Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 07, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | ENTEGRA FINANCIAL CORP. | |
Entity Central Index Key | 0001522327 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 6,919,212 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Entity Emerging Growth Company | true | |
Entity Small Business | false | |
Entity Ex Transition Period | false |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and due from banks | $ 15,494 | $ 15,409 |
Interest-earning deposits | 82,791 | 53,710 |
Cash and cash equivalents | 98,285 | 69,119 |
Investments - equity securities | 6,812 | 6,178 |
Investments - available for sale | 357,132 | 359,738 |
Other investments, at cost | 12,092 | 12,039 |
Loans held for sale (includes $3,270 and $2,431 at fair value) | 9,208 | 7,570 |
Loans receivable | 1,079,837 | 1,076,069 |
Allowance for loan losses | (12,043) | (11,985) |
Fixed assets, net | 26,093 | 26,385 |
Real estate owned | 2,256 | 2,493 |
Accrued interest receivable | 6,669 | 6,443 |
Bank owned life insurance | 32,087 | 32,886 |
Small Business Investment Company Holdings, at cost | 4,306 | 3,839 |
Net deferred tax asset | 5,265 | 7,551 |
Loan servicing rights | 2,753 | 2,837 |
Goodwill | 23,903 | 23,903 |
Core deposit intangible | 3,404 | 3,577 |
Other assets | 11,092 | 7,799 |
Total assets | 1,669,151 | 1,636,441 |
Liabilities: | ||
Core deposits | 828,850 | 795,261 |
Retail certificates of deposit | 340,047 | 349,971 |
Wholesale deposits | 77,322 | 76,008 |
Federal Home Loan Bank advances | 213,500 | 213,500 |
Junior subordinated notes | 14,433 | 14,433 |
Other borrowings | 9,385 | 9,299 |
Post employment benefits | 9,410 | 9,305 |
Accrued interest payable | 1,173 | 1,647 |
Other liabilities | 4,106 | 4,145 |
Total liabilities | 1,498,226 | 1,473,569 |
Commitments and contingencies | ||
Shareholders' 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; 6,919,212 and 6,917,703 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | ||
Common stock held by Rabbi Trust, at cost; 17,672 shares at both March 31, 2019 and December 31, 2018 | (379) | (379) |
Additional paid in capital | 74,320 | 74,051 |
Retained earnings | 96,439 | 92,624 |
Accumulated other comprehensive loss | 545 | (3,424) |
Total shareholders' equity | 170,925 | 162,872 |
Total liabilities and shareholders' equity | $ 1,669,151 | $ 1,636,441 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Loans at fair value | $ 3,270 | $ 2,431 |
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 | 6,919,212 | 6,917,703 |
Common stock, shares outstanding | 6,919,212 | 6,917,703 |
Common Stock held by Rabbi Trust | 17,672 | 17,672 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest income: | ||
Interest and fees on loans | $ 12,916 | $ 11,892 |
Interest on tax exempt loans | 108 | 92 |
Taxable securities | 2,081 | 1,789 |
Tax-exempt securities | 760 | 550 |
Interest-earning deposits | 472 | 349 |
Other | 205 | 170 |
Total interest and dividend income | 16,542 | 14,842 |
Interest expense: | ||
Deposits | 2,926 | 1,382 |
Federal Home Loan Bank advances | 1,396 | 820 |
Junior subordinated notes | 139 | 138 |
Other borrowings | 128 | 109 |
Interest Expense | 4,589 | 2,449 |
Net interest income | 11,953 | 12,393 |
Provision for loan losses | 116 | 361 |
Net interest income after provision for loan losses | 11,837 | 12,032 |
Noninterest income: | ||
Servicing income, net | 89 | 94 |
Mortgage banking | 263 | 239 |
Gain on sale of SBA loans | 80 | 61 |
Loss on sale of investments, net | (12) | |
Equity securities gains (losses) | 418 | (53) |
Service charges on deposit accounts | 398 | 431 |
Interchange fees | 246 | 248 |
Bank owned life insurance | 180 | 200 |
Legal settlement income | 1,750 | |
Other | 278 | 208 |
Total noninterest income | 3,702 | 1,416 |
Noninterest expenses: | ||
Compensation and employee benefits | 6,020 | 5,617 |
Net occupancy | 1,120 | 1,092 |
Federal deposit insurance | 142 | 279 |
Professional and advisory | 325 | 277 |
Data processing | 493 | 509 |
Marketing and advertising | 279 | 209 |
Merger-related expenses | 1,350 | 196 |
Net cost of operation of real estate owned | 7 | 50 |
Other | 1,002 | 894 |
Total noninterest expenses | 10,738 | 9,123 |
Income before taxes | 4,801 | 4,325 |
Income tax expense (benefit) | 986 | 743 |
Net income | $ 3,815 | $ 3,582 |
Earnings per common share: | ||
Earnings per share - basic | $ 0.55 | $ 0.52 |
Earnings per share - diluted | $ 0.55 | $ 0.51 |
Weighted average common shares outstanding: | ||
Common shares outstanding - Basic | 6,918,769 | 6,885,911 |
Common shares outstanding - Diluted | 6,943,267 | 7,027,884 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 3,815 | $ 3,582 |
Other comprehensive income (loss): | ||
Change in unrealized holding gains and losses on securities available for sale | 5,390 | (4,505) |
Reclassification adjustment for securities losses (gains) realized in net income | 12 | |
Change in unrealized holding gains and losses on cash flow hedge | (159) | 202 |
Reclassification adjustment for cash flow hedge effectiveness | (65) | (56) |
Other comprehensive income (loss), before tax | 5,166 | (4,347) |
Income tax effect related to items of other comprehensive income (loss) | (1,197) | 965 |
Other comprehensive income (loss), after tax | 3,969 | (3,382) |
Comprehensive income (loss) | $ 7,784 | $ 200 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - 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, 2017 | $ 72,997 | $ 78,718 | $ (23) | $ (379) | $ 151,313 | |
Beginning Balance (in shares) at Dec. 31, 2017 | 6,879,191 | |||||
Net income (loss) | 3,582 | 3,582 | ||||
Other comprehensive income, net of tax | (3,382) | (3,582) | ||||
Stock compensation expense | 257 | 257 | ||||
Stock options exercised, net of shares surrendered | 117 | 117 | ||||
Stock options exercised, net of shares surrendered (in shares) | 8,081 | |||||
Vesting of restricted stock units, net shares surrendered | (11) | (11) | ||||
Vesting of restricted stock units, net shares surrendered (in shares) | 1,143 | |||||
Cumulative effect of change in accounting principle | (9) | 9 | ||||
Ending Balance at Mar. 31, 2018 | 73,360 | 82,291 | (3,396) | (379) | 151,876 | |
Ending Balance (in shares) at Mar. 31, 2018 | 6,888,415 | |||||
Beginning Balance at Dec. 31, 2018 | 74,051 | 92,624 | (3,424) | (379) | 162,872 | |
Beginning Balance (in shares) at Dec. 31, 2018 | 6,917,703 | |||||
Net income (loss) | 3,815 | 3,815 | ||||
Other comprehensive income, net of tax | 3,969 | 3,969 | ||||
Stock compensation expense | 290 | 290 | ||||
Vesting of restricted stock units, net shares surrendered | (21) | (21) | ||||
Vesting of restricted stock units, net shares surrendered (in shares) | 1,509 | |||||
Ending Balance at Mar. 31, 2019 | $ 74,320 | $ 96,439 | $ 545 | $ (379) | $ 170,925 | |
Ending Balance (in shares) at Mar. 31, 2019 | 6,919,212 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,815 | $ 3,582 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and accretion | 220 | 173 |
Investment amortization, net | 820 | 813 |
Equity securities losses (gains) | (418) | 53 |
Provision for loan losses | 116 | 361 |
Provision for real estate owned | 18 | |
Share-based compensation expense | 290 | 257 |
Deferred tax expense | 1,045 | 895 |
Loss on sales of investments | 12 | |
Income on bank owned life insurance, net | (180) | (200) |
Mortgage banking income, net | (263) | (239) |
Gain on sales of SBA loans | (80) | (61) |
Net realized (gain) loss on sale of real estate owned | (6) | 16 |
Loans originated for sale | (9,510) | (9,745) |
Proceeds from sale of loans originated for sale | 8,215 | 9,866 |
Net change in operating assets and liabilities: | ||
Accrued interest receivable | (226) | (134) |
Loan servicing rights | 84 | 30 |
Other assets | (3,711) | (1,135) |
Postemployment benefits | 105 | (163) |
Accrued interest payable | (474) | (170) |
Other liabilities | (170) | (428) |
Net cash provided by operating activities | (328) | 3,801 |
Activity for investment securities: | ||
Purchases | (21,758) | |
Maturities/calls and principal repayments | 7,177 | 8,858 |
Sales | 10,009 | |
Net increase in loans | (3,474) | (31,241) |
Proceeds from sale of real estate owned | 34 | 355 |
Proceeds from settlement of BOLI policies | 1,115 | |
Purchase of fixed assets | (39) | (345) |
Purchase of Small Business Investment Company Holdings, at cost | (467) | (68) |
Purchase of other investments, at cost | (53) | (78) |
Net cash provided by (used in) investing activities | 4,293 | (34,268) |
Cash flows from financing activities: | ||
Net increase in deposits | 24,366 | 43,375 |
Net increase in escrow deposits | 770 | 653 |
Net increase in other borrowings | 86 | 463 |
Proceeds from FHLB advances | 50,000 | 40,000 |
Repayment of FHLB advances | (50,000) | (40,000) |
Cash received (paid for shares surrendered) upon exercise of stock options | 117 | |
Cash paid for shares surrendered upon vesting of restricted stock | (21) | (11) |
Net cash provided by financing activities | 25,201 | 44,597 |
Increase (decrease) in cash and cash equivalents | 29,166 | 14,130 |
Cash and cash equivalents, beginning of period | 69,119 | 109,467 |
Cash and cash equivalents, end of period | 98,285 | 123,597 |
Cash paid during the year for: | ||
Interest on deposits and other borrowings | 5,220 | 2,619 |
Income taxes | 554 | |
Noncash investing and financing activities: | ||
Real estate acquired in satisfaction of mortgage loans | 749 | |
Loans originated for disposition of real estate owned | $ 209 | $ 54 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Organization Entegra Financial Corp. (“we,” “us,” “our,” or 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 the Company, pursuant to which Macon Bancorp converted from a 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. (“Entegra Services”), which holds investment securities. 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. Estimates The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those 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 The accompanying consolidated financial statements include the accounts of the Company, the Bank, and Entegra Services. The accounts of the Trust are not consolidated with the Company. In consolidation, all significant intercompany accounts and transactions have been eliminated. Reclassification Certain amounts in the prior year’s financial statements may have been reclassified to conform to the current year’s presentation. The reclassifications had no effect on our results of operations or financial condition as previously reported. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the Securities and Exchange Commission’s (the “SEC”) instructions for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 14, 2019 (the “2018 Form 10-K”). In the opinion of management, these interim financial statements present fairly, in all material respects, the Company’s consolidated financial position and results of operations for each of the interim periods presented. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Assets acquired and liabilities assumed are measured and recorded at fair value at the date of acquisition, including identifiable intangible assets. If the fair value of net assets purchased exceeds the fair value of consideration paid, a bargain purchase gain is recognized at the date of acquisition. Conversely, if the consideration paid exceeds the fair value of the net assets acquired, goodwill is recognized at the acquisition date. 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. The determination of the fair value of loans acquired takes into account credit quality deterioration and probability of loss; therefore, the related allowance for loan losses is not carried forward. 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. Recent Accounting Standards Updates Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” In June 2016, the FASB issued amendments to ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. 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. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | NOTE 2. INVESTMENT SECURITIES The following table presents the holdings of our equity securities as of March 31, 2019 and December 31, 2018: March 31, December 31, 2019 2018 (Dollars in thousands) Mutual funds $ 6,812 $ 6,178 Equity securities with a fair value of $6.2 million as of March 31, 2019 are held in a Rabbi Trust and seek to generate returns that will fund the cost of certain deferred compensation agreements. Equity securities with a fair value of $0.6 million as of March 31, 2019 are in a mutual fund that qualifies under the Community Reinvestment Act (“CRA”) as CRA activity. There were gains on equity securities of $0.4 million for the three months ended March 31, 2019, and losses of $0.1 million for the three months ended March 31, 2018. The amortized cost and estimated fair values of available-for-sale (“AFS”) securities as of March 31, 2019 and December 31, 2018 are summarized as follows: March 31, 2019 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 33,918 $ 112 $ (208 ) $ 33,822 Municipal Securities 115,467 2,194 (182 ) 117,479 Mortgage-backed Securities - Guaranteed 82,467 196 (1,137 ) 81,526 Collateralized Mortgage Obligation - Guaranteed 22,194 99 (388 ) 21,905 Collateralized Mortgage Obligation - Non Guaranteed 66,842 491 (194 ) 67,139 Collateralized Loan Obligations 15,524 — (312 ) 15,212 Corporate bonds 19,920 237 (108 ) 20,049 $ 356,332 $ 3,329 $ (2,529 ) $ 357,132 December 31, 2018 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 34,068 $ 74 $ (152 ) $ 33,990 Municipal Securities 115,860 209 (1,667 ) 114,402 Mortgage-backed Securities - Guaranteed 86,664 98 (1,578 ) 85,184 Collateralized Mortgage Obligation - Guaranteed 22,492 47 (650 ) 21,889 Collateralized Mortgage Obligation - Non Guaranteed 69,774 125 (728 ) 69,171 Collateralized Loan Obligations 15,534 1 (458 ) 15,077 Corporate bonds 19,936 232 (143 ) 20,025 $ 364,328 $ 786 $ (5,376 ) $ 359,738 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: March 31, 2019 Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) U.S. Treasury & Government Agencies $ 22,738 $ 179 $ 2,032 $ 29 $ 24,770 $ 208 Municipal Securities — — 20,277 182 20,277 182 Mortgage-backed Securities - Guaranteed 5,987 60 54,578 1,077 60,565 1,137 Collateralized Mortgage Obligations - Guaranteed — — 15,433 388 15,433 388 Collateralized Mortgage Obligations - Non Guaranteed 2,908 25 17,739 169 20,647 194 Collateralized loan obligations 11,750 269 3,462 43 15,212 312 Corporate bonds 3,125 25 3,350 83 6,475 108 $ 46,508 $ 558 $ 116,871 $ 1,971 $ 163,379 $ 2,529 December 31, 2018 Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) U.S. Treasury & Government Agencies $ 23,423 $ 152 $ — $ — $ 23,423 $ 152 Municipal Securities 33,028 421 56,153 1,246 89,181 1,667 Mortgage-backed Securities - Guaranteed 27,692 370 45,619 1,208 73,311 1,578 Collateralized Mortgage Obligations - Guaranteed 2,042 19 15,294 631 17,336 650 Collateralized Mortgage Obligations - Non Guaranteed 22,383 185 30,471 543 52,854 728 Collateralized loan obligations 11,618 404 1,449 54 13,067 458 Corporate bonds 2,492 45 3,345 98 5,837 143 $ 122,678 $ 1,596 $ 152,331 $ 3,780 $ 275,009 $ 5,376 Information pertaining to the number of securities with gross unrealized losses is detailed in the table below. Management of the Company believes all unrealized losses as of March 31, 2019 and December 31, 2018 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. March 31, 2019 Less Than More Than Total U.S. Treasury & Government Agencies 15 1 16 Municipal Securities — 18 18 Mortgage-backed Securities - Guaranteed 5 52 57 Collateralized Mortgage Obligations - Guaranteed — 8 8 Collateralized Mortgage Obligations - Non Guaranteed 2 13 15 Collateralized Loan Obligations 6 2 8 Corporate bonds 4 4 8 32 98 130 December 31, 2018 Less Than More Than Total U.S. Treasury & Government Agencies 14 — 14 Municipal Securities 31 52 83 Mortgage-backed Securities - Guaranteed 21 43 64 Collateralized Mortgage Obligations - Guaranteed 1 8 9 Collateralized Mortgage Obligations - Non Guaranteed 12 22 34 Collateralized Loan Obligations 6 1 7 Corporate bonds 3 4 7 88 130 218 The Company received proceeds from sales of securities classified as AFS and corresponding gross realized gains and losses as follows for the three months ended March 31, 2018: (Dollars in thousands) Gross proceeds $ 10,009 Gross realized gains 21 Gross realized losses 33 There were no investment security sales for the three months ended March 31, 2019. The Company had securities pledged against deposits and borrowings of approximately $159.8 million at March 31, 2019 and $155.8 million at December 31, 2018. The amortized cost and estimated fair value of investments in debt securities at March 31, 2019, 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 (Dollars in thousands) Less than 1 year $ 1,979 $ 1,981 Over 1 year through 5 years 4,570 3,207 After 5 years through 10 years 30,973 32,307 Over 10 years 147,307 149,067 184,829 186,562 Mortgage-backed securities 171,503 170,570 Total $ 356,332 $ 357,132 |
LOANS RECEIVABLE
LOANS RECEIVABLE | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
LOANS RECEIVABLE | NOTE 3. LOANS RECEIVABLE Loans receivable as of March 31, 2019 and December 31, 2018 are summarized as follows: March 31, December 31, 2019 2018 (Dollars in thousands) Real estate mortgage loans: One-to four-family residential $ 328,779 $ 325,560 Commercial real estate 500,600 498,106 Home equity loans and lines of credit 47,665 48,679 Residential construction 46,622 39,533 Other construction and land 99,462 104,645 Total real estate loans 1,023,128 1,016,523 Commercial and industrial 51,562 54,410 Consumer 6,494 6,842 Total commercial and consumer 58,056 61,252 Loans receivable, gross 1,081,184 1,077,775 Less: Net deferred loan fees (1,046 ) (1,000 ) Fair value discount (915 ) (1,048 ) Hedged loans basis adjustment (See Note 8) 503 245 Unamortized premium 319 333 Unamortized discount (208 ) (236 ) Loans receivable, net of deferred fees $ 1,079,837 $ 1,076,069 The Bank had $267.2 million and $256.1 million of loans pledged as collateral to secure funding with the Federal Home Loan Bank of Atlanta (“FHLB”) at March 31, 2019 and December 31, 2018, respectively. The Bank also had $115.2 million and $114.4 million of loans pledged as collateral to secure funding availability with the Federal Reserve Bank (“FRB”) Discount Window at March 31, 2019 and December 31, 2018, respectively. Included in loans receivable and other borrowings at March 31, 2019 are $4.4 million in 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. The following tables present the activity related to the discount on individually purchased loans for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Discount on purchased loans, beginning of period $ 236 $ 710 Accretion (28 ) (29 ) Discount on purchased loans, end of period $ 208 $ 681 The following table presents the activity related to the fair value discount on loans from business combinations for the three months ended March 31 2019, and 2018: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Fair value discount, beginning of period $ 1,048 $ 2,012 Accretion (133 ) (266 ) Fair value discount, end of period $ 915 $ 1,746 |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
ALLOWANCE FOR LOAN LOSSES | NOTE 4. ALLOWANCE FOR LOAN LOSSES The following tables present, by portfolio segment, the changes in the allowance for loan losses for the periods indicated: Three Months Ended March 31, 2019 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,909 $ 5,130 $ 560 $ 452 $ 1,250 $ 608 $ 76 $ 11,985 Provision 34 (112 ) 255 68 (42 ) 43 (130 ) 116 Charge-offs (4 ) — (209 ) — — (59 ) (26 ) (298 ) Recoveries 20 56 — — 8 4 152 240 Ending balance $ 3,959 $ 5,074 $ 606 $ 520 $ 1,216 $ 596 $ 72 $ 12,043 Three Months Ended March 31, 2018 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Provision (151 ) 229 (21 ) 150 63 128 (37 ) 361 Charge-offs (110 ) (35 ) (41 ) — — — (29 ) (215 ) Recoveries 13 3 21 — 20 5 72 134 Ending balance $ 3,770 $ 4,561 $ 575 $ 453 $ 1,108 $ 636 $ 64 $ 11,167 The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the net investment in loans for the periods indicated: March 31, 2019 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 148 $ 80 $ 74 $ — $ 46 $ 5 $ — $ 353 Collectively evaluated for impairment 3,811 4,994 532 520 1,170 591 72 11,690 $ 3,959 $ 5,074 $ 606 $ 520 $ 1,216 $ 596 $ 72 $ 12,043 Loans Receivable Individually evaluated for impairment $ 3,262 $ 5,994 $ 312 $ — $ 1,358 $ 271 $ — $ 11,197 Collectively evaluated for impairment 325,414 493,085 47,500 46,566 97,918 51,563 6,594 1,068,640 $ 328,676 $ 499,079 $ 47,812 $ 46,566 $ 99,276 $ 51,834 $ 6,594 $ 1,079,837 December 31, 2018 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 79 $ 27 $ — $ — $ 54 $ 7 $ — $ 167 Collectively evaluated for impairment 3,830 5,103 560 452 1,196 601 76 11,818 $ 3,909 $ 5,130 $ 560 $ 452 $ 1,250 $ 608 $ 76 $ 11,985 Loans Receivable Individually evaluated for impairment $ 2,900 $ 6,019 $ 313 $ — $ 1,377 $ 276 $ — $ 10,885 Collectively evaluated for impairment 322,255 490,530 48,512 39,488 103,087 54,367 6,945 1,065,184 $ 325,155 $ 496,549 $ 48,825 $ 39,488 $ 104,464 $ 54,643 $ 6,945 $ 1,076,069 Portfolio Quality Indicators The Company’s loan 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. 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 is 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 of credit 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 of such businesses. 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 the date of loan origination in excess of principal repayment. The following tables present the recorded investment in gross loans by loan grade as of the dates indicated: March 31, 2019 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 7,449 $ — $ — $ — $ 1,191 $ 6 $ 8,646 2 — 10,444 — — — 904 — 11,348 3 31,789 89,877 4,839 9,562 12,292 14,717 17 163,093 4 124,622 281,883 3,719 24,186 55,743 22,044 215 512,412 5 25,610 88,755 392 2,443 17,947 12,105 4 147,256 6 318 8,185 — 1 1,280 478 — 10,262 7 646 5,491 — — 187 383 — 6,707 $ 182,985 $ 492,084 $ 8,950 $ 36,192 $ 87,449 $ 51,822 $ 242 $ 859,724 Ungraded Loan Exposure: Performing $ 144,670 $ 6,976 $ 38,519 $ 10,374 $ 11,763 $ 12 $ 6,351 $ 218,665 Nonperforming 1,021 19 343 — 64 — 1 1,448 Subtotal $ 145,691 $ 6,995 $ 38,862 $ 10,374 $ 11,827 $ 12 $ 6,352 $ 220,113 Total $ 328,676 $ 499,079 $ 47,812 $ 46,566 $ 99,276 $ 51,834 $ 6,594 $ 1,079,837 December 31, 2018 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 7,569 $ — $ — $ — $ 1,264 $ 7 $ 8,840 2 — 7,860 — — — 20 — 7,880 3 31,623 87,756 5,212 9,365 12,111 15,685 264 162,016 4 121,688 280,630 4,014 18,358 61,646 22,374 245 508,955 5 24,738 88,698 615 3,404 17,630 12,307 5 147,397 6 321 7,867 — 1 1,303 495 — 9,987 7 674 5,725 — — 376 487 — 7,262 $ 179,044 $ 486,105 $ 9,841 $ 31,128 $ 93,066 $ 52,632 $ 521 $ 852,337 Ungraded Loan Exposure: Performing $ 145,470 $ 10,420 $ 38,806 $ 8,360 $ 11,334 $ 2,011 $ 6,424 $ 222,825 Nonperforming 641 24 178 — 64 — — 907 Subtotal $ 146,111 $ 10,444 $ 38,984 $ 8,360 $ 11,398 $ 2,011 $ 6,424 $ 223,732 Total $ 325,155 $ 496,549 $ 48,825 $ 39,488 $ 104,464 $ 54,643 $ 6,945 $ 1,076,069 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. March 31, 2019 30-59 Days 60-89 Days 90 Days Total Current Total Loans (Dollars in thousands) One-to-four family residential $ 4,364 $ — $ 251 $ 4,615 $ 324,061 $ 328,676 Commercial real estate 4,291 119 1,515 5,925 493,154 499,079 Home equity and lines of credit 159 — 343 502 47,310 47,812 Residential construction 350 — 1 351 46,215 46,566 Other construction and land 129 — 64 193 99,083 99,276 Commercial 283 — 62 345 51,489 51,834 Consumer 35 3 1 39 6,555 6,594 Total $ 9,611 $ 122 $ 2,237 $ 11,970 $ 1,067,867 $ 1,079,837 December 31, 2018 30-59 Days 60-89 Days 90 Days Total Current Total Loans (Dollars in thousands) One-to-four family residential $ 3,562 $ 1,317 $ 84 $ 4,963 $ 320,192 $ 325,155 Commercial real estate 2,615 — 1,782 4,397 492,152 496,549 Home equity and lines of credit 400 457 73 930 47,895 48,825 Residential construction — — 1 1 39,487 39,488 Other construction and land 613 32 64 709 103,755 104,464 Commercial 307 25 121 453 54,190 54,643 Consumer 27 4 — 31 6,914 6,945 Total $ 7,524 $ 1,835 $ 2,125 $ 11,484 $ 1,064,585 $ 1,076,069 Impaired Loans The following table presents investments in loans considered to be impaired and related information on those impaired loans as of March 31, 2019 and December 31, 2018. March 31, 2019 December 31, 2018 Recorded Unpaid Specific Recorded Unpaid Specific (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 2,324 $ 2,475 $ — $ 845 $ 923 $ — Commercial real estate 3,925 6,271 — 3,835 6,207 — Home equity and lines of credit 213 328 — 283 283 — Other construction and land 549 683 — 365 366 — $ 7,011 $ 9,757 $ — $ 5,328 $ 7,779 $ — Loans with a valuation allowance One-to-four family residential $ 938 $ 938 $ 148 $ 2,055 $ 2,055 $ 79 Commercial real estate 2,069 2,069 80 2,184 2,184 27 Home equity and lines of credit 99 99 74 30 30 — Other construction and land 809 809 46 1,012 1,012 54 Commercial 271 271 5 276 276 7 $ 4,186 $ 4,186 $ 353 $ 5,557 $ 5,557 $ 167 Total One-to-four family residential $ 3,262 $ 3,413 $ 148 $ 2,900 $ 2,978 $ 79 Commercial real estate 5,994 8,340 80 6,019 8,391 27 Home equity and lines of credit 312 427 74 313 313 — Other construction and land 1,358 1,492 46 1,377 1,378 54 Commercial 271 271 5 276 276 7 $ 11,197 $ 13,943 $ 353 $ 10,885 $ 13,336 $ 167 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated: Three Months Ended March 31, 2019 2018 Average Interest Income Average Interest Income (Dollars in thousands) Loans without a valuation allowance One-to four-family residential $ 2,483 $ 29 $ 1,877 $ 29 Commercial real estate 6,272 37 5,613 31 Home equity and lines of credit 328 15 427 14 Other construction and land 685 5 699 5 $ 9,768 $ 86 $ 8,616 $ 79 Loans with a valuation allowance One-to four-family residential $ 937 $ 8 $ 1,621 $ 16 Commercial real estate 2,155 23 1,693 23 Home equity and lines of credit 99 2 — — Other construction and land 819 12 1,724 9 Commercial 274 6 290 5 $ 4,284 $ 51 $ 5,328 $ 53 Total One-to four-family residential $ 3,420 $ 37 $ 3,498 $ 45 Commercial real estate 8,427 60 7,306 54 Home equity and lines of credit 427 17 427 14 Other construction and land 1,504 17 2,423 14 Commercial 274 6 290 5 $ 14,052 $ 137 $ 13,944 $ 132 Nonperforming Loans The following table summarizes the balances of nonperforming loans as of March 31, 2019 and December 31, 2018. Certain loans classified as Troubled Debt Restructurings (“TDRs”) and impaired loans may be on non-accrual status even though they are not contractually delinquent. March 31, December 31, (Dollars in thousands) One-to-four family residential $ 1,394 $ 1,037 Commercial real estate 2,854 3,266 Home equity loans and lines of credit 343 178 Residential construction 1 — Other construction and land 251 256 Commercial 62 120 Consumer 1 — Non-performing loans $ 4,906 $ 4,857 TDRs The following tables summarize TDR loans as of the dates indicated: March 31, 2019 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 2,138 $ 358 $ 2,496 Commercial real estate 3,912 1,212 5,124 Home equity and lines of credit 313 — 313 Other construction and land 1,170 187 1,357 Commercial 271 — 271 $ 7,804 $ 1,757 $ 9,561 December 31, 2018 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 2,154 $ 361 $ 2,515 Commercial real estate 3,690 1,462 5,152 Home equity and lines of credit 283 30 313 Other construction and land 1,185 192 1,377 Commercial 276 — 276 $ 7,588 $ 2,045 $ 9,633 There were no loan modifications that were deemed TDRs at the time of the modification during the three months ended March 31, 2019 or 2018. There were no TDRs that defaulted during the three months ending March 31, 2019 or 2018 and which were modified as TDRs within the previous 12 months. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 5. GOODWILL AND OTHER INTANGIBLES The Company had $23.9 million of goodwill as of March 31, 2019 and December 31, 2018. The Company had $3.4 million and $3.6 million of core deposit intangibles as of March 31, 2019 and December 31, 2018, respectively. The following is a summary of gross carrying amounts and accumulated amortization of core deposit intangibles: As of and for the As of and for the March 31, December 31, 2019 2018 Dollars in thousands Gross balance at beginning of period $ 4,840 $ 4,840 Additions from acquisitions — — Gross balance at end of period 4,840 4,840 Less accumulated amortization (1,436 ) (1,263 ) Core deposit intangible, net $ 3,404 $ 3,577 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 is $0.7 million for 2019 and each of the next three years, $0.6 million in the fifth year, and $0.3 million in the final year. |
DEPOSITS
DEPOSITS | 3 Months Ended |
Mar. 31, 2019 | |
Banking and Thrift [Abstract] | |
DEPOSITS | NOTE 6. DEPOSITS The following table summarizes deposit balances and interest expense by type of deposit as of and for the three months ended March 31, 2019 and 2018 and the year ended December 31, 2018. As of and for the As of and for the Year Ended Three Months Ended March 31, December 31, 2019 2018 2018 (Dollars in thousands) Balance Interest Balance Interest Balance Interest Noninterest-bearing demand $ 194,562 $ — $ 192,916 $ — $ 184,404 $ — Interest-bearing demand 198,516 98 206,530 87 209,085 374 Money Market 390,839 1,138 336,625 366 356,086 2,637 Savings 49,996 14 52,162 15 50,716 59 Time Deposits 412,306 1,676 417,675 914 420,949 5,048 $ 1,246,219 $ 2,926 $ 1,205,908 $ 1,382 $ 1,221,240 $ 8,118 The following table indicates wholesale deposits included in the money market and time deposits amounts above: As of March 31, As of December 31, 2019 2018 2018 (Dollars in thousands) Balance Balance Balance Wholesale money market $ 5,063 $ 25,026 $ 5,030 Wholesale time deposits 72,259 56,232 70,978 $ 77,322 $ 81,258 $ 76,008 |
BORROWINGS
BORROWINGS | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
BORROWINGS | NOTE 7. BORROWINGS The scheduled maturities and respective weighted average rates of outstanding FHLB advances are as follows for the dates indicated: March 31, 2019 December 31, 2018 Year of Balance Weighted Balance Weighted (Dollars in thousands) 2019 163,500 2.59 % 168,500 2.52 % 2020 45,000 2.80 % 45,000 2.80 % 2024 5,000 2.81 % — — $ 213,500 2.64 % $ 213,500 2.58 % The Company has 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. The Company had drawn $5.0 million on the revolving credit loan facility as of March 31, 2019 and December 31, 2018. The Company also had other borrowings of $4.4 million and $4.3 million at March 31, 2019 and December 31, 2018, respectively, which is comprised of participated loans that did not qualify for sale accounting. Interest expense on these other borrowings accrues at the same rate as the interest income recognized on the loans receivable, resulting in no effect to net income. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Interest Rate Swaps Risk Management Objective of Interest Rate Swaps The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of certain balance sheet assets and liabilities. In the normal course of business, the Company also uses derivative financial instruments to add stability to interest income or expense and to manage its exposure to movements in interest rates. The Company does not use derivatives for trading or speculative purposes and only enters into transactions that have a qualifying hedging relationship. The Company's hedging strategies involving interest rate derivatives are classified as either “Fair Value Hedges” or “Cash Flow Hedges,” depending upon the rate characteristic of the hedged item. Fair Value Hedge : Cash Flow Hedge : Credit and Collateral Risks for Interest Rate Swaps The Company manages credit exposure on interest rate swap transactions by entering into a bilateral credit support agreement with each counterparty. The credit support agreements allow for collateralization of exposures beyond specified minimum threshold amounts. The Company’s agreements with its interest rate swap counterparties contain a provision where if either party defaults on any of its indebtedness, then it could also be declared in default on its derivative obligations. The agreements with derivative counterparties also include provisions that if not met, could result in the Company being declared in default. If the Company were to be declared in default, the counterparty could terminate the derivative positions and the Company and the counterparty would be required to settle their obligations under the agreements. At March 31, 2019, the Company had two derivatives in net liability positions of $0.6 million under these agreements and recognized the right to reclaim cash collateral of $0.6 million which was included in the consolidated balance sheets in Other assets. The Company had one derivative in a net liability position of $0.2 million at December 31, 2018. Mortgage Derivatives Risk Management Objective of Mortgage Lending Activities The Company also maintains a risk management program to manage interest rate risk and pricing risk associated with its mortgage lending activities. The risk management program includes the use of forward contracts and other derivatives that are recorded in the financial statements at fair value and are used to offset changes in value of the mortgage inventory due to changes in market interest rates. As a normal part of our operations, we enter into derivative contracts to economically hedge risks associated with overall price risk related to interest rate lock commitments (”IRLCs”) and mortgage loans held-for-sale for which the fair value option has been elected. Fair value changes occur as a result of interest rate movements as well as changes in the value of the associated servicing. Derivative instruments used include forward sales commitments and IRLCs. Credit and Collateral Risks for Mortgage Lending Activities The Company’s underlying risks are primarily related to interest rates and forward sales commitments entered into as part of its mortgage banking activities. Forward sales commitments are contracts for the delayed delivery or net settlement of an underlying instrument, such as a mortgage loan, in which the seller agrees to deliver on a specified future date, either a specified instrument at a specified price or yield or the net cash equivalent of an underlying instrument. These hedges are used to preserve the Company’s position relative to future sales of mortgage loans to third parties in an effort to minimize the volatility of the expected gain on sale from changes in interest rate and the associated pricing changes. 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 sheets (in thousands). Derivative Assets (1) Derivative Liabilities (1) March 31, December 31, March 31, December 31, 2019 2018 2019 2018 Derivatives designated as hedging instruments: Interest rate swaps $ 260 $ 354 $ 861 $ 462 Total $ 260 $ 354 $ 861 $ 462 Derivatives not designated as hedging instruments: Mortgage derivatives $ 45 $ 34 $ 21 $ 22 Total $ 45 $ 34 $ 21 $ 22 (1) All derivative assets are located in “Other assets” on the consolidated balance sheets and all derivative liabilities are located in “Other liabilities” on the consolidated balance sheets. The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of income: Derivatives Designated as Hedging Instrument s Three Months Ended March 31, 2019 2018 (dollars in thousands) Interest Interest Interest Interest Total amounts of income and expense line items presented in the consolidated statements of income $ 16,542 $ 4,589 $ 14,842 $ 2,449 Amounts related to fair value hedging relationships Interest rate swaps: Hedged items 259 — — — Derivatives designated as hedging instruments (274 ) — — — Amounts related to cash flow hedging relationships Interest rate swaps: Amount reclassified from accumulated other comprehensive loss into income — (65 ) — (56 ) Fair Value Hedges The Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps, designated as fair value hedges, involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed payments over the life of the agreements without the exchange of the underlying notional amount. The gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in earnings. The Company entered into a pay-fixed/receive-variable interest rate swap with a notional amount of $25.0 million which was designated as a fair value hedge associated with the Company’s fixed rate loan program. As of March 31, 2019, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges: (dollars in thousands) Carrying amount of the Cumulative amount of fair Line item in the balance sheet in which the hedged item is included March 31, March 31, Loans receivable (1) $ 97,891 $ 503 (1) These amounts include the amortized cost basis of the closed portfolio used to designate the hedging relationship in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At March 31, 2019, the amortized cost basis of the closed portfolio used in the the hedging relationship was $97.9 million, the cumulative basis adjustment associated with the hedging relationship was $0.5 million, and the amount of the designated hedged item was $25.0 million. Cash Flow Hedges Interest rate swap contracts, designated as cash flow hedges, 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 forward starting interest rate swap begins exchanging cash flows in 2020 when the current interest rate swap agreement expires. The structures of the swap agreements designated as cash flow hedges are described in the table below (dollars in thousands): Underlyings Designation Notional Payment Provision Life of Swap Contract Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 0.958%/Receive 3 month LIBOR 4 yrs Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 3.02%/Receive 3 month LIBOR 3 yrs The table below presents the effect of the Company's derivatives in cash flow hedging relationships for the periods presented (dollars in thousands): As of and for the Three Months As of and for the Year Interest rate swaps Location 2019 2018 2018 Amounts recognized in AOCI on derivatives OCI $ (159 ) $ 202 $ 2 Amounts reclassified from AOCI into income Interest expense (65 ) (56 ) (431 ) Amounts recognized in consolidated statement of comprehensive income $ (224 ) $ 146 $ (429 ) Derivatives Not Designated as Hedging Instruments Mortgage Derivatives Mortgage derivative fair value assets and liabilities are described above. At March 31, 2019 and December 31, 2018, the Company had the following IRLCs and forward commitments for the future delivery of residential mortgage loans. As of As of (Dollars in thousands) 2019 2018 Mortgage derivatives Interest rate lock commitments $ 2,736 $ 1,627 Forward sales commitment 4,250 3,500 The table below presents the effect of the Company's derivatives not designated as hedging instruments for the periods presented: Three Months Ended March 31, Interest rate products Location 2019 2018 (Dollars in thousands) Amount of (loss) gain recognized in income on forward commitments Noninterest income $ (38 ) $ 10 Amount of gain recognized in income on interest rate lock commitments Noninterest income 11 17 Amount of gain (loss) recognized in income on derivatives not designated as hedging instruments $ (27 ) $ 27 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9. INCOME TAXES The components of net deferred taxes as of March 31, 2019 and December 31, 2018 are summarized as follows: As of As of 2019 2018 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,729 $ 2,703 Deferred compensation and post-employment benefits 1,874 1,854 Non-accrual interest 251 245 Valuation reserve for other real estate 198 191 North Carolina NOL carryover 233 293 Federal NOL carryover 554 1,231 AMT credit carryover — 316 General federal business credit carryover 826 691 Unrealized losses on securities 581 1,061 Loan basis differences 46 50 Fixed assets 131 123 Core deposit intangible 148 129 Derivative instruments 21 — Other 1,122 1,207 Total deferred tax assets 8,714 10,094 Deferred tax liabilities: Loan servicing rights 633 653 Goodwill 581 495 Core deposit intangible 70 74 Deferred loan costs 1,014 1,001 Prepaid expenses 14 14 Unrealized gains on securities 961 105 Derivative instruments 6 29 Investment in partnerships 170 155 Other — 17 Total deferred tax liabilities 3,449 2,543 Net deferred tax asset $ 5,265 $ 7,551 The following table summarizes the amount and expiration dates of the Company’s unused net operating losses and other carryforwards as of March 31, 2019: As of September, 2017 (Dollars in thousands) Amount Expiration Dates Federal $ 2,803 2032-2037 North Carolina $ 13,708 2026-2029 Federal General Business Carryforwards $ 826 2037-2039 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share | |
EARNINGS PER SHARE | NOTE 10. EARNINGS PER SHARE The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock as of the dates indicated: Three Months Ended (Dollars in thousands, except per share amounts) 2019 2018 Numerator: Net income $ 3,815 $ 3,582 Denominator: Weighted-average common shares outstanding - basic 6,918,769 6,885,911 Effect of dilutive securities: Stock options 6,960 96,871 Restricted stock units 17,538 45,102 Weighted-average common shares outstanding - diluted 6,943,267 7,027,884 Earnings per share - basic $ 0.55 $ 0.52 Earnings per share - diluted $ 0.55 $ 0.51 The average market price used in calculating the assumed number of dilutive shares issued related to stock options for the three months ended March 31, 2019 and 2018 was $23.12 and $28.56, respectively. The average stock price was less than the exercise price for 91,977 options in the three months ended March 31, 2019 and 19,592 options in the three months ended March 31, 2018. As a result, these stock options are not deemed dilutive in calculating diluted earnings per share for the respective periods in the table above. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Inputs Value of Loan | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 11. 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 three months ended March 31, 2019 and 2018. Three Months Ended March 31, 2019 (Dollars in thousands) Available Cash Flow Total Balance, beginning of period $ (3,528 ) $ 104 $ (3,424 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities available for sale — — — Change in net unrealized holding losses on securities available for sale 5,390 — 5,390 Reclassification adjustment for net securities losses realized in net income — — — Change in unrealized holding gains on cash flow hedge — (159 ) (159 ) Reclassification adjustment for cash flow hedge effectiveness — (65 ) (65 ) Income tax effect (1,244 ) 47 (1,197 ) Balance, end of period $ 618 $ (73 ) $ 545 Three Months Ended March 31, 2018 (Dollars in thousands) Balance, beginning of period $ (455 ) $ 432 $ (23 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities available for sale — — — Change in net unrealized holding losses on securities available for sale (4,505 ) — (4,505 ) Reclassification adjustment for net securities losses realized in net income 12 — 12 Change in unrealized holding gains on cash flow hedge — 202 202 Reclassification adjustment for cash flow hedge effectiveness — (56 ) (56 ) Cumulative effect of change in accounting principle 9 — 9 Income tax effect 996 (31 ) 965 Balance, end of period $ (3,943 ) $ 547 $ (3,396 ) The following table shows the line items in the Consolidated Statements of Income affected by amounts reclassified from accumulated other comprehensive income as of the dates indicated: Three Months Ended (Dollars in thousands) 2019 2018 Income Statement Line Item Affected Available-for-sale securities Losses recognized $ — $ (12 ) Loss on sale of investments, net Income tax effect — 3 Income tax expense Reclassified out of AOCI, net of tax — (9 ) Net income Cash flow hedge Interest expense - effective portion — 30 Interest expense - FHLB advances Interest expense - effective portion 65 26 Interest expense - Junior subordinated notes Income tax effect (15 ) (13 ) Income tax expense Reclassified out of AOCI, net of tax 50 43 Net income Total reclassified out of AOCI, net of tax $ 50 $ 34 Net income |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. 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: March 31, 2019 (Dollars in thousands) Lines of credit $ 175,353 Standby letters of credit 1,011 $ 176,364 The Company had outstanding commitments to originate loans as follows: March 31, 2019 Amount Range of Rates (Dollar in thousands) Fixed $ 24,709 4.25% to 12.00% Variable 9,323 3.38% to 8.00% $ 34,032 The allowance for unfunded commitments was $0.1 million at March 31, 2019 and December 31, 2018. 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 March 31, 2019 and December 31, 2018. 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 | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 13. FAIR VALUE DISCLOSURES Overview Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 (“ASC 820”), Fair Value Measurements and Disclosures Fair Value Hierarchy Level 1 Valuation is based on inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as interest rates, yield curves observable at commonly quoted intervals, and other market-corroborated inputs. Level 3 Valuation is generated from techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon models that primarily use, as inputs, observable market-based parameters. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company evaluates fair value measurement inputs on an ongoing basis in order to determine if there is a change of sufficient significance to warrant a transfer between levels. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company's valuation process. Fair Value Option ASC 820 allows companies to report selected financial assets and liabilities at fair value using the fair value option. The changes in fair value are recognized in earnings and the assets and liabilities measured under this methodology are required to be displayed separately on the balance sheet. The Company made the election in June 2018, to record mortgage loans held-for-sale at fair value under the fair value option, which allows for a more effective offset of the changes in fair values of the loans and the derivative instruments used to hedge them without the burden of complying with the requirements for hedge accounting. Financial Assets and Financial Liabilities Measured on a Recurring Basis The Company uses the following methods and assumptions in estimating the fair value of its financial assets and financial liabilities on a recurring basis: Investment Securities Available-for-Sale 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 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. Equity Securities Equity securities represent investments in exchange traded mutual funds which are valued by reference to quoted market prices and considered a Level 1 security. Mortgage Loans Held-for-Sale Mortgage loans held-for-sale are recorded at fair value on a recurring basis. The estimated fair value is determined using Level 3 inputs based on observable data such as the existing forward commitment terms or the current market value of similar loans. 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 IRLCs, forward sale commitments, and interest rate swaps. IRLCs 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. The following tables present financial assets and financial liabilities measured at fair value on a recurring basis at the dates indicated, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value: March 31, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Assets: Equity securities $ 6,812 $ — $ — $ 6,812 Securities available for sale: U.S. Treasury & Government Agencies 4,991 28,831 — 33,822 Municipal Securities — 117,479 — 117,479 Mortgage-backed Securities - Guaranteed — 81,526 — 81,526 Collateralized Mortgage Obligations - Guaranteed — 21,905 — 21,905 Collateralized Mortgage Obligations - Non Guaranteed — 67,139 — 67,139 Collateralized Loan Obligations — 15,212 15,212 Corporate bonds — 19,556 493 20,049 Total securities available for sale 4,991 351,648 493 357,132 Mortgage loans held for sale — — 3,270 3,270 Loan servicing rights — — 2,753 2,753 Interest rate swaps — 260 — 260 Mortgage derivatives — — 45 45 Total recurring assets at fair value $ 11,803 $ 351,908 $ 6,561 $ 370,272 Liabilities: Interest rate swaps $ — $ 861 $ — $ 861 Mortgage derivatives — — 21 21 Total recurring liabilities at fair value $ — $ 861 $ 21 $ 882 December 31, 2018 Level 1 Level 2 Level 3 Total (Dollars in thousands) Assets: Equity securities $ 6,178 $ — $ — $ 6,178 Securities available for sale: U.S. Treasury & Government Agencies 4,949 29,041 — 33,990 Municipal Securities — 114,402 — 114,402 Mortgage-backed Securities - Guaranteed — 85,184 — 85,184 Collateralized Mortgage Obligations - Guaranteed — 21,889 — 21,889 Collateralized Mortgage Obligations - Non Guaranteed — 69,171 — 69,171 Collateralized Loan Obligations — 15,077 15,077 Corporate bonds — 19,532 493 20,025 Total securities available for sale 4,949 354,296 493 359,738 Mortgage loans held for sale — — 2,431 2,431 Loan servicing rights — — 2,837 2,837 Interest rate swaps — 354 — 354 Mortgage derivatives — — 34 34 Total recurring assets at fair value $ 11,127 $ 354,650 $ 5,795 $ 371,572 Liabilities: Interest rate swaps $ — $ 462 $ — $ 462 Mortgage derivatives — — 22 22 Total recurring liabilities at fair value $ — $ 462 $ 22 $ 484 The following table presents the changes in assets and liabilities measured at fair value on a recurring basis for which we have utilized Level 3 inputs to determine fair value: Three Months Ended March 31, 2019 2018 (Dollars in thousands) Balance at beginning of period $ 5,773 $ 3,321 AFS securities Transfer to Level 2 — 1,331 Mortgage loans held for sale 839 — Loan servicing right activity, included in servicing income, net Capitalization from loans sold 47 100 Fair value adjustment (131 ) (130 ) Mortgage derivative gains (losses) included in other income 12 27 Balance at end of period $ 6,540 $ 4,649 Financial Assets Measured on a Nonrecurring Basis The Company uses the following methods and assumptions in estimating the fair value of its financial assets on a nonrecurring basis: SBA Loans Held for Sale SBA loans held for sale are carried at the lower of cost or fair value. The fair value of SBA loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics and 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. REO REO 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. REO carried at fair value is classified as Level 3. Small Business Investment Company (“SBIC) Holdings SBIC holdings are carried at the lower of cost or cost less a valuation allowance. From time to time, impairment of SBIC is evident as a result of underlying financial review and a valuation allowance is established. SBIC carried at cost less a valuation allowance is classified as Level 3. The following table presents nonfinancial assets measured at fair value on a nonrecurring basis at the dates indicated, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: March 31, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,324 $ 2,324 Commercial real estate — — 3,925 3,925 Home equity loans and lines of credit — — 213 213 Other construction and land — — 549 549 Real estate owned: Commercial real estate — — 949 949 Other construction and land — — 1,307 1,307 Total assets $ — $ — $ 9,267 $ 9,267 December 31, 2018 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to-four family residential $ — $ — $ 845 $ 845 Commercial real estate — — 3,835 3,835 Home equity loans and lines of credit — — 283 283 Other construction and land — — 365 365 Real estate owned: One-to-four family residential — — 228 228 Commercial real estate — — 949 949 Other construction and land — — 1,316 1,316 Total assets $ — $ — $ 7,821 $ 7,821 There were no liabilities measured at fair value on a nonrecurring basis as of March 31, 2019, or December 31, 2018. Impaired loans totaling $4.2 million at March 31, 2019 and $5.6 million at December 31, 2018 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 March 31, 2019. 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% -10% Loan servicing rights Discounted Cash Flows Prepayment speed 9% - 20% Discount rate 10% - 14% Mortgage loans held for sale External pricing model Recent trade pricing 101% - 103% Mortgage derivatives External pricing model Pull-through rate 78%-100% SBIC Indicative value provided by fund Current operations and financial condition N/A Fair Value of Financial Assets and Financial Liabilities The following table includes the estimated fair value of the Company's financial assets and financial liabilities at the dates indicated: Fair Value Measurements at March 31, 2019 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 98,285 $ 98,285 $ 98,285 $ — $ — Equity securities 6,812 6,812 6,812 — — Securities available for sale 357,132 357,132 4,991 351,648 493 Loans held for sale 9,208 9,885 — 6,615 3,270 Loans receivable, net 1,079,837 1,046,136 — — 1,046,552 Other investments, at cost 12,092 12,092 — 12,092 — Accrued interest receivable 6,669 6,669 — 6,669 — BOLI 32,087 32,087 — 32,087 — Loan servicing rights 2,753 2,753 — — 2,753 Mortgage derivatives 45 45 — — 45 Interest rate swaps 260 260 — 260 — SBIC investments 4,306 4,306 — — 4,306 Liabilities: Demand deposits $ 833,913 $ 833,913 $ — $ 833,913 $ — Time deposits 412,306 416,631 — — 416,631 Federal Home Loan Bank advances 213,500 213,249 — 213,249 — Junior subordinated debentures 14,433 13,720 — 13,720 — Other borrowings 9,385 9,572 — 9,572 — Accrued interest payable 1,173 1,173 — 1,173 — Mortgage derivatives 21 21 — — 21 Interest rate swaps 861 861 — 861 — Fair Value Measurements at December 31, 2018 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 69,119 $ 69,119 $ 69,119 $ — $ — Equity securities 6,178 6,178 6,178 — — Securities available for sale 359,739 359,739 4,949 354,297 493 Loans held for sale 7,570 8,114 — 5,683 2,431 Loans receivable, net 1,076,069 1,046,136 — — 1,046,136 Other investments, at cost 12,039 12,039 — 12,039 — Accrued interest receivable 6,443 6,443 — 6,443 — BOLI 32,886 32,886 — 32,886 — Loan servicing rights 2,837 2,837 — — 2,837 Mortgage derivatives 34 34 — — 34 Interest rate swaps 354 354 — 354 — SBIC investments 3,839 3,839 — — 3,839 Liabilities: Demand deposits $ 800,291 $ 800,291 $ — $ 800,291 $ — Time deposits 420,949 424,054 — — 424,054 Federal Home Loan Bank advances 213,500 213,513 — 213,513 — Junior subordinated debentures 14,433 12,440 — 12,440 — Other borrowings 9,299 9,253 — 9,253 — Accrued interest payable 1,647 1,647 — 1,647 — Mortgage derivatives 22 22 — — 22 Interest rate swaps 462 462 — 462 — |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 14. Leases As of January 1, 2019, we adopted certain accounting standard updates related to accounting for leases (Topic 842 - Leases We lease certain office facilities and office equipment under operating leases. The lease agreements have maturity dates ranging from March 2020 to May 2027, one of which includes an option for a five-year extension. The weighted average remaining life of the lease term for these leases was 6.82 years as of March 31, 2019. We do not apply the recognition requirements of Topic 842 - Leases Leases Maturities of lease liabilities as of March 31, 2019 were as follows: (Dollard in thousands) Operating 2019 $ 107 2020 69 2021 53 2022 53 2023 53 Thereafter 177 Total undiscounted lease payments 512 Discount effect of cash flows (68 ) Total lease liability $ 444 The total operating lease costs were $56,000 for the three months ended March 31, 2019. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15. Subsequent Events On April 23, 2019, Entegra entered into a definitive agreement (the “Merger Agreement”) to merge with and into First Citizens BancShares, Inc., a North Carolina corporation (“BancShares”). Under the terms of the Merger Agreement, each outstanding share of Entegra common stock would be converted into the right to receive $30.18 in cash. Previously on January 15, 2019, Entegra had entered into a definitive agreement to merge with and into SmartFinancial, Inc. (“SmartFinancial”), a Tennessee corporation. Under the terms of the SmartFinancial definitive agreement, each outstanding share of Entegra common stock would be converted into the right to receive 1.215 shares of SmartFinancial common stock. On April 18, 2019, Entegra notified SmartFinancial that it had received a proposal from BancShares and certain affiliates containing the Merger Agreement described above and that the Entegra board of directors had concluded that such proposal constituted a Superior Proposal (as defined in the SmartFinancial definitive agreement). On April 23, 2019, SmartFinancial delivered a notice to Entegra waiving its rights to renegotiate its agreement with Entegra, subject to Entegra’s compliance with the SmartFinancial Merger Agreement and the payment of the termination fee due to SmartFinancial simultaneously with the termination of the SmartFinancial definitive agreement. On April 23, 2019, in connection with the termination by Entegra of the SmartFinancial definitive agreement, BancShares, on behalf of Entegra, paid SmartFinancial a termination fee of $6.4 million as required by the terms of the SmartFinancial definitive agreement, and the SmartFinancial definitive agreement was terminated. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Organization | Organization Entegra Financial Corp. (“we,” “us,” “our,” or 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 the Company, pursuant to which Macon Bancorp converted from a 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. (“Entegra Services”), which holds investment securities. 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. |
Estimates | Estimates The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those 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 The accompanying consolidated financial statements include the accounts of the Company, the Bank, and Entegra Services. The accounts of the Trust are not consolidated with the Company. In consolidation, all significant intercompany accounts and transactions have been eliminated. |
Reclassification | Reclassification Certain amounts in the prior year’s financial statements may have been reclassified to conform to the current year’s presentation. The reclassifications had no effect on our results of operations or financial condition as previously reported. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the Securities and Exchange Commission’s (the “SEC”) instructions for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 14, 2019 (the “2018 Form 10-K”). In the opinion of management, these interim financial statements present fairly, in all material respects, the Company’s consolidated financial position and results of operations for each of the interim periods presented. Results of operations for interim periods are not necessarily indicative of the results of operations that may be expected for a full year or any future period. |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Assets acquired and liabilities assumed are measured and recorded at fair value at the date of acquisition, including identifiable intangible assets. If the fair value of net assets purchased exceeds the fair value of consideration paid, a bargain purchase gain is recognized at the date of acquisition. Conversely, if the consideration paid exceeds the fair value of the net assets acquired, goodwill is recognized at the acquisition date. 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. The determination of the fair value of loans acquired takes into account credit quality deterioration and probability of loss; therefore, the related allowance for loan losses is not carried forward. 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. |
Recent Accounting Standards Updates | Recent Accounting Standards Updates Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” In June 2016, the FASB issued amendments to ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. 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. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investment Securities | |
Schedule of holdings of our trading account | The following table presents the holdings of our equity securities as of March 31, 2019 and December 31, 2018: March 31, December 31, 2019 2018 (Dollars in thousands) Mutual funds $ 6,812 $ 6,178 |
Schedule of investment securities available for sale | The amortized cost and estimated fair values of available-for-sale (“AFS”) securities as of March 31, 2019 and December 31, 2018 are summarized as follows: March 31, 2019 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 33,918 $ 112 $ (208 ) $ 33,822 Municipal Securities 115,467 2,194 (182 ) 117,479 Mortgage-backed Securities - Guaranteed 82,467 196 (1,137 ) 81,526 Collateralized Mortgage Obligation - Guaranteed 22,194 99 (388 ) 21,905 Collateralized Mortgage Obligation - Non Guaranteed 66,842 491 (194 ) 67,139 Collateralized Loan Obligations 15,524 — (312 ) 15,212 Corporate bonds 19,920 237 (108 ) 20,049 $ 356,332 $ 3,329 $ (2,529 ) $ 357,132 December 31, 2018 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 34,068 $ 74 $ (152 ) $ 33,990 Municipal Securities 115,860 209 (1,667 ) 114,402 Mortgage-backed Securities - Guaranteed 86,664 98 (1,578 ) 85,184 Collateralized Mortgage Obligation - Guaranteed 22,492 47 (650 ) 21,889 Collateralized Mortgage Obligation - Non Guaranteed 69,774 125 (728 ) 69,171 Collateralized Loan Obligations 15,534 1 (458 ) 15,077 Corporate bonds 19,936 232 (143 ) 20,025 $ 364,328 $ 786 $ (5,376 ) $ 359,738 |
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: March 31, 2019 Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) U.S. Treasury & Government Agencies $ 22,738 $ 179 $ 2,032 $ 29 $ 24,770 $ 208 Municipal Securities — — 20,277 182 20,277 182 Mortgage-backed Securities - Guaranteed 5,987 60 54,578 1,077 60,565 1,137 Collateralized Mortgage Obligations - Guaranteed — — 15,433 388 15,433 388 Collateralized Mortgage Obligations - Non Guaranteed 2,908 25 17,739 169 20,647 194 Collateralized loan obligations 11,750 269 3,462 43 15,212 312 Corporate bonds 3,125 25 3,350 83 6,475 108 $ 46,508 $ 558 $ 116,871 $ 1,971 $ 163,379 $ 2,529 December 31, 2018 Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) U.S. Treasury & Government Agencies $ 23,423 $ 152 $ — $ — $ 23,423 $ 152 Municipal Securities 33,028 421 56,153 1,246 89,181 1,667 Mortgage-backed Securities - Guaranteed 27,692 370 45,619 1,208 73,311 1,578 Collateralized Mortgage Obligations - Guaranteed 2,042 19 15,294 631 17,336 650 Collateralized Mortgage Obligations - Non Guaranteed 22,383 185 30,471 543 52,854 728 Collateralized loan obligations 11,618 404 1,449 54 13,067 458 Corporate bonds 2,492 45 3,345 98 5,837 143 $ 122,678 $ 1,596 $ 152,331 $ 3,780 $ 275,009 $ 5,376 |
Securities Gross Unrealized Losses Position | March 31, 2019 Less Than More Than Total U.S. Treasury & Government Agencies 15 1 16 Municipal Securities — 18 18 Mortgage-backed Securities - Guaranteed 5 52 57 Collateralized Mortgage Obligations - Guaranteed — 8 8 Collateralized Mortgage Obligations - Non Guaranteed 2 13 15 Collateralized Loan Obligations 6 2 8 Corporate bonds 4 4 8 32 98 130 December 31, 2018 Less Than More Than Total U.S. Treasury & Government Agencies 14 — 14 Municipal Securities 31 52 83 Mortgage-backed Securities - Guaranteed 21 43 64 Collateralized Mortgage Obligations - Guaranteed 1 8 9 Collateralized Mortgage Obligations - Non Guaranteed 12 22 34 Collateralized Loan Obligations 6 1 7 Corporate bonds 3 4 7 88 130 218 |
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 three months ended March 31, 2018: (Dollars in thousands) Gross proceeds $ 10,009 Gross realized gains 21 Gross realized losses 33 |
Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity | The amortized cost and estimated fair value of investments in debt securities at March 31, 2019, by contractual maturity, is shown below. Available-for-Sale Amortized Fair (Dollars in thousands) Less than 1 year $ 1,979 $ 1,981 Over 1 year through 5 years 4,570 3,207 After 5 years through 10 years 30,973 32,307 Over 10 years 147,307 149,067 184,829 186,562 Mortgage-backed securities 171,503 170,570 Total $ 356,332 $ 357,132 |
LOANS RECEIVABLE (Tables)
LOANS RECEIVABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Loans Receivable | |
Loan Receivable | Loans receivable as of March 31, 2019 and December 31, 2018 are summarized as follows: March 31, December 31, 2019 2018 (Dollars in thousands) Real estate mortgage loans: One-to four-family residential $ 328,779 $ 325,560 Commercial real estate 500,600 498,106 Home equity loans and lines of credit 47,665 48,679 Residential construction 46,622 39,533 Other construction and land 99,462 104,645 Total real estate loans 1,023,128 1,016,523 Commercial and industrial 51,562 54,410 Consumer 6,494 6,842 Total commercial and consumer 58,056 61,252 Loans receivable, gross 1,081,184 1,077,775 Less: Net deferred loan fees (1,046 ) (1,000 ) Fair value discount (915 ) (1,048 ) Hedged loans basis adjustment (See Note 8) 503 245 Unamortized premium 319 333 Unamortized discount (208 ) (236 ) Loans receivable, net of deferred fees $ 1,079,837 $ 1,076,069 |
Activity Related to Discount on Purchased Loans | The following tables present the activity related to the discount on individually purchased loans for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Discount on purchased loans, beginning of period $ 236 $ 710 Accretion (28 ) (29 ) Discount on purchased loans, end of period $ 208 $ 681 |
Aggregate amount of extensions of credit to executive officers and directors | The following table presents the activity related to the fair value discount on loans from business combinations for the three months ended March 31 2019, and 2018: For the Three Months Ended March 31, (Dollars in thousands) 2019 2018 Fair value discount, beginning of period $ 1,048 $ 2,012 Accretion (133 ) (266 ) Fair value discount, end of period $ 915 $ 1,746 |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Allowance For Loan Losses | |
Changes in Allowance for Loan Losses | The following tables present, by portfolio segment, the changes in the allowance for loan losses for the periods indicated: Three Months Ended March 31, 2019 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,909 $ 5,130 $ 560 $ 452 $ 1,250 $ 608 $ 76 $ 11,985 Provision 34 (112 ) 255 68 (42 ) 43 (130 ) 116 Charge-offs (4 ) — (209 ) — — (59 ) (26 ) (298 ) Recoveries 20 56 — — 8 4 152 240 Ending balance $ 3,959 $ 5,074 $ 606 $ 520 $ 1,216 $ 596 $ 72 $ 12,043 Three Months Ended March 31, 2018 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Provision (151 ) 229 (21 ) 150 63 128 (37 ) 361 Charge-offs (110 ) (35 ) (41 ) — — — (29 ) (215 ) Recoveries 13 3 21 — 20 5 72 134 Ending balance $ 3,770 $ 4,561 $ 575 $ 453 $ 1,108 $ 636 $ 64 $ 11,167 |
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 net investment in loans for the periods indicated: March 31, 2019 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 148 $ 80 $ 74 $ — $ 46 $ 5 $ — $ 353 Collectively evaluated for impairment 3,811 4,994 532 520 1,170 591 72 11,690 $ 3,959 $ 5,074 $ 606 $ 520 $ 1,216 $ 596 $ 72 $ 12,043 Loans Receivable Individually evaluated for impairment $ 3,262 $ 5,994 $ 312 $ — $ 1,358 $ 271 $ — $ 11,197 Collectively evaluated for impairment 325,414 493,085 47,500 46,566 97,918 51,563 6,594 1,068,640 $ 328,676 $ 499,079 $ 47,812 $ 46,566 $ 99,276 $ 51,834 $ 6,594 $ 1,079,837 December 31, 2018 One-to four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 79 $ 27 $ — $ — $ 54 $ 7 $ — $ 167 Collectively evaluated for impairment 3,830 5,103 560 452 1,196 601 76 11,818 $ 3,909 $ 5,130 $ 560 $ 452 $ 1,250 $ 608 $ 76 $ 11,985 Loans Receivable Individually evaluated for impairment $ 2,900 $ 6,019 $ 313 $ — $ 1,377 $ 276 $ — $ 10,885 Collectively evaluated for impairment 322,255 490,530 48,512 39,488 103,087 54,367 6,945 1,065,184 $ 325,155 $ 496,549 $ 48,825 $ 39,488 $ 104,464 $ 54,643 $ 6,945 $ 1,076,069 |
Credit Risk Profile by Rating | The following tables present the recorded investment in gross loans by loan grade as of the dates indicated: March 31, 2019 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 7,449 $ — $ — $ — $ 1,191 $ 6 $ 8,646 2 — 10,444 — — — 904 — 11,348 3 31,789 89,877 4,839 9,562 12,292 14,717 17 163,093 4 124,622 281,883 3,719 24,186 55,743 22,044 215 512,412 5 25,610 88,755 392 2,443 17,947 12,105 4 147,256 6 318 8,185 — 1 1,280 478 — 10,262 7 646 5,491 — — 187 383 — 6,707 $ 182,985 $ 492,084 $ 8,950 $ 36,192 $ 87,449 $ 51,822 $ 242 $ 859,724 Ungraded Loan Exposure: Performing $ 144,670 $ 6,976 $ 38,519 $ 10,374 $ 11,763 $ 12 $ 6,351 $ 218,665 Nonperforming 1,021 19 343 — 64 — 1 1,448 Subtotal $ 145,691 $ 6,995 $ 38,862 $ 10,374 $ 11,827 $ 12 $ 6,352 $ 220,113 Total $ 328,676 $ 499,079 $ 47,812 $ 46,566 $ 99,276 $ 51,834 $ 6,594 $ 1,079,837 December 31, 2018 Loan Grade One-to-Four Commercial Home Equity Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ — $ 7,569 $ — $ — $ — $ 1,264 $ 7 $ 8,840 2 — 7,860 — — — 20 — 7,880 3 31,623 87,756 5,212 9,365 12,111 15,685 264 162,016 4 121,688 280,630 4,014 18,358 61,646 22,374 245 508,955 5 24,738 88,698 615 3,404 17,630 12,307 5 147,397 6 321 7,867 — 1 1,303 495 — 9,987 7 674 5,725 — — 376 487 — 7,262 $ 179,044 $ 486,105 $ 9,841 $ 31,128 $ 93,066 $ 52,632 $ 521 $ 852,337 Ungraded Loan Exposure: Performing $ 145,470 $ 10,420 $ 38,806 $ 8,360 $ 11,334 $ 2,011 $ 6,424 $ 222,825 Nonperforming 641 24 178 — 64 — — 907 Subtotal $ 146,111 $ 10,444 $ 38,984 $ 8,360 $ 11,398 $ 2,011 $ 6,424 $ 223,732 Total $ 325,155 $ 496,549 $ 48,825 $ 39,488 $ 104,464 $ 54,643 $ 6,945 $ 1,076,069 |
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. March 31, 2019 30-59 Days 60-89 Days 90 Days Total Current Total Loans (Dollars in thousands) One-to-four family residential $ 4,364 $ — $ 251 $ 4,615 $ 324,061 $ 328,676 Commercial real estate 4,291 119 1,515 5,925 493,154 499,079 Home equity and lines of credit 159 — 343 502 47,310 47,812 Residential construction 350 — 1 351 46,215 46,566 Other construction and land 129 — 64 193 99,083 99,276 Commercial 283 — 62 345 51,489 51,834 Consumer 35 3 1 39 6,555 6,594 Total $ 9,611 $ 122 $ 2,237 $ 11,970 $ 1,067,867 $ 1,079,837 December 31, 2018 30-59 Days 60-89 Days 90 Days Total Current Total Loans (Dollars in thousands) One-to-four family residential $ 3,562 $ 1,317 $ 84 $ 4,963 $ 320,192 $ 325,155 Commercial real estate 2,615 — 1,782 4,397 492,152 496,549 Home equity and lines of credit 400 457 73 930 47,895 48,825 Residential construction — — 1 1 39,487 39,488 Other construction and land 613 32 64 709 103,755 104,464 Commercial 307 25 121 453 54,190 54,643 Consumer 27 4 — 31 6,914 6,945 Total $ 7,524 $ 1,835 $ 2,125 $ 11,484 $ 1,064,585 $ 1,076,069 |
Summary of Average Impaired Loans | The following table presents investments in loans considered to be impaired and related information on those impaired loans as of March 31, 2019 and December 31, 2018. March 31, 2019 December 31, 2018 Recorded Unpaid Specific Recorded Unpaid Specific (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 2,324 $ 2,475 $ — $ 845 $ 923 $ — Commercial real estate 3,925 6,271 — 3,835 6,207 — Home equity and lines of credit 213 328 — 283 283 — Other construction and land 549 683 — 365 366 — $ 7,011 $ 9,757 $ — $ 5,328 $ 7,779 $ — Loans with a valuation allowance One-to-four family residential $ 938 $ 938 $ 148 $ 2,055 $ 2,055 $ 79 Commercial real estate 2,069 2,069 80 2,184 2,184 27 Home equity and lines of credit 99 99 74 30 30 — Other construction and land 809 809 46 1,012 1,012 54 Commercial 271 271 5 276 276 7 $ 4,186 $ 4,186 $ 353 $ 5,557 $ 5,557 $ 167 Total One-to-four family residential $ 3,262 $ 3,413 $ 148 $ 2,900 $ 2,978 $ 79 Commercial real estate 5,994 8,340 80 6,019 8,391 27 Home equity and lines of credit 312 427 74 313 313 — Other construction and land 1,358 1,492 46 1,377 1,378 54 Commercial 271 271 5 276 276 7 $ 11,197 $ 13,943 $ 353 $ 10,885 $ 13,336 $ 167 |
Financing Receivables on Nonaccrual Status | The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated: Three Months Ended March 31, 2019 2018 Average Interest Income Average Interest Income (Dollars in thousands) Loans without a valuation allowance One-to four-family residential $ 2,483 $ 29 $ 1,877 $ 29 Commercial real estate 6,272 37 5,613 31 Home equity and lines of credit 328 15 427 14 Other construction and land 685 5 699 5 $ 9,768 $ 86 $ 8,616 $ 79 Loans with a valuation allowance One-to four-family residential $ 937 $ 8 $ 1,621 $ 16 Commercial real estate 2,155 23 1,693 23 Home equity and lines of credit 99 2 — — Other construction and land 819 12 1,724 9 Commercial 274 6 290 5 $ 4,284 $ 51 $ 5,328 $ 53 Total One-to four-family residential $ 3,420 $ 37 $ 3,498 $ 45 Commercial real estate 8,427 60 7,306 54 Home equity and lines of credit 427 17 427 14 Other construction and land 1,504 17 2,423 14 Commercial 274 6 290 5 $ 14,052 $ 137 $ 13,944 $ 132 |
Schedule of Nonperforming Loans | The following table summarizes the balances of nonperforming loans as of March 31, 2019 and December 31, 2018. March 31, December 31, (Dollars in thousands) One-to-four family residential $ 1,394 $ 1,037 Commercial real estate 2,854 3,266 Home equity loans and lines of credit 343 178 Residential construction 1 — Other construction and land 251 256 Commercial 62 120 Consumer 1 — Non-performing loans $ 4,906 $ 4,857 |
Summary of TDR Loans | The following tables summarize TDR loans as of the dates indicated: March 31, 2019 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 2,138 $ 358 $ 2,496 Commercial real estate 3,912 1,212 5,124 Home equity and lines of credit 313 — 313 Other construction and land 1,170 187 1,357 Commercial 271 — 271 $ 7,804 $ 1,757 $ 9,561 December 31, 2018 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 2,154 $ 361 $ 2,515 Commercial real estate 3,690 1,462 5,152 Home equity and lines of credit 283 30 313 Other construction and land 1,185 192 1,377 Commercial 276 — 276 $ 7,588 $ 2,045 $ 9,633 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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: As of and for the As of and for the March 31, December 31, 2019 2018 Dollars in thousands Gross balance at beginning of period $ 4,840 $ 4,840 Additions from acquisitions — — Gross balance at end of period 4,840 4,840 Less accumulated amortization (1,436 ) (1,263 ) Core deposit intangible, net $ 3,404 $ 3,577 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Deposits Tables Abstract | |
Summary of Deposit Balances and Interest Expenses | The following table summarizes deposit balances and interest expense by type of deposit as of and for the three months ended March 31, 2019 and 2018 and the year ended December 31, 2018. As of and for the As of and for the Year Ended Three Months Ended March 31, December 31, 2019 2018 2018 (Dollars in thousands) Balance Interest Balance Interest Balance Interest Noninterest-bearing demand $ 194,562 $ — $ 192,916 $ — $ 184,404 $ — Interest-bearing demand 198,516 98 206,530 87 209,085 374 Money Market 390,839 1,138 336,625 366 356,086 2,637 Savings 49,996 14 52,162 15 50,716 59 Time Deposits 412,306 1,676 417,675 914 420,949 5,048 $ 1,246,219 $ 2,926 $ 1,205,908 $ 1,382 $ 1,221,240 $ 8,118 |
Summary of wholesale deposits included in the money market and time deposits amounts | The following table indicates wholesale deposits included in the money market and time deposits amounts above: As of March 31, As of December 31, 2019 2018 2018 (Dollars in thousands) Balance Balance Balance Wholesale money market $ 5,063 $ 25,026 $ 5,030 Wholesale time deposits 72,259 56,232 70,978 $ 77,322 $ 81,258 $ 76,008 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Borrowings | |
Scheduled maturities of FHLB advances and respective weighted average rates | The scheduled maturities and respective weighted average rates of outstanding FHLB advances are as follows for the dates indicated: March 31, 2019 December 31, 2018 Year of Balance Weighted Balance Weighted (Dollars in thousands) 2019 163,500 2.59 % 168,500 2.52 % 2020 45,000 2.80 % 45,000 2.80 % 2024 5,000 2.81 % — — $ 213,500 2.64 % $ 213,500 2.58 % |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Financial Instruments And Hedging Activities | |
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 sheets (in thousands). Derivative Assets (1) Derivative Liabilities (1) March 31, December 31, March 31, December 31, 2019 2018 2019 2018 Derivatives designated as hedging instruments: Interest rate swaps $ 260 $ 354 $ 861 $ 462 Total $ 260 $ 354 $ 861 $ 462 Derivatives not designated as hedging instruments: Mortgage derivatives $ 45 $ 34 $ 21 $ 22 Total $ 45 $ 34 $ 21 $ 22 (1) All derivative assets are located in “Other assets” on the consolidated balance sheets and all derivative liabilities are located in “Other liabilities” on the consolidated balance sheets. |
Schedule of Cash Flow Hedges Included in Statement of Income | The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of income: Derivatives Designated as Hedging Instrument s Three Months Ended March 31, 2019 2018 (dollars in thousands) Interest Interest Interest Interest Total amounts of income and expense line items presented in the consolidated statements of income $ 16,542 $ 4,589 $ 14,842 $ 2,449 Amounts related to fair value hedging relationships Interest rate swaps: Hedged items 259 — — — Derivatives designated as hedging instruments (274 ) — — — Amounts related to cash flow hedging relationships Interest rate swaps: Amount reclassified from accumulated other comprehensive loss into income — (65 ) — (56 ) |
Schedule of Fair value Hedges recorded on the balance sheet related to cumulative basis adjustments | As of March 31, 2019, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges: (dollars in thousands) Carrying amount of the Cumulative amount of fair Line item in the balance sheet in which the hedged item is included March 31, March 31, Loans receivable (1) $ 97,891 $ 503 (1) These amounts include the amortized cost basis of the closed portfolio used to designate the hedging relationship in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At March 31, 2019, the amortized cost basis of the closed portfolio used in the the hedging relationship was $97.9 million, the cumulative basis adjustment associated with the hedging relationship was $0.5 million, and the amount of the designated hedged item was $25.0 million. |
Schedule of Structure of the Swap Agreements | The structures of the swap agreements designated as cash flow hedges are described in the table below (dollars in thousands): Underlyings Designation Notional Payment Provision Life of Swap Contract Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 0.958%/Receive 3 month LIBOR 4 yrs Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 3.02%/Receive 3 month LIBOR 3 yrs |
Schedule of derivatives in cash flow hedging | The table below presents the effect of the Company's derivatives in cash flow hedging relationships for the periods presented (dollars in thousands): As of and for the Three Months As of and for the Year Interest rate swaps Location 2019 2018 2018 Amounts recognized in AOCI on derivatives OCI $ (159 ) $ 202 $ 2 Amounts reclassified from AOCI into income Interest expense (65 ) (56 ) (431 ) Amounts recognized in consolidated statement of comprehensive income $ (224 ) $ 146 $ (429 ) |
Schedule of Company's IRLCs and forward commitments for the future delivery of residential mortgage loans | Mortgage derivative fair value assets and liabilities are described above. At March 31, 2019 and December 31, 2018, the Company had the following IRLCs and forward commitments for the future delivery of residential mortgage loans. As of As of (Dollars in thousands) 2019 2018 Mortgage derivatives Interest rate lock commitments $ 2,736 $ 1,627 Forward sales commitment 4,250 3,500 The table below presents the effect of the Company's derivatives not designated as hedging instruments for the periods presented: Three Months Ended March 31, Interest rate products Location 2019 2018 (Dollars in thousands) Amount of (loss) gain recognized in income on forward commitments Noninterest income $ (38 ) $ 10 Amount of gain recognized in income on interest rate lock commitments Noninterest income 11 17 Amount of gain (loss) recognized in income on derivatives not designated as hedging instruments $ (27 ) $ 27 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Schedule of Components of Income Tax Expense (Benefit) | The components of net deferred taxes as of March 31, 2019 and December 31, 2018 are summarized as follows: As of As of 2019 2018 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,729 $ 2,703 Deferred compensation and post-employment benefits 1,874 1,854 Non-accrual interest 251 245 Valuation reserve for other real estate 198 191 North Carolina NOL carryover 233 293 Federal NOL carryover 554 1,231 AMT credit carryover — 316 General federal business credit carryover 826 691 Unrealized losses on securities 581 1,061 Loan basis differences 46 50 Fixed assets 131 123 Core deposit intangible 148 129 Derivative instruments 21 — Other 1,122 1,207 Total deferred tax assets 8,714 10,094 Deferred tax liabilities: Loan servicing rights 633 653 Goodwill 581 495 Core deposit intangible 70 74 Deferred loan costs 1,014 1,001 Prepaid expenses 14 14 Unrealized gains on securities 961 105 Derivative instruments 6 29 Investment in partnerships 170 155 Other — 17 Total deferred tax liabilities 3,449 2,543 Net deferred tax asset $ 5,265 $ 7,551 |
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 and other carryforwards as of March 31, 2019: As of September, 2017 (Dollars in thousands) Amount Expiration Dates Federal $ 2,803 2032-2037 North Carolina $ 13,708 2026-2029 Federal General Business Carryforwards $ 826 2037-2039 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Earnings Per Share Tables Abstract | |
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 as of the dates indicated: Three Months Ended (Dollars in thousands, except per share amounts) 2019 2018 Numerator: Net income $ 3,815 $ 3,582 Denominator: Weighted-average common shares outstanding - basic 6,918,769 6,885,911 Effect of dilutive securities: Stock options 6,960 96,871 Restricted stock units 17,538 45,102 Weighted-average common shares outstanding - diluted 6,943,267 7,027,884 Earnings per share - basic $ 0.55 $ 0.52 Earnings per share - diluted $ 0.55 $ 0.51 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Income Loss | |
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 three months ended March 31, 2019 and 2018. Three Months Ended March 31, 2019 (Dollars in thousands) Available Cash Flow Total Balance, beginning of period $ (3,528 ) $ 104 $ (3,424 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities available for sale — — — Change in net unrealized holding losses on securities available for sale 5,390 — 5,390 Reclassification adjustment for net securities losses realized in net income — — — Change in unrealized holding gains on cash flow hedge — (159 ) (159 ) Reclassification adjustment for cash flow hedge effectiveness — (65 ) (65 ) Income tax effect (1,244 ) 47 (1,197 ) Balance, end of period $ 618 $ (73 ) $ 545 Three Months Ended March 31, 2018 (Dollars in thousands) Balance, beginning of period $ (455 ) $ 432 $ (23 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities available for sale — — — Change in net unrealized holding losses on securities available for sale (4,505 ) — (4,505 ) Reclassification adjustment for net securities losses realized in net income 12 — 12 Change in unrealized holding gains on cash flow hedge — 202 202 Reclassification adjustment for cash flow hedge effectiveness — (56 ) (56 ) Cumulative effect of change in accounting principle 9 — 9 Income tax effect 996 (31 ) 965 Balance, end of period $ (3,943 ) $ 547 $ (3,396 ) |
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 Income affected by amounts reclassified from accumulated other comprehensive income as of the dates indicated: Three Months Ended (Dollars in thousands) 2019 2018 Income Statement Line Item Affected Available-for-sale securities Losses recognized $ — $ (12 ) Loss on sale of investments, net Income tax effect — 3 Income tax expense Reclassified out of AOCI, net of tax — (9 ) Net income Cash flow hedge Interest expense - effective portion — 30 Interest expense - FHLB advances Interest expense - effective portion 65 26 Interest expense - Junior subordinated notes Income tax effect (15 ) (13 ) Income tax expense Reclassified out of AOCI, net of tax 50 43 Net income Total reclassified out of AOCI, net of tax $ 50 $ 34 Net income |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies | |
Schedule of commitments to fund lines of credit | The following summarizes the Company’s approximate commitments to extend credit: March 31, 2019 (Dollars in thousands) Lines of credit $ 175,353 Standby letters of credit 1,011 $ 176,364 |
Schedule of Outstanding commitments to originate mortgage loans | The Company had outstanding commitments to originate loans as follows: March 31, 2019 Amount Range of Rates (Dollar in thousands) Fixed $ 24,709 4.25% to 12.00% Variable 9,323 3.38% to 8.00% $ 34,032 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures | |
Summary of assets and liabilities measured at fair value on a recurring basis | The following tables present financial assets and financial liabilities measured at fair value on a recurring basis at the dates indicated, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value: March 31, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Assets: Equity securities $ 6,812 $ — $ — $ 6,812 Securities available for sale: U.S. Treasury & Government Agencies 4,991 28,831 — 33,822 Municipal Securities — 117,479 — 117,479 Mortgage-backed Securities - Guaranteed — 81,526 — 81,526 Collateralized Mortgage Obligations - Guaranteed — 21,905 — 21,905 Collateralized Mortgage Obligations - Non Guaranteed — 67,139 — 67,139 Collateralized Loan Obligations — 15,212 15,212 Corporate bonds — 19,556 493 20,049 Total securities available for sale 4,991 351,648 493 357,132 Mortgage loans held for sale — — 3,270 3,270 Loan servicing rights — — 2,753 2,753 Interest rate swaps — 260 — 260 Mortgage derivatives — — 45 45 Total recurring assets at fair value $ 11,803 $ 351,908 $ 6,561 $ 370,272 Liabilities: Interest rate swaps $ — $ 861 $ — $ 861 Mortgage derivatives — — 21 21 Total recurring liabilities at fair value $ — $ 861 $ 21 $ 882 December 31, 2018 Level 1 Level 2 Level 3 Total (Dollars in thousands) Assets: Equity securities $ 6,178 $ — $ — $ 6,178 Securities available for sale: U.S. Treasury & Government Agencies 4,949 29,041 — 33,990 Municipal Securities — 114,402 — 114,402 Mortgage-backed Securities - Guaranteed — 85,184 — 85,184 Collateralized Mortgage Obligations - Guaranteed — 21,889 — 21,889 Collateralized Mortgage Obligations - Non Guaranteed — 69,171 — 69,171 Collateralized Loan Obligations — 15,077 15,077 Corporate bonds — 19,532 493 20,025 Total securities available for sale 4,949 354,296 493 359,738 Mortgage loans held for sale — — 2,431 2,431 Loan servicing rights — — 2,837 2,837 Interest rate swaps — 354 — 354 Mortgage derivatives — — 34 34 Total recurring assets at fair value $ 11,127 $ 354,650 $ 5,795 $ 371,572 Liabilities: Interest rate swaps $ — $ 462 $ — $ 462 Mortgage derivatives — — 22 22 Total recurring liabilities at fair value $ — $ 462 $ 22 $ 484 |
Schedule of changes in assets measured at fair value on a recurring basis | The following table presents the changes in assets and liabilities measured at fair value on a recurring basis for which we have utilized Level 3 inputs to determine fair value: Three Months Ended March 31, 2019 2018 (Dollars in thousands) Balance at beginning of period $ 5,773 $ 3,321 AFS securities Transfer to Level 2 — 1,331 Mortgage loans held for sale 839 — Loan servicing right activity, included in servicing income, net Capitalization from loans sold 47 100 Fair value adjustment (131 ) (130 ) Mortgage derivative gains (losses) included in other income 12 27 Balance at end of period $ 6,540 $ 4,649 |
Summary of assets and liabilities measured at a fair value on a nonrecurring basis | The following table presents nonfinancial assets measured at fair value on a nonrecurring basis at the dates indicated, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: March 31, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,324 $ 2,324 Commercial real estate — — 3,925 3,925 Home equity loans and lines of credit — — 213 213 Other construction and land — — 549 549 Real estate owned: Commercial real estate — — 949 949 Other construction and land — — 1,307 1,307 Total assets $ — $ — $ 9,267 $ 9,267 December 31, 2018 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to-four family residential $ — $ — $ 845 $ 845 Commercial real estate — — 3,835 3,835 Home equity loans and lines of credit — — 283 283 Other construction and land — — 365 365 Real estate owned: One-to-four family residential — — 228 228 Commercial real estate — — 949 949 Other construction and land — — 1,316 1,316 Total assets $ — $ — $ 7,821 $ 7,821 |
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 March 31, 2019. 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% -10% Loan servicing rights Discounted Cash Flows Prepayment speed 9% - 20% Discount rate 10% - 14% Mortgage loans held for sale External pricing model Recent trade pricing 101% - 103% Mortgage derivatives External pricing model Pull-through rate 78%-100% SBIC Indicative value provided by fund Current operations and financial condition N/A |
Schedule of carrying amount and estimated fair value of the Company's financial instruments | The following table includes the estimated fair value of the Company's financial assets and financial liabilities at the dates indicated: Fair Value Measurements at March 31, 2019 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 98,285 $ 98,285 $ 98,285 $ — $ — Equity securities 6,812 6,812 6,812 — — Securities available for sale 357,132 357,132 4,991 351,648 493 Loans held for sale 9,208 9,885 — 6,615 3,270 Loans receivable, net 1,079,837 1,046,136 — — 1,046,552 Other investments, at cost 12,092 12,092 — 12,092 — Accrued interest receivable 6,669 6,669 — 6,669 — BOLI 32,087 32,087 — 32,087 — Loan servicing rights 2,753 2,753 — — 2,753 Mortgage derivatives 45 45 — — 45 Interest rate swaps 260 260 — 260 — SBIC investments 4,306 4,306 — — 4,306 Liabilities: Demand deposits $ 833,913 $ 833,913 $ — $ 833,913 $ — Time deposits 412,306 416,631 — — 416,631 Federal Home Loan Bank advances 213,500 213,249 — 213,249 — Junior subordinated debentures 14,433 13,720 — 13,720 — Other borrowings 9,385 9,572 — 9,572 — Accrued interest payable 1,173 1,173 — 1,173 — Mortgage derivatives 21 21 — — 21 Interest rate swaps 861 861 — 861 — Fair Value Measurements at December 31, 2018 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 69,119 $ 69,119 $ 69,119 $ — $ — Equity securities 6,178 6,178 6,178 — — Securities available for sale 359,739 359,739 4,949 354,297 493 Loans held for sale 7,570 8,114 — 5,683 2,431 Loans receivable, net 1,076,069 1,046,136 — — 1,046,136 Other investments, at cost 12,039 12,039 — 12,039 — Accrued interest receivable 6,443 6,443 — 6,443 — BOLI 32,886 32,886 — 32,886 — Loan servicing rights 2,837 2,837 — — 2,837 Mortgage derivatives 34 34 — — 34 Interest rate swaps 354 354 — 354 — SBIC investments 3,839 3,839 — — 3,839 Liabilities: Demand deposits $ 800,291 $ 800,291 $ — $ 800,291 $ — Time deposits 420,949 424,054 — — 424,054 Federal Home Loan Bank advances 213,500 213,513 — 213,513 — Junior subordinated debentures 14,433 12,440 — 12,440 — Other borrowings 9,299 9,253 — 9,253 — Accrued interest payable 1,647 1,647 — 1,647 — Mortgage derivatives 22 22 — — 22 Interest rate swaps 462 462 — 462 — |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Schedule of Future minimum lease payments | Maturities of lease liabilities as of March 31, 2019 were as follows: (Dollard in thousands) Operating 2019 $ 107 2020 69 2021 53 2022 53 2023 53 Thereafter 177 Total undiscounted lease payments 512 Discount effect of cash flows (68 ) Total lease liability $ 444 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) | Mar. 31, 2019 |
Disclosure Organization Details Narrative Abstract | |
Ownership percentage in Macon Capital Trust I | 100.00% |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Mutual funds | $ 6,812 | $ 6,178 |
Amortized Cost | 356,332 | 364,328 |
Gross Unrealized Gains | 3,329 | 786 |
Gross Unrealized Losses | (2,529) | (5,376) |
Estimated fair value | 357,132 | 359,738 |
U.S. Government Agencies [Member] | ||
Amortized Cost | 33,918 | 34,068 |
Gross Unrealized Gains | 112 | 74 |
Gross Unrealized Losses | (208) | (152) |
Estimated fair value | 33,822 | 33,990 |
Municipal Securities [Member] | ||
Amortized Cost | 115,467 | 115,860 |
Gross Unrealized Gains | 2,194 | 209 |
Gross Unrealized Losses | (182) | (1,667) |
Estimated fair value | 117,479 | 114,402 |
Mortgage-backed Securities - Guaranteed [Member] | ||
Amortized Cost | 82,467 | 86,664 |
Gross Unrealized Gains | 196 | 98 |
Gross Unrealized Losses | (1,137) | (1,578) |
Estimated fair value | 81,526 | 85,184 |
Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Amortized Cost | 22,194 | 22,492 |
Gross Unrealized Gains | 99 | 47 |
Gross Unrealized Losses | (388) | (650) |
Estimated fair value | 21,905 | 21,889 |
Collateralized Mortgage Obligations - Non Guaranteed [Member] | ||
Amortized Cost | 66,842 | 69,774 |
Gross Unrealized Gains | 491 | 125 |
Gross Unrealized Losses | (194) | (728) |
Estimated fair value | 67,139 | 69,171 |
Collateralized mortgage obligations [Member] | ||
Amortized Cost | 15,524 | 15,534 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (312) | (458) |
Estimated fair value | 15,212 | 15,077 |
Corporate debt securities [Member] | ||
Amortized Cost | 19,920 | 19,936 |
Gross Unrealized Gains | 237 | 232 |
Gross Unrealized Losses | (108) | (143) |
Estimated fair value | $ 20,049 | $ 20,025 |
INVESTMENT SECURITIES (Details
INVESTMENT SECURITIES (Details 2) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Held to maturity, Less Than 12 Months Fair Value | $ 32 | $ 88 |
Held to maturity, Over 12 Months Fair Value | 98 | 130 |
Held to maturity, Fair Value | 130 | 218 |
Available for sale, Less Than 12 Months Fair Value | 46,508 | 122,678 |
Available for sale, Less Than 12 Months Unrealized Losses | 558 | 1,596 |
Available for sale, Over 12 Months Fair Value | 116,871 | 152,331 |
Available for sale, Over 12 Months Unrealized Losses | 1,971 | 3,780 |
Available for sale, Fair Value | 163,379 | 275,009 |
Available for sale, Unrealized Losses | 2,529 | 5,376 |
U.S. Government Agencies [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 15 | 14 |
Held to maturity, Over 12 Months Fair Value | 1 | |
Held to maturity, Fair Value | 16 | 14 |
Available for sale, Less Than 12 Months Fair Value | 22,738 | 23,423 |
Available for sale, Less Than 12 Months Unrealized Losses | 179 | 152 |
Available for sale, Over 12 Months Fair Value | 2,032 | |
Available for sale, Over 12 Months Unrealized Losses | 29 | |
Available for sale, Fair Value | 24,770 | 23,423 |
Available for sale, Unrealized Losses | 208 | 152 |
Municipal Securities [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 31 | |
Held to maturity, Over 12 Months Fair Value | 18 | 52 |
Held to maturity, Fair Value | 18 | 83 |
Available for sale, Less Than 12 Months Fair Value | 33,028 | |
Available for sale, Less Than 12 Months Unrealized Losses | 421 | |
Available for sale, Over 12 Months Fair Value | 20,277 | 56,153 |
Available for sale, Over 12 Months Unrealized Losses | 182 | 1,246 |
Available for sale, Fair Value | 20,277 | 89,181 |
Available for sale, Unrealized Losses | 182 | 1,667 |
Mortgage-backed Securities - Guaranteed [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 5 | 21 |
Held to maturity, Over 12 Months Fair Value | 52 | 43 |
Held to maturity, Fair Value | 57 | 64 |
Available for sale, Less Than 12 Months Fair Value | 5,987 | 27,692 |
Available for sale, Less Than 12 Months Unrealized Losses | 60 | 370 |
Available for sale, Over 12 Months Fair Value | 54,578 | 45,619 |
Available for sale, Over 12 Months Unrealized Losses | 1,077 | 1,208 |
Available for sale, Fair Value | 60,565 | 73,311 |
Available for sale, Unrealized Losses | 1,137 | 1,578 |
Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 1 | |
Held to maturity, Over 12 Months Fair Value | 8 | 8 |
Held to maturity, Fair Value | 8 | 9 |
Available for sale, Less Than 12 Months Fair Value | 2,042 | |
Available for sale, Less Than 12 Months Unrealized Losses | 19 | |
Available for sale, Over 12 Months Fair Value | 15,433 | 15,294 |
Available for sale, Over 12 Months Unrealized Losses | 388 | 631 |
Available for sale, Fair Value | 15,433 | 17,336 |
Available for sale, Unrealized Losses | 388 | 650 |
Collateralized Mortgage Obligations - Non Guaranteed [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 2 | 12 |
Held to maturity, Over 12 Months Fair Value | 13 | 22 |
Held to maturity, Fair Value | 15 | 34 |
Available for sale, Less Than 12 Months Fair Value | 2,908 | 22,383 |
Available for sale, Less Than 12 Months Unrealized Losses | 25 | 185 |
Available for sale, Over 12 Months Fair Value | 17,739 | 30,471 |
Available for sale, Over 12 Months Unrealized Losses | 169 | 543 |
Available for sale, Fair Value | 20,647 | 52,854 |
Available for sale, Unrealized Losses | 194 | 728 |
Collateralized mortgage obligations [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 6 | 6 |
Held to maturity, Over 12 Months Fair Value | 2 | 1 |
Held to maturity, Fair Value | 8 | 7 |
Available for sale, Less Than 12 Months Fair Value | 11,750 | 11,618 |
Available for sale, Less Than 12 Months Unrealized Losses | 269 | 404 |
Available for sale, Over 12 Months Fair Value | 3,462 | 1,449 |
Available for sale, Over 12 Months Unrealized Losses | 43 | 54 |
Available for sale, Fair Value | 15,212 | 13,067 |
Available for sale, Unrealized Losses | 312 | 458 |
Corporate debt securities [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 4 | 3 |
Held to maturity, Over 12 Months Fair Value | 4 | 4 |
Held to maturity, Fair Value | 8 | 7 |
Available for sale, Less Than 12 Months Fair Value | 3,125 | 2,492 |
Available for sale, Less Than 12 Months Unrealized Losses | 25 | 45 |
Available for sale, Over 12 Months Fair Value | 3,350 | 3,345 |
Available for sale, Over 12 Months Unrealized Losses | 83 | 98 |
Available for sale, Fair Value | 6,475 | 5,837 |
Available for sale, Unrealized Losses | $ 108 | $ 143 |
INVESTMENT SECURITIES (Detail_2
INVESTMENT SECURITIES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Gross proceeds | $ 10,009 | ||
Securities pledged against deposits | 159,800 | $ 155,800 | |
Available-for-sale Securities [Member] | |||
Gross proceeds | 10,009 | ||
Gross realized gains | 21 | ||
Gross realized losses | $ 33 |
INVESTMENT SECURITIES (Detail_3
INVESTMENT SECURITIES (Details 4) $ in Thousands | Mar. 31, 2019USD ($) |
Disclosure Investment Securities Details Abstract | |
Available for sale, Less than 1 year, Amortized Cost | $ 1,979 |
Available for sale, Over 1 year through 5 years, Amortized Cost | 4,570 |
Available for sale, After 5 years through 10 years, Amortized Cost | 30,973 |
Available for sale, Over 10 years, Amortized Cost | 147,307 |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Amortized Cost | 184,829 |
Available for sale, Mortgage-backed securities, Amortized Cost | 171,503 |
Available for sale, Total, Amortized Cost | 356,332 |
Available for Sale, Less than 1 year, Fair Value | 1,981 |
Available for Sale, Over 1 year through 5 years, Fair Value | 3,207 |
Available for Sale, After 5 years through 10 years, Fair Value | 32,307 |
Available for Sale, Over 10 years, Fair Value | 149,067 |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Fair Value | 186,562 |
Available for Sale, Mortgage-backed securities, Fair Value | 170,570 |
Available for Sale, Total, Fair Value | $ 357,132 |
LOANS RECEIVABLE (Details)
LOANS RECEIVABLE (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | $ 1,081,184 | $ 1,077,775 | ||
Less: Net deferred loan fees | (1,046) | (1,000) | ||
Fair value discount | (915) | (1,048) | $ (1,746) | $ (2,012) |
Hedged loans basis adjustment | 503 | 245 | ||
Unamortized premium | 319 | 333 | ||
Unamortized discount | (208) | (236) | ||
Loans receivable | 1,079,837 | 1,076,069 | ||
One To Four Family Residential [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 328,779 | 325,560 | ||
Loans receivable | 328,676 | 325,155 | ||
Commercial Real Estate Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 500,600 | 498,106 | ||
Loans receivable | 499,079 | 496,549 | ||
Home Equity Line of Credit [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 47,665 | 48,679 | ||
Loans receivable | 47,812 | 48,825 | ||
Residential Construction [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 46,622 | 39,533 | ||
Loans receivable | 46,566 | 39,488 | ||
Other Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 99,462 | 104,645 | ||
Loans receivable | 99,276 | 104,464 | ||
Real Estate Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 1,023,128 | 1,016,523 | ||
Commercial Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 51,562 | 54,410 | ||
Loans receivable | 51,834 | 54,643 | ||
Consumer Portfolio Segment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | 6,494 | 6,842 | ||
Loans receivable | 6,594 | 6,945 | ||
Commercial and Consumer Loan [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans receivable, gross | $ 58,056 | $ 61,252 |
LOANS RECEIVABLE (Details 2)
LOANS RECEIVABLE (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Discount on purchased loans, beginning of period | $ 1,000 | |
Discount on purchased loans, end of period | 1,046 | |
Federal Deposit Insurance Corporation [Member] | ||
Discount on purchased loans, beginning of period | 236 | $ 710 |
Accretion | (28) | (29) |
Discount on purchased loans, end of period | $ 208 | $ 681 |
LOANS RECEIVABLE (Details 3)
LOANS RECEIVABLE (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disclosure Loans Receivable Details 3Abstract | ||
Fair value discount, beginning of year | $ 1,048 | $ 2,012 |
Accretion | (133) | (266) |
Discount on purchased loans, end of period | $ 915 | $ 1,746 |
LOANS RECEIVABLE (Detail Narrat
LOANS RECEIVABLE (Detail Narrative) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Federal Reserve Bank Advances [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans pledged as collateral to secure funding amount | $ 115,200 | $ 114,400 |
Federal Home Loan Bank of Atlanta [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans pledged as collateral to secure funding amount | $ 267,200 | $ 256,100 |
ALLOWANCE FOR LOAN LOSSES (Deta
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | $ 11,985 | $ 10,887 |
Provision | 116 | 361 |
Charge-offs | (298) | (215) |
Recoveries | 240 | 134 |
Balance, end of period | 12,043 | 11,167 |
One To Four Family Residential [Member] | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 3,909 | 4,018 |
Provision | 34 | (151) |
Charge-offs | (4) | (110) |
Recoveries | 20 | 13 |
Balance, end of period | 3,959 | 3,770 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 5,130 | 4,364 |
Provision | (112) | 229 |
Charge-offs | (35) | |
Recoveries | 56 | 3 |
Balance, end of period | 5,074 | 4,561 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 560 | 616 |
Provision | 255 | (21) |
Charge-offs | (209) | (41) |
Recoveries | 21 | |
Balance, end of period | 606 | 575 |
Residential Construction [Member] | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 452 | 303 |
Provision | 68 | 150 |
Charge-offs | ||
Recoveries | ||
Balance, end of period | 520 | 453 |
Other Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 1,250 | 1,025 |
Provision | (42) | 63 |
Charge-offs | ||
Recoveries | 8 | 20 |
Balance, end of period | 1,216 | 1,108 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 608 | 503 |
Provision | 43 | 128 |
Charge-offs | (59) | |
Recoveries | 4 | 5 |
Balance, end of period | 596 | 636 |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning balance | 76 | 58 |
Provision | (130) | (37) |
Charge-offs | (26) | (29) |
Recoveries | 152 | 72 |
Balance, end of period | $ 72 | $ 64 |
ALLOWANCE FOR LOAN LOSSES (De_2
ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Allowance for loan losses | ||||
Individually evaluated for impairment | $ 353 | $ 167 | ||
Collectively evaluated for impairment | 11,690 | 11,818 | ||
Balance, end of period | 12,043 | 11,985 | $ 11,167 | $ 10,887 |
Loans Receivable | ||||
Individually evaluated for impairment | 11,197 | 10,885 | ||
Collectively evaluated for impairment | 1,068,640 | 1,065,184 | ||
Total Loans Receivable | 1,079,837 | 1,076,069 | ||
One To Four Family Residential [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 148 | 79 | ||
Collectively evaluated for impairment | 3,811 | 3,830 | ||
Balance, end of period | 3,959 | 3,909 | 3,770 | 4,018 |
Loans Receivable | ||||
Individually evaluated for impairment | 3,262 | 2,900 | ||
Collectively evaluated for impairment | 325,414 | 322,255 | ||
Total Loans Receivable | 328,676 | 325,155 | ||
Commercial Real Estate Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 80 | 27 | ||
Collectively evaluated for impairment | 4,994 | 5,103 | ||
Balance, end of period | 5,074 | 5,130 | 4,561 | 4,364 |
Loans Receivable | ||||
Individually evaluated for impairment | 5,994 | 6,019 | ||
Collectively evaluated for impairment | 493,085 | 490,530 | ||
Total Loans Receivable | 499,079 | 496,549 | ||
Home Equity Line of Credit [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 74 | |||
Collectively evaluated for impairment | 532 | 560 | ||
Balance, end of period | 606 | 560 | 575 | 616 |
Loans Receivable | ||||
Individually evaluated for impairment | 312 | 313 | ||
Collectively evaluated for impairment | 47,500 | 48,512 | ||
Total Loans Receivable | 47,812 | 48,825 | ||
Residential Construction [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 520 | 452 | ||
Balance, end of period | 520 | 452 | 453 | 303 |
Loans Receivable | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 46,566 | 39,488 | ||
Total Loans Receivable | 46,566 | 39,488 | ||
Other Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 46 | 54 | ||
Collectively evaluated for impairment | 1,170 | 1,196 | ||
Balance, end of period | 1,216 | 1,250 | 1,108 | 1,025 |
Loans Receivable | ||||
Individually evaluated for impairment | 1,358 | 1,377 | ||
Collectively evaluated for impairment | 97,918 | 103,087 | ||
Total Loans Receivable | 99,276 | 104,464 | ||
Commercial Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 5 | 7 | ||
Collectively evaluated for impairment | 591 | 601 | ||
Balance, end of period | 596 | 608 | 636 | 503 |
Loans Receivable | ||||
Individually evaluated for impairment | 271 | 276 | ||
Collectively evaluated for impairment | 51,563 | 54,367 | ||
Total Loans Receivable | 51,834 | 54,643 | ||
Consumer Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 72 | 76 | ||
Balance, end of period | 72 | 76 | $ 64 | $ 58 |
Loans Receivable | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 6,594 | 6,945 | ||
Total Loans Receivable | $ 6,594 | $ 6,945 |
ALLOWANCE FOR LOAN LOSSES (De_3
ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Loans receivable | $ 1,079,837 | $ 1,076,069 |
One To Four Family Residential [Member] | ||
Loans receivable | 328,676 | 325,155 |
Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 499,079 | 496,549 |
Home Equity Line of Credit [Member] | ||
Loans receivable | 47,812 | 48,825 |
Residential Construction [Member] | ||
Loans receivable | 46,566 | 39,488 |
Other Portfolio Segment [Member] | ||
Loans receivable | 99,276 | 104,464 |
Commercial Portfolio Segment [Member] | ||
Loans receivable | 51,834 | 54,643 |
Consumer Portfolio Segment [Member] | ||
Loans receivable | 6,594 | 6,945 |
Graded Loan [Member] | ||
Loans receivable | 859,724 | 852,337 |
Graded Loan [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 182,985 | 179,044 |
Graded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 492,084 | 486,105 |
Graded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | 8,950 | 9,841 |
Graded Loan [Member] | Residential Construction [Member] | ||
Loans receivable | 36,192 | 31,128 |
Graded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 87,449 | 93,066 |
Graded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 51,822 | 52,632 |
Graded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | 242 | 521 |
Graded Loan [Member] | Loan Grade One [Member] | ||
Loans receivable | 8,646 | 8,840 |
Graded Loan [Member] | Loan Grade One [Member] | One To Four Family Residential [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade One [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 7,449 | 7,569 |
Graded Loan [Member] | Loan Grade One [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade One [Member] | Residential Construction [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade One [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade One [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 1,191 | 1,264 |
Graded Loan [Member] | Loan Grade One [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | 6 | 7 |
Graded Loan [Member] | Loan Grade Two [Member] | ||
Loans receivable | 11,348 | 7,880 |
Graded Loan [Member] | Loan Grade Two [Member] | One To Four Family Residential [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Two [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 10,444 | 7,860 |
Graded Loan [Member] | Loan Grade Two [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Two [Member] | Residential Construction [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Two [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Two [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 904 | 20 |
Graded Loan [Member] | Loan Grade Two [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Three [Member] | ||
Loans receivable | 163,093 | 162,016 |
Graded Loan [Member] | Loan Grade Three [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 31,789 | 31,623 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 89,877 | 87,756 |
Graded Loan [Member] | Loan Grade Three [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | 4,839 | 5,212 |
Graded Loan [Member] | Loan Grade Three [Member] | Residential Construction [Member] | ||
Loans receivable | 9,562 | 9,365 |
Graded Loan [Member] | Loan Grade Three [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 12,292 | 12,111 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 14,717 | 15,685 |
Graded Loan [Member] | Loan Grade Three [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | 17 | 264 |
Graded Loan [Member] | Loan Grade Four [Member] | ||
Loans receivable | 512,412 | 508,955 |
Graded Loan [Member] | Loan Grade Four [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 124,622 | 121,688 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 281,883 | 280,630 |
Graded Loan [Member] | Loan Grade Four [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | 3,719 | 4,014 |
Graded Loan [Member] | Loan Grade Four [Member] | Residential Construction [Member] | ||
Loans receivable | 24,186 | 18,358 |
Graded Loan [Member] | Loan Grade Four [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 55,743 | 61,646 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 22,044 | 22,374 |
Graded Loan [Member] | Loan Grade Four [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | 215 | 245 |
Graded Loan [Member] | Loan Grade Five [Member] | ||
Loans receivable | 147,256 | 147,397 |
Graded Loan [Member] | Loan Grade Five [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 25,610 | 24,738 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 88,755 | 88,698 |
Graded Loan [Member] | Loan Grade Five [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | 392 | 615 |
Graded Loan [Member] | Loan Grade Five [Member] | Residential Construction [Member] | ||
Loans receivable | 2,443 | 3,404 |
Graded Loan [Member] | Loan Grade Five [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 17,947 | 17,630 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 12,105 | 12,307 |
Graded Loan [Member] | Loan Grade Five [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | 4 | 5 |
Graded Loan [Member] | Loan Grade Six [Member] | ||
Loans receivable | 10,262 | 9,987 |
Graded Loan [Member] | Loan Grade Six [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 318 | 321 |
Graded Loan [Member] | Loan Grade Six [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 8,185 | 7,867 |
Graded Loan [Member] | Loan Grade Six [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Six [Member] | Residential Construction [Member] | ||
Loans receivable | 1 | 1 |
Graded Loan [Member] | Loan Grade Six [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 1,280 | 1,303 |
Graded Loan [Member] | Loan Grade Six [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 478 | 495 |
Graded Loan [Member] | Loan Grade Six [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Seven [Member] | ||
Loans receivable | 6,707 | 7,262 |
Graded Loan [Member] | Loan Grade Seven [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 646 | 674 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 5,491 | 5,725 |
Graded Loan [Member] | Loan Grade Seven [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Seven [Member] | Residential Construction [Member] | ||
Loans receivable | ||
Graded Loan [Member] | Loan Grade Seven [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 187 | 376 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 383 | 487 |
Graded Loan [Member] | Loan Grade Seven [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | ||
UnGraded Loan [Member] | ||
Loans receivable | 220,113 | 223,732 |
UnGraded Loan [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 145,691 | 146,111 |
UnGraded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 6,995 | 10,444 |
UnGraded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | 38,862 | 38,984 |
UnGraded Loan [Member] | Residential Construction [Member] | ||
Loans receivable | 10,374 | 8,360 |
UnGraded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 11,827 | 11,398 |
UnGraded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 12 | 2,011 |
UnGraded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | 6,352 | 6,424 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | ||
Loans receivable | 1,448 | 907 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 1,021 | 641 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 19 | 24 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | 343 | 178 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Residential Construction [Member] | ||
Loans receivable | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 64 | 64 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | 1 | |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | ||
Loans receivable | 220,113 | 223,732 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | One To Four Family Residential [Member] | ||
Loans receivable | 144,670 | 145,470 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans receivable | 6,976 | 10,420 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans receivable | 38,519 | 38,806 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Residential Construction [Member] | ||
Loans receivable | 10,374 | 8,360 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans receivable | 11,763 | 11,334 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Portfolio Segment [Member] | ||
Loans receivable | 12 | 2,011 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Consumer Portfolio Segment [Member] | ||
Loans receivable | $ 6,351 | $ 6,424 |
ALLOWANCE FOR LOAN LOSSES (De_4
ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | $ 9,611 | $ 7,524 |
60-89 Days Past | 122 | 1,835 |
90 Days and Over Past Due | 2,237 | 2,125 |
Total Past Due | 11,970 | 11,484 |
Current | 1,067,867 | 1,064,585 |
Total Loans Receivable | 1,079,837 | 1,076,069 |
One To Four Family Residential [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 4,364 | 3,562 |
60-89 Days Past | 1,317 | |
90 Days and Over Past Due | 251 | 84 |
Total Past Due | 4,615 | 4,963 |
Current | 324,061 | 320,192 |
Total Loans Receivable | 328,676 | 325,155 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 4,291 | 2,615 |
60-89 Days Past | 119 | |
90 Days and Over Past Due | 1,515 | 1,782 |
Total Past Due | 5,925 | 4,397 |
Current | 493,154 | 492,152 |
Total Loans Receivable | 499,079 | 496,549 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 159 | 400 |
60-89 Days Past | 457 | |
90 Days and Over Past Due | 343 | 73 |
Total Past Due | 502 | 930 |
Current | 47,310 | 47,895 |
Total Loans Receivable | 47,812 | 48,825 |
Residential Construction [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 350 | |
60-89 Days Past | ||
90 Days and Over Past Due | 1 | 1 |
Total Past Due | 351 | 1 |
Current | 46,215 | 39,487 |
Total Loans Receivable | 46,566 | 39,488 |
Other Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 129 | 613 |
60-89 Days Past | 32 | |
90 Days and Over Past Due | 64 | 64 |
Total Past Due | 193 | 709 |
Current | 99,083 | 103,755 |
Total Loans Receivable | 99,276 | 104,464 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 283 | 307 |
60-89 Days Past | 25 | |
90 Days and Over Past Due | 62 | 121 |
Total Past Due | 345 | 453 |
Current | 51,489 | 54,190 |
Total Loans Receivable | 51,834 | 54,643 |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 35 | 27 |
60-89 Days Past | 3 | 4 |
90 Days and Over Past Due | 1 | |
Total Past Due | 39 | 31 |
Current | 6,555 | 6,914 |
Total Loans Receivable | $ 6,594 | $ 6,945 |
ALLOWANCE FOR LOAN LOSSES (De_5
ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | $ 7,011 | $ 5,328 |
Unpaid Principal Balance, without a valuation allowance | 9,757 | 7,779 |
Recorded Balance, Recorded Balance, with a valuation allowance | 4,186 | 5,557 |
Unpaid Principal Balance, with a valuation allowance | 4,186 | 5,557 |
Recorded Balance | 11,197 | 10,885 |
Unpaid Principal Balance | 13,943 | 13,336 |
Specific Allowance | 353 | 167 |
One To Four Family Residential [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 2,324 | 845 |
Unpaid Principal Balance, without a valuation allowance | 2,475 | 923 |
Recorded Balance, Recorded Balance, with a valuation allowance | 938 | 2,055 |
Unpaid Principal Balance, with a valuation allowance | 938 | 2,055 |
Recorded Balance | 3,262 | 2,900 |
Unpaid Principal Balance | 3,413 | 2,978 |
Specific Allowance | 148 | 79 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 3,925 | 3,835 |
Unpaid Principal Balance, without a valuation allowance | 6,271 | 6,207 |
Recorded Balance, Recorded Balance, with a valuation allowance | 2,069 | 2,184 |
Unpaid Principal Balance, with a valuation allowance | 2,069 | 2,184 |
Recorded Balance | 5,994 | 6,019 |
Unpaid Principal Balance | 8,340 | 8,391 |
Specific Allowance | 80 | 27 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 213 | 283 |
Unpaid Principal Balance, without a valuation allowance | 328 | 283 |
Recorded Balance, Recorded Balance, with a valuation allowance | 99 | 30 |
Unpaid Principal Balance, with a valuation allowance | 99 | 30 |
Recorded Balance | 312 | 313 |
Unpaid Principal Balance | 427 | 313 |
Specific Allowance | 74 | |
Other Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 549 | 365 |
Unpaid Principal Balance, without a valuation allowance | 683 | 366 |
Recorded Balance, Recorded Balance, with a valuation allowance | 809 | 1,012 |
Unpaid Principal Balance, with a valuation allowance | 809 | 1,012 |
Recorded Balance | 1,358 | 1,377 |
Unpaid Principal Balance | 1,492 | 1,378 |
Specific Allowance | 46 | 54 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, Recorded Balance, with a valuation allowance | 271 | 276 |
Unpaid Principal Balance, with a valuation allowance | 271 | 276 |
Recorded Balance | 271 | 276 |
Unpaid Principal Balance | 271 | 276 |
Specific Allowance | $ 5 | $ 7 |
ALLOWANCE FOR LOAN LOSSES (De_6
ALLOWANCE FOR LOAN LOSSES (Details 6) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Average Investment in Impaired Loans, without a valuation allowance | $ 9,768 | $ 8,616 |
Interest Income Recognized, without a valuation allowance | 86 | 79 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 4,284 | 5,328 |
Interest Income Recognized, with a valuation allowance | 51 | 53 |
Average Investment in Impaired Loans | 14,052 | 13,944 |
Interest Income Recognized | 137 | 132 |
One To Four Family Residential [Member] | ||
Average Investment in Impaired Loans, without a valuation allowance | 2,483 | 1,877 |
Interest Income Recognized, without a valuation allowance | 29 | 29 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 937 | 1,621 |
Interest Income Recognized, with a valuation allowance | 8 | 16 |
Average Investment in Impaired Loans | 3,420 | 3,498 |
Interest Income Recognized | 37 | 45 |
Commercial Real Estate Portfolio Segment [Member] | ||
Average Investment in Impaired Loans, without a valuation allowance | 6,272 | 5,613 |
Interest Income Recognized, without a valuation allowance | 37 | 31 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 2,155 | 1,693 |
Interest Income Recognized, with a valuation allowance | 23 | 23 |
Average Investment in Impaired Loans | 8,427 | 7,306 |
Interest Income Recognized | 60 | 54 |
Home Equity Line of Credit [Member] | ||
Average Investment in Impaired Loans, without a valuation allowance | 328 | 427 |
Interest Income Recognized, without a valuation allowance | 15 | 14 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 99 | |
Interest Income Recognized, with a valuation allowance | 2 | |
Average Investment in Impaired Loans | 427 | 427 |
Interest Income Recognized | 17 | 14 |
Other Portfolio Segment [Member] | ||
Average Investment in Impaired Loans, without a valuation allowance | 685 | 699 |
Interest Income Recognized, without a valuation allowance | 5 | 5 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 819 | 1,724 |
Interest Income Recognized, with a valuation allowance | 12 | 9 |
Average Investment in Impaired Loans | 1,504 | 2,423 |
Interest Income Recognized | 17 | 14 |
Commercial Portfolio Segment [Member] | ||
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 274 | 290 |
Interest Income Recognized, with a valuation allowance | 6 | 5 |
Average Investment in Impaired Loans | 274 | 290 |
Interest Income Recognized | $ 6 | $ 5 |
ALLOWANCE FOR LOAN LOSSES (De_7
ALLOWANCE FOR LOAN LOSSES (Details 7) - Nonperforming Financing Receivable [Member] - Loans [Member] - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | $ 4,906 | $ 4,857 |
One To Four Family Residential [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 1,394 | 1,037 |
Commercial Real Estate Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 2,854 | 3,266 |
Home Equity Line of Credit [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 343 | 178 |
Residential Construction [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 1 | |
Other Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 251 | 256 |
Commercial Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 62 | 120 |
Consumer Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | $ 1 |
ALLOWANCE FOR LOAN LOSSES (De_8
ALLOWANCE FOR LOAN LOSSES (Details 8) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Modifications [Line Items] | ||
TDR loans | $ 9,561 | $ 9,633 |
Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 5,124 | 7,588 |
Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,757 | 2,045 |
One To Four Family Residential [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 2,496 | 2,515 |
One To Four Family Residential [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 2,138 | 2,154 |
One To Four Family Residential [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 358 | 361 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 7,804 | 5,152 |
Commercial Real Estate Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 3,912 | 3,690 |
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,212 | 1,462 |
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 | 283 |
Home Equity Line of Credit [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 30 | |
Other Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,357 | 1,377 |
Other Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,170 | 1,185 |
Other Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 187 | 192 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 271 | 276 |
Commercial Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 271 | 276 |
Commercial Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount at beginning of period | $ 4,840 | $ 4,840 |
Additions from acquisitions during the period | ||
Gross balance at end of period | 4,840 | 4,840 |
Accumulated amortization | (1,436) | (1,263) |
Finite Lived Core Deposits Net | 3,404 | $ 3,577 |
Amortization expense | $ 700 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Deposits By Type [Line Items] | |||
Balance | $ 1,246,219 | $ 1,205,908 | $ 1,221,240 |
Interest Expense | 2,926 | 1,382 | 8,118 |
Noninterest-bearing demand [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 194,562 | 192,916 | 184,404 |
Interest Expense | |||
Interest-bearing Deposits [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 198,516 | 206,530 | 209,085 |
Interest Expense | 98 | 87 | 374 |
Money Market Funds [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 390,839 | 336,625 | 356,086 |
Interest Expense | 1,138 | 366 | 2,637 |
Savings Deposits [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 49,996 | 52,162 | 50,716 |
Interest Expense | 14 | 15 | 59 |
Time deposit [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 412,306 | 417,675 | 420,949 |
Interest Expense | $ 1,676 | $ 914 | $ 5,048 |
DEPOSITS (Details 2)
DEPOSITS (Details 2) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Disclosure Deposits Details 3Abstract | |||
Wholesale money market | $ 5,063 | $ 5,030 | $ 25,026 |
Wholesale time deposits | 72,259 | 70,978 | 56,232 |
Total | $ 77,322 | $ 76,008 | $ 81,258 |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Federal Home Loan Bank, Advances [Abstract] | ||
2019 | $ 163,500 | $ 168,500 |
2020 | 45,000 | 45,000 |
2024 | 5,000 | |
Total | $ 213,500 | $ 213,500 |
Federal Home Loan Bank, Advances, Weighted Average Rate [Abstract] | ||
2019 | 2.59% | 2.52% |
2020 | 2.80% | 2.80% |
2024 | 2.81% | |
Total | 2.64% | 2.58% |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Interest rate swap | $ 545 | $ (3,396) | $ (3,424) | $ (23) | |
Interest Expense | 4,589 | $ 2,449 | |||
Designated as Hedging Instrument [Member] | |||||
Asset derivatives, Fair value | [1] | 260 | 354 | ||
Liability derivatives, Fair value | [1] | 860 | 462 | ||
Designated as Hedging Instrument [Member] | Interest rate swaps [Member] | |||||
Asset derivatives, Fair value | [1] | 260 | 354 | ||
Liability derivatives, Fair value | [1] | 860 | 462 | ||
Designated as Hedging Instrument [Member] | Mortgage Derivatives [Member] | |||||
Asset derivatives, Fair value | [1] | 45 | 34 | ||
Liability derivatives, Fair value | [1] | 21 | 22 | ||
Not Designated as Hedging Instrument [Member] | |||||
Asset derivatives, Fair value | [1] | 45 | 34 | ||
Liability derivatives, Fair value | [1] | $ 21 | $ 22 | ||
[1] | All derivative assets are located in "Other assets" on the consolidated balance sheets and all derivative liabilities are located in "Other liabilities" on the consolidated balance sheets. |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest Income | $ 16,542 | $ 14,842 |
Interest Expenses | 4,589 | 2,449 |
Fair Value Hedging Relationships [Member] | Hedged Assets [Member] | ||
Interest Income | 259 | |
Fair Value Hedging Relationships [Member] | Interest Rate Swap - Derivatives Designated As Hedging Instruments [Member] | ||
Interest Income | (274) | |
Cash Flow Hedging Relationships [Member] | Interest Rate Swap - Accumulated Other Comprehensive Loss Into Income [Member] | ||
Interest Expenses | $ (65) | $ (56) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Loan Receivable | $ 1,079,837 | $ 1,076,069 | |
Hedged Assets [Member] | |||
Loan Receivable | [1] | 97,891 | |
Hedged Assets [Member] | Fair Value Hedging Relationships [Member] | |||
Loan Receivable | [1] | $ 503 | |
[1] | These amounts include the amortized cost basis of the closed portfolio used to designate the hedging relationship in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At March 31, 2019, the amortized cost basis of the closed portfolio used in the the hedging relationship was $97.9 million, the cumulative basis adjustment associated with the hedging relationship was $0.5 million, and the amount of the designated hedged item was $25.0 million. |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 4) - Junior Subordinated Debt [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Notional Amount | $ 14,000 |
Fixed Interest Rate | 0.958% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 4 years |
Notional Amount | $ 14,000 |
Fixed Interest Rate | 3.02% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 3 years |
DERIVATIVE FINANCIAL INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 5) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Disclosure Derivative Financial Instruments And Hedging Activities Details 5Abstract | |||
Amount of gain (loss) recognized in AOCI on derivatives | $ (159) | $ 202 | $ 2 |
Amount of gain (loss) reclassified from AOCI into income | (65) | (56) | (431) |
Amount of gain (loss) recognized in consolidated statement of comprehensive income | $ (224) | $ 146 | $ (429) |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 6) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Amount of gain (loss) recognized in income | $ (27) | $ 27 | |
Interest Rate Lock Commitments [Member] | |||
Amount of gain (loss) recognized in income | 11 | 17 | |
Forward Sales Commitments [Member] | |||
Amount of gain (loss) recognized in income | (38) | $ 10 | |
Residential Real Estate [Member] | Interest Rate Lock Commitments [Member] | |||
Fair value Derivative Assets and Liabilities | 2,736 | $ 1,627 | |
Residential Real Estate [Member] | Forward Sales Commitments [Member] | |||
Fair value Derivative Assets and Liabilities | $ 4,250 | $ 3,500 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Allowance for loan losses | $ 2,729 | $ 2,703 |
Deferred compensation and post employment benefits | 1,874 | 1,854 |
Non-accrual interest | 251 | 245 |
Valuation reserve for other real estate | 198 | 191 |
North Carolina NOL carryover | 233 | 293 |
Federal NOL carryover | 554 | 1,231 |
AMT credit carryforward | 316 | |
General federal business credit carryover | 826 | 691 |
Unrealized losses on securities | 581 | 1,061 |
Loan basis differences | 46 | 50 |
Fixed assets | 131 | 123 |
Core deposit intangible | 148 | 129 |
Derivative instruments | 21 | |
Other | 1,122 | 1,207 |
Total deferred tax assets | 8,714 | 10,094 |
Deferred tax liabilities: | ||
Loan servicing rights | 633 | 653 |
Goodwill | 581 | 495 |
Core deposit intangible | 70 | 74 |
Deferred loan costs | 1,014 | 1,001 |
Prepaid expenses | 14 | 14 |
Unrealized gains on securities | 961 | 105 |
Derivative instruments | 6 | 29 |
Investment in partnerships | 170 | 155 |
Other | 17 | |
Total deferred tax liabilities | 3,449 | 2,543 |
Net deferred tax asset | $ 5,265 | $ 7,551 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Federal [Member] | |
Unused Net Operating Losses | $ 2,803 |
Federal [Member] | Minimum [Member] | |
Expiration Dates | 2032 |
Federal [Member] | Maximum [Member] | |
Expiration Dates | 2037 |
North Carolina [Member] | |
Unused Net Operating Losses | $ 13,708 |
North Carolina [Member] | Minimum [Member] | |
Expiration Dates | 2026 |
North Carolina [Member] | Maximum [Member] | |
Expiration Dates | 2029 |
Federal general business credit [Member] | |
Unused Net Operating Losses | $ 826 |
Federal general business credit [Member] | Minimum [Member] | |
Expiration Dates | 2037 |
Federal general business credit [Member] | Maximum [Member] | |
Expiration Dates | 2039 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net income | $ 3,815 | $ 3,582 |
Weighted average shares outstanding | 6,918,769 | 6,885,911 |
Effect of dilutive stock options | 6,960 | 96,871 |
Effect of dilutive restricted stock units | 17,538 | 45,102 |
Average shares outstanding | 6,943,267 | 7,027,884 |
Earnings per share - basic | $ 0.55 | $ 0.52 |
Earnings per share - diluted | 0.55 | 0.51 |
Equity Option [Member] | ||
Average Stock Price | $ 23.12 | $ 28.56 |
Anti-Dilutaive Shares | 91,977 | 19,592 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Balance, beginning of period | $ (3,424) | $ (23) | $ (23) |
Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities available for sale | |||
Change in net unrealized holding losses on securities available for sale | 5,390 | (4,505) | |
Reclassification adjustment for net securities losses realized in net income | 12 | ||
Change in unrealized holding gains and losses on cash flow hedge | (159) | 202 | 2 |
Reclassification adjustment for cash flow hedge effectiveness | (65) | (56) | (431) |
Cumulative effect of change in accounting principle | |||
Income tax effect | (1,197) | 965 | |
Balance, end of period | 545 | (3,396) | (3,424) |
Available-for-sale Securities [Member] | |||
Balance, beginning of period | (3,528) | (455) | (455) |
Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities available for sale | |||
Change in net unrealized holding losses on securities available for sale | 5,390 | (4,505) | |
Reclassification adjustment for net securities losses realized in net income | 12 | ||
Change in unrealized holding gains and losses on cash flow hedge | |||
Reclassification adjustment for cash flow hedge effectiveness | |||
Cumulative effect of change in accounting principle | 9 | ||
Income tax effect | (1,244) | 996 | |
Balance, end of period | 618 | (3,943) | (3,528) |
Cash Flow Hedge [Member] | |||
Balance, beginning of period | 104 | 432 | 432 |
Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities available for sale | |||
Change in net unrealized holding losses on securities available for sale | |||
Reclassification adjustment for net securities losses realized in net income | |||
Change in unrealized holding gains and losses on cash flow hedge | (159) | 202 | |
Reclassification adjustment for cash flow hedge effectiveness | (65) | (56) | |
Cumulative effect of change in accounting principle | |||
Income tax effect | 47 | (31) | |
Balance, end of period | $ (73) | $ 547 | $ 104 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense - Junior subordinated notes | $ 139 | $ 138 |
Cash Flow Hedge [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense - FHLB advances | 30 | |
Interest expense - Junior subordinated notes | 65 | 26 |
Tax effect | (15) | (13) |
Impact, net of tax | 50 | 43 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Impact, net of tax | 50 | 34 |
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 | (12) | |
Tax effect | 3 | |
Impact, net of tax | $ (9) |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 176,364 |
Lines of credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | 175,353 |
Standby Letters of Credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 1,011 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Fixed | $ 24,709 |
Variable | 9,323 |
Total | $ 34,032 |
Minimum [Member] | |
Fixed (as a percent) | 4.25% |
Variable (as a percent) | 3.38% |
Maximum [Member] | |
Fixed (as a percent) | 12.00% |
Variable (as a percent) | 8.00% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
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 | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 370,272 | $ 371,572 |
Liabilities measured at fair value on recurring basis | 882 | 484 |
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 | 2,753 | 2,837 |
Mortgage Derivatives [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 45 | 34 |
Liabilities measured at fair value on recurring basis | 21 | 22 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 260 | 354 |
Liabilities measured at fair value on recurring basis | 861 | 462 |
Mortgage loans held for sale [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 3,270 | 2,431 |
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 | 11,803 | 11,127 |
Liabilities measured at fair value on recurring basis | ||
Fair Value, Inputs, Level 1 [Member] | 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 | ||
Fair Value, Inputs, Level 1 [Member] | Mortgage Derivatives [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Liabilities measured at fair value on recurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Liabilities measured at fair value on recurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Mortgage loans held for sale [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
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 | 351,908 | 354,650 |
Liabilities measured at fair value on recurring basis | 861 | 462 |
Fair Value, Inputs, Level 2 [Member] | 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 | ||
Fair Value, Inputs, Level 2 [Member] | Mortgage Derivatives [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Liabilities measured at fair value on recurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 260 | 354 |
Liabilities measured at fair value on recurring basis | 861 | 462 |
Fair Value, Inputs, Level 2 [Member] | Mortgage loans held for sale [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
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 | 6,561 | 5,795 |
Liabilities measured at fair value on recurring basis | 21 | 22 |
Fair Value, Inputs, Level 3 [Member] | 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 | 2,753 | 2,837 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Derivatives [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 45 | 34 |
Liabilities measured at fair value on recurring basis | 21 | 22 |
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Liabilities measured at fair value on recurring basis | ||
Fair Value, Inputs, Level 3 [Member] | Mortgage loans held for sale [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 3,270 | 2,431 |
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 | 6,812 | 6,178 |
Trading account assets [Member] | 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 | 6,812 | 6,178 |
Trading account 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 | ||
Trading account assets [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 | ||
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 | 357,132 | 359,738 |
Available-for-sale Securities [Member] | U.S. Treasury securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 33,822 | 33,990 |
Available-for-sale Securities [Member] | Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 117,479 | 114,402 |
Available-for-sale Securities [Member] | Mortgage-backed Securities - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 81,526 | 85,184 |
Available-for-sale Securities [Member] | Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 21,905 | 21,889 |
Available-for-sale Securities [Member] | Collateralized Mortgage Obligations - Non Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 67,139 | 69,171 |
Available-for-sale Securities [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 15,212 | 15,077 |
Available-for-sale Securities [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 20,049 | 20,025 |
Available-for-sale Securities [Member] | 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 | 4,991 | 4,949 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member] | U.S. Treasury securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 4,991 | 4,949 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Mortgage-backed Securities - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Collateralized Mortgage Obligations - Non Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [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 | 351,648 | 354,296 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member] | U.S. Treasury securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 28,831 | 29,041 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 117,479 | 114,402 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage-backed Securities - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 81,526 | 85,184 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 21,905 | 21,889 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Collateralized Mortgage Obligations - Non Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 67,139 | 69,171 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 15,212 | 15,077 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 19,556 | 19,532 |
Available-for-sale Securities [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 | 493 | 493 |
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member] | U.S. Treasury securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage-backed Securities - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Collateralized Mortgage Obligations - Non Guaranteed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Collateralized mortgage obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | ||
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 493 | $ 493 |
FAIR VALUE DISCLOSURES (Detai_2
FAIR VALUE DISCLOSURES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disclosure Fair Value Disclosures Details 2Abstract | ||
Balance at beginning of period | $ 5,773 | $ 3,321 |
Corporate bonds Transfer to Level 2 | 1,331 | |
Mortgage loans held for sale | 839 | |
Capitalization from loans sold | 47 | 100 |
Fair value adjustment | (131) | (130) |
Mortgage derivative gains included in Other income | 12 | 27 |
Balance at end of period | $ 6,540 | $ 4,649 |
FAIR VALUE DISCLOSURES (Detai_3
FAIR VALUE DISCLOSURES (Details 3) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets measured at fair value on nonrecurring basis | $ 370,272 | $ 371,572 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets measured at fair value on nonrecurring basis | 6,561 | 5,795 |
Fair Value, Measurements, Nonrecurring [Member] | ||
Assets measured at fair value on nonrecurring basis | 9,267 | 7,821 |
Impaired loans measured at present value | 4,200 | 5,600 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets measured at fair value on nonrecurring basis | 9,267 | 7,821 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 2,324 | 845 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 3,925 | 3,835 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Home Equity Line of Credit [Member] | ||
Assets measured at fair value on nonrecurring basis | 213 | 283 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 549 | 365 |
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 | 2,324 | 845 |
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 | 3,925 | 3,835 |
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 | 213 | 283 |
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 | 549 | 365 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 228 | |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 949 | 949 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 1,307 | 1,316 |
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 | 228 | |
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 | 949 | 949 |
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 | $ 1,307 | $ 1,316 |
FAIR VALUE DISCLOSURES (Detai_4
FAIR VALUE DISCLOSURES (Details 4) | 3 Months Ended |
Mar. 31, 2019 | |
Impaired Loans [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Unobservable Input | Collateral discounts and estimated selling cost |
Valuation Technique | Discounted Appraisals |
Impaired Loans [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 0.00% |
Impaired Loans [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 30.00% |
Real Estate Owned [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Unobservable Input | Collateral discounts and estimated selling cost |
Valuation Technique | Discounted Appraisals |
Real Estate Owned [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 0.00% |
Real Estate Owned [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 30.00% |
Corporate Bond [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Unobservable Input | Recent trade pricing |
Valuation Technique | Discounted Cash Flows |
Corporate Bond [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 0.00% |
Corporate Bond [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 10.00% |
Loan Servicing Rights[Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Valuation Technique | Discounted Cash Flows |
Loan Servicing Rights[Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Prepayment Speed | 9.00% |
Discount rate | 10.00% |
Loan Servicing Rights[Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Prepayment Speed | 20.00% |
Discount rate | 14.00% |
Mortgage loans held for sale [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Unobservable Input | External pricing model |
Valuation Technique | Recent trade pricing |
Mortgage loans held for sale [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 101.00% |
Mortgage loans held for sale [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 103.00% |
Mortgage Derivatives [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Unobservable Input | External pricing model |
Valuation Technique | Pull-through rate |
Mortgage Derivatives [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 78.00% |
Mortgage Derivatives [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 100.00% |
SBIC Investments [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Unobservable Input | Current operations and financial condition |
Valuation Technique | Indicative value provided by fund |
FAIR VALUE DISCLOSURES (Detai_5
FAIR VALUE DISCLOSURES (Details 5) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Assets: | ||||
Cash and equivalents | $ 98,285 | $ 69,119 | $ 123,597 | $ 109,467 |
Trading securities | 6,812 | 6,178 | ||
Securities available for sale | 357,132 | 359,738 | ||
Loans held for sale | 9,208 | 7,570 | ||
Other investments, at cost | 12,092 | 12,039 | ||
Accrued interest receivable | 6,669 | 6,443 | ||
Bank owned life insurance | 32,087 | 32,886 | ||
Loan servicing rights | 2,753 | 2,837 | ||
Liabilities: | ||||
Federal Home Loan Bank advances | 213,500 | 213,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 9,385 | 9,299 | ||
Accrued interest payable | 1,173 | 1,647 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Assets: | ||||
Cash and equivalents | 98,285 | 69,119 | ||
Trading securities | 6,812 | 6,178 | ||
Securities available for sale | 4,991 | 4,949 | ||
Loans held for sale | ||||
Loans receivable, net | ||||
Other investments, at cost | ||||
Accrued interest receivable | ||||
Bank owned life insurance | ||||
Loan servicing rights | ||||
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] | ||||
Assets: | ||||
Cash and equivalents | ||||
Trading securities | ||||
Securities available for sale | 351,648 | 354,297 | ||
Loans held for sale | 6,615 | 5,683 | ||
Loans receivable, net | ||||
Other investments, at cost | 12,092 | 12,039 | ||
Accrued interest receivable | 6,669 | 6,443 | ||
Bank owned life insurance | 32,087 | 32,886 | ||
Loan servicing rights | ||||
SBIC investments | ||||
Liabilities: | ||||
Demand deposits | 833,913 | 800,291 | ||
Time deposits | ||||
Federal Home Loan Bank advances | 213,249 | 213,513 | ||
Junior subordinated debentures | 13,720 | 12,440 | ||
Other borrowings | 9,572 | 9,253 | ||
Accrued interest payable | 1,173 | 1,647 | ||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||||
Assets: | ||||
Derivative asset | 260 | 354 | ||
Liabilities: | ||||
Derivative Liabilities | 861 | 462 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Assets: | ||||
Cash and equivalents | ||||
Trading securities | ||||
Securities available for sale | 493 | 493 | ||
Loans held for sale | 3,270 | 2,431 | ||
Loans receivable, net | 1,046,552 | 1,046,136 | ||
Other investments, at cost | ||||
Accrued interest receivable | ||||
Bank owned life insurance | ||||
Loan servicing rights | 2,753 | 2,837 | ||
SBIC investments | 4,306 | 3,839 | ||
Liabilities: | ||||
Demand deposits | ||||
Time deposits | 390,806 | 424,054 | ||
Federal Home Loan Bank advances | ||||
Junior subordinated debentures | ||||
Other borrowings | ||||
Accrued interest payable | ||||
Fair Value, Inputs, Level 3 [Member] | Mortgage Derivatives [Member] | ||||
Assets: | ||||
Derivative asset | 45 | 34 | ||
Liabilities: | ||||
Derivative Liabilities | 21 | 22 | ||
Reported Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 98,285 | 69,119 | ||
Trading securities | 6,812 | 6,178 | ||
Securities available for sale | 357,132 | 359,739 | ||
Loans held for sale | 9,208 | 7,570 | ||
Loans receivable, net | 1,079,837 | 1,076,069 | ||
Other investments, at cost | 12,092 | 12,039 | ||
Accrued interest receivable | 6,669 | 6,443 | ||
Bank owned life insurance | 32,087 | 32,886 | ||
Loan servicing rights | 2,753 | 2,837 | ||
SBIC investments | 4,306 | 3,839 | ||
Liabilities: | ||||
Demand deposits | 833,913 | 800,291 | ||
Time deposits | 412,306 | 420,949 | ||
Federal Home Loan Bank advances | 213,500 | 213,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 9,385 | 9,299 | ||
Accrued interest payable | 1,173 | 1,647 | ||
Reported Value Measurement [Member] | Interest Rate Swap [Member] | ||||
Assets: | ||||
Derivative asset | 260 | 354 | ||
Liabilities: | ||||
Derivative Liabilities | 861 | 462 | ||
Reported Value Measurement [Member] | Mortgage Derivatives [Member] | ||||
Assets: | ||||
Derivative asset | 45 | 34 | ||
Liabilities: | ||||
Derivative Liabilities | 21 | 22 | ||
Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 98,285 | 69,119 | ||
Trading securities | 6,812 | 6,178 | ||
Securities available for sale | 357,132 | 359,739 | ||
Loans held for sale | 9,885 | 8,114 | ||
Loans receivable, net | 1,046,136 | 1,046,136 | ||
Other investments, at cost | 12,092 | 12,039 | ||
Accrued interest receivable | 6,669 | 6,443 | ||
Bank owned life insurance | 32,087 | 32,886 | ||
Loan servicing rights | 2,753 | 2,837 | ||
SBIC investments | 4,306 | 3,839 | ||
Liabilities: | ||||
Demand deposits | 833,913 | 800,291 | ||
Time deposits | 416,631 | 424,054 | ||
Federal Home Loan Bank advances | 213,249 | 213,513 | ||
Junior subordinated debentures | 13,720 | 12,440 | ||
Other borrowings | 9,572 | 9,253 | ||
Accrued interest payable | 1,173 | 1,647 | ||
Fair Value Measurement [Member] | Interest Rate Swap [Member] | ||||
Assets: | ||||
Derivative asset | 260 | 354 | ||
Liabilities: | ||||
Derivative Liabilities | 861 | 462 | ||
Fair Value Measurement [Member] | Mortgage Derivatives [Member] | ||||
Assets: | ||||
Derivative asset | 45 | 34 | ||
Liabilities: | ||||
Derivative Liabilities | $ 21 | $ 22 |
LEASES (Details)
LEASES (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 107 |
2020 | 69 |
2021 | 53 |
2022 | 53 |
2023 | 53 |
Thereafter | 177 |
Total undiscounted lease payments | 512 |
Discount effect of cash flows | (68) |
Total lease liability | $ 444 |
LEASES (Details Narrative)
LEASES (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Total Operating Lease Cost | $ 56 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] $ / shares in Units, $ in Thousands | Apr. 23, 2019USD ($)$ / shares |
SmartFinancial, Inc. [Member] | |
Termination Fees Paid by First Citizens BancShares, Inc. | $ | $ 6,400 |
First Citizens BancShares, Inc. [Member] | |
Cash Paid for each outstanding share of Enterga common stock (per Share) | $ / shares | $ 30.18 |