Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 04, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-35302 | |
Entity Registrant Name | Entegra Financial Corp. | |
Entity Central Index Key | 0001522327 | |
Entity Tax Identification Number | 45-2460660 | |
Entity Incorporation, State or Country Code | NC | |
Entity Address, Address Line One | 14 One Center Court | |
Entity Address, Address Line Two | Franklin | |
Entity Address, City or Town | North Carolina | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28734 | |
City Area Code | 828 | |
Local Phone Number | 524-7000 | |
Trading Symbol | ENFC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Common Stock, Shares Outstanding | 6,927,523 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Title of Twelve (b) Security | Common Stock, no par value per share |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and due from banks | $ 17,662 | $ 15,409 |
Interest-earning deposits | 126,534 | 53,710 |
Cash and cash equivalents | 144,196 | 69,119 |
Investments - equity securities | 6,947 | 6,178 |
Investments - available for sale | 349,327 | 359,738 |
Other investments, at cost | 11,652 | 12,039 |
Loans held for sale (includes $5,221 and $2,431 at fair value) | 11,142 | 7,570 |
Loans receivable,net | 1,076,581 | 1,076,069 |
Allowance for loan losses | (12,309) | (11,985) |
Fixed assets, net | 25,430 | 26,385 |
Real estate owned | 3,088 | 2,493 |
Accrued interest receivable | 6,163 | 6,443 |
Bank owned life insurance | 32,461 | 32,886 |
Small Business Investment Company Holdings, at cost | 4,993 | 3,839 |
Net deferred tax asset | 2,871 | 7,551 |
Loan servicing rights | 2,520 | 2,837 |
Goodwill | 23,903 | 23,903 |
Core deposit intangible | 3,059 | 3,577 |
Other assets | 11,999 | 7,799 |
Total assets | 1,704,023 | 1,636,441 |
Liabilities: | ||
Core deposits | 905,965 | 795,261 |
Retail certificates of deposit | 303,601 | 349,971 |
Wholesale deposits | 70,379 | 76,008 |
Federal Home Loan Bank advances | 205,500 | 213,500 |
Junior subordinated notes | 14,433 | 14,433 |
Other borrowings | 4,463 | 9,299 |
Post employment benefits | 9,205 | 9,305 |
Accrued interest payable | 1,730 | 1,647 |
Other liabilities | 5,771 | 4,145 |
Total liabilities | 1,521,047 | 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; 6,925,283 and 6,917,703 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | ||
Common stock held by Rabbi Trust, at cost; 17,672 shares at September 30, 2019 and December 31, 2018 | (379) | (379) |
Additional paid in capital | 74,816 | 74,051 |
Retained earnings | 102,600 | 92,624 |
Accumulated other comprehensive loss | 5,939 | (3,424) |
Total shareholders' equity | 182,976 | 162,872 |
Total liabilities and shareholders' equity | $ 1,704,023 | $ 1,636,441 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Loans at fair value | $ 5,221 | $ 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 | 6,925,283 | 6,917,703 |
Common stock, shares outstanding | 6,925,283 | 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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest income: | ||||
Interest and fees on loans | $ 13,444 | $ 12,621 | $ 39,598 | $ 36,981 |
Interest on tax exempt loans | 102 | 106 | 314 | 290 |
Taxable securities | 1,945 | 1,827 | 6,014 | 5,173 |
Tax-exempt securities | 760 | 695 | 2,279 | 1,852 |
Interest-earning deposits | 564 | 528 | 1,520 | 1,309 |
Other | 181 | 201 | 559 | 544 |
Total interest and dividend income | 16,996 | 15,978 | 50,284 | 46,149 |
Interest expense: | ||||
Deposits | 3,633 | 2,331 | 9,963 | 5,540 |
Federal Home Loan Bank advances | 1,315 | 1,091 | 4,094 | 2,841 |
Junior subordinated notes | 142 | 141 | 423 | 421 |
Other borrowings | 52 | 123 | 277 | 352 |
Interest Expense | 5,142 | 3,686 | 14,757 | 9,154 |
Net interest income | 11,854 | 12,292 | 35,527 | 36,995 |
Provision for loan losses | 336 | 246 | 1,054 | |
Net interest income after provision for loan losses | 11,854 | 11,956 | 35,281 | 35,941 |
Noninterest income: | ||||
Servicing (loss) income, net | 51 | 180 | 126 | 313 |
Mortgage banking | 475 | 233 | 1,079 | 755 |
Gain on sale of SBA loans | 290 | 257 | 387 | 547 |
Loss on sale of investments, net | (520) | |||
Equity securities gains (losses) | (30) | 191 | 500 | 183 |
Service charges on deposit accounts | 406 | 406 | 1,205 | 1,242 |
Interchange fees, net | 305 | 276 | 849 | 795 |
Bank owned life insurance | 189 | 195 | 554 | 589 |
Legal settlement income | 1,750 | |||
Other | 372 | 227 | 878 | 775 |
Total noninterest income | 2,058 | 1,965 | 7,328 | 4,679 |
Noninterest expenses: | ||||
Compensation and employee benefits | 5,802 | 5,882 | 17,532 | 17,151 |
Net occupancy | 1,052 | 1,128 | 3,256 | 3,342 |
Federal deposit insurance | (3) | 191 | 280 | 618 |
Professional and advisory | 179 | 413 | 763 | 1,023 |
Data processing | 526 | 532 | 1,529 | 1,607 |
Marketing and advertising | 159 | 227 | 594 | 671 |
Merger-related expenses | 295 | 96 | 3,229 | 564 |
Net cost of operation of real estate owned | 46 | 59 | 76 | 202 |
Other | 861 | 1,013 | 2,944 | 2,925 |
Total noninterest expenses | 8,917 | 9,541 | 30,203 | 28,103 |
Income before taxes | 4,995 | 4,380 | 12,406 | 12,517 |
Income tax expense (benefit) | 998 | 857 | 2,430 | 2,325 |
Net income | $ 3,997 | $ 3,523 | $ 9,976 | $ 10,192 |
Earnings per common share: | ||||
Earnings per share - basic | $ 0.58 | $ 0.51 | $ 1.44 | $ 1.48 |
Earnings per share - diluted | $ 0.56 | $ 0.50 | $ 1.42 | $ 1.45 |
Weighted average common shares outstanding: | ||||
Common shares outstanding - Basic | 6,923,114 | 6,891,672 | 6,920,880 | 6,889,130 |
Common shares outstanding - Diluted | 7,089,850 | 7,031,150 | 7,029,164 | 7,023,714 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 3,997 | $ 3,523 | $ 9,976 | $ 10,192 |
Other comprehensive income (loss): | ||||
Change in unrealized holding gains and losses on securities available for sale | 2,455 | (2,318) | 12,889 | (8,181) |
Reclassification adjustment for securities losses (gains) realized in net income | 947 | |||
Change in unrealized holding gains and losses on cash flow hedge | (85) | 93 | (531) | 303 |
Reclassification adjustment for cash flow hedge effectiveness | (49) | (149) | (172) | (347) |
Other comprehensive income (loss), before tax | 2,321 | (2,374) | 12,186 | (7,278) |
Income tax effect related to items of other comprehensive income (loss) | (532) | 538 | (2,823) | 1,635 |
Other comprehensive income (loss), after tax | 1,789 | (1,836) | 9,363 | (5,643) |
Comprehensive income | $ 5,786 | $ 1,687 | $ 19,339 | $ 4,549 |
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) | (3,382) | ||||
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, 2017 | 72,997 | 78,718 | (23) | (379) | 151,313 | |
Beginning Balance (in shares) at Dec. 31, 2017 | 6,879,191 | |||||
Net income (loss) | 10,192 | |||||
Stock compensation expense | 772 | |||||
Cumulative effect of change in accounting principle | 9 | |||||
Ending Balance at Sep. 30, 2018 | 73,865 | 88,901 | (5,657) | (379) | 156,730 | |
Ending Balance (in shares) at Sep. 30, 2018 | 6,891,672 | |||||
Beginning Balance at Mar. 31, 2018 | 73,360 | 82,291 | (3,396) | (379) | 151,876 | |
Beginning Balance (in shares) at Mar. 31, 2018 | 6,888,415 | |||||
Net income (loss) | 3,087 | 3,087 | ||||
Other comprehensive income, net of tax | (425) | (425) | ||||
Stock compensation expense | 258 | 258 | ||||
Vesting of restricted stock units, net shares surrendered | (10) | (10) | ||||
Vesting of restricted stock units, net shares surrendered (in shares) | 3,257 | |||||
Ending Balance at Jun. 30, 2018 | 73,608 | 85,378 | (3,821) | (379) | 154,786 | |
Ending Balance (in shares) at Jun. 30, 2018 | 6,891,672 | |||||
Net income (loss) | 3,523 | 3,523 | ||||
Other comprehensive income, net of tax | (1,836) | (1,836) | ||||
Stock compensation expense | 257 | 257 | ||||
Ending Balance at Sep. 30, 2018 | 73,865 | 88,901 | (5,657) | (379) | 156,730 | |
Ending Balance (in shares) at Sep. 30, 2018 | 6,891,672 | |||||
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 | |||||
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) | 9,976 | |||||
Stock compensation expense | 870 | |||||
Ending Balance at Sep. 30, 2019 | 74,816 | 102,600 | 5,939 | (379) | 182,976 | |
Ending Balance (in shares) at Sep. 30, 2019 | 6,925,283 | |||||
Beginning Balance at Mar. 31, 2019 | 74,320 | 96,439 | 545 | (379) | 170,925 | |
Beginning Balance (in shares) at Mar. 31, 2019 | 6,919,212 | |||||
Net income (loss) | 2,164 | 2,164 | ||||
Other comprehensive income, net of tax | 3,605 | 3,605 | ||||
Stock compensation expense | 290 | 290 | ||||
Stock options exercised, net of shares surrendered | (10) | (10) | ||||
Stock options exercised, net of shares surrendered (in shares) | 553 | |||||
Vesting of restricted stock units, net shares surrendered | (24) | (24) | ||||
Vesting of restricted stock units, net shares surrendered (in shares) | 2,799 | |||||
Ending Balance at Jun. 30, 2019 | 74,576 | 98,603 | 4,150 | (379) | 176,950 | |
Ending Balance (in shares) at Jun. 30, 2019 | 6,922,564 | |||||
Net income (loss) | 3,997 | 3,997 | ||||
Other comprehensive income, net of tax | 1,789 | 1,789 | ||||
Stock compensation expense | 290 | 290 | ||||
Vesting of restricted stock units, net shares surrendered | (50) | (50) | ||||
Vesting of restricted stock units, net shares surrendered (in shares) | 2,719 | |||||
Ending Balance at Sep. 30, 2019 | $ 74,816 | $ 102,600 | $ 5,939 | $ (379) | $ 182,976 | |
Ending Balance (in shares) at Sep. 30, 2019 | 6,925,283 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 9,976 | $ 10,192 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and accretion | 944 | (255) |
Investment amortization, net | 2,448 | 2,672 |
Equity securities losses (gains) | (500) | (183) |
Provision for loan losses | 246 | 1,054 |
Provision for real estate owned | 35 | 83 |
Share-based compensation expense | 870 | 772 |
Deferred tax expense | 1,815 | 1,796 |
Loss on sales of investments | 520 | |
Income on bank owned life insurance, net | (554) | (589) |
Mortgage banking income, net | (1,079) | (755) |
Gain on sales of SBA loans | (387) | (547) |
Gain on sale of fixed assets | (10) | |
Gain on sale of other investment | (113) | |
Net realized gain on sale of real estate owned | (50) | (16) |
Loans originated for sale | (35,059) | (36,982) |
Proceeds from sale of loans originated for sale | 31,242 | 38,159 |
Net change in operating assets and liabilities: | ||
Accrued interest receivable | 280 | (753) |
Loan servicing rights | 317 | (15) |
Other assets | (3,168) | (3,381) |
Postemployment benefits | (100) | (287) |
Accrued interest payable | 83 | 423 |
Other liabilities | 1,180 | (4,233) |
Net cash provided by operating activities | 8,416 | 7,675 |
Activity for investment securities: | ||
Purchases | (107,204) | |
Maturities/calls and principal repayments | 20,852 | 32,832 |
Sales | 54,174 | |
Proceeds from sale of Visa Class B restricted shares | 427 | |
Net increase in loans | (847) | (62,647) |
Proceeds from sale of real estate owned | 272 | 410 |
Proceeds from settlement of BOLI policies | 1,115 | |
Proceeds from sale of fixed assets | 100 | |
Purchase of fixed assets | (107) | (3,551) |
Purchase of Small Business Investment Company Holdings, at cost | (1,154) | (118) |
Proceeds from sale of other investment | 122 | |
Purchase of other investments, at cost | (78) | |
Redemption of other investments, at cost | 387 | 425 |
Net cash provided by (used in) investing activities | 20,740 | (85,330) |
Cash flows from financing activities: | ||
Net increase in deposits | 56,705 | 92,614 |
Net increase in escrow deposits | 2,157 | 1,970 |
Net (decrease) increase in other borrowings | (4,836) | 773 |
Proceeds from FHLB advances | 195,000 | 255,500 |
Repayment of FHLB advances | (203,000) | (265,500) |
Cash received (paid for shares surrendered) upon exercise of stock options | (10) | 117 |
Cash paid for shares surrendered upon vesting of restricted stock | (95) | (21) |
Net cash provided by financing activities | 45,921 | 85,453 |
Increase (decrease) in cash and cash equivalents | 75,077 | 7,798 |
Cash and cash equivalents, beginning of period | 69,119 | 109,467 |
Cash and cash equivalents, end of period | 144,196 | 117,265 |
Cash paid during the year for: | ||
Interest on deposits and other borrowings | 14,831 | 9,460 |
Income taxes | 804 | 4,070 |
Noncash investing and financing activities: | ||
Real estate acquired in satisfaction of mortgage loans | 1,061 | 1,502 |
Loans originated for disposition of real estate owned | 209 | 774 |
Loan sales/investments to be settled | 1,710 | 2,169 |
Reclassification for adoption of Accounting Standards Update | $ 617 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 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 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 under the Securities Act of 1933, as amended. 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 (as amended, the “2018 Form 10-K”). In the opinion of management, these interim consolidated 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. Merger with First Citizens BancShares, Inc. On April 23, 2019, Entegra entered into a definitive agreement to merge with and into BancShares (the “Merger Agreement”). 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 definitive 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. Approval of the proposed merger by Entegra’s shareholders has been received. Completion of the proposed merger remains subject to the receipt of required regulatory approvals and the satisfaction or waiver of other customary conditions, and is expected to occur during the fourth quarter of 2019. Recent Accounting Standards Updates Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” In September 2016, the Financial Accounting Standards Board (“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 that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018: September 30, December 31, 2019 2018 (Dollars in thousands) Mutual funds $ 6,947 $ 6,178 Equity securities with a fair value of $6.3 million as of September 30, 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 September 30, 2019 are in a mutual fund that qualifies under the Community Reinvestment Act (“CRA”) as CRA activity. There were losses of $30 thousand on equity securities and gains of $0.5 million for the three and nine months ended September 30, 2019, respectively. There were gains on equity securities of $0.2 million for both the three and nine months ended September 30, 2018. The amortized cost and estimated fair values of available-for-sale (“AFS”) investment securities as of September 30, 2019 and December 31, 2018 are summarized as follows: September 30, 2019 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 33,423 $ 184 $ (349 ) $ 33,258 Municipal Securities 113,789 6,367 — 120,156 Mortgage-backed Securities - Guaranteed 73,818 783 (767 ) 73,834 Collateralized Mortgage Obligations - Guaranteed 21,428 382 (36 ) 21,774 Collateralized Mortgage Obligations - Non Guaranteed 63,647 1,642 (25 ) 65,264 Collateralized Loan Obligations 15,511 — (290 ) 15,221 Corporate bonds 19,412 437 (29 ) 19,820 $ 341,028 $ 9,795 $ (1,496 ) $ 349,327 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 the fair value of AFS investment securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: September 30, 2019 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Available-for-Sale: U.S. Treasury & Government Agencies $ 19,818 $ 226 $ 6,912 $ 123 $ 26,730 $ 349 Mortgage-backed Securities - Guaranteed 901 6 37,332 761 38,233 767 Collateralized Mortgage Obligations - Guaranteed 1,799 8 1,797 28 3,596 36 Collateralized Mortgage Obligations - Non Guaranteed 3,003 12 2,748 13 5,751 25 Collateralized Loan Obligations 5,984 30 9,237 260 15,221 290 Corporate Bonds — — 1,032 29 1,032 29 $ 31,505 $ 282 $ 59,058 $ 1,214 $ 90,563 $ 1,496 December 31, 2018 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Available-for-Sale: 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 unrealized losses is detailed in the table below. The Company believes all unrealized losses as of September 30, 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. September 30, 2019 Less Than More Than Total Available-for-Sale: U.S. Treasury & Government Agencies 13 5 18 Mortgage-backed Securities - Guaranteed 1 39 40 Collateralized Mortgage Obligations - Guaranteed 1 1 2 Collateralized Mortgage Obligations - Non Guaranteed 2 5 7 Collateralized loan obligation 3 5 8 Corporate bonds — 1 1 20 56 76 December 31, 2018 Less Than More Than Total Available-for-Sale: 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 obligation 6 1 7 Corporate bonds 3 4 7 88 130 218 The Company received proceeds from sales of investment securities classified as AFS and corresponding gross realized gains and losses as follows: Three Months Ended Nine Months AFS Gross proceeds $ — $ 54,174 Gross realized gains — 77 Gross realized losses — 1,024 Visa Class B Restricted Shares Gross proceeds — 427 Gross realized gains — 427 Gross realized losses — — Total Gross proceeds $ — $ 54,601 Gross realized gains — 504 Gross realized losses — 1,024 There were no investment security sales for the three or nine months ended September 30, 2019. The Company had securities pledged against deposits and borrowings of approximately $160.7 million and $155.8 million at September 30, 2019 and December 31, 2018, respectively. The amortized cost and estimated fair value of investments in debt securities at September 30, 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 $ 1,990 $ 1,996 Over 1 year through 5 years 6,952 6,107 After 5 years through 10 years 31,457 33,331 Over 10 years 141,736 147,021 182,135 188,455 Mortgage-backed securities 158,893 160,872 Total $ 341,028 $ 349,327 |
LOANS RECEIVABLE
LOANS RECEIVABLE | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
LOANS RECEIVABLE | NOTE 3. LOANS RECEIVABLE Loans receivable as of September 30, 2019 and December 31, 2018 are summarized as follows: September 30, December 31, 2019 2018 (Dollars in thousands) Real estate mortgage loans: One-to-four family residential $ 336,098 $ 325,560 Commercial real estate 482,831 498,106 Home equity loans and lines of credit 45,822 48,679 Residential construction 57,687 39,533 Other construction and land 101,988 104,645 Total real estate loans 1,024,426 1,016,523 Commercial and industrial 45,652 54,410 Consumer 6,989 6,842 Total commercial and consumer 52,641 61,252 Loans receivable, gross 1,077,067 1,077,775 Less: Net deferred loan fees (1,030 ) (1,000 ) Acquired loans fair value discount (697 ) (1,048 ) Hedged loans basis adjustment (See Note 8) 1,088 245 Unamortized premium 232 333 Unamortized discount (79 ) (236 ) Loans receivable, net of deferred fees $ 1,076,581 $ 1,076,069 The Bank had $279.9 million and $256.1 million of loans pledged as collateral to secure funding availability with the Federal Home Loan Bank of Atlanta (“FHLB”) at September 30, 2019 and December 31, 2018, respectively. The Bank also had $124.0 million and $114.4 million of loans pledged as collateral to secure funding availability with the Federal Reserve Bank (“FRB”) Discount Window at September 30, 2019 and December 31, 2018, respectively. Included in loans receivable and other borrowings at September 30, 2019 are $4.5 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 and nine month periods ended September 30, 2019 and 2018: For the Three Months Ended For the Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Discount on purchased loans, beginning of period $ 180 $ 399 $ 236 $ 710 Accretion (101 ) (67 ) (157 ) (378 ) Discount on purchased loans, end of period $ 79 $ 332 $ 79 $ 332 The following table presents the activity related to the fair value discount on loans from business combinations for the three and nine month periods ended September 30, 2019 and 2018: For the Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Fair value discount, beginning of period $ 789 $ 1,395 $ 1,048 $ 2,012 Accretion (92 ) (193 ) (351 ) (810 ) Fair value discount, end of period $ 697 $ 1,202 $ 697 $ 1,202 |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 9 Months Ended |
Sep. 30, 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 September 30, 2019 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,979 $ 5,264 $ 521 $ 567 $ 1,143 $ 596 $ 124 $ 12,194 Provision (123 ) (118 ) 18 86 89 120 (72 ) — Charge-offs — (1 ) (49 ) — — — (12 ) (62 ) Recoveries 85 3 25 — 8 18 38 177 Ending balance $ 3,941 $ 5,148 $ 515 $ 653 $ 1,240 $ 734 $ 78 $ 12,309 Three Months Ended September 30, 2018 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,772 $ 4,902 $ 552 $ 453 $ 1,146 $ 633 $ 67 $ 11,525 Provision 33 141 209 12 42 26 (127 ) 336 Charge-offs (6 ) — (219 ) — — (45 ) (17 ) (287 ) Recoveries 1 — — 1 16 2 152 172 Ending balance $ 3,800 $ 5,043 $ 542 $ 466 $ 1,204 $ 616 $ 75 $ 11,746 Nine Months Ended September 30, 2019 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,909 $ 5,130 $ 560 $ 452 $ 1,250 $ 608 $ 76 $ 11,985 Provision (69 ) 52 62 201 (32 ) 161 (129 ) 246 Charge-offs (4 ) (93 ) (258 ) — (1 ) (59 ) (105 ) (520 ) Recoveries 105 59 151 — 23 24 236 598 Ending balance $ 3,941 $ 5,148 $ 515 $ 653 $ 1,240 $ 734 $ 78 $ 12,309 Nine Months Ended September 30, 2018 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Provision (117 ) 711 162 162 136 182 (182 ) 1,054 Charge-offs (116 ) (35 ) (260 ) — — (79 ) (75 ) (565 ) Recoveries 15 3 24 1 43 10 274 370 Ending balance $ 3,800 $ 5,043 $ 542 $ 466 $ 1,204 $ 616 $ 75 $ 11,746 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: September 30, 2019 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 39 $ 41 $ — $ — $ 44 $ 226 $ — $ 350 Collectively evaluated for impairment 3,902 5,107 515 653 1,196 508 78 11,959 $ 3,941 $ 5,148 $ 515 $ 653 $ 1,240 $ 734 $ 78 $ 12,309 Loans Receivable Individually evaluated for impairment $ 1,976 $ 3,489 $ 283 $ — $ 1,270 $ 1,170 $ — $ 8,188 Collectively evaluated for impairment 334,715 478,013 45,708 57,629 100,501 44,738 7,089 1,068,393 $ 336,691 $ 481,502 $ 45,991 $ 57,629 $ 101,771 $ 45,908 $ 7,089 $ 1,076,581 December 31, 2018 One-to-four Commercial Home Equity and 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 lien holders that may further weaken our collateral position. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. Residential construction and other construction and land Residential mortgage construction loans are typically secured by undeveloped or partially developed land with funds to be disbursed as home construction is completed, contingent upon receipt and satisfactory review of invoices and inspections. Declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the collateral’s current market value. Non-commercial construction and land development loans can experience delays in completion and/or cost overruns that exceed the borrower’s financial ability to complete the project. Cost overruns can result in foreclosure of partially completed collateral with unrealized value and diminished marketability. Commercial construction and land development loans are dependent on the supply and demand for commercial real estate in the markets we serve as well as the demand for newly constructed residential homes and building lots. Deterioration in demand could result in significant decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for our customers. Commercial We centrally underwrite each of our commercial loans based primarily upon the customer’s ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. We strive to gain a complete understanding of our borrower’s businesses including the experience and background of the principals 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: September 30, 2019 Loan Grade One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ 2,778 $ 9,441 $ — $ 200 $ 715 $ 713 $ 116 $ 13,963 2 — 10,253 — — — 925 — 11,178 3 30,315 85,865 4,773 10,758 20,902 13,019 16 165,648 4 136,075 278,495 3,546 28,060 54,123 18,525 411 519,235 5 24,948 83,575 687 3,619 15,208 10,908 4 138,949 6 375 8,541 — 1 1,239 478 — 10,634 7 624 4,668 — — 182 1,292 — 6,766 195,115 480,838 9,006 42,638 92,369 45,860 547 866,373 Ungraded Loan Exposure: Performing 140,800 664 36,916 14,991 9,351 48 6,541 209,311 Nonperforming 776 — 69 — 51 — 1 897 Subtotal 141,576 664 36,985 14,991 9,402 48 6,542 210,208 Total $ 336,691 $ 481,502 $ 45,991 $ 57,629 $ 101,771 $ 45,908 $ 7,089 $ 1,076,581 December 31, 2018 Loan Grade One-to-four Commercial Home Equity and 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. September 30, 2019 30-59 Days 60-89 Days 90 Days and Total Current Total Loans (Dollars in thousands) One-to-four family residential $ 3,440 $ 404 $ 652 $ 4,496 $ 332,195 $ 336,691 Commercial real estate 773 2,909 587 4,269 477,233 481,502 Home equity and lines of credit 264 — 69 333 45,658 45,991 Residential construction — — 1 1 57,628 57,629 Other construction and land 175 16 198 389 101,382 101,771 Commercial 15 6 969 990 44,918 45,908 Consumer 70 — 1 71 7,018 7,089 Total $ 4,737 $ 3,335 $ 2,477 $ 10,549 $ 1,066,032 $ 1,076,581 December 31, 2018 30-59 Days 60-89 Days 90 Days and Over 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 September 30, 2019 and December 31, 2018. September 30, 2019 December 31, 2018 Recorded Unpaid Specific Recorded Unpaid Specific (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 1,440 $ 1,593 $ — $ 845 $ 923 $ — Commercial real estate 1,896 4,279 — 3,835 6,207 — Home equity and lines of credit 283 283 — 283 283 — Other construction and land 537 676 — 365 366 — $ 4,156 $ 6,831 $ — $ 5,328 $ 7,779 $ — Loans with a valuation allowance One-to-four family residential $ 536 $ 536 $ 39 $ 2,055 $ 2,055 $ 79 Commercial real estate 1,593 1,593 41 2,184 2,184 27 Home equity and lines of credit — — — 30 30 — Other construction and land 733 733 44 1,012 1,012 54 Commercial 1,170 1,170 226 276 276 7 $ 4,032 $ 4,032 $ 350 $ 5,557 $ 5,557 $ 167 Total One-to-four family residential $ 1,976 $ 2,129 $ 39 $ 2,900 $ 2,978 $ 79 Commercial real estate 3,489 5,872 41 6,019 8,391 27 Home equity and lines of credit 283 283 — 313 313 — Other construction and land 1,270 1,409 44 1,377 1,378 54 Commercial 1,170 1,170 226 276 276 7 $ 8,188 $ 10,863 $ 350 $ 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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Average Interest Average Interest Average Interest Average Interest (Dollars in thousands) (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 1,597 $ 20 $ 2,247 $ 23 $ 1,607 $ 62 $ 2,264 $ 69 Commercial real estate 4,280 20 4,790 32 4,286 62 5,920 97 Home equity and lines of credit 283 4 428 4 283 13 428 13 Other construction and land 677 6 692 6 681 18 695 16 $ 6,837 $ 50 $ 8,157 $ 65 $ 6,857 $ 155 $ 9,307 $ 195 Loans with a valuation allowance One-to-four family residential $ 540 $ 8 $ 825 $ 11 $ 545 $ 24 $ 831 $ 32 Commercial real estate 1,598 22 2,172 22 1,610 66 2,184 68 Other construction and land 762 11 842 11 796 34 854 34 Commercial 1,158 5 281 5 1,166 16 285 17 $ 4,058 $ 46 $ 4,120 $ 49 $ 4,117 $ 140 $ 4,154 $ 151 Total One-to-four family residential $ 2,137 $ 28 $ 3,072 $ 34 $ 2,152 $ 86 $ 3,095 $ 101 Commercial real estate 5,878 42 6,962 54 5,896 128 8,104 165 Home equity and lines of credit 283 4 428 4 283 13 428 13 Other construction and land 1,439 17 1,534 17 1,477 52 1,549 50 Commercial 1,158 5 281 5 1,166 16 285 17 $ 10,895 $ 96 $ 12,277 $ 114 $ 10,974 $ 295 $ 13,461 $ 346 Nonperforming Loans The following table summarizes the balances of non-performing loans as of September 30, 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. September 30, December 31, (Dollars in thousands) One-to-four family residential $ 1,132 $ 1,037 Commercial real estate 1,859 3,266 Home equity loans and lines of credit 69 178 Residential construction 1 — Other construction and land 233 256 Commercial 975 120 Consumer 1 — Non-performing loans $ 4,270 $ 4,857 TDRs The following tables summarize TDR loans as of the dates indicated: September 30, 2019 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 1,617 $ — $ 1,617 Commercial real estate 2,332 1,152 3,484 Home equity and lines of credit 283 — 283 Other construction and land 1,087 182 1,269 Commercial 263 — 263 $ 5,582 $ 1,334 $ 6,916 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 Loan modifications that were deemed TDRs at the time of the modification during the periods presented are summarized in the table below: Three Months Ended Nine Months Ended (Dollars in thousands) Number of Recorded Number of Recorded Extended payment terms Commercial real estate — $ — 1 $ 206 There were no loan modifications that were deemed TDRs at the time of the modification during the three or nine month periods ended September 30, 2019. There were no TDRs that defaulted during the three month and nine month periods ending September 30, 2019 and 2018 and which were modified as TDRs within the previous 12 months. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018. The Company had $3.1 million and $3.6 million of core deposit intangibles as of September 30, 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 September 30, 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 (1,781 ) (1,263 ) Core deposit intangible, net $ 3,059 $ 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 | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 2019 and 2018 and the year ended December 31, 2018: As of and for the As of and for the Year Ended Nine Months Ended September 30, December 31, 2019 2018 2018 (Dollars in thousands) Balance Interest Balance Interest Balance Interest Noninterest-bearing demand $ 211,356 $ — $ 199,224 $ — $ 184,404 $ — Interest-bearing demand 186,201 273 206,967 282 209,085 374 Money Market 463,289 4,185 372,428 1,687 356,086 2,637 Savings 45,119 41 52,874 44 50,716 59 Time Deposits 373,980 5,464 424,539 3,527 420,949 5,048 $ 1,279,945 $ 9,963 $ 1,256,032 $ 5,540 $ 1,221,240 $ 8,118 The following table indicates wholesale deposits included in the money market and time deposits amounts above: September 30, December 31, (Dollars in thousands) 2019 2018 2018 Wholesale money market $ — $ 49,595 $ 5,030 Wholesale time deposits 70,379 71,880 70,978 $ 70,379 $ 121,475 $ 76,008 |
BORROWINGS
BORROWINGS | 9 Months Ended |
Sep. 30, 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 (dollars in thousands): September 30, 2019 December 31, 2018 Year of Maturity Balance Weighted Balance Weighted 2019 $ 50,500 2.53 % $ 168,500 2.52 % 2020 150,000 2.34 % 45,000 2.80 % 2024 5,000 2.81 % — — $ 205,500 2.40 % $ 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 no balance outstanding on the revolving credit loan facility as of September 30, 2019 and had drawn $5.0 million as of December 31, 2018. The Company also had other borrowings of $4.5 million and $4.3 million at September 30, 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2019, the Company had two derivatives in a total net liability position of $1.8 million under these agreements and recognized the right to reclaim cash collateral of $1.8 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) September 30, December 31, September 30, December 31, Derivatives designated as hedging instruments: Interest rate swaps $ 97 $ 354 $ 1,760 $ 462 Total $ 97 $ 354 $ 1,760 $ 462 Derivatives not designated as hedging instruments: Mortgage derivatives $ 79 $ 34 $ 16 $ 22 Total $ 79 $ 34 $ 16 $ 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 Instruments Three months ended September 30, 2019 2018 (dollars in thousands) Interest Interest Interest Interest Total amounts of income and expense line items presented in the consolidated statements of income $ 16,996 $ 5,142 $ 15,978 $ 3,686 Amounts related to fair value hedging relationships Interest rate swaps: Hedged items 120 — (182 ) — Derivatives designated as hedging instruments (148 ) — 187 — Amounts related to cash flow hedging relationships Interest rate swaps: Amount reclassified from accumulated other comprehensive income into income — (49 ) — (149 ) Nine months ended September 30, 2019 2018 (dollars in thousands) Interest Interest Interest Interest Total amounts of income and expense line items presented in the consolidated statements of income $ 50,284 $ 14,757 $ 46,149 $ 9,154 Amounts related to fair value hedging relationships Interest rate swaps: Hedged items 843 — (263 ) — Derivatives designated as hedging instruments (893 ) — 261 — Amounts related to cash flow hedging relationships Interest rate swaps: Amount reclassified from accumulated other comprehensive loss into income — (172 ) — (347 ) 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 September 30, 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 September 30, September 30, Loans receivable (1) $ 90,639 $ 1,088 (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 September 30, 2019, the amortized cost basis of the closed portfolio used in the the hedging relationship was $90.6 million, the cumulative basis adjustment associated with the hedging relationship was $1.1 million, and the amount of the designated hedged items 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 structure of the swap agreements designated as cash flow hedges is 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 As of and for the As of and for the Three Months Ended Nine Months Ended Year Ended Interest rate swaps Location 2019 2018 2019 2018 2018 Amounts recognized in AOCI on derivatives OCI $ (85 ) $ 93 $ (531 ) $ 303 $ 2 Amounts reclassified from AOCI into income Interest expense (49 ) (149 ) (172 ) (347 ) (431 ) Amounts recognized in consolidated statement of comprehensive income $ (134 ) $ (56 ) $ (703 ) $ (44 ) $ (429 ) Derivatives Not Designated as Hedging Instruments Mortgage Derivatives Mortgage derivative fair value assets and liabilities are described above. At September 30, 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 $ 8,003 $ 1,627 Forward sales commitment 12,750 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 Nine Months Ended Interest rate products Location 2019 2018 2019 2018 (Dollars in thousands) Amount of gain (loss) recognized in income on forward commitments Noninterest income $ (29 ) $ 12 $ (124 ) $ (33 ) Amount of gain (loss) recognized in income on interest rate lock commitments Noninterest income (15 ) (46 ) 30 (17 ) Amount of loss recognized in income on derivatives not designated as hedging instruments $ (44 ) $ (34 ) $ (94 ) $ (50 ) |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9. INCOME TAXES The components of net deferred taxes as of September 30, 2019 and December 31, 2018 are summarized as follows: September 30, December 31, 2019 2018 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,817 $ 2,703 Deferred compensation and post-employment benefits 1,820 1,854 Non-accrual interest 259 245 Valuation reserve for other real estate 253 191 North Carolina NOL carryover 91 293 Federal NOL carryover — 1,231 AMT credit carryover — 316 General federal business credit carryover 310 691 Unrealized losses on securities 344 1,061 Loan basis differences 42 50 Fixed assets 144 123 Core deposit intangible 186 129 Derivative instruments 121 — Other 1,542 1,207 Total deferred tax assets 7,929 10,094 Deferred tax liabilities: Loan servicing rights 579 653 Goodwill 754 495 Core deposit intangible 61 74 Deferred loan costs 1,018 1,001 Prepaid expenses 14 14 Unrealized gains on securities 2,448 105 Derivative instruments 14 29 Investment in partnerships 170 155 Other — 17 Total deferred tax liabilities 5,058 2,543 Net deferred tax asset $ 2,871 $ 7,551 The following table summarizes the amount and expiration dates of the Company’s unused net operating losses as of September 30, 2019: (Dollars in thousands) Amount Expiration Dates North Carolina $ 6,311 2026-2029 Federal General Business Credit Carryforwards $ 310 2038 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 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 Nine Months Ended (Dollars in thousands, except per share amounts) 2019 2018 2019 2018 Numerator: Net income $ 3,997 $ 3,523 $ 9,976 $ 10,192 Denominator: Weighted-average common shares outstanding - basic 6,923,114 6,891,672 6,920,880 6,889,130 Effect of dilutive securities: Stock options 121,076 90,580 75,283 92,465 Restricted stock units 45,660 48,898 33,001 42,119 Weighted-average common shares outstanding - diluted 7,089,850 7,031,150 7,029,164 7,023,714 Earnings per share - basic $ 0.58 $ 0.51 $ 1.44 $ 1.48 Earnings per share - diluted $ 0.56 $ 0.50 $ 1.42 $ 1.45 The following table presents stock options that are not deemed dilutive in calculating diluted earnings per share for the respective periods in the table above: Average Stock Price Anti-dilutive Shares Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended 2019 2018 2019 2018 2019 2018 2019 2018 Stock options $ 29.93 $ 28.25 $ 27.08 $ 28.44 11,900 30,438 44,900 23,721 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 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 (“AOCI”) and changes in those components as of and for the three and nine months ended September 30, 2019 and 2018. Three Months Ended September 30, 2019 Available for Cash Flow Total (Dollars in thousands) Balance, beginning of period $ 4,496 $ (346 ) $ 4,150 Change in net unrealized holding gains on securities available for sale 2,455 — 2,455 Change in unrealized holding losses on cash flow hedge — (85 ) (85 ) Reclassification adjustment for cash flow hedge effectiveness — (49 ) (49 ) Income tax effect (560 ) 28 (532 ) Balance, end of period $ 6,391 $ (452 ) $ 5,939 Three Months Ended September 30, 2018 (Dollars in thousands) Balance, beginning of period $ (4,271 ) $ 450 $ (3,821 ) Change in net unrealized holding losses on securities available for sale (2,318 ) — (2,318 ) Change in unrealized holding gains on cash flow hedge — 93 93 Reclassification adjustment for cash flow hedge effectiveness — (149 ) (149 ) Income tax effect 524 14 538 Balance, end of period $ (6,065 ) $ 408 $ (5,657 ) Nine Months Ended September 30, 2019 Available for Cash Flow Total (Dollars in thousands) Balance, beginning of period $ (3,528 ) $ 104 $ (3,424 ) Change in net unrealized holding losses on securities available for sale 12,889 — 12,889 Change in unrealized holding gains on cash flow hedge — (531 ) (531 ) Reclassification adjustment for cash flow effectiveness — (172 ) (172 ) Income tax effect (2,970 ) 147 (2,823 ) Balance, end of period $ 6,391 $ (452 ) $ 5,939 Nine Months Ended September 30, 2018 (Dollars in thousands) Balance, beginning of period $ (455 ) $ 432 $ (23 ) Change in net unrealized holding losses on securities available for sale (8,181 ) — (8,181 ) Reclassification adjustment for net securities gains realized in net income 947 — 947 Change in unrealized holding gains on cash flow hedge — 303 303 Reclassification adjustment for cash flow effectiveness — (347 ) (347 ) Cumulative effect of change in accounting principle 9 — 9 Income tax effect 1,615 20 1,635 Balance, end of period $ (6,065 ) $ 408 $ (5,657 ) The following table shows the line items in the Consolidated Statements of Income affected by amounts reclassified from AOCI as of the dates indicated: Three Months Ended Nine Months Ended (Dollars in thousands) 2019 2018 2019 2018 Income Statement Line Item Affected Available-for-sale securities Losses recognized $ — $ — $ — $ (947 ) Loss on sale of investments, net Income tax effect — — — 213 Income tax expense Reclassified out of AOCI, net of tax — — — (734 ) Net income Cash flow hedge Interest expense- effective portion — 99 — 223 Interest expense - FHLB advances Interest expense- effective portion 49 50 172 124 Interest expense - Junior subordinated notes Income tax effect (11 ) (33 ) (39 ) (78 ) Income tax expense Reclassified out of AOCI, net of tax 38 116 133 269 Net income Total reclassified out of AOCI, net of tax $ 38 $ 116 $ 133 $ (465 ) Net income |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 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: September 30, 2019 (Dollars in thousands) Lines of credit $ 159,801 Standby letters of credit 1,078 $ 160,879 As of September 30, 2019, the Company had outstanding commitments to originate loans as follows: September 30, 2019 Amount Range of Rates (Dollar in thousands) Fixed $ 20,965 3.13% to 6.99% Variable 4,869 2.88% to 6.49% $ 25,834 The allowance for unfunded commitments was $0.1 million at September 30, 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 September 30, 2019 and December 31, 2018. In the normal course of business, the Company is periodically involved in litigation and other matters. In the opinion of the Company’s management, none of the litigation and other matters are expected to have a material adverse effect on the accompanying consolidated financial statements. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 13. FAIR VALUE 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, 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 September 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 AFS investment 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 AFS investment 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: September 30, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Assets: Equity securities $ 6,947 $ — $ — $ 6,947 Securities available for sale: U.S. Treasury & Government Agencies 5,079 28,179 — 33,258 Municipal Securities — 120,156 — 120,156 Mortgage-backed Securities - Guaranteed — 73,834 — 73,834 Collateralized Mortgage Obligations - Guaranteed — 21,774 — 21,774 Collateralized Mortgage Obligations - Non Guaranteed — 65,264 — 65,264 Collateralized Loan Obligations — 15,221 15,221 Corporate bonds — 19,326 494 19,820 Total securities available for sale 5,079 343,754 494 349,327 Mortgage loans held for sale — — 5,221 5,221 Loan servicing rights — — 2,520 2,520 Interest rate swaps — 97 — 97 Mortgage derivatives — — 79 79 Total recurring assets at fair value $ 12,026 $ 343,851 $ 8,314 $ 364,191 Liabilities: Interest rate swaps $ — $ 1,760 $ — $ 1,760 Mortgage derivatives — — 16 16 Total recurring liabilities at fair value $ — $ 1,760 $ 16 $ 1,776 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 Nine Months Ended 2019 2018 2019 2018 (Dollars in thousands) (Dollars in thousands) Balance at beginning of period $ 6,683 $ 4,404 $ 5,773 $ 3,321 AFS securities Fair value adjustment — — 1 — Mortgage loans held for sale 1,647 651 2,790 1,821 Loan servicing right activity, included in servicing income, net Capitalization from loans sold 133 129 225 374 Fair value adjustment (176 ) (43 ) (542 ) (359 ) Mortgage derivative gains(losses) included in other income 11 (34 ) 51 (50 ) Balance at end of period $ 8,298 $ 5,107 $ 8,298 $ 5,107 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: Small Business Administration (“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. Real Estate Owned (“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: September 30, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to-four family residential $ — $ — $ 1,440 $ 1,440 Commercial real estate — — 1,896 1,896 Home equity loans and lines of credit — — 283 283 Other construction and land — — 537 537 Real estate owned: One-to-four family residential — — 349 349 Commercial real estate — — 1,485 1,485 Other construction and land — — 1,254 1,254 Total assets $ — $ — $ 7,244 $ 7,244 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 September 30, 2019 or December 31, 2018. Impaired loans totaling $4.0 million at September 30, 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 September 30, 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 100% - 108% Loan servicing rights Discounted Cash Flows Prepayment speed 11% - 21% Discount rate 10% - 14% Mortgage loans held for sale External pricing model Recent trade pricing 100% - 106% Mortgage derivatives External pricing model Pull-through rate 72% - 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 September 30, 2019 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 144,196 $ 144,196 $ 144,196 $ — $ — Equity securities 6,947 6,947 6,947 — — Securities available for sale 349,327 349,327 5,079 343,754 494 Loans held for sale 11,142 11,817 — 6,596 5,221 Loans receivable, net 1,076,581 1,048,805 — — 1,048,805 Other investments, at cost 11,652 11,652 — 11,652 — Accrued interest receivable 6,163 6,163 — 6,163 — BOLI 32,461 32,461 — 32,461 — Loan servicing rights 2,520 2,520 — — 2,520 Mortgage derivatives 79 79 — — 79 Interest rate swaps 97 97 — 97 — SBIC investments 4,993 4,993 — — 4,993 Liabilities: Demand deposits $ 905,965 $ 905,965 $ — $ 905,965 $ — Time deposits 373,980 379,529 — — 379,529 Federal Home Loan Bank advances 205,500 204,846 — 204,846 — Junior subordinated debentures 14,433 13,292 — 13,292 — Other borrowings 4,463 4,697 — 4,697 — Accrued interest payable 1,730 1,730 — 1,730 — Mortgage derivatives 16 16 — — 16 Interest rate swaps 1,760 1,760 — 1,760 — 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 | 9 Months Ended |
Sep. 30, 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 6.32 years as of September 30, 2019. We do not apply the recognition requirements of Topic 842 - Leases Leases Maturities of lease liabilities as of September 30, 2019 were as follows: (Dollard in thousands) Operating 2019 $ 36 2020 69 2021 53 2022 53 2023 53 Thereafter 177 Total undiscounted lease payments 441 Discount effect of cash flows (55 ) Total lease liability $ 386 The total operating lease costs were $51,000 and $156,000 for the three months and nine months ended September 30, 2019, respectively. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 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 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 under the Securities Act of 1933, as amended. 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 (as amended, the “2018 Form 10-K”). In the opinion of management, these interim consolidated 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. Merger with First Citizens BancShares, Inc. On April 23, 2019, Entegra entered into a definitive agreement to merge with and into BancShares (the “Merger Agreement”). 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 definitive 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. Approval of the proposed merger by Entegra’s shareholders has been received. Completion of the proposed merger remains subject to the receipt of required regulatory approvals and the satisfaction or waiver of other customary conditions, and is expected to occur during the fourth quarter of 2019. |
Recent Accounting Standards Updates | Recent Accounting Standards Updates Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” In September 2016, the Financial Accounting Standards Board (“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 that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investment Securities | |
Schedule of holdings of our trading account | The following table presents the holdings of our equity securities as of September 30, 2019 and December 31, 2018: September 30, December 31, 2019 2018 (Dollars in thousands) Mutual funds $ 6,947 $ 6,178 |
Schedule of investment securities available for sale | The amortized cost and estimated fair values of available-for-sale (“AFS”) investment securities as of September 30, 2019 and December 31, 2018 are summarized as follows: September 30, 2019 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. Treasury & Government Agencies $ 33,423 $ 184 $ (349 ) $ 33,258 Municipal Securities 113,789 6,367 — 120,156 Mortgage-backed Securities - Guaranteed 73,818 783 (767 ) 73,834 Collateralized Mortgage Obligations - Guaranteed 21,428 382 (36 ) 21,774 Collateralized Mortgage Obligations - Non Guaranteed 63,647 1,642 (25 ) 65,264 Collateralized Loan Obligations 15,511 — (290 ) 15,221 Corporate bonds 19,412 437 (29 ) 19,820 $ 341,028 $ 9,795 $ (1,496 ) $ 349,327 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 the fair value of AFS investment securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: September 30, 2019 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Available-for-Sale: U.S. Treasury & Government Agencies $ 19,818 $ 226 $ 6,912 $ 123 $ 26,730 $ 349 Mortgage-backed Securities - Guaranteed 901 6 37,332 761 38,233 767 Collateralized Mortgage Obligations - Guaranteed 1,799 8 1,797 28 3,596 36 Collateralized Mortgage Obligations - Non Guaranteed 3,003 12 2,748 13 5,751 25 Collateralized Loan Obligations 5,984 30 9,237 260 15,221 290 Corporate Bonds — — 1,032 29 1,032 29 $ 31,505 $ 282 $ 59,058 $ 1,214 $ 90,563 $ 1,496 December 31, 2018 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Available-for-Sale: 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 | September 30, 2019 Less Than More Than Total Available-for-Sale: U.S. Treasury & Government Agencies 13 5 18 Mortgage-backed Securities - Guaranteed 1 39 40 Collateralized Mortgage Obligations - Guaranteed 1 1 2 Collateralized Mortgage Obligations - Non Guaranteed 2 5 7 Collateralized loan obligation 3 5 8 Corporate bonds — 1 1 20 56 76 December 31, 2018 Less Than More Than Total Available-for-Sale: 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 obligation 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 investment securities classified as AFS and corresponding gross realized gains and losses as follows: Three Months Ended Nine Months AFS Gross proceeds $ — $ 54,174 Gross realized gains — 77 Gross realized losses — 1,024 Visa Class B Restricted Shares Gross proceeds — 427 Gross realized gains — 427 Gross realized losses — — Total Gross proceeds $ — $ 54,601 Gross realized gains — 504 Gross realized losses — 1,024 |
Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity | The amortized cost and estimated fair value of investments in debt securities at September 30, 2019, by contractual maturity, is shown below. Available-for-Sale Amortized Fair (Dollars in thousands) Less than 1 year $ 1,990 $ 1,996 Over 1 year through 5 years 6,952 6,107 After 5 years through 10 years 31,457 33,331 Over 10 years 141,736 147,021 182,135 188,455 Mortgage-backed securities 158,893 160,872 Total $ 341,028 $ 349,327 |
LOANS RECEIVABLE (Tables)
LOANS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Loans Receivable | |
Loan Receivable | Loans receivable as of September 30, 2019 and December 31, 2018 are summarized as follows: September 30, December 31, 2019 2018 (Dollars in thousands) Real estate mortgage loans: One-to-four family residential $ 336,098 $ 325,560 Commercial real estate 482,831 498,106 Home equity loans and lines of credit 45,822 48,679 Residential construction 57,687 39,533 Other construction and land 101,988 104,645 Total real estate loans 1,024,426 1,016,523 Commercial and industrial 45,652 54,410 Consumer 6,989 6,842 Total commercial and consumer 52,641 61,252 Loans receivable, gross 1,077,067 1,077,775 Less: Net deferred loan fees (1,030 ) (1,000 ) Acquired loans fair value discount (697 ) (1,048 ) Hedged loans basis adjustment (See Note 8) 1,088 245 Unamortized premium 232 333 Unamortized discount (79 ) (236 ) Loans receivable, net of deferred fees $ 1,076,581 $ 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 and nine month periods ended September 30, 2019 and 2018: For the Three Months Ended For the Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Discount on purchased loans, beginning of period $ 180 $ 399 $ 236 $ 710 Accretion (101 ) (67 ) (157 ) (378 ) Discount on purchased loans, end of period $ 79 $ 332 $ 79 $ 332 The following table presents the activity related to the fair value discount on loans from business combinations for the three and nine month periods ended September 30, 2019 and 2018: For the Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Fair value discount, beginning of period $ 789 $ 1,395 $ 1,048 $ 2,012 Accretion (92 ) (193 ) (351 ) (810 ) Fair value discount, end of period $ 697 $ 1,202 $ 697 $ 1,202 |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2019 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,979 $ 5,264 $ 521 $ 567 $ 1,143 $ 596 $ 124 $ 12,194 Provision (123 ) (118 ) 18 86 89 120 (72 ) — Charge-offs — (1 ) (49 ) — — — (12 ) (62 ) Recoveries 85 3 25 — 8 18 38 177 Ending balance $ 3,941 $ 5,148 $ 515 $ 653 $ 1,240 $ 734 $ 78 $ 12,309 Three Months Ended September 30, 2018 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,772 $ 4,902 $ 552 $ 453 $ 1,146 $ 633 $ 67 $ 11,525 Provision 33 141 209 12 42 26 (127 ) 336 Charge-offs (6 ) — (219 ) — — (45 ) (17 ) (287 ) Recoveries 1 — — 1 16 2 152 172 Ending balance $ 3,800 $ 5,043 $ 542 $ 466 $ 1,204 $ 616 $ 75 $ 11,746 Nine Months Ended September 30, 2019 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,909 $ 5,130 $ 560 $ 452 $ 1,250 $ 608 $ 76 $ 11,985 Provision (69 ) 52 62 201 (32 ) 161 (129 ) 246 Charge-offs (4 ) (93 ) (258 ) — (1 ) (59 ) (105 ) (520 ) Recoveries 105 59 151 — 23 24 236 598 Ending balance $ 3,941 $ 5,148 $ 515 $ 653 $ 1,240 $ 734 $ 78 $ 12,309 Nine Months Ended September 30, 2018 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Beginning balance $ 4,018 $ 4,364 $ 616 $ 303 $ 1,025 $ 503 $ 58 $ 10,887 Provision (117 ) 711 162 162 136 182 (182 ) 1,054 Charge-offs (116 ) (35 ) (260 ) — — (79 ) (75 ) (565 ) Recoveries 15 3 24 1 43 10 274 370 Ending balance $ 3,800 $ 5,043 $ 542 $ 466 $ 1,204 $ 616 $ 75 $ 11,746 |
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: September 30, 2019 One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 39 $ 41 $ — $ — $ 44 $ 226 $ — $ 350 Collectively evaluated for impairment 3,902 5,107 515 653 1,196 508 78 11,959 $ 3,941 $ 5,148 $ 515 $ 653 $ 1,240 $ 734 $ 78 $ 12,309 Loans Receivable Individually evaluated for impairment $ 1,976 $ 3,489 $ 283 $ — $ 1,270 $ 1,170 $ — $ 8,188 Collectively evaluated for impairment 334,715 478,013 45,708 57,629 100,501 44,738 7,089 1,068,393 $ 336,691 $ 481,502 $ 45,991 $ 57,629 $ 101,771 $ 45,908 $ 7,089 $ 1,076,581 December 31, 2018 One-to-four Commercial Home Equity and 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: September 30, 2019 Loan Grade One-to-four Commercial Home Equity and Residential Other Commercial Consumer Total (Dollars in thousands) 1 $ 2,778 $ 9,441 $ — $ 200 $ 715 $ 713 $ 116 $ 13,963 2 — 10,253 — — — 925 — 11,178 3 30,315 85,865 4,773 10,758 20,902 13,019 16 165,648 4 136,075 278,495 3,546 28,060 54,123 18,525 411 519,235 5 24,948 83,575 687 3,619 15,208 10,908 4 138,949 6 375 8,541 — 1 1,239 478 — 10,634 7 624 4,668 — — 182 1,292 — 6,766 195,115 480,838 9,006 42,638 92,369 45,860 547 866,373 Ungraded Loan Exposure: Performing 140,800 664 36,916 14,991 9,351 48 6,541 209,311 Nonperforming 776 — 69 — 51 — 1 897 Subtotal 141,576 664 36,985 14,991 9,402 48 6,542 210,208 Total $ 336,691 $ 481,502 $ 45,991 $ 57,629 $ 101,771 $ 45,908 $ 7,089 $ 1,076,581 December 31, 2018 Loan Grade One-to-four Commercial Home Equity and 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. September 30, 2019 30-59 Days 60-89 Days 90 Days and Total Current Total Loans (Dollars in thousands) One-to-four family residential $ 3,440 $ 404 $ 652 $ 4,496 $ 332,195 $ 336,691 Commercial real estate 773 2,909 587 4,269 477,233 481,502 Home equity and lines of credit 264 — 69 333 45,658 45,991 Residential construction — — 1 1 57,628 57,629 Other construction and land 175 16 198 389 101,382 101,771 Commercial 15 6 969 990 44,918 45,908 Consumer 70 — 1 71 7,018 7,089 Total $ 4,737 $ 3,335 $ 2,477 $ 10,549 $ 1,066,032 $ 1,076,581 December 31, 2018 30-59 Days 60-89 Days 90 Days and Over 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 September 30, 2019 and December 31, 2018. September 30, 2019 December 31, 2018 Recorded Unpaid Specific Recorded Unpaid Specific (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 1,440 $ 1,593 $ — $ 845 $ 923 $ — Commercial real estate 1,896 4,279 — 3,835 6,207 — Home equity and lines of credit 283 283 — 283 283 — Other construction and land 537 676 — 365 366 — $ 4,156 $ 6,831 $ — $ 5,328 $ 7,779 $ — Loans with a valuation allowance One-to-four family residential $ 536 $ 536 $ 39 $ 2,055 $ 2,055 $ 79 Commercial real estate 1,593 1,593 41 2,184 2,184 27 Home equity and lines of credit — — — 30 30 — Other construction and land 733 733 44 1,012 1,012 54 Commercial 1,170 1,170 226 276 276 7 $ 4,032 $ 4,032 $ 350 $ 5,557 $ 5,557 $ 167 Total One-to-four family residential $ 1,976 $ 2,129 $ 39 $ 2,900 $ 2,978 $ 79 Commercial real estate 3,489 5,872 41 6,019 8,391 27 Home equity and lines of credit 283 283 — 313 313 — Other construction and land 1,270 1,409 44 1,377 1,378 54 Commercial 1,170 1,170 226 276 276 7 $ 8,188 $ 10,863 $ 350 $ 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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Average Interest Average Interest Average Interest Average Interest (Dollars in thousands) (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 1,597 $ 20 $ 2,247 $ 23 $ 1,607 $ 62 $ 2,264 $ 69 Commercial real estate 4,280 20 4,790 32 4,286 62 5,920 97 Home equity and lines of credit 283 4 428 4 283 13 428 13 Other construction and land 677 6 692 6 681 18 695 16 $ 6,837 $ 50 $ 8,157 $ 65 $ 6,857 $ 155 $ 9,307 $ 195 Loans with a valuation allowance One-to-four family residential $ 540 $ 8 $ 825 $ 11 $ 545 $ 24 $ 831 $ 32 Commercial real estate 1,598 22 2,172 22 1,610 66 2,184 68 Other construction and land 762 11 842 11 796 34 854 34 Commercial 1,158 5 281 5 1,166 16 285 17 $ 4,058 $ 46 $ 4,120 $ 49 $ 4,117 $ 140 $ 4,154 $ 151 Total One-to-four family residential $ 2,137 $ 28 $ 3,072 $ 34 $ 2,152 $ 86 $ 3,095 $ 101 Commercial real estate 5,878 42 6,962 54 5,896 128 8,104 165 Home equity and lines of credit 283 4 428 4 283 13 428 13 Other construction and land 1,439 17 1,534 17 1,477 52 1,549 50 Commercial 1,158 5 281 5 1,166 16 285 17 $ 10,895 $ 96 $ 12,277 $ 114 $ 10,974 $ 295 $ 13,461 $ 346 |
Schedule of Nonperforming Loans | The following table summarizes the balances of non-performing loans as of September 30, 2019 and December 31, 2018. September 30, December 31, (Dollars in thousands) One-to-four family residential $ 1,132 $ 1,037 Commercial real estate 1,859 3,266 Home equity loans and lines of credit 69 178 Residential construction 1 — Other construction and land 233 256 Commercial 975 120 Consumer 1 — Non-performing loans $ 4,270 $ 4,857 |
Summary of TDR Loans | The following tables summarize TDR loans as of the dates indicated: September 30, 2019 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 1,617 $ — $ 1,617 Commercial real estate 2,332 1,152 3,484 Home equity and lines of credit 283 — 283 Other construction and land 1,087 182 1,269 Commercial 263 — 263 $ 5,582 $ 1,334 $ 6,916 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 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 (1,781 ) (1,263 ) Core deposit intangible, net $ 3,059 $ 3,577 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 2019 and 2018 and the year ended December 31, 2018: As of and for the As of and for the Year Ended Nine Months Ended September 30, December 31, 2019 2018 2018 (Dollars in thousands) Balance Interest Balance Interest Balance Interest Noninterest-bearing demand $ 211,356 $ — $ 199,224 $ — $ 184,404 $ — Interest-bearing demand 186,201 273 206,967 282 209,085 374 Money Market 463,289 4,185 372,428 1,687 356,086 2,637 Savings 45,119 41 52,874 44 50,716 59 Time Deposits 373,980 5,464 424,539 3,527 420,949 5,048 $ 1,279,945 $ 9,963 $ 1,256,032 $ 5,540 $ 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: September 30, December 31, (Dollars in thousands) 2019 2018 2018 Wholesale money market $ — $ 49,595 $ 5,030 Wholesale time deposits 70,379 71,880 70,978 $ 70,379 $ 121,475 $ 76,008 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 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 (dollars in thousands): September 30, 2019 December 31, 2018 Year of Maturity Balance Weighted Balance Weighted 2019 $ 50,500 2.53 % $ 168,500 2.52 % 2020 150,000 2.34 % 45,000 2.80 % 2024 5,000 2.81 % — — $ 205,500 2.40 % $ 213,500 2.58 % |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 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) September 30, December 31, September 30, December 31, Derivatives designated as hedging instruments: Interest rate swaps $ 97 $ 354 $ 1,760 $ 462 Total $ 97 $ 354 $ 1,760 $ 462 Derivatives not designated as hedging instruments: Mortgage derivatives $ 79 $ 34 $ 16 $ 22 Total $ 79 $ 34 $ 16 $ 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 Instruments Three months ended September 30, 2019 2018 (dollars in thousands) Interest Interest Interest Interest Total amounts of income and expense line items presented in the consolidated statements of income $ 16,996 $ 5,142 $ 15,978 $ 3,686 Amounts related to fair value hedging relationships Interest rate swaps: Hedged items 120 — (182 ) — Derivatives designated as hedging instruments (148 ) — 187 — Amounts related to cash flow hedging relationships Interest rate swaps: Amount reclassified from accumulated other comprehensive income into income — (49 ) — (149 ) Nine months ended September 30, 2019 2018 (dollars in thousands) Interest Interest Interest Interest Total amounts of income and expense line items presented in the consolidated statements of income $ 50,284 $ 14,757 $ 46,149 $ 9,154 Amounts related to fair value hedging relationships Interest rate swaps: Hedged items 843 — (263 ) — Derivatives designated as hedging instruments (893 ) — 261 — Amounts related to cash flow hedging relationships Interest rate swaps: Amount reclassified from accumulated other comprehensive loss into income — (172 ) — (347 ) |
Schedule of Fair value Hedges recorded on the balance sheet related to cumulative basis adjustments | As of September 30, 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 September 30, September 30, Loans receivable (1) $ 90,639 $ 1,088 (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 September 30, 2019, the amortized cost basis of the closed portfolio used in the the hedging relationship was $90.6 million, the cumulative basis adjustment associated with the hedging relationship was $1.1 million, and the amount of the designated hedged items was $25.0 million. |
Schedule of Structure of the Swap Agreements | The structure of the swap agreements designated as cash flow hedges is 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 As of and for the As of and for the Three Months Ended Nine Months Ended Year Ended Interest rate swaps Location 2019 2018 2019 2018 2018 Amounts recognized in AOCI on derivatives OCI $ (85 ) $ 93 $ (531 ) $ 303 $ 2 Amounts reclassified from AOCI into income Interest expense (49 ) (149 ) (172 ) (347 ) (431 ) Amounts recognized in consolidated statement of comprehensive income $ (134 ) $ (56 ) $ (703 ) $ (44 ) $ (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 September 30, 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 $ 8,003 $ 1,627 Forward sales commitment 12,750 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 Nine Months Ended Interest rate products Location 2019 2018 2019 2018 (Dollars in thousands) Amount of gain (loss) recognized in income on forward commitments Noninterest income $ (29 ) $ 12 $ (124 ) $ (33 ) Amount of gain (loss) recognized in income on interest rate lock commitments Noninterest income (15 ) (46 ) 30 (17 ) Amount of loss recognized in income on derivatives not designated as hedging instruments $ (44 ) $ (34 ) $ (94 ) $ (50 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Schedule of Components of Income Tax Expense (Benefit) | The components of net deferred taxes as of September 30, 2019 and December 31, 2018 are summarized as follows: September 30, December 31, 2019 2018 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,817 $ 2,703 Deferred compensation and post-employment benefits 1,820 1,854 Non-accrual interest 259 245 Valuation reserve for other real estate 253 191 North Carolina NOL carryover 91 293 Federal NOL carryover — 1,231 AMT credit carryover — 316 General federal business credit carryover 310 691 Unrealized losses on securities 344 1,061 Loan basis differences 42 50 Fixed assets 144 123 Core deposit intangible 186 129 Derivative instruments 121 — Other 1,542 1,207 Total deferred tax assets 7,929 10,094 Deferred tax liabilities: Loan servicing rights 579 653 Goodwill 754 495 Core deposit intangible 61 74 Deferred loan costs 1,018 1,001 Prepaid expenses 14 14 Unrealized gains on securities 2,448 105 Derivative instruments 14 29 Investment in partnerships 170 155 Other — 17 Total deferred tax liabilities 5,058 2,543 Net deferred tax asset $ 2,871 $ 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 as of September 30, 2019: (Dollars in thousands) Amount Expiration Dates North Carolina $ 6,311 2026-2029 Federal General Business Credit Carryforwards $ 310 2038 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 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 Nine Months Ended (Dollars in thousands, except per share amounts) 2019 2018 2019 2018 Numerator: Net income $ 3,997 $ 3,523 $ 9,976 $ 10,192 Denominator: Weighted-average common shares outstanding - basic 6,923,114 6,891,672 6,920,880 6,889,130 Effect of dilutive securities: Stock options 121,076 90,580 75,283 92,465 Restricted stock units 45,660 48,898 33,001 42,119 Weighted-average common shares outstanding - diluted 7,089,850 7,031,150 7,029,164 7,023,714 Earnings per share - basic $ 0.58 $ 0.51 $ 1.44 $ 1.48 Earnings per share - diluted $ 0.56 $ 0.50 $ 1.42 $ 1.45 The following table presents stock options that are not deemed dilutive in calculating diluted earnings per share for the respective periods in the table above: Average Stock Price Anti-dilutive Shares Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended 2019 2018 2019 2018 2019 2018 2019 2018 Stock options $ 29.93 $ 28.25 $ 27.08 $ 28.44 11,900 30,438 44,900 23,721 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income Loss | |
Schedule of Accumulated other comprehensive income (loss) | The following table summarizes the components of accumulated other comprehensive income (“AOCI”) and changes in those components as of and for the three and nine months ended September 30, 2019 and 2018. Three Months Ended September 30, 2019 Available for Cash Flow Total (Dollars in thousands) Balance, beginning of period $ 4,496 $ (346 ) $ 4,150 Change in net unrealized holding gains on securities available for sale 2,455 — 2,455 Change in unrealized holding losses on cash flow hedge — (85 ) (85 ) Reclassification adjustment for cash flow hedge effectiveness — (49 ) (49 ) Income tax effect (560 ) 28 (532 ) Balance, end of period $ 6,391 $ (452 ) $ 5,939 Three Months Ended September 30, 2018 (Dollars in thousands) Balance, beginning of period $ (4,271 ) $ 450 $ (3,821 ) Change in net unrealized holding losses on securities available for sale (2,318 ) — (2,318 ) Change in unrealized holding gains on cash flow hedge — 93 93 Reclassification adjustment for cash flow hedge effectiveness — (149 ) (149 ) Income tax effect 524 14 538 Balance, end of period $ (6,065 ) $ 408 $ (5,657 ) Nine Months Ended September 30, 2019 Available for Cash Flow Total (Dollars in thousands) Balance, beginning of period $ (3,528 ) $ 104 $ (3,424 ) Change in net unrealized holding losses on securities available for sale 12,889 — 12,889 Change in unrealized holding gains on cash flow hedge — (531 ) (531 ) Reclassification adjustment for cash flow effectiveness — (172 ) (172 ) Income tax effect (2,970 ) 147 (2,823 ) Balance, end of period $ 6,391 $ (452 ) $ 5,939 Nine Months Ended September 30, 2018 (Dollars in thousands) Balance, beginning of period $ (455 ) $ 432 $ (23 ) Change in net unrealized holding losses on securities available for sale (8,181 ) — (8,181 ) Reclassification adjustment for net securities gains realized in net income 947 — 947 Change in unrealized holding gains on cash flow hedge — 303 303 Reclassification adjustment for cash flow effectiveness — (347 ) (347 ) Cumulative effect of change in accounting principle 9 — 9 Income tax effect 1,615 20 1,635 Balance, end of period $ (6,065 ) $ 408 $ (5,657 ) |
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 AOCI as of the dates indicated: Three Months Ended Nine Months Ended (Dollars in thousands) 2019 2018 2019 2018 Income Statement Line Item Affected Available-for-sale securities Losses recognized $ — $ — $ — $ (947 ) Loss on sale of investments, net Income tax effect — — — 213 Income tax expense Reclassified out of AOCI, net of tax — — — (734 ) Net income Cash flow hedge Interest expense- effective portion — 99 — 223 Interest expense - FHLB advances Interest expense- effective portion 49 50 172 124 Interest expense - Junior subordinated notes Income tax effect (11 ) (33 ) (39 ) (78 ) Income tax expense Reclassified out of AOCI, net of tax 38 116 133 269 Net income Total reclassified out of AOCI, net of tax $ 38 $ 116 $ 133 $ (465 ) Net income |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies | |
Schedule of commitments to fund lines of credit | The following summarizes the Company’s approximate commitments to extend credit: September 30, 2019 (Dollars in thousands) Lines of credit $ 159,801 Standby letters of credit 1,078 $ 160,879 |
Schedule of Outstanding commitments to originate mortgage loans | As of September 30, 2019, the Company had outstanding commitments to originate loans as follows: September 30, 2019 Amount Range of Rates (Dollar in thousands) Fixed $ 20,965 3.13% to 6.99% Variable 4,869 2.88% to 6.49% $ 25,834 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Assets: Equity securities $ 6,947 $ — $ — $ 6,947 Securities available for sale: U.S. Treasury & Government Agencies 5,079 28,179 — 33,258 Municipal Securities — 120,156 — 120,156 Mortgage-backed Securities - Guaranteed — 73,834 — 73,834 Collateralized Mortgage Obligations - Guaranteed — 21,774 — 21,774 Collateralized Mortgage Obligations - Non Guaranteed — 65,264 — 65,264 Collateralized Loan Obligations — 15,221 15,221 Corporate bonds — 19,326 494 19,820 Total securities available for sale 5,079 343,754 494 349,327 Mortgage loans held for sale — — 5,221 5,221 Loan servicing rights — — 2,520 2,520 Interest rate swaps — 97 — 97 Mortgage derivatives — — 79 79 Total recurring assets at fair value $ 12,026 $ 343,851 $ 8,314 $ 364,191 Liabilities: Interest rate swaps $ — $ 1,760 $ — $ 1,760 Mortgage derivatives — — 16 16 Total recurring liabilities at fair value $ — $ 1,760 $ 16 $ 1,776 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 Nine Months Ended 2019 2018 2019 2018 (Dollars in thousands) (Dollars in thousands) Balance at beginning of period $ 6,683 $ 4,404 $ 5,773 $ 3,321 AFS securities Fair value adjustment — — 1 — Mortgage loans held for sale 1,647 651 2,790 1,821 Loan servicing right activity, included in servicing income, net Capitalization from loans sold 133 129 225 374 Fair value adjustment (176 ) (43 ) (542 ) (359 ) Mortgage derivative gains(losses) included in other income 11 (34 ) 51 (50 ) Balance at end of period $ 8,298 $ 5,107 $ 8,298 $ 5,107 |
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: September 30, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to-four family residential $ — $ — $ 1,440 $ 1,440 Commercial real estate — — 1,896 1,896 Home equity loans and lines of credit — — 283 283 Other construction and land — — 537 537 Real estate owned: One-to-four family residential — — 349 349 Commercial real estate — — 1,485 1,485 Other construction and land — — 1,254 1,254 Total assets $ — $ — $ 7,244 $ 7,244 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 September 30, 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 100% - 108% Loan servicing rights Discounted Cash Flows Prepayment speed 11% - 21% Discount rate 10% - 14% Mortgage loans held for sale External pricing model Recent trade pricing 100% - 106% Mortgage derivatives External pricing model Pull-through rate 72% - 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 September 30, 2019 Carrying (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 144,196 $ 144,196 $ 144,196 $ — $ — Equity securities 6,947 6,947 6,947 — — Securities available for sale 349,327 349,327 5,079 343,754 494 Loans held for sale 11,142 11,817 — 6,596 5,221 Loans receivable, net 1,076,581 1,048,805 — — 1,048,805 Other investments, at cost 11,652 11,652 — 11,652 — Accrued interest receivable 6,163 6,163 — 6,163 — BOLI 32,461 32,461 — 32,461 — Loan servicing rights 2,520 2,520 — — 2,520 Mortgage derivatives 79 79 — — 79 Interest rate swaps 97 97 — 97 — SBIC investments 4,993 4,993 — — 4,993 Liabilities: Demand deposits $ 905,965 $ 905,965 $ — $ 905,965 $ — Time deposits 373,980 379,529 — — 379,529 Federal Home Loan Bank advances 205,500 204,846 — 204,846 — Junior subordinated debentures 14,433 13,292 — 13,292 — Other borrowings 4,463 4,697 — 4,697 — Accrued interest payable 1,730 1,730 — 1,730 — Mortgage derivatives 16 16 — — 16 Interest rate swaps 1,760 1,760 — 1,760 — 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) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule Of Unrealized Losses That Were Recognized Within Other Comprehensive Income At Time Of Transfer To Held To Maturity [Table Text Block] | |
Schedule of Future minimum lease payments | Maturities of lease liabilities as of September 30, 2019 were as follows: (Dollard in thousands) Operating 2019 $ 36 2020 69 2021 53 2022 53 2023 53 Thereafter 177 Total undiscounted lease payments 441 Discount effect of cash flows (55 ) Total lease liability $ 386 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2019 | Apr. 23, 2019 |
Ownership percentage in Macon Capital Trust I | 100.00% | |
SmartFinancial, Inc.[Member] | ||
Termination Fees | $ 6,400 | |
BancShares [Member] | ||
Right to receive cash for Common Stock Outstanding, per Share | $ 30.18 |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Mutual funds | $ 6,947 | $ 6,178 |
Amortized Cost | 341,028 | 364,328 |
Gross Unrealized Gains | 9,795 | 786 |
Gross Unrealized Losses | (1,496) | (5,376) |
Estimated fair value | 349,327 | 359,738 |
U.S. Government Agencies [Member] | ||
Amortized Cost | 33,423 | 34,068 |
Gross Unrealized Gains | 184 | 74 |
Gross Unrealized Losses | (349) | (152) |
Estimated fair value | 33,258 | 33,990 |
Municipal Securities [Member] | ||
Amortized Cost | 113,789 | 115,860 |
Gross Unrealized Gains | 6,367 | 209 |
Gross Unrealized Losses | (1,667) | |
Estimated fair value | 120,156 | 114,402 |
Mortgage-backed Securities - Guaranteed [Member] | ||
Amortized Cost | 73,818 | 86,664 |
Gross Unrealized Gains | 783 | 98 |
Gross Unrealized Losses | (767) | (1,578) |
Estimated fair value | 73,834 | 85,184 |
Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Amortized Cost | 21,428 | 22,492 |
Gross Unrealized Gains | 382 | 47 |
Gross Unrealized Losses | (36) | (650) |
Estimated fair value | 21,774 | 21,889 |
Collateralized Mortgage Obligations - Non Guaranteed [Member] | ||
Amortized Cost | 63,647 | 69,774 |
Gross Unrealized Gains | 1,642 | 125 |
Gross Unrealized Losses | (25) | (728) |
Estimated fair value | 65,264 | 69,171 |
Collateralized mortgage obligations [Member] | ||
Amortized Cost | 15,511 | 15,534 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (290) | (458) |
Estimated fair value | 15,221 | 15,077 |
Corporate debt securities [Member] | ||
Amortized Cost | 19,412 | 19,936 |
Gross Unrealized Gains | 437 | 232 |
Gross Unrealized Losses | (29) | (143) |
Estimated fair value | $ 19,820 | $ 20,025 |
INVESTMENT SECURITIES (Details
INVESTMENT SECURITIES (Details 2) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Held to maturity, Less Than 12 Months Fair Value | $ 20 | $ 88 |
Held to maturity, Over 12 Months Fair Value | 56 | 130 |
Held to maturity, Fair Value | 76 | 218 |
Available for sale, Less Than 12 Months Fair Value | 31,505 | 122,678 |
Available for sale, Less Than 12 Months Unrealized Losses | 282 | 1,596 |
Available for sale, Over 12 Months Fair Value | 59,058 | 152,331 |
Available for sale, Over 12 Months Unrealized Losses | 1,214 | 3,780 |
Available for sale, Fair Value | 90,563 | 275,009 |
Available for sale, Unrealized Losses | 1,496 | 5,376 |
U.S. Government Agencies [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 13 | 14 |
Held to maturity, Over 12 Months Fair Value | 5 | |
Held to maturity, Fair Value | 18 | 14 |
Available for sale, Less Than 12 Months Fair Value | 19,818 | 23,423 |
Available for sale, Less Than 12 Months Unrealized Losses | 226 | 152 |
Available for sale, Over 12 Months Fair Value | 6,912 | |
Available for sale, Over 12 Months Unrealized Losses | 123 | |
Available for sale, Fair Value | 26,730 | 23,423 |
Available for sale, Unrealized Losses | 349 | 152 |
Municipal Securities [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 31 | |
Held to maturity, Over 12 Months Fair Value | 52 | |
Held to maturity, Fair Value | 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 | 56,153 | |
Available for sale, Over 12 Months Unrealized Losses | 1,246 | |
Available for sale, Fair Value | 89,181 | |
Available for sale, Unrealized Losses | 1,667 | |
Mortgage-backed Securities - Guaranteed [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 1 | 21 |
Held to maturity, Over 12 Months Fair Value | 39 | 43 |
Held to maturity, Fair Value | 40 | 64 |
Available for sale, Less Than 12 Months Fair Value | 901 | 27,692 |
Available for sale, Less Than 12 Months Unrealized Losses | 6 | 370 |
Available for sale, Over 12 Months Fair Value | 37,332 | 45,619 |
Available for sale, Over 12 Months Unrealized Losses | 761 | 1,208 |
Available for sale, Fair Value | 38,233 | 73,311 |
Available for sale, Unrealized Losses | 767 | 1,578 |
Collateralized Mortgage Obligations - Guaranteed [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 1 | 1 |
Held to maturity, Over 12 Months Fair Value | 1 | 8 |
Held to maturity, Fair Value | 2 | 9 |
Available for sale, Less Than 12 Months Fair Value | 1,799 | 2,042 |
Available for sale, Less Than 12 Months Unrealized Losses | 8 | 19 |
Available for sale, Over 12 Months Fair Value | 1,797 | 15,294 |
Available for sale, Over 12 Months Unrealized Losses | 28 | 631 |
Available for sale, Fair Value | 3,596 | 17,336 |
Available for sale, Unrealized Losses | 36 | 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 | 5 | 22 |
Held to maturity, Fair Value | 7 | 34 |
Available for sale, Less Than 12 Months Fair Value | 3,003 | 22,383 |
Available for sale, Less Than 12 Months Unrealized Losses | 12 | 185 |
Available for sale, Over 12 Months Fair Value | 2,748 | 30,471 |
Available for sale, Over 12 Months Unrealized Losses | 13 | 543 |
Available for sale, Fair Value | 5,751 | 52,854 |
Available for sale, Unrealized Losses | 25 | 728 |
Collateralized mortgage obligations [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 3 | 6 |
Held to maturity, Over 12 Months Fair Value | 5 | 1 |
Held to maturity, Fair Value | 8 | 7 |
Available for sale, Less Than 12 Months Fair Value | 5,984 | 11,618 |
Available for sale, Less Than 12 Months Unrealized Losses | 30 | 404 |
Available for sale, Over 12 Months Fair Value | 9,237 | 1,449 |
Available for sale, Over 12 Months Unrealized Losses | 260 | 54 |
Available for sale, Fair Value | 15,221 | 13,067 |
Available for sale, Unrealized Losses | 290 | 458 |
Corporate debt securities [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 3 | |
Held to maturity, Over 12 Months Fair Value | 1 | 4 |
Held to maturity, Fair Value | 1 | 7 |
Available for sale, Less Than 12 Months Fair Value | 2,492 | |
Available for sale, Less Than 12 Months Unrealized Losses | 45 | |
Available for sale, Over 12 Months Fair Value | 1,032 | 3,345 |
Available for sale, Over 12 Months Unrealized Losses | 29 | 98 |
Available for sale, Fair Value | 1,032 | 5,837 |
Available for sale, Unrealized Losses | $ 29 | $ 143 |
INVESTMENT SECURITIES (Detail_2
INVESTMENT SECURITIES (Details 3) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Gross proceeds | $ 54,174 | ||
Gross realized gains | 504 | ||
Gross realized losses | 1,024 | ||
Securities pledged against deposits | $ 160,700 | $ 155,800 | |
Available-for-sale Securities [Member] | |||
Gross proceeds | 55,174 | ||
Gross realized gains | 77 | ||
Gross realized losses | 1,024 | ||
Visa Class B Restricted Shares [Member] | |||
Gross proceeds | 427 | ||
Gross realized gains | 427 | ||
Gross realized losses |
INVESTMENT SECURITIES (Detail_3
INVESTMENT SECURITIES (Details 4) $ in Thousands | Sep. 30, 2019USD ($) |
Default Rate [Member] | |
Available for sale, Less than 1 year, Amortized Cost | $ 1,990 |
Available for sale, Over 1 year through 5 years, Amortized Cost | 6,952 |
Available for sale, After 5 years through 10 years, Amortized Cost | 31,457 |
Available for sale, Over 10 years, Amortized Cost | 141,736 |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Amortized Cost | 182,135 |
Available for sale, Mortgage-backed securities, Amortized Cost | 158,893 |
Available for sale, Total, Amortized Cost | 341,028 |
Available for Sale, Less than 1 year, Fair Value | 1,996 |
Available for Sale, Over 1 year through 5 years, Fair Value | 6,107 |
Available for Sale, After 5 years through 10 years, Fair Value | 33,331 |
Available for Sale, Over 10 years, Fair Value | 147,021 |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Fair Value | 188,455 |
Available for Sale, Mortgage-backed securities, Fair Value | 160,872 |
Available for Sale, Total, Fair Value | $ 349,327 |
LOANS RECEIVABLE (Details)
LOANS RECEIVABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | $ 1,077,067 | $ 1,077,775 | ||||
Less: Net deferred loan fees | (1,030) | (1,000) | ||||
Fair value discount | (697) | $ (789) | (1,048) | $ (1,202) | $ (1,395) | $ (2,012) |
Hedged loans basis adjustment | 1,088 | 245 | ||||
Unamortized premium | 232 | 333 | ||||
Unamortized discount | (79) | (236) | ||||
Loans Receivable | 1,076,581 | 1,076,069 | ||||
One-to-four family residential | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 336,098 | 325,560 | ||||
Loans Receivable | 336,691 | 325,155 | ||||
Commercial Real Estate Portfolio Segment [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 482,831 | 498,106 | ||||
Loans Receivable | 481,502 | 496,549 | ||||
Home Equity Line of Credit [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 45,822 | 48,679 | ||||
Loans Receivable | 45,991 | 48,825 | ||||
Residential construction | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 57,687 | 39,533 | ||||
Loans Receivable | 57,629 | 39,488 | ||||
Other Portfolio Segment [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 101,988 | 104,645 | ||||
Loans Receivable | 101,771 | 104,464 | ||||
Real Estate Loans [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 1,024,426 | 1,016,523 | ||||
Commercial Portfolio Segment [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 45,652 | 54,410 | ||||
Loans Receivable | 45,908 | 54,643 | ||||
Consumer Portfolio Segment [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | 6,989 | 6,842 | ||||
Loans Receivable | 7,089 | 6,945 | ||||
Commercial and Consumer Loan [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans receivable, gross | $ 52,641 | $ 61,252 |
LOANS RECEIVABLE (Details 2)
LOANS RECEIVABLE (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Discount on purchased loans, beginning of period | $ 1,000 | |||
Discount on purchased loans, end of period | $ 1,030 | 1,030 | ||
Federal Deposit Insurance Corporation [Member] | ||||
Discount on purchased loans, beginning of period | 180 | $ 399 | 236 | $ 710 |
Accretion | (101) | (67) | (157) | (378) |
Discount on purchased loans, end of period | $ 79 | $ 332 | $ 79 | $ 332 |
LOANS RECEIVABLE (Details 3)
LOANS RECEIVABLE (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Loans and Leases Receivable Commitments, Variable Interest Rates | ||||
Fair value discount, beginning of year | $ 789 | $ 1,395 | $ 1,048 | $ 2,012 |
Accretion | (92) | (193) | (351) | (810) |
Discount on purchased loans, end of period | $ 697 | $ 1,202 | $ 697 | $ 1,202 |
LOANS RECEIVABLE (Detail Narrat
LOANS RECEIVABLE (Detail Narrative) - USD ($) $ in Thousands | Sep. 30, 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 | $ 124,000 | $ 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 | $ 279,900 | $ 256,100 |
ALLOWANCE FOR LOAN LOSSES (Deta
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | $ 12,194 | $ 11,525 | $ 11,985 | $ 10,887 |
Provision | 336 | 246 | 1,054 | |
Charge-offs | (62) | (287) | (520) | (565) |
Recoveries | 177 | 172 | 598 | 370 |
Balance, end of period | 12,309 | 11,746 | 12,309 | 11,746 |
One-to-four family residential | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | 3,979 | 3,772 | 3,909 | 4,018 |
Provision | (123) | 33 | (69) | (117) |
Charge-offs | (6) | (4) | (116) | |
Recoveries | 85 | 1 | 105 | 15 |
Balance, end of period | 3,941 | 3,800 | 3,941 | 3,800 |
Commercial Real Estate Portfolio Segment [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | 5,264 | 4,902 | 5,130 | 4,364 |
Provision | (118) | 141 | 52 | 711 |
Charge-offs | (1) | (93) | (35) | |
Recoveries | 3 | 59 | 3 | |
Balance, end of period | 5,148 | 5,043 | 5,148 | 5,043 |
Home Equity Line of Credit [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | 521 | 552 | 560 | 616 |
Provision | 18 | 209 | 62 | 162 |
Charge-offs | (49) | (219) | (258) | (260) |
Recoveries | 25 | 151 | 24 | |
Balance, end of period | 515 | 542 | 515 | 542 |
Residential construction | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | 567 | 453 | 452 | 303 |
Provision | 86 | 12 | 201 | 162 |
Charge-offs | ||||
Recoveries | 1 | 1 | ||
Balance, end of period | 653 | 466 | 653 | 466 |
Other Portfolio Segment [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | 1,143 | 1,146 | 1,250 | 1,025 |
Provision | 89 | 42 | (32) | 136 |
Charge-offs | (1) | |||
Recoveries | 8 | 16 | 23 | 43 |
Balance, end of period | 1,240 | 1,204 | 1,240 | 1,204 |
Commercial Portfolio Segment [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | 596 | 633 | 608 | 503 |
Provision | 120 | 26 | 161 | 182 |
Charge-offs | (45) | (59) | (79) | |
Recoveries | 18 | 2 | 24 | 10 |
Balance, end of period | 734 | 616 | 734 | 616 |
Consumer Portfolio Segment [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning balance | 124 | 67 | 76 | 58 |
Provision | (72) | (127) | (129) | (182) |
Charge-offs | (12) | (17) | (105) | (75) |
Recoveries | 38 | 152 | 236 | 274 |
Balance, end of period | $ 78 | $ 75 | $ 78 | $ 75 |
ALLOWANCE FOR LOAN LOSSES (De_2
ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Allowance for loan losses | ||||||
Individually evaluated for impairment | $ 350 | $ 167 | ||||
Collectively evaluated for impairment | 11,959 | 11,818 | ||||
Balance, end of period | 12,309 | $ 12,194 | 11,985 | $ 11,746 | $ 11,525 | $ 10,887 |
Loans Receivable | ||||||
Individually evaluated for impairment | 8,188 | 10,885 | ||||
Collectively evaluated for impairment | 1,068,393 | 1,065,184 | ||||
Loans Receivable | 1,076,581 | 1,076,069 | ||||
One-to-four family residential | ||||||
Allowance for loan losses | ||||||
Individually evaluated for impairment | 39 | 79 | ||||
Collectively evaluated for impairment | 3,902 | 3,830 | ||||
Balance, end of period | 3,941 | 3,979 | 3,909 | 3,800 | 3,772 | 4,018 |
Loans Receivable | ||||||
Individually evaluated for impairment | 1,976 | 2,900 | ||||
Collectively evaluated for impairment | 334,715 | 322,255 | ||||
Loans Receivable | 336,691 | 325,155 | ||||
Commercial Real Estate Portfolio Segment [Member] | ||||||
Allowance for loan losses | ||||||
Individually evaluated for impairment | 41 | 27 | ||||
Collectively evaluated for impairment | 5,107 | 5,103 | ||||
Balance, end of period | 5,148 | 5,264 | 5,130 | 5,043 | 4,902 | 4,364 |
Loans Receivable | ||||||
Individually evaluated for impairment | 3,489 | 6,019 | ||||
Collectively evaluated for impairment | 478,013 | 490,530 | ||||
Loans Receivable | 481,502 | 496,549 | ||||
Home Equity Line of Credit [Member] | ||||||
Allowance for loan losses | ||||||
Individually evaluated for impairment | ||||||
Collectively evaluated for impairment | 515 | 560 | ||||
Balance, end of period | 515 | 521 | 560 | 542 | 552 | 616 |
Loans Receivable | ||||||
Individually evaluated for impairment | 283 | 313 | ||||
Collectively evaluated for impairment | 45,708 | 48,512 | ||||
Loans Receivable | 45,991 | 48,825 | ||||
Residential construction | ||||||
Allowance for loan losses | ||||||
Individually evaluated for impairment | ||||||
Collectively evaluated for impairment | 653 | 452 | ||||
Balance, end of period | 653 | 567 | 452 | 466 | 453 | 303 |
Loans Receivable | ||||||
Individually evaluated for impairment | ||||||
Collectively evaluated for impairment | 57,629 | 39,488 | ||||
Loans Receivable | 57,629 | 39,488 | ||||
Other Portfolio Segment [Member] | ||||||
Allowance for loan losses | ||||||
Individually evaluated for impairment | 44 | 54 | ||||
Collectively evaluated for impairment | 1,196 | 1,196 | ||||
Balance, end of period | 1,240 | 1,143 | 1,250 | 1,204 | 1,146 | 1,025 |
Loans Receivable | ||||||
Individually evaluated for impairment | 1,270 | 1,377 | ||||
Collectively evaluated for impairment | 100,501 | 103,087 | ||||
Loans Receivable | 101,771 | 104,464 | ||||
Commercial Portfolio Segment [Member] | ||||||
Allowance for loan losses | ||||||
Individually evaluated for impairment | 226 | 7 | ||||
Collectively evaluated for impairment | 508 | 601 | ||||
Balance, end of period | 734 | 596 | 608 | 616 | 633 | 503 |
Loans Receivable | ||||||
Individually evaluated for impairment | 1,170 | 276 | ||||
Collectively evaluated for impairment | 44,738 | 54,367 | ||||
Loans Receivable | 45,908 | 54,643 | ||||
Consumer Portfolio Segment [Member] | ||||||
Allowance for loan losses | ||||||
Individually evaluated for impairment | ||||||
Collectively evaluated for impairment | 78 | 76 | ||||
Balance, end of period | 78 | $ 124 | 76 | $ 75 | $ 67 | $ 58 |
Loans Receivable | ||||||
Individually evaluated for impairment | ||||||
Collectively evaluated for impairment | 7,089 | 6,945 | ||||
Loans Receivable | $ 7,089 | $ 6,945 |
ALLOWANCE FOR LOAN LOSSES (De_3
ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Loans Receivable | $ 1,076,581 | $ 1,076,069 |
One-to-four family residential | ||
Loans Receivable | 336,691 | 325,155 |
Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 481,502 | 496,549 |
Home Equity Line of Credit [Member] | ||
Loans Receivable | 45,991 | 48,825 |
Residential construction | ||
Loans Receivable | 57,629 | 39,488 |
Other Portfolio Segment [Member] | ||
Loans Receivable | 101,771 | 104,464 |
Commercial Portfolio Segment [Member] | ||
Loans Receivable | 45,908 | 54,643 |
Consumer Portfolio Segment [Member] | ||
Loans Receivable | 7,089 | 6,945 |
Graded Loan [Member] | ||
Loans Receivable | 866,373 | 852,337 |
Graded Loan [Member] | One-to-four family residential | ||
Loans Receivable | 195,115 | 179,044 |
Graded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 480,838 | 486,105 |
Graded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans Receivable | 9,006 | 9,841 |
Graded Loan [Member] | Residential construction | ||
Loans Receivable | 42,638 | 31,128 |
Graded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 92,369 | 93,066 |
Graded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 45,860 | 52,632 |
Graded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | 547 | 521 |
Graded Loan [Member] | Loan Grade One [Member] | ||
Loans Receivable | 13,963 | 8,840 |
Graded Loan [Member] | Loan Grade One [Member] | One-to-four family residential | ||
Loans Receivable | 2,778 | |
Graded Loan [Member] | Loan Grade One [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 9,441 | 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 | ||
Loans Receivable | 200 | |
Graded Loan [Member] | Loan Grade One [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 715 | |
Graded Loan [Member] | Loan Grade One [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 713 | 1,264 |
Graded Loan [Member] | Loan Grade One [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | 116 | 7 |
Graded Loan [Member] | Loan Grade Two [Member] | ||
Loans Receivable | 11,178 | 7,880 |
Graded Loan [Member] | Loan Grade Two [Member] | One-to-four family residential | ||
Loans Receivable | ||
Graded Loan [Member] | Loan Grade Two [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 10,253 | 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 | ||
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 | 925 | 20 |
Graded Loan [Member] | Loan Grade Two [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | ||
Graded Loan [Member] | Loan Grade Three [Member] | ||
Loans Receivable | 165,648 | 162,016 |
Graded Loan [Member] | Loan Grade Three [Member] | One-to-four family residential | ||
Loans Receivable | 30,315 | 31,623 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 85,865 | 87,756 |
Graded Loan [Member] | Loan Grade Three [Member] | Home Equity Line of Credit [Member] | ||
Loans Receivable | 4,773 | 5,212 |
Graded Loan [Member] | Loan Grade Three [Member] | Residential construction | ||
Loans Receivable | 10,758 | 9,365 |
Graded Loan [Member] | Loan Grade Three [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 20,902 | 12,111 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 13,019 | 15,685 |
Graded Loan [Member] | Loan Grade Three [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | 16 | 264 |
Graded Loan [Member] | Loan Grade Four [Member] | ||
Loans Receivable | 519,235 | 508,955 |
Graded Loan [Member] | Loan Grade Four [Member] | One-to-four family residential | ||
Loans Receivable | 136,075 | 121,688 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 278,495 | 280,630 |
Graded Loan [Member] | Loan Grade Four [Member] | Home Equity Line of Credit [Member] | ||
Loans Receivable | 3,546 | 4,014 |
Graded Loan [Member] | Loan Grade Four [Member] | Residential construction | ||
Loans Receivable | 28,060 | 18,358 |
Graded Loan [Member] | Loan Grade Four [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 54,123 | 61,646 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 18,525 | 22,374 |
Graded Loan [Member] | Loan Grade Four [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | 411 | 245 |
Graded Loan [Member] | Loan Grade Five [Member] | ||
Loans Receivable | 138,949 | 147,397 |
Graded Loan [Member] | Loan Grade Five [Member] | One-to-four family residential | ||
Loans Receivable | 24,948 | 24,738 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 83,575 | 88,698 |
Graded Loan [Member] | Loan Grade Five [Member] | Home Equity Line of Credit [Member] | ||
Loans Receivable | 687 | 615 |
Graded Loan [Member] | Loan Grade Five [Member] | Residential construction | ||
Loans Receivable | 3,619 | 3,404 |
Graded Loan [Member] | Loan Grade Five [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 15,208 | 17,630 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 10,908 | 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 | 10,634 | 9,987 |
Graded Loan [Member] | Loan Grade Six [Member] | One-to-four family residential | ||
Loans Receivable | 375 | 321 |
Graded Loan [Member] | Loan Grade Six [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 8,541 | 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 | ||
Loans Receivable | 1 | 1 |
Graded Loan [Member] | Loan Grade Six [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 1,239 | 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 | 6,766 | 7,262 |
Graded Loan [Member] | Loan Grade Seven [Member] | One-to-four family residential | ||
Loans Receivable | 624 | 674 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 4,668 | 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 | ||
Loans Receivable | ||
Graded Loan [Member] | Loan Grade Seven [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 182 | 376 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 1,292 | 487 |
Graded Loan [Member] | Loan Grade Seven [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | ||
UnGraded Loan [Member] | ||
Loans Receivable | 210,208 | 223,732 |
UnGraded Loan [Member] | One-to-four family residential | ||
Loans Receivable | 141,576 | 146,111 |
UnGraded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 664 | 10,444 |
UnGraded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans Receivable | 36,985 | 38,984 |
UnGraded Loan [Member] | Residential construction | ||
Loans Receivable | 14,991 | 8,360 |
UnGraded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 9,402 | 11,398 |
UnGraded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 48 | 2,011 |
UnGraded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | 6,542 | 6,424 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | ||
Loans Receivable | 897 | 907 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | One-to-four family residential | ||
Loans Receivable | 776 | 641 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 24 | |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans Receivable | 69 | 178 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Residential construction | ||
Loans Receivable | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 51 | 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 | 209,311 | 222,825 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | One-to-four family residential | ||
Loans Receivable | 140,800 | 145,470 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Receivable | 664 | 10,420 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans Receivable | 36,916 | 38,806 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Residential construction | ||
Loans Receivable | 14,991 | 8,360 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans Receivable | 9,351 | 11,334 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Portfolio Segment [Member] | ||
Loans Receivable | 48 | 2,011 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Consumer Portfolio Segment [Member] | ||
Loans Receivable | $ 6,541 | $ 6,424 |
ALLOWANCE FOR LOAN LOSSES (De_4
ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | $ 10,549 | $ 11,484 |
Current | 1,066,032 | 1,064,585 |
Loans Receivable | 1,076,581 | 1,076,069 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 4,737 | 7,524 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 2,631 | 1,835 |
90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 2,477 | 2,125 |
One-to-four family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 4,496 | 4,963 |
Current | 332,195 | 320,192 |
Loans Receivable | 336,691 | 325,155 |
One-to-four family residential | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 3,440 | 3,562 |
One-to-four family residential | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 404 | 1,317 |
One-to-four family residential | 90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 652 | 84 |
Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 4,269 | 4,397 |
Current | 477,233 | 492,152 |
Loans Receivable | 481,502 | 496,549 |
Commercial real estate | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 773 | 2,615 |
Commercial real estate | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 2,909 | |
Commercial real estate | 90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 587 | 1,782 |
Home equity and lines of credit | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 333 | 930 |
Current | 45,658 | 47,895 |
Loans Receivable | 45,991 | 48,825 |
Home equity and lines of credit | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 264 | 400 |
Home equity and lines of credit | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 457 | |
Home equity and lines of credit | 90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 69 | 73 |
Residential construction | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1 | 1 |
Current | 57,628 | 39,487 |
Loans Receivable | 57,629 | 39,488 |
Residential construction | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | ||
Residential construction | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | ||
Residential construction | 90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 1 | 1 |
Other construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 389 | 709 |
Current | 101,382 | 103,755 |
Loans Receivable | 101,771 | 104,464 |
Other construction and land | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 175 | 613 |
Other construction and land | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 16 | 32 |
Other construction and land | 90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 198 | 64 |
Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 990 | 453 |
Current | 44,918 | 54,190 |
Loans Receivable | 45,908 | 54,643 |
Commercial | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 15 | 307 |
Commercial | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 6 | 25 |
Commercial | 90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 969 | 121 |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 71 | 31 |
Current | 7,018 | 6,914 |
Loans Receivable | 7,089 | 6,945 |
Consumer | 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 70 | 27 |
Consumer | 60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | 4 | |
Consumer | 90 Days and Over Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Total Past Due | $ 1 |
ALLOWANCE FOR LOAN LOSSES (De_5
ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | $ 4,156 | $ 5,328 |
Unpaid Principal Balance, without a valuation allowance | 6,831 | 7,779 |
Recorded Balance, Recorded Balance, with a valuation allowance | 4,032 | 5,557 |
Unpaid Principal Balance, with a valuation allowance | 4,032 | 5,557 |
Recorded Balance | 8,188 | 10,885 |
Unpaid Principal Balance | 10,863 | 13,336 |
Specific Allowance | 350 | 167 |
One-to-four family residential | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 1,440 | 845 |
Unpaid Principal Balance, without a valuation allowance | 1,593 | 923 |
Recorded Balance, Recorded Balance, with a valuation allowance | 536 | 2,055 |
Unpaid Principal Balance, with a valuation allowance | 536 | 2,055 |
Recorded Balance | 1,976 | 2,900 |
Unpaid Principal Balance | 2,129 | 2,978 |
Specific Allowance | 39 | 79 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 1,896 | 3,835 |
Unpaid Principal Balance, without a valuation allowance | 4,279 | 6,207 |
Recorded Balance, Recorded Balance, with a valuation allowance | 1,593 | 2,184 |
Unpaid Principal Balance, with a valuation allowance | 1,593 | 2,184 |
Recorded Balance | 3,489 | 6,019 |
Unpaid Principal Balance | 5,872 | 8,391 |
Specific Allowance | 41 | 27 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 283 | 283 |
Unpaid Principal Balance, without a valuation allowance | 283 | 283 |
Recorded Balance, Recorded Balance, with a valuation allowance | 30 | |
Unpaid Principal Balance, with a valuation allowance | 30 | |
Recorded Balance | 283 | 313 |
Unpaid Principal Balance | 283 | 313 |
Specific Allowance | ||
Other Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 537 | 365 |
Unpaid Principal Balance, without a valuation allowance | 676 | 366 |
Recorded Balance, Recorded Balance, with a valuation allowance | 733 | 1,012 |
Unpaid Principal Balance, with a valuation allowance | 733 | 1,012 |
Recorded Balance | 1,270 | 1,377 |
Unpaid Principal Balance | 1,409 | 1,378 |
Specific Allowance | 44 | 54 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, Recorded Balance, with a valuation allowance | 1,170 | 276 |
Unpaid Principal Balance, with a valuation allowance | 1,170 | 276 |
Recorded Balance | 1,170 | 276 |
Unpaid Principal Balance | 1,170 | 276 |
Specific Allowance | $ 226 | $ 7 |
ALLOWANCE FOR LOAN LOSSES (De_6
ALLOWANCE FOR LOAN LOSSES (Details 6) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Average Investment in Impaired Loans, without a valuation allowance | $ 6,857 | $ 9,307 | $ 6,837 | $ 8,157 |
Interest Income Recognized, without a valuation allowance | 155 | 195 | 50 | 65 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 4,117 | 4,154 | 4,058 | 4,120 |
Interest Income Recognized, with a valuation allowance | 140 | 151 | 46 | 49 |
Average Investment in Impaired Loans | 10,974 | 13,461 | 10,895 | 12,277 |
Interest Income Recognized | 295 | 346 | 96 | 114 |
One-to-four family residential | ||||
Average Investment in Impaired Loans, without a valuation allowance | 1,607 | 2,264 | 1,597 | 2,247 |
Interest Income Recognized, without a valuation allowance | 62 | 69 | 20 | 23 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 545 | 831 | 540 | 825 |
Interest Income Recognized, with a valuation allowance | 24 | 32 | 8 | 11 |
Average Investment in Impaired Loans | 2,152 | 3,095 | 2,137 | 3,072 |
Interest Income Recognized | 86 | 101 | 28 | 34 |
Commercial Real Estate Portfolio Segment [Member] | ||||
Average Investment in Impaired Loans, without a valuation allowance | 4,286 | 5,920 | 4,280 | 4,790 |
Interest Income Recognized, without a valuation allowance | 62 | 97 | 20 | 32 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 1,610 | 2,184 | 1,598 | 2,172 |
Interest Income Recognized, with a valuation allowance | 66 | 68 | 22 | 22 |
Average Investment in Impaired Loans | 5,896 | 8,104 | 5,878 | 6,962 |
Interest Income Recognized | 128 | 165 | 42 | 54 |
Home Equity Line of Credit [Member] | ||||
Average Investment in Impaired Loans, without a valuation allowance | 283 | 428 | 283 | 428 |
Interest Income Recognized, without a valuation allowance | 13 | 13 | 4 | 4 |
Average Investment in Impaired Loans | 283 | 428 | 283 | 428 |
Interest Income Recognized | 13 | 13 | 4 | 4 |
Other Portfolio Segment [Member] | ||||
Average Investment in Impaired Loans, without a valuation allowance | 681 | 695 | 677 | 692 |
Interest Income Recognized, without a valuation allowance | 18 | 16 | 6 | 6 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 796 | 854 | 762 | 842 |
Interest Income Recognized, with a valuation allowance | 34 | 34 | 11 | 11 |
Average Investment in Impaired Loans | 1,477 | 1,549 | 1,439 | 1,534 |
Interest Income Recognized | 52 | 50 | 17 | 17 |
Commercial Portfolio Segment [Member] | ||||
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 1,166 | 285 | 1,158 | 281 |
Interest Income Recognized, with a valuation allowance | 16 | 17 | 5 | 5 |
Average Investment in Impaired Loans | 1,166 | 285 | 1,158 | 281 |
Interest Income Recognized | $ 16 | $ 17 | $ 5 | $ 5 |
ALLOWANCE FOR LOAN LOSSES (De_7
ALLOWANCE FOR LOAN LOSSES (Details 7) - Nonperforming Financing Receivable [Member] - Loans [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | $ 4,270 | $ 4,857 |
One-to-four family residential | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 1,132 | 1,037 |
Commercial Real Estate Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 1,859 | 3,266 |
Home Equity Line of Credit [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 69 | 178 |
Residential construction | ||
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 | 233 | 256 |
Commercial Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 975 | 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) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)Number | Sep. 30, 2018USD ($)Number | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | $ 6,916 | $ 9,633 | ||
Performing Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 5,582 | 7,588 | ||
Nonperforming Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 1,334 | 2,045 | ||
One-to-four family residential | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 1,617 | 2,515 | ||
One-to-four family residential | Performing Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 1,617 | 2,154 | ||
One-to-four family residential | Nonperforming Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 361 | |||
Commercial Real Estate Portfolio Segment [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 3,484 | 5,152 | ||
Number of Loans Modifications | Number | 1 | |||
Modification Outstanding Recorded Investment | $ 206 | |||
Commercial Real Estate Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 2,332 | 3,690 | ||
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 1,152 | 1,462 | ||
Home Equity Line of Credit [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 283 | 313 | ||
Home Equity Line of Credit [Member] | Performing Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 283 | 283 | ||
Home Equity Line of Credit [Member] | Nonperforming Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 30 | |||
Other Portfolio Segment [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 1,269 | 1,377 | ||
Other Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 1,087 | 1,185 | ||
Other Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 182 | 192 | ||
Commercial Portfolio Segment [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 263 | 276 | ||
Commercial Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans | 263 | 276 | ||
Commercial Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDR loans |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 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 | (1,781) | (1,263) |
Finite Lived Core Deposits Net | 3,059 | $ 3,577 |
Amortization expense | $ 700 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Deposits By Type [Line Items] | |||||
Balance | $ 1,279,945 | $ 1,256,032 | $ 1,279,945 | $ 1,256,032 | $ 1,221,240 |
Interest Expense | 3,633 | 2,331 | 9,963 | 5,540 | 8,118 |
Noninterest-bearing demand [Member] | |||||
Deposits By Type [Line Items] | |||||
Balance | 211,356 | 199,224 | 211,356 | 199,224 | 184,404 |
Interest Expense | |||||
Interest-bearing Deposits [Member] | |||||
Deposits By Type [Line Items] | |||||
Balance | 186,201 | 206,967 | 186,201 | 206,967 | 209,085 |
Interest Expense | 273 | 282 | 374 | ||
Money Market Funds [Member] | |||||
Deposits By Type [Line Items] | |||||
Balance | 463,289 | 372,428 | 463,289 | 372,428 | 356,086 |
Interest Expense | 4,185 | 1,687 | 2,637 | ||
Savings Deposits [Member] | |||||
Deposits By Type [Line Items] | |||||
Balance | 45,119 | 52,874 | 45,119 | 52,874 | 50,716 |
Interest Expense | 41 | 44 | 59 | ||
Time deposit [Member] | |||||
Deposits By Type [Line Items] | |||||
Balance | $ 373,980 | $ 424,539 | 373,980 | 424,539 | 420,949 |
Interest Expense | $ 5,464 | $ 3,527 | $ 5,048 |
DEPOSITS (Details 2)
DEPOSITS (Details 2) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Disclosure Deposits Details 3Abstract | |||
Wholesale money market | $ 5,030 | $ 49,595 | |
Wholesale time deposits | 70,379 | 70,978 | 71,880 |
Total | $ 70,379 | $ 76,008 | $ 121,475 |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Federal Home Loan Bank, Advances [Abstract] | ||
2019 | $ 85,500 | $ 168,500 |
2020 | 115,000 | 45,000 |
2024 | 5,000 | |
Total | $ 205,500 | $ 213,500 |
Federal Home Loan Bank, Advances, Weighted Average Rate [Abstract] | ||
2019 | 2.53% | 2.52% |
2020 | 2.34% | 2.80% |
2024 | 2.81% | |
Total | 2.40% | 2.58% |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Designated as Hedging Instrument [Member] | |||
Asset derivatives, Fair value | [1] | $ 97 | $ 354 |
Liability derivatives, Fair value | [1] | 1,760 | 462 |
Designated as Hedging Instrument [Member] | Interest rate swaps [Member] | |||
Asset derivatives, Fair value | [1] | 97 | 354 |
Liability derivatives, Fair value | [1] | 1,760 | 462 |
Designated as Hedging Instrument [Member] | Mortgage Derivatives [Member] | |||
Asset derivatives, Fair value | [1] | 79 | 34 |
Liability derivatives, Fair value | [1] | 16 | 22 |
Not Designated as Hedging Instrument [Member] | |||
Asset derivatives, Fair value | [1] | 79 | 34 |
Liability derivatives, Fair value | [1] | $ 16 | $ 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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest Income | $ 16,996 | $ 15,978 | $ 50,284 | $ 46,149 |
Interest Expenses | 5,142 | 3,686 | 14,757 | 9,154 |
Fair Value Hedging Relationships [Member] | Hedged Assets [Member] | ||||
Interest Income | 120 | (182) | 843 | (263) |
Fair Value Hedging Relationships [Member] | Interest Rate Swap - Derivatives Designated As Hedging Instruments [Member] | ||||
Interest Income | (148) | 187 | (893) | 261 |
Cash Flow Hedging Relationships [Member] | Interest Rate Swap - Accumulated Other Comprehensive Loss Into Income [Member] | ||||
Interest Expenses | $ (49) | $ (149) | $ (172) | $ (347) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Loan Receivable | $ 1,076,581 | $ 1,076,069 | |
Hedged Assets [Member] | |||
Loan Receivable | [1] | 90,639 | |
Hedged Assets [Member] | Fair Value Hedging Relationships [Member] | |||
Loan Receivable | [1] | $ 1,088 | |
[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 September 30, 2019, the amortized cost basis of the closed portfolio used in the the hedging relationship was $90.6 million, the cumulative basis adjustment associated with the hedging relationship was $1.1 million, and the amount of the designated hedged items was $25.0 million. |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 4) - Junior Subordinated Debt [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Loans and Leases Receivable Commitments, Fixed Interest Rates | |||||
Amount of gain (loss) recognized in AOCI on derivatives | $ (85) | $ 93 | $ (531) | $ 303 | $ 2 |
Amount of gain (loss) reclassified from AOCI into income | (49) | (149) | (172) | (347) | (431) |
Amount of gain (loss) recognized in consolidated statement of comprehensive income | $ (134) | $ (56) | $ (703) | $ (44) | $ (429) |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 6) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Amount of gain (loss) recognized in income | $ (44) | $ (34) | $ (94) | $ (50) | |
Interest Rate Lock Commitments [Member] | |||||
Amount of gain (loss) recognized in income | (15) | (46) | 30 | (17) | |
Forward Sales Commitments [Member] | |||||
Amount of gain (loss) recognized in income | (29) | $ 12 | (124) | $ (33) | |
Residential Real Estate [Member] | Interest Rate Lock Commitments [Member] | |||||
Fair value Derivative Assets and Liabilities | 8,003 | 8,003 | $ 1,627 | ||
Residential Real Estate [Member] | Forward Sales Commitments [Member] | |||||
Fair value Derivative Assets and Liabilities | $ 12,750 | $ 12,750 | $ 3,500 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Allowance for loan losses | $ 2,817 | $ 2,703 |
Deferred compensation and post-employment benefits | 1,820 | 1,854 |
Non-accrual interest | 259 | 245 |
Valuation reserve for other real estate | 253 | 191 |
North Carolina NOL carryover | 91 | 293 |
Federal NOL carryover | 1,231 | |
AMT credit carryover | 316 | |
General federal business credit carryover | 310 | 691 |
Unrealized losses on securities | 344 | 1,061 |
Loan basis differences | 42 | 50 |
Fixed assets | 144 | 123 |
Core deposit intangible | 186 | 129 |
Derivative instruments | 121 | |
Other | 1,542 | 1,207 |
Total deferred tax assets | 7,929 | 10,094 |
Deferred tax liabilities: | ||
Loan servicing rights | 579 | 653 |
Goodwill | 754 | 495 |
Core deposit intangible | 61 | 74 |
Deferred loan costs | 1,018 | 1,001 |
Prepaid expenses | 14 | 14 |
Unrealized gains on securities | 2,448 | 105 |
Derivative instruments | 14 | 29 |
Investment in partnerships | 170 | 155 |
Other | 17 | |
Total deferred tax liabilities | 5,058 | 2,543 |
Net deferred tax asset | $ 2,871 | $ 7,551 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
North Carolina [Member] | |
Unused Net Operating Losses | $ 6,311 |
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 | $ 310 |
Expiration Dates | 2038 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net income | $ 3,997 | $ 2,164 | $ 3,815 | $ 3,523 | $ 3,087 | $ 3,582 | $ 9,976 | $ 10,192 |
Weighted average shares outstanding | 6,923,114 | 6,891,672 | 6,920,880 | 6,889,130 | ||||
Effect of dilutive stock options | 121,076 | 90,580 | 75,283 | 92,465 | ||||
Effect of dilutive restricted stock units | 45,660 | 48,898 | 33,001 | 42,119 | ||||
Weighted-average common shares outstanding - diluted | 7,089,850 | 7,031,150 | 7,029,164 | 7,023,714 | ||||
Earnings per share - basic | $ 0.58 | $ 0.51 | $ 1.44 | $ 1.48 | ||||
Earnings per share - diluted | 0.56 | 0.50 | 1.42 | 1.45 | ||||
Equity Option [Member] | ||||||||
Average Stock Price | $ 29.93 | $ 28.25 | $ 27.08 | $ 28.44 | ||||
Anti-Dilutaive Shares | 11,900 | 30,438 | 44,900 | 23,721 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Balance, beginning of period | $ 4,150 | $ (3,821) | $ (23) | $ (3,424) | $ (23) | $ (23) |
Change in net unrealized holding losses on securities available for sale | 2,455 | (2,318) | 12,889 | (8,181) | ||
Reclassification adjustment for net securities losses realized in net income | 947 | |||||
Change in unrealized holding gains and losses on cash flow hedge | (85) | 93 | (531) | 303 | 2 | |
Reclassification adjustment for cash flow hedge effectiveness | (49) | (149) | (172) | (347) | (431) | |
Cumulative effect of change in accounting principle | 9 | |||||
Income tax effect | (532) | 538 | (2,823) | 1,635 | ||
Balance, end of period | 5,939 | (5,657) | 5,939 | (5,657) | (3,424) | |
Available-for-sale Securities [Member] | ||||||
Balance, beginning of period | 4,496 | (4,271) | (455) | (3,528) | (455) | (455) |
Change in net unrealized holding losses on securities available for sale | 2,455 | (2,318) | 12,889 | (8,181) | ||
Reclassification adjustment for net securities losses realized in net income | 947 | |||||
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 | (560) | 524 | (2,970) | 1,615 | ||
Balance, end of period | 6,391 | (6,065) | 6,391 | (6,065) | (3,528) | |
Cash Flow Hedge [Member] | ||||||
Balance, beginning of period | (346) | 450 | $ 432 | 104 | 432 | 432 |
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 | (85) | 93 | (531) | 303 | ||
Reclassification adjustment for cash flow hedge effectiveness | (49) | (149) | (172) | (347) | ||
Cumulative effect of change in accounting principle | ||||||
Income tax effect | 28 | 14 | 147 | 20 | ||
Balance, end of period | $ (452) | $ 408 | $ (452) | $ 408 | $ 104 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense - Junior subordinated notes | $ 142 | $ 141 | $ 423 | $ 421 |
Cash Flow Hedge [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense - FHLB advances | 99 | 223 | ||
Interest expense - Junior subordinated notes | 49 | 50 | 172 | 124 |
Tax effect | (11) | (33) | (39) | (78) |
Impact, net of tax | 38 | 116 | 133 | 269 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Impact, net of tax | 38 | 116 | 133 | (465) |
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 | (947) | |||
Tax effect | 213 | |||
Impact, net of tax | $ (734) |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 160,879 |
Lines of credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | 159,801 |
Standby Letters of Credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 1,078 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Fixed | $ 20,965 |
Variable | 4,869 |
Total | $ 25,834 |
Minimum [Member] | |
Fixed (as a percent) | 3.13% |
Variable (as a percent) | 2.88% |
Maximum [Member] | |
Fixed (as a percent) | 6.99% |
Variable (as a percent) | 6.49% |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 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 | Sep. 30, 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 | $ 364,191 | $ 371,572 |
Liabilities measured at fair value on recurring basis | 1,776 | 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 | 2,520 | 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 | 79 | 34 |
Liabilities measured at fair value on recurring basis | 16 | 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 | 97 | 354 |
Liabilities measured at fair value on recurring basis | 1,760 | 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 | 5,221 | 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 | 12,026 | 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 | 343,851 | 354,650 |
Liabilities measured at fair value on recurring basis | 1,760 | 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 | 97 | 354 |
Liabilities measured at fair value on recurring basis | 1,760 | 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 | 8,314 | 5,795 |
Liabilities measured at fair value on recurring basis | 16 | 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 | 2,520 | 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 | 79 | 34 |
Liabilities measured at fair value on recurring basis | 16 | 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 | 5,221 | 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 | 6,947 | 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 | 6,947 | 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 | 349,327 | 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 | 33,258 | 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 | 120,156 | 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 | 73,834 | 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 | 21,774 | 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 | 65,264 | 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 | 15,221 | 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 | 19,820 | 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 | 5,079 | 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 | 5,079 | 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 | 343,754 | 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 | 28,179 | 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 | 120,156 | 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 | 73,834 | 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 | 21,774 | 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 | 65,264 | 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 | 15,221 | 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 | 19,326 | 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 | 494 | 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 | $ 494 | $ 493 |
FAIR VALUE DISCLOSURES (Detai_2
FAIR VALUE DISCLOSURES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest Expense Federal Home Loan Bank Advances | ||||
Balance at beginning of period | $ 6,683 | $ 4,404 | $ 5,773 | $ 3,321 |
Fair value adjustment to AFS securities | 1 | |||
Mortgage loans held for sale | 1,647 | 651 | 2,790 | 1,821 |
Capitalization from loans sold | 133 | 129 | 225 | 374 |
Fair value adjustment | (176) | (43) | (542) | (359) |
Mortgage derivative gains included in Other income | 11 | (34) | 51 | (50) |
Balance at end of period | $ 8,298 | $ 5,107 | $ 8,298 | $ 5,107 |
FAIR VALUE DISCLOSURES (Detai_3
FAIR VALUE DISCLOSURES (Details 3) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets measured at fair value on nonrecurring basis | $ 364,191 | $ 371,572 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets measured at fair value on nonrecurring basis | 8,314 | 5,795 |
Fair Value, Measurements, Nonrecurring [Member] | ||
Assets measured at fair value on nonrecurring basis | 7,224 | 7,821 |
Impaired loans measured at present value | 4,000 | 5,600 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets measured at fair value on nonrecurring basis | 7,224 | 7,821 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | One-to-four family residential | ||
Assets measured at fair value on nonrecurring basis | 1,440 | 845 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 1,896 | 3,835 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Home Equity Line of Credit [Member] | ||
Assets measured at fair value on nonrecurring basis | 283 | 283 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 537 | 365 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | One-to-four family residential | ||
Assets measured at fair value on nonrecurring basis | 1,440 | 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 | 1,896 | 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 | 283 | 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 | 537 | 365 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | One-to-four family residential | ||
Assets measured at fair value on nonrecurring basis | 349 | 228 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 1,485 | 949 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 1,257 | 1,316 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | One-to-four family residential | ||
Assets measured at fair value on nonrecurring basis | 349 | 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 | 1,485 | 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 | $ 1,254 | $ 1,316 |
FAIR VALUE DISCLOSURES (Detai_4
FAIR VALUE DISCLOSURES (Details 4) | 9 Months Ended |
Sep. 30, 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 | 100.00% |
Corporate Bond [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 108.00% |
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 | 11.00% |
Discount rate | 10.00% |
Loan Servicing Rights[Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Prepayment Speed | 21.00% |
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 | 100.00% |
Mortgage loans held for sale [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Recent trade pricing | 106.00% |
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 | 72.00% |
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 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||||
Cash and equivalents | $ 144,196 | $ 69,119 | $ 117,265 | $ 109,467 |
Trading securities | 6,947 | 6,178 | ||
Securities available for sale | 349,327 | 359,738 | ||
Loans held for sale | 11,142 | 7,570 | ||
Other investments, at cost | 11,652 | 12,039 | ||
Accrued interest receivable | 6,163 | 6,443 | ||
Bank owned life insurance | 32,461 | 32,886 | ||
Loan servicing rights | 2,520 | 2,837 | ||
Liabilities: | ||||
Federal Home Loan Bank advances | 205,500 | 213,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 4,463 | 9,299 | ||
Accrued interest payable | 1,730 | 1,647 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Assets: | ||||
Cash and equivalents | 144,196 | 69,119 | ||
Trading securities | 6,947 | 6,178 | ||
Securities available for sale | 5,079 | 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 | 343,754 | 354,297 | ||
Loans held for sale | 6,596 | 5,683 | ||
Loans receivable, net | ||||
Other investments, at cost | 11,652 | 12,039 | ||
Accrued interest receivable | 6,163 | 6,443 | ||
Bank owned life insurance | 32,461 | 32,886 | ||
Loan servicing rights | ||||
SBIC investments | ||||
Liabilities: | ||||
Demand deposits | 905,965 | 800,291 | ||
Time deposits | ||||
Federal Home Loan Bank advances | 204,846 | 213,513 | ||
Junior subordinated debentures | 13,292 | 12,440 | ||
Other borrowings | 4,697 | 9,253 | ||
Accrued interest payable | 1,730 | 1,647 | ||
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||||
Assets: | ||||
Derivative asset | 97 | 354 | ||
Liabilities: | ||||
Derivative Liabilities | 1,760 | 462 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Assets: | ||||
Cash and equivalents | ||||
Trading securities | ||||
Securities available for sale | 494 | 493 | ||
Loans held for sale | 5,221 | 2,431 | ||
Loans receivable, net | 1,048,805 | 1,046,136 | ||
Other investments, at cost | ||||
Accrued interest receivable | ||||
Bank owned life insurance | ||||
Loan servicing rights | 2,520 | 2,837 | ||
SBIC investments | 4,993 | 3,839 | ||
Liabilities: | ||||
Demand deposits | ||||
Time deposits | 379,529 | 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 | 79 | 34 | ||
Liabilities: | ||||
Derivative Liabilities | 16 | 22 | ||
Reported Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 144,196 | 69,119 | ||
Trading securities | 6,947 | 6,178 | ||
Securities available for sale | 349,327 | 359,739 | ||
Loans held for sale | 11,142 | 7,570 | ||
Loans receivable, net | 1,076,581 | 1,076,069 | ||
Other investments, at cost | 11,652 | 12,039 | ||
Accrued interest receivable | 6,163 | 6,443 | ||
Bank owned life insurance | 32,461 | 32,886 | ||
Loan servicing rights | 2,520 | 2,837 | ||
SBIC investments | 4,993 | 3,839 | ||
Liabilities: | ||||
Demand deposits | 905,965 | 800,291 | ||
Time deposits | 373,980 | 420,949 | ||
Federal Home Loan Bank advances | 205,500 | 213,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 4,463 | 9,299 | ||
Accrued interest payable | 1,730 | 1,647 | ||
Reported Value Measurement [Member] | Interest Rate Swap [Member] | ||||
Assets: | ||||
Derivative asset | 97 | 354 | ||
Liabilities: | ||||
Derivative Liabilities | 1,760 | 462 | ||
Reported Value Measurement [Member] | Mortgage Derivatives [Member] | ||||
Assets: | ||||
Derivative asset | 79 | 34 | ||
Liabilities: | ||||
Derivative Liabilities | 16 | 22 | ||
Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 144,196 | 69,119 | ||
Trading securities | 6,947 | 6,178 | ||
Securities available for sale | 349,327 | 359,739 | ||
Loans held for sale | 11,817 | 8,114 | ||
Loans receivable, net | 1,048,805 | 1,046,136 | ||
Other investments, at cost | 11,652 | 12,039 | ||
Accrued interest receivable | 6,163 | 6,443 | ||
Bank owned life insurance | 32,461 | 32,886 | ||
Loan servicing rights | 2,520 | 2,837 | ||
SBIC investments | 4,993 | 3,839 | ||
Liabilities: | ||||
Demand deposits | 905,965 | 800,291 | ||
Time deposits | 379,529 | 424,054 | ||
Federal Home Loan Bank advances | 204,846 | 213,513 | ||
Junior subordinated debentures | 13,292 | 12,440 | ||
Other borrowings | 4,697 | 9,253 | ||
Accrued interest payable | 1,730 | 1,647 | ||
Fair Value Measurement [Member] | Interest Rate Swap [Member] | ||||
Assets: | ||||
Derivative asset | 97 | 354 | ||
Liabilities: | ||||
Derivative Liabilities | 1,760 | 462 | ||
Fair Value Measurement [Member] | Mortgage Derivatives [Member] | ||||
Assets: | ||||
Derivative asset | 79 | 34 | ||
Liabilities: | ||||
Derivative Liabilities | $ 16 | $ 22 |
LEASES (Details)
LEASES (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 36 |
2020 | 69 |
2021 | 53 |
2022 | 53 |
2023 | 53 |
Thereafter | 177 |
Total undiscounted lease payments | 441 |
Discount effect of cash flows | (55) |
Total lease liability | $ 386 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Total Operating Lease Cost | $ 51 | $ 156 |