Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 12, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Entity Registrant Name | Virginia National Bankshares Corp | ||
Entity Central Index Key | 0001572334 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 2,559,115 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 112,395,854 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and due from banks | $ 11,741 | $ 11,390 |
Federal funds sold | 7,133 | 6,887 |
Securities: | ||
Available for sale, at fair value | 61,392 | 67,501 |
Restricted securities, at cost | 1,683 | 2,284 |
Total securities | 63,075 | 69,785 |
Loans | 537,190 | 528,784 |
Allowance for loan losses | (4,891) | (4,043) |
Loans, net | 532,299 | 524,741 |
Premises and equipment, net | 7,042 | 7,371 |
Bank owned life insurance | 16,790 | 16,344 |
Goodwill | 372 | 372 |
Other intangible assets, net | 477 | 579 |
Accrued interest receivable and other assets | 5,871 | 6,417 |
Total assets | 644,800 | 643,886 |
Demand deposits: | ||
Noninterest-bearing | 185,819 | 193,081 |
Interest-bearing | 106,884 | 102,583 |
Money market and savings deposit accounts | 171,299 | 138,065 |
Certificates of deposit and other time deposits | 108,531 | 109,233 |
Total deposits | 572,533 | 542,962 |
Repurchase agreements and other borrowings | 34,092 | |
Accrued interest payable and other liabilities | 1,525 | 1,727 |
Total liabilities | 574,058 | 578,781 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Preferred stock, $2.50 par value, 2,000,000 shares authorized, no shares outstanding | ||
Common stock, $2.50 par value, 10,000,000 shares authorized; 2,543,452 and 2,410,680 shares issued and outstanding in 2018 and 2017, respectively | 6,359 | 6,027 |
Capital surplus | 27,013 | 22,038 |
Retained earnings | 38,647 | 37,923 |
Accumulated other comprehensive loss | (1,277) | (883) |
Total shareholders' equity | 70,742 | 65,105 |
Total liabilities and shareholders' equity | $ 644,800 | $ 643,886 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 2.50 | $ 2.50 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value per share | $ 2.50 | $ 2.50 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 2,543,452 | 2,410,680 |
Common stock, shares outstanding | 2,543,452 | 2,410,680 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Interest and dividend income: | |||
Loans, including fees | $ 23,919 | $ 20,864 | |
Federal funds sold | 209 | 241 | |
Investment securities: | |||
Taxable | 1,073 | 1,115 | |
Tax exempt | 340 | 288 | |
Dividends | 145 | 96 | |
Other | 7 | ||
Total interest and dividend income | 25,686 | 22,611 | |
Interest expense: | |||
Demand and savings deposits | 1,134 | 467 | |
Certificates and other time deposits | 1,258 | 663 | |
Repurchase agreements and other borrowings | 398 | 104 | |
Total interest expense | 2,790 | 1,234 | |
Net interest income | 22,896 | 21,377 | |
Provision for loan losses | 1,873 | 418 | |
Net interest income after provision for loan losses | 21,023 | 20,959 | |
Noninterest income: | |||
Trust income | 1,665 | 2,407 | |
Advisory and brokerage income | 565 | 520 | |
Royalty income | 585 | 230 | |
Customer service fees | 909 | 927 | |
Debit/credit card and ATM fees | 747 | 864 | |
Earnings/increase in value of bank owned life insurance | 446 | 427 | |
Fees on mortgage sales | 193 | 138 | |
Losses on sales and calls of securities | (75) | ||
Losses on sales of assets | (33) | ||
Other | 453 | 442 | |
Total noninterest income | 5,530 | 5,880 | |
Noninterest expense: | |||
Salaries and employee benefits | 8,036 | 8,281 | |
Net occupancy | 1,835 | 1,860 | |
Equipment | 500 | 541 | |
Data Processing | 1,088 | 990 | |
Other | 4,555 | 4,210 | |
Total noninterest expense | 16,014 | 15,882 | |
Income before income taxes | 10,539 | 10,957 | |
Provision for income taxes | 2,069 | 4,403 | |
Net income | $ 8,470 | $ 6,554 | |
Net income per common share, basic | [1] | $ 3.33 | $ 2.61 |
Net income per common share, diluted | [1] | $ 3.31 | $ 2.58 |
[1] | Per share data has been adjusted to reflect a 5% stock dividend effective April 13, 2018. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 8,470 | $ 6,554 |
Other comprehensive income (loss) | ||
Unrealized losses on securities, net of tax of ($105) and ($4) for the years ended December 31, 2018 and 2017 | (394) | (9) |
Reclassification adjustment for realized losses on sales, net of tax of $0 and $25 for the years ended December 31, 2018 and 2017 | 50 | |
Total other comprehensive income (loss) | (394) | 41 |
Total comprehensive income | $ 8,076 | $ 6,595 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain on available-for-sale securities, tax | $ (105) | $ (4) |
Reclassification adjustment for realized gains on sales and calls of securities, tax | $ 0 | $ 25 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Capital Surplus [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2016 | $ 5,922 | $ 21,152 | $ 32,759 | $ (779) | $ 59,054 |
Stock options exercised | 105 | 876 | 981 | ||
Stock option/grant expense | 10 | 10 | |||
Cash dividends declared | (1,535) | (1,535) | |||
Net income | 6,554 | 6,554 | |||
Reclassification of stranded tax effects from changes in tax rate | 145 | (145) | |||
Other comprehensive income (loss) | 41 | 41 | |||
Balance at Dec. 31, 2017 | 6,027 | 22,038 | 37,923 | (883) | 65,105 |
Stock options exercised | 31 | 237 | 268 | ||
Stock option/grant expense | 65 | 65 | |||
Cash dividends declared | (2,772) | (2,772) | |||
Net income | 8,470 | 8,470 | |||
5% stock dividend distributed | 301 | 4,673 | (4,974) | ||
Other comprehensive income (loss) | (394) | (394) | |||
Balance at Dec. 31, 2018 | $ 6,359 | $ 27,013 | $ 38,647 | $ (1,277) | $ 70,742 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend declared, per share | $ 1.09 | $ 0.64 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 8,470 | $ 6,554 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 1,873 | 418 |
Net amortization and accretion of securities | 275 | 415 |
Losses on sales and calls of securities | 75 | |
Earnings/increase in value of bank owned life insurance | (446) | (427) |
Amortization of intangible assets | 109 | 112 |
Depreciation and other amortization | 1,117 | 1,138 |
Net loss on sale of assets | 33 | |
Deferred tax expense (benefit) | (234) | 768 |
Stock option/stock grant expense | 65 | 10 |
Decrease (increase) in accrued interest receivable and other assets | 910 | (509) |
Increase (decrease) in accrued interest payable and other liabilities | (415) | 241 |
Net cash provided by operating activities | 11,757 | 8,795 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of available for sale securities | (45,290) | |
Net decrease (increase) in restricted investments | 601 | (575) |
Proceeds from maturities, calls and principal payments of available for sale securities | 5,335 | 9,599 |
Proceeds from sale of available for sale securities | 24,424 | |
Net decrease (increase) in organic loans | 7,721 | (27,514) |
Net increase in purchased loans | (17,152) | (19,198) |
Purchase of wealth management book of business | (100) | (300) |
Purchase of bank owned life insurance | (2,000) | |
Purchase of bank premises and equipment, net | (846) | (463) |
Net cash used in investing activities | (4,441) | (61,317) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net increase in demand deposits, NOW accounts, and money market accounts | 30,273 | 24,104 |
Net decrease in certificates of deposit and other time deposits | (702) | (5,793) |
Net decrease in securities sold under agreements to repurchase | (19,092) | (608) |
Net increase (decrease) in short term borrowings | (15,000) | 15,000 |
Proceeds from stock options exercised | 268 | 981 |
Cash dividends paid | (2,466) | (1,385) |
Net cash provided by (used in) financing activities | (6,719) | 32,299 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 597 | (20,223) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 18,277 | 38,500 |
End of period | 18,874 | 18,277 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash payments for: Interest | 2,657 | 1,231 |
Cash payments for: Taxes | 2,465 | 3,775 |
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES | ||
Unrealized gain (loss) on available for sale securities | $ (499) | $ 62 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Organization Virginia National Bankshares Corporation (the “Company”) is a bank holding company incorporated under the laws of the Commonwealth of Virginia. The Company is authorized to issue (a) 10,000,000 shares of common stock with a par value of $2.50 per share and (b) 2,000,000 shares of preferred stock at a par value $2.50 per share. There is currently no preferred stock outstanding. The Company is regulated under the Bank Holding Company Act of 1956, as amended and is subject to inspection, examination, and supervision by the Federal Reserve Board. Virginia National Bank (the “Bank”) is a wholly-owned subsidiary of the Company and was organized in 1998 under federal law as a national banking association to engage in a general commercial and retail banking business. The Bank is headquartered in Charlottesville, Virginia and primarily serves the Virginia communities in and around the cities of Charlottesville, Winchester, and Harrisonburg and the counties of Albemarle and Frederick. As a national bank, the Bank is subject to the supervision, examination and regulation of the Office of the Comptroller of the Currency (“OCC”). Effective July 1, 2018, VNBTrust, National Association (“VNBTrust”), formerly a subsidiary of the Bank, was merged into Virginia National Bank, and the Bank continues to offer investment management, wealth advisory and trust and estate administration services under the name of VNB Wealth Management, also referred to herein as “VNB Wealth.” All references herein to VNB Wealth Management or VNB Wealth refer to VNBTrust for periods prior to July 1, 2018. During 2018, the Company changed the structure of its VNB Wealth lines of business. The Company formed Masonry Capital Management, LLC (“Masonry Capital”), a registered investment adviser, to offer investment advisory and management services to clients through separately managed accounts and through one or more private investment fund(s). The Company believes the formation of Masonry Capital will allow the Company to offer its investment strategy to a wider range of clients. Masonry Capital is a wholly-owned subsidiary of the Company. Sale Agreement with SRCM Holdings LLC and Acquisition Royalty Payments Due to the Company In 2007 when VNBTrust was established, the OCC also approved the Bank’s application for VNBTrust to create a wholly owned operating subsidiary, VNB Investment Management Company, LLC, a Delaware limited liability corporation. In January 2010, VNB Investment Management Company changed its name to Swift Run Capital Management, LLC (“SRCM”). SRCM served as the general partner of Swift Run Capital, L.P. (the “Fund”), a private investment fund. On July 18, 2013 (the “Closing Date”), the Company completed the sale of all of the membership interests of SRCM to SRCM Holdings LLC (“SRCM Holdings”) pursuant to a purchase and sale agreement dated June 27, 2013 (the “SRCM Sale Agreement”). A former officer of the Company is the principal owner of SRCM Holdings. Under the terms of the SRCM Sale Agreement, SRCM Holdings agreed to pay the Company periodically during the ten-year period beginning January 1, 2014 and ending December 31, 2023 (the “Term”), (i) ongoing acquisition royalty payments equal to 20% of the management and performance fee revenue received by SRCM from limited partners of the Fund as of the Closing Date and from VNBTrust clients that opened accounts with SRCM within 30 days of the Closing Date, and (ii) ongoing referral royalty payments equal to 20% of the management and performance fee revenue received by SRCM from other clients referred by the Company and its affiliates to SRCM during the Term. A portion of the payments received from SRCM are applied to write down a contingent asset that was established to estimate the value for the sale of SRCM, with the remaining portion of the payments applied to noninterest income as royalty income. Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to the reporting guidelines prescribed by regulatory authorities. The following is a description of the more significant of those policies and practices. Principles of consolidation – The consolidated financial statements include the accounts of Virginia National Bankshares Corporation (the “Company”), and its subsidiary Virginia National Bank (the “Bank”). All references herein to VNB Wealth Management or VNB Wealth refer to VNBTrust for periods prior to July 1, 2018. All significant intercompany balances and transactions have been eliminated in consolidation. Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 (including impaired loans), other-than-temporary impairment of securities, intangible assets, income taxes, and fair value measurements. Cash flow reporting – For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on hand, funds due from banks, and federal funds sold. Securities sold under agreements to repurchase – The Company sold certain securities under agreements to repurchase in 2017 and 2018. The agreements were treated as collateralized financing transactions and the obligations to repurchase securities sold were reflected as a liability in the accompanying consolidated balance sheets. The dollar amount of the securities underlying the agreements remained in the asset accounts. The Company discontinued the repurchase agreement product effective December 31, 2018. Securities – Unrestricted investments are classified in two categories as described below. ● Securities held to maturity – Securities classified as held to maturity are those debt securities the Company has both the positive intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. Currently the Company has no securities classified as held to maturity because of Management’s desire to have more flexibility in managing the investment portfolio. ● Securities available for sale – Securities classified as available for sale are those debt securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities available for sale are carried at fair value. Unrealized gains or losses are reported as a separate component of other comprehensive income. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities or to “call” dates, whichever occurs first. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Impairment of securities occurs when the fair value of a security is less than its amortized cost. For debt securities, impairment is considered other-than-temporary and recognized in its entirety in net income if either (1) the Company intends to sell the security or (2) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If, however, the Company does not intend to sell the security and it is not more-than-likely that the Company will be required to sell the security before recovery, the Company must determine what portion of the impairment is attributable to a credit loss, which occurs when the amortized cost of the security exceeds the present value of the cash flows expected to be collected from the security. If there is no credit loss, there is no other-than-temporary impairment. If there is a credit loss, other-than-temporary impairment exists, and the credit loss must be recognized in net income and the remaining portion of impairment must be recognized in other comprehensive income. Restricted securities – As members of the Federal Reserve Bank of Richmond (“FRB”) and the Federal Home Loan Bank of Atlanta (“FHLB”), the Company is required to maintain certain minimum investments in the common stock of the FRB and FHLB. Required levels of investments are based upon the Bank’s capital and a percentage of qualifying assets. Additionally, the Company has purchased common stock in CBB Financial Corp. (“CBBFC”), the holding company for Community Bankers’ Bank. Shares of common stock from the FRB, FHLB and CBBFC are classified as restricted securities which are carried at cost Loans – Loans are reported at the principal balance outstanding net of unearned discounts and of the allowance for loan losses. Interest income on loans is reported on the level-yield method and includes amortization of deferred loan fees and costs over the loan term. Purchased performing loans are accounted for in the same manner as the rest of the loan portfolio. Further information regarding the Company’s accounting policies related to past due loans, non-accrual loans, impaired loans and troubled-debt restructurings is presented in Note 3 - Loans. Allowance for loan losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses inherent in the loan portfolio. The allowance for loan losses includes allowance allocations calculated in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 310, “Receivables” and allowance allocations calculated in accordance with ASC Topic 450, “Contingencies.” Further information regarding the Company’s policies and methodology used to estimate the allowance for loan losses is presented in Note 4 – Allowance for Loan Losses. Transfers of financial assets – Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company or its subsidiaries – put presumptively beyond reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company or its subsidiaries does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. Premises and equipment – Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method based on the estimated useful lives of assets, which range from 3 to 20 years. Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and betterments are capitalized and depreciated over their estimated useful lives. Upon disposition, the asset and related accumulated depreciation are removed from the books and any resulting gain or loss is charged to income. More information regarding premises and equipment is presented in Note 5 – Premises and Equipment. Intangible Assets – Goodwill is determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and other intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually, or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. Intangible assets with definite useful lives are amortized over their estimated useful lives, which range from 3 to 10 years, to their estimated residual values. Goodwill is the only intangible asset with an indefinite life included on the Company’s Consolidated Balance Sheets. Management has concluded that no circumstances indicating an impairment of these assets existed as of the balance sheet date. Bank owned life insurance – The Company has purchased life insurance on certain key employees. These policies are recorded at their cash surrender value on the Consolidated Balance Sheets. Income generated from polices is recorded as noninterest income. Fair value measurements – ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon internally developed models that primarily use, as inputs, observable market-based parameters. Any such valuation adjustments are applied consistently over time. Additional information on fair value measurements is presented in Note 14 – Fair Value Measurements. Stock-based compensation – The Company accounts for all plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements include stock options and restricted stock. For stock options, compensation is estimated at the date of grant, using the Black-Scholes option valuation model for determining fair value. The model employs the following assumptions: ● Dividend yield - calculated as the ratio of historical cash dividends paid per share of common stock to the stock price on the date of grant; ● Expected life (term of the option) - based on the average of the contractual life and vesting schedule for the respective option; ● Expected volatility - based on the monthly historical volatility of the Company’s stock price over the expected life of the options; ● Risk-free interest rate - based upon the U.S. Treasury bill yield curve, for periods within the contractual life of the option, in effect at the time of grant. The Company has elected to estimate forfeitures when recognizing compensation expense, and this estimate of forfeitures is adjusted over the requisite service period or vesting schedule based on the extent to which actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and also will impact the amount of estimated unamortized compensation expense to be recognized in future periods. Further information on stock-based compensation is presented in Note 17 – Stock Incentive Plans. Net Income per common share – Basic net income per share, commonly referred to as earnings per share, represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. Additional information on net income per share is presented in Note 18 – Net Income per Share. Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. Further information on the Company’s other comprehensive income is presented in Note 19 – Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”). The Company early adopted this new standard effective in the consolidated financial statements of December 31, 2017. ASU 2018-02 requires reclassification from AOCI to retained earnings for stranded tax effects resulting from the impact of the newly enacted federal corporate income tax rate on items included in AOCI. The amount of this reclassification in 2017 was $145,000. Advertising costs – The Company follows the policy of charging the costs of advertising to expense as they are incurred. Income taxes – Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss carry forwards, and tax credit carry forwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The results for the year ended December 31, 2017 include the effect of the Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, 2017. Among other things, the Tax Act permanently lowered the federal corporate income tax rate to 21 percent from the maximum rate prior to the passage of the Tax Act of 35 percent, effective January 1, 2018. As a result of the reduction of the federal corporate tax rate, U.S. GAAP required companies to re-measure their deferred tax assets and deferred tax liabilities, including those accounted for in accumulated other comprehensive income, as of the date of the Tax Act’s enactment and record the corresponding effects in income tax expense in the fourth quarter of 2017. As a result of the permanent reduction in the corporate income tax rate, the Company recognized a $963,000 reduction in the value of its net deferred tax asset and recorded a corresponding incremental income tax expense of $963,000 for the fourth quarter of 2017. When tax returns are filed, it is highly probable that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of income. Further information on the Company’s accounting policies for income taxes is presented in Note 8 – Income Taxes. Securities and Other Property Held in a Fiduciary Capacity – Securities and other property held by VNB Wealth in a fiduciary or agency capacity are not assets of the Company and are not included in the accompanying consolidated financial statements. Reclassifications – Certain reclassifications have been made to the prior year financial statements to conform to current year presentation. The results of the reclassifications are not considered material. Adoption of New Accounting Standard Revenue Recognition During the first quarter of 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers”, and all subsequent amendments to the ASU (collectively “ASC 606”), which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as OREO. The majority of the Company’s revenue is from interest income, including loans and securities, which are outside the scope of the standard. The services that fall within the scope of the standard are presented within noninterest income on the consolidated statement of income and are recognized as revenue as the Company satisfies its obligations to the customer. The revenue that falls within the scope of ASC 606 is primarily related to service charges on deposit accounts, debit/credit card and ATM fees, asset management fees and sales of other real estate owned, when applicable. ASC 606 did not result in a change to the accounting for any in-scope revenue streams; as such, no cumulative effect adjustment was recorded. Recent Accounting Pronouncements Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The FASB made subsequent amendments to Topic 842 in July 2018 through ASU 2018-10 (“Codification Improvements to Topic 842, Leases”) and ASU 2018-11 (“Leases (Topic 842): Targeted Improvements”). Among these amendments is the provision in ASU 2018-11 that provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). The Company has completed an inventory of its leases, which are comprised primarily of real estate in which the Company is the lessee, and all of which are accounted for as operating leases under current guidance. The Company adopted Topic 842 effective January 1, 2019 using the optional transition method noted above. The effect of adopting this standard on January 1, 2019 is to record a $4.0 million right of use asset and corresponding lease obligation liability on our consolidated balance sheet. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact that Topic 326 will have on its consolidated financial statements. Early in 2017, the Company formed a cross-functional steering committee, including some members of senior management, to provide governance and guidance over the project plan. The steering committee meets regularly to address the compliance requirements, data requirements and sources, and analysis efforts that are required to adopt these new requirements. The Company has engaged a vendor to assist in modeling expected lifetime losses under Topic 326, and expects to develop and refine an approach to estimating the allowance for credit losses during. 2019. The extent of the change is indeterminable at this time as it will be dependent upon portfolio composition and credit quality at the adoption date, as well as economic conditions and forecasts at that time. Upon adoption, the impact to the allowance for credit losses (currently allowance for loan losses) will have an offsetting one-time cumulative-effect adjustment to retained earnings. Goodwill Impairment Testing In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Public business entities that are SEC filers should adopt the amendments in this ASU for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017- 08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.” The amendments in this ASU shorten the amortization period for certain callable debt securities purchased at a premium. Upon adoption of the standard, premiums on these qualifying callable debt securities will be amortized to the earliest call date. Discounts on purchased debt securities will continue to be accreted to maturity. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Upon transition, entities should apply the guidance on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and provide the disclosures required for a change in accounting principle. The Company does not expect the adoption of ASU 2017-08 to have a material impact on its consolidated financial statements. Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” The amendments in this ASU expand the scope of Topic 718 to include share-based payments issued to non-employees for goods or services, which were previously excluded. The amendments will align the accounting for share-based payments to nonemployees and employees more similarly. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-07 to have a material impact on its consolidated financial statements. Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this ASU modify the disclosure requirements in Topic 820 to add disclosures regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. Certain disclosure requirements in Topic 820 are also removed or modified. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Certain of the amendments are to be applied prospectively while others are to be applied retrospectively. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements. |
Securities
Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | Note 2 – Securities The amortized cost and fair values of securities available for sale as of December 31, 2018 and December 31, 2017 are as follows: December 31, 2018 Amortized Gross Unrealized Gross Unrealized Fair U.S. Government agencies $ 19,500 $ - $ (526 ) $ 18,974 Mortgage-backed securities/CMOs 25,901 1 (839 ) 25,063 Municipal bonds 17,608 12 (265 ) 17,355 Total Securities Available for Sale $ 63,009 $ 13 $ (1,630 ) $ 61,392 December 31, 2017 Amortized Gross Unrealized Gross Unrealized Fair U.S. Government agencies $ 19,500 $ - $ (538 ) $ 18,962 Mortgage-backed securities/CMOs 30,450 - (505 ) 29,945 Municipal bonds 18,668 68 (143 ) 18,593 Total Debt Securities 68,618 67,500 Marketable equity securities 1 - - 1 Total Securities Available for Sale $ 68,619 $ 68 $ (1,186 ) $ 67,501 All mortgage-backed securities included in the above tables were issued by U.S. government agencies and corporations. At December 31, 2018, the securities issued by political subdivisions or agencies were highly rated with 92% of the municipal bonds having AA or higher ratings. Approximately 87% of the municipal bonds are general obligation bonds with issuers that are geographically diverse. Marketable equity securities consist of nominal investments made by the Company in equity positions of various community banks and bank holding companies. There were no securities classified as held to maturity as of December 31, 2018 or December 31, 2017. Restricted securities are securities with limited marketability and consist of stock in the FRB, FHLB and CBBFC totaling $1.7 million and $2.3 million as of December 31, 2018 and December 31, 2017, respectively. These restricted securities are carried at cost as they are not permitted to be traded. For the year ended December 31, 2018, there were no sales of securities. For the year ended December 31, 2017, proceeds from the sales of securities amounted to $24.4 million, and gross realized losses on these securities were $75,000. Securities pledged to secure deposits, and for other purposes required by law, had carrying values of $18.0 million at December 31, 2018 and $29.0 million at December 31, 2017. The decrease in the amount of pledged securities during 2018 resulted from the elimination of the repurchase agreement program effective December 31, 2018, thereby eliminating the need to pledge collateral for such deposits. Year-end securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, were as follows: December 31, 2018 Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ - $ - $ 18,974 $ (526 ) $ 18,974 $ (526 ) Mortgage-backed/CMOs - - 24,657 (839 ) 24,657 (839 ) Municipal bonds 4,983 (34 ) 10,722 (231 ) 15,705 (265 ) $ 4,983 $ (34 ) $ 54,353 $ (1,596 ) $ 59,336 $ (1,630 ) December 31, 2017 Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ 7,390 $ (110 ) $ 11,572 $ (428 ) $ 18,962 $ (538 ) Mortgage-backed/CMOs 21,422 (260 ) 8,523 (245 ) 29,945 (505 ) Municipal bonds 10,389 (132 ) 504 (11 ) 10,893 (143 ) $ 39,201 $ (502 ) $ 20,599 $ (684 ) $ 59,800 $ (1,186 ) As of December 31, 2018, there were $59.3 million, or fifty-eight issues, of individual securities in a loss position. These securities had an unrealized loss of $1.6 million and consisted of twenty-four mortgage-backed/CMOs, twenty-seven municipal bonds, and seven Agency notes. The Company’s securities portfolio is primarily made up of fixed rate bonds, whose prices move inversely with interest rates. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. At the end of any accounting period, the portfolio may have both unrealized gains and losses. Management does not believe any of the securities in an unrealized loss position are impaired due to credit quality and does not intend to sell or believe it will be required to sell any of the securities before recovery of the amortized cost basis. Accordingly, as of December 31, 2018, management believes the impairments detailed in the table above are temporary, and no impairment loss has been realized in the Company’s consolidated income statement. The amortized cost and fair value of available for sale debt securities at December 31, 2018 are presented below based upon contractual maturities, by major investment categories. Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations. Amortized Cost Fair Value U.S. Government agencies After one year to five years $ 19,500 $ 18,974 $ 19,500 $ 18,974 Mortgage-backed securities/CMOs After one year to five years $ 2,895 $ 2,830 After five years to ten years 10,373 10,036 Ten years or more 12,633 12,197 $ 25,901 $ 25,063 Municipal bonds After one year to five years 1,987 1,952 After five years to ten years 8,406 8,290 Ten years or more 7,215 7,113 $ 17,608 $ 17,355 Total Debt Securities Available for Sale $ 63,009 $ 61,392 |
Loans
Loans | 12 Months Ended |
Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans | Note 3 – Loans The composition of the loan portfolio by loan classification appears below. December 31, December 31, 2018 2017 Commercial Commercial and industrial - organic $ 41,526 $ 45,254 Commercial and industrial - government guaranteed 31,367 22,946 Commercial and industrial - syndicated 12,134 13,165 Total commercial and industrial 85,027 81,365 Real estate construction and land Residential construction 1,552 3,812 Commercial construction 5,078 13,365 Land and land development 10,894 9,681 Total construction and land 17,524 26,858 Real estate mortgages 1-4 family residential, first lien, investment 40,311 40,313 1-4 family residential, first lien, owner occupied 16,775 16,448 1-4 family residential, junior lien 3,169 2,965 1-4 family residential - purchased 18,647 - Home equity lines of credit, first lien 8,325 9,238 Home equity lines of credit, junior lien 10,912 13,226 Farm 10,397 10,445 Multifamily 27,328 33,356 Commercial owner occupied 93,800 80,261 Commercial non-owner occupied 123,214 116,599 Total real estate mortgage 352,878 322,851 Consumer Consumer revolving credit 21,540 24,030 Consumer all other credit 5,530 9,036 Student loans purchased 54,691 64,644 Total consumer 81,761 97,710 Total loans 537,190 528,784 Less: Allowance for loan losses (4,891 ) (4,043 ) Net loans $ 532,299 $ 524,741 The balances in the table above include unamortized premiums and net deferred loan costs and fees. Unamortized premiums on loans purchased were $2.5 million and $2.0 million as of December 31, 2018 and 2017, respectively. Net deferred loan costs (fees) totaled $129,000 and $199,000 as of December 31, 2018 and 2017, respectively. Loan origination/risk management. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and the Board of Directors approves lending policies on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies, and nonperforming and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions. Commercial and industrial loans are reported in three classes. Organic loans are originated by the Bank’s commercial lenders. Syndicated loans, also referred to as Shared National Credits, are purchased from national lending correspondents. Government guaranteed loan balances represent the guaranteed portion of loans which the Company purchased that are 100% guaranteed by either the United States Department of Agriculture (“USDA”) or the Small Business Administration (“SBA”); the originating institution holds the unguaranteed portion of each loan and services it. These loans are typically purchased at a premium. In the event of early prepayment, the Bank may need to write off any unamortized premium. Both organic and syndicated loans are underwritten according to the Bank’s loan policies. The Company has developed policies to limit overall credit exposure to the syndicated market as a whole and to each borrower. Organic commercial and industrial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Management examines current and projected cash flows to determine the ability of borrowers to repay their obligations as agreed. Commercial and industrial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Most commercial and industrial loans are secured by the assets being financed or other business assets such as accounts receivable, inventory or marketable securities and may incorporate personal guarantees; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. The Bank’s loan policies for underwriting syndicated loans are based on the “Interagency Guidance on Leveraged Lending” applicable to national banks supervised by the OCC. Real estate construction and land loans consist primarily of loans for the purchase or refinance of unimproved lots or raw land. Additionally, the Company finances the construction of real estate projects typically where the permanent mortgage will remain with the Company. Specific underwriting guidelines are delineated in the Bank’s loan policies. Commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial loans, in addition to those specific to real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. Management monitors and evaluates commercial real estate loans based on cash flows, collateral, geography and risk grade criteria. As a general rule, the Company avoids financing projects where the source of repayment is dependent upon the sale or operation of the collateral, unless other underwriting factors are present to help mitigate risk. Residential mortgages include consumer purpose 1-to-4 family residential properties and home equity loans, as well as investor-owned residential real estate. In addition, the Company purchased a package of 1-to-4 family residential mortgages in December of 2018. Each of the 42 adjustable rate loans purchased, totaling approximately $18.6 million, were individually underwritten by the Company prior to the closing of the sale. Consumer purpose loans have underwriting standards that are heavily influenced by statutory requirements, which include, but are not limited to, documentation requirements, limits on maximum loan-to-value percentages, and collection remedies. Loans to finance 1-4 family investment properties are primarily dependent upon rental income generated from the property and secondarily supported by the borrower’s personal income. The Company typically originates residential mortgages with the intention of retaining in its portfolio adjustable-rate mortgages and shorter-term, fixed-rate loans. The Company also originates longer-term, fixed rate loans, which are sold to secondary mortgage market correspondents. Consumer loans are generally small loans spread across many borrowers and are underwritten after determining the ability of the consumer borrower to repay their obligations as agreed. The underwriting standards are heavily influenced by statutory requirements, which include, but are not limited to, documentation requirements and collection remedies. Consumer loans may be secured or unsecured and are comprised of revolving lines, installment loans and other consumer loans. Included in consumer loans are student loan packages that were purchased beginning in 2015. Along with the purchase of these student loans, the Company purchased surety bonds to fully insure this portion of the Company’s consumer portfolio. ReliaMax Surety Company (“ReliaMax Surety”), the South Dakota insurance company which issued surety bonds for the student loan pool, was placed into liquidation due to insolvency on June 27, 2018, and the surety bonds terminated on July 27, 2018. Deposit account overdrafts are included in the consumer loan balances and totaled $26,000 and $434,000 at December 31, 2018 and 2017, respectively. Independent loan review is performed by an independent loan review firm that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management and the Audit and Compliance Committee of the Board. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures. Concentrations of credit. Most of the Company’s lending activity occurs within the Commonwealth of Virginia, primarily in the Company’s primary markets and surrounding areas. The majority of the Company’s loan portfolio consists of commercial real estate loans. The Company manages this risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations to any one business or industry. Related party loans. In the ordinary course of business, the Company has granted loans to certain directors, principal officers and their affiliates (collectively referred to as “related party loans”). Activity in related party loans during 2018 and 2017 is presented in the following table. 2018 2017 Balance outstanding at beginning of year $ 21,443 $ 12,578 Principal additions 2,199 13,818 Principal reductions (2,238 ) (4,953 ) Balance outstanding at end of year $ 21,404 $ 21,443 Past due, non-accrual and charged-off loans . Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Smaller, unsecured consumer loans are typically charged-off when management judges such loans to be uncollectible or the borrowers file for bankruptcy; these loans are generally not placed in non-accrual status prior to charge-off. In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, the Company considers the borrower’s debt service capacity through the analysis of current financial information, if available, and/or current information with regards to the Company’s collateral position. Regulatory provisions would typically require a loan to be charged-off or placed on non-accrual status if (i) principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or (ii) full payment of principal and interest is not expected. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income on non-accrual loans is recognized only to the extent that cash payments are received in excess of principal due. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower. Student loans purchased which were 120 or more days past due as of July 27, 2018, were placed in non-accrual based on the loss of insurance on these loans. The Company has filed claims with the liquidator of ReliaMax Surety, which issued surety bonds on the student loan portfolio, for these non-accrual loans. Based on information released by the liquidator, the Company expects to collect the principal balances outstanding on such non-accrual loans, together with interest outstanding as of that date. Student loans that have or will become 120 days or more past due after July 27, 2018 are classified as charge-offs. The Company has contracted with a third party to proactively manage the collections of past due student loans; this third party has extensive experience and specializes in this type of asset management. Non-accrual loans are shown below by class: December 31, 2018 December 31, 2017 Land and land development $ 32 $ 41 1-4 family residential mortgages, first lien, owner occupied 82 99 1-4 family residential mortgages, junior lien - 37 Student loans purchased 445 - Commercial and industrial - organic 56 Total nonaccrual loans $ 615 $ 177 The following tables show the aging of past due loans as of December 31, 2018 and December 31, 2017. Past Due Aging as of 90 Days December 31, 2018 30-59 60-89 90 Days or Past Due Days Past Days Past More Past Total Past Total and Still Due Due Due Due Current Loans Accruing Commercial loans Commercial and industrial - organic $ 50 $ 172 $ - $ 222 $ 41,304 $ 41,526 $ - Commercial and industrial - government guaranteed - - 548 548 30,819 31,367 548 Commercial and industrial - syndicated - - - - 12,134 12,134 - Real estate construction and land Residential construction - - - - 1,552 1,552 - Commercial construction - - - - 5,078 5,078 - Land and land development 1 - 15 16 10,878 10,894 15 Real estate mortgages 1-4 family residential, first lien, investment - - - - 40,311 40,311 - 1-4 family residential, first lien, owner occupied - - - - 16,775 16,775 - 1-4 family residential, junior lien - - - - 3,169 3,169 - 1-4 family residential - purchased 954 - - 954 17,693 18,647 - Home equity lines of credit, first lien - - - - 8,325 8,325 - Home equity lines of credit, junior lien - - - - 10,912 10,912 - Farm - - - - 10,397 10,397 - Multifamily - - - - 27,328 27,328 - Commercial owner occupied - - - - 93,800 93,800 - Commercial non-owner occupied 75 - - 75 123,139 123,214 - Consumer loans Consumer revolving credit - - - - 21,540 21,540 - Consumer all other credit 4 599 - 603 4,927 5,530 - Student loans purchased 850 463 754 2,067 52,624 54,691 332 Total Loans $ 1,934 $ 1,234 $ 1,317 $ 4,485 $ 532,705 $ 537,190 $ 895 Past Due Aging as of 90 Days December 31, 2017 30-59 60-89 90 Days or Past Due Days Past Days Past More Past Total Past Total and Still Due Due Due Due Current Loans Accruing Commercial loans Commercial and industrial - organic $ - $ - $ - $ - $ 45,254 $ 45,254 $ - Commercial and industrial - government guaranteed - - - - 22,946 22,946 - Commercial and industrial - syndicated - - - - 13,165 13,165 - Real estate construction and land Residential construction - - - - 3,812 3,812 - Commercial construction - - - - 13,365 13,365 - Land and land development 20 - - 20 9,661 9,681 - Real estate mortgages 1-4 family residential, first lien, investment 118 - - 118 40,195 40,313 - 1-4 family residential, first lien, owner occupied 128 - 18 146 16,302 16,448 18 1-4 family residential, junior lien - - - - 2,965 2,965 - Home equity lines of credit, first lien 100 - - 100 9,138 9,238 - Home equity lines of credit, junior lien - - - - 13,226 13,226 - Farm - - - - 10,445 10,445 - Multifamily - - - - 33,356 33,356 - Commercial owner occupied 11 - - 11 80,250 80,261 - Commercial non-owner occupied 79 91 - 170 116,429 116,599 - Consumer loans Consumer revolving credit 1 - - 1 24,029 24,030 - Consumer all other credit 71 - - 71 8,965 9,036 - Student loans purchased 997 160 271 1,428 63,216 64,644 271 Total Loans $ 1,525 $ 251 $ 289 $ 2,065 $ 526,719 $ 528,784 $ 289 Impaired loans. Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts when due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net of the impairment, using either the present value of estimated future cash flows at the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Regulatory guidelines require the Company to re-evaluate the fair value of collateral supporting impaired collateral dependent loans on at least an annual basis. The following tables provide a breakdown by class of the loans classified as impaired loans as of December 31, 2018 and December 31, 2017. These loans are reported at their recorded investment, which is the carrying amount of the loan as reflected on the Company’s balance sheet, net of charge-offs and other amounts applied to reduce the net book balance. Average recorded investment in impaired loans is computed using an average of month-end balances for these loans for the twelve months ended December 31, 2018 and December 31, 2017. Interest income recognized is for the years ended December 31, 2018 and December 31, 2017. December 31, 2018 Unpaid Average Interest Recorded Principal Associated Recorded Income Investment Balance Allowance Investment Recognized Impaired loans without a valuation allowance: Land and land development $ 32 $ 90 $ - $ 37 $ - 1-4 family residential mortgages, first lien, owner occupied 82 127 - 90 - 1-4 family residential mortgages, junior lien 127 127 248 15 Commercial non-owner occupied real estate 923 923 - 947 51 Total impaired loans without a valuation allowance 1,164 1,267 - 1,322 66 Impaired loans with a valuation allowance Student loans purchased 1,602 1,602 90 1,387 86 Total impaired loans with a valuation allowance 1,602 1,602 90 1,387 86 Total impaired loans $ 2,766 $ 2,869 $ 90 $ 2,709 $ 152 December 31, 2017 Unpaid Average Interest Recorded Principal Associated Recorded Income Investment Balance Allowance Investment Recognized Impaired loans without a valuation allowance: Land and land development $ 41 $ 94 $ - $ 46 $ - 1-4 family residential mortgages, first lien, owner occupied 99 137 - 107 - 1-4 family residential mortgages, junior lien 379 382 367 17 Commercial non-owner occupied real estate 972 972 - 992 48 Student loans purchased 1,083 1,083 - 959 64 Impaired loans with a valuation allowance - - - - - Total impaired loans $ 2,574 $ 2,668 $ - $ 2,471 $ 129 Troubled debt restructurings (“TDRs”) are also considered impaired loans. TDRs occur when the Bank agrees to modify the original terms of a loan by granting a concession that it would not otherwise consider due to the deterioration in the financial condition of the borrower. These concessions are done in an attempt to improve the paying capacity of the borrower, and in some cases to avoid foreclosure, and are made with the intent to restore the loan to a performing status once sufficient payment history can be demonstrated. These concessions could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Based on regulatory guidance on Student Lending, the Company classified 66 of its student loans purchased as TDRs for a total of $1.2 million as of December 31, 2018. The Company classified 64 of its student loans purchased as TDRs for a total of $1.1 million as of December 31, 2017. These borrowers, who should have been in repayment, requested and were granted payment extensions exceeding the maximum lifetime allowable payment forbearance of twelve months (36 months lifetime allowance for military service), as permitted under the regulatory guidance, and are therefore considered restructurings. Student loan borrowers are allowed inschool deferments, plus an automatic six month grace period post in-school status, before repayment is scheduled to begin, and these deferments do not count toward the maximum allowable forbearance. Initially, all student loans were fully insured by a surety bond, and the Company did not expect to experience a loss on these loans. Based on the termination of the surety bond on July 27, 2018 due to the insolvency of the insurer, management has evaluated these loans individually for impairment and included any potential loss in the allowance for loan losses; interest continues to accrue on these TDRs during any deferment and forbearance periods. The following provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in non-accrual status, which are considered to be nonperforming. Troubled debt restructurings (TDRs) December 31, 2018 December 31, 2017 No. of Recorded No. of Recorded Loans Investment Loans Investment Performing TDRs 1-4 family residential mortgages, junior lien 1 $ 127 2 $ 342 Commercial non-owner occupied real estate 1 923 1 972 Student loans purchased 65 1,157 64 1,083 Total performing TDRs 67 $ 2,207 67 $ 2,397 Nonperforming TDRs Student loans purchased 1 4 - - Land and land development 1 $ 19 1 $ 24 Total nonperforming TDRs 2 $ 23 1 $ 24 Total TDRs 69 $ 2,230 68 $ 2,421 A summary of loans shown above that were modified as TDRs during the years ended December 31, 2018 and 2017 is shown below by class. Loans modified as TDRs that were fully paid down, charged-off, or foreclosed upon by period end are not reported. The Post-Modification Recorded Balance reflects any interest or fees from the original loan which may have been added to the principal balance on the new note as a condition of the TDR. Additionally, the Post-Modification Recorded Balance is reported below at the period end balances, inclusive of all partial principal pay downs and principal charge-offs since the modification date. During year ended During year ended December 31, 2018 December 31, 2017 Pre- Post- Pre- Post- Modification Modification Modification Modification Number Recorded Recorded Number Recorded Recorded of Loans Balance Balance of Loans Balance Balance Student loans purchased 12 $ 244 $ 244 21 $ 316 $ 316 Total loans modified during the period 12 $ 244 $ 244 21 $ 316 $ 316 There was one loan modified as a TDR that subsequently defaulted during the year ended December 31, 2018 and was modified as TDRs during the twelve months prior to default. This student loan had balance of $33.0 thousand prior to being charged off. There were no loans modified as TDRs that subsequently defaulted during the year ended December 31, 2017 and were modified as TDRs during the twelve months prior to default. There were no loans secured by 1-4 family residential property that were in the process of foreclosure at either December 31, 2018 or December 31, 2017. |
Allowance for Loan Losses
Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2018 | |
Allowance for Loan Losses [Abstract] | |
Allowance for Loan Losses | Note 4 – Allowance for Loan Losses A summary of the transactions in the allowance for loan losses for the years ended December 31, 2018 and 2017 appears below: 2018 2017 Balance, beginning of period $ 4,043 $ 3,688 Loans charged off (1,097 ) (111 ) Recoveries 72 48 Net charge-offs (1,025 ) (63 ) Provision for loan losses 1,873 418 Balance, December 31 $ 4,891 $ 4,043 Management has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Company has segmented certain loans in the portfolio by product type. Within these segments, the Company has sub-segmented its portfolio by classes, based on the associated risks within these classes. Loan Classes by Segments Commercial loan segment: Real estate construction and land loan segment: Real estate mortgage loan segment: Consumer loan segment: Management utilizes a loss migration model for determining the quantitative risk assigned to unimpaired loans in order to capture historical loss information at the loan level, track loss migration through risk grade deterioration, and increase efficiencies related to performing the calculations. The quantitative risk factor for each loan class primarily utilizes a migration analysis loss method based on loss history for the prior twelve quarters. The migration analysis loss method is used for all loan classes except for the following: ● Student loans purchased - ReliaMax Surety, the insurance company which issued surety bonds for the student loan pool, was placed into liquidation due to insolvency on June 27, 2018 and the surety bonds terminated on July 27, 2018. As such, a reserve was calculated beginning in the second quarter of 2018 using the insurance claim history on the portfolio to establish a historical charge-off rate. In addition qualitative factors were applied to the student loan pool and the calculated reserve is net of any deposit reserve accounts held at the Bank. For reporting periods prior to June 30, 2018, the Company did not charge off student loans as the insurance covered the past due loans, but the Company did apply qualitative factors to calculate a reserve on these loans, net of the deposit reserve accounts held by the Company for this group of loans. ● Commercial and industrial syndicated loans - Prior to the quarter ended September 30, 2016, there was not an established loss history in the commercial and industrial syndicated loans. The S&P credit and recovery ratings on the credit facilities were utilized to calculate a three-year weighted average historical default rate. During the third quarter of 2016, there was a small loss in the commercial and industrial syndicated loans; therefore, the Company utilized a combination of the migration analysis loss method and the S&P credit and recovery ratings. ● Commercial and industrial government guaranteed loans – These loans require no reserve as these are 100% guaranteed by either the “SBA” or the “USDA”. Furthermore, a nominal loss reserve is applied to loans rated “Good” in an abundance of caution. Under the migration analysis method, average loss rates are calculated at the risk grade and class levels by dividing the twelve-quarter average net charge-off amount by the twelve-quarter average loan balances. Qualitative factors are combined with these quantitative factors to arrive at the overall general allowances. The Company’s internal creditworthiness grading system is based on experiences with similarly graded loans. The Company performs regular credit reviews of the loan portfolio to review the credit quality and adherence to its underwriting standards. Additionally, external reviews of portions of the loan portfolio are conducted on a semi-annual basis. Loans that trend upward toward more positive risk ratings generally have a lower risk factor associated. Conversely, loans that migrate toward more negative ratings generally will result in a higher risk factor being applied to those related loan balances. Risk Ratings and Historical Loss Factor Assigned Excellent A 0% historical loss factor is applied, as these loans are secured by cash or fully guaranteed by a U.S. government agency and represent a minimal risk. The Company has never experienced a loss within this category. Good A 0% historical loss factor is applied, as these loans represent a low risk and are secured by marketable collateral within margin. The Company has never experienced a loss within this category. Pass A historical loss factor for loans rated “Pass” is applied to current balances of like-rated loans, pooled by class. Loans with the following risk ratings are pooled by class and considered together as “Pass”: Satisfactory - modest risk loans where the borrower has strong and liquid financial statements and more than adequate cash flow Average – average risk loans where the borrower has reasonable debt service capacity Marginal – acceptable risk loans where the borrower has acceptable financial statements but is leveraged Watch These loans have an acceptable risk but require more attention than normal servicing. A historical loss factor for loans rated “Watch” is applied to current balances of like-rated loans pooled by class. Special Mention These potential problem loans are currently protected but are potentially weak. A historical loss factor for loans rated “Special Mention” is applied to current balances of like-rated loans pooled by class. Substandard These problem loans are inadequately protected by the sound worth and paying capacity of the borrower and/or the value of any collateral pledged. These loans may be considered impaired and evaluated on an individual basis. Otherwise, a historical loss factor for loans rated “Substandard” is applied to current balances of all other “Substandard” loans pooled by class. Doubtful Loans with this rating have significant deterioration in the sound worth and paying capacity of the borrower and/or the value of any collateral pledged, making collection or liquidation of the loan in full highly questionable. These loans would be considered impaired and are evaluated on an individual basis. The following represents the loan portfolio designated by the internal risk ratings assigned to each credit at year-end: Special Sub- December 31, 2018 Excellent Good Pass Watch Mention standard TOTAL Commercial Commercial and industrial - organic $ 3,692 $ 23,381 $ 13,993 $ 264 $ 28 $ 168 $ 41,526 Commercial and industrial - government guaranteed 31,367 - - - - - 31,367 Commercial and industrial - syndicated - - 9,588 - - 2,546 12,134 Real estate construction Residential construction - - 1,552 - - - 1,552 Commercial construction - - 5,078 - - - 5,078 Land and land development - - 9,888 501 - 505 10,894 Real estate mortgages 1-4 family residential, first lien, investment - - 36,314 3,607 117 273 40,311 1-4 family residential, first lien, owner occupied - - 15,540 1,087 11 137 16,775 1-4 family residential, junior lien - - 2,573 58 22 516 3,169 1-4 family residential, first lien - purchased - - 18,647 - - - 18,647 Home equity lines of credit, first lien - - 7,911 414 - - 8,325 Home equity lines of credit, junior lien - - 10,704 97 - 111 10,912 Farm - - 8,719 339 - 1,339 10,397 Multifamily - - 27,328 - - - 27,328 Commercial owner occupied - - 86,868 6,932 - - 93,800 Commercial non-owner occupied - - 120,720 1,519 - 975 123,214 Consumer Consumer revolving credit 44 20,852 644 - - - 21,540 Consumer all other credit 263 4,699 535 4 - 29 5,530 Student loans purchased - - 51,494 2,401 431 365 54,691 Total Loans $ 35,366 $ 48,932 $ 428,096 $ 17,223 $ 609 $ 6,964 $ 537,190 Special Sub- December 31, 2017 Excellent Good Pass Watch Mention standard TOTAL Commercial Commercial and industrial - organic $ 3,000 $ 23,937 $ 17,324 $ 13 $ 269 $ 711 $ 45,254 Commercial and industrial - government guaranteed 22,946 - - - - - 22,946 Commercial and industrial - syndicated - - 10,590 - - 2,575 13,165 Real estate construction Residential construction - - 3,812 - - - 3,812 Commercial construction - - 13,365 - - - 13,365 Land and land development - - 9,137 3 - 541 9,681 Real estate mortgages 1-4 family residential, first lien, investment - - 38,003 1,875 - 435 40,313 1-4 family residential, first lien, owner occupied - - 15,465 260 - 723 16,448 1-4 family residential, junior lien - - 2,488 265 41 171 2,965 Home equity lines of credit, first lien - - 9,098 140 - - 9,238 Home equity lines of credit, junior lien - - 13,115 - - 111 13,226 Farm - - 9,065 - - 1,380 10,445 Multifamily - - 33,356 - - - 33,356 Commercial owner occupied - 669 79,137 455 - - 80,261 Commercial non-owner occupied - - 114,610 972 - 1,017 116,599 Consumer Consumer revolving credit 6 22,977 1,045 1 1 - 24,030 Consumer all other credit 294 8,006 701 2 - 33 9,036 Student loans purchased - - 63,561 1,083 - - 64,644 Total Loans $ 26,246 $ 55,589 $ 433,872 $ 5,069 $ 311 $ 7,697 $ 528,784 In addition to the historical factors, the adequacy of the Company’s allowance for loan losses is evaluated through reference to eight qualitative factors, listed below and ranked in order of importance: 1) Changes in national and local economic conditions, including the condition of various market segments; 2) Changes in the value of underlying collateral; 3) Changes in volume of classified assets, measured as a percentage of capital; 4) Changes in volume of delinquent loans; 5) The existence and effect of any concentrations of credit and changes in the level of such concentrations; 6) Changes in lending policies and procedures, including underwriting standards; 7) Changes in the experience, ability and depth of lending management and staff; and 8) Changes in the level of policy exceptions. It has been the Company’s experience that the first five factors drive losses to a much greater extent than the last three factors; therefore, the first five factors are weighted more heavily. Qualitative factors are not assessed against loans rated “Excellent” or “Good.” For each segment and class of loans, management must exercise significant judgment to determine the estimation method that fits the credit risk characteristics of the various segments. Although this evaluation is inherently subjective, qualified management utilizes its significant knowledge and experience related to both the market and history of the Company’s loan losses. During these evaluations, particular characteristics associated with a segment of the loan portfolio are also considered. These characteristics are detailed below: ● Commercial loans not secured by real estate carry risks associated with the successful operation of a business, and the repayments of these loans depend on the profitability and cash flows of the business. Additional risk relates to the value of collateral where depreciation occurs and the valuation is less precise. ● Commercial loans purchased from the syndicated loan market generally represent shared national credits, which are participations in loans or loan commitments that are shared by three or more banks. Included in the Company’s shared national credit portfolio are purchased participations and assignments in leveraged lending transactions. Leveraged lending transactions are generally used to support a merger- or acquisition-related transaction, to back a recapitalization of a company's balance sheet or to refinance debt. When considering a participation in the leveraged lending market, the Company participates only in first lien senior secured term loans. To further minimize risk, the Company has developed policies to limit overall credit exposure to the syndicated market as a whole, as well as limits by industry and borrower. ● Loans secured by commercial real estate also carry risks associated with the success of the business and the ability to generate a positive cash flow sufficient to service debts. Real estate security diminishes risks only to the extent that a market exists for the subject collateral. ● Consumer loans carry risks associated with the continued creditworthiness of the borrower and the value of the collateral, such as automobiles which may depreciate more rapidly than other assets. In addition, these loans may be unsecured. Consumer loans are more likely than real estate loans to be immediately affected in an adverse manner by job loss, divorce, illness or personal bankruptcy. Consumer loans are further segmented into student loans purchased, consumer revolving lines and all other consumer loans. ● Real estate secured construction loans carry risks that a project will not be completed as scheduled and budgeted and that the value of the collateral may, at any point, be less than the principal amount of the loan. Additional risks may occur if the general contractor, who may not be a loan customer, is unable to finish the project as planned due to financial pressures unrelated to the project. ● Residential real estate loans carry risks associated with the continued creditworthiness of the borrower and changes in the value of the collateral. In addition, for investor-owned residential real estate, the repayment may be volatile as leases are generally shorter term in nature. Impaired loans are individually evaluated and, if deemed appropriate, a specific allocation is made for these loans. In reviewing the loans classified as impaired totaling $2.8 million at December 31, 2018, there was $90.0 thousand in valuation allowance on these loans after consideration was given for each borrowing as to the fair value of the collateral on the loan or the present value of expected future cash flows from the customer. Allowance for Loan Losses Rollforward by Portfolio Segment As of and for the year ended December 31, 2018 Real Estate Commercial Construction Real Estate Consumer Loans and Land Mortgages Loans Total Allowance for Loan Losses: Balance as of January 1, 2018 $ 885 $ 206 $ 2,730 $ 222 $ 4,043 Charge-offs (75 ) - - (1,022 ) (1,097 ) Recoveries 54 - 2 16 72 Provision for (recovery of) loan losses (53 ) (87 ) (121 ) 2,134 1,873 Ending Balance $ 811 $ 119 $ 2,611 $ 1,350 $ 4,891 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ 90 $ 90 Collectively evaluated for impairment 811 119 2,611 1,260 4,801 Loans: Individually evaluated for impairment $ - $ 32 $ 1,132 $ 1,602 $ 2,766 Collectively evaluated for impairment 85,027 17,492 351,746 80,159 534,424 Ending Balance $ 85,027 $ 17,524 $ 352,878 $ 81,761 $ 537,190 As of and for the year ended December 31, 2017 Real Estate Commercial Construction Real Estate Consumer Loans and Land Mortgages Loans Total Allowance for Loan Losses: Balance as of January 1, 2017 $ 824 $ 127 $ 2,506 $ 231 $ 3,688 Charge-offs (111 ) - - - (111 ) Recoveries 31 - 2 15 48 Provision for (recovery of) loan losses 141 79 222 (24 ) 418 Ending Balance $ 885 $ 206 $ 2,730 $ 222 $ 4,043 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ - $ - Collectively evaluated for impairment 885 206 2,730 222 4,043 Loans: Individually evaluated for impairment $ - $ 41 $ 1,450 $ 1,083 $ 2,574 Collectively evaluated for impairment 81,365 26,817 321,401 96,627 526,210 Ending Balance $ 81,365 $ 26,858 $ 322,851 $ 97,710 $ 528,784 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 5 – Premises and Equipment Premises and equipment are summarized as follows: December 31, 2018 December 31, 2017 Leasehold improvements $ 14,594 $ 14,426 Building and land 1,215 1,216 Construction and fixed assets in progress 434 118 Furniture and equipment 6,513 6,370 Computer software 2,305 2,167 $ 25,061 $ 24,297 Less: accumulated depreciation and amortization 18,019 16,926 $ 7,042 $ 7,371 At December 31, 2018, the Company had leased certain of its banking and operations offices, or the land on which such offices were built, under operating lease agreements on terms ranging from 1 to 20 years with renewal options. Rent expense charged to operations under operating lease agreements totaled $913,000 in 2018 and $879,000 in 2017. The following is a schedule of future minimum rental payments required under non-cancelable operating leases that have initial or remaining terms in excess of one year as of December 31, 2018: 2019 $ 792 2020 793 2021 803 2022 767 2023 666 Thereafter 862 $ 4,683 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 – Intangible Assets On February 1, 2016 (the “Effective Date”), VNB Wealth purchased the book of business, including interest in the client relationships, (“Purchased Relationships”), from a current officer (the “Seller”) of VNB Wealth pursuant to an employment and asset purchase agreement (the “Purchase Agreement”). Prior to becoming an employee of VNB Wealth and until the Effective Date of the sale, the Seller provided services to these Purchased Relationships as a sole proprietor. As of January 15, 2016, the fair value of the assets under management associated with the Purchased Relationships totaled $31.5 million. Under the terms of the Purchase Agreement, the Company will receive all future revenue for investment management, advisory, brokerage, insurance, consulting, trust and related services performed for the Purchased Relationships. The purchase price of $1.2 million is payable over a five year period. During the first quarter of 2016, the Company recognized goodwill and other intangible assets arising from this purchase. As required under ASC Topic 805, “Business Combinations,” using the acquisition method of accounting, below is a summary of the net asset values, as determined by an independent third party, based on the fair value measurements and the purchase price. The intangible assets identified below will be amortized using a straight line method over the estimated useful life, and the amortized cost will be shown as noninterest expense. In accordance with ASC 350, “Intangibles-Goodwill and Other,” the Company will review the carrying value of indefinite lived goodwill at least annually or more frequently if certain impairment indicators exist. Estimated % of Total Economic Useful Fair Value Intangible Assets Life Identified Intangible Assets Non-Compete Agreement $ 103 9.0 % 3 years Customer Relationships Intangible 670 58.5 % 10 years Total Identified Intangible Assets $ 773 67.5 % Goodwill $ 372 32.5 % Indefinite Total Intangible Assets $ 1,145 100.0 % Through the twelve months ended December 31, 2018, the Company recognized $109,000 in amortization expense from these identified intangible assets with a finite life. The net carrying value of $477,000 will be recognized as amortization expense in future reporting periods through 2026. The following shows the gross and net balance of these intangible assets as of December 31, 2018. Gross Carrying Accumulated Net Carrying Value Amortization Value Identified Intangible Assets Non-Compete Agreement $ 103 $ 100 $ 3 Customer Relationships Intangible 670 196 $ 474 Total Identified Intangible Assets $ 773 $ 296 $ 477 As of December 31, 2018, the Company carried a contingent liability of $63,000, representing the net of the fair value of the purchase price, less the first three payments made to the Seller. The remaining two annual payments as delineated in the Purchase Agreement will be paid from this liability. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2018 | |
Demand deposits: | |
Deposits | Note 7 – Deposits At December 31, 2018, the scheduled maturities of time deposits are as follows: 2019 $ 79,167 2020 21,076 2021 6,266 2022 946 2023 1,076 $ 108,531 The aggregate amount of time deposits with a minimum balance of $250,000 was $28.0 million at December 31, 2018 and $28.2 million at December 31, 2017. Brokered deposits totaled $32.5 million at December 31, 2017. These deposits represented reciprocal relationships established under the Certificate of Deposit Account Registry Service (CDARS™), whereby depositors can obtain FDIC insurance on deposits up to at least $50 million, and were classified as brokered for 2017. However, in May 2018, the “Economic Growth, Regulatory Relief, and Consumer Protection Act” was enacted, which excluded reciprocal CDARS™ deposits for certain banks from brokered deposit treatment up to the lesser of $5 billion or 20% of a bank’s total liabilities. Therefore, the Company’s CDARS™ reciprocal deposits of $27.3 million as of December 31, 2018 were not treated as brokered deposits. The Company implemented an Insured Cash Sweep ® ® ® The company had no deposits to report as brokered deposits as of December 31, 2018. Deposit account overdrafts reported as loans totaled $26,000 and $434,000 at December 31, 2018 and 2017, respectively. The Company has entered into deposit transactions with certain directors, principal officers and their affiliates (collectively referred to as “related party deposits”), all of which are under the same terms as other customers. The aggregate amount of these related party deposits was $6.3 million and $6.5 million as of December 31, 2018 and 2017, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 – Income Taxes The Company files tax returns in the U.S. federal jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal tax examinations by tax authorities for years prior to 2015. The Commonwealth of Virginia assesses a Bank Franchise Tax on banks instead of a state income tax. The Bank Franchise Tax expense is reported in noninterest expense, and the calculation of that tax is unrelated to taxable income. Net deferred tax assets consist of the following components as of year-end: 2018 2017 Deferred tax assets: Allowance for loan losses $ 1,027 $ 849 Non-accrual loan interest 15 9 Stock option/grant expense 32 54 Start-up expenses 47 29 Home equity closing costs 27 32 Deferred compensation expense 10 9 Goodwill and other intangible assets 14 9 Securities available for sale unrealized loss 339 235 Depreciation 404 366 $ 1,915 $ 1,592 Deferred tax liabilities: Deferred loan costs 27 42 27 42 Net deferred tax assets $ 1,888 $ 1,550 The provision for income taxes charged to operations for years ended December 31, 2018 and 2017 consists of the following: 2018 2017 Current tax expense $ 2,303 $ 3,635 Deferred tax benefit (234 ) (195 ) Deferred tax asset adjustment for enacted change in tax rate - 963 Provision for income taxes $ 2,069 $ 4,403 Income tax expense for 2017 included a downward adjustment of net deferred tax assets in the amount of $963,000, recorded as a result of the enactment of the Tax Cuts and Jobs Act on December 22, 2017. The Act reduced the corporate Federal tax rate from 34% to 21% effective January 1, 2018. The Company’s income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the years ended December 31, 2018 and 2017 due to the following: 2018 2017 Federal statutory rate 21% 34% Computed statutory tax expense $ 2,213 $ 3,727 Increase (decrease) in tax resulting from: Tax-exempt interest income (74 ) (104 ) Tax-exempt income from Bank Owned Life Insurance (BOLI) (94 ) (145 ) Stock option expense 7 4 Stock option exercise benefit (18 ) (59 ) Deferred tax asset adjustment for enacted change in tax rate - 963 Other expenses 35 17 Provision for income taxes $ 2,069 $ 4,403 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Note 9 – Commitments and Contingent Liabilities In the normal course of business, there are various outstanding commitments and contingent liabilities, which are not reflected in the accompanying consolidated financial statements. The Company does not anticipate any material loss as a result of these transactions. As a member of the Federal Reserve System, the Company is required to maintain certain average clearing balances. Those balances include amounts on deposit with the Federal Reserve. For the final weekly reporting period in the years ended December 31, 2018 and December 31, 2017, no daily average required balances were required for either year. |
Financial Instruments With Off-
Financial Instruments With Off-Balance Sheet Risk and Credit Risk | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Financial Instruments With Off-Balance Sheet Risk and Credit Risk | Note 10 – Financial Instruments with Off-Balance Sheet Risk and Credit Risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit and standby letters of credit, such as unfunded lines of credit and standby letters of credit. The Company also treats authorization limits for originating Automated Clearing House (“ACH”) transactions as commitments. In addition to the amounts shown below, the Company has extended commitment letters at December 31, 2018 in the amount of $9.5 million to various borrowers. At December 31, 2017, commitment letters totaled $34.4 million. Commitment letters are done in the normal course of business and typically expire after 120 days. All of these off-balance-sheet instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet, although material losses are not anticipated. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The totals for financial instruments whose contract amount represents credit risk are shown below: Notional Amount December 31, 2018 December 31, 2017 Unfunded lines-of-credit $ 88,323 $ 99,757 ACH 20,131 17,681 Letters of credit 5,744 6,039 Total $ 114,198 $ 123,477 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 on a case-by-case basis. The amount of collateral, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral normally consists of real property. Standby letters of credit are conditional commitments by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds real estate and bank deposits as collateral supporting those commitments for which collateral is deemed necessary. The Company has approximately $1.3 million in deposits in other financial institutions in excess of amounts insured by the FDIC at December 31, 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11 – Related Party Transactions From time to time, the Company and its subsidiaries have business dealings with companies owned by directors and beneficial shareholders of the Company. Payments made to these companies that exceeded the disclosure threshold of $120,000 in 2018 are reported below. In 2018, rental expenditures of $492,000 (including reimbursements for taxes, insurance, and other expenses) were paid to an entity indirectly owned by a director of the Company. |
Capital Requirements
Capital Requirements | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Capital Requirements | Note 12 – Capital Requirements The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Federal banking regulations also impose regulatory capital requirements on bank holding companies. However, in August 2018, the Federal Reserve Board issued an interim final rule, which was effective August 30, 2018, that expanded its small bank holding company policy statement (the “SBHC Policy Statement”) to bank holding companies with total consolidated assets of less than $3 billion (up from the prior $1 billion threshold). Under the SBHC Policy Statement, qualifying bank holding companies have additional flexibility in the amount of debt they can issue and are also exempt from the Basel III Capital Rules (subsidiary depository institutions of qualifying bank holding companies are still subject to capital requirements). The Company currently has less than $3 billion in total consolidated assets and would likely qualify under the revised SBHC Policy Statement. However, the Company does not currently intend to issue a material amount of debt or take any other action that would cause its capital ratios to fall below the minimum ratios required by the Basel III Capital Rules. The Basel III regulatory capital rules effective January 1, 2015 required the Company and its subsidiaries to comply with the following new minimum capital ratios: (i) a new common equity Tier 1 capital ratio of 4.50% of risk-weighted assets; (ii) a Tier 1 capital ratio of 6.00% of risk-weighted assets (increased from the prior requirement of 4.00%); (iii) a total capital ratio of 8.00% of risk-weighted assets (unchanged from the prior requirement); and (iv) a leverage ratio of 4.00% of total assets (unchanged from the prior requirement). These were the initial capital requirements. Beginning January 1, 2016 a capital conservation buffer requirement began to be phased in over a four-year period, beginning at 0.625% of risk-weighted assets and increasing annually to 2.50% at January 1, 2019. Therefore, for the calendar year 2018, this 1.875% buffer effectively results in the minimum (i) common equity Tier 1 capital ratio of 6.375% of risk-weighted assets; (ii) Tier 1 capital ratio of 7.875% of risk-weighted assets; and (iii) total capital ratio of 9.875% of risk-weighted assets. With respect to the Bank, the rules also revised the “prompt corrective action” regulations pursuant to Section 38 of the FDIA. In addition, the new capital requirements for the Company and the Bank include changes in the risk weights of assets to better reflect credit risk and other risk exposures. The Bank’s capital ratios remained well above the levels designated by bank regulators as “well capitalized” at December 31, 2018. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that management believes have changed the institution’s category. The Company calculates its regulatory capital under the Basel III regulatory capital framework. The table below summarizes the Company’s regulatory capital and related ratios for the periods presented: December 31, 2018 Minimum To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Consolidated $ 76,090 14.52 % $ 41,935 8.00 % N/A N/A Bank $ 75,491 14.41 % $ 41,914 8.00 % $ 52,393 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 71,169 13.58 % $ 23,589 4.50 % N/A N/A Bank $ 70,570 13.47 % $ 23,577 4.50 % $ 34,055 6.50 % Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 71,169 13.58 % $ 31,451 6.00 % N/A N/A Bank $ 70,570 13.47 % $ 31,436 6.00 % $ 41,914 8.00 % Tier 1 Capital (To Average Assets) Consolidated $ 71,169 11.14 % $ 25,550 4.00 % N/A N/A Bank $ 70,570 11.05 % $ 25,544 4.00 % $ 31,930 5.00 % December 31, 2017 Minimum To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Consolidated $ 69,196 12.99 % $ 42,622 8.00 % N/A N/A Bank $ 68,058 12.78 % $ 42,591 8.00 % $ 53,238 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 65,153 12.23 % $ 23,975 4.50 % N/A N/A Bank $ 64,015 12.02 % $ 23,957 4.50 % $ 34,605 6.50 % Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 65,153 12.23 % $ 31,967 6.00 % N/A N/A Bank $ 64,015 12.02 % $ 31,943 6.00 % $ 42,591 8.00 % Tier 1 Capital (To Average Assets) Consolidated $ 65,153 10.58 % $ 24,638 4.00 % N/A N/A Bank $ 64,015 10.40 % $ 24,624 4.00 % $ 30,780 5.00 % |
Dividend Restrictions
Dividend Restrictions | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | |
Dividend Restrictions | Note 13 – Dividend Restrictions The primary source of funds for the dividends paid by the Company to shareholders is dividends received from the Bank. Federal regulations limit the amount of dividends which the Bank can pay to the Company without obtaining prior approval. The amount of cash dividends that the Bank may pay is limited to current year earnings plus retained net profits for the two preceding years. In addition, dividends paid by the Bank would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. In addition to the regulatory limits, the Company’s Board of Directors, under current policies, will generally only consider a cash dividend payment to shareholders that, when combined with any previous cash dividends paid within the last 12 months, does not exceed 50% of the Bank’s after-tax earnings for the preceding 12-months, or 60% if the previous three quarterly dividends are not within the preceding 12 months. At December 31, 2018, the maximum amount of retained earnings available to the Bank for cash dividends to the Company was $16,235,000. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 14 – Fair Value Measurements Determination of Fair Value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the “Fair Value Measurements and Disclosures” topic of FASB ASC 825, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market for the asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. Fair Value Hierarchy In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 – Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. Level 3 – Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. Securities available for sale Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). The following tables present the balances measured at fair value on a recurring basis: Fair Value Measurements at December 31, 2018 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 18,974 $ - $ 18,974 $ - Mortgage-backed securities/CMOs 25,063 - 25,063 - Municipal bonds 17,355 - 17,355 - Total securities available for sale $ 61,392 $ - $ 61,392 $ - Fair Value Measurements at December 31, 2017 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 18,962 $ - $ 18,962 $ - Mortgage-backed securities/CMOs 29,945 - 29,945 - Municipal bonds 18,593 - 18,593 - Marketable equity securities 1 - 1 - Total securities available for sale $ 67,501 $ - $ 67,501 $ - Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or writedowns of individual assets. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the consolidated financial statements: Other real estate owned Other real estate owned is measured at fair value less cost to sell, based on an appraisal conducted by an independent, licensed appraiser outside of the Company (Level 2). If the collateral value is significantly adjusted due to differences in the comparable properties, or is discounted by the Company because of marketability, then the fair value is considered Level 3. OREO is measured at fair value on a nonrecurring basis. Any initial fair value adjustment is charged against the Allowance for Loan Losses. Subsequent fair value adjustments are recorded in the period incurred and included in other noninterest expense on the Consolidated Statements of Income. The Company had no OREO at December 31, 2018 or December 31, 2017. Impaired loans Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected when due. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral value is significantly adjusted due to differences in the comparable properties, or is discounted by the Company because of marketability, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant (Level 2) or the net book value on the applicable business’ financial statements if not considered significant (Level 3). Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the Allowance for Loan Losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses in the Consolidated Statements of Income. The Company had $2.8 million and $2.6 million in impaired loans as of December 31, 2018 and December 31, 2017, respectively. None of the impaired loans as of December 31, 2017 required a valuation allowance after consideration was given for each borrowing as to the fair value of the collateral on the loan or the present value of expected future cash flows from the customer. The impaired loans as of December 31, 2018 requiring a valuation allowance are shown in the table below. The following table presents the balances measured at fair value on a nonrecurring basis as of December 31, 2018 (dollars in thousands): Fair Value Measurements at December 31, 2018 Using: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Description Balance (Level 1) (Level 2) (Level 3) Assets: Impaired loans Student loans purchased 1,512 - - 1,512 Total impaired loans $ 1,512 $ - $ - $ 1,512 There were no balances measured at fair value on a nonrecurring basis at December 31, 2017. On January 1, 2018, the Company adopted ASU 2016-01, “Financial Instruments – Overall (Subtopic 825- 10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 makes targeted improvements to several areas of U.S. GAAP, including the disclosure of the fair value of financial instruments that are not measured at fair value on a recurring basis. In accordance with the prospective adoption of ASU No. 2016-01, the fair value of loans as of December 31, 2018 was measured using an exit price notion. The fair value of loans as of December 31, 2017 was measured using an entry price notion. The Company has historically estimated the fair value for loans reported at amortized cost on its balance sheet by examining the average rates per the terms of these loans, and comparing those average rates to the current rates offered by the Company (i.e., the entry price notion). Utilizing the exit price notion requires the Company to estimate fair value of these loans based on the price that would be received to sell these loans in the principal or most advantageous market for the loans in an orderly transaction between market participants at the measurement date. The carrying values and estimated fair values of the Company’s financial instruments are as follows: Fair Value Measurement at December 31, 2018 using: Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 18,874 $ 18,874 $ - $ - $ 18,874 Available for sale securities 61,392 - 61,392 - 61,392 Loans, net 532,299 - - 514,917 514,917 Bank owned life insurance 16,790 - 16,790 - 16,790 Accrued interest receivable 2,100 - 342 1,758 2,100 Liabilities Demand deposits and interest-bearing transaction and money market accounts $ 464,002 $ - $ 464,002 $ - $ 464,002 Certificates of deposit 108,531 - 108,323 - 108,323 Repurchase agreements and other borrowings - - - - - Accrued interest payable 243 - 243 - 243 Fair Value Measurement at December 31, 2017 using: Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 18,277 $ 18,277 $ - $ - $ 18,277 Available for sale securities 67,501 - 67,501 - 67,501 Loans, net 524,741 - - 517,339 517,339 Bank owned life insurance 16,344 - 16,344 - 16,344 Accrued interest receivable 2,012 - 363 1,649 2,012 Liabilities Demand deposits and interest-bearing transaction and money market accounts $ 433,729 $ - $ 433,729 $ - $ 433,729 Certificates of deposit 109,233 - 108,936 - 108,936 Repurchase agreements and other borrowings 34,092 - 34,092 - 34,092 Accrued interest payable 110 - 110 - 110 The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change, and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk; however, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk. |
Other Noninterest Expenses
Other Noninterest Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Other Expenses [Abstract] | |
Other Noninterest Expenses | Note 15 – Other Noninterest Expenses The Company had the following other noninterest expenses as of the dates indicated: For the Year Ended December 31 2018 2017 ATM, debit and credit card $ 207 $ 283 Bank franchise tax 469 476 Computer software 424 397 Marketing, advertising and promotion 715 472 Professional fees 797 565 Other 1,943 2,017 $ 4,555 $ 4,210 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 16 – Employee Benefit Plans The Company has a 401(k) plan available to all employees who are at least 18 years of age. Employees are able to elect the amount to contribute, not to exceed a maximum amount as determined by Internal Revenue Service regulation. The company matches 100% of the first 6% of employee contributions. “Vesting” refers to the rights of ownership to the assets in the 401(k) accounts. Matching contributions as well as employee contributions are fully vested immediately. The Company contributed $304,000 and $322,000 to the 401(k) plan in 2018 and 2017, respectively. These expenses represent the matching contribution by the Company. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plans | Note 17 – Stock Incentive Plans At the Annual Shareholders Meeting on May 21, 2014, shareholders approved the Virginia National Bankshares Corporation 2014 Stock Incentive Plan (“2014 Plan”). The 2014 Plan makes available up to 262,500 shares of the Company’s common stock, as adjusted by the 5% Stock Dividend, to be issued to plan participants. Similar to the Company’s 2003 Stock Incentive Plan (“2003 Plan”) and 2005 Stock Incentive Plan (“2005 Plan”), the 2014 Plan provides for granting of both incentive and nonqualified stock options, as well as restricted stock, unrestricted stock and other stock based awards. No new grants will be issued under the 2003 Plan or the 2005 Plan as these plans have expired. For all of the Company’s stock incentive plans (the “Plans”), the option price of incentive options will not be less than the fair value of the stock at the time an option is granted. Nonqualified options may be granted at prices established by the Board of Directors, including prices less than the fair value on the date of grant. Outstanding options generally expire in ten years from the grant date. Stock options generally vest by the fourth or fifth anniversary of the date of the grant. A summary of the shares issued and available under each of the Company’s stock incentive plans (the “Plans”) is shown below as of December 31, 2018. Share data and exercise price range per share have been adjusted to reflect the 5% Stock Dividend. Although the 2003 Plan and 2005 Plan have expired and no new grants will be issued under these plans, there were shares issued before the plans expired which are still outstanding as shown below. 2003 Plan 2005 Plan 2014 Plan Aggregate shares issuable 134,787 241,500 262,500 Options issued, net of forfeited and expired options (113,457 ) (57,019 ) (64,850 ) Cancelled due to Plan expiration (21,330 ) (184,481 ) - Remaining available for grant - - 197,650 Grants issued and outstanding: Total vested and unvested shares 16,345 1,811 64,325 Fully vested shares 16,345 1,811 - Exercise price range $ 17.39 to $ 11.18 to $ 28.76 to $ 17.39 $ 14.37 $ 44.75 The Company accounts for all of its stock incentive plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in financial statements. Stock-based compensation arrangements for 2018 and prior years included stock options and restricted stock. All stock-based payments to employees are required to be valued using a fair value method on the date of grant and expensed based on that fair value over the applicable vesting period. For the years ended December 31, 2018 and 2017, the Company recognized $65,000 and $10,000, respectively, in compensation expense for stock options. As of December 31, 2018, there was $405,000 in unrecognized compensation expense for stock options remaining to be recognized in future reporting periods through 2023. Stock Options Changes in the stock options outstanding related to all of the Plans are summarized below. Share and per share data have been adjusted to reflect the 5% Stock Dividend. December 31, 2018 Weighted Average Aggregate Number of Options Exercise Price Intrinsic Value Outstanding at January 1, 2018 46,117 $ 19.96 $ 793 Issued 62,750 44.34 Exercised (12,502 ) 21.39 Expired (13,884 ) 21.53 Forfeited - - Outstanding at December 31, 2018 82,481 $ 38.02 $ 327 Options exercisable at December 31, 2018 18,156 $ 17.00 $ 318 There was an intrinsic value of $252,000 for the options exercised during the year ended December 31, 2018. The fair value of any option grant is estimated at the grant date using the Black-Scholes pricing model. In 2017, a stock option grant of 2,100 shares, as adjusted to reflect the 5% Stock Dividend, was issued. There were stock option grants of 62,750 shares issued during the year ended December 31, 2018, and the fair value on each option granted was estimated based on the assumptions noted in the following table: For the year ended For the year ended December 31, 2018 December 31, 2017 Expected volatility 1 15.49% 17.90% Expected dividends 2 1.81% 1.72% Expected term (in years) 3 6.50 6.30 Risk-free rate 4 2.85% 2.00% 1 Based on the monthly historical volatility of the Company’s stock price over the expected life of the options. 2 Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant. 3 Based on the average of the contractual life and vesting period for the respective option. 4 Based upon an interpolated US Treasury yield curve interest rate that corresponds to the contractual life of the option, in effect at the time of the grant. Summary information pertaining to options outstanding at December 31, 2018 is as follows: Options Outstanding Options Exercisable Weighted- Weighted- Weighted- Number of Average Average Number of Average Options Remaining Exercise Options Exercise Exercise Price Outstanding Contractual Life Price Exercisable Price $11.18 to $20.00 18,156 0.5 Years $ 17.00 18,156 $ 17.00 $20.01 to $30.00 1,575 8.2 Years 28.76 0 - $30.01 to $40.00 - - - 0 - $40.01 to $44.75 62,750 9.4 Years 44.34 0 - Total 82,481 7.4 Years $ 38.02 18,156 $ 17.00 Stock Grants There were no restricted stock grants outstanding throughout 2018 or 2017. No restricted or unrestricted stock grants were awarded during the twelve months of 2018 or 2017. On February 20, 2019, a total of 10,993 shares of unrestricted stock were granted to non-employee directors and certain members of executive management. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 18 – Net Income per Share On March 16, 2018, the Board of Directors approved a stock dividend of five percent (5%) on the outstanding shares of common stock of the Company (or .05 share for each share outstanding) which was issued on April 13, 2018 to all shareholders of record as of the close of business on April 3, 2018 (the “5% Stock Dividend”). Shareholders received cash in lieu of any fractional shares that they otherwise would have been entitled to receive in connection with the stock dividend. The price paid for fractional shares was based on the volume-weighted average price of a share of common stock for the most recent three (3) days prior to the record date during which a trade of the Company’s stock occurred. For the following table, share and per share data have been adjusted to reflect the 5% Stock Dividend. The table shows the weighted average number of shares used in computing net income per common share and the effect on the weighted average number of shares of diluted potential common stock for the years ended December 31, 2018 and 2017. Potential dilutive common stock equivalents have no effect on net income available to the Company’s shareholders. Weighted Per Share Net Income Average Shares Amount December 31, 2018 Basic net income per share $ 8,470 2,539,907 $ 3.33 Effect of dilutive stock options 18,073 (0.02 ) Diluted net income per share $ 8,470 2,557,980 $ 3.31 December 31, 2017 Basic net income per share $ 6,554 2,513,371 $ 2.61 Effect of dilutive stock options 22,216 (0.03 ) Diluted net income per share $ 6,554 2,535,587 $ 2.58 In 2018, stock options representing 62,750 average shares were not included in the calculation of net income per share, as their effect would have been antidilutive. There were no stock options excluded in the calculation of net income per share in 2017. |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2018 | |
Other Comprehensive Income (Loss), Tax [Abstract] | |
Other Comprehensive Income | Note 19 – Other Comprehensive Income A component of the Company’s comprehensive income, in addition to net income from operations, is the recognition of the realized gains and losses on AFS securities, net of income taxes. Reclassifications of unrealized gains and losses on AFS securities are reported in the income statement as “Gains (losses) on sales” with the corresponding income tax effect reflected as a component of income tax expense. Amounts reclassified out of accumulated other comprehensive income (loss) are presented below: December 31, December 31, 2018 2017 Available-for-sale securities Realized gains (losses) on sales of securities $ - $ (75 ) Tax effect - 25 Realized gains (losses), net of tax $ - $ (50 ) |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 20 – Segment Reporting Virginia National Bankshares Corporation has two reportable segments, the Bank and VNB Wealth. Effective July 1, 2018, VNBTrust merged into Virginia National Bank, which continues to offer the same services previously provided by VNBTrust. The Company’s commercial banking segment involves making loans and generating deposits from individuals, businesses and charitable organizations. Loan fee income, service charges from deposit accounts, and other non-interest-related fees, such as fees for debit cards and ATM usage and fees for treasury management services, generate additional income for this segment. The VNB Wealth segment includes (a) trust income from the investment management, wealth advisory and trust and estate services, comprised of both management fees and performance fees, (b) advisory and brokerage income from investment advisory, retail brokerage, annuity and insurance services offered under the name of VNB Investment Services, (c) income from the Company’s registered investment adviser, Masonry Capital Management, LLC, and (d) royalty income from the sale of Swift Run Capital Management, LLC in 2013. More information on royalty income and the related sale can be found under in Note 1 - Summary of Significant Accounting Policies. A management fee for administrative and technology support services provided by the Bank is allocated to VNB Wealth. For both the years ended December 31, 2018 and 2017, management fees of $100,000 were charged to VNB Wealth and eliminated in consolidated totals. The accounting policies of the segments are the same as those described in the summary of significant accounting policies provided earlier in this report. Each reportable segment is a strategic business unit that offers different products and services. They are managed separately, because each segment appeals to different markets and, accordingly, require different technology and marketing strategies. Segment information for the years ended, December 31, 2018, and 2017 is shown in the following tables. Note that asset information is not reported below, as the assets previously allocated to VNB Wealth are reported at the Bank level subsequent to the merger of VNBTrust, National Association, into the Bank effective July 1, 2018; also, assets specifically allocated to the VNB Wealth lines of business are insignificant and are no longer provided to the chief operating decision maker. 2018 Bank VNB Wealth Consolidated Net interest income $ 22,823 $ 73 $ 22,896 Provision for loan losses 1,873 - 1,873 Non-interest income 2,715 2,815 5,530 Non-interest expense 13,876 2,138 16,014 Income before income taxes 9,789 750 10,539 Provision for income taxes 1,911 158 2,069 Net income $ 7,878 $ 592 $ 8,470 2017 Bank VNB Wealth Consolidated Net interest income $ 21,282 $ 95 $ 21,377 Provision for loan losses 418 - 418 Non-interest income 2,722 3,158 5,880 Non-interest expense 13,380 2,502 15,882 Income before income taxes 10,206 751 10,957 Provision for income taxes 4,147 256 4,403 Net income $ 6,059 $ 495 $ 6,554 |
Condensed Parent Company Financ
Condensed Parent Company Financial Statements | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Parent Company Financial Statements | Note 21 – Condensed Parent Company Financial Statements Condensed financial statements pertaining only to the Parent Company are presented below. The investment in subsidiary is accounted for using the equity method of accounting. Cash dividend payments authorized by the Bank’s Board of Directors were paid to the Parent Company in 2018 and 2017, totaling $2.3 million and $720,000, respectively. The payment of dividends by the Bank is restricted by various regulatory limitations. Banking regulations also prohibit extensions of credit to the parent company unless appropriately secured by assets. For more detail on dividends, see Note 13 – Dividend Restrictions. Condensed Parent Company Only BALANCE SHEETS December 31, 2018 December 31, 2017 ASSETS Cash and due from banks $ 1,146 $ 1,236 Investment securities 65 65 Investments in subsidiary 70,142 63,967 Other assets 182 330 Total assets $ 71,535 $ 65,598 LIABILITIES & SHAREHOLDERS' EQUITY Other liabilities $ 793 $ 493 Stockholders' equity 70,742 65,105 Total liabilities and stockholders' equity $ 71,535 $ 65,598 STATEMENTS OF INCOME For the years ended December 31, 2018 December 31, 2017 Dividends from subsidiary $ 2,250 $ 720 Noninterest expense 429 388 Income before income taxes $ 1,821 $ 332 Income tax (benefit) (79 ) (137 ) Income before equity in undistributed earnings of subsidiary $ 1,900 $ 469 Equity in undistributed earnings of subsidiary 6,570 6,085 Net income $ 8,470 $ 6,554 STATEMENTS OF CASH FLOWS For the years ended December 31, 2018 December 31, 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,470 $ 6,554 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiary (6,570 ) (6,085 ) Deferred tax expense 4 91 Stock option & stock grant expense 65 10 Decrease (increase) in other assets 144 (93 ) Increase (decrease) in other liabilities (5 ) 3 Net cash provided by operating activities 2,108 480 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of available for sale securities - (1 ) Net cash used in investing activities - (1 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from stock options exercised 268 981 Dividends paid (2,466 ) (1,385 ) Net cash used in financing activities (2,198 ) (404 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (90 ) 75 CASH AND CASH EQUIVALENTS Beginning of period 1,236 1,161 End of period $ 1,146 $ 1,236 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization | Organization Virginia National Bankshares Corporation (the “Company”) is a bank holding company incorporated under the laws of the Commonwealth of Virginia. The Company is authorized to issue (a) 10,000,000 shares of common stock with a par value of $2.50 per share and (b) 2,000,000 shares of preferred stock at a par value $2.50 per share. There is currently no preferred stock outstanding. The Company is regulated under the Bank Holding Company Act of 1956, as amended and is subject to inspection, examination, and supervision by the Federal Reserve Board. Virginia National Bank (the “Bank”) is a wholly-owned subsidiary of the Company and was organized in 1998 under federal law as a national banking association to engage in a general commercial and retail banking business. The Bank is headquartered in Charlottesville, Virginia and primarily serves the Virginia communities in and around the cities of Charlottesville, Winchester, and Harrisonburg and the counties of Albemarle and Frederick. As a national bank, the Bank is subject to the supervision, examination and regulation of the Office of the Comptroller of the Currency (“OCC”). Effective July 1, 2018, VNBTrust, National Association (“VNBTrust”), formerly a subsidiary of the Bank, was merged into Virginia National Bank, and the Bank continues to offer investment management, wealth advisory and trust and estate administration services under the name of VNB Wealth Management, also referred to herein as “VNB Wealth.” All references herein to VNB Wealth Management or VNB Wealth refer to VNBTrust for periods prior to July 1, 2018. During 2018, the Company changed the structure of its VNB Wealth lines of business. The Company formed Masonry Capital Management, LLC (“Masonry Capital”), a registered investment adviser, to offer investment advisory and management services to clients through separately managed accounts and through one or more private investment fund(s). The Company believes the formation of Masonry Capital will allow the Company to offer its investment strategy to a wider range of clients. Masonry Capital is a wholly-owned subsidiary of the Company. |
Sale Agreement with SRCM Holdings LLC and Acquisition Royalty Payments Due to VNBTrust | Sale Agreement with SRCM Holdings LLC and Acquisition Royalty Payments Due to the Company In 2007 when VNBTrust was established, the OCC also approved the Bank’s application for VNBTrust to create a wholly owned operating subsidiary, VNB Investment Management Company, LLC, a Delaware limited liability corporation. In January 2010, VNB Investment Management Company changed its name to Swift Run Capital Management, LLC (“SRCM”). SRCM served as the general partner of Swift Run Capital, L.P. (the “Fund”), a private investment fund. On July 18, 2013 (the “Closing Date”), the Company completed the sale of all of the membership interests of SRCM to SRCM Holdings LLC (“SRCM Holdings”) pursuant to a purchase and sale agreement dated June 27, 2013 (the “SRCM Sale Agreement”). A former officer of the Company is the principal owner of SRCM Holdings. Under the terms of the SRCM Sale Agreement, SRCM Holdings agreed to pay the Company periodically during the ten-year period beginning January 1, 2014 and ending December 31, 2023 (the “Term”), (i) ongoing acquisition royalty payments equal to 20% of the management and performance fee revenue received by SRCM from limited partners of the Fund as of the Closing Date and from VNBTrust clients that opened accounts with SRCM within 30 days of the Closing Date, and (ii) ongoing referral royalty payments equal to 20% of the management and performance fee revenue received by SRCM from other clients referred by the Company and its affiliates to SRCM during the Term. A portion of the payments received from SRCM are applied to write down a contingent asset that was established to estimate the value for the sale of SRCM, with the remaining portion of the payments applied to noninterest income as royalty income. |
Basis of Presentation | Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to the reporting guidelines prescribed by regulatory authorities. The following is a description of the more significant of those policies and practices. |
Principles of consolidation | Principles of consolidation – The consolidated financial statements include the accounts of Virginia National Bankshares Corporation (the “Company”), and its subsidiary Virginia National Bank (the “Bank”). All references herein to VNB Wealth Management or VNB Wealth refer to VNBTrust for periods prior to July 1, 2018. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 (including impaired loans), other-than-temporary impairment of securities, intangible assets, income taxes, and fair value measurements. |
Cash flow reporting | Cash flow reporting – For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on hand, funds due from banks, and federal funds sold. |
Securities sold under agreements to repurchase | Securities sold under agreements to repurchase – The Company sold certain securities under agreements to repurchase in 2017 and 2018. The agreements were treated as collateralized financing transactions and the obligations to repurchase securities sold were reflected as a liability in the accompanying consolidated balance sheets. The dollar amount of the securities underlying the agreements remained in the asset accounts. The Company discontinued the repurchase agreement product effective December 31, 2018. |
Securities | Securities – Unrestricted investments are classified in two categories as described below. ● Securities held to maturity – Securities classified as held to maturity are those debt securities the Company has both the positive intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. Currently the Company has no securities classified as held to maturity because of Management’s desire to have more flexibility in managing the investment portfolio. ● Securities available for sale – Securities classified as available for sale are those debt securities that the Company intends to hold for an indefinite period of time but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities available for sale are carried at fair value. Unrealized gains or losses are reported as a separate component of other comprehensive income. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities or to “call” dates, whichever occurs first. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Impairment of securities occurs when the fair value of a security is less than its amortized cost. For debt securities, impairment is considered other-than-temporary and recognized in its entirety in net income if either (1) the Company intends to sell the security or (2) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If, however, the Company does not intend to sell the security and it is not more-than-likely that the Company will be required to sell the security before recovery, the Company must determine what portion of the impairment is attributable to a credit loss, which occurs when the amortized cost of the security exceeds the present value of the cash flows expected to be collected from the security. If there is no credit loss, there is no other-than-temporary impairment. If there is a credit loss, other-than-temporary impairment exists, and the credit loss must be recognized in net income and the remaining portion of impairment must be recognized in other comprehensive income. |
Restricted securities | Restricted securities – As members of the Federal Reserve Bank of Richmond (“FRB”) and the Federal Home Loan Bank of Atlanta (“FHLB”), the Company is required to maintain certain minimum investments in the common stock of the FRB and FHLB. Required levels of investments are based upon the Bank’s capital and a percentage of qualifying assets. Additionally, the Company has purchased common stock in CBB Financial Corp. (“CBBFC”), the holding company for Community Bankers’ Bank. Shares of common stock from the FRB, FHLB and CBBFC are classified as restricted securities which are carried at cost |
Loans | Loans – Loans are reported at the principal balance outstanding net of unearned discounts and of the allowance for loan losses. Interest income on loans is reported on the level-yield method and includes amortization of deferred loan fees and costs over the loan term. Purchased performing loans are accounted for in the same manner as the rest of the loan portfolio. Further information regarding the Company’s accounting policies related to past due loans, non-accrual loans, impaired loans and troubled-debt restructurings is presented in Note 3 - Loans. |
Allowance for loan losses | Allowance for loan losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses inherent in the loan portfolio. The allowance for loan losses includes allowance allocations calculated in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 310, “Receivables” and allowance allocations calculated in accordance with ASC Topic 450, “Contingencies.” Further information regarding the Company’s policies and methodology used to estimate the allowance for loan losses is presented in Note 4 – Allowance for Loan Losses. |
Transfers of financial assets | Transfers of financial assets – Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company or its subsidiaries – put presumptively beyond reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company or its subsidiaries does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. |
Premises and equipment | Premises and equipment – Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method based on the estimated useful lives of assets, which range from 3 to 20 years. Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and betterments are capitalized and depreciated over their estimated useful lives. Upon disposition, the asset and related accumulated depreciation are removed from the books and any resulting gain or loss is charged to income. More information regarding premises and equipment is presented in Note 5 – Premises and Equipment. |
Intangible Assets | Intangible Assets – Goodwill is determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and other intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually, or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. Intangible assets with definite useful lives are amortized over their estimated useful lives, which range from 3 to 10 years, to their estimated residual values. Goodwill is the only intangible asset with an indefinite life included on the Company’s Consolidated Balance Sheets. Management has concluded that no circumstances indicating an impairment of these assets existed as of the balance sheet date. |
Bank owned life insurance | Bank owned life insurance – The Company has purchased life insurance on certain key employees. These policies are recorded at their cash surrender value on the Consolidated Balance Sheets. Income generated from polices is recorded as noninterest income. |
Fair value measurements | Fair value measurements – ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon internally developed models that primarily use, as inputs, observable market-based parameters. Any such valuation adjustments are applied consistently over time. Additional information on fair value measurements is presented in Note 14 – Fair Value Measurements. |
Stock-based compensation | Stock-based compensation – The Company accounts for all plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements include stock options and restricted stock. For stock options, compensation is estimated at the date of grant, using the Black-Scholes option valuation model for determining fair value. The model employs the following assumptions: ● Dividend yield - calculated as the ratio of historical cash dividends paid per share of common stock to the stock price on the date of grant; ● Expected life (term of the option) - based on the average of the contractual life and vesting schedule for the respective option; ● Expected volatility - based on the monthly historical volatility of the Company’s stock price over the expected life of the options; ● Risk-free interest rate - based upon the U.S. Treasury bill yield curve, for periods within the contractual life of the option, in effect at the time of grant. The Company has elected to estimate forfeitures when recognizing compensation expense, and this estimate of forfeitures is adjusted over the requisite service period or vesting schedule based on the extent to which actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and also will impact the amount of estimated unamortized compensation expense to be recognized in future periods. Further information on stock-based compensation is presented in Note 17 – Stock Incentive Plans. |
Net Income per common share | Net Income per common share – Basic net income per share, commonly referred to as earnings per share, represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method. Additional information on net income per share is presented in Note 18 – Net Income per Share. |
Comprehensive income | Comprehensive income – Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. Further information on the Company’s other comprehensive income is presented in Note 19 – Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”). The Company early adopted this new standard effective in the consolidated financial statements of December 31, 2017. ASU 2018-02 requires reclassification from AOCI to retained earnings for stranded tax effects resulting from the impact of the newly enacted federal corporate income tax rate on items included in AOCI. The amount of this reclassification in 2017 was $145,000. |
Advertising costs | Advertising costs – The Company follows the policy of charging the costs of advertising to expense as they are incurred. |
Income taxes | Income taxes – Deferred taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss carry forwards, and tax credit carry forwards. Deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The results for the year ended December 31, 2017 include the effect of the Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, 2017. Among other things, the Tax Act permanently lowered the federal corporate income tax rate to 21 percent from the maximum rate prior to the passage of the Tax Act of 35 percent, effective January 1, 2018. As a result of the reduction of the federal corporate tax rate, U.S. GAAP required companies to re-measure their deferred tax assets and deferred tax liabilities, including those accounted for in accumulated other comprehensive income, as of the date of the Tax Act’s enactment and record the corresponding effects in income tax expense in the fourth quarter of 2017. As a result of the permanent reduction in the corporate income tax rate, the Company recognized a $963,000 reduction in the value of its net deferred tax asset and recorded a corresponding incremental income tax expense of $963,000 for the fourth quarter of 2017. When tax returns are filed, it is highly probable that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of income. Further information on the Company’s accounting policies for income taxes is presented in Note 8 – Income Taxes. |
Securities and Other Property Held in a Fiduciary Capacity | Securities and Other Property Held in a Fiduciary Capacity – Securities and other property held by VNB Wealth in a fiduciary or agency capacity are not assets of the Company and are not included in the accompanying consolidated financial statements. |
Reclassifications | Reclassifications – Certain reclassifications have been made to the prior year financial statements to conform to current year presentation. The results of the reclassifications are not considered material. |
Adoption of New Accounting Standard | Adoption of New Accounting Standard Revenue Recognition During the first quarter of 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers”, and all subsequent amendments to the ASU (collectively “ASC 606”), which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as OREO. The majority of the Company’s revenue is from interest income, including loans and securities, which are outside the scope of the standard. The services that fall within the scope of the standard are presented within noninterest income on the consolidated statement of income and are recognized as revenue as the Company satisfies its obligations to the customer. The revenue that falls within the scope of ASC 606 is primarily related to service charges on deposit accounts, debit/credit card and ATM fees, asset management fees and sales of other real estate owned, when applicable. ASC 606 did not result in a change to the accounting for any in-scope revenue streams; as such, no cumulative effect adjustment was recorded. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The FASB made subsequent amendments to Topic 842 in July 2018 through ASU 2018-10 (“Codification Improvements to Topic 842, Leases”) and ASU 2018-11 (“Leases (Topic 842): Targeted Improvements”). Among these amendments is the provision in ASU 2018-11 that provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). The Company has completed an inventory of its leases, which are comprised primarily of real estate in which the Company is the lessee, and all of which are accounted for as operating leases under current guidance. The Company adopted Topic 842 effective January 1, 2019 using the optional transition method noted above. The effect of adopting this standard on January 1, 2019 is to record a $4.0 million right of use asset and corresponding lease obligation liability on our consolidated balance sheet. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact that Topic 326 will have on its consolidated financial statements. Early in 2017, the Company formed a cross-functional steering committee, including some members of senior management, to provide governance and guidance over the project plan. The steering committee meets regularly to address the compliance requirements, data requirements and sources, and analysis efforts that are required to adopt these new requirements. The Company has engaged a vendor to assist in modeling expected lifetime losses under Topic 326, and expects to develop and refine an approach to estimating the allowance for credit losses during. 2019. The extent of the change is indeterminable at this time as it will be dependent upon portfolio composition and credit quality at the adoption date, as well as economic conditions and forecasts at that time. Upon adoption, the impact to the allowance for credit losses (currently allowance for loan losses) will have an offsetting one-time cumulative-effect adjustment to retained earnings. Goodwill Impairment Testing In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Public business entities that are SEC filers should adopt the amendments in this ASU for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017- 08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.” The amendments in this ASU shorten the amortization period for certain callable debt securities purchased at a premium. Upon adoption of the standard, premiums on these qualifying callable debt securities will be amortized to the earliest call date. Discounts on purchased debt securities will continue to be accreted to maturity. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Upon transition, entities should apply the guidance on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and provide the disclosures required for a change in accounting principle. The Company does not expect the adoption of ASU 2017-08 to have a material impact on its consolidated financial statements. Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this ASU modify the disclosure requirements in Topic 820 to add disclosures regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. Certain disclosure requirements in Topic 820 are also removed or modified. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Certain of the amendments are to be applied prospectively while others are to be applied retrospectively. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements. |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost and Fair Values of Securities Available For Sale | The amortized cost and fair values of securities available for sale as of December 31, 2018 and December 31, 2017 are as follows: December 31, 2018 Amortized Gross Unrealized Gross Unrealized Fair U.S. Government agencies $ 19,500 $ - $ (526 ) $ 18,974 Mortgage-backed securities/CMOs 25,901 1 (839 ) 25,063 Municipal bonds 17,608 12 (265 ) 17,355 Total Securities Available for Sale $ 63,009 $ 13 $ (1,630 ) $ 61,392 December 31, 2017 Amortized Gross Unrealized Gross Unrealized Fair U.S. Government agencies $ 19,500 $ - $ (538 ) $ 18,962 Mortgage-backed securities/CMOs 30,450 - (505 ) 29,945 Municipal bonds 18,668 68 (143 ) 18,593 Total Debt Securities 68,618 67,500 Marketable equity securities 1 - - 1 Total Securities Available for Sale $ 68,619 $ 68 $ (1,186 ) $ 67,501 |
Schedule of Unrealized Losses in the Bank's Securities Portfolio | Year-end securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, were as follows: December 31, 2018 Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ - $ - $ 18,974 $ (526 ) $ 18,974 $ (526 ) Mortgage-backed/CMOs - - 24,657 (839 ) 24,657 (839 ) Municipal bonds 4,983 (34 ) 10,722 (231 ) 15,705 (265 ) $ 4,983 $ (34 ) $ 54,353 $ (1,596 ) $ 59,336 $ (1,630 ) December 31, 2017 Less than 12 Months 12 Months or more Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses U.S. Government agencies $ 7,390 $ (110 ) $ 11,572 $ (428 ) $ 18,962 $ (538 ) Mortgage-backed/CMOs 21,422 (260 ) 8,523 (245 ) 29,945 (505 ) Municipal bonds 10,389 (132 ) 504 (11 ) 10,893 (143 ) $ 39,201 $ (502 ) $ 20,599 $ (684 ) $ 59,800 $ (1,186 ) |
Schedule of Amortized Cost and Fair Values of Securities Available For Sale Based upon Contractual Maturities and by Major Investment Categories | Amortized Cost Fair Value U.S. Government agencies After one year to five years $ 19,500 $ 18,974 $ 19,500 $ 18,974 Mortgage-backed securities/CMOs After one year to five years $ 2,895 $ 2,830 After five years to ten years 10,373 10,036 Ten years or more 12,633 12,197 $ 25,901 $ 25,063 Municipal bonds After one year to five years 1,987 1,952 After five years to ten years 8,406 8,290 Ten years or more 7,215 7,113 $ 17,608 $ 17,355 Total Debt Securities Available for Sale $ 63,009 $ 61,392 |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Schedule of Composition of Loan Portfolio by Loan Classification | The composition of the loan portfolio by loan classification appears below. December 31, December 31, 2018 2017 Commercial Commercial and industrial - organic $ 41,526 $ 45,254 Commercial and industrial - government guaranteed 31,367 22,946 Commercial and industrial - syndicated 12,134 13,165 Total commercial and industrial 85,027 81,365 Real estate construction and land Residential construction 1,552 3,812 Commercial construction 5,078 13,365 Land and land development 10,894 9,681 Total construction and land 17,524 26,858 Real estate mortgages 1-4 family residential, first lien, investment 40,311 40,313 1-4 family residential, first lien, owner occupied 16,775 16,448 1-4 family residential, junior lien 3,169 2,965 1-4 family residential - purchased 18,647 - Home equity lines of credit, first lien 8,325 9,238 Home equity lines of credit, junior lien 10,912 13,226 Farm 10,397 10,445 Multifamily 27,328 33,356 Commercial owner occupied 93,800 80,261 Commercial non-owner occupied 123,214 116,599 Total real estate mortgage 352,878 322,851 Consumer Consumer revolving credit 21,540 24,030 Consumer all other credit 5,530 9,036 Student loans purchased 54,691 64,644 Total consumer 81,761 97,710 Total loans 537,190 528,784 Less: Allowance for loan losses (4,891 ) (4,043 ) Net loans $ 532,299 $ 524,741 |
Schedule of Activity in Related Party Loans | Activity in related party loans during 2018 and 2017 is presented in the following table. 2018 2017 Balance outstanding at beginning of year $ 21,443 $ 12,578 Principal additions 2,199 13,818 Principal reductions (2,238 ) (4,953 ) Balance outstanding at end of year $ 21,404 $ 21,443 |
Schedule of Impaired Loans Classified as Non-Accruals by Class | Non-accrual loans are shown below by class: December 31, 2018 December 31, 2017 Land and land development $ 32 $ 41 1-4 family residential mortgages, first lien, owner occupied 82 99 1-4 family residential mortgages, junior lien - 37 Student loans purchased 445 - Commercial and industrial - organic 56 Total nonaccrual loans $ 615 $ 177 |
Schedule of Aging of Past Due Loans | The following tables show the aging of past due loans as of December 31, 2018 and December 31, 2017. Past Due Aging as of 90 Days December 31, 2018 30-59 60-89 90 Days or Past Due Days Past Days Past More Past Total Past Total and Still Due Due Due Due Current Loans Accruing Commercial loans Commercial and industrial - organic $ 50 $ 172 $ - $ 222 $ 41,304 $ 41,526 $ - Commercial and industrial - government guaranteed - - 548 548 30,819 31,367 548 Commercial and industrial - syndicated - - - - 12,134 12,134 - Real estate construction and land Residential construction - - - - 1,552 1,552 - Commercial construction - - - - 5,078 5,078 - Land and land development 1 - 15 16 10,878 10,894 15 Real estate mortgages 1-4 family residential, first lien, investment - - - - 40,311 40,311 - 1-4 family residential, first lien, owner occupied - - - - 16,775 16,775 - 1-4 family residential, junior lien - - - - 3,169 3,169 - 1-4 family residential - purchased 954 - - 954 17,693 18,647 - Home equity lines of credit, first lien - - - - 8,325 8,325 - Home equity lines of credit, junior lien - - - - 10,912 10,912 - Farm - - - - 10,397 10,397 - Multifamily - - - - 27,328 27,328 - Commercial owner occupied - - - - 93,800 93,800 - Commercial non-owner occupied 75 - - 75 123,139 123,214 - Consumer loans Consumer revolving credit - - - - 21,540 21,540 - Consumer all other credit 4 599 - 603 4,927 5,530 - Student loans purchased 850 463 754 2,067 52,624 54,691 332 Total Loans $ 1,934 $ 1,234 $ 1,317 $ 4,485 $ 532,705 $ 537,190 $ 895 Past Due Aging as of 90 Days December 31, 2017 30-59 60-89 90 Days or Past Due Days Past Days Past More Past Total Past Total and Still Due Due Due Due Current Loans Accruing Commercial loans Commercial and industrial - organic $ - $ - $ - $ - $ 45,254 $ 45,254 $ - Commercial and industrial - government guaranteed - - - - 22,946 22,946 - Commercial and industrial - syndicated - - - - 13,165 13,165 - Real estate construction and land Residential construction - - - - 3,812 3,812 - Commercial construction - - - - 13,365 13,365 - Land and land development 20 - - 20 9,661 9,681 - Real estate mortgages 1-4 family residential, first lien, investment 118 - - 118 40,195 40,313 - 1-4 family residential, first lien, owner occupied 128 - 18 146 16,302 16,448 18 1-4 family residential, junior lien - - - - 2,965 2,965 - Home equity lines of credit, first lien 100 - - 100 9,138 9,238 - Home equity lines of credit, junior lien - - - - 13,226 13,226 - Farm - - - - 10,445 10,445 - Multifamily - - - - 33,356 33,356 - Commercial owner occupied 11 - - 11 80,250 80,261 - Commercial non-owner occupied 79 91 - 170 116,429 116,599 - Consumer loans Consumer revolving credit 1 - - 1 24,029 24,030 - Consumer all other credit 71 - - 71 8,965 9,036 - Student loans purchased 997 160 271 1,428 63,216 64,644 271 Total Loans $ 1,525 $ 251 $ 289 $ 2,065 $ 526,719 $ 528,784 $ 289 |
Schedule of Loans Classified as Impaired Loans | The following tables provide a breakdown by class of the loans classified as impaired loans as of December 31, 2018 and December 31, 2017. These loans are reported at their recorded investment, which is the carrying amount of the loan as reflected on the Company’s balance sheet, net of charge-offs and other amounts applied to reduce the net book balance. Average recorded investment in impaired loans is computed using an average of month-end balances for these loans for the twelve months ended December 31, 2018 and December 31, 2017. Interest income recognized is for the years ended December 31, 2018 and December 31, 2017. December 31, 2018 Unpaid Average Interest Recorded Principal Associated Recorded Income Investment Balance Allowance Investment Recognized Impaired loans without a valuation allowance: Land and land development $ 32 $ 90 $ - $ 37 $ - 1-4 family residential mortgages, first lien, owner occupied 82 127 - 90 - 1-4 family residential mortgages, junior lien 127 127 248 15 Commercial non-owner occupied real estate 923 923 - 947 51 Total impaired loans without a valuation allowance 1,164 1,267 - 1,322 66 Impaired loans with a valuation allowance Student loans purchased 1,602 1,602 90 1,387 86 Total impaired loans with a valuation allowance 1,602 1,602 90 1,387 86 Total impaired loans $ 2,766 $ 2,869 $ 90 $ 2,709 $ 152 December 31, 2017 Unpaid Average Interest Recorded Principal Associated Recorded Income Investment Balance Allowance Investment Recognized Impaired loans without a valuation allowance: Land and land development $ 41 $ 94 $ - $ 46 $ - 1-4 family residential mortgages, first lien, owner occupied 99 137 - 107 - 1-4 family residential mortgages, junior lien 379 382 367 17 Commercial non-owner occupied real estate 972 972 - 992 48 Student loans purchased 1,083 1,083 - 959 64 Impaired loans with a valuation allowance - - - - - Total impaired loans $ 2,574 $ 2,668 $ - $ 2,471 $ 129 |
Summary of Modified Loans | The following provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in non-accrual status, which are considered to be nonperforming. Troubled debt restructurings (TDRs) December 31, 2018 December 31, 2017 No. of Recorded No. of Recorded Loans Investment Loans Investment Performing TDRs 1-4 family residential mortgages, junior lien 1 $ 127 2 $ 342 Commercial non-owner occupied real estate 1 923 1 972 Student loans purchased 65 1,157 64 1,083 Total performing TDRs 67 $ 2,207 67 $ 2,397 Nonperforming TDRs Student loans purchased 1 4 - - Land and land development 1 $ 19 1 $ 24 Total nonperforming TDRs 2 $ 23 1 $ 24 Total TDRs 69 $ 2,230 68 $ 2,421 |
Schedule of Loans Modified Under Terms of a TDR | During year ended During year ended December 31, 2018 December 31, 2017 Pre- Post- Pre- Post- Modification Modification Modification Modification Number Recorded Recorded Number Recorded Recorded of Loans Balance Balance of Loans Balance Balance Student loans purchased 12 $ 244 $ 244 21 $ 316 $ 316 Total loans modified during the period 12 $ 244 $ 244 21 $ 316 $ 316 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Allowance for Loan Losses [Abstract] | |
Summary of Transactions in Allowance for Loan Losses | A summary of the transactions in the allowance for loan losses for the years ended December 31, 2018 and 2017 appears below: 2018 2017 Balance, beginning of period $ 4,043 $ 3,688 Loans charged off (1,097 ) (111 ) Recoveries 72 48 Net charge-offs (1,025 ) (63 ) Provision for loan losses 1,873 418 Balance, December 31 $ 4,891 $ 4,043 |
Internal Risk Rating Grades | The following represents the loan portfolio designated by the internal risk ratings assigned to each credit at year-end: Special Sub- December 31, 2018 Excellent Good Pass Watch Mention standard TOTAL Commercial Commercial and industrial - organic $ 3,692 $ 23,381 $ 13,993 $ 264 $ 28 $ 168 $ 41,526 Commercial and industrial - government guaranteed 31,367 - - - - - 31,367 Commercial and industrial - syndicated - - 9,588 - - 2,546 12,134 Real estate construction Residential construction - - 1,552 - - - 1,552 Commercial construction - - 5,078 - - - 5,078 Land and land development - - 9,888 501 - 505 10,894 Real estate mortgages 1-4 family residential, first lien, investment - - 36,314 3,607 117 273 40,311 1-4 family residential, first lien, owner occupied - - 15,540 1,087 11 137 16,775 1-4 family residential, junior lien - - 2,573 58 22 516 3,169 1-4 family residential, first lien - purchased - - 18,647 - - - 18,647 Home equity lines of credit, first lien - - 7,911 414 - - 8,325 Home equity lines of credit, junior lien - - 10,704 97 - 111 10,912 Farm - - 8,719 339 - 1,339 10,397 Multifamily - - 27,328 - - - 27,328 Commercial owner occupied - - 86,868 6,932 - - 93,800 Commercial non-owner occupied - - 120,720 1,519 - 975 123,214 Consumer Consumer revolving credit 44 20,852 644 - - - 21,540 Consumer all other credit 263 4,699 535 4 - 29 5,530 Student loans purchased - - 51,494 2,401 431 365 54,691 Total Loans $ 35,366 $ 48,932 $ 428,096 $ 17,223 $ 609 $ 6,964 $ 537,190 Special Sub- December 31, 2017 Excellent Good Pass Watch Mention standard TOTAL Commercial Commercial and industrial - organic $ 3,000 $ 23,937 $ 17,324 $ 13 $ 269 $ 711 $ 45,254 Commercial and industrial - government guaranteed 22,946 - - - - - 22,946 Commercial and industrial - syndicated - - 10,590 - - 2,575 13,165 Real estate construction Residential construction - - 3,812 - - - 3,812 Commercial construction - - 13,365 - - - 13,365 Land and land development - - 9,137 3 - 541 9,681 Real estate mortgages 1-4 family residential, first lien, investment - - 38,003 1,875 - 435 40,313 1-4 family residential, first lien, owner occupied - - 15,465 260 - 723 16,448 1-4 family residential, junior lien - - 2,488 265 41 171 2,965 Home equity lines of credit, first lien - - 9,098 140 - - 9,238 Home equity lines of credit, junior lien - - 13,115 - - 111 13,226 Farm - - 9,065 - - 1,380 10,445 Multifamily - - 33,356 - - - 33,356 Commercial owner occupied - 669 79,137 455 - - 80,261 Commercial non-owner occupied - - 114,610 972 - 1,017 116,599 Consumer Consumer revolving credit 6 22,977 1,045 1 1 - 24,030 Consumer all other credit 294 8,006 701 2 - 33 9,036 Student loans purchased - - 63,561 1,083 - - 64,644 Total Loans $ 26,246 $ 55,589 $ 433,872 $ 5,069 $ 311 $ 7,697 $ 528,784 |
Allowance for Loan Losses Rollforward by Portfolio Segment | Allowance for Loan Losses Rollforward by Portfolio Segment As of and for the year ended December 31, 2018 Real Estate Commercial Construction Real Estate Consumer Loans and Land Mortgages Loans Total Allowance for Loan Losses: Balance as of January 1, 2018 $ 885 $ 206 $ 2,730 $ 222 $ 4,043 Charge-offs (75 ) - - (1,022 ) (1,097 ) Recoveries 54 - 2 16 72 Provision for (recovery of) loan losses (53 ) (87 ) (121 ) 2,134 1,873 Ending Balance $ 811 $ 119 $ 2,611 $ 1,350 $ 4,891 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ 90 $ 90 Collectively evaluated for impairment 811 119 2,611 1,260 4,801 Loans: Individually evaluated for impairment $ - $ 32 $ 1,132 $ 1,602 $ 2,766 Collectively evaluated for impairment 85,027 17,492 351,746 80,159 534,424 Ending Balance $ 85,027 $ 17,524 $ 352,878 $ 81,761 $ 537,190 As of and for the year ended December 31, 2017 Real Estate Commercial Construction Real Estate Consumer Loans and Land Mortgages Loans Total Allowance for Loan Losses: Balance as of January 1, 2017 $ 824 $ 127 $ 2,506 $ 231 $ 3,688 Charge-offs (111 ) - - - (111 ) Recoveries 31 - 2 15 48 Provision for (recovery of) loan losses 141 79 222 (24 ) 418 Ending Balance $ 885 $ 206 $ 2,730 $ 222 $ 4,043 Ending Balance: Individually evaluated for impairment $ - $ - $ - $ - $ - Collectively evaluated for impairment 885 206 2,730 222 4,043 Loans: Individually evaluated for impairment $ - $ 41 $ 1,450 $ 1,083 $ 2,574 Collectively evaluated for impairment 81,365 26,817 321,401 96,627 526,210 Ending Balance $ 81,365 $ 26,858 $ 322,851 $ 97,710 $ 528,784 |
Premises and Equipment) (Tables
Premises and Equipment) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Premises and Equipment | Premises and equipment are summarized as follows: December 31, 2018 December 31, 2017 Leasehold improvements $ 14,594 $ 14,426 Building and land 1,215 1,216 Construction and fixed assets in progress 434 118 Furniture and equipment 6,513 6,370 Computer software 2,305 2,167 $ 25,061 $ 24,297 Less: accumulated depreciation and amortization 18,019 16,926 $ 7,042 $ 7,371 |
Schedule of future minimum rental payments required under non-cancelable operating leases | The following is a schedule of future minimum rental payments required under non-cancelable operating leases that have initial or remaining terms in excess of one year as of December 31, 2018: 2019 $ 792 2020 793 2021 803 2022 767 2023 666 Thereafter 862 $ 4,683 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the net asset values, as determined by an independent third party, based on the fair value measurement | Estimated % of Total Economic Useful Fair Value Intangible Assets Life Identified Intangible Assets Non-Compete Agreement $ 103 9.0 % 3 years Customer Relationships Intangible 670 58.5 % 10 years Total Identified Intangible Assets $ 773 67.5 % Goodwill $ 372 32.5 % Indefinite Total Intangible Assets $ 1,145 100.0 % |
Schedule of gross and net balance of intangible assets | Gross Carrying Accumulated Net Carrying Value Amortization Value Identified Intangible Assets Non-Compete Agreement $ 103 $ 100 $ 3 Customer Relationships Intangible 670 196 $ 474 Total Identified Intangible Assets $ 773 $ 296 $ 477 |
Deposits) (Tables)
Deposits) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Demand deposits: | |
Schedule of Maturities of Time Deposits | At December 31, 2018, the scheduled maturities of time deposits are as follows: 2019 $ 79,167 2020 21,076 2021 6,266 2022 946 2023 1,076 $ 108,531 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Net Deferred Tax Assets | Net deferred tax assets consist of the following components as of year-end: 2018 2017 Deferred tax assets: Allowance for loan losses $ 1,027 $ 849 Non-accrual loan interest 15 9 Stock option/grant expense 32 54 Start-up expenses 47 29 Home equity closing costs 27 32 Deferred compensation expense 10 9 Goodwill and other intangible assets 14 9 Securities available for sale unrealized loss 339 235 Depreciation 404 366 $ 1,915 $ 1,592 Deferred tax liabilities: Deferred loan costs 27 42 27 42 Net deferred tax assets $ 1,888 $ 1,550 |
Schedule of Provision for Income Taxes | The provision for income taxes charged to operations for years ended December 31, 2018 and 2017 consists of the following: 2018 2017 Current tax expense $ 2,303 $ 3,635 Deferred tax benefit (234 ) (195 ) Deferred tax asset adjustment for enacted change in tax rate - 963 Provision for income taxes $ 2,069 $ 4,403 |
Schedule of Effective Income Tax Rate Reconciliation, Amount | The Company’s income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income for the years ended December 31, 2018 and 2017 due to the following: 2018 2017 Federal statutory rate 21% 34% Computed statutory tax expense $ 2,213 $ 3,727 Increase (decrease) in tax resulting from: Tax-exempt interest income (74 ) (104 ) Tax-exempt income from Bank Owned Life Insurance (BOLI) (94 ) (145 ) Stock option expense 7 4 Stock option exercise benefit (18 ) (59 ) Deferred tax asset adjustment for enacted change in tax rate - 963 Other expenses 35 17 Provision for income taxes $ 2,069 $ 4,403 |
Financial Instruments With Of_2
Financial Instruments With Off-Balance Sheet Risk and Credit Risk) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of Financial Instruments with Credit Risk | The totals for financial instruments whose contract amount represents credit risk are shown below: Notional Amount December 31, 2018 December 31, 2017 Unfunded lines-of-credit $ 88,323 $ 99,757 ACH 20,131 17,681 Letters of credit 5,744 6,039 Total $ 114,198 $ 123,477 |
Capital Requirements) (Tables)
Capital Requirements) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of Company's and Bank's Actual Capital Amounts and Ratios | The Company calculates its regulatory capital under the Basel III regulatory capital framework. The table below summarizes the Company’s regulatory capital and related ratios for the periods presented: December 31, 2018 Minimum To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Consolidated $ 76,090 14.52 % $ 41,935 8.00 % N/A N/A Bank $ 75,491 14.41 % $ 41,914 8.00 % $ 52,393 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 71,169 13.58 % $ 23,589 4.50 % N/A N/A Bank $ 70,570 13.47 % $ 23,577 4.50 % $ 34,055 6.50 % Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 71,169 13.58 % $ 31,451 6.00 % N/A N/A Bank $ 70,570 13.47 % $ 31,436 6.00 % $ 41,914 8.00 % Tier 1 Capital (To Average Assets) Consolidated $ 71,169 11.14 % $ 25,550 4.00 % N/A N/A Bank $ 70,570 11.05 % $ 25,544 4.00 % $ 31,930 5.00 % December 31, 2017 Minimum To Be Well Capitalized Minimum Capital Under Prompt Corrective Actual Requirement Action Provisions Amount Ratio Amount Ratio Amount Ratio Total Capital (To Risk Weighted Assets) Consolidated $ 69,196 12.99 % $ 42,622 8.00 % N/A N/A Bank $ 68,058 12.78 % $ 42,591 8.00 % $ 53,238 10.00 % Common Equity Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 65,153 12.23 % $ 23,975 4.50 % N/A N/A Bank $ 64,015 12.02 % $ 23,957 4.50 % $ 34,605 6.50 % Tier 1 Capital (To Risk Weighted Assets) Consolidated $ 65,153 12.23 % $ 31,967 6.00 % N/A N/A Bank $ 64,015 12.02 % $ 31,943 6.00 % $ 42,591 8.00 % Tier 1 Capital (To Average Assets) Consolidated $ 65,153 10.58 % $ 24,638 4.00 % N/A N/A Bank $ 64,015 10.40 % $ 24,624 4.00 % $ 30,780 5.00 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Available for Sale Securities Measured at Fair Value on a Recurring Basis | The following tables present the balances measured at fair value on a recurring basis: Fair Value Measurements at December 31, 2018 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 18,974 $ - $ 18,974 $ - Mortgage-backed securities/CMOs 25,063 - 25,063 - Municipal bonds 17,355 - 17,355 - Total securities available for sale $ 61,392 $ - $ 61,392 $ - Fair Value Measurements at December 31, 2017 Using: Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Description Balance (Level 1) (Level 2) (Level 3) Assets: U.S. Government agencies $ 18,962 $ - $ 18,962 $ - Mortgage-backed securities/CMOs 29,945 - 29,945 - Municipal bonds 18,593 - 18,593 - Marketable equity securities 1 - 1 - Total securities available for sale $ 67,501 $ - $ 67,501 $ - |
Other Real Estate Owned Measured at Fair Value on a Nonrecurring Basis | The following table presents the balances measured at fair value on a nonrecurring basis as of December 31, 2018 (dollars in thousands): Fair Value Measurements at December 31, 2018 Using: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Description Balance (Level 1) (Level 2) (Level 3) Assets: Impaired loans Student loans purchased 1,512 - - 1,512 Total impaired loans $ 1,512 $ - $ - $ 1,512 |
Schedule of the Carrying Values and Estimated Fair Values of the Bank's Financial Instruments | The carrying values and estimated fair values of the Company’s financial instruments are as follows: Fair Value Measurement at December 31, 2018 using: Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 18,874 $ 18,874 $ - $ - $ 18,874 Available for sale securities 61,392 - 61,392 - 61,392 Loans, net 532,299 - - 514,917 514,917 Bank owned life insurance 16,790 - 16,790 - 16,790 Accrued interest receivable 2,100 - 342 1,758 2,100 Liabilities Demand deposits and interest-bearing transaction and money market accounts $ 464,002 $ - $ 464,002 $ - $ 464,002 Certificates of deposit 108,531 - 108,323 - 108,323 Repurchase agreements and other borrowings - - - - - Accrued interest payable 243 - 243 - 243 Fair Value Measurement at December 31, 2017 using: Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Carrying value Level 1 Level 2 Level 3 Fair Value Assets Cash and cash equivalent $ 18,277 $ 18,277 $ - $ - $ 18,277 Available for sale securities 67,501 - 67,501 - 67,501 Loans, net 524,741 - - 517,339 517,339 Bank owned life insurance 16,344 - 16,344 - 16,344 Accrued interest receivable 2,012 - 363 1,649 2,012 Liabilities Demand deposits and interest-bearing transaction and money market accounts $ 433,729 $ - $ 433,729 $ - $ 433,729 Certificates of deposit 109,233 - 108,936 - 108,936 Repurchase agreements and other borrowings 34,092 - 34,092 - 34,092 Accrued interest payable 110 - 110 - 110 |
Other Noninterest Expenses (Tab
Other Noninterest Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Expenses [Abstract] | |
Schedule of Other Expenses | The Company had the following other noninterest expenses as of the dates indicated: For the Year Ended December 31 2018 2017 ATM, debit and credit card $ 207 $ 283 Bank franchise tax 469 476 Computer software 424 397 Marketing, advertising and promotion 715 472 Professional fees 797 565 Other 1,943 2,017 $ 4,555 $ 4,210 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Shares Issued and Available Under Stock Incentive Plans | 2003 Plan 2005 Plan 2014 Plan Aggregate shares issuable 134,787 241,500 262,500 Options issued, net of forfeited and expired options (113,457 ) (57,019 ) (64,850 ) Cancelled due to Plan expiration (21,330 ) (184,481 ) - Remaining available for grant - - 197,650 Grants issued and outstanding: Total vested and unvested shares 16,345 1,811 64,325 Fully vested shares 16,345 1,811 - Exercise price range $ 17.39 to $ 11.18 to $ 28.76 to $ 17.39 $ 14.37 $ 44.75 |
Summary of Stock Option Activity | Changes in the stock options outstanding related to all of the Plans are summarized below. Share and per share data have been adjusted to reflect the 5% Stock Dividend. December 31, 2018 Weighted Average Aggregate Number of Options Exercise Price Intrinsic Value Outstanding at January 1, 2018 46,117 $ 19.96 $ 793 Issued 62,750 44.34 Exercised (12,502 ) 21.39 Expired (13,884 ) 21.53 Forfeited - - Outstanding at December 31, 2018 82,481 $ 38.02 $ 327 Options exercisable at December 31, 2018 18,156 $ 17.00 $ 318 |
Schedule of Assumptions Used to Determine Fair Value of Options Granted | The fair value of any option grant is estimated at the grant date using the Black-Scholes pricing model. In 2017, a stock option grant of 2,100 shares, as adjusted to reflect the 5% Stock Dividend, was issued. There were stock option grants of 62,750 shares issued during the year ended December 31, 2018, and the fair value on each option granted was estimated based on the assumptions noted in the following table: For the year ended For the year ended December 31, 2018 December 31, 2017 Expected volatility 1 15.49% 17.90% Expected dividends 2 1.81% 1.72% Expected term (in years) 3 6.50 6.30 Risk-free rate 4 2.85% 2.00% 1 Based on the monthly historical volatility of the Company’s stock price over the expected life of the options. 2 Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant. 3 Based on the average of the contractual life and vesting period for the respective option. 4 Based upon an interpolated US Treasury yield curve interest rate that corresponds to the contractual life of the option, in effect at the time of the grant. |
Schedule of Options Outstanding and Exercisable, by Exercise Price Range | Summary information pertaining to options outstanding at December 31, 2018 is as follows: Options Outstanding Options Exercisable Weighted- Weighted- Weighted- Number of Average Average Number of Average Options Remaining Exercise Options Exercise Exercise Price Outstanding Contractual Life Price Exercisable Price $11.18 to $20.00 18,156 0.5 Years $ 17.00 18,156 $ 17.00 $20.01 to $30.00 1,575 8.2 Years 28.76 0 - $30.01 to $40.00 - - - 0 - $40.01 to $44.75 62,750 9.4 Years 44.34 0 - Total 82,481 7.4 Years $ 38.02 18,156 $ 17.00 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of shares used in computing earnings per share | For the following table, share and per share data have been adjusted to reflect the 5% Stock Dividend. The table shows the weighted average number of shares used in computing net income per common share and the effect on the weighted average number of shares of diluted potential common stock for the years ended December 31, 2018 and 2017. Potential dilutive common stock equivalents have no effect on net income available to the Company’s shareholders. Weighted Per Share Net Income Average Shares Amount December 31, 2018 Basic net income per share $ 8,470 2,539,907 $ 3.33 Effect of dilutive stock options 18,073 (0.02 ) Diluted net income per share $ 8,470 2,557,980 $ 3.31 December 31, 2017 Basic net income per share $ 6,554 2,513,371 $ 2.61 Effect of dilutive stock options 22,216 (0.03 ) Diluted net income per share $ 6,554 2,535,587 $ 2.58 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Comprehensive Income (Loss), Tax [Abstract] | |
Schedule of Comprehensive Income | December 31, December 31, 2018 2017 Available-for-sale securities Realized gains (losses) on sales of securities $ - $ (75 ) Tax effect - 25 Realized gains (losses), net of tax $ - $ (50 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Segment information for the years ended, December 31, 2018, and 2017 is shown in the following tables. 2018 Bank VNB Wealth Consolidated Net interest income $ 22,823 $ 73 $ 22,896 Provision for loan losses 1,873 - 1,873 Non-interest income 2,715 2,815 5,530 Non-interest expense 13,876 2,138 16,014 Income before income taxes 9,789 750 10,539 Provision for income taxes 1,911 158 2,069 Net income $ 7,878 $ 592 $ 8,470 2017 Bank VNB Wealth Consolidated Net interest income $ 21,282 $ 95 $ 21,377 Provision for loan losses 418 - 418 Non-interest income 2,722 3,158 5,880 Non-interest expense 13,380 2,502 15,882 Income before income taxes 10,206 751 10,957 Provision for income taxes 4,147 256 4,403 Net income $ 6,059 $ 495 $ 6,554 |
Condensed Parent Company Fina_2
Condensed Parent Company Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Balance sheet | BALANCE SHEETS December 31, 2018 December 31, 2017 ASSETS Cash and due from banks $ 1,146 $ 1,236 Investment securities 65 65 Investments in subsidiary 70,142 63,967 Other assets 182 330 Total assets $ 71,535 $ 65,598 LIABILITIES & SHAREHOLDERS' EQUITY Other liabilities $ 793 $ 493 Stockholders' equity 70,742 65,105 Total liabilities and stockholders' equity $ 71,535 $ 65,598 |
Statement of income | STATEMENTS OF INCOME For the years ended December 31, 2018 December 31, 2017 Dividends from subsidiary $ 2,250 $ 720 Noninterest expense 429 388 Income before income taxes $ 1,821 $ 332 Income tax (benefit) (79 ) (137 ) Income before equity in undistributed earnings of subsidiary $ 1,900 $ 469 Equity in undistributed earnings of subsidiary 6,570 6,085 Net income $ 8,470 $ 6,554 |
Statement of cash flow | STATEMENTS OF CASH FLOWS For the years ended December 31, 2018 December 31, 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,470 $ 6,554 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiary (6,570 ) (6,085 ) Deferred tax expense 4 91 Stock option & stock grant expense 65 10 Decrease (increase) in other assets 144 (93 ) Increase (decrease) in other liabilities (5 ) 3 Net cash provided by operating activities 2,108 480 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of available for sale securities - (1 ) Net cash used in investing activities - (1 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from stock options exercised 268 981 Dividends paid (2,466 ) (1,385 ) Net cash used in financing activities (2,198 ) (404 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (90 ) 75 CASH AND CASH EQUIVALENTS Beginning of period 1,236 1,161 End of period $ 1,146 $ 1,236 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 18, 2013 | Feb. 28, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Organization and Significant Accounting Policies [Line Items] | |||||
Shares of common stock authorized | 10,000,000 | 10,000,000 | |||
Shares of common stock, par value per share | $ 2.50 | $ 2.50 | |||
Preferred stock authorized | 2,000,000 | 2,000,000 | |||
Preferred stock, par value per share | $ 2.50 | $ 2.50 | |||
Increase in income tax payable | $ 145 | $ 963 | |||
Increase in assets and liabilities | $ 2,100 | ||||
Topic 842 [Member] | |||||
Organization and Significant Accounting Policies [Line Items] | |||||
Right of use asset | $ 4,000 | ||||
VNB Trust National Association [Member] | SRCM Holdings LLC [Member] | |||||
Organization and Significant Accounting Policies [Line Items] | |||||
Period for which counterparty to agreement will pay quarterly payments | 10 years | ||||
Acquisitions royalty payments as percentage of the management and performance fee revenue received by counterparty from limited partners of the Fund | 20.00% | ||||
Ongoing referral payments percentage of the management and performance fee revenue received by counterparty from from clients referred by the Company and its affiliates | 20.00% | ||||
Minimum [Member] | |||||
Organization and Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of assets | 3 years | ||||
Maximum [Member] | |||||
Organization and Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of assets | 20 years |
Securities (Amortized Cost and
Securities (Amortized Cost and Fair Values of Securities Available for Sale) (Details)) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available for Sale | ||
Amortized Cost | $ 63,009 | $ 68,619 |
Gross Unrealized Gains | 13 | 68 |
Gross Unrealized (Losses) | (1,630) | (1,186) |
Available for Sale, Fair Value | 61,392 | 67,501 |
US Government Agencies Debt Securities [Member] | ||
Available for Sale | ||
Amortized Cost | 19,500 | 19,500 |
Gross Unrealized Gains | ||
Gross Unrealized (Losses) | (526) | (538) |
Available for Sale, Fair Value | 18,974 | 18,962 |
Mortgage-backed securities/CMOs [Member] | ||
Available for Sale | ||
Amortized Cost | 25,901 | 30,450 |
Gross Unrealized Gains | 1 | |
Gross Unrealized (Losses) | (839) | (505) |
Available for Sale, Fair Value | 25,063 | 29,945 |
Municipal Bonds [Member] | ||
Available for Sale | ||
Amortized Cost | 17,608 | 18,668 |
Gross Unrealized Gains | 12 | 68 |
Gross Unrealized (Losses) | (265) | (143) |
Available for Sale, Fair Value | $ 17,355 | 18,593 |
Debt Securities [Member] | ||
Available for Sale | ||
Amortized Cost | 68,618 | |
Available for Sale, Fair Value | 67,500 | |
Marketable equity securities [Member] | ||
Available for Sale | ||
Amortized Cost | 1 | |
Gross Unrealized Gains | ||
Gross Unrealized (Losses) | ||
Available for Sale, Fair Value | $ 1 |
Securities (Narrative) (Details
Securities (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Schedule of Investments [Line Items] | ||
Held to maturity | ||
Restricted securities, at cost | 1,683 | 2,284 |
Proceeds from the sales and calls of securities | 24,400 | |
Loss on sales of securities | 75 | |
Securities pledged to secure deposits and for other purposes required by law | 18,000 | 29,000 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 59,336 | 59,800 |
Unrealized loss of available for sale securities | $ 1,630 | 1,186 |
Number of securities designated as available for sale securities having unrealized loss | item | 58 | |
Municipal Bonds [Member] | ||
Schedule of Investments [Line Items] | ||
Percentage of securities rated with AA or higher ratings | 92.00% | |
Percentage of securities as general obligation bonds with issuers that are geographically diverse | 87.00% | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | $ 15,705 | 10,893 |
Unrealized loss of available for sale securities | $ 265 | 143 |
Number of securities designated as available for sale securities having unrealized loss | item | 27 | |
Mortgage-backed securities/CMOs [Member] | ||
Schedule of Investments [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | $ 24,657 | 29,945 |
Unrealized loss of available for sale securities | $ 839 | $ 505 |
Number of securities designated as available for sale securities having unrealized loss | item | 24 |
Securities (Schedule of Unreali
Securities (Schedule of Unrealized Losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Fair value | $ 4,983 | $ 39,201 |
Continuous Unrealized Loss Position of 12 Months or More, Fair value | 54,353 | 20,599 |
Total, Fair value | 59,336 | 59,800 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (34) | (502) |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (1,596) | (684) |
Total, Unrealized losses | (1,630) | (1,186) |
US Government Agencies Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Fair value | 7,390 | |
Continuous Unrealized Loss Position of 12 Months or More, Fair value | 18,974 | 11,572 |
Total, Fair value | 18,974 | 18,962 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (110) | |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (526) | (428) |
Total, Unrealized losses | (526) | (538) |
Mortgage-backed securities/CMOs [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Fair value | 21,422 | |
Continuous Unrealized Loss Position of 12 Months or More, Fair value | 24,657 | 8,523 |
Total, Fair value | 24,657 | 29,945 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (260) | |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (839) | (245) |
Total, Unrealized losses | (839) | (505) |
Municipal Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous Unrealized Loss Position of Less Than 12 Months, Fair value | 4,983 | 10,389 |
Continuous Unrealized Loss Position of 12 Months or More, Fair value | 10,722 | 504 |
Total, Fair value | 15,705 | 10,893 |
Continuous Unrealized Loss Position of Less Than 12 Months, Unrealized losses | (34) | (132) |
Continuous Unrealized Loss Position of 12 Months or More, Unrealized losses | (231) | (11) |
Total, Unrealized losses | $ (265) | $ (143) |
Securities (Schedule of Amortiz
Securities (Schedule of Amortized Cost and Fair Values of Securities Available For Sale Based upon Contractual Maturities and by Major Investment Categories) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Amortized Cost | |
Total Securities Available for Sale | $ 63,009 |
Fair Value | |
Total Securities Available for Sale | 61,392 |
US Government Agencies Debt Securities [Member] | |
Amortized Cost | |
After one year to five years | 19,500 |
Total Securities Available for Sale | 19,500 |
Fair Value | |
After one year to five years | 18,974 |
Total Securities Available for Sale | 18,974 |
Mortgage-backed securities/CMOs [Member] | |
Amortized Cost | |
After one year to five years | 2,895 |
After five years to ten years | 10,373 |
Ten years or more | 12,633 |
Total Securities Available for Sale | 25,901 |
Fair Value | |
After one year to five years | 2,830 |
After five years to ten years | 10,036 |
Ten years or more | 12,197 |
Total Securities Available for Sale | 25,063 |
Municipal Bonds [Member] | |
Amortized Cost | |
After one year to five years | 1,987 |
After five years to ten years | 8,406 |
Ten years or more | 7,215 |
Total Securities Available for Sale | 17,608 |
Fair Value | |
After one year to five years | 1,952 |
After five years to ten years | 8,290 |
Ten years or more | 7,113 |
Total Securities Available for Sale | $ 17,355 |
Loans (Schedule of Composition
Loans (Schedule of Composition of Loan Portfolio by Loan Classification) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 537,190 | $ 528,784 |
Allowance for loan losses | (4,891) | (4,043) |
Total loans, net | 532,299 | 524,741 |
Commercial and industrial - organic [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 41,526 | 45,254 |
Commercial and industrial - government guaranteed [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 31,367 | 22,946 |
Commercial and industrial - syndicated [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 12,134 | 13,165 |
Commercial Loan [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 85,027 | 81,365 |
Residential Construction [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 1,552 | 3,812 |
Commercial construction [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 5,078 | 13,365 |
Land and land development [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 10,894 | 9,681 |
Real Estate Construction and Land [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 17,524 | 26,858 |
1-4 family residential, first lien, investment [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 40,311 | 40,313 |
1-4 family residential, first lien, owner occupied [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 16,775 | 16,448 |
1-4 family residential, junior lien [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 3,169 | 2,965 |
1-4 family residential-purchased [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 18,647 | |
Home equity lines of credit, first lien [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 8,325 | 9,238 |
Home equity lines of credit, junior lien [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 10,912 | 13,226 |
Farm [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 10,397 | 10,445 |
Multifamily [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 27,328 | 33,356 |
Commercial owner occupied [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 93,800 | 80,261 |
Commercial non-owner occupied real estate [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 123,214 | 116,599 |
Real Estate Mortgages [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 352,878 | 322,851 |
Consumer Revolving Credit [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 21,540 | 24,030 |
Consumer all Other Credit [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 5,530 | 9,036 |
Student Loans Purchased [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 54,691 | 64,644 |
Consumer Loan [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 81,761 | $ 97,710 |
Loans (Narrative) (Details)
Loans (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Commerical and industrial loan guarantee by SBA and USDA | 100.00% | |
Total loans | $ 537,190 | $ 528,784 |
Deposit account overdrafts | $ 26 | 434 |
Lifetime allowance for military service | 36 months | |
Unamortized premium | $ 2,500 | 2,000 |
Net deferred loan costs | 129 | 199 |
Charged off | $ 1,097 | 111 |
1-4 family residential-purchased [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of student loan packages purchased | item | 42 | |
Total loans | $ 18,647 | |
TDRs [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of student loan packages purchased | item | 66 | 64 |
Total loans | $ 1,200 | $ 1,100 |
Student Loans Purchased [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 54,691 | $ 64,644 |
Charged off | $ 33 |
Loans (Schedule of Activity in
Loans (Schedule of Activity in Related Party Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Activity in related party loans | ||
Balance outstanding at beginning of year | $ 21,443 | $ 12,578 |
Principal additions | 2,199 | 13,818 |
Principal reductions | (2,238) | (4,953) |
Balance outstanding at end of year | $ 21,404 | $ 21,443 |
Loans (Non-Accrual Loans by Loa
Loans (Non-Accrual Loans by Loan Classification) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total nonaccrual loans | $ 615 | $ 177 |
Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total nonaccrual loans | 32 | 41 |
1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total nonaccrual loans | 82 | 99 |
1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total nonaccrual loans | 37 | |
Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total nonaccrual loans | 445 | |
Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total nonaccrual loans | $ 56 |
Loans (Schedule of Aging of Pas
Loans (Schedule of Aging of Past Due Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Past Due and Non-Accrual Loans | ||
Total Past Due | $ 4,485 | $ 2,065 |
Current | 532,705 | 526,719 |
Total Loans | 537,190 | 528,784 |
90 Days Past Due and Still Accruing | 895 | 289 |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 1,934 | 1,525 |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 1,234 | 251 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 1,317 | 289 |
Commercial and industrial - organic [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 222 | |
Current | 41,304 | 45,254 |
Total Loans | 41,526 | 45,254 |
90 Days Past Due and Still Accruing | ||
Commercial and industrial - organic [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 50 | |
Commercial and industrial - organic [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 172 | |
Commercial and industrial - organic [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial and industrial - government guaranteed [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 548 | |
Current | 30,819 | 22,946 |
Total Loans | 31,367 | 22,946 |
90 Days Past Due and Still Accruing | 548 | |
Commercial and industrial - government guaranteed [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial and industrial - government guaranteed [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial and industrial - government guaranteed [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 548 | |
Commercial and industrial - syndicated [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Current | 12,134 | 13,165 |
Total Loans | 12,134 | 13,165 |
90 Days Past Due and Still Accruing | ||
Commercial and industrial - syndicated [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial and industrial - syndicated [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial and industrial - syndicated [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Residential Construction [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Current | 1,552 | 3,812 |
Total Loans | 1,552 | 3,812 |
90 Days Past Due and Still Accruing | ||
Residential Construction [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Residential Construction [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Residential Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial construction [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Current | 5,078 | 13,365 |
Total Loans | 5,078 | 13,365 |
90 Days Past Due and Still Accruing | ||
Commercial construction [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial construction [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Land and land development [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 16 | 20 |
Current | 10,878 | 9,661 |
Total Loans | 10,894 | 9,681 |
90 Days Past Due and Still Accruing | 15 | |
Land and land development [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 1 | 20 |
Land and land development [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Land and land development [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 15 | |
1-4 family residential, first lien, investment [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 118 | |
Current | 40,311 | 40,195 |
Total Loans | 40,311 | 40,313 |
90 Days Past Due and Still Accruing | ||
1-4 family residential, first lien, investment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 118 | |
1-4 family residential, first lien, investment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
1-4 family residential, first lien, investment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
1-4 family residential, first lien, owner occupied [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 146 | |
Current | 16,775 | 16,302 |
Total Loans | 16,775 | 16,448 |
90 Days Past Due and Still Accruing | 18 | |
1-4 family residential, first lien, owner occupied [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 128 | |
1-4 family residential, first lien, owner occupied [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
1-4 family residential, first lien, owner occupied [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 18 | |
1-4 family residential, junior lien [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Current | 3,169 | 2,965 |
Total Loans | 3,169 | 2,965 |
90 Days Past Due and Still Accruing | ||
1-4 family residential, junior lien [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
1-4 family residential, junior lien [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
1-4 family residential, junior lien [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Home equity lines of credit, first lien [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 100 | |
Current | 8,325 | 9,138 |
Total Loans | 8,325 | 9,238 |
90 Days Past Due and Still Accruing | ||
Home equity lines of credit, first lien [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 100 | |
Home equity lines of credit, first lien [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Home equity lines of credit, first lien [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Home equity lines of credit, junior lien [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Current | 10,912 | 13,226 |
Total Loans | 10,912 | 13,226 |
90 Days Past Due and Still Accruing | ||
Home equity lines of credit, junior lien [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Home equity lines of credit, junior lien [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Home equity lines of credit, junior lien [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Farm [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Current | 10,397 | 10,445 |
Total Loans | 10,397 | 10,445 |
90 Days Past Due and Still Accruing | ||
Farm [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Farm [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Farm [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Multifamily [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Current | 27,328 | 33,356 |
Total Loans | 27,328 | 33,356 |
90 Days Past Due and Still Accruing | ||
Multifamily [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Multifamily [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Multifamily [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial owner occupied [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 11 | |
Current | 93,800 | 80,250 |
Total Loans | 93,800 | 80,261 |
90 Days Past Due and Still Accruing | ||
Commercial owner occupied [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 11 | |
Commercial owner occupied [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial owner occupied [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Commercial non-owner occupied real estate [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 75 | 170 |
Current | 123,139 | 116,429 |
Total Loans | 123,214 | 116,599 |
90 Days Past Due and Still Accruing | ||
Commercial non-owner occupied real estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 75 | 79 |
Commercial non-owner occupied real estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 91 | |
Commercial non-owner occupied real estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Consumer Revolving Credit [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 1 | |
Current | 21,540 | 24,029 |
Total Loans | 21,540 | 24,030 |
90 Days Past Due and Still Accruing | ||
Consumer Revolving Credit [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 1 | |
Consumer Revolving Credit [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Consumer Revolving Credit [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Consumer all Other Credit [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 603 | 71 |
Current | 4,927 | 8,965 |
Total Loans | 5,530 | 9,036 |
90 Days Past Due and Still Accruing | ||
Consumer all Other Credit [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 4 | 71 |
Consumer all Other Credit [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 599 | |
Consumer all Other Credit [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
Student Loans Purchased [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 2,067 | 1,428 |
Current | 52,624 | 63,216 |
Total Loans | 54,691 | 64,644 |
90 Days Past Due and Still Accruing | 332 | 271 |
Student Loans Purchased [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 850 | 997 |
Student Loans Purchased [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 463 | 160 |
Student Loans Purchased [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 754 | 271 |
1-4 family residential-purchased [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 954 | |
Current | 17,693 | |
Total Loans | 18,647 | |
90 Days Past Due and Still Accruing | ||
1-4 family residential-purchased [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | 954 | |
1-4 family residential-purchased [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due | ||
1-4 family residential-purchased [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Past Due and Non-Accrual Loans | ||
Total Past Due |
Loans (Impaired Loans by Loan C
Loans (Impaired Loans by Loan Classification) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | $ 1,164 | |
Unpaid Principal Balance, without a valuation allowance | 1,267 | |
Associated Allowance, without a valuation allowance | ||
Average Recorded Investment, without a valuation allowance | 1,322 | |
Interest Income Recognized, without a valuation allowance | 66 | |
Recorded Investment, with a valuation allowance | 1,602 | |
Unpaid Principal Balance, with a valuation allowance | 1,602 | |
Associated Allowance, with a valuation allowance | 90 | |
Average Recorded Investment, with a valuation allowance | 1,387 | |
Interest Income Recognized, with a valuation allowance | 86 | |
Recorded Investment, total | 2,766 | 2,574 |
Unpaid Principal Balance, total | 2,869 | 2,668 |
Associated Allowance, total | 90 | |
Average Recorded Investment, total | 2,709 | 2,471 |
Interest Income Recognized, total | 152 | 129 |
Land and land development [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | 32 | 41 |
Unpaid Principal Balance, without a valuation allowance | 90 | 94 |
Associated Allowance, without a valuation allowance | ||
Average Recorded Investment, without a valuation allowance | 37 | 46 |
Interest Income Recognized, without a valuation allowance | ||
1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | 82 | 99 |
Unpaid Principal Balance, without a valuation allowance | 127 | 137 |
Associated Allowance, without a valuation allowance | ||
Average Recorded Investment, without a valuation allowance | 90 | 107 |
Interest Income Recognized, without a valuation allowance | ||
1-4 family residential, junior lien [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | 127 | 379 |
Unpaid Principal Balance, without a valuation allowance | 127 | 382 |
Associated Allowance, without a valuation allowance | ||
Average Recorded Investment, without a valuation allowance | 248 | 367 |
Interest Income Recognized, without a valuation allowance | 15 | 17 |
Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | 923 | 972 |
Unpaid Principal Balance, without a valuation allowance | 923 | 972 |
Associated Allowance, without a valuation allowance | ||
Average Recorded Investment, without a valuation allowance | 947 | 992 |
Interest Income Recognized, without a valuation allowance | 51 | 48 |
Student Loans Purchased [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment, without a valuation allowance | 1,083 | |
Unpaid Principal Balance, without a valuation allowance | 1,083 | |
Associated Allowance, without a valuation allowance | ||
Average Recorded Investment, without a valuation allowance | 959 | |
Interest Income Recognized, without a valuation allowance | $ 64 | |
Recorded Investment, with a valuation allowance | 1,602 | |
Unpaid Principal Balance, with a valuation allowance | 1,602 | |
Associated Allowance, with a valuation allowance | 90 | |
Average Recorded Investment, with a valuation allowance | 1,387 | |
Interest Income Recognized, with a valuation allowance | $ 86 |
Loans (Schedule of Troubled Deb
Loans (Schedule of Troubled Debt Restructurings) (Details) $ in Thousands | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item |
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 69 | 68 |
Total Troubled Debt Restructurings | $ | $ 2,230 | $ 2,421 |
Performing Financing Receivable [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 67 | 67 |
Total Troubled Debt Restructurings | $ | $ 2,207 | $ 2,397 |
Performing Financing Receivable [Member] | 1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 1 | 2 |
Total Troubled Debt Restructurings | $ | $ 127 | $ 342 |
Performing Financing Receivable [Member] | Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 1 | 1 |
Total Troubled Debt Restructurings | $ | $ 923 | $ 972 |
Performing Financing Receivable [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 65 | 64 |
Total Troubled Debt Restructurings | $ | $ 1,157 | $ 1,083 |
Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 2 | 1 |
Total Troubled Debt Restructurings | $ | $ 23 | $ 24 |
Nonperforming Financing Receivable [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 1 | |
Total Troubled Debt Restructurings | $ | $ 4 | |
Nonperforming Financing Receivable [Member] | Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Number of loans | item | 1 | 1 |
Total Troubled Debt Restructurings | $ | $ 19 | $ 24 |
Loans (Schedule of Loans Modifi
Loans (Schedule of Loans Modified Under the Terms of a TDR) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | |
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | item | 12 | 21 |
Pre-Modification Recorded Balance | $ 244 | $ 316 |
Post-Modification Recorded Balance | $ 244 | $ 316 |
Student Loans Purchased [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | item | 12 | 21 |
Pre-Modification Recorded Balance | $ 244 | $ 316 |
Post-Modification Recorded Balance | $ 244 | $ 316 |
Allowance for Loan Losses (Narr
Allowance for Loan Losses (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for Loan Losses [Abstract] | ||
Impaired loans | $ 2,766 | $ 2,574 |
Allowance for Loan Losses (Past
Allowance for Loan Losses (Past Due Aging by Loan Classification) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | $ 4,043 | $ 3,688 |
Charge-offs | (1,097) | (111) |
Recoveries | 72 | 48 |
Net charge-offs | (1,025) | (63) |
Provision for loan losses | 1,873 | 418 |
Ending Balance | $ 4,891 | $ 4,043 |
Allowance for Loan Losses (Loan
Allowance for Loan Losses (Loan Portfolio Designated by the Internal Risk Ratings Assigned to Each Credit) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 537,190 | $ 528,784 |
Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 41,526 | 45,254 |
Commercial and industrial - government guaranteed [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 31,367 | 22,946 |
Commercial and industrial - syndicated [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 12,134 | 13,165 |
Residential Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,552 | 3,812 |
Commercial construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,078 | 13,365 |
Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 10,894 | 9,681 |
1-4 family residential, first lien, investment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 40,311 | 40,313 |
1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 16,775 | 16,448 |
1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,169 | 2,965 |
Home equity lines of credit, first lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 8,325 | 9,238 |
Home equity lines of credit, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 10,912 | 13,226 |
Farm [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 10,397 | 10,445 |
Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 27,328 | 33,356 |
Commercial owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 93,800 | 80,261 |
Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 123,214 | 116,599 |
Consumer Revolving Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 21,540 | 24,030 |
Consumer all Other Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,530 | 9,036 |
Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 54,691 | 64,644 |
1-4 family residential-purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 18,647 | |
Excellent [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 35,366 | 26,246 |
Excellent [Member] | Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,692 | 3,000 |
Excellent [Member] | Commercial and industrial - government guaranteed [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 31,367 | 22,946 |
Excellent [Member] | Commercial and industrial - syndicated [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Residential Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Commercial construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | 1-4 family residential, first lien, investment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | 1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | 1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Home equity lines of credit, first lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Home equity lines of credit, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Farm [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Commercial owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Excellent [Member] | Consumer Revolving Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 44 | 6 |
Excellent [Member] | Consumer all Other Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 263 | 294 |
Excellent [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 48,932 | 55,589 |
Good [Member] | Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 23,381 | 23,937 |
Good [Member] | Commercial and industrial - government guaranteed [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Commercial and industrial - syndicated [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Residential Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Commercial construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | 1-4 family residential, first lien, investment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | 1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | 1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Home equity lines of credit, first lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Home equity lines of credit, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Farm [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Commercial owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 669 | |
Good [Member] | Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | Consumer Revolving Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 20,852 | 22,977 |
Good [Member] | Consumer all Other Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,699 | 8,006 |
Good [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Good [Member] | 1-4 family residential-purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 428,096 | 433,872 |
Pass [Member] | Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 13,993 | 17,324 |
Pass [Member] | Commercial and industrial - government guaranteed [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Pass [Member] | Commercial and industrial - syndicated [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 9,588 | 10,590 |
Pass [Member] | Residential Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,552 | 3,812 |
Pass [Member] | Commercial construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,078 | 13,365 |
Pass [Member] | Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 9,888 | 9,137 |
Pass [Member] | 1-4 family residential, first lien, investment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 36,314 | 38,003 |
Pass [Member] | 1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 15,540 | 15,465 |
Pass [Member] | 1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,573 | 2,488 |
Pass [Member] | Home equity lines of credit, first lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 7,911 | 9,098 |
Pass [Member] | Home equity lines of credit, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 10,704 | 13,115 |
Pass [Member] | Farm [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 8,719 | 9,065 |
Pass [Member] | Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 27,328 | 33,356 |
Pass [Member] | Commercial owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 86,868 | 79,137 |
Pass [Member] | Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 120,720 | 114,610 |
Pass [Member] | Consumer Revolving Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 644 | 1,045 |
Pass [Member] | Consumer all Other Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 535 | 701 |
Pass [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 51,494 | 63,561 |
Pass [Member] | 1-4 family residential-purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 18,647 | |
Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 17,223 | 5,069 |
Watch [Member] | Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 264 | 13 |
Watch [Member] | Commercial and industrial - government guaranteed [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Watch [Member] | Commercial and industrial - syndicated [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Watch [Member] | Residential Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Watch [Member] | Commercial construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Watch [Member] | Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 501 | 3 |
Watch [Member] | 1-4 family residential, first lien, investment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,607 | 1,875 |
Watch [Member] | 1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,087 | 260 |
Watch [Member] | 1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 58 | 265 |
Watch [Member] | Home equity lines of credit, first lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 414 | 140 |
Watch [Member] | Home equity lines of credit, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 97 | |
Watch [Member] | Farm [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 339 | |
Watch [Member] | Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Watch [Member] | Commercial owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 6,932 | 455 |
Watch [Member] | Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,519 | 972 |
Watch [Member] | Consumer Revolving Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1 | |
Watch [Member] | Consumer all Other Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4 | 2 |
Watch [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,401 | 1,083 |
Watch [Member] | 1-4 family residential-purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 609 | 311 |
Special Mention [Member] | Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 28 | 269 |
Special Mention [Member] | Commercial and industrial - government guaranteed [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Commercial and industrial - syndicated [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Residential Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Commercial construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | 1-4 family residential, first lien, investment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 117 | |
Special Mention [Member] | 1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 11 | |
Special Mention [Member] | 1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 22 | 41 |
Special Mention [Member] | Home equity lines of credit, first lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Home equity lines of credit, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Farm [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Commercial owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Consumer Revolving Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1 | |
Special Mention [Member] | Consumer all Other Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Special Mention [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 431 | |
Special Mention [Member] | 1-4 family residential-purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 6,964 | 7,697 |
Substandard [Member] | Commercial and industrial - organic [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 168 | 711 |
Substandard [Member] | Commercial and industrial - government guaranteed [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | Commercial and industrial - syndicated [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,546 | 2,575 |
Substandard [Member] | Residential Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | Commercial construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | Land and land development [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 505 | 541 |
Substandard [Member] | 1-4 family residential, first lien, investment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 273 | 435 |
Substandard [Member] | 1-4 family residential, first lien, owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 137 | 723 |
Substandard [Member] | 1-4 family residential, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 516 | 171 |
Substandard [Member] | Home equity lines of credit, first lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | Home equity lines of credit, junior lien [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 111 | 111 |
Substandard [Member] | Farm [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,339 | 1,380 |
Substandard [Member] | Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | Commercial owner occupied [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | Commercial non-owner occupied real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 975 | 1,017 |
Substandard [Member] | Consumer Revolving Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | ||
Substandard [Member] | Consumer all Other Credit [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 29 | 33 |
Substandard [Member] | Student Loans Purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 365 | |
Substandard [Member] | 1-4 family residential-purchased [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans |
Allowance for Loan Losses (Allo
Allowance for Loan Losses (Allowance for Credit Losses Rollforward by Portfolio Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for loan losses: | ||
Beginning Balance | $ 4,043 | $ 3,688 |
Charge-offs | (1,097) | (111) |
Recoveries | 72 | 48 |
Provision for (recovery of) loan losses | 1,873 | 418 |
Ending Balance | 4,891 | 4,043 |
Ending balance: Individually evaluated for impairment | 90 | |
Ending balance: Collectively evaluated for impairment | 4,801 | 4,043 |
Financing Receivables: | ||
Individually evaluated for impairment | 2,766 | 2,574 |
Collectively evaluated for impairment | 534,424 | 526,210 |
Ending Balance | 537,190 | 528,784 |
Commercial Loan [Member] | ||
Allowance for loan losses: | ||
Beginning Balance | 885 | 824 |
Charge-offs | (75) | (111) |
Recoveries | 54 | 31 |
Provision for (recovery of) loan losses | (53) | 141 |
Ending Balance | 811 | 885 |
Ending balance: Individually evaluated for impairment | ||
Ending balance: Collectively evaluated for impairment | 811 | 885 |
Financing Receivables: | ||
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 85,027 | 81,365 |
Ending Balance | 85,027 | 81,365 |
Real Estate Construction and Land [Member] | ||
Allowance for loan losses: | ||
Beginning Balance | 206 | 127 |
Charge-offs | ||
Recoveries | ||
Provision for (recovery of) loan losses | (87) | 79 |
Ending Balance | 119 | 206 |
Ending balance: Individually evaluated for impairment | ||
Ending balance: Collectively evaluated for impairment | 119 | 206 |
Financing Receivables: | ||
Individually evaluated for impairment | 32 | 41 |
Collectively evaluated for impairment | 17,492 | 26,817 |
Ending Balance | 17,524 | 26,858 |
Real Estate Mortgages [Member] | ||
Allowance for loan losses: | ||
Beginning Balance | 2,730 | 2,506 |
Charge-offs | ||
Recoveries | 2 | 2 |
Provision for (recovery of) loan losses | (121) | 222 |
Ending Balance | 2,611 | 2,730 |
Ending balance: Individually evaluated for impairment | ||
Ending balance: Collectively evaluated for impairment | 2,611 | 2,730 |
Financing Receivables: | ||
Individually evaluated for impairment | 1,132 | 1,450 |
Collectively evaluated for impairment | 351,746 | 321,401 |
Ending Balance | 352,878 | 322,851 |
Consumer Loan [Member] | ||
Allowance for loan losses: | ||
Beginning Balance | 222 | 231 |
Charge-offs | (1,022) | |
Recoveries | 16 | 15 |
Provision for (recovery of) loan losses | 2,134 | (24) |
Ending Balance | 1,350 | 222 |
Ending balance: Individually evaluated for impairment | 90 | |
Ending balance: Collectively evaluated for impairment | 1,260 | 222 |
Financing Receivables: | ||
Individually evaluated for impairment | 1,602 | 1,083 |
Collectively evaluated for impairment | 80,159 | 96,627 |
Ending Balance | $ 81,761 | $ 97,710 |
Premises and Equipment (Summary
Premises and Equipment (Summary of Premises and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 25,061 | $ 24,297 |
Less: accumulated depreciation and amortization | 18,019 | 16,926 |
Premises and equipment, net | 7,042 | 7,371 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 14,594 | 14,426 |
Building and land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 1,215 | 1,216 |
Construction and fixed assets in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 434 | 118 |
Furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 6,513 | 6,370 |
Computer software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 2,305 | $ 2,167 |
Premises and Equipment (Narrati
Premises and Equipment (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Leased Assets [Line Items] | ||
Rent expense | $ 913 | $ 879 |
Minimum [Member] | ||
Operating Leased Assets [Line Items] | ||
Lease term | 1 year | |
Maximum [Member] | ||
Operating Leased Assets [Line Items] | ||
Lease term | 20 years |
Premises and Equipment (Schedul
Premises and Equipment (Schedule of Future Minimum Rental Payments Under Operating Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future minimum rental payments | |
2019 | $ 792 |
2020 | 793 |
2021 | 803 |
2022 | 767 |
2023 | 666 |
Thereafter | 862 |
Total | $ 4,683 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | Feb. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2016 |
Business Acquisition [Line Items] | ||||
Amortization expense | $ 109 | $ 112 | ||
Net carrying value of intangible assets which will be recognized as amortization expense in future reporting periods through 2026 | 477 | $ 579 | ||
Contingent liability | 63 | |||
Senior Wealth Advisor for VNB Trust [Member] | ||||
Business Acquisition [Line Items] | ||||
Fair market value of the Purchased Relationships | $ 31,500 | |||
Purchase price | $ 1,200 | |||
Purchase price repayment term | 5 years | |||
Amortization expense | $ 109 |
Intangible Assets (Schedule of
Intangible Assets (Schedule of Net Asset Values, as Determined by Independent Third Party, Based on Fair Value Measurement) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value | ||
Goodwill | $ 372 | $ 372 |
Non-Compete Agreement [Member] | ||
% of Total Intangible Assets | ||
Estimated Economic Useful Life | 3 years | |
Customer Relationships Intangible [Member] | ||
% of Total Intangible Assets | ||
Estimated Economic Useful Life | 10 years | |
Senior Wealth Advisor for VNB Trust [Member] | ||
Fair Value | ||
Total Identified Intangible Assets | $ 773 | |
Goodwill | 372 | |
Total Assets | $ 1,145 | |
% of Total Intangible Assets | ||
Total Identified Intangible Assets | 67.50% | |
Goodwill | 32.50% | |
Total Intangible Assets | 100.00% | |
Senior Wealth Advisor for VNB Trust [Member] | Non-Compete Agreement [Member] | ||
Fair Value | ||
Total Identified Intangible Assets | $ 103 | |
% of Total Intangible Assets | ||
Total Identified Intangible Assets | 9.00% | |
Senior Wealth Advisor for VNB Trust [Member] | Customer Relationships Intangible [Member] | ||
Fair Value | ||
Total Identified Intangible Assets | $ 670 | |
% of Total Intangible Assets | ||
Total Identified Intangible Assets | 58.50% |
Intangible Assets (Schedule o_2
Intangible Assets (Schedule of Gross and Net Balance of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 773 | |
Accumulated Amortization | 296 | |
Net Carrying Value | 477 | $ 579 |
Non-Compete Agreement [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 103 | |
Accumulated Amortization | 100 | |
Net Carrying Value | 3 | |
Customer Relationships Intangible [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 670 | |
Accumulated Amortization | 196 | |
Net Carrying Value | $ 474 |
Deposits (Narrative) (Details)
Deposits (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Demand deposits: | ||
Time Deposits, $250,000 or More | $ 28,000 | $ 28,200 |
Brokered deposits | 32,500 | |
Nonbrokered deposits | $ 5,000,000 | |
Percentage of brokered deposits | 20.00% | |
Reciprocal deposits | $ 27,300 | |
Demand deposit account | 15,800 | |
Money market account | 21,000 | |
Deposit account overdrafts | 26 | 434 |
Aggregate amount of related party deposits | $ 6,300 | $ 6,500 |
Deposits (Schedule of Maturitie
Deposits (Schedule of Maturities of Time Deposits) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Demand deposits: | ||
2019 | $ 79,167 | |
2020 | 21,076 | |
2021 | 6,266 | |
2022 | 946 | |
2023 | 1,076 | |
Total | $ 108,531 | $ 109,233 |
Income Taxes (Schedule of Net D
Income Taxes (Schedule of Net Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for loan losses | $ 1,027 | $ 849 |
Non-accrual loan interest | 15 | 9 |
Stock option/grant expense | 32 | 54 |
Start-up expenses | 47 | 29 |
Home equity closing costs | 27 | 32 |
Deferred compensation expense | 10 | 9 |
Goodwill and other intangible assets | 14 | 9 |
Securities available for sale unrealized loss | 339 | 235 |
Depreciation | 404 | 366 |
Deferred tax assets | 1,915 | 1,592 |
Deferred tax liabilities: | ||
Deferred loan costs | 27 | 42 |
Deferred tax liabilities | 27 | 42 |
Net deferred tax assets | $ 1,888 | $ 1,550 |
Income Taxes (Schedule of Provi
Income Taxes (Schedule of Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Provision for income taxes | ||
Current tax expense | $ 2,303 | $ 3,635 |
Deferred tax benefit | (234) | (195) |
Deferred tax asset adjustment for enacted change in tax rate | 963 | |
Provision for income taxes | $ 2,069 | $ 4,403 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation, Amount) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Federal statutory rate | 21.00% | 34.00% |
Computed statutory tax expense | $ 2,213 | $ 3,727 |
Increase (decrease) in tax resulting from: | ||
Tax-exempt interest income | (74) | (104) |
Tax-exempt income from Bank Owned Life Insurance (BOLI) | (94) | (145) |
Stock option expense | 7 | 4 |
Stock option exercise benefit | (18) | (59) |
Deferred tax asset adjustment for enacted change in tax rate | 963 | |
Other expenses | 35 | 17 |
Provision for income taxes | $ 2,069 | $ 4,403 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Narrative) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Daily average required balances |
Financial Instruments With Of_3
Financial Instruments With Off-Balance Sheet Risk and Credit Risk (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | ||
Commitment letters | $ 34,400 | $ 9,500 |
Commitment letters expiration period | 120 days | |
Deposits in other financial institutions in excess of amounts insured by the FDIC | $ 1,300 |
Financial Instruments With Of_4
Financial Instruments With Off-Balance Sheet Risk and Credit Risk (Schedule of Financial Instruments with Credit Risk) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | $ 114,198 | $ 123,477 |
Unused lines of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | 88,323 | 99,757 |
ACH [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | 20,131 | 17,681 |
Letters of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Notional Amount | $ 5,744 | $ 6,039 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Director [Member] | |
Related Party Transaction [Line Items] | |
Rental expenditures (including reimbursements for taxes, insurance, and other expenses) | $ 492 |
Capital Requirements (Narrative
Capital Requirements (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Aug. 30, 2018 | Dec. 31, 2017 |
Assets | $ 644,800 | $ 643,886 | |
SBHC Policy Statement [Member] | |||
Assets | $ 3,000,000 | ||
Threshold [Member] | |||
Assets | $ 1,000,000 |
Capital Requirements (Schedule
Capital Requirements (Schedule of Company and Bank Actual Capital Amounts and Ratios) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Total Capital, Amount | ||
Total Capital, Actual, Amount | $ 76,090 | $ 69,196 |
Total Capital, Minimum Capital Requirement, Amount | 41,935 | 42,622 |
Common Equity Tier 1 Capital, Amount | ||
Common Equity Tier 1 Capital, Actual, Amount | 71,169 | 65,153 |
Common Equity Tier 1 Capital, Minimum Capital Requirement, Amount | 23,589 | 23,975 |
Tier 1 Capital, Amount | ||
Tier 1 Capital, Actual, Amount | 71,169 | 65,153 |
Tier 1 Capital, Minimum Capital Requirement, Amount | 31,451 | 31,967 |
Tier 1 Capital, Amount | ||
Tier 1 Capital, Actual, Amount | 71,169 | 65,153 |
Tier 1 Capital, Minimum Capital Requirement, Amount | $ 25,550 | $ 24,638 |
Total Capital, Ratio | ||
Total Capital (To Risk Weighted Assets), Ratio | 14.52% | 12.99% |
Total Capital, Minimum Capital Requirement, Ratio | 8.00% | 8.00% |
Tier 1 Capital (To Risk Weighted Assets), Ratio | 13.58% | 12.23% |
Tier 1 Capital, Minimum Capital Requirement, Ratio | 6.00% | 6.00% |
Common Equity Tier 1 Capital, Ratio | ||
Common Equity Tier 1 Capital (To Risk Weighted Assets), Ratio | 13.58% | 12.23% |
Common Equity Tier 1 Capital, Minimum Capital Requirement, Ratio | 4.50% | 4.50% |
Tier 1 Capital, Ratio | ||
Tier 1 Capital (To Average Assets), Ratio | 11.14% | 10.58% |
Tier 1 Capital, Minimum Capital Requirement, Ratio | 4.00% | 4.00% |
Bank [Member] | ||
Total Capital, Amount | ||
Total Capital, Actual, Amount | $ 75,491 | $ 68,058 |
Total Capital, Minimum Capital Requirement, Amount | 41,914 | 42,591 |
Total Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Amount | 52,393 | 53,238 |
Common Equity Tier 1 Capital, Amount | ||
Common Equity Tier 1 Capital, Actual, Amount | 70,570 | 64,015 |
Common Equity Tier 1 Capital, Minimum Capital Requirement, Amount | 23,577 | 23,957 |
Common Equity Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | 34,055 | 34,605 |
Tier 1 Capital, Amount | ||
Tier 1 Capital, Actual, Amount | 70,570 | 64,015 |
Tier 1 Capital, Minimum Capital Requirement, Amount | 31,436 | 31,943 |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Amount | 41,914 | 42,591 |
Tier 1 Capital, Amount | ||
Tier 1 Capital, Actual, Amount | 70,570 | 64,015 |
Tier 1 Capital, Minimum Capital Requirement, Amount | 25,544 | 24,624 |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Amount | $ 31,930 | $ 30,780 |
Total Capital, Ratio | ||
Total Capital (To Risk Weighted Assets), Ratio | 14.41% | 12.78% |
Total Capital, Minimum Capital Requirement, Ratio | 8.00% | 8.00% |
Total Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Ratio | 10.00% | 10.00% |
Tier 1 Capital (To Risk Weighted Assets), Ratio | 13.47% | 12.02% |
Tier 1 Capital, Minimum Capital Requirement, Ratio | 6.00% | 6.00% |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Ratio | 8.00% | 8.00% |
Common Equity Tier 1 Capital, Ratio | ||
Common Equity Tier 1 Capital (To Risk Weighted Assets), Ratio | 13.47% | 12.02% |
Common Equity Tier 1 Capital, Minimum Capital Requirement, Ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital ,Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 6.50% | 6.50% |
Tier 1 Capital, Ratio | ||
Tier 1 Capital (To Average Assets), Ratio | 11.05% | 10.40% |
Tier 1 Capital, Minimum Capital Requirement, Ratio | 4.00% | 4.00% |
Tier 1 Capital, Minimum To Be Well Capitalized Under Prompt Corrective, Ratio | 5.00% | 5.00% |
Dividend Restrictions (Narrativ
Dividend Restrictions (Narrative) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | |
Amount available for cash dividends | $ 16,235 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | $ 61,392 | $ 67,501 |
US Government Agencies Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 18,974 | 18,962 |
Mortgage-backed securities/CMOs [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 25,063 | 29,945 |
Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 17,355 | 18,593 |
Marketable equity securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 1 | |
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 a recurring basis | ||
Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Mortgage-backed securities/CMOs [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Marketable equity securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a 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 a recurring basis | 61,392 | 67,501 |
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 18,974 | 18,962 |
Fair Value, Inputs, Level 2 [Member] | Mortgage-backed securities/CMOs [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 25,063 | 29,945 |
Fair Value, Inputs, Level 2 [Member] | Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 17,355 | 18,593 |
Fair Value, Inputs, Level 2 [Member] | Marketable equity securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | 1 | |
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 a recurring basis | ||
Fair Value, Inputs, Level 3 [Member] | US Government Agencies Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | ||
Fair Value, Inputs, Level 3 [Member] | Mortgage-backed securities/CMOs [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | ||
Fair Value, Inputs, Level 3 [Member] | Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis | ||
Fair Value, Inputs, Level 3 [Member] | Marketable equity securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on a recurring basis |
Fair Value Measurements (Asse_2
Fair Value Measurements (Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 61,392 | $ 67,501 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 61,392 | 67,501 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | ||
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 1,512 | |
Fair Value, Measurements, Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | ||
Fair Value, Measurements, Nonrecurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | ||
Fair Value, Measurements, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 1,512 | |
Fair Value, Measurements, Nonrecurring [Member] | Student Loans Purchased [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 1,512 | |
Fair Value, Measurements, Nonrecurring [Member] | Student Loans Purchased [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | ||
Fair Value, Measurements, Nonrecurring [Member] | Student Loans Purchased [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | ||
Fair Value, Measurements, Nonrecurring [Member] | Student Loans Purchased [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 1,512 |
Fair Value Measurements (Carryi
Fair Value Measurements (Carrying Values and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Cash and cash equivalent | $ 18,874 | $ 18,277 |
Available for sale securities | ||
Loans, net | ||
Bank owned life insurance | ||
Accrued interest receivable | ||
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | ||
Certificates of deposit | ||
Repurchase agreements and other borrowings | ||
Accrued interest payable | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Cash and cash equivalent | ||
Available for sale securities | 61,392 | 67,501 |
Loans, net | ||
Bank owned life insurance | 16,790 | 16,344 |
Accrued interest receivable | 342 | 363 |
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | 464,002 | 433,729 |
Certificates of deposit | 108,323 | 108,936 |
Repurchase agreements and other borrowings | 34,092 | |
Accrued interest payable | 243 | 110 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Cash and cash equivalent | ||
Available for sale securities | ||
Loans, net | 514,917 | 517,339 |
Bank owned life insurance | ||
Accrued interest receivable | 1,758 | 1,649 |
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | ||
Certificates of deposit | ||
Repurchase agreements and other borrowings | ||
Accrued interest payable | ||
Carying Value [Member] | ||
Assets | ||
Cash and cash equivalent | 18,874 | 18,277 |
Available for sale securities | 61,392 | 67,501 |
Loans, net | 532,299 | 524,741 |
Bank owned life insurance | 16,790 | 16,344 |
Accrued interest receivable | 2,100 | 2,012 |
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | 464,002 | 433,729 |
Certificates of deposit | 108,531 | 109,233 |
Repurchase agreements and other borrowings | 34,092 | |
Accrued interest payable | 243 | 110 |
Fair Value [Member] | ||
Assets | ||
Cash and cash equivalent | 18,874 | 18,277 |
Available for sale securities | 61,392 | 67,501 |
Loans, net | 514,917 | 517,339 |
Bank owned life insurance | 16,790 | 16,344 |
Accrued interest receivable | 2,100 | 2,012 |
Liabilities | ||
Demand deposits and interest-bearing transaction and money market accounts | 464,002 | 433,729 |
Certificates of deposit | 108,323 | 108,936 |
Repurchase agreements and other borrowings | 34,092 | |
Accrued interest payable | $ 243 | $ 110 |
Fair Value Measurements (Asse_3
Fair Value Measurements (Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Impaired loans | $ 2,766 | $ 2,574 |
Other Noninterest Expenses (Sch
Other Noninterest Expenses (Schedule of Other Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Other Expenses [Abstract] | ||
ATM, debit and credit card | $ 207 | $ 283 |
Bank franchise tax | 469 | 476 |
Computer software | 424 | 397 |
Marketing, advertising and promotion | 715 | 472 |
Professional fees | 797 | 565 |
Other | 1,943 | 2,017 |
Total | $ 4,555 | $ 4,210 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Minimum age of employees for Benefit Plans | 18 years | |
Percentage of contribution matched | 100.00% | |
Percentage of employee contribution | 6.00% | |
Amount of contributed to the plan | $ 304 | $ 322 |
Stock Incentive Plans (Summary
Stock Incentive Plans (Summary of Shares Issued and Available Under Each Plan) (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
2003 Stock Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate shares issuable | 134,787 |
Options issued, net of forfeited and expired options | (113,457) |
Cancelled due to Plan expiration | (21,330) |
Remaining available for grant | |
Total vested and unvested shares | 16,345 |
Fully vested shares | 16,345 |
2003 Stock Plan [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share | $ / shares | $ 17.39 |
2003 Stock Plan [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share | $ / shares | $ 17.39 |
2005 Stock Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate shares issuable | 241,500 |
Options issued, net of forfeited and expired options | (57,019) |
Cancelled due to Plan expiration | (184,481) |
Remaining available for grant | |
Total vested and unvested shares | 1,811 |
Fully vested shares | 1,811 |
2005 Stock Plan [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share | $ / shares | $ 11.18 |
2005 Stock Plan [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share | $ / shares | $ 14.37 |
2014 Stock Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate shares issuable | 262,500 |
Options issued, net of forfeited and expired options | (64,850) |
Cancelled due to Plan expiration | |
Remaining available for grant | 197,650 |
Total vested and unvested shares | 64,325 |
Fully vested shares | |
2014 Stock Plan [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share | $ / shares | $ 28.76 |
2014 Stock Plan [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price per share | $ / shares | $ 44.75 |
Stock Incentive Plans (Plan dur
Stock Incentive Plans (Plan duration - Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 20, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense related to the non-vested awards | $ 405 | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 65 | $ 10 | |
Stock dividend percentage | 5.00% | ||
Option Issued | 62,750 | 2,100 | |
Employee Stock Option [Member] | Subsequent Event [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrestricted stock granted to non-employee directors | 10,993 | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Plan duration | 10 years |
Stock Incentive Plans (Changes
Stock Incentive Plans (Changes in the Stock Options Outstanding) (Details) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Options | ||
Outstanding, at the beginning | 46,117 | |
Issued | 62,750 | 2,100 |
Exercised | (12,502) | |
Expired | (13,884) | |
Forfeited | ||
Outstanding, at the end | 82,481 | 46,117 |
Options Exercisable | 18,156 | |
Weighted Average Exercise Price | ||
Outstanding, at the beginning | $ 19.96 | |
Issued | 44.34 | |
Exercised | 21.39 | |
Expired | 21.53 | |
Forfeited | ||
Outstanding, at the end | 38.02 | $ 19.96 |
Exercisable | $ 17 | |
Aggregate Intrinsic Value | ||
Outstanding, at the beginning | $ 793 | |
Outstanding at end | 327 | $ 793 |
Exercisable | $ 318 |
Stock Incentive Plans (Summar_2
Stock Incentive Plans (Summary Information Pertaining to Options Outstanding) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Expected volatility1 | [1] | 15.49% | 17.90% |
Expected dividends2 | [2] | 1.81% | 1.72% |
Expected term (in years)3 | [3] | 6 years 6 months | 6 years 2 months 30 days |
Risk-free rate4 | [4] | 2.85% | 2.00% |
Options Outstanding | 82,481 | ||
Weighted-Average Remaining Contractual Life | 7 years 4 months 24 days | ||
Weighted Average Exercise Price | $ 38.02 | ||
Options Exercisable | 18,156 | ||
Weighted-Average Exercise Price | $ 17 | ||
$11.74 to 20.00 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price, Minimum | 11.18 | ||
Exercise Price, Maximum | $ 20 | ||
Options Outstanding | 18,156 | ||
Weighted-Average Remaining Contractual Life | 6 months | ||
Weighted Average Exercise Price | $ 17 | ||
Options Exercisable | 18,156 | ||
Weighted-Average Exercise Price | $ 17 | ||
$20.01 to 30.00 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price, Minimum | 20.01 | ||
Exercise Price, Maximum | $ 30 | ||
Options Outstanding | 1,575 | ||
Weighted-Average Remaining Contractual Life | 8 years 2 months 12 days | ||
Weighted Average Exercise Price | $ 28.76 | ||
Options Exercisable | 0 | ||
Weighted-Average Exercise Price | |||
$30.01 to 33.91 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price, Minimum | 30.01 | ||
Exercise Price, Maximum | $ 40 | ||
Options Outstanding | |||
Weighted Average Exercise Price | |||
Options Exercisable | 0 | ||
Weighted-Average Exercise Price | |||
$40.01 to $44.75 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price, Minimum | 40.01 | ||
Exercise Price, Maximum | $ 44.75 | ||
Options Outstanding | 62,750 | ||
Weighted-Average Remaining Contractual Life | 9 years 4 months 24 days | ||
Weighted Average Exercise Price | $ 44.34 | ||
Options Exercisable | 0 | ||
Weighted-Average Exercise Price | |||
[1] | Based on the monthly historical volatility of the Company's stock price over the expected life of the options. | ||
[2] | Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant. | ||
[3] | Based on the average of the contractual life and vesting period for the respective option. | ||
[4] | Based upon an interpolated US Treasury yield curve interest rate that corresponds to the contractual life of the option, in effect at the time of the grant. |
Stock Incentive Plans (Options
Stock Incentive Plans (Options and Restricted stock - Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Intrinsic value of options exercised | $ 252 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Basic net income per share | |||
Net income | $ 8,470 | $ 6,554 | |
Weighted Average Shares | 2,539,907 | 2,513,371 | |
Per Share Amount | [1] | $ 3.33 | $ 2.61 |
Effect of dilutive stock options | 18,073 | 22,216 | |
Effect of dilutive stock options, Per Share Amount | $ (0.02) | $ (0.03) | |
Diluted net income per share | |||
Net income | $ 8,470 | $ 6,554 | |
Weighted Average Shares | 2,557,980 | 2,535,587 | |
Per Share Amount | [1] | $ 3.31 | $ 2.58 |
[1] | Per share data has been adjusted to reflect a 5% stock dividend effective April 13, 2018. |
Net Income Per Share (Narrative
Net Income Per Share (Narrative) (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities considered to be anti-dilutive and excluded from earnings per share calculation | 62,750 |
Other Comprehensive Income (Sch
Other Comprehensive Income (Schedule of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Available-for-sale securities | ||
Realized gains (losses) on sales of securities | $ (75) | |
Tax effect | 25 | |
Realized gains (losses), net of tax | $ (50) |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | item | 2 | |
VNB Wealth [Member] | ||
Segment Reporting Information [Line Items] | ||
Management fees | $ | $ 100 | $ 100 |
Segment Reporting (Schedule of
Segment Reporting (Schedule of Segment Reporting Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net interest income | $ 22,896 | $ 21,377 |
Provision for loan losses | 1,873 | 418 |
Non-interest income | 5,530 | 5,880 |
Non-interest expense | 16,014 | 15,882 |
Income before income taxes | 10,539 | 10,957 |
Provision for income taxes | 2,069 | 4,403 |
Net income | 8,470 | 6,554 |
Bank [Member] | ||
Segment Reporting Information [Line Items] | ||
Net interest income | 22,823 | 21,282 |
Provision for loan losses | 1,873 | 418 |
Non-interest income | 2,715 | 2,722 |
Non-interest expense | 13,876 | 13,380 |
Income before income taxes | 9,789 | 10,206 |
Provision for income taxes | 1,911 | 4,147 |
Net income | 7,878 | 6,059 |
VNB Wealth [Member] | ||
Segment Reporting Information [Line Items] | ||
Net interest income | 73 | 95 |
Provision for loan losses | ||
Non-interest income | 2,815 | 3,158 |
Non-interest expense | 2,138 | 2,502 |
Income before income taxes | 750 | 751 |
Provision for income taxes | 158 | 256 |
Net income | $ 592 | $ 495 |
Condensed Parent Company Fina_3
Condensed Parent Company Financial Statements (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Information Disclosure [Abstract] | ||
Cash dividend paid | $ 2,300 | $ 720 |
Condensed Parent Company Fina_4
Condensed Parent Company Financial Statements (Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | |||
Cash and due from banks | $ 11,741 | $ 11,390 | |
Investment securities | 63,075 | 69,785 | |
Other assets | 5,871 | 6,417 | |
Total assets | 644,800 | 643,886 | |
LIABILITIES & SHAREHOLDERS' EQUITY | |||
Stockholders' equity | 70,742 | 65,105 | $ 59,054 |
Total liabilities and shareholders' equity | 644,800 | 643,886 | |
Parent Company [Member] | |||
ASSETS | |||
Cash and due from banks | 1,146 | 1,236 | |
Investment securities | 65 | 65 | |
Investments in subsidiary | 70,142 | 63,967 | |
Other assets | 182 | 330 | |
Total assets | 71,535 | 65,598 | |
LIABILITIES & SHAREHOLDERS' EQUITY | |||
Other liabilities | 793 | 493 | |
Stockholders' equity | 70,742 | 65,105 | |
Total liabilities and shareholders' equity | $ 71,535 | $ 65,598 |
Condensed Parent Company Fina_5
Condensed Parent Company Financial Statements (Statement of Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Income Statements, Captions [Line Items] | ||
Noninterest expense | $ 16,014 | $ 15,882 |
Income before income taxes | 10,539 | 10,957 |
Income tax (benefit) | 2,069 | 4,403 |
Net income | 8,470 | 6,554 |
Parent Company [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Dividends from subsidiary | 2,250 | 720 |
Noninterest expense | 429 | 388 |
Income before income taxes | 1,821 | 332 |
Income tax (benefit) | (79) | (137) |
Income before equity in undistributed earnings of subsidiary | 1,900 | 469 |
Equity in undistributed earnings of subsidiary | 6,570 | 6,085 |
Net income | $ 8,470 | $ 6,554 |
Condensed Parent Company Fina_6
Condensed Parent Company Financial Statements (Statement of Cash Flow) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 8,470 | $ 6,554 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred tax expense | (234) | 768 |
Stock option & stock grant expense | 65 | 10 |
Net cash provided by operating activities | 11,757 | 8,795 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of available for sale securities | 45,290 | |
Net cash used in investing activities | (4,441) | (61,317) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds form stock options exercised | 268 | 981 |
Dividends paid | (2,466) | (1,385) |
Net cash provided by financing activities | (6,719) | 32,299 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 597 | (20,223) |
CASH AND CASH EQUIVALENTS | ||
Beginning of period | 18,277 | 38,500 |
End of period | 18,874 | 18,277 |
Parent Company [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | 8,470 | 6,554 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in undistributed earnings of subsidiary | (6,570) | (6,085) |
Deferred tax expense | 4 | 91 |
Stock option & stock grant expense | 65 | 10 |
Decrease (increase) in other assets | 144 | (93) |
Increase (decrease) in other liabilities | (5) | 3 |
Net cash provided by operating activities | 2,108 | 480 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of available for sale securities | (1) | |
Net cash used in investing activities | (1) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds form stock options exercised | 268 | 981 |
Dividends paid | (2,466) | (1,385) |
Net cash provided by financing activities | (2,198) | (404) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (90) | 75 |
CASH AND CASH EQUIVALENTS | ||
Beginning of period | 1,236 | 1,161 |
End of period | $ 1,146 | $ 1,236 |