) | (16,200) |
Share-based Compensation Arrangement Options, Outstanding | 433,300 | 407,200 |
Option Exercisable | 145,480 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price of Options Outstanding | $ 18.41 | $ 18.55 |
Granted | 25.92 | 17.52 |
Exercised | 18.55 | |
Forfeited, exchanged or expired | 18.55 | 18.55 |
Weighted Average Exercise Price of Options Outstanding | 19.11 | $ 18.41 |
Weighted Average Exercise Price of Options Exercisable | $ 18.47 | |
Weighted Avg. Remaining Years Contractual Life (in years) | 8 years 2 months 8 days | |
Aggregate Intrinsic Value of Options Outstanding | $ 4,409 |
SHARE-BASED COMPENSATION (De104
SHARE-BASED COMPENSATION (Details 2) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement Options, Outstanding | shares | 433,300 |
Weighted Average Exercise Price of Options Outstanding | $ / shares | $ 19.11 |
Weighted Avg. Remaining Years Contractual Life (in years) | 8 years 2 months 8 days |
Option Exercisable | shares | 136,380 |
Weighted Average Exercise Price of Options Exercisable | $ / shares | $ 18.47 |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement Options, Outstanding | shares | 433,300 |
Weighted Average Exercise Price of Options Outstanding | $ / shares | $ 19.11 |
Weighted Avg. Remaining Years Contractual Life (in years) | 8 years 2 months 8 days |
Option Exercisable | shares | 145,480 |
Weighted Average Exercise Price of Options Exercisable | $ / shares | $ 18.47 |
Employee Stock Option [Member] | $ 16.00-17.00 | |
Share-based Compensation Arrangement Options, Outstanding | shares | 5,000 |
Weighted Average Exercise Price of Options Outstanding | $ / shares | $ 16.75 |
Weighted Avg. Remaining Years Contractual Life (in years) | 8 years 1 month 20 days |
Option Exercisable | shares | 1,000 |
Weighted Average Exercise Price of Options Exercisable | $ / shares | $ 16.75 |
Employee Stock Option [Member] | $ 17.01-18.00 | |
Share-based Compensation Arrangement Options, Outstanding | shares | 40,500 |
Weighted Average Exercise Price of Options Outstanding | $ / shares | $ 17.45 |
Weighted Avg. Remaining Years Contractual Life (in years) | 8 years 4 months 28 days |
Option Exercisable | shares | 8,100 |
Weighted Average Exercise Price of Options Exercisable | $ / shares | $ 17.45 |
Employee Stock Option [Member] | $ 18.01-18.55 | |
Share-based Compensation Arrangement Options, Outstanding | shares | 346,900 |
Weighted Average Exercise Price of Options Outstanding | $ / shares | $ 18.54 |
Weighted Avg. Remaining Years Contractual Life (in years) | 7 years 11 months 12 days |
Option Exercisable | shares | 136,380 |
Weighted Average Exercise Price of Options Exercisable | $ / shares | $ 18.54 |
Employee Stock Option [Member] | $ 18.56-25.00 | |
Share-based Compensation Arrangement Options, Outstanding | shares | 29,000 |
Weighted Average Exercise Price of Options Outstanding | $ / shares | $ 24.02 |
Weighted Avg. Remaining Years Contractual Life (in years) | 9 years 6 months 18 days |
Employee Stock Option [Member] | $ 25.01-30.55 | |
Share-based Compensation Arrangement Options, Outstanding | shares | 11,900 |
Weighted Average Exercise Price of Options Outstanding | $ / shares | $ 30.55 |
Weighted Avg. Remaining Years Contractual Life (in years) | 9 years 11 months 23 days |
SHARE-BASED COMPENSATION (De105
SHARE-BASED COMPENSATION (Details 3) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation and related assumption for option program | ||
Fair value per option | $ 5.30 | $ 3.02 |
Expected life (in years) | 6 years 6 months | 6 years 6 months |
Expected stock price volatility | 13.00% | 12.00% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 2.19% | 1.57% |
Expected forfeiture rate | 0.00% | 0.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes Details | |||
Current - Federal | $ 365 | $ 549 | $ (150) |
Current - State | 66 | 24 | |
Deferred - Federal | 6,729 | 2,370 | 2,252 |
Deferred - State | 368 | 552 | 109 |
Change in valuation allowance | |||
Income tax expense (benefit) | $ 7,528 | $ 3,495 | $ (16,739) |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes Details | |||
Computed income tax expense (benefit) | $ 3,537 | $ 3,455 | $ 2,480 |
Deferred tax valuation allowance | |||
State income tax, net of federal benefit | 282 | 218 | 165 |
Nontaxable municipal security income | (1,036) | (544) | (126) |
Nontaxable BOLI income | (243) | (107) | (160) |
Change in federal and state rates applied to deferreds | 4,871 | 353 | |
Low income housing tax credit investments | (44) | ||
Other | 161 | 120 | (148) |
Actual income tax expense (benefit) | $ 7,528 | $ 3,495 | $ (16,739) |
Effective tax rate | 74.50% | 35.40% | (236.20%) |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Allowance for loan losses | $ 2,356 | $ 3,245 |
Deferred compensation and post employment benefits | 1,993 | 3,365 |
Non-accrual interest | 204 | 375 |
Valuation reserve for other real estate | 346 | 693 |
North Carolina NOL carryover | 475 | 557 |
Federal NOL carryover | 3,507 | 8,560 |
AMT credit carryforward | 645 | 414 |
Unrealized losses on securities | 149 | 3,255 |
Loan basis differences | 77 | 238 |
Deposit premium | 104 | 155 |
Fixed assets | 63 | |
Other | 1,009 | 966 |
Total deferred tax assets | 10,928 | 21,823 |
Deferred tax liabilities: | ||
Fixed assets | 263 | |
Loan servicing rights | 620 | 962 |
Goodwill | 126 | 18 |
Core deposit intangible | 37 | 158 |
Deferred loan costs | 757 | 1,002 |
Prepaid expenses | 31 | 57 |
Unrealized gains on securities | 377 | 201 |
Derivative instruments | 128 | 176 |
Other | 21 | 1 |
Total deferred tax liabilities | 2,097 | 2,838 |
Net deferred tax asset | $ 8,831 | $ 18,985 |
INCOME TAXES (Details 4)
INCOME TAXES (Details 4) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Federal [Member] | |
Unused Net Operating Losses | $ 16,702 |
Federal [Member] | Minimum [Member] | |
Expiration Dates | 2,031 |
Federal [Member] | Maximum [Member] | |
Expiration Dates | 2,034 |
North Carolina [Member] | |
Unused Net Operating Losses | $ 24,060 |
North Carolina [Member] | Minimum [Member] | |
Expiration Dates | 2,026 |
North Carolina [Member] | Maximum [Member] | |
Expiration Dates | 2,029 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share Details | |||
Net income | $ 2,579 | $ 6,376 | $ 23,825 |
Weighted average shares outstanding | 6,561,699 | 6,477,284 | 6,546,375 |
Effect of dilutive securities | 54,248 | ||
Effect of dilutive restricted stock units | 42,667 | 12,647 | |
Average shares outstanding | 6,658,614 | 6,489,931 | 6,546,375 |
Earnings per share - basic | $ 0.39 | $ 0.98 | $ 3.64 |
Earnings per share - diluted | $ 0.39 | $ 0.98 | $ 3.64 |
ACCUMULATED OTHER COMPREHENS111
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Balance, beginning of period | $ (5,456) | $ (1,736) | $ (2,269) |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | 202 | 377 | 289 |
Change in unrealized holding gain (loss) on securities available for sale | 6,347 | (6,652) | (166) |
Reclassification adjustment for net securities gains realized in net income | 1,102 | (1,216) | (403) |
Reclassification adjustment for other then temporary impairment of securities available for sale | 757 | ||
Transfer of net unrealized loss from available for sale to held to maturity | |||
Amortization of unrealized gains and losses on securities transferred to held to maturity | 578 | 984 | |
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | 325 | ||
Change in unrealized holding gains and losses on cash flow hedge | 99 | 444 | |
Reclassification adjustment for cash flow hedge effectiveness | (14) | 32 | |
Income tax benefit (expense) | (3,060) | 2,392 | (171) |
Balance, end of period | (23) | (5,456) | (1,736) |
Valuation Allowance of Deferred Tax Assets [Member] | |||
Balance, beginning of period | (202) | (579) | (868) |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | 202 | 377 | 289 |
Change in unrealized holding gain (loss) on securities available for sale | |||
Reclassification adjustment for net securities gains realized in net income | |||
Transfer of net unrealized loss from available for sale to held to maturity | |||
Amortization of unrealized gains and losses on securities transferred to held to maturity | |||
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | |||
Income tax benefit (expense) | |||
Balance, end of period | (202) | (579) | |
Available-for-sale Securities [Member] | |||
Balance, beginning of period | (5,554) | (594) | (236) |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | |||
Change in unrealized holding gain (loss) on securities available for sale | 6,347 | (6,652) | (166) |
Reclassification adjustment for net securities gains realized in net income | 1,102 | (1,216) | (403) |
Reclassification adjustment for other then temporary impairment of securities available for sale | 757 | ||
Transfer of net unrealized loss from available for sale to held to maturity | |||
Amortization of unrealized gains and losses on securities transferred to held to maturity | |||
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | |||
Income tax benefit (expense) | (3,107) | 2,908 | 211 |
Balance, end of period | (455) | (5,554) | (594) |
Held-to-maturity Securities [Member] | |||
Balance, beginning of period | (563) | (1,165) | |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | |||
Change in unrealized holding gain (loss) on securities available for sale | |||
Reclassification adjustment for net securities gains realized in net income | |||
Transfer of net unrealized loss from available for sale to held to maturity | |||
Amortization of unrealized gains and losses on securities transferred to held to maturity | 578 | 984 | |
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | 325 | ||
Income tax benefit (expense) | (340) | (382) | |
Balance, end of period | $ (563) | ||
Cash Flow Hedge [Member] | |||
Balance, beginning of period | 300 | ||
Change in unrealized holding gains and losses on cash flow hedge | 99 | 444 | |
Reclassification adjustment for cash flow hedge effectiveness | (14) | 32 | |
Income tax benefit (expense) | 47 | (176) | |
Balance, end of period | $ 432 | $ 300 |
ACCUMULATED OTHER COMPREHENS112
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification adjustment for other then temporary impairment of securities available for sale | $ (757) | ||
Increase related to transfer from AFS | |||
Reduction related to transfer to AFS | 325 | ||
Interest expense - Junior subordinated notes | 557 | 532 | 458 |
Cash Flow Hedge [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense - FHLB advances | (20) | (16) | |
Interest expense - Junior subordinated notes | 34 | (16) | |
Tax effect | 5 | 12 | |
Impact, net of tax | 19 | (20) | |
Valuation Allowance of Deferred Tax [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Impact, net of tax | 202 | 377 | 289 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Impact, net of tax | (960) | 561 | (62) |
Gain on sale of investments, net [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Before tax | (1,102) | 1,216 | 403 |
Reclassification adjustment for other then temporary impairment of securities available for sale | (757) | ||
Tax effect | 678 | (449) | (152) |
Impact, net of tax | $ (1,181) | 767 | 657 |
Investment Income (Expense) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Before tax | (578) | (984) | |
Increase related to transfer from AFS | |||
Reduction related to transfer to AFS | (325) | ||
Tax effect | 340 | 382 | |
Impact, net of tax | $ (563) | $ (602) |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Bank [Member] | |||
Tier I capital to total average assets, Actual Amount | $ 136,280 | $ 138,402 | |
Tier I capital to total average assets, Actual Percent | 8.79% | 11.06% | |
Tier I capital to total average assets, Minimum capital adequacy Amount | $ 61,994 | $ 50,034 | |
Tier I capital to total average assets, Minimum capital adequacy Percent | [1] | 4.00% | 4.00% |
Tier I capital to total average assets, Required to be Categorized Well Capitalized, Amount | $ 77,492 | $ 62,542 | |
Tier I capital to total average assets, Required to be Categorized Well Capitalized, Percent | 5.00% | 5.00% | |
CET1 capital to risk-weighted assets, Actual Amount | $ 136,280 | $ 138,402 | |
CET1 capital to risk-weighted assets, Actual Percent | 11.92% | 16.33% | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 65,729 | $ 38,150 | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 5.75% | 5.125% |
CET1 capital to risk-weighted assets, Required to be Categorized Well Capitalized, Amount | $ 74,303 | $ 55,106 | |
CET1 capital to risk-weighted assets, Required to be Categorized Well Capitalized, Percent | 6.50% | 6.50% | |
Tier I capital to risk-weighted assets, Actual Amount | $ 136,280 | $ 138,402 | |
Tier I capital to risk-weighted assets, Actual Percent | 11.92% | 16.33% | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 82,876 | $ 50,867 | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 7.25% | 6.625% |
Tier I capital to risk-weighted assets, Required to meet Memorandum of Understanding, Amount | $ 91,450 | $ 67,823 | |
Tier I capital to risk-weighted assets, Required to meet Memorandum of Understanding, Percent | 8.00% | 8.00% | |
Total Capital to risk-weighted assets, Actual Amount | $ 147,266 | $ 147,807 | |
Total Capital to risk-weighted assets, Actual Percent | 12.88% | 17.43% | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 105,739 | $ 67,823 | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 9.25% | 8.625% |
Total Capital to risk-weighted assets, Required to be Categorized Well Capitalized, Amount | $ 114,312 | $ 84,778 | |
Total Capital to risk-weighted assets, Required to be Categorized Well Capitalized, Percent | 0.10% | 10.00% | |
Parent Company [Member] | |||
Tier I capital to total average assets, Actual Amount | $ 134,470 | $ 141,013 | |
Tier I capital to total average assets, Actual Percent | 8.68% | 11.28% | |
Tier I capital to total average assets, Minimum capital adequacy Amount | $ 61,967 | $ 50,200 | |
Tier I capital to total average assets, Minimum capital adequacy Percent | [1] | 4.00% | 4.00% |
CET1 capital to risk-weighted assets, Actual Amount | $ 120,861 | $ 130,079 | |
CET1 capital to risk-weighted assets, Actual Percent | 10.57% | 15.33% | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 65,775 | $ 38,188 | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 5.75% | 5.125% |
Tier I capital to risk-weighted assets, Actual Amount | $ 134,470 | $ 141,013 | |
Tier I capital to risk-weighted assets, Actual Percent | 11.76% | 16.62% | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 82,934 | $ 50,918 | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 7.25% | 6.625% |
Total Capital to risk-weighted assets, Actual Amount | $ 145,457 | $ 150,418 | |
Total Capital to risk-weighted assets, Actual Percent | 12.72% | 17.72% | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 105,812 | $ 67,891 | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 9.25% | 8.625% |
[1] | As of December 31, 2017, includes capital conservation buffer of 1.25%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered "adequately capitalized" including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital - 4.0%; Common Equity Tier 1 Capital - 7.0%; Tier 1 Risk-based Capital - 8.5%; and Total Risk-based Capital - 10.5%. |
COMMITMENTS AND CONTINGENCIE114
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 141,651 |
Lines of credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | 139,974 |
Standby Letters of Credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 1,677 |
COMMITMENTS AND CONTINGENCIE115
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Fixed | $ 47,184 |
Variable | 11,686 |
Total | $ 58,870 |
Minimum [Member] | |
Fixed (as a percent) | 3.10% |
Variable (as a percent) | 3.99% |
Maximum [Member] | |
Fixed (as a percent) | 6.99% |
Variable (as a percent) | 7.00% |
COMMITMENTS AND CONTINGENCIE116
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Mortgage Loans Sold to Federal National Mortgage Association[Member] | ||
Loss Contingencies [Line Items] | ||
Obligation for representations and warranties, reserve | $ 300 | $ 300 |
Commitments to Extend Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Allowance for unfunded commitments | $ 100 | $ 100 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 352,348 | $ 406,641 |
Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 342,863 | 398,291 |
Available-for-sale Securities [Member] | US Government Corporations and Agencies Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 19,518 | 14,621 |
Available-for-sale Securities [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 139,760 | 160,181 |
Available-for-sale Securities [Member] | Mortgage-backed Securities, SBA securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 63,275 | 57,756 |
Trading account assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 6,095 | 5,211 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 9,208 | 8,329 |
Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 3,113 | 3,118 |
Fair Value, Inputs, Level 1 [Member] | Trading account assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 6,095 | 5,211 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 339,819 | 393,505 |
Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 339,258 | 393,029 |
Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | US Government Corporations and Agencies Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 17,022 | 12,107 |
Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 139,760 | 160,181 |
Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | Mortgage-backed Securities, SBA securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 63,275 | 57,756 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 3,321 | 4,807 |
Fair Value, Inputs, Level 3 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 492 | 2,144 |
U.S. Treasury securities [Member] | Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,496 | 2,514 |
Mutual Funds [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 617 | 604 |
Mutual Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 617 | 604 |
Municipal Securities [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 94,863 | 146,771 |
Municipal Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 94,863 | 146,771 |
Collateralized Mortgage Backed Securities [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 5,539 | |
Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 5,539 | |
Corporate Bond [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 19,291 | 18,358 |
Corporate Bond [Member] | Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 18,799 | 16,214 |
Corporate Bond [Member] | Fair Value, Inputs, Level 3 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 492 | 2,144 |
Derivative Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 561 | 476 |
Derivative Assets [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 561 | 476 |
Loan Servicing Rights[Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,756 | 2,603 |
Loan Servicing Rights[Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,756 | 2,603 |
Forward Sales Commitments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 28 | 19 |
Forward Sales Commitments [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 28 | 19 |
Interest Rate Lock Commitments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 45 | 41 |
Interest Rate Lock Commitments [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 45 | $ 41 |
FAIR VALUE DISCLOSURES (Deta118
FAIR VALUE DISCLOSURES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures Details 2 | |||
Balance at beginning of period | $ 4,807 | $ 2,390 | $ 2,248 |
Corporate bonds Fair value adjustment | 1 | ||
Corporate bonds Transfers from HTM | 2,144 | ||
Corporate bonds Transfer to Level 2 | (1,087) | ||
Corporate bonds Sold | (566) | ||
Capitalization from loans sold | 618 | 604 | 544 |
Fair value adjustment | (465) | (345) | (387) |
Mortgage derivative gains included in Other income | 13 | 14 | (15) |
Balance at end of period | $ 3,321 | $ 4,807 | $ 2,390 |
FAIR VALUE DISCLOSURES (Deta119
FAIR VALUE DISCLOSURES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets measured at fair value on nonrecurring basis | $ 9,768 | $ 13,782 |
Impaired loans measured at present value | 4,400 | 4,600 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets measured at fair value on nonrecurring basis | 9,768 | 13,782 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 2,266 | 2,205 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 4,050 | 6,329 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Home Equity Line of Credit [Member] | ||
Assets measured at fair value on nonrecurring basis | 313 | 213 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 571 | 809 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 2,266 | 2,205 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 4,050 | 6,329 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Home Equity Line of Credit [Member] | ||
Assets measured at fair value on nonrecurring basis | 313 | 213 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 571 | 809 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 288 | 1,336 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 544 | 722 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 1,736 | 2,168 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 288 | 1,336 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 544 | 722 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | $ 1,736 | $ 2,168 |
FAIR VALUE DISCLOSURES (Deta120
FAIR VALUE DISCLOSURES (Details 4) | 12 Months Ended |
Dec. 31, 2017 | |
Impaired Loans [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Unobservable Input | Collateral discounts and estimated selling cost |
Valuation Technique | Discounted Appraisals |
Impaired Loans [Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 0.00% |
Impaired Loans [Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 30.00% |
Real Estate Owned [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Unobservable Input | Collateral discounts and estimated selling cost |
Valuation Technique | Discounted Appraisals |
Real Estate Owned [Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 0.00% |
Real Estate Owned [Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 30.00% |
Loan Servicing Rights[Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Valuation Technique | Discounted Cash Flows |
Loan Servicing Rights[Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Prepayment Speed | 5.00% |
Discount rate | 12.00% |
Loan Servicing Rights[Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Prepayment Speed | 35.00% |
Discount rate | 14.00% |
Corporate Bond [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Unobservable Input | Recent trade pricing |
Valuation Technique | Discounted Cash Flows |
Corporate Bond [Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Recent trade pricing | 0.00% |
Corporate Bond [Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Recent trade pricing | 8.00% |
SBIC Investments [Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Recent trade pricing | 0.00% |
SBIC Investments [Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Recent trade pricing | 13.00% |
FAIR VALUE DISCLOSURES (Deta121
FAIR VALUE DISCLOSURES (Details 5) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||||
Cash and equivalents | $ 109,467 | $ 43,294 | $ 40,650 | $ 58,982 |
Trading securities | 6,095 | 5,211 | ||
Securities available for sale | 342,863 | 398,291 | ||
Other investments, at cost | 12,386 | 15,261 | ||
Interest receivable | 5,405 | 5,012 | ||
Bank owned life insurance | 32,150 | 31,347 | ||
Loan servicing rights | 2,756 | 2,603 | $ 2,344 | $ 2,187 |
Commitments | ||||
Liabilities: | ||||
Time deposits | 396,735 | |||
Federal Home Loan Bank advances | 223,500 | 298,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 8,623 | 2,725 | ||
Accrued interest payable | 935 | 254 | ||
Reported Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 109,467 | 43,294 | ||
Trading securities | 6,095 | 5,211 | ||
Securities available for sale | 342,863 | 398,291 | ||
Loans held for sale | 3,845 | 4,584 | ||
Loans receivable, net | 1,005,139 | 744,361 | ||
Other investments, at cost | 12,386 | 15,261 | ||
Interest receivable | 5,405 | 5,012 | ||
Bank owned life insurance | 32,150 | 31,347 | ||
Loan servicing rights | 2,756 | 2,603 | ||
Derivative asset | 561 | 476 | ||
SBIC investments | 3,491 | 1,655 | ||
Liabilities: | ||||
Demand deposits | 765,442 | 540,808 | ||
Time deposits | 396,735 | 289,205 | ||
Federal Home Loan Bank advances | 223,500 | 298,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 8,623 | 2,725 | ||
Accrued interest payable | 935 | 254 | ||
Reported Value Measurement [Member] | Forward Sales Commitments [Member] | ||||
Assets: | ||||
Commitments | 28 | 19 | ||
Reported Value Measurement [Member] | Interest Rate Lock Commitments [Member] | ||||
Assets: | ||||
Commitments | 45 | 41 | ||
Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 109,467 | 43,294 | ||
Trading securities | 6,095 | 5,211 | ||
Securities available for sale | 342,863 | 398,291 | ||
Loans held for sale | 4,211 | 5,093 | ||
Loans receivable, net | 992,993 | 741,612 | ||
Other investments, at cost | 12,386 | 15,261 | ||
Interest receivable | 5,405 | 5,012 | ||
Bank owned life insurance | 32,150 | 31,347 | ||
Loan servicing rights | 2,756 | 2,603 | ||
Derivative asset | 561 | 476 | ||
SBIC investments | 3,491 | 1,655 | ||
Liabilities: | ||||
Demand deposits | 765,442 | 540,808 | ||
Time deposits | 390,806 | 286,611 | ||
Federal Home Loan Bank advances | 223,627 | 298,667 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 8,620 | 2,907 | ||
Accrued interest payable | 935 | 254 | ||
Portion at Fair Value Measurement [Member] | Forward Sales Commitments [Member] | ||||
Assets: | ||||
Commitments | 28 | 19 | ||
Portion at Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member] | ||||
Assets: | ||||
Commitments | 45 | 41 | ||
Fair Value, Inputs, Level 1 [Member] | Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 109,467 | 43,294 | ||
Trading securities | 6,095 | 5,211 | ||
Securities available for sale | 3,113 | 3,118 | ||
Loans held for sale | ||||
Loans receivable, net | ||||
Other investments, at cost | ||||
Interest receivable | ||||
Bank owned life insurance | ||||
Loan servicing rights | ||||
Derivative asset | ||||
SBIC investments | ||||
Liabilities: | ||||
Demand deposits | ||||
Time deposits | ||||
Federal Home Loan Bank advances | ||||
Junior subordinated debentures | ||||
Other borrowings | ||||
Accrued interest payable | ||||
Fair Value, Inputs, Level 2 [Member] | Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | ||||
Trading securities | ||||
Securities available for sale | 339,258 | 393,029 | ||
Loans held for sale | 4,211 | 5,093 | ||
Loans receivable, net | ||||
Other investments, at cost | 12,386 | 15,261 | ||
Interest receivable | 5,405 | 5,012 | ||
Bank owned life insurance | 32,150 | 31,347 | ||
Loan servicing rights | ||||
Derivative asset | 561 | 476 | ||
SBIC investments | ||||
Liabilities: | ||||
Demand deposits | 765,442 | 540,808 | ||
Time deposits | ||||
Federal Home Loan Bank advances | 223,627 | 298,667 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 8,620 | 2,907 | ||
Accrued interest payable | 935 | 254 | ||
Fair Value, Inputs, Level 3 [Member] | Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | ||||
Trading securities | ||||
Securities available for sale | 492 | 2,144 | ||
Loans held for sale | ||||
Loans receivable, net | 992,993 | 741,612 | ||
Other investments, at cost | ||||
Interest receivable | ||||
Bank owned life insurance | ||||
Loan servicing rights | 2,756 | 2,603 | ||
Derivative asset | ||||
SBIC investments | 3,491 | 1,655 | ||
Liabilities: | ||||
Demand deposits | ||||
Time deposits | 390,806 | 286,611 | ||
Federal Home Loan Bank advances | ||||
Junior subordinated debentures | ||||
Other borrowings | ||||
Accrued interest payable | ||||
Fair Value, Inputs, Level 3 [Member] | Portion at Fair Value Measurement [Member] | Forward Sales Commitments [Member] | ||||
Assets: | ||||
Commitments | 28 | 19 | ||
Fair Value, Inputs, Level 3 [Member] | Portion at Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member] | ||||
Assets: | ||||
Commitments | $ 45 | $ 41 |
SHARE REPURCHASES (Details)
SHARE REPURCHASES (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Jan. 28, 2016 | |
Share Repurchases Details | |||||||
Number of Shares Authorized to be Repurchased | 327,318 | ||||||
Number of Shares Purchased | 13,000 | 13,000 | |||||
Average Price Paid per Share | $ 23.12 | $ 23.12 | |||||
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | 209,750 | 209,750 | 209,750 | 209,750 | 222,750 | 222,750 |
PARENT COMPANY FINANCIAL INF123
PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Financial Condition (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||||
Cash and cash equivalents | $ 109,467 | $ 43,294 | $ 40,650 | $ 58,982 |
Other assets | 5,055 | 4,099 | ||
Total assets | 1,581,449 | 1,292,877 | ||
Liabilities and stockholders' equity: | ||||
Junior subordinated notes | 14,433 | 14,433 | ||
Other borrowings | 8,623 | 2,725 | ||
Other liabilities | 10,294 | 3,673 | ||
Stockholders equity | 151,313 | 133,068 | $ 131,469 | $ 107,319 |
Total liabilities and stockholders' equity | 1,581,449 | 1,292,877 | ||
Parent Company [Member] | ||||
Assets: | ||||
Cash and cash equivalents | 3,244 | 3,137 | ||
Equity investment in subsidiary | 167,252 | 144,011 | ||
Equity investment in trust | 433 | 433 | ||
Other assets | 624 | 508 | ||
Total assets | 171,553 | 148,089 | ||
Liabilities and stockholders' equity: | ||||
Junior subordinated notes | 14,433 | 14,433 | ||
Other borrowings | 5,000 | |||
Other liabilities | 807 | 588 | ||
Stockholders equity | 151,313 | 133,068 | ||
Total liabilities and stockholders' equity | $ 171,553 | $ 148,089 |
PARENT COMPANY FINANCIAL INF124
PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Operations (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total income | $ 50,529 | $ 40,520 | $ 33,144 |
Interest expense | 7,684 | 6,032 | 5,723 |
Income (loss) before income taxes and equity in undistributed income of subsidiary | 10,107 | 9,871 | 7,086 |
Income tax benefit allocated from consolidated income tax return | 7,528 | 3,495 | (16,739) |
Net income | 2,579 | 6,376 | 23,825 |
Parent Company [Member] | |||
Interest income | 56 | 81 | 190 |
Dividends from subsidiary | 20,630 | 510 | 114 |
Total income | 20,686 | 591 | 304 |
Interest expense | 626 | 532 | 458 |
Other | 361 | 358 | 259 |
Total expenses | 987 | 890 | 717 |
Income (loss) before income taxes and equity in undistributed income of subsidiary | 19,699 | (299) | (413) |
Income tax benefit allocated from consolidated income tax return | 326 | 283 | 180 |
Income (loss) before equity in undistributed income (loss) of subsidiary | 20,025 | (16) | (233) |
Equity in undistributed income (loss) of subsidiary | (17,446) | 6,392 | 24,058 |
Net income | $ 2,579 | $ 6,376 | $ 23,825 |
PARENT COMPANY FINANCIAL INF125
PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 2,579 | $ 6,376 | $ 23,825 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net cash provided by (used in) operating activities | 17,825 | 17,190 | 7,994 |
Investing activities: | |||
Net cash used in investing activities | 105,172 | (173,546) | (95,350) |
Cash flows from financing activities: | |||
Purchase of stock | (301) | (1,922) | |
Purchase of common stock for Rabbi Trust | (279) | ||
Net cash provided by (used in) financing activities | (56,824) | 159,527 | 69,024 |
Increase in cash and cash equivalents | 66,173 | 2,644 | (18,332) |
Noncash investing and financing activities: | |||
Transfer of Rabbi Trust investments to Company stock | 100 | ||
Common stock issued in acquisitions | 9,872 | ||
Parent Company [Member] | |||
Cash flows from operating activities: | |||
Net income | 2,579 | 6,376 | 23,825 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in undistributed earnings in subsidiaries | 17,446 | (6,392) | (24,058) |
(Increase) decrease in other assets | (97) | 55 | (19) |
Increase (decrease) in other liabilities | 166 | 97 | 75 |
Net cash provided by (used in) operating activities | 20,094 | 136 | (177) |
Investing activities: | |||
Investment in subsidiary | (25,448) | (13,486) | |
Net cash used in investing activities | (25,448) | (13,486) | |
Cash flows from financing activities: | |||
Proceeds from other borrowings | 5,000 | ||
Cash paid to tax authorities for shares surrendered upon vesting of restricted stock units | (149) | (87) | |
Cash paid to tax authorities for shares surrendered upon exercise of stock options | (6) | ||
Purchase of stock | (301) | (1,835) | |
Purchase of common stock for Rabbi Trust | (279) | ||
Reimbursement from bank subsidiary for share-based compensation | 917 | 864 | 70 |
Net cash provided by (used in) financing activities | 5,461 | (1,058) | 70 |
Increase in cash and cash equivalents | 107 | (14,408) | (107) |
Cash and cash equivalents, beginning of year | 3,137 | 17,545 | 17,652 |
Cash and cash equivalents, end of year | 3,244 | $ 3,137 | $ 17,545 |
Noncash investing and financing activities: | |||
Transfer of Rabbi Trust investments to Company stock | 100 | ||
Common stock issued in acquisitions | $ 9,872 |