Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Coastway Bancorp, Inc. | |
Entity Central Index Key | 1,585,023 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,466,634 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Cash and cash equivalents: | ||
Cash and due from banks | $ 2,493 | $ 3,041 |
Interest-earning deposits | 19,904 | 15,281 |
Total cash and cash equivalents | 22,397 | 18,322 |
Certificates of deposit | 3,046 | 6,074 |
Federal Home Loan Bank stock, at cost | 7,533 | 5,283 |
Loans, net of allowance for loan losses of $2,456 and $2,194, respectively | 524,616 | 467,023 |
Loans held for sale, at fair value | 28,082 | 18,952 |
Premises and equipment, net | 31,679 | 31,407 |
Accrued interest receivable | 1,546 | 1,414 |
Real estate held for sale | 3,305 | |
Foreclosed real estate | 411 | 710 |
Bank-owned life insurance | 4,421 | 4,326 |
Net deferred tax asset | 614 | 815 |
Other assets | 8,580 | 7,506 |
Total assets | 632,925 | 565,137 |
Deposits: | ||
Interest-bearing | 291,408 | 277,559 |
Non-interest-bearing | 99,547 | 95,960 |
Total deposits | 390,955 | 373,519 |
Borrowed funds | 166,050 | 115,500 |
Accrued expenses and other liabilities | 6,606 | 5,196 |
Total liabilities | 563,611 | 494,215 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 20,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.01 par value; 50,000,000 shares authorized; and 4,466,634 and 4,822,279 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 45 | 48 |
Additional paid-in capital | 41,602 | 46,094 |
Retained earnings | 31,465 | 28,697 |
Unearned compensation - Employee Stock Ownership Plan (ESOP) | (3,524) | (3,643) |
Accumulated other comprehensive loss | (274) | (274) |
Total stockholders' equity | 69,314 | 70,922 |
Total liabilities and stockholders' equity | $ 632,925 | $ 565,137 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Loans, allowance for loan losses | $ 2,456 | $ 2,194 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 4,466,634 | 4,822,279 |
Common stock, shares outstanding | 4,466,634 | 4,822,279 |
Consolidated Statements of Net
Consolidated Statements of Net Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Interest income: | ||||
Interest and fees on loans | $ 5,398 | $ 4,527 | $ 15,455 | $ 12,899 |
Other interest income | 80 | 51 | 226 | 128 |
Total interest income | 5,478 | 4,578 | 15,681 | 13,027 |
Interest expense: | ||||
Interest on deposits | 514 | 486 | 1,499 | 1,559 |
Interest on borrowed funds | 188 | 49 | 481 | 112 |
Total interest expense | 702 | 535 | 1,980 | 1,671 |
Net interest income | 4,776 | 4,043 | 13,701 | 11,356 |
Provision for loan losses | 89 | 196 | 343 | 367 |
Net interest income after provision for loan losses | 4,687 | 3,847 | 13,358 | 10,989 |
Non-interest income: | ||||
Customer service fees | 834 | 815 | 2,408 | 2,314 |
Net gain on sales of loans and other mortgage banking income | 1,473 | 811 | 3,624 | 2,523 |
Bank-owned life insurance income | 31 | 34 | 95 | 102 |
Other income (loss) | 64 | (51) | 140 | 28 |
Total non-interest income | 2,402 | 1,609 | 6,267 | 4,967 |
Non-interest expenses: | ||||
Salary and employee benefits | 2,712 | 2,353 | 8,141 | 7,126 |
Occupancy and equipment | 789 | 721 | 2,301 | 2,309 |
Data processing | 454 | 419 | 1,301 | 1,279 |
Deposit servicing | 314 | 209 | 758 | 577 |
Professional fees | 175 | 150 | 559 | 498 |
FDIC insurance assessment | 100 | 90 | 285 | 278 |
Advertising | 78 | 68 | 239 | 211 |
Foreclosed real estate | 54 | 37 | 96 | 140 |
Impairment loss on real estate held for sale | 386 | 581 | ||
Other general and administrative | 478 | 386 | 1,375 | 1,199 |
Total non-interest expenses | 5,154 | 4,819 | 15,055 | 14,198 |
Income before income taxes | 1,935 | 637 | 4,570 | 1,758 |
Income tax expense | 752 | 291 | 1,802 | 736 |
Net income and comprehensive income | $ 1,183 | $ 346 | $ 2,768 | $ 1,022 |
Weighted average common shares outstanding - basic | 4,112,278 | 4,518,147 | 4,290,734 | 4,544,296 |
Weighted average common shares outstanding - diluted | 4,116,902 | 4,518,147 | 4,293,138 | 4,544,296 |
Per share information: | ||||
Basic earnings per common share | $ 0.29 | $ 0.08 | $ 0.65 | $ 0.22 |
Diluted earnings per common share | $ 0.29 | $ 0.08 | $ 0.64 | $ 0.22 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned Compensation-ESOP | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2015 | $ 48 | $ 46,094 | $ 28,697 | $ (3,643) | $ (274) | $ 70,922 |
Balance (in shares) at Dec. 31, 2015 | 4,822,279 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income and comprehensive income | 2,768 | 2,768 | ||||
Common stock repurchased | $ (3) | (4,613) | (4,616) | |||
Common stock repurchased (in shares) | (355,645) | |||||
Stock-based compensation | 90 | 90 | ||||
ESOP shares committed to be allocated ( 11,867 shares) | 31 | 119 | 150 | |||
Balance at Sep. 30, 2016 | $ 45 | $ 41,602 | $ 31,465 | $ (3,524) | $ (274) | $ 69,314 |
Balance (in shares) at Sep. 30, 2016 | 4,466,634 |
Consolidated Statement of Chan6
Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) | Sep. 30, 2016shares |
Consolidated Statement of Changes in Stockholders' Equity | |
ESOP shares committed to be allocated, number of shares | 11,867 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 2,768,000 | $ 1,022,000 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Provision for loan losses | 343,000 | 367,000 |
Loans originated for sale | (161,274,000) | (132,236,000) |
Loans sold | 155,353,000 | 134,149,000 |
Gain on sale of mortgage loans, net | (3,209,000) | (1,835,000) |
Gain on sale of portfolio loans, net | (328,000) | |
Amortization of deferred loan costs | 784,000 | 585,000 |
Loss on foreclosed real estate | 94,000 | 81,000 |
Loss on real estate held for sale | 11,000 | |
Impairment loss on real estate held for sale | 581,000 | |
Depreciation and amortization expense | 995,000 | 956,000 |
Bank-owned life insurance income | (95,000) | (102,000) |
Deferred income tax expense (benefit) | 201,000 | 47,000 |
ESOP expense | 150,000 | 131,000 |
Stock-based compensation | 90,000 | |
Net change in: | ||
Accrued interest receivable | (132,000) | (106,000) |
Other, net | 336,000 | 1,087,000 |
Net cash (used in) provided by operating activities | (3,585,000) | 4,399,000 |
Cash flows from investing activities: | ||
Purchase of and increase in certificates of deposit | (15,000) | (3,048,000) |
Maturities of certificates of deposit | 3,043,000 | |
Purchase of FHLB stock | (2,350,000) | (1,373,000) |
Proceeds from redemption of FHLB stock | 100,000 | |
Loan originations, net of principal payments | (43,781,000) | (22,565,000) |
Purchase of loans from third party originations | (15,150,000) | (44,203,000) |
Proceeds from portfolio loans sold | 4,554,000 | |
Proceeds from the sale of real estate held for sale | 3,294,000 | |
Proceeds from sale of foreclosed real estate | 416,000 | 916,000 |
Purchases of premises and equipment | (1,267,000) | (629,000) |
Net cash used by investing activities | (55,710,000) | (66,348,000) |
Cash flows from financing activities: | ||
Net increase in deposits | 17,436,000 | 14,619,000 |
Net change in short-term borrowed funds | 48,800,000 | 48,000,000 |
Increase in long-term borrowed funds | 1,750,000 | |
Repayments of long-term borrowed funds | (1,300,000) | |
Repurchase of common stock | (4,616,000) | (902,000) |
Net cash provided by financing activities | 63,370,000 | 60,417,000 |
Net change in cash and cash equivalents | 4,075,000 | (1,532,000) |
Cash and cash equivalents at beginning of period | 18,322,000 | 14,582,000 |
Cash and cash equivalents at end of period | 22,397,000 | 13,050,000 |
Supplemental cash flow information: | ||
Interest paid on deposits | 1,499,000 | 1,557,000 |
Interest paid on borrowed funds | 478,000 | 109,000 |
Income taxes paid | 1,765,000 | 190,000 |
Supplemental non-cash information: | ||
Loans transferred to foreclosed real estate | $ 211,000 | 725,000 |
Real estate transferred from real estate held for investment to real estate held for sale | $ 55,000 |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation and Consolidation | |
Basis of Presentation and Consolidation | (1) Basis of Presentation and Consolidation General information Coastway Bancorp, Inc., a Maryland chartered stock corporation (“Company” or “Corporation”), was formed to serve as the holding company for Coastway Community Bank. Coastway Community Bank (the “Bank”) is a Rhode Island-chartered savings bank. The Bank provides a variety of financial services to individuals and small businesses throughout Rhode Island. Its primary deposit products are savings, demand, money market and term certificate accounts and its primary lending products are one-to four-family residential mortgage loans, home equity loans and lines of credit, commercial real estate and SBA loans. Basis of Presentation The consolidated financial statements include the accounts of the Corporation and its subsidiary. All significant intercompany transactions have been eliminated. The unaudited consolidated financial statements of the Corporation presented herein have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 8 of Regulation S-X and do not include all of the information and note disclosures required by GAAP for a complete set of financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures necessary for the fair presentation of the accompanying consolidated financial statements have been included. The results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying unaudited financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015, included in the Corporation’s annual report on Form 10-K. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and the valuation of loans held for sale, mortgage banking derivatives and commitments to sell fixed-rate residential mortgages. Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Corporation’s stock at the grant date is utilized for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Recent Accounting Pronouncements As an “emerging growth company” as defined in Title 1 of the Jumpstart Our Business Startups (JOBS) Act, the Corporation has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As of September 30, 2016, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The ASU requires equity instruments (except those accounted for under the equity method of accounting or that result in consolidations of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure an equity investment that does not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions. For public business entities, the standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities, including emerging growth companies, the standard is effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal periods after December 15, 2019. We do not expect a significant impact upon adoption on January 1, 2019. In February 2016, the FASB issued ASU 2016-02, which will require organizations that lease assets — referred to as “lessees” — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under the new guidance, a lessee will be required to recognize right to use assets and lease liabilities for leases with lease terms of more than 12 months. However, unlike current Generally Accepted Accounting Principles (GAAP) — which requires only capital leases to be recognized on the balance sheet — the new ASU will require both types of leases to be recognized on the balance sheet. The accounting by organizations that own the assets leased by the lessee — also known as lessor accounting — will remain largely unchanged from current GAAP. However, the ASU contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model. The ASU on leases will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, including emerging growth companies, the ASU on leases will take effect for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. We are currently evaluating the impact of adoption of this standard, including identifying contracts that are, or contain, leases, as the lease identification guidance in the new standard is different than the current standard. On March 30, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, which is intended to improve the accounting for employee share-based payments. The ASU affects all organizations that issue share-based payment awards to their employees. The ASU, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, simplifies several aspects of the accounting for share-based payment award transactions, including: · The income tax consequences · Classification of awards as either equity or liabilities, and · Classification on the statement of cash flows. For public companies, the amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For private companies and emerging growth companies, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any organization in any interim or annual period. This standard will be effective for the Corporation for the year ended December 31, 2018. We do not anticipate a material impact as a result of adopting this standard as share-based awards were first granted during the first quarter of 2016. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses , that will significantly change how banks measure and recognize credit impairment for many financial assets from an incurred loss methodology to a current expected credit loss model. The current expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are in the scope of the standard. The FASB also made targeted amendments to the current impairment model for available-for-sale debt securities. The ASU is effective for public business entities that are SEC filers, for annual and interim periods in fiscal years beginning after December 15, 2019, and for other companies, including emerging growth companies, for interim and annual periods in fiscal years beginning after December 15, 2020. All entities may early adopt the standard for annual and interim periods in fiscal years after December 15, 2018. The standard will be effective for the Corporation on January 1, 2021. We are currently evaluating the impact of adoption of this standard, including different methodologies that may be employed to estimate credit losses, such as loss rate methods, component loss methods, and qualitative factors, as well as additional data gathering that will be needed to adopt the standard. The standard will add new disclosures related to factors that influenced management’s estimate, including current expected credit losses, the changes in those factors, and reasons for the changes as well as the method applied to revert to historical credit loss experience. |
Certificates of Deposit
Certificates of Deposit | 9 Months Ended |
Sep. 30, 2016 | |
Certificates of Deposit | |
Certificates of Deposit | (2) Certificates of Deposit At September 30, 2016, a certificate of deposit totaling $3.0 million with an interest rate of 0.65% matures in December 2016. Certificates of deposit are carried at cost which approximates fair value. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2016 | |
Loans | |
Loans | (3) Loans Major classifications of loans at the dates indicated, are as follows: (Dollars in thousands) September 30, December 31, Residential real estate mortgage loans: 1-4 family $ $ Home equity loans and lines of credit Total residential real estate mortgage loans Commercial real estate Commercial business Commercial construction SBA Consumer Total loans Allowance for loan losses ) ) Net deferred loan costs Loans, net $ $ Residential one- to four-family loans of $241.9 million at September 30, 2016 and $208.8 million at December 31, 2015 included purchased loans which were individually underwritten based on the Bank’s credit standards, totaling $66.3 million and $64.1 million, respectively. During the three months ended September 30, 2016 and 2015, the Bank purchased $6.0 million and $26.2 million of loans at a cost of $6.1 million and $26.5 million, respectively. During the nine months ended September 30, 2016 and 2015, the Bank purchased $15.0 million and $43.7 million of loans at a cost of $15.2 million and $44.2 million, respectively. The loans purchased from third parties are located in New England, primarily Massachusetts. Loan Segments One-to four-family residential real estate and home equity — Loans in these segments are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The Bank generally has first liens on one-to four-family residential real estate loans and first or second liens on property securing home equity loans and equity lines-of-credit. Jumbo one- to four-family loans generally have maximum loan-to-value ratios of 95%. Loan-to-value ratios of one- to four-family loans without private mortgage insurance may be made with loan-to-value ratios up to 95%. Home equity loans and lines of credit may be underwritten with a loan-to-value ratio up to 80%. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in these segments. Commercial — Commercial loan segments include commercial real estate, commercial and industrial loans for businesses and construction financing for businesses/properties located principally in Rhode Island. For commercial real estate loans, the underlying cash flows generated by the properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on the credit quality in this segment. Non-real estate commercial loans are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. Commercial construction generally represent loans to finance construction of retail and office space. Commercial loans also include loans made under the SBA 504 program which is an economic development program that finances the expansion of small businesses. The Bank generally provides 50% of the projected costs, and the loan is secured by a first lien on the commercial property. The SBA does not provide a guarantee on loans made under the SBA 504 program. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. SBA — Loans in this segment include commercial loans underwritten using SBA guidelines for the SBA’s 7(a) program and include both guaranteed and unguaranteed portions of the same loans. Currently, under the SBA 7(a) program, loans may qualify for guarantees up to 85% of principal and accrued interest up to a maximum SBA guarantee of $3.75 million per borrower and related entities. The Bank does not treat the SBA guarantee as a substitute for a borrower meeting reasonable credit standards. SBA guarantees are generally sought on loans that exhibit minimum capital levels, a short time in business, lower collateral coverage or maximum loan terms beyond the Bank’s normal underwriting criteria. For a number of SBA loans, the Bank has sold portions of certain loans and retains the unguaranteed portion while continuing to service the entire loan. The guaranteed portion of SBA loans in the Bank’s portfolio is not allocated a general reserve because the Bank has not experienced losses on such loans and management expects the guarantees will be effective, if necessary. Guaranteed portions of SBA loans totaled $26.8 million and $24.8 million at September 30, 2016 and December 31, 2015. Consumer — This segment includes unsecured and vehicle loans and repayment is dependent on the credit quality of the individual borrower. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Allowance for Loan Losses Allowance for Loan Loss Methodology The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. For impaired loans that are deemed collateral dependent, the recorded balance of the loan is reduced by a charge-off to bring the loan balance to the fair value of the collateral net of estimated selling costs. The allowance for loan losses is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general and specific components as described below. The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by loan segments. Management uses a ten year historical loss period to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies; charge-off trends over the past three year period; weighted average risk ratings; loan concentrations; management’s assessment of internal factors; and management’s assessment of external factors such as interest rates, real estate markets and local and national economic factors. There were no changes in the Bank’s methodology pertaining to the general component of the allowance for loan losses during the nine months ended September 30, 2016 and the year ended December 31, 2015. The Corporation evaluates the need for a specific allowance when loans are determined to be impaired. Loss is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral less estimated selling expenses. Factors in identifying a specific problem loan include: (1) the strength of the customer’s personal or business cash flows; (2) the availability of other sources of repayment; (3) the amount due or past due; (4) the type and value of collateral; (5) the strength of the collateral position; (6) the estimated cost to sell the collateral; and (7) the borrower’s effort to cure the delinquency. In addition, for loans secured by real estate, the Corporation considers the extent of any past due and unpaid property taxes applicable to the property serving as collateral on the mortgage. Credit Quality Indicators Commercial and SBA loans are risk rated based on key factors such as management ability, financial condition, debt repayment ability, collateral, industry conditions and loan structure. Risk ratings 1 through 5 are considered “pass” rated, risk rating 5.5 is considered “watch list”, risk rating 6 is considered “special mention”, while risk ratings 7, 8 and 9 are considered “classified” ratings. Risk Ratings 1-5: Loans in this category are pass rated loans with low to average risk. Risk rating 5.5 — Watch List: loans in this category exhibit the characteristics associated with 5 risk-rated loans, but possess negative factors that warrant increased oversight yet do not warrant a negative risk rating. Factors may include short-term negative operating trends, temporary liquidity shortfalls, modest delinquency, missing or incomplete financial information, or negative balance sheet trends. Risk Rating 6 — Special Mention: these loans have potential weaknesses and require management’s close attention. If these weaknesses are not addressed, they may weaken the prospects for repayment at a future date. Special mention assets do not expose the institution to sufficient risk to warrant a classified rating. Risk Rating 7 — Substandard: loans in this category are inadequately protected by the current financial condition and repayment ability of the borrower or pledged collateral, if any. These assets have a well-defined weakness(es) that jeopardizes the repayment of the debt in full, and are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Risk Rating 8 — Doubtful: loans in this category have all the weaknesses of those classified substandard. In addition, it is highly unlikely that a doubtful asset can be collected or liquidated in full. The possibility of loss is extremely high. However, because of certain important and reasonably specific pending factors, which may work to strengthen the asset, its classification as a loss is deferred until the asset’s status can be better determined. Risk Rating 9 — Loss: loans classified as loss are considered uncollectible and of such little value that they are no longer considered collectible. This classification does not mean that the asset has no recovery or salvage value. However, it is not practical or desirable to defer writing off the asset even though partial recovery may occur in the future. On an annual basis, or more often if needed, the Bank formally reviews the ratings on commercial and SBA loans over $250,000. On an annual basis, the Bank engages an independent third-party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review of its control process related to loan ratings. Credit quality for residential real estate mortgage and consumer loans is determined by monitoring loan payment history and on-going communications with borrowers, and are not risk graded. Non-performing homogenous loans are individually evaluated for impairment. The following table presents the credit risk profile by internally assigned risk rating category at the dates indicated: September 30, 2016 Commercial Commercial Commercial (Dollars in thousands) Real Estate Business Construction SBA Total Loans rated 1-5 $ $ $ $ $ Loans rated 5.5 — — Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — $ $ $ $ $ December 31, 2015 Commercial Commercial Commercial (Dollars in thousands) Real Estate Business Construction SBA Total Loans rated 1-5 $ $ $ $ $ Loans rated 5.5 — Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — — — $ $ $ $ $ Past Due and Non-Accrual Loans The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the loan is both well secured and in the process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual at an earlier date if collection of principal or interest is considered doubtful. All interest accrued, but not collected for loans that are placed on non-accrual, is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following table presents past due loans as of the dates indicated. September 30, 2016 (Dollars in thousands) 30-59 Days 60-89 Days 90 Days Total Past Due > 90 Loans on Residential real estate: Residential 1-4 family $ — $ $ $ $ — $ Home equity loans and lines of credit — — Commercial real estate — — — Commercial business — — — — — — Commercial construction — — — — — — SBA — — Consumer — — — — — — Total gross loans $ $ $ $ $ — $ The balance of loans on non-accrual exceed loans past due, due to a combination of loans that are current, but that have been modified in a troubled debt restructuring and/or loans for which future payments are not reasonably assured. December 31, 2015 (Dollars in thousands) 30-59 Days 60-89 Days 90 Days Total Past Due > 90 Loans on Residential real estate: Residential 1-4 family $ $ $ $ $ — $ Home equity loans and lines of credit — Commercial real estate — — — Commercial business — — — — — — Commercial construction — — — — — — SBA — — — Consumer — — — — Total gross loans $ $ $ $ $ — $ Impaired Loans A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Bank periodically may agree to modify the contractual terms of loans, such as a reduction in interest rate of the loan for some period of time, an extension of the maturity date or an extension of time to make payments with the delinquent payments added to the end of the loan term. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring (“TDR”). All TDRs are initially classified as impaired. Loans on non-accrual status at the date of modification are initially classified as non-accruing troubled debt restructurings. TDRs may be returned to accrual status after a period of satisfactory payment performance according to the terms of the restructuring, generally six months of current payments. The following tables set forth the recorded investment in impaired loans and the related specific allowance allocated as of the dates indicated. September 30, 2016 (Dollars in thousands) Unpaid Total recorded Recorded Recorded Related Residential real estate: Residential 1-4 family $ $ $ $ $ Home equity loans & lines of credit Commercial real estate — — SBA — — Consumer — Total $ $ $ $ $ December 31, 2015 (Dollars in thousands) Unpaid Total recorded Recorded Recorded Related Residential real estate: Residential 1-4 family $ $ $ $ $ Home equity loans & lines of credit Commercial real estate — — SBA — — Consumer — Total $ $ $ $ $ Of the $2.1 million and $2.0 million of impaired SBA loans at September 30, 2016 and at December 31, 2015, respectively, guaranteed portions of such loans amounted to $1.7 million at both dates. The following table presents the average recorded investment in impaired loans and the related interest recognized during the periods indicated. Three Months Ended Three Months Ended (Dollars in thousands) Average recorded Interest income Average recorded Interest income Residential real estate: Residential 1-4 family $ $ $ $ Home equity loans & lines of credit Commercial real estate SBA Consumer — — Total $ $ $ $ Nine Months Ended Nine Months Ended (Dollars in thousands) Average recorded Interest income Average recorded Interest income Residential real estate: Residential 1-4 family $ $ $ $ Home equity loans & lines of credit Commercial real estate SBA Consumer — — Total $ $ $ $ Troubled Debt Restructurings (TDRs) Loans are designated as a TDR when, as part of an agreement to modify the original contractual terms of the loan, the Bank grants a concession on the terms, that would not otherwise be considered, as a result of financial difficulties of the borrower. Typically, such concessions may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, or a deferment or reduction of payments, principal or interest, which materially alters the Bank’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination. All loans that are modified are reviewed by the Bank to identify if a TDR has occurred. TDRs are included in the impaired loan category and as such, these loans are individually evaluated for impairment and a specific reserve is assigned for the amount of the estimated credit loss. Total TDR loans, included in impaired loans as of September 30, 2016 and December 31, 2015 were $10.9 million and $6.6 million, respectively. No additional funds are committed to be advanced in connection with TDR loans. TDR loans on accrual status amounted to $8.5 million and $3.5 million at September 30, 2016 and December 31, 2015, respectively. Troubled debt restructuring agreements entered into during the period indicated are as follows: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (Dollars in thousands) Number of Pre-modification Post-modification Number of Pre-modification Post-modification Residential 1-4 family — $ — $ — $ $ Home equity Commercial real estate SBA — — — Total $ $ $ $ The troubled debt restructurings described above had no impact to the allowance for loan losses and resulted in no charge-offs during the three and nine months ended September 30, 2016, respectively. Troubled debt restructurings that subsequently defaulted within 12 months of restructuring are as follows during the periods indicated: Three Months Ended Nine Months Ended (Dollars in thousands) Number of TDRs Post-modification Number of TDRs Post-modification Residential 1-4 family — $ — $ SBA Total $ $ The troubled debt restructurings described above resulted in no charge-offs and no specific reserves for the three and nine months ended September 30, 2016. Troubled debt restructuring agreements entered into during the periods indicated are as follows: Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 (Dollars in thousands) Number of Pre-modification Post-modification Number of Pre-modification Post-modification Residential 1-4 family 1 $ $ 3 $ $ Home equity 2 6 Commercial real estate — — — 1 SBA — — — 1 Total 3 $ $ 11 $ $ The troubled debt restructurings described above had no impact to the allowance for loan losses and resulted in no charge-offs during the three and nine months ended September 30, 2015, respectively. Troubled debt restructurings that subsequently defaulted within 12 months of restructuring are as follows during the periods indicated: Three Months Ended Nine Months Ended (Dollars in thousands) Number of TDRs Post-modification Number of TDRs Post-modification Residential 1-4 family — $ — $ Home equity — — SBA — — Total — $ — $ The troubled debt restructurings described above resulted in no charge-offs and no specific reserves for the three months ended September 30, 2015 and $43,000 in charge-offs and no specific reserves for the nine months ended September 30, 2015. Allowance for loan loss activity Changes in the allowance for loan losses by segment are presented below: Three Months Ended September 30, 2016 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at June 30, 2016 $ $ $ $ $ $ $ $ Provision (credit) ) ) ) Loans charged-off — — — — — ) — ) Recoveries — — — — Allowance at September 30, 2016 $ $ $ $ $ $ $ $ Three Months Ended September 30, 2015 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at June 30, 2015 $ $ $ $ $ $ $ $ Provision (credit) ) — Loans charged-off ) ) — — — ) ) ) Recoveries — — — — Allowance at September 30, 2015 $ $ $ $ $ $ $ $ Nine Months Ended September 30, 2016 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at December 31, 2015 $ $ $ $ $ $ $ $ Provision (credit) ) Loans charged-off ) ) — — — ) — ) Recoveries — — — Allowance at September 30, 2016 $ $ $ $ $ $ $ $ Nine Months Ended September 30, 2015 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at December 31, 2014 $ $ $ $ $ $ $ $ Provision (credit) ) ) ) Loans charged-off ) ) — — — ) ) ) Recoveries — — — Allowance at September 30, 2015 $ $ $ $ $ $ $ $ The allowance for loan losses and loan balances by impaired and non-impaired components are as follows at the dates indicated: September 30, 2016 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans Total $ $ $ $ $ $ $ $ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans Total loans $ $ $ $ $ $ $ $ December 31, 2015 Residential Home Commercial Commercial Commercial (Dollars in thousands) 1-4 family Equity Real Estate Business Construction SBA Consumer Total Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans Total $ $ $ $ $ $ $ $ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans Total loans $ $ $ $ $ $ $ $ |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2016 | |
Employee Benefits | |
Employee Benefits | (4) Employee Benefits Deferred Compensation Supplemental Executive Plan The Bank maintains a non-qualified deferred compensation supplemental executive retirement plan (“DCSERP”) with a senior executive. The DCSERP allows the executive to invest all or a portion of the deferred compensation in Corporation stock, provided that such stock will only be settled in Corporation stock. The assets invested in bonds which are held in a Rabbi Trust, related to this Plan totaled $1.1 million at September 30, 2016 and $930,000 at December 31, 2015, and are included in other assets at fair value in the consolidated balance sheet. The liability for the benefit obligation reported in accrued expenses and other liabilities totaled $1.1 million at September 30, 2016 and $930,000 at December 31, 2015. Additionally, the Rabbi Trust holds 8,900 shares of Corporation stock at September 30, 2016 which is accounted for at its cost basis of $100,000, which is offset in stockholders’ equity by the benefit obligation of $100,000. Rabbi trust shares are considered outstanding shares for both basic and diluted EPS. Supplemental Retirement Agreements The Bank has entered into supplemental retirement agreements (“SERP”) with seven executive officers, which provide for payments upon attaining the retirement age specified in the agreements, generally ages 65-67. The present value of these future payments is accrued over the remaining service or vesting term. Supplemental retirement benefits generally accrue as they are vested; however a termination of employment subsequent to a change in control will result in the vesting of all benefits that would have accrued to the officer’s normal retirement date. During the three months ended September 30, 2016 and 2015, SERP expense totaled $192,000 and $151,000, respectively and for the nine months ended September 30, 2016 and 2015, SERP expense totaled $575,000 and $453,000 respectively. Defined Benefit Pension Plan Pension expense income totaled $5,000 and $5,000 for the three months ended September 30, 2016 and 2015, respectively, and $16,000 and $16,000 for the nine months ended September 30, 2016 and 2015, respectively. The Bank expects to contribute $19,000 during the plan year ending December 31, 2016. Employee Stock Ownership Plan The Corporation maintains an Employee Stock Ownership Plan (“ESOP”) to provide eligible employees the opportunity to own Corporation stock. This plan is a tax-qualified retirement plan for the benefit of all Corporation employees. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The Corporation granted a loan to the ESOP for the purchase of shares of the Corporation’s common stock concurrent with the January 2014 initial public offering. As of September 30, 2016, the ESOP holds 395,543 shares, or 9% of the common stock outstanding on that date. The loan obtained by the ESOP from the Corporation made to purchase the common stock is payable annually over 25 years at the prime rate, as published in The Wall Street Journal, which is currently 3.50% per annum at September 30, 2016. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. The balance of the loan was $3.7 million at September 30, 2016. Any cash dividends paid on allocated shares will, at the direction of the Corporation, be credited to the participant accounts and invested in the ESOP’s investment fund; be distributed to the participants in proportion with the participants’ stock fund account balance; be distributed to the participants within 90 days of the calendar year in which paid in proportion with the participants’ stock fund account balance; or be used to make payments on the outstanding debt of the ESOP. Cash dividends paid on unallocated shares will be used to repay the outstanding debt of the ESOP then due. If the amount of dividends exceeds the outstanding debt of the ESOP, then, in the sole discretion of the Corporation, cash dividends may be allocated to active participants on a non-discriminatory basis, or be deemed to be general earnings of the ESOP. Shares used as collateral to secure the loan are released and available for allocation to eligible employees as the principal and interest on the loan is paid. Shares held by the ESOP include the following: September 30, Allocated Distributions ) Committed to be allocated Unallocated The fair value of unallocated shares was approximately $4.8 million at September 30, 2016. Total compensation expense recognized in connection with the ESOP was $51,000 and $43,000 for the three months ended September 30, 2016 and 2015, respectively and was $150,000 and $131,000, for the nine month periods ended September 30, 2016 and 2015 respectively. |
Other Stock-Based Compensation
Other Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Other Stock-Based Compensation | |
Other Stock-Based Compensation | (5) Other Stock-Based Compensation On May 21, 2015, the Coastway Bancorp, Inc. stockholders approved the 2015 Equity Incentive Plan (“EIP”). Types of awards permitted by the EIP include stock options, restricted stock awards, restricted stock units, and performance awards. The number of shares available for issuance under the EIP was 692,885 at December 31, 2015. Stock options under the EIP will generally expire ten years after the date of grant. Unless otherwise determined by the Compensation Committee, awards under the EIP (other than Performance Awards) shall be granted with a vesting rate not exceeding twenty percent per year, with the first installment vesting no earlier than one year after the date of grant. Upon an involuntary termination following a change in control, all stock options, restricted stock awards and units will become fully vested and performance awards will be deemed earned. There were no awards granted under the EIP during the year ended December 31, 2015. In February 2016, the Compensation Committee of the Board of Directors authorized the grant of 91,225 options at a strike price of $12.41 and 39,045 shares of restricted stock to directors and certain key senior executives. The options and the restricted stock both vest over a five year period. The $12.41 fair value of the restricted stock is based on the closing price of the Company’s common stock on the date of the grant. The holders of restricted stock participate fully in rewards of stock ownership of the Company, including voting, and dividend rights when vested. Restricted stock expense for the three and nine month periods ended September 30, 2016 was $24,000 and $60,000, respectively. At September 30, 2016, there was $424,000 of unrecognized salary and employee benefits cost related to restricted stock. The grant-date fair value of stock options of $2.59 was estimated using the Black-Scholes Option-Pricing Model. Stock option expense for the three and nine months ended September 30, 2016 was $12,000 and $30,000, respectively. At September 30, 2016, there was $207,000 of unrecognized salary and employee benefits cost related to stock options. The instrinsic value of stock options was $118,000 at September 30, 2016. The following presents the assumptions used in determining the grant-date fair value of stock options: Volatility % Weighted average forfeiture rate Weighted average dividend yield Expected Term 8 years Weighted average risk free rate % |
Earnings per Common Share and S
Earnings per Common Share and Share Repurchase Plans | 9 Months Ended |
Sep. 30, 2016 | |
Earnings per Common Share and Share Repurchase Plans | |
Earnings per Common Share and Share Repurchase Plans | (6) Earnings per Common Share and Share Repurchase Plans Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects 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. There were no potentially dilutive common stock equivalents as of September 30, 2015. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. Earnings per common share have been computed as follows in the three months ended September 30, 2016 and 2015 and the nine months ended September 30, 2016 and 2015: Three months ended Nine months ended September 30, September 30, (Dollars in thousands) 2016 2015 2016 2015 Net income applicable to common stock $ $ $ $ Weighted average common shares outstanding Less: Average unallocated ESOP shares ) ) ) ) Weighted average number of common shares outstanding — basic Dilutive impact of stock options — — — — Dilutive impact of restricted stock — — Weighted average number of common shares outstanding — diluted Earnings per share — basic $ $ $ $ Earnings per share — diluted $ $ $ $ The incremental shares of common stock totaling 7,112 and 7,376 shares pertaining to outstanding stock options were not considered in computing diluted earnings per share for the three and nine months ended September 30, 2016 because they were anti-dilutive. There were no stock options granted for the three and nine months ended September 30, 2015 and as such, there was no impact on dilutive earnings per share. On January 30, 2015, the Corporation authorized a program to repurchase, from time to time and as market and business conditions warrant, up to 247,499 shares of the Corporation’s common stock. During the nine months ended September 30, 2016 and 2015, 71,659 shares and 80,400 shares were repurchased at a cost of $932,000 and $902,000, respectively. The 71,659 shares repurchased during the nine months ended September 30, 2016 were repurchased from one stockholder at a price of $13.00 per share. On May 19, 2016, the Corporation announced it had completed this first stock repurchase program. On May 18, 2016, the Company authorized a program to repurchase, from time to time and as business conditions warrant, up to 235,086 shares of the Corporation’s common stock. During the nine months ended September 30, 2016, 235,086 shares were repurchased for a cost of $3.1 million. The 235,086 shares were repurchased from one stockholder at a price of $13.00 per share. On June 14, 2016, the Corporation announced it had completed this stock repurchase program. No shares were repurchased during the three months ended September 30, 2016. |
Off-Balance Sheets Activities a
Off-Balance Sheets Activities and Derivatives | 9 Months Ended |
Sep. 30, 2016 | |
Off-Balance Sheets Activities and Derivatives | |
Off-Balance Sheets Activities and Derivatives | (7) Off-Balance Sheets Activities and Derivatives In the normal course of business, there are outstanding commitments and contingencies which are not reflected in the accompanying consolidated financial statements. Loan Commitments The Bank is a party to conditional commitments to lend funds in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit which include commercial lines of credit and home equity lines that involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Bank’s exposure to credit loss is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments as it does for on-balance-sheet instruments. The following financial instruments were outstanding whose contract amounts represent credit risk: September 30, December 31, 2016 2015 (In thousands) Commitments to originate loans for portfolio $ $ Commitments to originate loans to be sold Commitments to purchase loans from third parties Unfunded commitments under home equity lines of credit Unfunded commitments under commercial lines of credit Unfunded commitments under SBA lines of credit Unfunded commitments under overdraft lines of credit Unadvanced funds on construction loans The 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. The commitments for lines-of-credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based upon management’s credit evaluation of the counterparty. Collateral held generally consists of real estate. Mortgage Banking At September 30, 2016, the Bank had $36.6 million of interest rate lock commitments to borrowers and loans held for sale of $28.1 million with $60.2 million of forward commitments for the future delivery of residential mortgage loans. Included in the forward commitments total are open To Be Announced securities (“TBAs”) with a notional amount of $19.5 million, mandatory delivery contracts with a notional amount of $8.8 million, and best efforts contracts with a notional amount of $31.9 million. The Bank has $2.8 million of closed hedge instruments that were not settled at September 30, 2016. At December 31, 2015, the Bank had $13.1 million of interest rate lock commitments to borrowers and loans held for sale of $19.0 million with $31.3 million of forward commitments for the future delivery of residential mortgage loans. Included in the forward commitments total are open TBAs with a notional amount of $4.0 million, mandatory delivery contracts with a notional amount of $2.8 million, and best efforts contracts with a notional amount of $24.5 million. The Bank had $4.8 million of closed hedge instruments that were not settled at December 31, 2015. The following table presents the fair values of derivative instruments and forward loan sale commitments in the consolidated balance sheets: Assets Liabilities Balance Balance Sheet Fair Sheet Fair Location Value Location Value (In thousands) September 30, 2016 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — Total derivative commitments N/A — Forward loan sale commitments Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale N/A — Other liabilities Total best efforts contracts — Mandatory delivery contracts Other assets N/A — TBA securities N/A — Other liabilities Total forward loan sale commitments Total derivative loan and forward loan sale commitments $ $ December 31, 2015 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — Total derivative commitments N/A — Forward loan sale commitments: Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale N/A — Other liabilities Total best efforts contracts — Mandatory delivery contracts Other assets N/A — TBA securities N/A — Other liabilities Total forward loan sale commitments Total derivative loan and forward loan sale commitments $ $ The following table presents information pertaining to the gains and losses on Bank’s derivative loan commitments not designated as hedging instruments and forward loan sale commitments: Three Months Ended Nine Months Ended Location of Gain/(Loss) 2016 2015 2016 2015 (In thousands) (In thousands) Derivative loan commitments Net gain on sales of loans and other mortgage banking income $ $ $ $ Best efforts contracts Net (loss) on sales of loans and other mortgage banking income ) ) ) ) Mandatory delivery contracts Net gain on sales of loans and other mortgage banking income — — TBA securities Net gain (loss) on sales of loans and other mortgage banking income ) ) ) $ $ ) $ $ |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | (8) Fair Value Measurements The Bank uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of an asset or liability is the price which a seller would receive in an orderly transaction between market participants (an exit price). Assets and liabilities are placed in a fair value hierarchy based on fair value measurements using three levels of inputs: (Level 1) quoted market prices in active markets for identical assets or liabilities; (Level 2) significant other observable inputs, including quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs such as interest rates and yield curves, volatilities, prepayment speeds, credit risks and default rates which provide a reasonable basis for fair value determination or inputs derived principally from observed market data; (Level 3) significant unobservable inputs for situations in which there is little, if any, market activity for the asset or liability. Unobservable inputs must reflect reasonable assumptions that market participants would use in pricing the asset or liability, which are developed on the basis of the best information available under the circumstances. Effective January 1, 2015, the Bank elected the fair value option pursuant to Accounting Standards Codification (“ASC”) 825, “Financial Instruments” for certain closed mortgage loans intended for sale and transferred the placement of loans held for sale to Level 2 in the fair value hierarchy. ASC 825 allows for the irrevocable option to elect fair value accounting for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis that may otherwise not be required to be measured at fair value under other accounting standards. The Bank has elected the fair value option for certain residential real estate mortgage loans held for sale pursuant to forward sale commitments in order to better match changes in fair values for the loans with changes in the fair value of the forward loan sale contracts used to economically hedge them. The aggregate fair value of loans held for sale, the contractual balance of loans held for sale and the gain on loans held for sale totaled $28.1 million, $26.9 million and $1.2 million at September 30, 2016. The aggregate fair value of loans held for sale, the contractual balance of loans held for sale and the gain on loans held for sale totaled $19.0 million, $18.3 million and $684,000 at December 31, 2015. The change in fair value of loans held for sale reported as a component of net gains on sale of loans and other mortgage banking income was $137,000 and $286,000 for the three months ended September 30, 2016 and 2015, respectively, and $540,000 and $157,000 for the nine months ended September 30, 2016 and 2015, respectively. The following tables summarize significant assets and liabilities carried at fair value and placement in the fair value hierarchy at the dates specified: September 30, 2016 (Dollars in thousands) (Level 1) (Level 2) (Level 3) Assets measured on a recurring basis: Loans held for sale $ — $ $ — Derivative loan commitments — — Mandatory delivery contracts — — Liabilities measured on a recurring basis: Forward loan sale commitments: Best efforts contracts — — TBA securities — — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) — — Foreclosed real estate — — December 31, 2015 (Dollars in thousands) (Level 1) (Level 2) (Level 3) Assets measured on a recurring basis: Loans held for sale $ — $ $ — Derivative loan commitments — — Forward sale mandatory delivery contracts — — Liabilities measured on a recurring basis: Forward loan sale commitments: Best efforts contracts — — TBA securities — — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) — — Foreclosed real estate — — Real estate held for sale — — The Bank did not have cause to transfer any assets between the fair value measurement levels during the three and nine months ended September 30, 2016 or the year ended December 31, 2015. Impaired loan balances in the table above represent those collateral dependent impaired loans where management has estimated the credit loss by comparing the loan’s carrying value against the expected realizable fair value of the collateral (appraised value or internal analysis less estimated cost to sell, adjusted as necessary for changes in relevant valuation factors subsequent to the measurement date). Certain inputs used in these assessments, and possible subsequent adjustments, are not always observable, and therefore, collateral dependent impaired loans are categorized as Level 3 within the fair value hierarchy. A specific allowance or partial charge-off is recorded to the collateral dependent impaired loan for the amount of management’s estimated credit loss. The provision to the allowance for loan losses related to collateral dependent impaired loans recorded at fair value for the three months ended September 30, 2016 and 2015, totaled $44,000 and $20,000, respectively, and for the nine months ended September 30, 2016 and 2015, totaled $67,000 and $120,000, respectively. The carrying value of impaired loans recorded at fair value is $587,000, net of $17,000 in charge-offs and specific reserves of $39,000 at September 30, 2016. The carrying value of impaired loans recorded at fair value was $1.1 million, net of $28,000 in charge-offs and $15,000 in specific reserves at December 31, 2015. Real estate acquired by the Bank through foreclosure proceedings or the acceptance of a deed in lieu of foreclosure is classified as foreclosed real estate. When property is acquired, it is generally recorded at the estimated fair value of the property acquired, less estimated costs to sell. The estimated fair value is based on market appraisals and the Bank’s internal analysis. Certain inputs used in appraisals or the Bank’s internal analysis, are not always observable, and therefore, foreclosed real estate may be categorized as Level 3 within the fair value hierarchy. There were $47,000 and $12,000 of provision for losses on foreclosed real estate for the three months ended September 30, 2016 and 2015, respectively. There were $62,000 and $12,000 of provision for losses on foreclosed real estate for the nine months ended September 30, 2016 and 2015, respectively. There was one property acquired through foreclosure during the three and nine months ended September 30, 2016 with a carrying value of $211,000. When real estate is determined to be held for sale, it is recorded at the lower of estimated fair value less estimated cost to sell. The fair value less costs to sell is determined based on current appraisals that utilize prices in observed transactions involving similar assets or estimated selling price less costs to sell. There were no write-downs on real estate held for sale during the three and nine months ended September 30, 2016 and $386,000 and $581,000 of write-downs on real estate held for sale during the three and nine months ended September 30, 2015. The Bank recorded no loss for the three months ended September 30, 2016 and recorded a loss of $11,000 upon the sale of its two real estate held for sale properties during the nine months ended September 30, 2016. Derivatives fair value methodology Fair value changes in mortgage banking derivatives (interest rate lock commitments and commitments to sell fixed-rate residential mortgages) subsequent to inception are estimated using anticipated market prices based on pricing indications provided from syndicate banks and consideration of pull-through and fallout rates. The fair value of the mortgage banking derivatives are considered to be Level 3 assets. The table below presents for the three and nine months ended September 30, 2016 and 2015, the change in Level 3 assets and liabilities that are measured on a recurring basis: Derivative Loan Commitments and Three months ended September 30, (Dollars in thousands) 2016 2015 Balance at beginning of period $ $ Gain (losses) arising during the period ) Gains on new commitments during the period Reclassifications of realized gains (losses) on settled commitments ) ) Balance at end of period $ $ Derivative Loan Commitments and Nine months ended September 30, (Dollars in thousands) 2016 2015 Balance at beginning of period $ $ Gain (losses) arising during the period ) Gains on new commitments during the period Reclassifications of realized gains (losses) on settled commitments ) ) Balance at end of period $ $ The following tables present additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis for which the Bank utilized Level 3 inputs (significant unobservable inputs for situations in which there is little, if any, market activity for the asset or liability) to determine fair value: September 30, 2016 (Dollars in thousands) Fair Valuation Technique Unobservable Input Unobservable Assets measured on a recurring basis: Derivative loan commitments $ Investor pricing Pull-through rate 76.2% – 100% Liabilities measured on a recurring basis: Forward loan sale commitments ) Investor pricing Pull-through rate 82.5% – 100% Assets measured on a non-recurring basis: Impaired loans (collateral dependent) Discounted appraisal Collateral discounts 5 – 30% Foreclosed real estate Discounted appraisal Collateral discounts 5 – 30% December 31, 2015 (Dollars in thousands) Fair Valuation Technique Unobservable Input Unobservable Assets measured on a recurring basis: Derivative commitments $ Investor pricing Pull-through rate 79.6% – 100% Liabilities measured on a recurring basis: Forward loan sale commitments ) Investor pricing Pull-through rate 82.5% – 100% Assets measured on a non-recurring basis: Impaired loans (collateral dependent) Discounted appraisals Collateral discounts 5 – 30% Foreclosed real estate Discounted appraisals Collateral discounts 5 – 30% Estimated Fair Values of Assets and Liabilities In addition to disclosures regarding the measurement of assets and liabilities carried at fair value on the balance sheet, the Corporation is also required to disclose fair value information about financial instruments for which it is practicable to estimate that value, whether or not recognized on the balance sheet. In cases where quoted fair values are not available, fair values are based upon estimates using various 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 following methods and assumptions were used by the Corporation in estimating fair values of its financial instruments. The following methods and assumptions were used by the Corporation in estimating fair value disclosures: Cash and cash equivalents — The carrying amounts of cash and cash equivalents approximate fair values based on the short-term nature of the assets. Certificates of deposit — The carrying value of certificates of deposit is deemed to approximate fair value, based on both the current interest rate and the maturity date. Federal Home Loan Bank stock — It is not practical to determine the fair value of Federal Home Loan Bank stock due to restrictions placed on its transferability. Loans, net — For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, using market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for non-performing loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable. Loans held for sale — Fair values of loans held for sale are based on prevailing market rates for loans with similar characteristics. Deposits — The fair values of deposits with no stated maturity, such as demand deposits, savings, club and money market accounts, are equal to the amount payable on demand at the reporting date. Fair values for term certificates are estimated using a discounted cash flow calculation that applies market interest rates currently being offered for deposits of similar remaining maturities. Borrowed funds — The fair values of the Bank’s FHLB advances are estimated using discounted cash flow analyses based on the current incremental borrowing rates in the market for similar types of borrowing arrangements. Accrued interest — The carrying amounts of accrued interest approximate fair value. Off-balance sheet credit-related instruments — Fair values for off-balance-sheet, credit related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The estimates of fair value of financial instruments were based on information available at September 30, 2016 and December 31, 2015 and are not indicative of the fair market value of those instruments as of the date of this report. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Corporation’s entire holdings of a particular financial instrument. The fair value of the Corporation’s time deposit liabilities do not take into consideration the value of the Corporation’s long-term relationships with depositors, which may have significant value. Because no active market exists for a portion of the Corporation’s financial instruments, fair value estimates were based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates were based on existing on- and off-balance sheet financial instruments without an attempt to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments, including premises and equipment and foreclosed real estate, and real estate held for sale. The carrying values, estimated fair values and placement in the fair value hierarchy of the Corporation’s financial instruments(1) for which fair value is only disclosed but not recognized on the balance sheet at the dates indicated are summarized as follows: September 30, 2016 Fair value measurement (Dollars in thousands) Carrying Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans, net $ $ $ — $ — $ FHLB stock N/A — — N/A Financial liabilities: Certificates of deposit — — Borrowed funds — — December 31, 2015 Fair value measurement (Dollars in thousands) Carrying Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans, net $ $ $ — $ — $ FHLB stock N/A — — N/A Financial liabilities: Certificates of deposit — — Borrowed funds — — (1) Excluded from this table are certain financial instruments that approximate fair value, as they were short-term in nature or payable on demand. These include cash and cash equivalents, certificates of deposit, accrued interest receivable, non-term deposit accounts, and accrued interest payable. The respective carrying values of cash and cash equivalents, certificates of deposit and non-term deposit accounts would all be considered to be classified within Level 1 of their fair value hierarchy. The $1.5 million and $1.4 million carrying value of accrued interest receivable on loans would generally be considered Level 3 in the fair value hierarchy and the carrying value of accrued interest payable of $27,000 and $24,000 at September 30, 2016 and December 31, 2015, respectively would be considered Level 2. |
Basis of Presentation and Con16
Basis of Presentation and Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation and Consolidation | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Corporation and its subsidiary. All significant intercompany transactions have been eliminated. The unaudited consolidated financial statements of the Corporation presented herein have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Article 8 of Regulation S-X and do not include all of the information and note disclosures required by GAAP for a complete set of financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures necessary for the fair presentation of the accompanying consolidated financial statements have been included. The results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying unaudited financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015, included in the Corporation’s annual report on Form 10-K. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets and the valuation of loans held for sale, mortgage banking derivatives and commitments to sell fixed-rate residential mortgages. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Corporation’s stock at the grant date is utilized for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As an “emerging growth company” as defined in Title 1 of the Jumpstart Our Business Startups (JOBS) Act, the Corporation has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. As of September 30, 2016, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The ASU requires equity instruments (except those accounted for under the equity method of accounting or that result in consolidations of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure an equity investment that does not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions. For public business entities, the standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities, including emerging growth companies, the standard is effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal periods after December 15, 2019. We do not expect a significant impact upon adoption on January 1, 2019. In February 2016, the FASB issued ASU 2016-02, which will require organizations that lease assets — referred to as “lessees” — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under the new guidance, a lessee will be required to recognize right to use assets and lease liabilities for leases with lease terms of more than 12 months. However, unlike current Generally Accepted Accounting Principles (GAAP) — which requires only capital leases to be recognized on the balance sheet — the new ASU will require both types of leases to be recognized on the balance sheet. The accounting by organizations that own the assets leased by the lessee — also known as lessor accounting — will remain largely unchanged from current GAAP. However, the ASU contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model. The ASU on leases will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, including emerging growth companies, the ASU on leases will take effect for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. We are currently evaluating the impact of adoption of this standard, including identifying contracts that are, or contain, leases, as the lease identification guidance in the new standard is different than the current standard. On March 30, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, which is intended to improve the accounting for employee share-based payments. The ASU affects all organizations that issue share-based payment awards to their employees. The ASU, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, simplifies several aspects of the accounting for share-based payment award transactions, including: · The income tax consequences · Classification of awards as either equity or liabilities, and · Classification on the statement of cash flows. For public companies, the amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For private companies and emerging growth companies, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any organization in any interim or annual period. This standard will be effective for the Corporation for the year ended December 31, 2018. We do not anticipate a material impact as a result of adopting this standard as share-based awards were first granted during the first quarter of 2016. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses , that will significantly change how banks measure and recognize credit impairment for many financial assets from an incurred loss methodology to a current expected credit loss model. The current expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are in the scope of the standard. The FASB also made targeted amendments to the current impairment model for available-for-sale debt securities. The ASU is effective for public business entities that are SEC filers, for annual and interim periods in fiscal years beginning after December 15, 2019, and for other companies, including emerging growth companies, for interim and annual periods in fiscal years beginning after December 15, 2020. All entities may early adopt the standard for annual and interim periods in fiscal years after December 15, 2018. The standard will be effective for the Corporation on January 1, 2021. We are currently evaluating the impact of adoption of this standard, including different methodologies that may be employed to estimate credit losses, such as loss rate methods, component loss methods, and qualitative factors, as well as additional data gathering that will be needed to adopt the standard. The standard will add new disclosures related to factors that influenced management’s estimate, including current expected credit losses, the changes in those factors, and reasons for the changes as well as the method applied to revert to historical credit loss experience. |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Loans | |
Summary of loan balances | (Dollars in thousands) September 30, December 31, Residential real estate mortgage loans: 1-4 family $ $ Home equity loans and lines of credit Total residential real estate mortgage loans Commercial real estate Commercial business Commercial construction SBA Consumer Total loans Allowance for loan losses ) ) Net deferred loan costs Loans, net $ $ |
Schedule of the credit risk profile by internally assigned risk rating category | September 30, 2016 Commercial Commercial Commercial (Dollars in thousands) Real Estate Business Construction SBA Total Loans rated 1-5 $ $ $ $ $ Loans rated 5.5 — — Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — $ $ $ $ $ December 31, 2015 Commercial Commercial Commercial (Dollars in thousands) Real Estate Business Construction SBA Total Loans rated 1-5 $ $ $ $ $ Loans rated 5.5 — Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — — — $ $ $ $ $ |
Schedule of past due and non-accrual loans | September 30, 2016 (Dollars in thousands) 30-59 Days 60-89 Days 90 Days Total Past Due > 90 Loans on Residential real estate: Residential 1-4 family $ — $ $ $ $ — $ Home equity loans and lines of credit — — Commercial real estate — — — Commercial business — — — — — — Commercial construction — — — — — — SBA — — Consumer — — — — — — Total gross loans $ $ $ $ $ — $ December 31, 2015 (Dollars in thousands) 30-59 Days 60-89 Days 90 Days Total Past Due > 90 Loans on Residential real estate: Residential 1-4 family $ $ $ $ $ — $ Home equity loans and lines of credit — Commercial real estate — — — Commercial business — — — — — — Commercial construction — — — — — — SBA — — — Consumer — — — — Total gross loans $ $ $ $ $ — $ |
Schedule of the recorded investment in impaired loans and the related specific allowance allocated | September 30, 2016 (Dollars in thousands) Unpaid Total recorded Recorded Recorded Related Residential real estate: Residential 1-4 family $ $ $ $ $ Home equity loans & lines of credit Commercial real estate — — SBA — — Consumer — Total $ $ $ $ $ December 31, 2015 (Dollars in thousands) Unpaid Total recorded Recorded Recorded Related Residential real estate: Residential 1-4 family $ $ $ $ $ Home equity loans & lines of credit Commercial real estate — — SBA — — Consumer — Total $ $ $ $ $ |
Schedule of the average recorded investment in impaired loans and the related interest recognized | Three Months Ended Three Months Ended (Dollars in thousands) Average recorded Interest income Average recorded Interest income Residential real estate: Residential 1-4 family $ $ $ $ Home equity loans & lines of credit Commercial real estate SBA Consumer — — Total $ $ $ $ Nine Months Ended Nine Months Ended (Dollars in thousands) Average recorded Interest income Average recorded Interest income Residential real estate: Residential 1-4 family $ $ $ $ Home equity loans & lines of credit Commercial real estate SBA Consumer — — Total $ $ $ $ |
Schedule of troubled debt restructurings agreements entered into during the period | Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (Dollars in thousands) Number of Pre-modification Post-modification Number of Pre-modification Post-modification Residential 1-4 family — $ — $ — $ $ Home equity Commercial real estate SBA — — — Total $ $ $ $ Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 (Dollars in thousands) Number of Pre-modification Post-modification Number of Pre-modification Post-modification Residential 1-4 family 1 $ $ 3 $ $ Home equity 2 6 Commercial real estate — — — 1 SBA — — — 1 Total 3 $ $ 11 $ $ |
Schedule of troubled debt restructurings that subsequently defaulted within 12 months of restructuring | Three Months Ended Nine Months Ended (Dollars in thousands) Number of TDRs Post-modification Number of TDRs Post-modification Residential 1-4 family — $ — $ SBA Total $ $ Three Months Ended Nine Months Ended (Dollars in thousands) Number of TDRs Post-modification Number of TDRs Post-modification Residential 1-4 family — $ — $ Home equity — — SBA — — Total — $ — $ |
Schedule of changes in the allowance for loan losses by segment | Three Months Ended September 30, 2016 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at June 30, 2016 $ $ $ $ $ $ $ $ Provision (credit) ) ) ) Loans charged-off — — — — — ) — ) Recoveries — — — — Allowance at September 30, 2016 $ $ $ $ $ $ $ $ Three Months Ended September 30, 2015 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at June 30, 2015 $ $ $ $ $ $ $ $ Provision (credit) ) — Loans charged-off ) ) — — — ) ) ) Recoveries — — — — Allowance at September 30, 2015 $ $ $ $ $ $ $ $ Nine Months Ended September 30, 2016 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at December 31, 2015 $ $ $ $ $ $ $ $ Provision (credit) ) Loans charged-off ) ) — — — ) — ) Recoveries — — — Allowance at September 30, 2016 $ $ $ $ $ $ $ $ Nine Months Ended September 30, 2015 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance at December 31, 2014 $ $ $ $ $ $ $ $ Provision (credit) ) ) ) Loans charged-off ) ) — — — ) ) ) Recoveries — — — Allowance at September 30, 2015 $ $ $ $ $ $ $ $ |
Schedule of allowance for loan losses and loan balances by impaired and non-impaired components | September 30, 2016 (Dollars in thousands) Residential Home Commercial Commercial Commercial SBA Consumer Total Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans Total $ $ $ $ $ $ $ $ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans Total loans $ $ $ $ $ $ $ $ December 31, 2015 Residential Home Commercial Commercial Commercial (Dollars in thousands) 1-4 family Equity Real Estate Business Construction SBA Consumer Total Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans Total $ $ $ $ $ $ $ $ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans Total loans $ $ $ $ $ $ $ $ |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Employee Benefits | |
Schedule of shares held by the ESOP | September 30, Allocated Distributions ) Committed to be allocated Unallocated |
Other Stock-Based Compensation
Other Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Stock-Based Compensation | |
Schedule of assumptions used to determine grant-date fair value of stock options | Volatility % Weighted average forfeiture rate Weighted average dividend yield Expected Term 8 years Weighted average risk free rate % |
Earnings per Common Share and20
Earnings per Common Share and Share Repurchase Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings per Common Share and Share Repurchase Plans | |
Schedule of earnings per common share | Three months ended Nine months ended September 30, September 30, (Dollars in thousands) 2016 2015 2016 2015 Net income applicable to common stock $ $ $ $ Weighted average common shares outstanding Less: Average unallocated ESOP shares ) ) ) ) Weighted average number of common shares outstanding — basic Dilutive impact of stock options — — — — Dilutive impact of restricted stock — — Weighted average number of common shares outstanding — diluted Earnings per share — basic $ $ $ $ Earnings per share — diluted $ $ $ $ |
Off-Balance Sheets Activities21
Off-Balance Sheets Activities and Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Off-Balance Sheets Activities and Derivatives | |
Schedule of financial instruments outstanding whose contract amounts represent credit risk | September 30, December 31, 2016 2015 (In thousands) Commitments to originate loans for portfolio $ $ Commitments to originate loans to be sold Commitments to purchase loans from third parties Unfunded commitments under home equity lines of credit Unfunded commitments under commercial lines of credit Unfunded commitments under SBA lines of credit Unfunded commitments under overdraft lines of credit Unadvanced funds on construction loans |
Schedule of the fair values of derivative instruments and forward loan sale commitments in the consolidated balance sheet | Assets Liabilities Balance Balance Sheet Fair Sheet Fair Location Value Location Value (In thousands) September 30, 2016 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — Total derivative commitments N/A — Forward loan sale commitments Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale N/A — Other liabilities Total best efforts contracts — Mandatory delivery contracts Other assets N/A — TBA securities N/A — Other liabilities Total forward loan sale commitments Total derivative loan and forward loan sale commitments $ $ December 31, 2015 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — Total derivative commitments N/A — Forward loan sale commitments: Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale N/A — Other liabilities Total best efforts contracts — Mandatory delivery contracts Other assets N/A — TBA securities N/A — Other liabilities Total forward loan sale commitments Total derivative loan and forward loan sale commitments $ $ |
Schedule of gains and losses on Bank's derivative loan commitments not designated as hedging instruments and forward loan sale commitments | Three Months Ended Nine Months Ended Location of Gain/(Loss) 2016 2015 2016 2015 (In thousands) (In thousands) Derivative loan commitments Net gain on sales of loans and other mortgage banking income $ $ $ $ Best efforts contracts Net (loss) on sales of loans and other mortgage banking income ) ) ) ) Mandatory delivery contracts Net gain on sales of loans and other mortgage banking income — — TBA securities Net gain (loss) on sales of loans and other mortgage banking income ) ) ) $ $ ) $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Summary of significant assets and liabilities carried at fair value and placement in the fair value hierarchy | September 30, 2016 (Dollars in thousands) (Level 1) (Level 2) (Level 3) Assets measured on a recurring basis: Loans held for sale $ — $ $ — Derivative loan commitments — — Mandatory delivery contracts — — Liabilities measured on a recurring basis: Forward loan sale commitments: Best efforts contracts — — TBA securities — — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) — — Foreclosed real estate — — December 31, 2015 (Dollars in thousands) (Level 1) (Level 2) (Level 3) Assets measured on a recurring basis: Loans held for sale $ — $ $ — Derivative loan commitments — — Forward sale mandatory delivery contracts — — Liabilities measured on a recurring basis: Forward loan sale commitments: Best efforts contracts — — TBA securities — — Assets measured on a non-recurring basis: Impaired loans (collateral dependent) — — Foreclosed real estate — — Real estate held for sale — — |
Schedule of changes in Level 3 assets and liabilities measured on a recurring basis | Derivative Loan Commitments and Three months ended September 30, (Dollars in thousands) 2016 2015 Balance at beginning of period $ $ Gain (losses) arising during the period ) Gains on new commitments during the period Reclassifications of realized gains (losses) on settled commitments ) ) Balance at end of period $ $ Derivative Loan Commitments and Nine months ended September 30, (Dollars in thousands) 2016 2015 Balance at beginning of period $ $ Gain (losses) arising during the period ) Gains on new commitments during the period Reclassifications of realized gains (losses) on settled commitments ) ) Balance at end of period $ $ |
Schedule of additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis for which the Bank utilized Level 3 inputs to determine fair value | September 30, 2016 (Dollars in thousands) Fair Valuation Technique Unobservable Input Unobservable Assets measured on a recurring basis: Derivative loan commitments $ Investor pricing Pull-through rate 76.2% – 100% Liabilities measured on a recurring basis: Forward loan sale commitments ) Investor pricing Pull-through rate 82.5% – 100% Assets measured on a non-recurring basis: Impaired loans (collateral dependent) Discounted appraisal Collateral discounts 5 – 30% Foreclosed real estate Discounted appraisal Collateral discounts 5 – 30% December 31, 2015 (Dollars in thousands) Fair Valuation Technique Unobservable Input Unobservable Assets measured on a recurring basis: Derivative commitments $ Investor pricing Pull-through rate 79.6% – 100% Liabilities measured on a recurring basis: Forward loan sale commitments ) Investor pricing Pull-through rate 82.5% – 100% Assets measured on a non-recurring basis: Impaired loans (collateral dependent) Discounted appraisals Collateral discounts 5 – 30% Foreclosed real estate Discounted appraisals Collateral discounts 5 – 30% |
Summary of carrying values, estimated fair values and placement in the fair value hierarchy of the Corporation's financial instruments | September 30, 2016 Fair value measurement (Dollars in thousands) Carrying Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans, net $ $ $ — $ — $ FHLB stock N/A — — N/A Financial liabilities: Certificates of deposit — — Borrowed funds — — December 31, 2015 Fair value measurement (Dollars in thousands) Carrying Fair Value Level 1 inputs Level 2 Inputs Level 3 Inputs Financial assets: Loans, net $ $ $ — $ — $ FHLB stock N/A — — N/A Financial liabilities: Certificates of deposit — — Borrowed funds — — (1) Excluded from this table are certain financial instruments that approximate fair value, as they were short-term in nature or payable on demand. These include cash and cash equivalents, certificates of deposit, accrued interest receivable, non-term deposit accounts, and accrued interest payable. The respective carrying values of cash and cash equivalents, certificates of deposit and non-term deposit accounts would all be considered to be classified within Level 1 of their fair value hierarchy. The $1.5 million and $1.4 million carrying value of accrued interest receivable on loans would generally be considered Level 3 in the fair value hierarchy and the carrying value of accrued interest payable of $27,000 and $24,000 at September 30, 2016 and December 31, 2015, respectively would be considered Level 2. |
Certificates of Deposit (Detail
Certificates of Deposit (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Certificates of deposit | $ 3,046 | $ 6,074 |
December 2,016 | ||
Certificates of deposit | $ 3,000 | |
Certificate of deposit interest rate (as a percent) | 0.65 |
Loans - Loan Balances (Details)
Loans - Loan Balances (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)family | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Loans | ||||||||
Total loans | $ 523,208 | $ 523,208 | $ 465,556 | |||||
Allowance for loan losses | (2,456) | $ (2,080) | (2,456) | $ (2,080) | (2,194) | $ (2,374) | $ (2,023) | $ (1,942) |
Net deferred loan costs | 3,864 | 3,864 | 3,661 | |||||
Loans, net | 524,616 | 524,616 | 467,023 | |||||
Residential 1-4 family | ||||||||
Loans | ||||||||
Allowance for loan losses | (1,011) | (800) | (1,011) | (800) | (863) | (946) | (787) | (654) |
Home equity loans and lines of credit | ||||||||
Loans | ||||||||
Allowance for loan losses | (526) | (518) | (526) | (518) | (525) | (529) | (515) | (584) |
Commercial real estate | ||||||||
Loans | ||||||||
Total loans | 133,181 | 133,181 | 125,782 | |||||
Allowance for loan losses | (559) | (501) | (559) | (501) | (503) | (541) | (460) | (400) |
Commercial business | ||||||||
Loans | ||||||||
Total loans | 15,575 | 15,575 | 8,918 | |||||
Allowance for loan losses | (69) | (29) | (69) | (29) | (39) | (65) | (25) | (28) |
Commercial construction | ||||||||
Loans | ||||||||
Total loans | 12,058 | 12,058 | 4,729 | |||||
Allowance for loan losses | (55) | (10) | (55) | (10) | (21) | (37) | (22) | (30) |
SBA | ||||||||
Loans | ||||||||
Total loans | 41,011 | 41,011 | 39,217 | |||||
Allowance for loan losses | (228) | (214) | (228) | (214) | (234) | (248) | (206) | (236) |
Consumer | ||||||||
Loans | ||||||||
Total loans | 1,139 | 1,139 | 1,252 | |||||
Allowance for loan losses | (8) | (8) | (8) | (8) | (9) | $ (8) | $ (8) | $ (10) |
Residential real estate mortgage loans | ||||||||
Loans | ||||||||
Total loans | 320,244 | 320,244 | 285,658 | |||||
Residential real estate mortgage loans | Residential 1-4 family | ||||||||
Loans | ||||||||
Total loans | 241,910 | 241,910 | 208,777 | |||||
Current balance of the loans purchased | 66,300 | 66,300 | 64,100 | |||||
Value of loans purchased from third parties | 6,000 | 26,200 | 15,000 | 43,700 | ||||
Cost of loans purchased from third parties during the year | 6,100 | $ 26,500 | $ 15,200 | $ 44,200 | ||||
Residential real estate mortgage loans | Residential 1-4 family | Minimum | ||||||||
Loans | ||||||||
Number of families per real estate property securing loans receivable | family | 1 | |||||||
Residential real estate mortgage loans | Residential 1-4 family | Maximum | ||||||||
Loans | ||||||||
Number of families per real estate property securing loans receivable | family | 4 | |||||||
Loan-to-value ratio (as a percent) | 95.00% | |||||||
Residential real estate mortgage loans | Residential 1-4 family | Maximum | Without PMI | ||||||||
Loans | ||||||||
Loan-to-value ratio (as a percent) | 95.00% | |||||||
Residential real estate mortgage loans | Home equity loans and lines of credit | ||||||||
Loans | ||||||||
Total loans | 78,334 | $ 78,334 | 76,881 | |||||
Residential real estate mortgage loans | Home equity loans and lines of credit | Maximum | ||||||||
Loans | ||||||||
Loan-to-value ratio (as a percent) | 80.00% | |||||||
Commercial loans | ||||||||
Loans | ||||||||
Total loans | 201,825 | $ 201,825 | 178,646 | |||||
Loans provided as a percentage of projected costs | 50.00% | |||||||
Commercial loans | Commercial real estate | ||||||||
Loans | ||||||||
Total loans | 133,181 | $ 133,181 | 125,782 | |||||
Commercial loans | Commercial business | ||||||||
Loans | ||||||||
Total loans | 15,575 | 15,575 | 8,918 | |||||
Commercial loans | Commercial construction | ||||||||
Loans | ||||||||
Total loans | 12,058 | 12,058 | 4,729 | |||||
Commercial loans | SBA | ||||||||
Loans | ||||||||
Total loans | $ 41,011 | 41,011 | 39,217 | |||||
Guaranteed portions | $ 26,800 | $ 24,800 | ||||||
Commercial loans | SBA | Maximum | ||||||||
Loans | ||||||||
Percentage of principal and accrued interest that may qualify for guarantees | 85.00% | |||||||
Guaranteed portions | $ 3,750 |
Loans - Allowance for Loan Loss
Loans - Allowance for Loan Loss Methodology (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Loans | |
Historical loss period used to capture relevant loss data for each loan segment | 10 years |
Period of charge-off trends to be considered for adjustment to historical loss factor | 3 years |
Loans - Credit Quality (Details
Loans - Credit Quality (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Credit Quality Indicators | ||
Value of commercial and SBA loan considered for risk review | $ 250,000 | |
Total loans | 523,208,000 | $ 465,556,000 |
Commercial real estate | ||
Credit Quality Indicators | ||
Total loans | 133,181,000 | 125,782,000 |
Commercial business | ||
Credit Quality Indicators | ||
Total loans | 15,575,000 | 8,918,000 |
Commercial construction | ||
Credit Quality Indicators | ||
Total loans | 12,058,000 | 4,729,000 |
SBA | ||
Credit Quality Indicators | ||
Total loans | 41,011,000 | 39,217,000 |
Commercial loans | ||
Credit Quality Indicators | ||
Total loans | 201,825,000 | 178,646,000 |
Commercial loans | Loans rated 1-5 | ||
Credit Quality Indicators | ||
Total loans | 188,419,000 | 170,203,000 |
Commercial loans | Loans rated 5.5 | ||
Credit Quality Indicators | ||
Total loans | 4,943,000 | 3,454,000 |
Commercial loans | Loans rated 6 | ||
Credit Quality Indicators | ||
Total loans | 2,165,000 | 1,325,000 |
Commercial loans | Loans rated 7 | ||
Credit Quality Indicators | ||
Total loans | 6,199,000 | 3,664,000 |
Commercial loans | Loans rated 8 | ||
Credit Quality Indicators | ||
Total loans | 99,000 | |
Commercial loans | Commercial real estate | ||
Credit Quality Indicators | ||
Total loans | 133,181,000 | 125,782,000 |
Commercial loans | Commercial real estate | Loans rated 1-5 | ||
Credit Quality Indicators | ||
Total loans | 123,657,000 | 122,466,000 |
Commercial loans | Commercial real estate | Loans rated 5.5 | ||
Credit Quality Indicators | ||
Total loans | 4,225,000 | 1,563,000 |
Commercial loans | Commercial real estate | Loans rated 6 | ||
Credit Quality Indicators | ||
Total loans | 674,000 | 75,000 |
Commercial loans | Commercial real estate | Loans rated 7 | ||
Credit Quality Indicators | ||
Total loans | 4,625,000 | 1,678,000 |
Commercial loans | Commercial business | ||
Credit Quality Indicators | ||
Total loans | 15,575,000 | 8,918,000 |
Commercial loans | Commercial business | Loans rated 1-5 | ||
Credit Quality Indicators | ||
Total loans | 15,575,000 | 8,826,000 |
Commercial loans | Commercial business | Loans rated 5.5 | ||
Credit Quality Indicators | ||
Total loans | 92,000 | |
Commercial loans | Commercial construction | ||
Credit Quality Indicators | ||
Total loans | 12,058,000 | 4,729,000 |
Commercial loans | Commercial construction | Loans rated 1-5 | ||
Credit Quality Indicators | ||
Total loans | 12,058,000 | 4,729,000 |
Commercial loans | SBA | ||
Credit Quality Indicators | ||
Total loans | 41,011,000 | 39,217,000 |
Commercial loans | SBA | Loans rated 1-5 | ||
Credit Quality Indicators | ||
Total loans | 37,129,000 | 34,182,000 |
Commercial loans | SBA | Loans rated 5.5 | ||
Credit Quality Indicators | ||
Total loans | 718,000 | 1,799,000 |
Commercial loans | SBA | Loans rated 6 | ||
Credit Quality Indicators | ||
Total loans | 1,491,000 | 1,250,000 |
Commercial loans | SBA | Loans rated 7 | ||
Credit Quality Indicators | ||
Total loans | 1,574,000 | $ 1,986,000 |
Commercial loans | SBA | Loans rated 8 | ||
Credit Quality Indicators | ||
Total loans | $ 99,000 |
Loans - Past Due Loans (Details
Loans - Past Due Loans (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Past Due Loans | ||
Total Past Due | $ 3,461 | $ 4,516 |
Loans on Non-accrual | $ 5,015 | 4,240 |
Minimum | ||
Past Due Loans | ||
Financing receivable past due threshold nonperforming | 90 days | |
Consumer | ||
Past Due Loans | ||
Total Past Due | 123 | |
Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | $ 2,532 | 2,168 |
Loans on Non-accrual | 3,770 | 3,068 |
Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 277 | 1,519 |
Loans on Non-accrual | 449 | 466 |
Commercial real estate | ||
Past Due Loans | ||
Total Past Due | 131 | 239 |
Loans on Non-accrual | 238 | 239 |
SBA | ||
Past Due Loans | ||
Total Past Due | 521 | 467 |
Loans on Non-accrual | 558 | 467 |
30 to 59 Days Past Due | ||
Past Due Loans | ||
Total Past Due | 156 | 2,529 |
30 to 59 Days Past Due | Consumer | ||
Past Due Loans | ||
Total Past Due | 123 | |
30 to 59 Days Past Due | Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | 1,156 | |
30 to 59 Days Past Due | Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 156 | 1,250 |
60 to 89 Days Past Due | ||
Past Due Loans | ||
Total Past Due | 1,187 | 881 |
60 to 89 Days Past Due | Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | 1,004 | 642 |
60 to 89 Days Past Due | Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 121 | 239 |
60 to 89 Days Past Due | SBA | ||
Past Due Loans | ||
Total Past Due | 62 | |
90 Days or more Past Due | ||
Past Due Loans | ||
Total Past Due | 2,118 | 1,106 |
90 Days or more Past Due | Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | 1,528 | 370 |
90 Days or more Past Due | Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 30 | |
90 Days or more Past Due | Commercial real estate | ||
Past Due Loans | ||
Total Past Due | 131 | 239 |
90 Days or more Past Due | SBA | ||
Past Due Loans | ||
Total Past Due | $ 459 | $ 467 |
Loans - Impaired Loans (Details
Loans - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Recorded investment in impaired loans and the related specific allowance allocated | |||||
Period of current payments after which loans are returned to accrual status after a period of satisfactory payment performance | 6 months | ||||
Unpaid contractual principal balance | $ 13,826 | $ 13,826 | $ 7,937 | ||
Total recorded investment in impaired loans | 13,500 | 13,500 | 7,704 | ||
Recorded investment with no allowance | 13,108 | 13,108 | 6,532 | ||
Recorded investment with allowance | 392 | 392 | 1,172 | ||
Related Allowance | |||||
Allowance for impaired loans | 50 | 50 | 63 | ||
Average recorded investment | 10,415 | $ 8,236 | 9,235 | $ 8,676 | |
Interest income recognized | 102 | 108 | 297 | 292 | |
Residential 1-4 family | |||||
Recorded investment in impaired loans and the related specific allowance allocated | |||||
Unpaid contractual principal balance | 6,020 | 6,020 | 4,458 | ||
Total recorded investment in impaired loans | 5,749 | 5,749 | 4,224 | ||
Recorded investment with no allowance | 5,566 | 5,566 | 3,287 | ||
Recorded investment with allowance | 183 | 183 | 937 | ||
Related Allowance | |||||
Allowance for impaired loans | 39 | 39 | 43 | ||
Average recorded investment | 5,638 | 5,272 | 5,051 | 5,856 | |
Interest income recognized | 45 | 51 | 136 | 155 | |
Home equity loans and lines of credit | |||||
Recorded investment in impaired loans and the related specific allowance allocated | |||||
Unpaid contractual principal balance | 1,207 | 1,207 | 1,035 | ||
Total recorded investment in impaired loans | 1,187 | 1,187 | 1,055 | ||
Recorded investment with no allowance | 992 | 992 | 834 | ||
Recorded investment with allowance | 195 | 195 | 221 | ||
Related Allowance | |||||
Allowance for impaired loans | 8 | 8 | 17 | ||
Average recorded investment | 1,233 | 1,144 | 1,263 | 1,003 | |
Interest income recognized | 9 | 28 | 41 | 34 | |
Commercial real estate | |||||
Recorded investment in impaired loans and the related specific allowance allocated | |||||
Unpaid contractual principal balance | 4,493 | 4,493 | 398 | ||
Total recorded investment in impaired loans | 4,493 | 4,493 | 398 | ||
Recorded investment with no allowance | 4,493 | 4,493 | 398 | ||
Related Allowance | |||||
Average recorded investment | 1,441 | 146 | 813 | 106 | |
Interest income recognized | 18 | 2 | 10 | 5 | |
SBA | |||||
Recorded investment in impaired loans and the related specific allowance allocated | |||||
Unpaid contractual principal balance | 2,092 | 2,092 | 2,032 | ||
Total recorded investment in impaired loans | 2,057 | 2,057 | 2,013 | ||
Recorded investment with no allowance | 2,057 | 2,057 | 2,013 | ||
Guaranteed portions of impaired loans | 1,700 | 1,700 | 1,700 | ||
Related Allowance | |||||
Average recorded investment | 2,089 | 1,659 | 2,094 | 1,693 | |
Interest income recognized | 30 | 27 | 110 | 98 | |
Consumer | |||||
Recorded investment in impaired loans and the related specific allowance allocated | |||||
Unpaid contractual principal balance | 14 | 14 | 14 | ||
Total recorded investment in impaired loans | 14 | 14 | 14 | ||
Recorded investment with allowance | 14 | 14 | 14 | ||
Related Allowance | |||||
Allowance for impaired loans | 3 | 3 | $ 3 | ||
Average recorded investment | $ 14 | $ 15 | $ 14 | $ 18 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructuring (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)loan | Sep. 30, 2015USD ($)itemloan | Sep. 30, 2016USD ($)loan | Sep. 30, 2015USD ($)loan | Dec. 31, 2015USD ($) | |
Troubled Debt Restructurings (TDRs) | |||||
Total TDR loans | $ 10,900,000 | $ 10,900,000 | $ 6,600,000 | ||
Additional funds committed in connection with TDR loans | $ 0 | $ 0 | |||
Number of restructurings (in loans) | loan | 2 | 3 | 7 | 11 | |
Pre-modification outstanding recorded investment | $ 4,025,000 | $ 441,000 | $ 4,589,000 | $ 1,559,000 | |
Post-modification outstanding recorded investment | 4,025,000 | 430,000 | 4,589,000 | 1,550,000 | |
Impact on allowance for loan losses | 0 | 0 | |||
Charge-offs | $ 0 | 0 | $ 0 | $ 0 | |
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | |||||
Number of TDR's that defaulted (in loans) | loan | 1 | 3 | 5 | ||
Recorded investment | $ 22,000 | $ 519,000 | $ 526,000 | ||
Accrual status | |||||
Troubled Debt Restructurings (TDRs) | |||||
Total TDR loans | $ 8,500,000 | 8,500,000 | $ 3,500,000 | ||
Default status | |||||
Troubled Debt Restructurings (TDRs) | |||||
Charge-offs | 0 | 0 | 43,000 | ||
TDR recorded investment reserves | $ 0 | $ 0 | $ 0 | ||
Residential 1-4 family | |||||
Troubled Debt Restructurings (TDRs) | |||||
Number of restructurings (in loans) | 1 | 1 | 3 | ||
Pre-modification outstanding recorded investment | $ 313,000 | $ 218,000 | $ 791,000 | ||
Post-modification outstanding recorded investment | $ 302,000 | $ 218,000 | $ 789,000 | ||
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | |||||
Number of TDR's that defaulted (in loans) | loan | 2 | 2 | |||
Recorded investment | $ 497,000 | $ 470,000 | |||
Home equity loans and lines of credit | |||||
Troubled Debt Restructurings (TDRs) | |||||
Number of restructurings (in loans) | loan | 1 | 2 | 4 | 6 | |
Pre-modification outstanding recorded investment | $ 25,000 | $ 128,000 | $ 321,000 | $ 215,000 | |
Post-modification outstanding recorded investment | $ 25,000 | $ 128,000 | $ 321,000 | $ 215,000 | |
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | |||||
Number of TDR's that defaulted (in loans) | loan | 2 | ||||
Recorded investment | $ 47,000 | ||||
Commercial real estate | |||||
Troubled Debt Restructurings (TDRs) | |||||
Number of restructurings (in loans) | loan | 1 | 1 | 1 | ||
Pre-modification outstanding recorded investment | $ 4,000,000 | $ 4,000,000 | $ 119,000 | ||
Post-modification outstanding recorded investment | $ 4,000,000 | $ 4,000,000 | $ 112,000 | ||
SBA | |||||
Troubled Debt Restructurings (TDRs) | |||||
Number of restructurings (in loans) | loan | 1 | 1 | |||
Pre-modification outstanding recorded investment | $ 50,000 | $ 434,000 | |||
Post-modification outstanding recorded investment | $ 50,000 | $ 434,000 | |||
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | |||||
Number of TDR's that defaulted (in loans) | loan | 1 | 1 | 1 | ||
Recorded investment | $ 22,000 | $ 22,000 | $ 9,000 |
Loans - Allowance for Loan Lo30
Loans - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | $ 2,374 | $ 2,023 | $ 2,194 | $ 1,942 | ||
Provision (credit) for loan losses | 89 | 196 | 343 | 367 | ||
Loans charged-off | (17) | (156) | (116) | (279) | ||
Recoveries | 10 | 17 | 35 | 50 | ||
Allowance at the end of the period | 2,456 | 2,080 | 2,456 | 2,080 | ||
Allowance for loan losses | ||||||
Allowance for impaired loans | $ 50 | $ 63 | ||||
Allowance for non-impaired loans | 2,406 | 2,131 | ||||
Total | 2,374 | 2,023 | 2,194 | 1,942 | 2,456 | 2,194 |
Loan balances | ||||||
Impaired loans | 13,500 | 7,704 | ||||
Non-impaired loans | 509,708 | 457,852 | ||||
Total Loans | 523,208 | 465,556 | ||||
Residential 1-4 family | ||||||
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | 946 | 787 | 863 | 654 | ||
Provision (credit) for loan losses | 60 | 113 | 163 | 274 | ||
Loans charged-off | (100) | (20) | (139) | |||
Recoveries | 5 | 5 | 11 | |||
Allowance at the end of the period | 1,011 | 800 | 1,011 | 800 | ||
Allowance for loan losses | ||||||
Allowance for impaired loans | 39 | 43 | ||||
Allowance for non-impaired loans | 972 | 820 | ||||
Total | 946 | 787 | 863 | 654 | 1,011 | 863 |
Loan balances | ||||||
Impaired loans | 5,749 | 4,224 | ||||
Non-impaired loans | 236,161 | 204,553 | ||||
Total Loans | 241,910 | 208,777 | ||||
Home equity loans and lines of credit | ||||||
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | 529 | 515 | 525 | 584 | ||
Provision (credit) for loan losses | (5) | 42 | 58 | 47 | ||
Loans charged-off | (53) | (67) | (128) | |||
Recoveries | 2 | 14 | 10 | 15 | ||
Allowance at the end of the period | 526 | 518 | 526 | 518 | ||
Allowance for loan losses | ||||||
Allowance for impaired loans | 8 | 17 | ||||
Allowance for non-impaired loans | 518 | 508 | ||||
Total | 529 | 515 | 525 | 584 | 526 | 525 |
Loan balances | ||||||
Impaired loans | 1,187 | 1,055 | ||||
Non-impaired loans | 77,147 | 75,826 | ||||
Total Loans | 78,334 | 76,881 | ||||
Commercial real estate | ||||||
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | 541 | 460 | 503 | 400 | ||
Provision (credit) for loan losses | 18 | 41 | 56 | 101 | ||
Allowance at the end of the period | 559 | 501 | 559 | 501 | ||
Allowance for loan losses | ||||||
Allowance for non-impaired loans | 559 | 503 | ||||
Total | 541 | 460 | 503 | 400 | 559 | 503 |
Loan balances | ||||||
Impaired loans | 4,493 | 398 | ||||
Non-impaired loans | 128,688 | 125,384 | ||||
Total Loans | 133,181 | 125,782 | ||||
Commercial business | ||||||
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | 65 | 25 | 39 | 28 | ||
Provision (credit) for loan losses | 4 | 4 | 30 | 1 | ||
Allowance at the end of the period | 69 | 29 | 69 | 29 | ||
Allowance for loan losses | ||||||
Allowance for non-impaired loans | 69 | 39 | ||||
Total | 65 | 25 | 39 | 28 | 69 | 39 |
Loan balances | ||||||
Non-impaired loans | 15,575 | 8,918 | ||||
Total Loans | 15,575 | 8,918 | ||||
Commercial construction | ||||||
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | 37 | 22 | 21 | 30 | ||
Provision (credit) for loan losses | 18 | (12) | 34 | (20) | ||
Allowance at the end of the period | 55 | 10 | 55 | 10 | ||
Allowance for loan losses | ||||||
Allowance for non-impaired loans | 55 | 21 | ||||
Total | 37 | 22 | 21 | 30 | 55 | 21 |
Loan balances | ||||||
Non-impaired loans | 12,058 | 4,729 | ||||
Total Loans | 12,058 | 4,729 | ||||
SBA | ||||||
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | 248 | 206 | 234 | 236 | ||
Provision (credit) for loan losses | (3) | 8 | 15 | (28) | ||
Loans charged-off | (17) | (1) | (29) | (10) | ||
Recoveries | 1 | 8 | 16 | |||
Allowance at the end of the period | 228 | 214 | 228 | 214 | ||
Allowance for loan losses | ||||||
Allowance for non-impaired loans | 228 | 234 | ||||
Total | 248 | 206 | 234 | 236 | 228 | 234 |
Loan balances | ||||||
Impaired loans | 2,057 | 2,013 | ||||
Non-impaired loans | 38,954 | 37,204 | ||||
Total Loans | 41,011 | 39,217 | ||||
Consumer | ||||||
Changes in the allowance for loan losses | ||||||
Allowance at beginning of the period | 8 | 8 | 9 | 10 | ||
Provision (credit) for loan losses | (3) | (13) | (8) | |||
Loans charged-off | (2) | (2) | ||||
Recoveries | 3 | 2 | 12 | 8 | ||
Allowance at the end of the period | 8 | 8 | 8 | 8 | ||
Allowance for loan losses | ||||||
Allowance for impaired loans | 3 | 3 | ||||
Allowance for non-impaired loans | 5 | 6 | ||||
Total | $ 8 | $ 8 | $ 9 | $ 10 | 8 | 9 |
Loan balances | ||||||
Impaired loans | 14 | 14 | ||||
Non-impaired loans | 1,125 | 1,238 | ||||
Total Loans | $ 1,139 | $ 1,252 |
Employee Benefits (Details)
Employee Benefits (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)employeeshares | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Employee Stock Ownership Plan | |||||
Percentage of common stock outstanding, held in ESOP (as a percent) | 9.00% | 9.00% | |||
Term of loan payable | 25 years | ||||
Interest rate (as a percent) | 3.50% | ||||
Loan obtained by the ESOP from the Corporation | $ 3,700,000 | $ 3,700,000 | |||
Shares held by the ESOP | |||||
Allocated (in shares) | shares | 31,674 | 31,674 | |||
Distributions (in shares) | shares | (391) | (391) | |||
Committed to be allocated (in shares) | shares | 11,867 | 11,867 | |||
Unallocated (in shares) | shares | 352,393 | 352,393 | |||
Total (in shares) | shares | 395,543 | 395,543 | |||
Fair value of unallocated shares | $ 4,800,000 | $ 4,800,000 | |||
Total expense | $ 51,000 | $ 43,000 | $ 150,000 | $ 131,000 | |
Deferred Compensation SERP | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Shares held in the Rabbi Trust (in shares) | shares | 8,900 | 8,900 | |||
Value of shares held in the Rabbi Trust | $ 100,000 | $ 100,000 | |||
Benefit obligation | 100,000 | 100,000 | |||
SERP | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Expense (income) | 192,000 | 151,000 | 575,000 | 453,000 | |
Defined Benefit Pension Plan | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Expense (income) | 5,000 | $ 5,000 | 16,000 | $ 16,000 | |
Expected contribution for the current plan year | 19,000 | ||||
Other assets | Deferred Compensation SERP | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Assets related to the Rabbi Trust | 1,100,000 | 1,100,000 | $ 930,000 | ||
Accrued expenses and other liabilities | Deferred Compensation SERP | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Liability for benefit obligation reported in accrued expenses and other liabilities | $ 1,100,000 | $ 1,100,000 | $ 930,000 | ||
Executive officers | SERP | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Number of employees with whom the entity entered into agreements (in employees) | employee | 7 | ||||
Executive officers | SERP | Minimum | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Retirement age for SERP | 65 years | ||||
Executive officers | SERP | Maximum | |||||
Deferred Compensation Supplemental Executive Plan | |||||
Retirement age for SERP | 67 years |
Other Stock-Based Compensatio32
Other Stock-Based Compensation (Details) - USD ($) | May 21, 2015 | Feb. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Equity Incentive Plan | |||||
Options (in shares) | 0 | 0 | |||
2015 Equity Incentive Plan | |||||
Equity Incentive Plan | |||||
Number of shares available for issuance under the EIP | 692,885 | ||||
Expiration period after grant date | 10 years | ||||
Restricted stock (in shares) | 0 | ||||
2015 Equity Incentive Plan | Maximum | |||||
Equity Incentive Plan | |||||
Vesting rate per year (as a percent) | 20.00% | ||||
2015 Equity Incentive Plan | Minimum | |||||
Equity Incentive Plan | |||||
Vesting period (in years) | 1 year | ||||
Directors and certain key senior executives | Options | |||||
Equity Incentive Plan | |||||
Options (in shares) | 91,225 | ||||
Options, strike price (in dollars per share) | $ 12.41 | ||||
Vesting period (in years) | 5 years | ||||
Grant-date fair value of stock options (in dollars per share) | $ 2.59 | ||||
Stock-based compensation expense | $ 12,000 | $ 30,000 | |||
Unrecognized salary and employee benefits cost | 207,000 | 207,000 | |||
Intrinsic value of stock options | 118,000 | 118,000 | |||
Directors and certain key senior executives | Restricted Stock | |||||
Equity Incentive Plan | |||||
Restricted stock (in shares) | 39,045 | ||||
Vesting period (in years) | 5 years | ||||
Stock-based compensation expense | 24,000 | 60,000 | |||
Unrecognized salary and employee benefits cost | $ 424,000 | $ 424,000 |
Other Stock-Based Compensatio33
Other Stock-Based Compensation - Assumptions used to determine grant-date fair value of stock options (Details) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Assumptions used to determine grant-date fair value of stock options | |
Volatility | 13.52% |
Weighted average forfeiture rate | 0.00% |
Weighted average dividend yield | $ 0 |
Expected Term | 8 years |
Weighted average risk free rate | 1.56% |
Earnings per Common Share and34
Earnings per Common Share and Share Repurchase Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | May 18, 2016 | Jan. 30, 2015 | |
Potentially dilutive common stock (in shares) | 0 | |||||
Earnings Per Common Share, Basic and Diluted | ||||||
Net income applicable to common stock | $ 1,183,000 | $ 346,000 | $ 2,768,000 | $ 1,022,000 | ||
Weighted average common shares outstanding | 4,466,634 | 4,888,340 | 4,649,024 | 4,918,423 | ||
Less: Average unallocated ESOP shares (in shares) | (354,356) | (370,193) | (358,290) | (374,127) | ||
Weighted average number of common shares outstanding - basic | 4,112,278 | 4,518,147 | 4,290,734 | 4,544,296 | ||
Dilutive impact of restricted stock | 4,624 | 2,404 | ||||
Weighted average number of common shares outstanding - diluted | 4,116,902 | 4,518,147 | 4,293,138 | 4,544,296 | ||
Earnings per share - basic | $ 0.29 | $ 0.08 | $ 0.65 | $ 0.22 | ||
Earnings per share - diluted | $ 0.29 | $ 0.08 | $ 0.64 | $ 0.22 | ||
Shares excluded from computing diluted earnings per share | 7,112 | 7,376 | ||||
Number of stock options granted (in shares) | 0 | 0 | ||||
Repurchase of common stock | $ 4,616,000 | $ 902,000 | ||||
Share Repurchase Program 2015 | ||||||
Earnings Per Common Share, Basic and Diluted | ||||||
Common stock authorized to repurchased under repurchase program (in shares) | 247,499 | |||||
Common stock repurchased (in shares) | 71,659 | 80,400 | ||||
Repurchase of common stock | $ 932,000 | $ 902,000 | ||||
Common stock repurchased per share (in dollars per share) | $ 13 | |||||
Share Repurchase Program 2016 | ||||||
Earnings Per Common Share, Basic and Diluted | ||||||
Common stock authorized to repurchased under repurchase program (in shares) | 235,086 | |||||
Common stock repurchased (in shares) | 0 | 235,086 | ||||
Repurchase of common stock | $ 3,100,000 | |||||
Common stock repurchased per share (in dollars per share) | $ 13 |
Off Balance sheets Activities a
Off Balance sheets Activities and Derivatives - Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Commitments to originate loans for portfolio | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | $ 24,907 | $ 14,905 |
Commitments to originate loans to be sold | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 36,587 | 13,142 |
Commitments to purchase loans from third parties | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 2,067 | 5,988 |
Unfunded commitments under home equity lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 52,284 | 51,639 |
Unfunded commitments under commercial lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 12,980 | 11,542 |
Unfunded commitments under SBA lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 4,204 | 4,340 |
Unfunded commitments under overdraft lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 176 | 181 |
Unadvanced funds on construction loans | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | $ 4,882 | $ 7,225 |
Off Balance sheets Activities36
Off Balance sheets Activities and Derivatives - Mortgage Banking (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair values of derivative instruments in the balance sheet | ||
Loans held for sale, at fair value | $ 28,082 | $ 18,952 |
Closed hedge instruments not settled | 2,800 | 4,800 |
Forward loan sale commitments | ||
Fair values of derivative instruments in the balance sheet | ||
Forward commitments | 60,200 | 31,300 |
To Be Announced securities | ||
Fair values of derivative instruments in the balance sheet | ||
Forward commitments | 19,500 | 4,000 |
Mandatory Delivery Contracts | ||
Fair values of derivative instruments in the balance sheet | ||
Forward commitments | 8,800 | 2,800 |
Best Efforts Contracts | ||
Fair values of derivative instruments in the balance sheet | ||
Forward commitments | 31,900 | 24,500 |
Interest rate lock commitments | ||
Fair values of derivative instruments in the balance sheet | ||
Commitments to borrowers | 36,600 | 13,100 |
Not Designated As Hedging Instruments | ||
Fair values of derivative instruments in the balance sheet | ||
Assets, Fair Value | 1,183 | 220 |
Liabilities, Fair Value | 713 | 180 |
Not Designated As Hedging Instruments | Derivative loan commitments | ||
Fair values of derivative instruments in the balance sheet | ||
Assets, Fair Value | 1,164 | 217 |
Not Designated As Hedging Instruments | Commitments hedged with best efforts | Other assets | ||
Fair values of derivative instruments in the balance sheet | ||
Assets, Fair Value | 736 | 162 |
Not Designated As Hedging Instruments | Commitments hedged with TBA | Other assets | ||
Fair values of derivative instruments in the balance sheet | ||
Assets, Fair Value | 428 | 55 |
Not Designated As Hedging Instruments | Forward loan sale commitments | ||
Fair values of derivative instruments in the balance sheet | ||
Assets, Fair Value | 19 | 3 |
Liabilities, Fair Value | 713 | 180 |
Not Designated As Hedging Instruments | To Be Announced securities | Other liabilities. | ||
Fair values of derivative instruments in the balance sheet | ||
Liabilities, Fair Value | 87 | 5 |
Not Designated As Hedging Instruments | Mandatory Delivery Contracts | Other assets | ||
Fair values of derivative instruments in the balance sheet | ||
Assets, Fair Value | 19 | 3 |
Not Designated As Hedging Instruments | Best Efforts Contracts | ||
Fair values of derivative instruments in the balance sheet | ||
Liabilities, Fair Value | 626 | 175 |
Not Designated As Hedging Instruments | Commitments | Other liabilities. | ||
Fair values of derivative instruments in the balance sheet | ||
Liabilities, Fair Value | 340 | 49 |
Not Designated As Hedging Instruments | Loans held for sale | Other liabilities. | ||
Fair values of derivative instruments in the balance sheet | ||
Liabilities, Fair Value | $ 286 | $ 126 |
Off Balance sheets Activities37
Off Balance sheets Activities and Derivatives - Gain/Loss on Derivatives (Details) - Not Designated As Hedging Instruments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Gains and losses on derivative instruments | ||||
Gains (losses) on derivative instruments | $ 261 | $ (247) | $ 430 | $ 169 |
Derivative loan commitments | Net gain (loss) on sales of loans and other mortgage banking income | ||||
Gains and losses on derivative instruments | ||||
Gains (losses) on derivative instruments | 162 | 210 | 947 | 466 |
Best Efforts Contracts | Net gain (loss) on sales of loans and other mortgage banking income | ||||
Gains and losses on derivative instruments | ||||
Gains (losses) on derivative instruments | (72) | (430) | (451) | (270) |
Mandatory Delivery Contracts | Net gain (loss) on sales of loans and other mortgage banking income | ||||
Gains and losses on derivative instruments | ||||
Gains (losses) on derivative instruments | 32 | 16 | ||
To Be Announced securities | Net gain (loss) on sales of loans and other mortgage banking income | ||||
Gains and losses on derivative instruments | ||||
Gains (losses) on derivative instruments | $ 139 | $ (27) | $ (82) | $ (27) |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Significant Assets and Liabilities Carried at Fair Value (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016USD ($)property | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)property | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Fair value measurements | |||||
Fair value of loans held for sale | $ 28,100,000 | $ 28,100,000 | $ 19,000,000 | ||
Guaranteed portion of loans sold by the bank | 26,900,000 | 26,900,000 | 18,300,000 | ||
Gain on loans held for sale | 1,200,000 | 684,000 | |||
Change in fair value of loans held for sale | 137,000 | $ 286,000 | 540,000 | $ 157,000 | |
Fair value, Foreclosed real estate | 411,000 | 411,000 | 710,000 | ||
Fair value, Real estate held for sale | 3,305,000 | ||||
Losses related to collateral dependent impaired loans recorded at fair value | 44,000 | 20,000 | 120,000 | 67,000 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Losses on foreclosed real estate | $ 0 | 12,000 | $ (62,000) | 0 | |
Number of properties acquired through foreclosure (in properties) | property | 1 | 1 | |||
Property acquired through foreclosure | $ 211,000 | $ 211,000 | |||
Total write-downs losses on real estate held for sale | $ 386,000 | $ 581,000 | |||
Loss on sale of real estate held for sale | 0 | $ 11,000 | |||
Number of properties classified in real estate held for sale adjusted to fair value less cost to sell | property | 2 | ||||
Impaired loans (collateral dependent) | |||||
Fair value measurements | |||||
Charge-offs | $ 17,000 | 28,000 | |||
Impaired loans, specific reserves | 39,000 | 15,000 | |||
Recurring | Level 2 | Loans held for sale | |||||
Fair value measurements | |||||
Assets, Fair Value | 28,082,000 | 28,082,000 | 18,952,000 | ||
Recurring | Level 2 | To Be Announced securities | |||||
Fair value measurements | |||||
Liabilities, Fair Value | 87,000 | 87,000 | 5,000 | ||
Recurring | Level 2 | Mandatory Delivery Contracts | |||||
Fair value measurements | |||||
Assets, Fair Value | 3,000 | ||||
Liabilities, Fair Value | 19,000 | 19,000 | |||
Recurring | Level 3 | Derivative loan commitments | |||||
Fair value measurements | |||||
Assets, Fair Value | 1,164,000 | 1,164,000 | 217,000 | ||
Recurring | Level 3 | Forward loan sale commitments | |||||
Fair value measurements | |||||
Liabilities, Fair Value | 626,000 | 626,000 | 175,000 | ||
Recurring | Level 3 | Best Efforts Contracts | |||||
Fair value measurements | |||||
Liabilities, Fair Value | 626,000 | 626,000 | 175,000 | ||
Non-recurring | Level 2 | |||||
Fair value measurements | |||||
Fair value, Real estate held for sale | 3,305,000 | ||||
Non-recurring | Level 3 | |||||
Fair value measurements | |||||
Fair value, Impaired loans (collateral dependent) | 587,000 | 587,000 | 1,084,000 | ||
Fair value, Foreclosed real estate | 411,000 | 411,000 | $ 710,000 | ||
Real estate, Held-for-sale | |||||
Fair value measurements | |||||
Total write-downs losses on real estate held for sale | $ 0 | $ 0 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in Level 3 Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative Loan Commitments and Forward Loan Sale Commitments, change in Level 3 assets and liabilities that are measured on a recurring basis | ||||
Balance at beginning of period | $ 448 | $ 418 | $ 42 | $ 2 |
Gains (losses) on new commitments during the period | (39) | 4 | (57) | 2 |
Gain (losses) arising during the period | 736 | 186 | 1,577 | 605 |
Reclassifications of realized gains (losses) on settled commitments | (607) | (410) | (1,024) | (411) |
Balance at end of period | $ 538 | $ 198 | $ 538 | $ 198 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Fair value, Foreclosed real estate | $ 411 | $ 710 |
Recurring | Level 3 | Derivative loan commitments | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Fair Value, Assets | 1,164 | 217 |
Recurring | Level 3 | Forward loan sale commitments | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Fair Value, Liabilities | (626) | (175) |
Recurring | Level 3 | Best Efforts Contracts | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Fair Value, Liabilities | (626) | (175) |
Non-recurring | Level 3 | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Fair value, Impaired loans | 587 | 1,084 |
Fair value, Foreclosed real estate | $ 411 | $ 710 |
Minimum | Recurring | Level 3 | Derivative loan commitments | Investor pricing | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Pull-through rate (as a percent) | 76.20% | 79.60% |
Minimum | Recurring | Level 3 | Forward loan sale commitments | Investor pricing | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Pull-through rate (as a percent) | 82.50% | 82.50% |
Minimum | Non-recurring | Level 3 | Impaired loans (collateral dependent) | Discounted appraisal | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Collateral discounts/selling costs (as a percent) | 5.00% | 5.00% |
Minimum | Non-recurring | Level 3 | Foreclosed real estate | Discounted appraisal | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Collateral discounts/selling costs (as a percent) | 5.00% | 5.00% |
Maximum | Recurring | Level 3 | Derivative loan commitments | Investor pricing | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Pull-through rate (as a percent) | 100.00% | 100.00% |
Maximum | Recurring | Level 3 | Forward loan sale commitments | Investor pricing | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Pull-through rate (as a percent) | 100.00% | 100.00% |
Maximum | Non-recurring | Level 3 | Impaired loans (collateral dependent) | Discounted appraisal | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Collateral discounts/selling costs (as a percent) | 30.00% | 30.00% |
Maximum | Non-recurring | Level 3 | Foreclosed real estate | Discounted appraisal | ||
Additional quantitative information about assets and liabilities measured at fair value on a recurring and non-recurring basis | ||
Collateral discounts/selling costs (as a percent) | 30.00% | 30.00% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Balance Sheet Grouping (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Financial liabilities: | ||
Borrowed funds | $ 166,050,000 | $ 115,500,000 |
Additional Fair Value Information | ||
Accrued interest receivable | 1,546,000 | 1,414,000 |
Carrying Amount | ||
Financial assets: | ||
Loans, net | 524,616,000 | 467,023,000 |
FHLB stock | 7,533,000 | 5,283,000 |
Financial liabilities: | ||
Certificates of deposit | 115,055,000 | 109,038,000 |
Borrowed funds | 166,050,000 | 115,500,000 |
Carrying Amount | Level 2 | ||
Additional Fair Value Information | ||
Accrued interest payable | 27,000 | 24,000 |
Carrying Amount | Level 3 | ||
Additional Fair Value Information | ||
Accrued interest receivable | 1,500,000 | 1,400,000 |
Fair Value | ||
Financial assets: | ||
Loans, net | 534,930,000 | 471,245,000 |
Financial liabilities: | ||
Certificates of deposit | 115,212,000 | 109,423,000 |
Borrowed funds | 165,908,000 | 115,495,000 |
Fair Value | Level 2 | ||
Financial liabilities: | ||
Certificates of deposit | 115,212,000 | 109,423,000 |
Borrowed funds | 165,908,000 | 115,495,000 |
Fair Value | Level 3 | ||
Financial assets: | ||
Loans, net | $ 534,930,000 | $ 471,245,000 |