Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 22, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | FVCBankcorp, Inc. | ||
Entity Central Index Key | 0001675644 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 13,755,249 | ||
Entity Public Float | $ 146,170,932 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Cond
Consolidated Statements of Condition - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 9,435,000 | $ 7,428,000 |
Interest-bearing deposits at other financial institutions | 34,060,000 | 15,139,000 |
Securities held-to-maturity (fair value of $1.7 million and $1.8 million at December 31, 2018 and 2017, respectively) | 1,761,000 | 1,760,000 |
Securities available-for-sale, at fair value | 123,537,000 | 115,952,000 |
Restricted stock, at cost | 5,299,000 | 3,438,000 |
Loans, net of allowance for loan losses of $9.2 million and $7.7 million at December 31, 2018 and 2017, respectively | 1,127,584,000 | 880,952,000 |
Premises and equipment, net | 2,271,000 | 1,236,000 |
Accrued interest receivable | 4,050,000 | 2,964,000 |
Prepaid expenses | 892,000 | 698,000 |
Deferred tax assets, net | 8,591,000 | 3,155,000 |
Goodwill and intangibles, net | 8,443,000 | 99,000 |
Bank owned life insurance (BOLI) | 16,406,000 | 15,969,000 |
Other real estate owned (OREO) | 4,224,000 | 3,866,000 |
Other assets | 5,023,000 | 568,000 |
Total assets | 1,351,576,000 | 1,053,224,000 |
Deposits: | ||
Noninterest-bearing | 233,318,000 | 175,446,000 |
Interest-bearing checking, savings and money market | 583,736,000 | 379,101,000 |
Time deposits | 345,386,000 | 373,616,000 |
Total deposits | 1,162,440,000 | 928,163,000 |
FHLB advances | 0 | 0 |
Subordinated notes, net of issuance costs | 24,407,000 | 24,327,000 |
Accrued interest payable | 811,000 | 417,000 |
Accrued expenses and other liabilities | 5,582,000 | 2,034,000 |
Total liabilities | 1,193,240,000 | 954,941,000 |
Commitments and Contingent Liabilities | ||
Stockholders' Equity | ||
Common stock, $0.01 par value | 137,000 | 109,000 |
Additional paid-in capital | 123,882,000 | 74,008,000 |
Retained earnings | 36,728,000 | 25,859,000 |
Accumulated other comprehensive loss, net | (2,411,000) | (1,693,000) |
Total stockholders' equity | 158,336,000 | 98,283,000 |
Total liabilities and stockholders' equity | $ 1,351,576,000 | $ 1,053,224,000 |
Consolidated Statements of Co_2
Consolidated Statements of Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Statements of Condition | ||
Securities held to maturity, fair value | $ 1,735 | $ 1,762 |
Allowance for loan losses | $ 9,159 | $ 7,725 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
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 | 20,000,000 | 20,000,000 |
Common stock, shares issued | 13,712,615 | 10,868,984 |
Common stock, shares outstanding | 13,712,615 | 10,868,984 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interest and Dividend Income | ||
Interest and fees on loans | $ 48,216 | $ 37,505 |
Interest and dividends on securities held-to-maturity | 51 | 51 |
Interest and dividends on securities available-for-sale | 2,767 | 2,433 |
Dividends on restricted stock | 291 | 223 |
Interest on deposits at other financial institutions | 599 | 90 |
Total interest and dividend income | 51,924 | 40,302 |
Interest Expense | ||
Interest on deposits | 10,354 | 6,417 |
Interest on federal funds purchased | 28 | 8 |
Interest on short-term debt | 74 | 189 |
Interest on long-term debt | 74 | 1 |
Interest on subordinated notes | 1,580 | 1,580 |
Total interest expense | 12,110 | 8,195 |
Net Interest Income | 39,814 | 32,107 |
Provision for loan losses | 1,920 | 1,200 |
Net interest income after provision for loan losses | 37,894 | 30,907 |
Noninterest Income | ||
Service charges on deposit accounts | 635 | 546 |
Gain (loss) on sale of securities available-for-sale | (462) | 164 |
Gain on foreclosure of other real estate owned | 1,076 | |
BOLI income | 438 | 855 |
Other fee income | 1,050 | 334 |
Total noninterest income | 1,661 | 2,975 |
Noninterest Expenses | ||
Salaries and employee benefits | 14,008 | 11,659 |
Occupancy and equipment expense | 2,524 | 2,259 |
Data processing and network administration | 1,233 | 1,074 |
State franchise taxes | 1,184 | 1,041 |
Audit, legal and consulting fees | 649 | 513 |
Merger and acquisition expense | 3,339 | |
Loan related expenses | 364 | 285 |
FDIC insurance | 469 | 384 |
Marketing, business development and advertising | 339 | 375 |
Director fees | 457 | 405 |
Postage, courier and telephone | 212 | 188 |
Internet banking | 308 | 242 |
Core deposits intangible amortization | 118 | 20 |
Other operating expenses | 1,244 | 901 |
Total noninterest expenses | 26,448 | 19,346 |
Net income before income tax expense | 13,107 | 14,535 |
Income tax expense | 2,238 | 6,846 |
Net income | $ 10,869 | $ 7,690 |
Earnings per share, basic | $ 0.93 | $ 0.74 |
Earnings per share, diluted | $ 0.85 | $ 0.67 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income | ||
Net income | $ 10,869 | $ 7,690 |
Other comprehensive gain (loss): | ||
Unrealized gain (loss) on securities available for sale, net of tax benefit of $389 in 2018 and net of tax expense of $4 in 2017 | (1,072) | 2 |
Reclassification adjustment for (gain) loss realized in income, net of tax benefit of $108 in 2018 and net of tax expense of $57 in 2017 | 354 | (107) |
Total other comprehensive (loss) | (718) | (105) |
Total comprehensive income | $ 10,151 | $ 7,585 |
Consolidated Statements of Co_3
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Comprehensive Income | ||
Tax expense securities available for sale | $ 389 | $ 4 |
Reclassification adjustment for (gain) loss realized in income, tax | $ (108) | $ 57 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities | ||
Net income | $ 10,869 | $ 7,690 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 497 | 536 |
Provision for loan losses | 1,920 | 1,200 |
Net amortization of premium of securities | 534 | 580 |
Net amortization of deferred loan costs and purchase premiums | 534 | 657 |
Net accretion of acquisition accounting adjustments | (64) | |
Amortization of subordinated debt issuance costs | 80 | 80 |
Core deposits intangible amortization | 118 | 20 |
Equity-based compensation expense | 707 | 628 |
BOLI income | (438) | (855) |
Realized losses (gains) on securities sales | 462 | (164) |
Deferred income tax (benefit) | (866) | 1,327 |
Gain on foreclosure of other real estate owned | (1,076) | |
Changes in assets and liabilities: | ||
(Increase) decrease in accrued interest receivable, prepaid expenses and other assets | (4,532) | 94 |
Increase (decrease) in accrued interest payable, accrued expenses | 3,520 | (223) |
Net cash provided by operating activities | 13,341 | 10,494 |
Cash Flows From Investing Activities | ||
Maturities of certificates of deposits purchased for investment | 245 | 250 |
Increase in interest-bearing deposits at other financial institutions | (15,047) | (11,630) |
Purchases of securities available-for-sale | (37,044) | (22,137) |
Proceeds from sales of securities available-for-sale | 23,012 | 2,631 |
Proceeds from maturities, calls and paydowns of securities available-for-sale | 16,938 | 14,958 |
Net purchase of restricted stock | 994 | |
Net purchase of restricted stock | (470) | |
Net increase in loans | (106,324) | (123,951) |
Cash acquired in acquisition | 5,172 | |
Proceeds of BOLI, net | (4,285) | |
Purchases of premises and equipment, net | (743) | (500) |
Net cash used in investing activities | (114,261) | (143,670) |
Cash Flows From Financing Activities | ||
Net increase in noninterest-bearing, interest-bearing checking, savings, and money market deposits | 195,001 | 19,603 |
Net (decrease) increase in time deposits | (99,113) | 132,568 |
Net decrease in FHLB advances | (27,577) | (27,000) |
Cash paid in lieu of fractional shares | (4) | |
Common stock issuance | 34,616 | 10,263 |
Net cash provided by financing activities | 102,927 | 135,430 |
Net increase in cash and cash equivalents | 2,007 | 2,254 |
Cash and cash equivalents, beginning of year | 7,428 | 5,174 |
Cash and cash equivalents, end of year | $ 9,435 | $ 7,428 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss, net | Total |
Balance at the beginning of the period at Dec. 31, 2016 | $ 82 | $ 63,145 | $ 17,884 | $ (1,299) | $ 79,812 |
Balance at the beginning of the period (in shares) at Dec. 31, 2016 | 8,143 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 7,690 | 7,690 | |||
Other comprehensive income (loss) | (105) | (105) | |||
Common stock issuance at $20 per share | $ 5 | 9,995 | 10,000 | ||
Common stock issuance at $20 per share (in shares | 500 | ||||
5-for-4 stock split | $ 22 | (22) | (4) | (4) | |
5-for-4 stock split (in shares) | 2,171 | ||||
Common stock issuance for options exercised, net | 263 | 263 | |||
Common stock issuance for options exercised, net (in shares) | 55 | ||||
Reclassification of stranded effects from change in tax rate | 289 | (289) | |||
Stock-based compensation expense | 627 | 627 | |||
Balance at the end of the period at Dec. 31, 2017 | $ 109 | 74,008 | 25,859 | (1,693) | 98,283 |
Balance at the end of the period (in shares) at Dec. 31, 2017 | 10,869 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 10,869 | 10,869 | |||
Other comprehensive income (loss) | (718) | (718) | |||
Common stock issuance at $20 per share | $ 18 | 33,457 | 33,475 | ||
Common stock issuance at $20 per share (in shares | 1,844 | ||||
Common stock issuance for options exercised, net | $ 2 | 1,139 | 1,141 | ||
Common stock issuance for options exercised, net (in shares) | 221 | ||||
Common stock issuance for acquisition of Colombo Bank | $ 8 | 14,571 | 14,579 | ||
Common stock issuance for acquisition of Colombo Bank (in shares) | 763 | ||||
Vesting of restricted stock grants (in shares) | 16 | ||||
Stock-based compensation expense | 707 | 707 | |||
Balance at the end of the period at Dec. 31, 2018 | $ 137 | $ 123,882 | $ 36,728 | $ (2,411) | $ 158,336 |
Balance at the end of the period (in shares) at Dec. 31, 2018 | 13,713 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | 12 Months Ended | |
Dec. 31, 2017$ / shares | Dec. 31, 2018$ / shares | |
Consolidated Statements of Changes in Stockholders' Equity | ||
Common stock issuance price (in dollars per share) | $ 20 | $ 20 |
Stock split ratio | 1.25 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Summary of Significant Accounting Policies | |
Organization and Summary of Significant Accounting Policies | Note 1. Organization and Summary of Significant Accounting Policies Organization FVCBankcorp, Inc. (the "Company"), a Virginia corporation, was formed in 2015 and is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. The Company is headquartered in Fairfax, Virginia. The Company conducts its business activities through the branch offices of its wholly owned subsidiary bank, FVCbank (the "Bank"). The Company exists primarily for the purposes of holding the stock of its subsidiary, the Bank. The Bank was organized under the laws of the Commonwealth of Virginia to engage in a general banking business serving the Washington, D.C. metropolitan area. The Bank commenced regular operations on November 27, 2007 and is a member of the Federal Reserve System and the Federal Deposit Insurance Corporation. It is subject to the regulations of the Federal Reserve System and the State Corporation Commission of Virginia. Consequently, it undergoes periodic examinations by these regulatory authorities. On October 12, 2018, the Company announced the completion of its acquisition of Colombo Bank ("Colombo"), pursuant to a previously announced definitive merger agreement. Colombo, which was headquartered in Rockville, Maryland, merged into FVCbank effective October 12, 2018 adding five banking locations in Washington, D.C., and Montgomery County and the City of Baltimore in Maryland. Pursuant to the terms of the merger agreement, based on the average closing price of the Company's common stock during the five trading day period ended on October 10, 2018, the second trading day prior to closing, of $19.614 (the Average Closing Price") holders of shares of Colombo common stock received 0.002217 shares of the Company's common stock and $0.053157 in cash for each share of Colombo common stock held immediately prior to the effective date of the Merger, plus cash in lieu of fractional shares at a rate equal to the Average Closing Price, and subject to the right of holders of Colombo common stock who owned fewer than 45,086 shares of Colombo common stock after aggregation of all shares held in the same name, and who made a timely election, to receive only cash in an amount equal to $0.096649 per share of Colombo common stock. As a result of the merger, 763,051 shares of the Company's common stock were issued in exchange for outstanding shares of Colombo common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America and conform to general practices within the banking industry. (a) Principles of Consolidation The consolidated financial statements include the accounts of the Company. All material intercompany balances and transactions have been eliminated in consolidation. (b) Use of Estimates In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and contingent liabilities, at of the date of the consolidated financial statements 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 accounting for business combinations and impairment testing of goodwill, the allowance for loan losses, the valuation of deferred tax assets, other-than-temporary impairment, and the valuation of other real estate owned. (c) Accounting for Business Combinations Business combinations are accounted for under the purchase method. The purchase method requires that the assets acquired and liabilities assumed be recorded, based on their estimated fair values at the date of acquisition. The excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed, including identifiable intangibles, is recorded as goodwill. (d) Cash and Cash Equivalents For purposes of the statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold. Generally, federal funds are purchased and sold for one day periods. (e) Investment Securities Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Equity securities are carried at fair value, with changes in fair value reported in net income. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. Gains and losses on the sale of securities are determined using the specific identification method. The Company regularly evaluates its securities whose values have declined below their amortized cost to assess whether the decline in fair value is other-than-temporary. The Company considers various factors in determining whether a decline in fair value is other-than-temporary including the issuer’s financial condition and/or future prospects, the effects of changes in interest rates or credit spreads, the expected recovery period and other quantitative and qualitative information. The valuation of securities for impairment is a process subject to estimation, judgment and uncertainty and is intended to determine whether declines in the fair value of investments should be recognized in current period earnings. The risks and uncertainties include changes in general economic conditions and future changes in assessments of the aforementioned factors. It is expected that such factors will change in the future, which may result in future other-than-temporary impairments. For impairments of debt securities that are deemed to be other-than-temporary, the credit portion of an other-than-temporary impairment loss is recognized in earnings and the non-credit portion is recognized in accumulated other comprehensive income in those situations where the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery. Interest income and dividends on securities are recognized in interest income on an accrual basis. Premiums and discounts are recognized in interest income using the effective interest method. Prepayments of the mortgages securing mortgage-backed securities may affect the yield to maturity. The Company uses actual principal prepayment experience and estimates of future principal prepayments in calculating the yield necessary to apply the effective interest method. (f) Loans and Allowance for Loan Losses Loans receivable that management has the intent and ability to hold for the foreseeable future or until loan maturity or pay-off are reported at their outstanding principal balance adjusted for any charge-offs, and net of the allowance for loan losses and deferred fees and costs. Loan origination fees and certain direct origination costs are deferred and amortized as an adjustment of the yield using the payment terms required by the loan contract. During 2018, as a result of the Company’s acquisition of Colombo, the loan portfolio was segregated between loans initially accounted for under the amortized cost method (referred to as “originated” loans) and loans acquired (referred to as “acquired” loans). The loans segregated to the acquired loan portfolio were initially measured at fair value and subsequently accounted for under either Accounting Standards Codification (“ASC”) Topic 310-30 or ASC Topic 310-20. Purchased credit-impaired (PCI) loans, which are the non-performing loans acquired in the Company’s acquisition of Colombo, are loans acquired at a discount (that is due, in part, to credit quality). These loans are initially recorded at fair value (as determined by the present value of expected future cash flows) with no allowance for loan losses. The Company accounts for interest income on all loans acquired at a discount (that is due, in part, to credit quality) based on the acquired loans’ expected cash flows. The acquired loans may be aggregated and accounted for as a pool of loans if the loans being aggregated have common risk characteristics. A pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flow. The difference between the cash flows expected at acquisition and the investment in the loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each pool. Increases in expected cash flows subsequent to the acquisition are recognized prospectively through adjustment to any previously recognized allowance for loan loss for that pool of loans and then through an increase in the yield on the pool over its remaining life, while decreases in expected cash flows are recognized as impairment through a loss provision and an increase in the allowance for loan losses. Therefore, the allowance for loan losses on these impaired pools reflect only losses incurred after the acquisition (representing the present value of all cash flows that were expected at acquisition but currently are not expected to be received). The Company periodically evaluates the remaining contractual required payments due and estimates of cash flows expected to be collected for PCI loans. These evaluations, performed quarterly, require the continued use of key assumptions and estimates, similar to the initial estimate of fair value. Changes in the contractual required payments due and estimated cash flows expected to be collected may result in changes in the accretable yield and non-accretable difference or reclassifications between accretable yield and the non-accretable difference. On an aggregate basis, if the acquired pools of PCI loans perform better than originally expected, the Company would expect to receive more future cash flows than originally modeled at the acquisition date. For the pools with better than expected cash flows, the forecasted increase would be recorded as an additional accretable yield that is recognized as a prospective increase to the Company’s interest income on loans. Loans are generally placed into nonaccrual status when they are past-due 90 days as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past-due less than 90 days and the borrower demonstrates the ability to pay and remain current. Loans are charged-off when a loan or a portion thereof is considered uncollectible. When cash payments are received, they are applied to principal first, then to accrued interest. It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not go on nonaccrual status if the Company determines that the loans are well secured and are in the process of collection. Nonperforming assets include nonaccrual loans, loans past due 90 days or more and other real estate owned. The allowance for loan losses is increased or decreased by provisions for (reversal of) loan losses, increased by recoveries of previously charged-off loans, and decreased by loan charge-offs. The Company maintains the allowance for loan losses at a level that represents management’s best estimate of known and inherent losses in the loan portfolio. Both the amount of the provision expense and the level of the allowance for loan losses are impacted by many factors, including general and industry-specific economic conditions, actual and expected credit losses, historical trends and specific conditions of the individual borrowers. Unusual and infrequently occurring events, such as weather-related disasters, may impact management’s assessment of possible credit losses. As a part of the analysis, the Company uses comparative peer group data and qualitative factors such as levels of and trends in delinquencies, nonaccrual loans, charged-off loans, changes in volume and terms of loans, effects of changes in lending policy, experience and ability and depth of management, national and local economic trends and conditions and concentrations of credit, competition, and loan review results to support estimates. The Company’s allowance for loan losses is based first on a segmentation of its loan portfolio by general loan type, or portfolio segments. For originated loans, certain portfolio segments are further disaggregated and evaluated collectively for impairment based on loan segments, which are largely based on the type of collateral underlying each loan. For purposes of this analysis, the Company categorizes loans into one of five categories: commercial and industrial, commercial real estate, commercial construction, consumer residential, and consumer nonresidential loans. Typically, financial institutions use their historical loss experience and trends in losses for each loan category which are then adjusted for portfolio trends and economic and environmental factors in determining their allowance for loan losses. Since the Bank’s inception in 2007, the Bank has experienced minimal loss history within its loan portfolio. Because of this, the allowance model uses the average loss rates of similar institutions (a custom peer group) as a baseline which is then adjusted based on the Company’s particular qualitative loan portfolio characteristics and environmental factors. The indicated loss factors resulting from this analysis are applied for each of the five categories of loans. The Company also maintains an allowance for loan losses for acquired loans when: (i) for loans accounted for under ASC 310-30, there is deterioration in credit quality subsequent to acquisition, and (ii) for loans accounted for under ASC 310-20, the inherent losses in the loans exceed the remaining discount recorded at the time of acquisition. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are determined to be impaired and, therefore, individually evaluated for impairment. The Company determines and recognizes impairment of certain loans when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the loan agreement. A loan is not considered impaired during a period of delay in payment if the Company expects to collect all amounts due, including past-due interest. The Company individually assigns loss factors to all loans that have been identified as having loss attributes, as indicated by deterioration in the financial condition of the borrower or a decline in underlying collateral value if the loan is collateral dependent. The Company evaluates the impairment of certain loans on a loan by loan basis for those loans that are adversely risk rated. Measurement of impairment is based on the expected future cash flows of an impaired loan, which are discounted at the loan’s effective interest rate, or measured on an observable market value, if one exists, or the fair value of the collateral underlying the loan, discounted to consider estimated costs to sell the collateral for collateral-dependent loans. If the net collateral value is less than the loan balance (including accrued interest and any unamortized premium or discount associated with the loan) an impairment is recognized and a specific reserve is established for the impaired loan. Loans classified as loss loans are fully reserved or charged-off. In addition, various regulatory agencies, as part of their examination process, periodically review the Company’s allowance for loan losses. These agencies may require the Company to recognize additions to the allowance based on their risk evaluation and credit judgment. Management believes that the allowance for loan losses at December 31, 2018 and 2017 is a reasonable estimate of known and inherent losses in the loan portfolio at those dates. Loans considered to be troubled debt restructuring (“TDRs”) are loans that have their terms restructured (e.g., interest rates, loan maturity date, payment and amortization period, etc.) in circumstances that provide payment relief to a borrower experiencing financial difficulty. All restructured loans are considered impaired loans and may either be in accruing status or nonaccruing status. Nonaccruing restructured loans may return to accruing status provided doubt has been removed concerning the collectability of principal and interest as evidenced by a sufficient period of payment performance in accordance with the restructured terms. Loans may be removed from the restructured category in the year subsequent to the restructuring if their revised loan terms are considered to be consistent with terms that can be obtained in the credit market for loans with comparable risk and if they meet certain performance criteria. (g) Premises and Equipment Land is carried at cost. Premises, furniture, equipment, and leasehold improvements are carried at cost less accumulated depreciation and amortization. Depreciation of premises, furniture and equipment is computed using the straight-line method over estimated useful lives from three to seven years. Amortization of leasehold improvements is computed using the straight-line method over the useful lives of the improvements or the lease term, whichever is shorter. Purchased computer software which is capitalized is amortized over estimated useful lives of one to three years. Rent expense on operating leases is recorded using the straight-line method over the appropriate lease term. (h) Goodwill and Intangible Assets Goodwill, which represents the excess of purchase price over fair value of net assets acquired, is not amortized but is evaluated at least annually for impairment by comparing its fair value with its carrying amount. Impairment is indicated when the carrying amount of a reporting unit exceeds its estimated fair value. Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company will perform the annual impairment test annually during the fourth quarter. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. No impairment was recorded for 2018 and 2017. (i) Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure are held for sale. At the time of acquisition, these properties are recorded at fair value less estimated selling costs, with any write down charged to the allowance for loan losses and any gain on foreclosure is recorded in net income, establishing a new cost basis. Subsequent to foreclosure, valuations of the assets are periodically performed by management, and these assets are subsequently accounted for at lower of cost or fair value less estimated selling costs. Adjustments are made for subsequent decline in the fair value of the assets less selling costs. Revenue and expenses from operations and valuation changes are charged to operating income in the year of the transaction. The Company foreclosed on no properties for the year ended December 31, 2018 and one during the year ended December 31, 2017. The Company, through its acquisition of Colombo, did acquire one residential real estate property. (j) Bank Owned Life Insurance The Company has purchased life insurance policies on certain key employees. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance date, which is the cash surrender value. The increase in the cash surrender value over time is recorded as other non-interest income. The Company monitors the financial strength and condition of the counterparty. (k) Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed surrendered when (1) the assets have been isolated from the Company — put presumptively beyond reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. (l) Income Taxes Deferred taxes are provided on a liability method whereby deferred tax assets and liabilities are recognized for deductible temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. The Company had no such liability recorded as of December 31, 2018 and 2017. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The results for the year ended December 31, 2017 included the effect of the Tax Cuts and Jobs Act (the Tax Act), which was signed into law on December 22, 2017. Among other things, the Tax Act permanently lowered the federal corporate income tax rate to 21% from the maximum rate prior to the passage of the Tax Act of 35%, effective January 1, 2018. As a result of the federal corporate income tax rate, U.S. GAAP required companies to re-measure their deferred tax assets and deferred tax liabilities, including those accounted for in accumulated other comprehensive income (loss), as of the date of the Tax Act’s enactment and record the corresponding effects in income tax expense in the fourth quarter of 2017. As a result of the permanent reduction in the corporate income tax rate, the Company recognized a $2.0 million reduction in the value of its net deferred tax asset and recorded a corresponding incremental income tax expense in the Company’s consolidated statement of income for 2017. (m) Comprehensive Income (Loss ) Comprehensive income consists of net income and other comprehensive income. Other comprehensive income (loss) includes unrealized gains (losses) on securities available-for-sale, which are also recognized as separate components of equity. Items reclassified out of accumulated other comprehensive income (loss) to net income relate solely to realized gains (losses) on sales of securities available-for-sale and appear under the caption “Gain (loss) on sale of securities available-for-sale” in the Company’s consolidated statements of income. (n) Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. (o) Equity-based Compensation The Company recognizes in the income statement the grant-date fair value of stock options and other equity-based compensation. The Company classifies stock awards as either an equity award or a liability award. Equity classified awards are valued as of the grant date using either an observable market price or a valuation methodology. Liability classified awards are valued at fair value at each reporting date. For the periods presented, all of the Company’s stock options are classified as equity awards. The Company recognizes in the income statement the grant-date fair value of stock options and other equity-based compensation. The fair value related to forfeitures of stock options and other equity-based compensation are recorded to the income statement as they occur, reducing equity-based compensation expense in that period. During 2017, the Company began granting restricted stock units which are granted at the fair market value of the Company’s common stock on the grant date. Most restricted stock units vest in one-quarter increments on the anniversary date of the grant. The weighted average per share fair values of stock option grants made in 2017 was $15.20. The fair values of the options granted were estimated on the grant date using the Black-Scholes option-pricing model based on the following weighted average assumptions: Years Ended December 31, 2018 2017 Dividend yield N/A — Expected life (in years) N/A Expected volatility N/A 16.60 % Risk-free interest rate N/A 1.94 % (p) 401(k) Plan Employee 401(k) plan expense is the amount of matching contributions paid by the Company. 401(k) plan expense was $280 thousand and $230 thousand for the years ended December 31, 2018 and 2017, respectively. (q) Earnings Per Share Basic earnings per share represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Common stock equivalents that may be issued by the Company consist primarily of outstanding stock options and restricted stock units, and the dilutive potential common shares resulting from outstanding stock options and restricted stock units are determined using the treasury method. Earnings and dividends per share are restated for all stock splits and dividends through the date of issuance of the financial statements. The effects of anti-dilutive common stock equivalents are excluded from the calculation of diluted earnings per share. (r) Reclassifications Certain prior year amounts have been reclassified to conform to the current year’s method of presentation. None of these reclassifications were significant. (s) Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, "Leases (Topic 842)." Among other things, in the amendments in ASU 2016‑02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The FASB made subsequent amendments to Topic 842 in July 2018 through ASU 2018-10 ("Codification Improvements to Topic 842, Leases.") and ASU 2018-11 ("Leases (Topic 842): Targeted Improvements.") Among these amendments is the provision in ASU 2018-11 that provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). The adoption of this standard on January 1, 2019 resulted in the Company recording a right of use asset of approximately $12.5 million and base liability of approximately $12.8 million. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company has identified a third party vendor to assist in the measurement of expected credit losses under this standard and has begun implementation efforts in order to assess the impact that ASU 2016-13 will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Public business entities that are SEC filers should adopt the amendments in this ASU for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017‑04 to have a material impact on its consolidated financial statements. In March 2017, the FASB issued ASU 2017 - 08, “ Receivables — Nonrefundable Fees and Other Costs (Subtopic 310 - 20), Premium Amortization on Purchased Callable Debt Securities. ” The amendments in this ASU shorten the amortization period for certain callable debt securities purchased at a premium. Upon adoption of the standard, premiums on these qualifying callable debt securities will be amortized to the earliest call date. Discounts on purchased debt securities will continue to be accreted to maturity. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Upon transition, entities should apply the guidance on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and provide the disclosures required for a change in accounting principle. The Company does not expect the adoption of ASU 2017-08 to have a material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this ASU modify the designation and measurement guidance for hedge accounting as well as provide for increased transparency regarding the presentation of economic results on both the financial statements and related footnotes. Certain aspects of hedge effectiveness assessments will al |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations | |
Business Combinations | Note 3. Business Combinations On October 12, 2018, the Company acquired Colombo, a commercial bank with approximately $199 million in assets, after purchase accounting adjustments. Based on an average closing price of the Company’s common stock during the five trading day period ended on October 10, 2018 of $19.614 (the “Average Closing Price”), the shareholders of Colombo common stock received 0.002217 shares of the Company’s common stock and $0.053157 in cash for each share of Colombo common stock held, plus cash in lieu of fractional shares at a rate equal to the Average Closing Price, and subject to the right of holders of Colombo common stock who own fewer than 45,086 shares of Colombo common stock after aggregation of all shares held in the same name, and who made a timely election, to receive only cash in an amount equal to $0.096649 per share of Colombo common stock. As a result, 763,051 shares of the Company’s common stock and $18.3 million in cash were issued in exchange for outstanding shares of Colombo common stock. Total consideration for the acquisition was $32.9 million. Merger and acquisition expense for 2018 was $3.3 million which was mainly related to legal and accounting cost, system conversion and integration expenses, employee retention and severance payments. The following table sets forth the assets acquired and liabilities assumed in the acquisition at their estimated fair values as of the closing date of the transactions: Assets acquired: October 12, 2018 Cash and cash equivalents $ 23,469 Interest-bearing deposits 3,874 Securities available-for-sale 12,732 Restricted stock, at cost 1,391 Loans 142,593 Premises and equipment 789 Deferred tax assets, net 4,289 Goodwill 6,512 Core deposit intangible, net 1,950 Accrued interest receivable 406 Prepaid expense 161 Other real estate owned (OREO) 358 Other assets 638 Total assets acquired $ 199,162 Liabilities assumed: Deposits: Non-interest bearing $ 19,080 Interest-bearing checking, savings and money market 48,426 Time deposits 70,778 Total deposits 138,284 FHLB advances 27,577 Accrued interest payable 127 Accrued expenses and other liabilities 294 Total liabilities assumed: $ 166,282 Total consideration paid $ 32,880 The fair value estimates are subject to change for up to one year after the closing date of the transaction if additional information relative to closing dates fair values becomes available. Fair Value Measurement of Assets Acquired and Liabilities Assumed Below are the methods used to determine the fair values of the significant assets acquired and liabilities assumed in the acquisition. Cash and cash equivalents. The carrying amount of cash and cash equivalents was used as a reasonable estimate of fair value. Interest-bearing deposits. The carrying amount of interest-bearing deposits was used as a reasonable estimate of fair value. Investment securities available-for-sale. The estimated fair value of investment securities available-for-sale was based on proceeds received from sale of securities immediately after consummation of acquisition. Restricted stocks. The carrying amount of restricted stocks was used as a reasonable estimate of fair value. These investments are carried at cost as no active trading market exists. Loans. The acquired loan portfolio was segregated into one of two categories for valuation purposes: purchased credit impaired (“PCI”) and performing loans. PCI loans were identified as those loans that were nonaccrual prior to the business combination and those loans that had been identified as potentially impaired. Potentially impaired loans were those loans that were identified during the credit review process where there was an indication that the borrower did not have sufficient cash flows to service the loan in accordance with its terms. Performing loans were those loans that were currently performing in accordance with the loan contract and do not appear to have any significant credit issues. For loans that were identified as performing, the fair values were determined using a discounted cash flow analysis (the “income approach”). Performing loans were segmented into pools based on loan type (commercial real estate, commercial and industrial, commercial construction, consumer residential and consumer nonresidential), and further segmented based on payment structure (fully amortizing, non-fully amortizing balloon, or interest only), rate type (fixed versus variable), and remaining maturity. The estimated cash flows expected to be collected for each loan was determined using a valuation model that included the following key assumptions: prepayment speeds, expected credit loss rates and discount rates. Prepayment speeds were influenced by many factors including, but not limited to, current yields, historic rate trends, payment types, interest rate type, and the duration of the individual loan. Expected credit loss rates were based on recent and historical default and loss rates observed for loans with similar characteristics, and further influenced by a credit review by management and a third party consultant on a selection of loans within the acquired portfolio. The discount rates used were based on rates market participants might charge for cash flows with similar risk characteristics at the acquisition date. These assumptions were developed based on management discussions and third party professional experience. For loans that were identified as PCI, either the above income approach was used or the asset approach was used. The income approach was used for PCI loans where there was an expectation that the borrower would more likely than not continue to pay based on the current terms of the loan contract. Management used the asset approach for all nonaccrual loans to reflect market participant assumptions. Under the asset approach, the fair value of each loan was determined based on the estimated values of the underlying collateral. The methods used to estimate the Level 3 fair values of loans are extremely sensitive to the assumptions and estimates used. While management attempted to use assumptions and estimates that best reflected the acquired loan portfolios and current market conditions, a greater degree of subjectivity is inherent in these values than in those determined in active markets. The difference between the fair value and the expected cash flows from acquired loans will be accreted to interest income over the remaining term of the loans in accordance with ASC Topic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.” See Note 5 for further details. Premises and equipment. The land and building acquired were recorded at fair value as determined by the current tax assessment at acquisition date. Other real estate owned (OREO). OREO was recorded at fair value based on an existing purchase contract. Core deposit intangible. Core deposit intangibles (“CDI”) are measures of the value of non-interest checking, savings, interest-bearing checking, and money market deposits that are acquired in a business combination excluding certificates of deposit with balances over $250,000 and high yielding interest bearing deposit accounts, which the Company determines customer related intangible assets as non-existent. The fair value of the CDI stemming from any business combination is based on the present value of the expected cost savings attributable to the core deposit funding, relative to an alternative funding source. The CDI is being amortized over an estimated useful life of 9.8 years to approximate the existing deposit relationships acquired. Deposits. The fair values of deposit liabilities with no stated maturity (non-interest checking, savings, interest-bearing checking, and money market deposits) are equal to the carrying amounts payable on demand. The fair values of the certificates of deposit represent contractual cash flows, discounted to present value using interest rates currently offered by market participants on deposits with similar characteristics and remaining maturities. FHLB advances. The fair value of FHLB advances was determined based on the repayment amount as all acquired advances were repaid immediately following the acquisition . |
Investment Securities and Other
Investment Securities and Other Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investment Securities and Other Investments | |
Investment Securities and Other Investments | Note 4. Investment Securities and Other Investments Amortized cost and fair values of securities held-to-maturity and securities available-for-sale as of December 31, 2018 and 2017, are as follows: December 31, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 264 $ — $ (6) $ 258 Securities of U.S. government and federal agencies 1,497 — (20) 1,477 Total Held-to-maturity Securities $ 1,761 $ — $ (26) $ 1,735 Available-for-sale Securities of U.S. government and federal agencies $ 1,000 $ — $ (44) $ 956 Securities of state and local municipalities tax exempt 3,678 — (39) 3,639 Securities of state and local municipalities taxable 2,378 — (70) 2,308 Corporate bonds 5,000 92 (79) 5,013 Certificates of deposit 245 — (1) 244 SBA pass-through securities 200 — (5) 195 Mortgage-backed securities 90,234 94 (2,291) 88,037 Collateralized mortgage obligations 23,945 10 (810) 23,145 Total Available-for-sale Securities $ 126,680 $ 196 $ (3,339) $ 123,537 December 31, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 263 $ 3 $ — $ 266 Securities of U.S. government and federal agencies 1,497 — (1) 1,496 Total Held-to-maturity Securities $ 1,760 $ 3 $ (1) $ 1,762 Available-for-sale Securities of U.S. government and federal agencies $ 1,000 $ — $ (32) $ 968 Securities of state and local municipalities tax exempt 3,694 23 (1) 3,716 Securities of state and local municipalities taxable 2,591 3 (41) 2,553 Corporate bonds 5,000 57 (61) 4,996 Certificates of deposit 490 — — 490 SBA pass-through securities 254 — (8) 246 Mortgage-backed securities 84,614 — (1,401) 83,213 Collateralized mortgage obligations 20,453 — (683) 19,770 Total Available-for-sale Securities $ 118,096 $ 83 $ (2,227) $ 115,952 The Company had no securities pledged with the Federal Reserve Bank for the years ended December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, securities with a market value of $8.1 million $0 were pledged to secure public deposits with the Treasury Board of Virginia at the Community Bankers’ Bank. The following table shows fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2018 and 2017, respectively. The reference point for determining when securities are in an unrealized loss position is month-end. Therefore, it is possible that a security’s market value exceeded its amortized cost on other days during the past twelve-month period. Securities that have been in a continuous unrealized loss position are as follows: Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized At December 31, 2018 Value Losses Value Losses Value Losses Securities of U.S. government and federal agencies $ — $ — $ 2,433 $ (64) $ 2,433 $ (64) Securities of state and local municipalities tax exempt 263 (1) 3,634 (44) 3,897 (45) Securities of state and local municipalities taxable 757 (1) 1,551 (69) 2,308 (70) Corporate bonds 988 (12) 933 (67) 1,921 (79) Certificates of deposit — — 244 (1) 244 (1) SBA pass-through securities — — 195 (5) 195 (5) Mortgage-backed securities 12,743 (59) 60,656 (2,232) 73,399 (2,291) Collateralized mortgage obligations — — 16,790 (810) 16,790 (810) Total $ 14,751 $ (73) $ 86,436 $ (3,292) $ 101,187 $ (3,365) Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized At December 31, 2017 Value Losses Value Losses Value Losses Securities of U.S. government and federal agencies $ 1,496 $ (1) $ 968 $ (32) $ 2,464 $ (33) Securities of state and local municipalities tax exempt 272 (1) — — 272 (1) Securities of state and local municipalities taxable 497 (3) 1,278 (38) 1,775 (41) Corporate bonds 1,492 (7) 946 (54) 2,438 (61) Certificates of deposit 245 — — — 245 — SBA pass-through securities — — 246 (8) 246 (8) Mortgage-backed securities 38,039 (404) 44,663 (997) 82,702 (1,401) Collateralized mortgage obligations 2,731 (28) 17,040 (655) 19,771 (683) Total $ 44,772 $ (444) $ 65,141 $ (1,784) $ 109,913 $ (2,228) Securities of U.S. government and federal agencies: The unrealized losses on one available-for-sale and one held-to-maturity securities were caused by interest rate increases. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Securities of state and local municipalities : The unrealized losses on the investments in securities of state and local municipalities were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Five of the nine investments carry an S&P investment grade rating of AA+ or above, one has a rating of AA-, one has an AA rating, while the remaining two do not carry a rating. Corporate bonds: The unrealized losses on the investments in corporate bonds were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. One of these two investments carries an S&P investment grade rating of A -. The remaining investment does not carry a rating. Certificates of Deposit: The unrealized loss on the certificate of deposit was caused by interest rate increases. Certificates of deposit are cash deposits with a stated maturity at a correspondent bank of the Company. Because the Company does not intend to redeem the certificate prior to maturity, the Company does not consider those investment to be other-than-temporarily impaired at December 31, 2018. SBA pass-through securities: The unrealized loss on the Company's single investment in SBA pass-through securities was caused by interest rate increases. Repayment of the principal on this investment is guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the security would not be settled at a price less than the amortized cost basis of the Company’s investment. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider the investment to be other-than-temporarily impaired at December 31, 2018. Mortgage-backed securities: The unrealized losses on the Company's investment in fifty-four mortgage-backed securities were caused by interest rate increases. The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2018. Collateralized mortgage obligations (CMOs): The unrealized loss associated with thirty-one CMOs was caused by interest rate increases. The contractual cash flows of these investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2018. The amortized cost and fair value of held-to-maturity and securities available-for-sale as of December 31, 2018, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties. 2018 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair Cost Value Cost Value Less than 1 year $ — $ — $ 745 $ 741 After 5 years through 10 years 1,761 1,735 18,579 18,260 After 10 years — — 107,356 104,536 Total $ 1,761 $ 1,735 $ 126,680 $ 123,537 For the years ended December 31, 2018 and 2017, proceeds from maturities, calls, and principal repayments of securities were $16.9 million and $15.0 million, respectively. During 2018 and 2017, proceeds from sales of securities available-for-sale amounted to $23.0 million and $2.6 million, gross realized losses of $462 thousand in 2018 and gross realized gains of $164 thousand in 2017. There were no realized gains in 2018 and no realized losses in 2017. The Company has other investments in the form of restricted stock totaling $5.3 million and $3.4 million at December 31, 2018 and 2017, respectively. The following table discloses the types of investments included in other investments: 2018 2017 Federal Reserve stock $ 4,029 $ 2,499 FHLB stock 1,123 817 Community Bankers' Bank stock 122 122 Atlantic Bankers' Bank stock 25 — $ 5,299 $ 3,438 As members of the Federal Reserve and Federal Home Loan Bank of Atlanta (“FHLB”), the Company’s banking subsidiary is required to hold stock in these entities. Stock membership in Community Bankers’ Bank allows the Company to secure overnight funding. These investments are carried at cost since no active trading markets exist. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2018 | |
Loans and Allowance for Loan Losses | |
Loans and Allowance for Loan Losses | Note 5. Loans and Allowance for Loan Losses A summary of loan balances by type follows: 2018 2017 Originated Acquired Total Total Commercial real estate $ 616,614 $ 66,988 $ 683,602 $ 526,657 Commercial and industrial 128,909 8,419 137,328 98,150 Commercial construction 141,694 11,645 153,339 123,444 Consumer residential 87,609 43,822 131,431 108,926 Consumer nonresidential 32,184 124 32,308 32,232 $ 1,007,010 $ 130,998 $ 1,138,008 $ 889,409 Less: Allowance for loan losses 9,159 — 9,159 7,725 Unearned income and (unamortized premiums), net 1,265 — 1,265 732 Loans, net $ 996,586 $ 130,998 $ 1,127,584 $ 880,952 During 2018, as a result of the Company’s acquisition of Colombo, the loan portfolio was segregated between loans initially accounted for under the amortized cost method (referred to as “originated” loans) and loans acquired (referred to as “acquired” loans). The loans segregated to the acquired loan portfolio were initially measured at fair value and subsequently accounted for under either ASC Topic 310-30 or ASC 310-20. The outstanding principal balance and related carrying amount of acquired loans included in the consolidated statement of condition as of December 31, 2018 are as follows: (in thousands) 2018 Purchased credit impaired acquired loans evaluated individually for future credit losses Outstanding principal balance $ 2,533 Carrying amount 1,401 Other acquired loans Outstanding principal balance 131,286 Carrying amount 129,597 Total acquired loans Outstanding principal balance 133,819 Carrying amount 130,998 The following table presents changes for the year ended December 31, 2018 in the accretable yield on purchased credit impaired loans for which the Company applies ASC 310-30. (in thousands) Balance at January 1, 2018 $ — Accretable yield at acquisition date 379 Accretion (22) Balance at December 31, 2018 $ 357 An analysis of the allowance for loan losses for the years ended December 31, 2018 and 2017 follows: Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Residential Nonresidential Unallocated Total 2018 Allowance for credit losses: Beginning Balance $ 4,832 $ 768 $ 1,191 $ 626 $ 268 $ 40 $ 7,725 Charge-offs — (86) — (187) (292) — (565) Recoveries — 26 — 1 52 — 79 Provision 716 766 94 78 306 (40) 1,920 Ending Balance $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ — $ 9,159 Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Residential Nonresidential Unallocated Total 2017 Allowance for credit losses: Beginning Balance $ 4,266 $ 1,032 $ 375 $ 500 $ 121 $ 158 $ 6,452 Charge-offs — (44) — — (33) — (77) Recoveries — 117 — — 33 — 150 Provision 566 (337) 816 126 147 (118) 1,200 Beginning Balance $ 4,832 $ 768 $ 1,191 $ 626 $ 268 $ 40 $ 7,725 The following table presents the recorded investment in loans and impairment method as of December 31, 2018 and 2017, by portfolio segment: Allowance for Loan Losses Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2018 Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ 372 $ — $ 1 $ — $ — $ 373 Purchased credit impaired — — — — — — — Collectively evaluated for impairment 5,548 1,102 1,285 517 334 — 8,786 $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ — $ 9,159 Loans Receivable Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2018 Financing receivables: Ending Balance Individually evaluated for impairment $ 1,306 $ 2,969 $ — $ 182 $ — $ — $ 4,457 Purchased credit impaired loans 139 467 421 374 — — 1,401 Collectively evaluated for impairment 682,157 133,892 152,918 130,875 32,308 — 1,132,150 $ 683,602 $ 137,328 $ 153,339 $ 131,431 $ 32,308 $ — $ 1,138,008 Allowance for Loan Losses Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2017 Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 4,832 768 1,191 626 268 40 7,725 $ 4,832 $ 768 $ 1,191 $ 626 $ 268 $ 40 $ 7,725 Loans Receivable Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2017 Financing receivables: Ending Balance Individually evaluated for impairment $ 1,882 $ 2,846 $ — $ 587 $ 5 $ — $ 5,320 Collectively evaluated for impairment 524,775 95,304 123,444 108,339 32,227 — 884,089 $ 526,657 $ 98,150 $ 123,444 $ 108,926 $ 32,232 $ — $ 889,409 Impaired loans by class excluding purchased credit impaired, as of December 31, 2018 and 2017 are summarized as follows: Impaired Loans — Originated Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (in thousands) Investment Balance Allowance Investment Recognized 2018 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 1,793 1,793 372 1,801 100 Commercial construction — — — — — Consumer residential 182 182 1 184 12 Consumer nonresidential — — — — — 1,975 1,975 373 1,985 112 2018 With no related allowance: Commercial real estate $ 1,306 $ 1,319 $ — $ 1,321 $ 68 Commercial and industrial 1,156 1,170 — 1,378 81 Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ 2,462 $ 2,489 $ — $ 2,699 $ 149 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized December 31, 2017 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ — $ — $ — $ — $ — December 31, 2017 With no related allowance: Commercial real estate $ 1,882 $ 1,882 $ — $ 1,894 $ 108 Commercial and industrial 2,846 2,860 — 2,516 150 Commercial construction — — — — — Consumer residential 587 587 — 587 24 Consumer nonresidential 5 5 — 8 1 $ 5,320 $ 5,334 $ — $ 5,005 $ 283 Impaired Loans — Acquired Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2018 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ — $ — $ — $ — $ — 2018 With no related allowance: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 20 20 — 58 3 Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ 20 $ 20 $ — $ 58 $ 3 No additional funds are committed to be advanced in connection with the impaired loans. There were no nonaccrual loans excluded from the impaired loan disclosure. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non-homogeneous loans such as commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings: Pass — Loans listed as pass include larger non-homogeneous loans not meeting the risk rating definitions below and smaller, homogeneous loans not assessed on an individual basis. Special Mention — Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard — Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the enhanced possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful — Loans classified as doubtful include those loans which have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently known facts, conditions and values, improbable. Loss — Loans classified as loss include those loans which are considered uncollectible and of such little value that their continuance as loans is not warranted. Even though partial recovery may be achieved in the future, it is neither practical nor desirable to defer writing off these loans. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows as of December 31, 2018 and 2017: 2018 — Originated Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer Estate Industrial Construction Residential Nonresidential Total Grade: Pass $ 610,580 $ 124,349 $ 141,694 $ 86,848 $ 32,184 $ 995,655 Special mention 6,034 1,783 — 761 — 8,578 Substandard — 2,777 — — — 2,777 Doubtful — — — — — — Loss — — — — — — Total $ 616,614 $ 128,909 $ 141,694 $ 87,609 $ 32,184 $ 1,007,010 2018 — Acquired Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer Estate Industrial Construction Residential Nonresidential Total Grade: Pass $ 66,849 $ 7,952 $ 11,224 $ 43,811 $ 124 $ 129,960 Special mention 56 — 421 — — 477 Substandard 83 467 — 11 — 561 Doubtful — — — — — — Loss — — — — — — Total $ 66,988 $ 8,419 $ 11,645 $ 43,822 $ 124 $ 130,998 2017 Commercial Real Commercial and Commercial Consumer Consumer Estate Industrial Construction Residential Nonresidential Total Grade: Pass $ 525,808 $ 95,131 $ 123,444 $ 106,700 $ 32,208 $ 883,291 Special mention 695 543 — 1,639 24 2,901 Substandard 154 2,476 — 587 — 3,217 Doubtful — — — — — — Loss — — — — — — Total $ 526,657 $ 98,150 $ 123,444 $ 108,926 $ 32,232 $ 889,409 Past due and nonaccrual loans presented by loan class were as follows as of December 31, 2018 and 2017: 2018 — Originated Loan Portfolio 30 - 59 days past 60 - 89 days past 90 days or more 90 days past due due due past due Total past due Current Total loans and still accruing Nonaccruals Commercial real estate $ 3,062 $ 2,148 $ — $ 5,210 $ 611,404 $ 616,614 $ — $ — Commercial and industrial 68 181 2,701 2,950 125,959 128,909 1,031 1,769 Commercial construction — — — — 141,694 141,694 — — Consumer residential 843 345 — 1,188 86,421 87,609 — 182 Consumer nonresidential 111 44 — 155 32,029 32,184 — — Total $ 4,084 $ 2,718 $ 2,701 $ 9,503 $ 997,507 $ 1,007,010 $ 1,031 $ 1,951 2018 - Acquired Loan Portfolio 30 - 59 days past 60 - 89 days past 90 days or more 90 days past due due due past due Total past due Current Total loans and still accruing Nonaccruals Commercial real estate $ 1,001 $ 83 $ 56 $ 1,140 $ 65,848 $ 66,988 $ — $ 56 Commercial and industrial 446 — — 446 7,973 8,419 — — Commercial construction 186 — — 186 11,459 11,645 — — Consumer residential 2,785 612 173 3,570 40,252 43,822 — 173 Consumer nonresidential — — — — 124 124 — — Total $ 4,418 $ 695 $ 229 $ 5,342 $ 125,656 $ 130,998 $ — $ 229 2017 30 - 59 days past 60 - 89 days past 90 days or more 90 days past due due due past due Total past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ — $ 154 $ 154 $ 526,503 $ 526,657 $ — $ 154 Commercial and industrial — — 48 48 98,102 98,150 48 — Commercial construction — 911 — 911 122,533 123,444 — — Consumer residential 275 — 587 862 108,064 108,926 — 587 Consumer nonresidential — — — — 32,232 32,232 — — Total $ 275 $ 911 $ 789 $ 1,975 $ 887,434 $ 889,409 $ 48 $ There were overdrafts of $28 thousand and $162 thousand at December 31, 2018 and 2017 which have been reclassified from deposits to loans. At December 31, 2018 and 2017, loans with a carrying value of $173.0 million and $128.7 million were pledged to the Federal Home Loan Bank of Atlanta. There were no defaults of troubled debt restructurings (TDR’s) where the default occurred within twelve months of the restructuring during the year ended December 31, 2018. There were no TDR’s originated in 2018. The following table presents the TDR’s originated during 2017. At December 31, 2017 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Troubled Debt Restructurings Contracts Investment Investment Commercial real estate — $ — $ — Commercial and industrial 1 204 187 Commercial construction — — — Consumer residential — — — Consumer nonresidential 1 9 5 Total 2 $ 213 $ 192 As of December 31, 2018 and 2017, the Company has a recorded investment in troubled debt restructurings of $203 thousand and $1.7 million respectively. The concessions made in troubled debt restructurings were extensions of the maturity dates or reductions in the stated interest rate for the remaining life of the debt. |
Other Real Estate Owned
Other Real Estate Owned | 12 Months Ended |
Dec. 31, 2018 | |
Other Real Estate Owned | |
Other Real Estate Owned | Note 6. Other Real Estate Owned Other real estate owned activity was as follows for December 31, 2018 and 2017. 2018 Beginning Balance $ 3,866 Other real estate acquired in acquisition 358 Capitalized expenditures — Gain on foreclosure — Sales of other real estate owned — Ending Balance $ 4,224 2017 Beginning Balance $ — Loans transferred to real estate owned 2,790 Capitalized expenditures — Gain on foreclosure 1,076 Sales of other real estate owned — Ending Balance $ 3,866 At December 31, 2018 there was one foreclosed residential real estate property recorded in other real estate owned which was acquired by the Company during its acquisition of Colombo. At December 31, 2017, there were no foreclosed residential real estate properties recorded in other real estate owned as a result of obtaining physical possession of the property. At December 31, 2018 and 2017, there was no residential real estate properties for which formal foreclosure proceedings are in process. The Company recorded no impairment charges during 2018 and 2017. |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangibles | |
Goodwill and Intangibles | Note 7. Goodwill and Intangibles As a result of the Company’s acquisition of Colombo in October 2018, the Company recognized goodwill and core deposit intangibles. Information concerning amortizable intangibles follows: Acquisition of 1st Commonwealth Acquisition of Colombo Bank Total Gross Carrying Accumulated Gross Carrying Accumulated Gross Carrying Accumulated Amount Amortization Amount Amortization Amount Amortization Balance at December 31, 2016 $ 204 $ 85 $ — $ — $ 204 $ 85 2017 activity: 1st Commonwealth amortization — 20 — — — 20 Balance at December 31, 2017 $ 204 $ 105 $ — $ — $ 204 $ 105 2018 activity: 1st Commonwealth amortization — 20 — — — 20 Acquisition of Colombo Bank — — 1,950 98 1,950 98 Balance at December 31, 2018 $ 204 $ 125 $ 1,950 $ 98 $ 2,154 $ 223 The aggregate amortization expense was $118 thousand for 2018 and $20 thousand for 2017. The estimated amortization expense for the next five years and thereafter is as follows: 2019 $ 385 2020 345 2021 305 2022 262 2023 205 Thereafter 429 The carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows: Balance at December 31, 2017 $ — Acquisition of Colombo Bank 6,512 Balance at December 31, 2018 $ 6,512 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Premises and Equipment | |
Premises and Equipment | Note 8. Premises and Equipment A summary of the cost and accumulated depreciation of premises and equipment follows: 2018 2017 Leasehold improvements $ 2,915 $ 2,586 Furniture, fixtures and equipment 3,799 3,246 Computer software 756 369 Land 61 — Buildings 196 — $ 7,727 $ 6,201 Less: accumulated depreciation 5,456 4,965 $ 2,271 $ 1,236 For the years ended December 31, 2018 and 2017, depreciation expense was $497 thousand and $536 thousand, respectively. The Company has entered into operating leases for office space over various terms. The leases cover an agreed upon period of time and generally have options to renew and are subject to annual increases as well as allocations for real estate taxes and certain operating expenses. Total rent expense for the years ended December 31, 2018 and 2017 amounted to $1.3 million and $1.1 million, respectively. The minimum base rent for the remainder of the leases are as follows: 2019 $ 1,533 2020 1,381 2021 1,244 2022 1,207 2023 848 Thereafter 2,485 $ 8,699 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2018 | |
Deposits | |
Deposits | Note 9. Deposits Remaining maturities on certificates of deposit are as follows: 2019 $ 245,576 2020 73,096 2021 11,952 2022 7,500 2023 7,262 Thereafter — $ 345,386 Total time deposits of $250,000 and greater were $135.6 million and $119.8 million at December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, the Company had two and one customer relationships, whose related balance on deposit exceeded 5% of outstanding deposits. These customer relationships comprise 13% of outstanding deposits at December 31, 2018 and 9% of outstanding deposits at December 31, 2017. Brokered deposits totaled $84.4 million and $115.5 million at December 31, 2018 and 2017, respectively. |
Other Borrowed Funds
Other Borrowed Funds | 12 Months Ended |
Dec. 31, 2018 | |
Other Borrowed Funds | |
Other borrowed funds | Note 10. Other Borrowed Funds Other borrowed funds at December 31, 2018 consist of the following: Weighted Amount Average Rate Subordinated debt $ 24,407 6.00 % Total borrowings $ 24,407 6.00 % The Company had no FHLB advances at December 31, 2018 and 2017. At December 31, 2018, 1‑4 family residential loans with a lendable value of $1.8 million, multi-family residential loans with a book value of $11.0 million, home equity lines of credit with a book value of $14.2 million and commercial real estate loans with a book value of $99.7 million were pledged against an available line of credit with the Federal Home Loan Bank totaling $126.8 million as of December 31, 2018. The Bank has a letter of credit with the FHLB in the amount of $80.0 million for the purpose of collateral against Virginia public deposits. The remaining lendable collateral value at December 31, 2018 totaled $213.2 million. The Company has unsecured lines of credit with correspondent banks totaling $169.0 million at December 31, 2018 and $44.0 million at December 31, 2017, available for overnight borrowing. At December 31, 2018 and 2017, none of these lines of credit with correspondent banks were drawn upon. On June 20, 2016, the Company issued $25 million in private placement of fixed-to-floating subordinated notes due June 30, 2026. Interest is payable at 6.00% per annum, from and including June 20, 2016 to, but excluding June 30, 2021, payable semi-annually in arrears. From and including June 30, 2021 to the maturity date or early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month LIBOR rate plus 487 basis points, payable quarterly in arrears. The Company may, at its option, beginning with the interest payment date of June 30, 2021 and on any scheduled interest payment date thereafter redeem the subordinated notes, in whole or in part, upon not fewer than 30 nor greater than 60 days’ notice to holders, at a redemption price equal to 100% of the principal amount of the subordinated notes to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption. Any partial redemption will be made pro rata among all of the holders. The subordinated notes qualify as Tier 2 capital for the Company to the fullest extent permitted under the BASEL III capital rules. When contributed to the capital of the Bank, the proceeds of the subordinated notes may be included in Tier 1 capital for the Bank. At December 31, 2018 and 2017, $21 million of the proceeds of the Company’s subordinated notes have been included in the Bank’s Tier 1 capital. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 11. Income Taxes The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017 are presented below: 2018 2017 Deferred Tax Assets: Allowance for loan losses $ 2,132 $ 1,622 Net operating loss carryforward - federal and state 4,270 259 Bank premises and equipment and deferred rent 213 280 Unrealized loss on securities available for sale 732 450 Nonqualified stock options and restricted stock 496 261 Organizational and start-up expenses 61 68 Acquisition accounting adjustments 372 58 Non-accrual loan interest 20 3 Deferred loan (fees) costs 295 154 Net Deferred Tax Assets $ 8,591 $ 3,155 The income tax expense charged to operations for the years ended December 31, 2018 and 2017 consists of the following: 2018 2017 Current tax expense $ 3,104 $ 5,519 Deferred tax expense (benefit) (1) (866) 1,327 $ 2,238 $ 6,846 (1) The deferred tax expense for December 31, 2017 includes the impact of the Tax Act as described in Note 2. Income tax expense differed from amounts computed by applying the U.S. federal income tax rate to income, before income tax expense as a result of the following: 2018 2017 Computed "expected" tax expense $ 2,753 $ 5,023 Increase (decrease) in income taxes resulting from: State income tax benefit (86) — Non-deductible expense 141 154 Tax free income (112) (328) Tax benefits from exercise of stock options (308) (39) Deferred tax asset adjustment for enacted change in tax rate — 2,036 Other (150) — $ 2,238 $ 6,846 The Company files income tax returns in the U.S. federal jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal examination by tax authorities for years prior to 2015. Under the provisions of the Internal Revenue Code, the Company has $16.5 million of net operating loss carryforwards which can be offset against future taxable income. The carryforwards expire December 31, 2037. The full realization of tax benefits associated with carryforwards depends predominately upon the recognition of ordinary income during the carryforward period. Beginning in 2019, the federal portion of net operating loss carryforwards available to offset taxable income is limited to $762 thousand annually under IRS Code section 382. The Company believes it will generate sufficient future taxable income to fully utilize the remaining deferred tax assets. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 12. Derivative Financial Instruments The Company enters into interest rate swap agreements (“swap agreements”) to facilitate the risk management strategies needed in order to accommodate the needs of its banking customers. The Company mitigates the risk of entering into these loan agreements by entering into equal and offsetting swap agreements with highly-rated third party financial institutions. These back-to-back swap agreements are free-standing derivatives and are recorded at fair value in the Company’s consolidated statements of condition (asset positions are included in other assets and liability positions are included in other liabilities) as of December 31, 2018. The Company is party to master netting arrangements with its financial institution counterparty; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Parties to a centrally cleared over-the-counter derivative exchange daily payments that reflect the daily change in value of the derivative. These payments, commonly referred to as variation margin, are recorded as settlements of the derivatives’ mark-to-market exposure rather than collateral against the exposures, which effectively results in any centrally cleared derivative having a Level 2 fair value that approximates zero on a daily basis, and therefore, these swap agreements were not included in the offsetting table in the Fair Value Measurement section. As of December 31, 2018, the Company entered into eight interest rate swap agreements which are collateralized by $1.6 million. There were no such agreements outstanding as of December 31, 2017. The notional amount and fair value of the Company's derivative financial instruments as of December 31, 2018 were as follows: December 31, 2018 Notional Amount Fair Value Interest Rate Swap Agreements Receive Fixed/Pay Variable Swaps $ 47,381 $ (1,705) Pay Fixed/Receive Variable Swaps 47,381 1,705 |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | Note 13. Financial Instruments with Off-Balance Sheet Risk The Company is party to credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments. At December 31, 2018 and 2017, the following financial instruments were outstanding which contract amounts represent credit risk: 2018 2017 Commitments to grant loans $ 22,349 $ 23,078 Unused commitments to fund loans and lines of credit 216,043 170,802 Commercial and standby letters of credit 9,383 9,725 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 equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer. Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer. Commercial and standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. Essentially all letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company generally holds collateral supporting those commitments, if deemed necessary. The Company maintains its cash accounts with the Federal Reserve and correspondent banks. The total amount of cash on deposit in correspondent banks exceeding the federally insured limits was $5.1 million and $608 thousand at December 31, 2018 and 2017, respectively. |
Minimum Regulatory Capital Requ
Minimum Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2018 | |
Minimum Regulatory Capital Requirements | |
Minimum Regulatory Capital Requirements | Note 14. Minimum Regulatory Capital Requirements In August, 2018, the Federal Reserve updated the Small Bank Holding Company Policy Statement (“the Statement”), in compliance with The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (“EGRRCPA”). The Statement, among other things, exempts bank holding companies that fall below a certain asset threshold from reporting consolidated regulatory capital ratios and from minimum regulatory capital requirements. The interim final rule expands the exemption to bank holding companies with consolidated total assets of less than $3 billion. Prior to August 2018, the statement exempted bank holding companies with consolidated total assets of less than $1 billion. As a result of the interim final rule, the Company qualifies as of August, 2018 as a small bank holding company and is no longer subject to regulatory capital requirements on a consolidated basis. Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, financial institutions must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. A financial institution’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (the Basel III rules) became effective for the Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. As a part of the new requirements, the Common Equity Tier 1 Capital ratio is calculated and utilized in the assessment of capital for all institutions. The net unrealized gain or loss on available-for-sale securities is not included in computing regulatory capital. Under the Basel III rules, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is being phased in from 0.625% for 2016 to 2.50% by 2019. The capital conservation buffer for 2018 is 1.875%. Management believes as of December 31, 2018 and 2017, the Bank meets all capital adequacy requirement to which they are subject. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2018 and 2017, the most recent regulatory notification categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category. Federal and state banking regulations place certain restrictions on dividends paid by the Company. The total amount of dividends which may be paid at any date is generally limited to retained earnings of the Company. The Bank continues to be subject to various capital requirements administered by banking agencies. Risk based capital ratios for the Bank as of December 31, 2018 and 2017 are shown in the following table. Well Capitalized Under Minimum Prompt Corrective Actual Capital Requirement (1) Action Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018: Total Risk Based Capital (to Risk Weighted Assets) $ 172,975 14.02 % $ 121,861 9.875 % $ 123,404 10.000 % Tier 1 Capital (to Risk Weighted Assets) $ 163,804 13.27 % $ 97,180 7.875 % $ 98,723 8.000 % Common Tier 1 (CET1) (to Risk Weighted Assets) $ 163,804 13.27 % $ 78,670 6.375 % $ 80,213 6.500 % Tier 1 Capital (to Average Assets) $ 163,804 12.41 % $ 52,771 4.000 % $ 65,971 5.000 % As of December 31, 2017: Total Risk Based Capital (to Risk Weighted Assets) $ 127,020 12.83 % $ 91,594 9.250 % $ 99,021 10.000 % Tier 1 Capital (to Risk Weighted Assets) $ 119,295 12.05 % $ 71,790 7.250 % $ 79,217 8.000 % Common Tier 1 (CET1) (to Risk Weighted Assets) $ 119,295 12.05 % $ 56,937 5.750 % $ 64,364 6.500 % Tier 1 Capital (to Average Assets) $ 119,295 11.79 % $ 40,456 4.000 % $ 50,571 5.000 % (1) Except with regard to the Bank’s Tier 1 to average assets ratio, the minimum capital requirement includes the phased-in portion of the Basel III Capital Rules capital conservation buffer. Dividend Restrictions — The Company's principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amounts of dividents that may be paid without approval of regulatory agencies. As of December 31, 2018, $30.9 million of retained earnings is available to pay dividends. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | Note 15. Related Party Transactions Officers, directors and their affiliates had borrowings of $14.8 million and $11.5 million at December 31, 2018 and 2017 with the Company. During the years ended December 31, 2018 and 2017, total principal additions were $4.2 million and $3.1 million and total principal payments were $898 thousand and $485 thousand, respectively. Related party deposits amounted to $36.8 million and $23.0 million at December 31, 2018 and 2017, respectively. |
Stock-Based Compensation Plan
Stock-Based Compensation Plan | 12 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation Plan | |
Stock-Based Compensation Plan | Note 16. Stock-Based Compensation Plan The Company’s Amended and Restated 2008 Option Plan (the Plan), which is shareholder-approved, was adopted to advance the interests of the Company by providing selected key employees of the Company, their affiliates, and directors with the opportunity to acquire shares of common stock. In June 2018, the shareholders approved an amendment to the Amended and Restated 2008 Plan to increase the number of shares authorized for issuance under the Plan by 200,000 shares. The maximum number of shares with respect to which awards may be made is 2,529,296 shares of common stock, subject to adjustment for certain corporate events. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant, generally vest annually over four years of continuous service and have ten year contractual terms. At December 31, 2018, 238,315 shares were available to grant under the Plan. No options were granted during 2018. For the year ended December 31, 2017, 625 options were granted. For the year ended December 31, 2018, 7,643 options were withheld from issuance upon exercise of the options in order to cover the cost of the exercise by the participant. A summary of option activity under the Plan as of December 31, 2018, and changes during the year then ended is presented below: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term Value (1) Outstanding at January 1, 2018 2,218,210 $ 7.74 5.51 Granted — — Exercised (228,562) 5.56 Forfeited or expired (13,401) 7.45 Outstanding at December 31, 2018 1,976,247 $ 8.00 4.98 $ 18,993,554 Exercisable at December 31, 2018 1,714,299 $ 7.62 4.68 $ 17,125,767 (1) The aggregate intrinsic value of stock options represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on December 31, 2018. This amount changes based on changes in the market value of the Company’s stock. The compensation cost that has been charged to income for the plan was $707 thousand and $627 thousand for 2018 and 2017, respectively. As of December 31, 2018, there was unamortized compensation expense of $296 thousand that will be amortized over 20 months. Tax benefits recognized for qualified and non-qualified stock options during 2018 and 2017 totaled $308 thousand and $39 thousand. A summary of the Company’s restricted stock grant activity as of December 31, 2018 is shown below. Weighted Average Number of Grant Date Shares Fair Value Nonvested at January 1, 2018 66,155 $ 17.50 Granted 2,000 19.11 Vested (16,206) 17.50 Forfeited (1,320) 17.55 Balance at December 31, 2018 50,629 $ 17.57 As of December 31, 2018, there was $862 thousand of total unrecognized compensation cost related to nonvested restricted shares granted under the Plan. The cost is expected to be recognized over a weighted-average period of 46 months. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 17. Fair Value Measurements Determination of Fair Value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with Fair Value Measurements and Disclosures topic of FASB ASC, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. Fair Value Hierarchy In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 — Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. Level 3 — Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements: Securities available-for-sale: Securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017: Fair Value Measurements at December 31, 2018 Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2018 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 956 $ — $ 956 $ — Securities of state and local municipalities tax exempt 3,639 — 3,639 — Securities of state and local municipalities taxable 2,308 — 2,308 — Corporate bonds 5,013 — 5,013 — Certificates of deposit 244 — 244 — SBA pass-through securities 195 — 195 — Mortgage-backed securities 88,037 — 88,037 — Collateralized mortgage obligations 23,145 — 23,145 — Total Available-for-Sale Securities $ 123,537 $ — $ 123,537 $ — Fair Value Measurements at December 31, 2017 Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2017 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 968 $ — $ 968 $ — Securities of state and local municipalities tax exempt 3,716 — 3,716 — Securities of state and local municipalities taxable 2,553 — 2,553 — Corporate bonds 4,996 — 4,996 — Certificates of deposit 490 — 490 — SBA pass-through securities 246 — 246 — Mortgage-backed securities 83,213 — 83,213 — Collateralized mortgage obligations 19,770 — 19,770 — Total Available-for-Sale Securities $ 115,952 $ — $ 115,952 $ — Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower of cost or market accounting or write-downs of individual assets. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements: Impaired Loans: Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Fair value is measured based on the value of the collateral securing the loans. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing a market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral is a house or building in the process of construction, has the value derived by discounting comparable sales due to lack of similar properties, or is discounted by the Company due to marketability, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the Allowance for Loan Losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Statements of Income. No loans were recorded at fair value at December 31, 2017. Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach with data from comparable properties. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available, which results in a Level 3 classification of the inputs for determining fair value. Other real estate owned properties are evaluated regularly for impairment and adjusted accordingly. The following table summarizes the Company’s assets that were measured at fair value on a nonrecurring basis at December 31, 2018 and December 31, 2017: Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2018 (Level 1) (Level 2) (Level 3) Assets Impaired Loans $ 1,602 $ — $ — $ 1,602 Other real estate owned $ 4,224 $ — $ 358 $ 3,866 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2017 (Level 1) (Level 2) (Level 3) Assets Other real estate owned $ 3,866 $ — $ — $ 3,866 The following table displays quantitative information about Level 3 Fair Value Measurements for December 31, 2018: Quantitative information about Level 3 Fair Value Measurements Assets Fair Value Valuation Technique(s) Unobservable input Range (Avg.) Impaired loans $ 1,602 Discounted value Marketability/ Selling costs 0.60% - 8 % (10.89) % Other real estate owned $ 3,866 Discounted appraised value Selling costs 10.51 % % The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments as of December 31, 2018 and 2017. Fair values for December 31, 2018 are estimated under the exit price notion in accordance with the prospective adoption of ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” Fair values for December 31, 2017 are estimated under the guidance in effect for that period, which did not require use of the exit price notion. Fair Value Measurements as of December 31, 2018 using Quoted Prices in Active Markets for Significant Significant Identical Unobservable Unobservable Carrying Assets Inputs Inputs Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 9,435 $ 9,435 $ — $ — Interest-bearing deposits at other institutions 34,060 34,060 — — Securities held-to-maturity 1,761 — 1,735 Securities available-for-sale 123,537 — 123,537 — Restricted stock 5,299 — 5,299 — Loans, net 1,127,584 — — 1,116,012 Bank owned life insurance 16,406 — 16,406 — Accrued interest receivable 4,050 — 4,050 — Financial liabilities: Checking, savings and money market accounts $ 817,054 $ — $ 817,054 $ — Time deposits 345,386 — 344,877 — Subordinated notes 24,407 — 24,515 — Accrued interest payable 811 — 811 — Fair Value Measurements as of December 31, 2017, using Quoted Prices in Active Markets for Significant Significant Identical Unobservable Unobservable Carrying Assets Inputs Inputs Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 7,428 $ 7,428 $ — $ — Interest-bearing deposits at other institutions 15,139 15,139 — — Securities held-to-maturity 1,760 — 1,762 Securities available-for-sale 115,952 — 115,952 — Restricted stock 3,438 — 3,438 — Loans, net 880,952 — — 876,569 Bank owned life insurance 15,969 — 15,969 — Accrued interest receivable 2,964 — 2,964 — Financial liabilities: Checking, savings and money market accounts $ 554,547 $ — $ 554,547 $ — Time deposits 373,616 — 371,782 — Subordinated notes 24,327 — 23,462 — Accrued interest payable 417 — 417 — |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share | |
Earnings Per Share | Note 18. Earnings Per Share Basic earnings per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if contracts to issue common stock were exercised or converted into common stock, or resulted in the issuance of stock which then shared in the earnings of the Company. The following shows the weighted average number of shares used in computing earnings per share and the effect of weighted average number of shares of dilutive potential common stock. Dilutive potential common stock has no effect on income available to common shareholders. There was an average of 313 shares and 625 shares excluded from the calculation for the years ended December 31, 2018 and 2017, as they were anti-dilutive. Years Ended December 31, 2018 2017 Net income $ 10,869 $ 7,690 Weighted average number of shares 11,715 10,435 Options effect of dilutive securities 1,107 1,110 Weighted average diluted shares 12,822 11,545 Basic EPS $ 0.93 $ 0.74 Diluted EPS $ 0.85 $ 0.67 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | Note 19. Supplemental Cash Flow Information For the Years Ended December 31, (dollars in thousands) 2018 2017 Supplemental Disclosure of Cash Flow Information: Cash paid for: Interest on deposits and borrowed funds $ 11,611 $ 7,949 Income taxes 5,892 5,934 Noncash investing and financing activities: Transfer of loans to other real estate owned — 2,790 Unrealized gain (loss) on securities available-for-sale (999) (158) Noncash transactions related to acquisitions: Assets acquired: Interest bearing deposits 3,829 — Investment securities available-for-sale 12,732 — Restricted stock 1,391 — Loans 142,593 — Premises and equipment 789 — Deferred tax assets, net 4,289 — Goodwill 6,512 — Core deposit intangible, net 1,950 — Accrued interest receivable 406 — Prepaid expenses 161 — Other real estate owned (OREO) 358 — Other assets 638 — Liabilities assumed: Non-interest bearing 19,080 — Interest-bearing checking, savings, and money market 48,426 — Time deposits 70,778 — FHLB advances 27,577 — Accrued interest payable 294 — Other liabilities 127 — Consideration: Issuance of common stock 14,579 — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | Note 20. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (AOCI) for the years ended December 31, 2018 and 2017 are shown in the following table. The Company has only one component, which is available-for-sale securities, for the years presented. Available-for-Sale Securities 2018 2017 Balance, beginning of period $ (1,693) $ (1,299) Net unrealized gains (losses) during the period (1,072) 2 Net reclassification adjustment for losses (gains) realized in income 354 (107) Other comprehensive loss, net of tax (718) (105) Reclassification of stranded effects from change in tax rate — (289) Balance, end of period $ (2,411) $ (1,693) The following table presents information related to reclassifications from accumulated other comprehensive income. Amount Reclassified from AOCI Affected Line Item into Income in the Consolidated For the Years Ended December 31, Statements of Details about AOCI 2018 2017 Income Losses (gains) on sale of available-for-sale securities $ 462 $ (164) Gain (loss) on sale of securities available-for-sale Income tax expense (benefit) (108) 57 Income tax expense Total $ 354 $ (107) Net of tax |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition | |
Revenue Recognition | Note 21. Revenue Recognition On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. The implementation of the new standard did not have a material impact on the measurement or recognition of revenue; as such, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, gain on sale of securities, BOLI income, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as trust and asset management income, deposit related fees, interchange fees, merchant income, and insurance commissions. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and personal checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Fees, Exchange and Other Service Charges Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. This income is reflected in other income on the Company’s consolidated statements of income. Other income Other noninterest income consists of insurance commissions and other miscellaneous revenue streams not meeting the criteria above. The Company receives monthly recurring commissions based as a percentage of premiums issued and revenue is recognized when received. Any residual miscellaneous fees are recognized as they occur, and therefore, the Company determined this consistent practice satisfies the obligation for performance. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years ended December 31, 2018 and 2017: Years Ended December 31, Noninterest Income 2018 2017 In-scope of Topic 606 Service Charges on Deposit Accounts $ 635 $ 546 Fees, Exchange, and Other Service Charges 284 211 Gain on foreclosure of other real estate owned — 1,076 Other income 27 29 Noninterest Income (in-scope of Topic 606) 946 1,862 Noninterest Income (out-scope of Topic 606) 715 1,113 Total Noninterest Income $ 1,661 $ 2,975 Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of December 31, 2018, the Company did not have any significant contract balances. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition cost. |
Parent Company Only Financial S
Parent Company Only Financial Statements | 12 Months Ended |
Dec. 31, 2018 | |
Parent Company Only Financial Statements | |
Parent Company Only Financial Statements | Note 22. Parent Company Only Financial Statements The FVCBankcorp, Inc. (Parent Company only) condensed financial statements are as follows: PARENT COMPANY ONLY CONDENSED STATEMENTS OF CONDITION December 31, 2018 and 2017 Assets 2018 2017 Cash and cash equivalents $ 6,252 $ 2,454 Securities available-for-sale 988 1,015 Investment in subsidiary 173,873 118,211 Other assets 1,682 940 Total assets $ 182,795 $ 122,620 Liabilities and Stockholders' Equity Subordinated notes $ 24,407 $ 24,327 Other liabilities 52 10 Total liabilities $ 24,459 $ 24,337 Total stockholders' equity $ 158,336 $ 98,283 Total liabilities and stockholders' equity $ 182,795 $ 122,620 PARENT COMPANY ONLY CONDENSED STATEMENTS OF OPERATIONS December 31, 2018 and 2017 2018 2017 Income: Interest on securities available-for-sale $ 65 $ 65 Gains on sale of securities available-for-sale — 119 Total income $ 65 $ 184 Expense: Interest on subordinated notes (1,580) (1,580) Salaries and employee benefits (715) (596) Occupancy and equipment (80) (80) Audit, legal and consulting fees (225) (108) Merger expenses (781) — Other operating expenses (128) (104) Total expense (3,509) (2,468) Net (loss) before income tax benefit and equity in undistributed earnings of subsidiary $ (3,444) $ (2,284) Income tax benefit (835) (788) Equity in undistributed earnings of subsidiary 13,478 9,186 Net income $ 10,869 $ 7,690 PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS December 31, 2018 and 2017 2018 2017 Cash Flows From Operating Activities Net income $ 10,869 $ 7,690 Equity in undistributed earnings of subsidiary (13,478) (9,186) Deferred income tax expense 111 158 Amortization of subordinated debt issuance costs 80 — Stock-based compensation expense 707 627 Realized gains on securities sales — (119) Change in other assets and liabilities (806) (820) Net cash used in operating activities $ (2,517) $ (1,650) Cash Flows From Investing Activities Proceeds from sales of securities available-for-sale $ — $ 596 Cash aquired in acquision, net 5,172 — Cash contributed to banking subsidiary (33,473) (7,500) Net cash used in investing activities $ (28,301) $ (6,904) Cash Flows From Financing Activities Cash paid in lieu of fractional shares $ — $ (4) Stock options exercised 1,141 263 Common stock issuance 33,475 10,000 Net cash provided by financing activities $ 34,616 $ 10,259 Net increase in cash and cash equivalents $ 3,798 $ 1,705 Cash and cash equivalents, beginning of year 2,454 749 Cash and cash equivalents, end of year $ 6,252 $ 2,454 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | (a) Principles of Consolidation The consolidated financial statements include the accounts of the Company. All material intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | (b) Use of Estimates In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and contingent liabilities, at of the date of the consolidated financial statements 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 accounting for business combinations and impairment testing of goodwill, the allowance for loan losses, the valuation of deferred tax assets, other-than-temporary impairment, and the valuation of other real estate owned. |
Accounting for Business Combinations | (c) Accounting for Business Combinations Business combinations are accounted for under the purchase method. The purchase method requires that the assets acquired and liabilities assumed be recorded, based on their estimated fair values at the date of acquisition. The excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed, including identifiable intangibles, is recorded as goodwill. |
Cash and Cash Equivalents | (d) Cash and Cash Equivalents For purposes of the statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold. Generally, federal funds are purchased and sold for one day periods. |
Investment Securities | (e) Investment Securities Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Equity securities are carried at fair value, with changes in fair value reported in net income. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. Gains and losses on the sale of securities are determined using the specific identification method. The Company regularly evaluates its securities whose values have declined below their amortized cost to assess whether the decline in fair value is other-than-temporary. The Company considers various factors in determining whether a decline in fair value is other-than-temporary including the issuer’s financial condition and/or future prospects, the effects of changes in interest rates or credit spreads, the expected recovery period and other quantitative and qualitative information. The valuation of securities for impairment is a process subject to estimation, judgment and uncertainty and is intended to determine whether declines in the fair value of investments should be recognized in current period earnings. The risks and uncertainties include changes in general economic conditions and future changes in assessments of the aforementioned factors. It is expected that such factors will change in the future, which may result in future other-than-temporary impairments. For impairments of debt securities that are deemed to be other-than-temporary, the credit portion of an other-than-temporary impairment loss is recognized in earnings and the non-credit portion is recognized in accumulated other comprehensive income in those situations where the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security prior to recovery. Interest income and dividends on securities are recognized in interest income on an accrual basis. Premiums and discounts are recognized in interest income using the effective interest method. Prepayments of the mortgages securing mortgage-backed securities may affect the yield to maturity. The Company uses actual principal prepayment experience and estimates of future principal prepayments in calculating the yield necessary to apply the effective interest method. |
Loans and Allowance for Loan Losses | (f) Loans and Allowance for Loan Losses Loans receivable that management has the intent and ability to hold for the foreseeable future or until loan maturity or pay-off are reported at their outstanding principal balance adjusted for any charge-offs, and net of the allowance for loan losses and deferred fees and costs. Loan origination fees and certain direct origination costs are deferred and amortized as an adjustment of the yield using the payment terms required by the loan contract. During 2018, as a result of the Company’s acquisition of Colombo, the loan portfolio was segregated between loans initially accounted for under the amortized cost method (referred to as “originated” loans) and loans acquired (referred to as “acquired” loans). The loans segregated to the acquired loan portfolio were initially measured at fair value and subsequently accounted for under either Accounting Standards Codification (“ASC”) Topic 310-30 or ASC Topic 310-20. Purchased credit-impaired (PCI) loans, which are the non-performing loans acquired in the Company’s acquisition of Colombo, are loans acquired at a discount (that is due, in part, to credit quality). These loans are initially recorded at fair value (as determined by the present value of expected future cash flows) with no allowance for loan losses. The Company accounts for interest income on all loans acquired at a discount (that is due, in part, to credit quality) based on the acquired loans’ expected cash flows. The acquired loans may be aggregated and accounted for as a pool of loans if the loans being aggregated have common risk characteristics. A pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flow. The difference between the cash flows expected at acquisition and the investment in the loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each pool. Increases in expected cash flows subsequent to the acquisition are recognized prospectively through adjustment to any previously recognized allowance for loan loss for that pool of loans and then through an increase in the yield on the pool over its remaining life, while decreases in expected cash flows are recognized as impairment through a loss provision and an increase in the allowance for loan losses. Therefore, the allowance for loan losses on these impaired pools reflect only losses incurred after the acquisition (representing the present value of all cash flows that were expected at acquisition but currently are not expected to be received). The Company periodically evaluates the remaining contractual required payments due and estimates of cash flows expected to be collected for PCI loans. These evaluations, performed quarterly, require the continued use of key assumptions and estimates, similar to the initial estimate of fair value. Changes in the contractual required payments due and estimated cash flows expected to be collected may result in changes in the accretable yield and non-accretable difference or reclassifications between accretable yield and the non-accretable difference. On an aggregate basis, if the acquired pools of PCI loans perform better than originally expected, the Company would expect to receive more future cash flows than originally modeled at the acquisition date. For the pools with better than expected cash flows, the forecasted increase would be recorded as an additional accretable yield that is recognized as a prospective increase to the Company’s interest income on loans. Loans are generally placed into nonaccrual status when they are past-due 90 days as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt. A loan remains in nonaccrual status until the loan is current as to payment of both principal and interest or past-due less than 90 days and the borrower demonstrates the ability to pay and remain current. Loans are charged-off when a loan or a portion thereof is considered uncollectible. When cash payments are received, they are applied to principal first, then to accrued interest. It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current. In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not go on nonaccrual status if the Company determines that the loans are well secured and are in the process of collection. Nonperforming assets include nonaccrual loans, loans past due 90 days or more and other real estate owned. The allowance for loan losses is increased or decreased by provisions for (reversal of) loan losses, increased by recoveries of previously charged-off loans, and decreased by loan charge-offs. The Company maintains the allowance for loan losses at a level that represents management’s best estimate of known and inherent losses in the loan portfolio. Both the amount of the provision expense and the level of the allowance for loan losses are impacted by many factors, including general and industry-specific economic conditions, actual and expected credit losses, historical trends and specific conditions of the individual borrowers. Unusual and infrequently occurring events, such as weather-related disasters, may impact management’s assessment of possible credit losses. As a part of the analysis, the Company uses comparative peer group data and qualitative factors such as levels of and trends in delinquencies, nonaccrual loans, charged-off loans, changes in volume and terms of loans, effects of changes in lending policy, experience and ability and depth of management, national and local economic trends and conditions and concentrations of credit, competition, and loan review results to support estimates. The Company’s allowance for loan losses is based first on a segmentation of its loan portfolio by general loan type, or portfolio segments. For originated loans, certain portfolio segments are further disaggregated and evaluated collectively for impairment based on loan segments, which are largely based on the type of collateral underlying each loan. For purposes of this analysis, the Company categorizes loans into one of five categories: commercial and industrial, commercial real estate, commercial construction, consumer residential, and consumer nonresidential loans. Typically, financial institutions use their historical loss experience and trends in losses for each loan category which are then adjusted for portfolio trends and economic and environmental factors in determining their allowance for loan losses. Since the Bank’s inception in 2007, the Bank has experienced minimal loss history within its loan portfolio. Because of this, the allowance model uses the average loss rates of similar institutions (a custom peer group) as a baseline which is then adjusted based on the Company’s particular qualitative loan portfolio characteristics and environmental factors. The indicated loss factors resulting from this analysis are applied for each of the five categories of loans. The Company also maintains an allowance for loan losses for acquired loans when: (i) for loans accounted for under ASC 310-30, there is deterioration in credit quality subsequent to acquisition, and (ii) for loans accounted for under ASC 310-20, the inherent losses in the loans exceed the remaining discount recorded at the time of acquisition. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are determined to be impaired and, therefore, individually evaluated for impairment. The Company determines and recognizes impairment of certain loans when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the loan agreement. A loan is not considered impaired during a period of delay in payment if the Company expects to collect all amounts due, including past-due interest. The Company individually assigns loss factors to all loans that have been identified as having loss attributes, as indicated by deterioration in the financial condition of the borrower or a decline in underlying collateral value if the loan is collateral dependent. The Company evaluates the impairment of certain loans on a loan by loan basis for those loans that are adversely risk rated. Measurement of impairment is based on the expected future cash flows of an impaired loan, which are discounted at the loan’s effective interest rate, or measured on an observable market value, if one exists, or the fair value of the collateral underlying the loan, discounted to consider estimated costs to sell the collateral for collateral-dependent loans. If the net collateral value is less than the loan balance (including accrued interest and any unamortized premium or discount associated with the loan) an impairment is recognized and a specific reserve is established for the impaired loan. Loans classified as loss loans are fully reserved or charged-off. In addition, various regulatory agencies, as part of their examination process, periodically review the Company’s allowance for loan losses. These agencies may require the Company to recognize additions to the allowance based on their risk evaluation and credit judgment. Management believes that the allowance for loan losses at December 31, 2018 and 2017 is a reasonable estimate of known and inherent losses in the loan portfolio at those dates. Loans considered to be troubled debt restructuring (“TDRs”) are loans that have their terms restructured (e.g., interest rates, loan maturity date, payment and amortization period, etc.) in circumstances that provide payment relief to a borrower experiencing financial difficulty. All restructured loans are considered impaired loans and may either be in accruing status or nonaccruing status. Nonaccruing restructured loans may return to accruing status provided doubt has been removed concerning the collectability of principal and interest as evidenced by a sufficient period of payment performance in accordance with the restructured terms. Loans may be removed from the restructured category in the year subsequent to the restructuring if their revised loan terms are considered to be consistent with terms that can be obtained in the credit market for loans with comparable risk and if they meet certain performance criteria. |
Premises and Equipment | (g) Premises and Equipment Land is carried at cost. Premises, furniture, equipment, and leasehold improvements are carried at cost less accumulated depreciation and amortization. Depreciation of premises, furniture and equipment is computed using the straight-line method over estimated useful lives from three to seven years. Amortization of leasehold improvements is computed using the straight-line method over the useful lives of the improvements or the lease term, whichever is shorter. Purchased computer software which is capitalized is amortized over estimated useful lives of one to three years. Rent expense on operating leases is recorded using the straight-line method over the appropriate lease term. |
Goodwill and Intangible Assets | (h) Goodwill and Intangible Assets Goodwill, which represents the excess of purchase price over fair value of net assets acquired, is not amortized but is evaluated at least annually for impairment by comparing its fair value with its carrying amount. Impairment is indicated when the carrying amount of a reporting unit exceeds its estimated fair value. Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company will perform the annual impairment test annually during the fourth quarter. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. No impairment was recorded for 2018 and 2017. |
Other Real Estate Owned | (i) Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure are held for sale. At the time of acquisition, these properties are recorded at fair value less estimated selling costs, with any write down charged to the allowance for loan losses and any gain on foreclosure is recorded in net income, establishing a new cost basis. Subsequent to foreclosure, valuations of the assets are periodically performed by management, and these assets are subsequently accounted for at lower of cost or fair value less estimated selling costs. Adjustments are made for subsequent decline in the fair value of the assets less selling costs. Revenue and expenses from operations and valuation changes are charged to operating income in the year of the transaction. The Company foreclosed on no properties for the year ended December 31, 2018 and one during the year ended December 31, 2017. The Company, through its acquisition of Colombo, did acquire one residential real estate property. |
Bank Owned Life Insurance | (j) Bank Owned Life Insurance The Company has purchased life insurance policies on certain key employees. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance date, which is the cash surrender value. The increase in the cash surrender value over time is recorded as other non-interest income. The Company monitors the financial strength and condition of the counterparty. |
Transfers of Financial Assets | (k) Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed surrendered when (1) the assets have been isolated from the Company — put presumptively beyond reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. |
Income Taxes | (l) Income Taxes Deferred taxes are provided on a liability method whereby deferred tax assets and liabilities are recognized for deductible temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. The Company had no such liability recorded as of December 31, 2018 and 2017. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The results for the year ended December 31, 2017 included the effect of the Tax Cuts and Jobs Act (the Tax Act), which was signed into law on December 22, 2017. Among other things, the Tax Act permanently lowered the federal corporate income tax rate to 21% from the maximum rate prior to the passage of the Tax Act of 35%, effective January 1, 2018. As a result of the federal corporate income tax rate, U.S. GAAP required companies to re-measure their deferred tax assets and deferred tax liabilities, including those accounted for in accumulated other comprehensive income (loss), as of the date of the Tax Act’s enactment and record the corresponding effects in income tax expense in the fourth quarter of 2017. As a result of the permanent reduction in the corporate income tax rate, the Company recognized a $2.0 million reduction in the value of its net deferred tax asset and recorded a corresponding incremental income tax expense in the Company’s consolidated statement of income for 2017. |
Comprehensive Income (Loss) | (m) Comprehensive Income (Loss ) Comprehensive income consists of net income and other comprehensive income. Other comprehensive income (loss) includes unrealized gains (losses) on securities available-for-sale, which are also recognized as separate components of equity. Items reclassified out of accumulated other comprehensive income (loss) to net income relate solely to realized gains (losses) on sales of securities available-for-sale and appear under the caption “Gain (loss) on sale of securities available-for-sale” in the Company’s consolidated statements of income. |
Fair Value of Financial Instruments | (n) Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. |
Equity-based Compensation | (o) Equity-based Compensation The Company recognizes in the income statement the grant-date fair value of stock options and other equity-based compensation. The Company classifies stock awards as either an equity award or a liability award. Equity classified awards are valued as of the grant date using either an observable market price or a valuation methodology. Liability classified awards are valued at fair value at each reporting date. For the periods presented, all of the Company’s stock options are classified as equity awards. The Company recognizes in the income statement the grant-date fair value of stock options and other equity-based compensation. The fair value related to forfeitures of stock options and other equity-based compensation are recorded to the income statement as they occur, reducing equity-based compensation expense in that period. During 2017, the Company began granting restricted stock units which are granted at the fair market value of the Company’s common stock on the grant date. Most restricted stock units vest in one-quarter increments on the anniversary date of the grant. The weighted average per share fair values of stock option grants made in 2017 was $15.20. The fair values of the options granted were estimated on the grant date using the Black-Scholes option-pricing model based on the following weighted average assumptions: Years Ended December 31, 2018 2017 Dividend yield N/A — Expected life (in years) N/A Expected volatility N/A 16.60 % Risk-free interest rate N/A 1.94 % |
401(k) Plan | (p) 401(k) Plan Employee 401(k) plan expense is the amount of matching contributions paid by the Company. 401(k) plan expense was $280 thousand and $230 thousand for the years ended December 31, 2018 and 2017, respectively. |
Earnings Per Share | (q) Earnings Per Share Basic earnings per share represent income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Common stock equivalents that may be issued by the Company consist primarily of outstanding stock options and restricted stock units, and the dilutive potential common shares resulting from outstanding stock options and restricted stock units are determined using the treasury method. Earnings and dividends per share are restated for all stock splits and dividends through the date of issuance of the financial statements. The effects of anti-dilutive common stock equivalents are excluded from the calculation of diluted earnings per share. |
Reclassifications | (r) Reclassifications Certain prior year amounts have been reclassified to conform to the current year’s method of presentation. None of these reclassifications were significant. |
Recent Accounting Pronouncements | (s) Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, "Leases (Topic 842)." Among other things, in the amendments in ASU 2016‑02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The FASB made subsequent amendments to Topic 842 in July 2018 through ASU 2018-10 ("Codification Improvements to Topic 842, Leases.") and ASU 2018-11 ("Leases (Topic 842): Targeted Improvements.") Among these amendments is the provision in ASU 2018-11 that provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic 840, Leases). The adoption of this standard on January 1, 2019 resulted in the Company recording a right of use asset of approximately $12.5 million and base liability of approximately $12.8 million. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company has identified a third party vendor to assist in the measurement of expected credit losses under this standard and has begun implementation efforts in order to assess the impact that ASU 2016-13 will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Public business entities that are SEC filers should adopt the amendments in this ASU for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017‑04 to have a material impact on its consolidated financial statements. In March 2017, the FASB issued ASU 2017 - 08, “ Receivables — Nonrefundable Fees and Other Costs (Subtopic 310 - 20), Premium Amortization on Purchased Callable Debt Securities. ” The amendments in this ASU shorten the amortization period for certain callable debt securities purchased at a premium. Upon adoption of the standard, premiums on these qualifying callable debt securities will be amortized to the earliest call date. Discounts on purchased debt securities will continue to be accreted to maturity. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Upon transition, entities should apply the guidance on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and provide the disclosures required for a change in accounting principle. The Company does not expect the adoption of ASU 2017-08 to have a material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this ASU modify the designation and measurement guidance for hedge accounting as well as provide for increased transparency regarding the presentation of economic results on both the financial statements and related footnotes. Certain aspects of hedge effectiveness assessments will also be simplified upon implementation of this update. The amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in any interim period. This ASU was further amended in October 2018 by ASU 2018-16, which adds the Overnight Index Swap rate as a U.S. benchmark interest rate. These amendments will be effective concurrently with ASU 2017-12. The Company does not expect the adoption of ASU 2017-12 to have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, “Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” The amendments expand the scope of Topic 718 to include share-based payments issued to non-employees for goods or services, which were previously excluded. The amendments will align the accounting for share-based payments to nonemployees and employees more similarly. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-07 to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments modify the disclosure requirements in Topic 820 to add disclosures regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty. Certain disclosure requirements in Topic 820 are also removed or modified. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Certain of the amendments are to be applied prospectively while others are to be applied retrospectively. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Summary of Significant Accounting Policies | |
Schedule weighted average assumptions of stock options | Years Ended December 31, 2018 2017 Dividend yield N/A — Expected life (in years) N/A Expected volatility N/A 16.60 % Risk-free interest rate N/A 1.94 % |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations | |
Schedule of assets acquired and liabilities assumed in the acquisition at their estimated fair values | Assets acquired: October 12, 2018 Cash and cash equivalents $ 23,469 Interest-bearing deposits 3,874 Securities available-for-sale 12,732 Restricted stock, at cost 1,391 Loans 142,593 Premises and equipment 789 Deferred tax assets, net 4,289 Goodwill 6,512 Core deposit intangible, net 1,950 Accrued interest receivable 406 Prepaid expense 161 Other real estate owned (OREO) 358 Other assets 638 Total assets acquired $ 199,162 Liabilities assumed: Deposits: Non-interest bearing $ 19,080 Interest-bearing checking, savings and money market 48,426 Time deposits 70,778 Total deposits 138,284 FHLB advances 27,577 Accrued interest payable 127 Accrued expenses and other liabilities 294 Total liabilities assumed: $ 166,282 Total consideration paid $ 32,880 |
Investment Securities and Oth_2
Investment Securities and Other Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investment Securities and Other Investments | |
Schedule of amortized cost and fair values of securities held-to-security and securities available-for-sale | December 31, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 264 $ — $ (6) $ 258 Securities of U.S. government and federal agencies 1,497 — (20) 1,477 Total Held-to-maturity Securities $ 1,761 $ — $ (26) $ 1,735 Available-for-sale Securities of U.S. government and federal agencies $ 1,000 $ — $ (44) $ 956 Securities of state and local municipalities tax exempt 3,678 — (39) 3,639 Securities of state and local municipalities taxable 2,378 — (70) 2,308 Corporate bonds 5,000 92 (79) 5,013 Certificates of deposit 245 — (1) 244 SBA pass-through securities 200 — (5) 195 Mortgage-backed securities 90,234 94 (2,291) 88,037 Collateralized mortgage obligations 23,945 10 (810) 23,145 Total Available-for-sale Securities $ 126,680 $ 196 $ (3,339) $ 123,537 December 31, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 263 $ 3 $ — $ 266 Securities of U.S. government and federal agencies 1,497 — (1) 1,496 Total Held-to-maturity Securities $ 1,760 $ 3 $ (1) $ 1,762 Available-for-sale Securities of U.S. government and federal agencies $ 1,000 $ — $ (32) $ 968 Securities of state and local municipalities tax exempt 3,694 23 (1) 3,716 Securities of state and local municipalities taxable 2,591 3 (41) 2,553 Corporate bonds 5,000 57 (61) 4,996 Certificates of deposit 490 — — 490 SBA pass-through securities 254 — (8) 246 Mortgage-backed securities 84,614 — (1,401) 83,213 Collateralized mortgage obligations 20,453 — (683) 19,770 Total Available-for-sale Securities $ 118,096 $ 83 $ (2,227) $ 115,952 |
Schedule of available-for-sale securities that have been in a continuous unrealized loss position | Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized At December 31, 2018 Value Losses Value Losses Value Losses Securities of U.S. government and federal agencies $ — $ — $ 2,433 $ (64) $ 2,433 $ (64) Securities of state and local municipalities tax exempt 263 (1) 3,634 (44) 3,897 (45) Securities of state and local municipalities taxable 757 (1) 1,551 (69) 2,308 (70) Corporate bonds 988 (12) 933 (67) 1,921 (79) Certificates of deposit — — 244 (1) 244 (1) SBA pass-through securities — — 195 (5) 195 (5) Mortgage-backed securities 12,743 (59) 60,656 (2,232) 73,399 (2,291) Collateralized mortgage obligations — — 16,790 (810) 16,790 (810) Total $ 14,751 $ (73) $ 86,436 $ (3,292) $ 101,187 $ (3,365) Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized At December 31, 2017 Value Losses Value Losses Value Losses Securities of U.S. government and federal agencies $ 1,496 $ (1) $ 968 $ (32) $ 2,464 $ (33) Securities of state and local municipalities tax exempt 272 (1) — — 272 (1) Securities of state and local municipalities taxable 497 (3) 1,278 (38) 1,775 (41) Corporate bonds 1,492 (7) 946 (54) 2,438 (61) Certificates of deposit 245 — — — 245 — SBA pass-through securities — — 246 (8) 246 (8) Mortgage-backed securities 38,039 (404) 44,663 (997) 82,702 (1,401) Collateralized mortgage obligations 2,731 (28) 17,040 (655) 19,771 (683) Total $ 44,772 $ (444) $ 65,141 $ (1,784) $ 109,913 $ (2,228) |
Schedule of amortized cost and fair value of held-to-maturity securities and available-for-sale securities by contractual maturity | 2018 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair Cost Value Cost Value Less than 1 year $ — $ — $ 745 $ 741 After 5 years through 10 years 1,761 1,735 18,579 18,260 After 10 years — — 107,356 104,536 Total $ 1,761 $ 1,735 $ 126,680 $ 123,537 |
Schedule of other investments | 2018 2017 Federal Reserve stock $ 4,029 $ 2,499 FHLB stock 1,123 817 Community Bankers' Bank stock 122 122 Atlantic Bankers' Bank stock 25 — $ 5,299 $ 3,438 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans and Allowance for Loan Losses | |
Summary of loan balances | 2018 2017 Originated Acquired Total Total Commercial real estate $ 616,614 $ 66,988 $ 683,602 $ 526,657 Commercial and industrial 128,909 8,419 137,328 98,150 Commercial construction 141,694 11,645 153,339 123,444 Consumer residential 87,609 43,822 131,431 108,926 Consumer nonresidential 32,184 124 32,308 32,232 $ 1,007,010 $ 130,998 $ 1,138,008 $ 889,409 Less: Allowance for loan losses 9,159 — 9,159 7,725 Unearned income and (unamortized premiums), net 1,265 — 1,265 732 Loans, net $ 996,586 $ 130,998 $ 1,127,584 $ 880,952 |
Schedule of acquired loans | (in thousands) 2018 Purchased credit impaired acquired loans evaluated individually for future credit losses Outstanding principal balance $ 2,533 Carrying amount 1,401 Other acquired loans Outstanding principal balance 131,286 Carrying amount 129,597 Total acquired loans Outstanding principal balance 133,819 Carrying amount 130,998 |
schedule of accretable yield on purchased credit impaired loans | The following table presents changes for the year ended December 31, 2018 in the accretable yield on purchased credit impaired loans for which the Company applies ASC 310-30. (in thousands) Balance at January 1, 2018 $ — Accretable yield at acquisition date 379 Accretion (22) Balance at December 31, 2018 $ 357 |
Schedule of allowance for loan losses | Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Residential Nonresidential Unallocated Total 2018 Allowance for credit losses: Beginning Balance $ 4,832 $ 768 $ 1,191 $ 626 $ 268 $ 40 $ 7,725 Charge-offs — (86) — (187) (292) — (565) Recoveries — 26 — 1 52 — 79 Provision 716 766 94 78 306 (40) 1,920 Ending Balance $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ — $ 9,159 Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Residential Nonresidential Unallocated Total 2017 Allowance for credit losses: Beginning Balance $ 4,266 $ 1,032 $ 375 $ 500 $ 121 $ 158 $ 6,452 Charge-offs — (44) — — (33) — (77) Recoveries — 117 — — 33 — 150 Provision 566 (337) 816 126 147 (118) 1,200 Beginning Balance $ 4,832 $ 768 $ 1,191 $ 626 $ 268 $ 40 $ 7,725 |
Schedule of recorded investment in loans and impairment by portfolio segment | Allowance for Loan Losses Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2018 Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ 372 $ — $ 1 $ — $ — $ 373 Purchased credit impaired — — — — — — — Collectively evaluated for impairment 5,548 1,102 1,285 517 334 — 8,786 $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ — $ 9,159 Loans Receivable Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2018 Financing receivables: Ending Balance Individually evaluated for impairment $ 1,306 $ 2,969 $ — $ 182 $ — $ — $ 4,457 Purchased credit impaired loans 139 467 421 374 — — 1,401 Collectively evaluated for impairment 682,157 133,892 152,918 130,875 32,308 — 1,132,150 $ 683,602 $ 137,328 $ 153,339 $ 131,431 $ 32,308 $ — $ 1,138,008 Allowance for Loan Losses Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2017 Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 4,832 768 1,191 626 268 40 7,725 $ 4,832 $ 768 $ 1,191 $ 626 $ 268 $ 40 $ 7,725 Loans Receivable Commercial Commercial Commercial Consumer Consumer Real Estate and Industrial Construction Residential Nonresidential Unallocated Total 2017 Financing receivables: Ending Balance Individually evaluated for impairment $ 1,882 $ 2,846 $ — $ 587 $ 5 $ — $ 5,320 Collectively evaluated for impairment 524,775 95,304 123,444 108,339 32,227 — 884,089 $ 526,657 $ 98,150 $ 123,444 $ 108,926 $ 32,232 $ — $ 889,409 |
Schedule of Impaired loans | Impaired Loans — Originated Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (in thousands) Investment Balance Allowance Investment Recognized 2018 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 1,793 1,793 372 1,801 100 Commercial construction — — — — — Consumer residential 182 182 1 184 12 Consumer nonresidential — — — — — 1,975 1,975 373 1,985 112 2018 With no related allowance: Commercial real estate $ 1,306 $ 1,319 $ — $ 1,321 $ 68 Commercial and industrial 1,156 1,170 — 1,378 81 Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ 2,462 $ 2,489 $ — $ 2,699 $ 149 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized December 31, 2017 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ — $ — $ — $ — $ — December 31, 2017 With no related allowance: Commercial real estate $ 1,882 $ 1,882 $ — $ 1,894 $ 108 Commercial and industrial 2,846 2,860 — 2,516 150 Commercial construction — — — — — Consumer residential 587 587 — 587 24 Consumer nonresidential 5 5 — 8 1 $ 5,320 $ 5,334 $ — $ 5,005 $ 283 Impaired Loans — Acquired Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2018 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ — $ — $ — $ — $ — 2018 With no related allowance: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 20 20 — 58 3 Commercial construction — — — — — Consumer residential — — — — — Consumer nonresidential — — — — — $ 20 $ 20 $ — $ 58 $ 3 |
Schedule of risk category of loans | 2018 — Originated Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer Estate Industrial Construction Residential Nonresidential Total Grade: Pass $ 610,580 $ 124,349 $ 141,694 $ 86,848 $ 32,184 $ 995,655 Special mention 6,034 1,783 — 761 — 8,578 Substandard — 2,777 — — — 2,777 Doubtful — — — — — — Loss — — — — — — Total $ 616,614 $ 128,909 $ 141,694 $ 87,609 $ 32,184 $ 1,007,010 2018 — Acquired Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer Estate Industrial Construction Residential Nonresidential Total Grade: Pass $ 66,849 $ 7,952 $ 11,224 $ 43,811 $ 124 $ 129,960 Special mention 56 — 421 — — 477 Substandard 83 467 — 11 — 561 Doubtful — — — — — — Loss — — — — — — Total $ 66,988 $ 8,419 $ 11,645 $ 43,822 $ 124 $ 130,998 2017 Commercial Real Commercial and Commercial Consumer Consumer Estate Industrial Construction Residential Nonresidential Total Grade: Pass $ 525,808 $ 95,131 $ 123,444 $ 106,700 $ 32,208 $ 883,291 Special mention 695 543 — 1,639 24 2,901 Substandard 154 2,476 — 587 — 3,217 Doubtful — — — — — — Loss — — — — — — Total $ 526,657 $ 98,150 $ 123,444 $ 108,926 $ 32,232 $ 889,409 |
Schedule of past due and nonaccrual loans | 2018 — Originated Loan Portfolio 30 - 59 days past 60 - 89 days past 90 days or more 90 days past due due due past due Total past due Current Total loans and still accruing Nonaccruals Commercial real estate $ 3,062 $ 2,148 $ — $ 5,210 $ 611,404 $ 616,614 $ — $ — Commercial and industrial 68 181 2,701 2,950 125,959 128,909 1,031 1,769 Commercial construction — — — — 141,694 141,694 — — Consumer residential 843 345 — 1,188 86,421 87,609 — 182 Consumer nonresidential 111 44 — 155 32,029 32,184 — — Total $ 4,084 $ 2,718 $ 2,701 $ 9,503 $ 997,507 $ 1,007,010 $ 1,031 $ 1,951 2018 - Acquired Loan Portfolio 30 - 59 days past 60 - 89 days past 90 days or more 90 days past due due due past due Total past due Current Total loans and still accruing Nonaccruals Commercial real estate $ 1,001 $ 83 $ 56 $ 1,140 $ 65,848 $ 66,988 $ — $ 56 Commercial and industrial 446 — — 446 7,973 8,419 — — Commercial construction 186 — — 186 11,459 11,645 — — Consumer residential 2,785 612 173 3,570 40,252 43,822 — 173 Consumer nonresidential — — — — 124 124 — — Total $ 4,418 $ 695 $ 229 $ 5,342 $ 125,656 $ 130,998 $ — $ 229 2017 30 - 59 days past 60 - 89 days past 90 days or more 90 days past due due due past due Total past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ — $ 154 $ 154 $ 526,503 $ 526,657 $ — $ 154 Commercial and industrial — — 48 48 98,102 98,150 48 — Commercial construction — 911 — 911 122,533 123,444 — — Consumer residential 275 — 587 862 108,064 108,926 — 587 Consumer nonresidential — — — — 32,232 32,232 — — Total $ 275 $ 911 $ 789 $ 1,975 $ 887,434 $ 889,409 $ 48 $ |
Schedule of TDR's originated | Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Troubled Debt Restructurings Contracts Investment Investment Commercial real estate — $ — $ — Commercial and industrial 1 204 187 Commercial construction — — — Consumer residential — — — Consumer nonresidential 1 9 5 Total 2 $ 213 $ 192 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Real Estate Owned | |
Schedule of other real estate owned | 2018 Beginning Balance $ 3,866 Other real estate acquired in acquisition 358 Capitalized expenditures — Gain on foreclosure — Sales of other real estate owned — Ending Balance $ 4,224 2017 Beginning Balance $ — Loans transferred to real estate owned 2,790 Capitalized expenditures — Gain on foreclosure 1,076 Sales of other real estate owned — Ending Balance $ 3,866 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangibles | |
Schedule of information concerning amortizable intangibles | Acquisition of 1st Commonwealth Acquisition of Colombo Bank Total Gross Carrying Accumulated Gross Carrying Accumulated Gross Carrying Accumulated Amount Amortization Amount Amortization Amount Amortization Balance at December 31, 2016 $ 204 $ 85 $ — $ — $ 204 $ 85 2017 activity: 1st Commonwealth amortization — 20 — — — 20 Balance at December 31, 2017 $ 204 $ 105 $ — $ — $ 204 $ 105 2018 activity: 1st Commonwealth amortization — 20 — — — 20 Acquisition of Colombo Bank — — 1,950 98 1,950 98 Balance at December 31, 2018 $ 204 $ 125 $ 1,950 $ 98 $ 2,154 $ 223 |
Schedule of estimated amortization expense | 2019 $ 385 2020 345 2021 305 2022 262 2023 205 Thereafter 429 |
Schedule of carrying amount of goodwill | Balance at December 31, 2017 $ — Acquisition of Colombo Bank 6,512 Balance at December 31, 2018 $ 6,512 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Premises and Equipment | |
Summary of the cost and accumulated depreciation of premises and equipment | 2018 2017 Leasehold improvements $ 2,915 $ 2,586 Furniture, fixtures and equipment 3,799 3,246 Computer software 756 369 Land 61 — Buildings 196 — $ 7,727 $ 6,201 Less: accumulated depreciation 5,456 4,965 $ 2,271 $ 1,236 |
Schedule of minimum base rent for the remainder of the leases | 2019 $ 1,533 2020 1,381 2021 1,244 2022 1,207 2023 848 Thereafter 2,485 $ 8,699 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deposits | |
Schedule of maturities on certificates of deposits | 2019 $ 245,576 2020 73,096 2021 11,952 2022 7,500 2023 7,262 Thereafter — $ 345,386 |
Other Borrowed Funds (Tables)
Other Borrowed Funds (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Borrowed Funds | |
Schedule of other borrowed funds | Other borrowed funds at December 31, 2018 consist of the following: Weighted Amount Average Rate Subordinated debt $ 24,407 6.00 % Total borrowings $ 24,407 6.00 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities | 2018 2017 Deferred Tax Assets: Allowance for loan losses $ 2,132 $ 1,622 Net operating loss carryforward - federal and state 4,270 259 Bank premises and equipment and deferred rent 213 280 Unrealized loss on securities available for sale 732 450 Nonqualified stock options and restricted stock 496 261 Organizational and start-up expenses 61 68 Acquisition accounting adjustments 372 58 Non-accrual loan interest 20 3 Deferred loan (fees) costs 295 154 Net Deferred Tax Assets $ 8,591 $ 3,155 |
Schedule of income tax expense charged to operations | 2018 2017 Current tax expense $ 3,104 $ 5,519 Deferred tax expense (benefit) (1) (866) 1,327 $ 2,238 $ 6,846 (1) The deferred tax expense for December 31, 2017 includes the impact of the Tax Act as described in Note 2. |
Schedule of income tax expense differed from amounts computed by applying the U.S. federal income tax rate to income, before income tax expense | 2018 2017 Computed "expected" tax expense $ 2,753 $ 5,023 Increase (decrease) in income taxes resulting from: State income tax benefit (86) — Non-deductible expense 141 154 Tax free income (112) (328) Tax benefits from exercise of stock options (308) (39) Deferred tax asset adjustment for enacted change in tax rate — 2,036 Other (150) — $ 2,238 $ 6,846 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Financial Instruments | |
Schedule of notional amount and fair value of derivative financial instruments | December 31, 2018 Notional Amount Fair Value Interest Rate Swap Agreements Receive Fixed/Pay Variable Swaps $ 47,381 $ (1,705) Pay Fixed/Receive Variable Swaps 47,381 1,705 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments with Off-Balance Sheet Risk | |
Schedule of financial instruments outstanding which contract amounts represent credit risk | 2018 2017 Commitments to grant loans $ 22,349 $ 23,078 Unused commitments to fund loans and lines of credit 216,043 170,802 Commercial and standby letters of credit 9,383 9,725 |
Minimum Regulatory Capital Re_2
Minimum Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum Regulatory Capital Requirements | |
Schedule of minimum capital requirement and capital position | Well Capitalized Under Minimum Prompt Corrective Actual Capital Requirement (1) Action Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018: Total Risk Based Capital (to Risk Weighted Assets) $ 172,975 14.02 % $ 121,861 9.875 % $ 123,404 10.000 % Tier 1 Capital (to Risk Weighted Assets) $ 163,804 13.27 % $ 97,180 7.875 % $ 98,723 8.000 % Common Tier 1 (CET1) (to Risk Weighted Assets) $ 163,804 13.27 % $ 78,670 6.375 % $ 80,213 6.500 % Tier 1 Capital (to Average Assets) $ 163,804 12.41 % $ 52,771 4.000 % $ 65,971 5.000 % As of December 31, 2017: Total Risk Based Capital (to Risk Weighted Assets) $ 127,020 12.83 % $ 91,594 9.250 % $ 99,021 10.000 % Tier 1 Capital (to Risk Weighted Assets) $ 119,295 12.05 % $ 71,790 7.250 % $ 79,217 8.000 % Common Tier 1 (CET1) (to Risk Weighted Assets) $ 119,295 12.05 % $ 56,937 5.750 % $ 64,364 6.500 % Tier 1 Capital (to Average Assets) $ 119,295 11.79 % $ 40,456 4.000 % $ 50,571 5.000 % (1) Except with regard to the Bank’s Tier 1 to average assets ratio, the minimum capital requirement includes the phased-in portion of the Basel III Capital Rules capital conservation buffer. |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation Plan | |
Summary of option activity | Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term Value (1) Outstanding at January 1, 2018 2,218,210 $ 7.74 5.51 Granted — — Exercised (228,562) 5.56 Forfeited or expired (13,401) 7.45 Outstanding at December 31, 2018 1,976,247 $ 8.00 4.98 $ 18,993,554 Exercisable at December 31, 2018 1,714,299 $ 7.62 4.68 $ 17,125,767 (1) The aggregate intrinsic value of stock options represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on December 31, 2018. This amount changes based on changes in the market value of the Company’s stock. |
Summary of restricted stock grant activity | Weighted Average Number of Grant Date Shares Fair Value Nonvested at January 1, 2018 66,155 $ 17.50 Granted 2,000 19.11 Vested (16,206) 17.50 Forfeited (1,320) 17.55 Balance at December 31, 2018 50,629 $ 17.57 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements at December 31, 2018 Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2018 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 956 $ — $ 956 $ — Securities of state and local municipalities tax exempt 3,639 — 3,639 — Securities of state and local municipalities taxable 2,308 — 2,308 — Corporate bonds 5,013 — 5,013 — Certificates of deposit 244 — 244 — SBA pass-through securities 195 — 195 — Mortgage-backed securities 88,037 — 88,037 — Collateralized mortgage obligations 23,145 — 23,145 — Total Available-for-Sale Securities $ 123,537 $ — $ 123,537 $ — Fair Value Measurements at December 31, 2017 Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2017 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 968 $ — $ 968 $ — Securities of state and local municipalities tax exempt 3,716 — 3,716 — Securities of state and local municipalities taxable 2,553 — 2,553 — Corporate bonds 4,996 — 4,996 — Certificates of deposit 490 — 490 — SBA pass-through securities 246 — 246 — Mortgage-backed securities 83,213 — 83,213 — Collateralized mortgage obligations 19,770 — 19,770 — Total Available-for-Sale Securities $ 115,952 $ — $ 115,952 $ — |
Schedule of the Company's assets that were measured at fair value on a nonrecurring basis | Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2018 (Level 1) (Level 2) (Level 3) Assets Impaired Loans $ 1,602 $ — $ — $ 1,602 Other real estate owned $ 4,224 $ — $ 358 $ 3,866 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Balance as of Assets Inputs Inputs Description December 31, 2017 (Level 1) (Level 2) (Level 3) Assets Other real estate owned $ 3,866 $ — $ — $ 3,866 |
Schedule of quantitative information about Level 3 Fair Value Measurements | Quantitative information about Level 3 Fair Value Measurements Assets Fair Value Valuation Technique(s) Unobservable input Range (Avg.) Impaired loans $ 1,602 Discounted value Marketability/ Selling costs 0.60% - 8 % (10.89) % Other real estate owned $ 3,866 Discounted appraised value Selling costs 10.51 % % |
Schedule of carrying amount, fair value and placement in the fair value hierarchy of the Company's financial instruments | Fair Value Measurements as of December 31, 2018 using Quoted Prices in Active Markets for Significant Significant Identical Unobservable Unobservable Carrying Assets Inputs Inputs Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 9,435 $ 9,435 $ — $ — Interest-bearing deposits at other institutions 34,060 34,060 — — Securities held-to-maturity 1,761 — 1,735 Securities available-for-sale 123,537 — 123,537 — Restricted stock 5,299 — 5,299 — Loans, net 1,127,584 — — 1,116,012 Bank owned life insurance 16,406 — 16,406 — Accrued interest receivable 4,050 — 4,050 — Financial liabilities: Checking, savings and money market accounts $ 817,054 $ — $ 817,054 $ — Time deposits 345,386 — 344,877 — Subordinated notes 24,407 — 24,515 — Accrued interest payable 811 — 811 — Fair Value Measurements as of December 31, 2017, using Quoted Prices in Active Markets for Significant Significant Identical Unobservable Unobservable Carrying Assets Inputs Inputs Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 7,428 $ 7,428 $ — $ — Interest-bearing deposits at other institutions 15,139 15,139 — — Securities held-to-maturity 1,760 — 1,762 Securities available-for-sale 115,952 — 115,952 — Restricted stock 3,438 — 3,438 — Loans, net 880,952 — — 876,569 Bank owned life insurance 15,969 — 15,969 — Accrued interest receivable 2,964 — 2,964 — Financial liabilities: Checking, savings and money market accounts $ 554,547 $ — $ 554,547 $ — Time deposits 373,616 — 371,782 — Subordinated notes 24,327 — 23,462 — Accrued interest payable 417 — 417 — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share | |
Schedule of earning per share | Years Ended December 31, 2018 2017 Net income $ 10,869 $ 7,690 Weighted average number of shares 11,715 10,435 Options effect of dilutive securities 1,107 1,110 Weighted average diluted shares 12,822 11,545 Basic EPS $ 0.93 $ 0.74 Diluted EPS $ 0.85 $ 0.67 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information | |
Schedule of supplemental cash flow information | For the Years Ended December 31, (dollars in thousands) 2018 2017 Supplemental Disclosure of Cash Flow Information: Cash paid for: Interest on deposits and borrowed funds $ 11,611 $ 7,949 Income taxes 5,892 5,934 Noncash investing and financing activities: Transfer of loans to other real estate owned — 2,790 Unrealized gain (loss) on securities available-for-sale (999) (158) Noncash transactions related to acquisitions: Assets acquired: Interest bearing deposits 3,829 — Investment securities available-for-sale 12,732 — Restricted stock 1,391 — Loans 142,593 — Premises and equipment 789 — Deferred tax assets, net 4,289 — Goodwill 6,512 — Core deposit intangible, net 1,950 — Accrued interest receivable 406 — Prepaid expenses 161 — Other real estate owned (OREO) 358 — Other assets 638 — Liabilities assumed: Non-interest bearing 19,080 — Interest-bearing checking, savings, and money market 48,426 — Time deposits 70,778 — FHLB advances 27,577 — Accrued interest payable 294 — Other liabilities 127 — Consideration: Issuance of common stock 14,579 — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in accumulated other comprehensive income (AOCI) | Available-for-Sale Securities 2018 2017 Balance, beginning of period $ (1,693) $ (1,299) Net unrealized gains (losses) during the period (1,072) 2 Net reclassification adjustment for losses (gains) realized in income 354 (107) Other comprehensive loss, net of tax (718) (105) Reclassification of stranded effects from change in tax rate — (289) Balance, end of period $ (2,411) $ (1,693) |
Schedule of reclassifications from accumulated other comprehensive income | Amount Reclassified from AOCI Affected Line Item into Income in the Consolidated For the Years Ended December 31, Statements of Details about AOCI 2018 2017 Income Losses (gains) on sale of available-for-sale securities $ 462 $ (164) Gain (loss) on sale of securities available-for-sale Income tax expense (benefit) (108) 57 Income tax expense Total $ 354 $ (107) Net of tax |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition | |
Schedule of noninterest income | Years Ended December 31, Noninterest Income 2018 2017 In-scope of Topic 606 Service Charges on Deposit Accounts $ 635 $ 546 Fees, Exchange, and Other Service Charges 284 211 Gain on foreclosure of other real estate owned — 1,076 Other income 27 29 Noninterest Income (in-scope of Topic 606) 946 1,862 Noninterest Income (out-scope of Topic 606) 715 1,113 Total Noninterest Income $ 1,661 $ 2,975 |
Parent Company Only Financial_2
Parent Company Only Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Parent Company Only Financial Statements | |
Schedule of parent company only condensed statements of condition | PARENT COMPANY ONLY CONDENSED STATEMENTS OF CONDITION December 31, 2018 and 2017 Assets 2018 2017 Cash and cash equivalents $ 6,252 $ 2,454 Securities available-for-sale 988 1,015 Investment in subsidiary 173,873 118,211 Other assets 1,682 940 Total assets $ 182,795 $ 122,620 Liabilities and Stockholders' Equity Subordinated notes $ 24,407 $ 24,327 Other liabilities 52 10 Total liabilities $ 24,459 $ 24,337 Total stockholders' equity $ 158,336 $ 98,283 Total liabilities and stockholders' equity $ 182,795 $ 122,620 |
Schedule of parent company only condensed statements of operations | PARENT COMPANY ONLY CONDENSED STATEMENTS OF OPERATIONS December 31, 2018 and 2017 2018 2017 Income: Interest on securities available-for-sale $ 65 $ 65 Gains on sale of securities available-for-sale — 119 Total income $ 65 $ 184 Expense: Interest on subordinated notes (1,580) (1,580) Salaries and employee benefits (715) (596) Occupancy and equipment (80) (80) Audit, legal and consulting fees (225) (108) Merger expenses (781) — Other operating expenses (128) (104) Total expense (3,509) (2,468) Net (loss) before income tax benefit and equity in undistributed earnings of subsidiary $ (3,444) $ (2,284) Income tax benefit (835) (788) Equity in undistributed earnings of subsidiary 13,478 9,186 Net income $ 10,869 $ 7,690 |
Schedule of parent company only condensed statements of cash flows | PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS December 31, 2018 and 2017 2018 2017 Cash Flows From Operating Activities Net income $ 10,869 $ 7,690 Equity in undistributed earnings of subsidiary (13,478) (9,186) Deferred income tax expense 111 158 Amortization of subordinated debt issuance costs 80 — Stock-based compensation expense 707 627 Realized gains on securities sales — (119) Change in other assets and liabilities (806) (820) Net cash used in operating activities $ (2,517) $ (1,650) Cash Flows From Investing Activities Proceeds from sales of securities available-for-sale $ — $ 596 Cash aquired in acquision, net 5,172 — Cash contributed to banking subsidiary (33,473) (7,500) Net cash used in investing activities $ (28,301) $ (6,904) Cash Flows From Financing Activities Cash paid in lieu of fractional shares $ — $ (4) Stock options exercised 1,141 263 Common stock issuance 33,475 10,000 Net cash provided by financing activities $ 34,616 $ 10,259 Net increase in cash and cash equivalents $ 3,798 $ 1,705 Cash and cash equivalents, beginning of year 2,454 749 Cash and cash equivalents, end of year $ 6,252 $ 2,454 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies- Organization (Details) - Colombo | Oct. 12, 2018Dlocation$ / sharesshares |
Number of banking locations | location | 5 |
Number of trading days | D | 5 |
Average closing price | $ 19.614 |
Number of shares issuable per share | 0.002217 |
Cash consideration per share | $ 0.053157 |
Maximum limit of shares for the right to receive only cash payment | shares | 45,086 |
Cash payment per share for shareholders having the right | $ 0.096649 |
Number of shares expected to be issued due to merger | shares | 763,051 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Loans and Allowance for Loan Losses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Summary of Significant Accounting Policies | |
Allowance for loan losses | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Premises, furniture and equipment | Minimum | |
Premises and Equipment | |
Estimated useful life (in years) | 3 years |
Premises, furniture and equipment | Maximum | |
Premises and Equipment | |
Estimated useful life (in years) | 7 years |
Computer software | Minimum | |
Premises and Equipment | |
Estimated useful life (in years) | 1 year |
Computer software | Maximum | |
Premises and Equipment | |
Estimated useful life (in years) | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets | ||
Impairment of Goodwill and intangible assets | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Other Real Estate Owned (Details) - property | Dec. 31, 2018 | Oct. 27, 2018 | Dec. 31, 2017 |
Other Real Estate Owned | |||
Properties foreclosed (in properties) | 0 | 1 | |
Residential | |||
Other Real Estate Owned | |||
Properties foreclosed (in properties) | 1 | 0 | |
Properties acquired (in properties) | 1 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies | ||
Federal corporate income tax rate (in percentage) | 21.00% | 35.00% |
Reduction in net deferred tax asset | $ 2 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Equity-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Summary of Significant Accounting Policies | |
Weighted average per share fair values of stock option | $ 15.20 |
Weighted average assumptions | |
Expected life (in years) | 5 years 6 months |
Expected volatility | 16.60% |
Risk-free interest rate | 1.94% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - 401(k) Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies | ||
401(K) plan contribution expense | $ 280 | $ 230 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - ASU No. 2016-02 Leases $ in Millions | Jan. 01, 2019USD ($) |
Finance Lease, Right-of-Use Asset | $ 12.5 |
Finance Lease, Liability | $ 12.8 |
Business Combinations (Details)
Business Combinations (Details) $ / shares in Units, $ in Thousands | Oct. 12, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($) |
Business Acquisition | ||
Merger and acquisition expense | $ 3,300 | |
Assets acquired: | ||
Goodwill | $ 6,512 | |
Core Deposits | ||
Deposits: | ||
Balance of CDI | $ 250,000 | |
Estimated useful life | 9 years 9 months 18 days | |
Colombo | ||
Business Acquisition | ||
Average closing price | $ / shares | $ 19.614 | |
Number of shares issuable per share | 0.002217 | |
Cash consideration per share | $ / shares | $ 0.053157 | |
Maximum limit of shares for the right to receive only cash payment | shares | 45,086 | |
Cash payment per share for shareholders having the right | $ / shares | $ 0.096649 | |
Number of shares expected to be issued due to merger | shares | 763,051 | |
Cash payments for exchange of shares | $ 18,300 | |
Total consideration | 32,900 | |
Assets acquired: | ||
Cash and cash equivalents | 23,469 | |
Interest-bearing deposits | 3,874 | |
Securities available-for-sale | 12,732 | |
Restricted stocks, at cost | 1,391 | |
Loans | 142,593 | |
Premises and equipment | 789 | |
Deferred tax assets, net | 4,289 | |
Goodwill | 6,512 | |
Core deposit intangible, net | 1,950 | |
Accrued interest receivable | 406 | |
Prepaid expense | 161 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other Real Estate Owned | 358 | |
Other assets | 638 | |
Total assets acquired | 199,162 | |
Deposits: | ||
Non-interest bearing | 19,080 | |
Interest-bearing checking, savings and money market | 48,426 | |
Time deposits | 70,778 | |
Total deposits | 138,284 | |
FHLB advances | 27,577 | |
Accrued interest payable | 127 | |
Accrued expenses and other liabilities | 294 | |
Total liabilities assumed: | 166,282 | |
Total consideration paid | $ 32,880 |
Investment Securities and Oth_3
Investment Securities and Other Investments (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Held-to-maturity | ||
Amortized Cost | $ 1,761,000 | $ 1,760,000 |
Gross Unrealized Gains | 3,000 | |
Gross Unrealized (Losses) | (26,000) | (1,000) |
Fair Value | 1,735,000 | 1,762,000 |
Available-for-sale | ||
Amortized Cost | 126,680,000 | 118,096,000 |
Gross Unrealized Gains | 196,000 | 83,000 |
Gross Unrealized (Losses) | (3,339,000) | (2,227,000) |
Fair Value | 123,537,000 | 115,952,000 |
Securities of state and local municipalities tax exempt | ||
Held-to-maturity | ||
Amortized Cost | 264,000 | 263,000 |
Gross Unrealized Gains | 3,000 | |
Gross Unrealized (Losses) | (6,000) | |
Fair Value | 258,000 | 266,000 |
Available-for-sale | ||
Amortized Cost | 3,678,000 | 3,694,000 |
Gross Unrealized Gains | 23,000 | |
Gross Unrealized (Losses) | (39,000) | (1,000) |
Fair Value | 3,639,000 | 3,716,000 |
Securities of U.S. government and federal agencies | ||
Held-to-maturity | ||
Amortized Cost | 1,497,000 | 1,497,000 |
Gross Unrealized (Losses) | (20,000) | (1,000) |
Fair Value | 1,477,000 | 1,496,000 |
Available-for-sale | ||
Amortized Cost | 1,000,000 | 1,000,000 |
Gross Unrealized (Losses) | (44,000) | (32,000) |
Fair Value | 956,000 | 968,000 |
Securities of state and local municipalities taxable | ||
Available-for-sale | ||
Amortized Cost | 2,378,000 | 2,591,000 |
Gross Unrealized Gains | 3,000 | |
Gross Unrealized (Losses) | (70,000) | (41,000) |
Fair Value | 2,308,000 | 2,553,000 |
Corporate bonds | ||
Available-for-sale | ||
Amortized Cost | 5,000,000 | 5,000,000 |
Gross Unrealized Gains | 92,000 | 57,000 |
Gross Unrealized (Losses) | (79,000) | (61,000) |
Fair Value | 5,013,000 | 4,996,000 |
Certificates of deposit | ||
Available-for-sale | ||
Amortized Cost | 245,000 | 490,000 |
Gross Unrealized (Losses) | (1,000) | |
Fair Value | 244,000 | 490,000 |
SBA pass-through securities | ||
Available-for-sale | ||
Amortized Cost | 200,000 | 254,000 |
Gross Unrealized (Losses) | (5,000) | (8,000) |
Fair Value | 195,000 | 246,000 |
Mortgage-backed securities | ||
Available-for-sale | ||
Amortized Cost | 90,234,000 | 84,614,000 |
Gross Unrealized Gains | 94,000 | |
Gross Unrealized (Losses) | (2,291,000) | (1,401,000) |
Fair Value | 88,037,000 | 83,213,000 |
Collateralized mortgage obligations | ||
Available-for-sale | ||
Amortized Cost | 23,945,000 | 20,453,000 |
Gross Unrealized Gains | 10,000 | |
Gross Unrealized (Losses) | (810,000) | (683,000) |
Fair Value | 23,145,000 | 19,770,000 |
Federal Reserve Bank | ||
Available-for-sale | ||
Pledged securities | 0 | 0 |
Community Bankers' Bank | ||
Available-for-sale | ||
Pledged securities | $ 8,100,000 | $ 0 |
Investment Securities and Oth_4
Investment Securities and Other Investments - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | $ 14,751 | $ 44,772 |
Fair Value, 12 Months or Longer | 86,436 | 65,141 |
Fair Value, Total | 101,187 | 109,913 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (73) | (444) |
Unrealized Losses, 12 Months or Longer | (3,292) | (1,784) |
Unrealized Losses, Total | (3,365) | (2,228) |
Securities of U.S. government and federal agencies | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 1,496 | |
Fair Value, 12 Months or Longer | 2,433 | 968 |
Fair Value, Total | 2,433 | 2,464 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (1) | |
Unrealized Losses, 12 Months or Longer | (64) | (32) |
Unrealized Losses, Total | (64) | (33) |
Securities of state and local municipalities tax exempt | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 263 | 272 |
Fair Value, 12 Months or Longer | 3,634 | |
Fair Value, Total | 3,897 | 272 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (1) | (1) |
Unrealized Losses, 12 Months or Longer | (44) | |
Unrealized Losses, Total | (45) | (1) |
Securities of state and local municipalities taxable | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 757 | 497 |
Fair Value, 12 Months or Longer | 1,551 | 1,278 |
Fair Value, Total | 2,308 | 1,775 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (1) | (3) |
Unrealized Losses, 12 Months or Longer | (69) | (38) |
Unrealized Losses, Total | (70) | (41) |
Corporate bonds | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 988 | 1,492 |
Fair Value, 12 Months or Longer | 933 | 946 |
Fair Value, Total | 1,921 | 2,438 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (12) | (7) |
Unrealized Losses, 12 Months or Longer | (67) | (54) |
Unrealized Losses, Total | (79) | (61) |
Certificates of deposit | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 245 | |
Fair Value, 12 Months or Longer | 244 | |
Fair Value, Total | 244 | 245 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, 12 Months or Longer | (1) | |
Unrealized Losses, Total | (1) | |
SBA pass-through securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, 12 Months or Longer | 195 | 246 |
Fair Value, Total | 195 | 246 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, 12 Months or Longer | (5) | (8) |
Unrealized Losses, Total | (5) | (8) |
Mortgage-backed securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 12,743 | 38,039 |
Fair Value, 12 Months or Longer | 60,656 | 44,663 |
Fair Value, Total | 73,399 | 82,702 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (59) | (404) |
Unrealized Losses, 12 Months or Longer | (2,232) | (997) |
Unrealized Losses, Total | (2,291) | (1,401) |
Collateralized mortgage obligations | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 2,731 | |
Fair Value, 12 Months or Longer | 16,790 | 17,040 |
Fair Value, Total | 16,790 | 19,771 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (28) | |
Unrealized Losses, 12 Months or Longer | (810) | (655) |
Unrealized Losses, Total | $ (810) | $ (683) |
Investment Securities and Oth_5
Investment Securities and Other Investments - Continuous Unrealized Loss Position - Additional information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($) | |
Schedule Of Available For Sale Securities | ||
Securities held to maturity, fair value | $ | $ 1,735 | $ 1,762 |
Gross Unrealized Losses | $ | 26 | 1 |
Securities of U.S. government and federal agencies | ||
Schedule Of Available For Sale Securities | ||
Securities held to maturity, fair value | $ | 1,477 | 1,496 |
Gross Unrealized Losses | $ | $ 20 | $ 1 |
Securities of U.S. government and federal agencies | Held-to-maturity | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 1 | |
Securities of U.S. government and federal agencies | Available-for-sale | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 1 | |
Securities of state and local municipalities | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 9 | |
Securities of state and local municipalities | AA+ | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 5 | |
Securities of state and local municipalities | AA- | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 1 | |
Securities of state and local municipalities | AA | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 1 | |
Securities of state and local municipalities | No rating | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 2 | |
Corporate bonds | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 2 | |
Corporate bonds | A- | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 1 | |
Mortgage-backed securities | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 54 | |
Collateralized mortgage obligations | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 31 |
Investment Securities and Oth_6
Investment Securities and Other Investments - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Held-to-maturity, Amortized Cost | ||
After 5 years through 10 years | $ 1,761 | |
Amortized Cost | 1,761 | $ 1,760 |
Held-to-maturity, Fair Value | ||
After 5 years through 10 years | 1,735 | |
Fair Value | 1,735 | 1,762 |
Available-for-sale, Amortized Cost | ||
Less than 1 year | 745 | |
After 5 years through 10 years | 18,579 | |
After 10 years | 107,356 | |
Amortized Cost | 126,680 | |
Available-for-sale, Fair Value | ||
Less than 1 year | 741 | |
After 5 years through 10 years | 18,260 | |
After 10 years | 104,536 | |
Fair Value | $ 123,537 | $ 115,952 |
Investment Securities and Oth_7
Investment Securities and Other Investments - Contractual Maturities - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Investment Securities and Other Investments | ||
Proceeds from maturities, calls and principal repayments of securities | $ 16,900,000 | $ 15,000,000 |
Proceeds from sales of securities available-for-sale | 23,012,000 | 2,631,000 |
Gross realized gains on available-for-sale securities | 164,000 | |
Goss realized losses on available-for-sale securities | 462,000 | |
Realized gain (losses) | $ 0 | $ 0 |
Investment Securities and Oth_8
Investment Securities and Other Investments - Other Investments - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Investments [Line Items] | ||
Restricted stock, at cost | $ 5,299 | $ 3,438 |
Federal Reserve stock | ||
Schedule of Investments [Line Items] | ||
Restricted stock, at cost | 4,029 | 2,499 |
FHLB stock | ||
Schedule of Investments [Line Items] | ||
Restricted stock, at cost | 1,123 | 817 |
Community Bankers' Bank stock | ||
Schedule of Investments [Line Items] | ||
Restricted stock, at cost | 122 | $ 122 |
Atlantic Bankers' Bank stock | ||
Schedule of Investments [Line Items] | ||
Restricted stock, at cost | $ 25 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses - Summary of loan balances by type (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loans and Allowance for Loan Losses | |||
Loans, gross | $ 1,138,008 | $ 889,409 | |
Allowance for loan losses | 9,159 | 7,725 | $ 6,452 |
Unearned income and (unamortized premiums), net | 1,265 | 732 | |
Loans, net | 1,127,584 | 880,952 | |
Commercial | Real Estate | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 683,602 | 526,657 | |
Allowance for loan losses | 5,548 | 4,832 | 4,266 |
Commercial | Commercial and Industrial | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 137,328 | 98,150 | |
Allowance for loan losses | 1,474 | 768 | 1,032 |
Commercial | Construction | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 153,339 | 123,444 | |
Allowance for loan losses | 1,285 | 1,191 | 375 |
Consumer | Residential | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 131,431 | 108,926 | |
Allowance for loan losses | 518 | 626 | 500 |
Consumer | Nonresidential | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 32,308 | 32,232 | |
Allowance for loan losses | 334 | $ 268 | $ 121 |
Originated Loan Portfolio | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 1,007,010 | ||
Allowance for loan losses | 9,159 | ||
Unearned income and (unamortized premiums), net | 1,265 | ||
Loans, net | 996,586 | ||
Originated Loan Portfolio | Commercial | Real Estate | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 616,614 | ||
Originated Loan Portfolio | Commercial | Commercial and Industrial | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 128,909 | ||
Originated Loan Portfolio | Commercial | Construction | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 141,694 | ||
Originated Loan Portfolio | Consumer | Residential | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 87,609 | ||
Originated Loan Portfolio | Consumer | Nonresidential | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 32,184 | ||
Acquired Loan Portfolio | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 130,998 | ||
Loans, net | 130,998 | ||
Acquired Loan Portfolio | Commercial | Real Estate | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 66,988 | ||
Acquired Loan Portfolio | Commercial | Commercial and Industrial | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 8,419 | ||
Acquired Loan Portfolio | Commercial | Construction | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 11,645 | ||
Acquired Loan Portfolio | Consumer | Residential | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | 43,822 | ||
Acquired Loan Portfolio | Consumer | Nonresidential | |||
Loans and Allowance for Loan Losses | |||
Loans, gross | $ 124 |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses - Outstanding principal balance and related carrying amount of acquired loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans and Leases Receivable Disclosure [Line Items] | ||
Carrying amount | $ 4,457 | $ 5,320 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Accretable yield at acquisition date | 379 | |
Accretion | (22) | |
Balance at end of the year | 357 | |
Purchased credit impaired | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Outstanding principal balance | 2,533 | |
Carrying amount | 1,401 | |
Other acquired loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Outstanding principal balance | 131,286 | |
Carrying amount | 129,597 | |
Acquired Loan Portfolio | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Outstanding principal balance | 133,819 | |
Carrying amount | $ 130,998 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses - Allowance for loan losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for loan losses | ||
Loans and Leases Receivable, Allowance, Beginning Balance | $ 7,725 | $ 6,452 |
Charge-offs | (565) | (77) |
Recoveries | 79 | 150 |
Provision | 1,920 | 1,200 |
Loans and Leases Receivable, Allowance, Ending Balance | 9,159 | 7,725 |
Ending Balance: Individually evaluated for impairment | 373 | |
Ending Balance: Collectively evaluated for impairment | 8,786 | 7,725 |
Loans receivables: | ||
Ending Balance: Individually evaluated for impairment | 4,457 | 5,320 |
Ending Balance: Collectively evaluated for impairment | 1,132,150 | 884,089 |
Loans receivables | 1,138,008 | 889,409 |
Purchased credit impaired | ||
Loans receivables: | ||
Ending Balance: Individually evaluated for impairment | 1,401 | |
Loans receivables | 1,401 | |
Commercial | Real Estate | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Allowance, Beginning Balance | 4,832 | 4,266 |
Provision | 716 | 566 |
Loans and Leases Receivable, Allowance, Ending Balance | 5,548 | 4,832 |
Ending Balance: Collectively evaluated for impairment | 5,548 | 4,832 |
Loans receivables: | ||
Ending Balance: Individually evaluated for impairment | 1,306 | 1,882 |
Ending Balance: Collectively evaluated for impairment | 682,157 | 524,775 |
Loans receivables | 683,602 | 526,657 |
Commercial | Real Estate | Purchased credit impaired | ||
Loans receivables: | ||
Loans receivables | 139 | |
Commercial | Commercial and Industrial | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Allowance, Beginning Balance | 768 | 1,032 |
Charge-offs | (86) | (44) |
Recoveries | 26 | 117 |
Provision | 766 | (337) |
Loans and Leases Receivable, Allowance, Ending Balance | 1,474 | 768 |
Ending Balance: Individually evaluated for impairment | 372 | |
Ending Balance: Collectively evaluated for impairment | 1,102 | 768 |
Loans receivables: | ||
Ending Balance: Individually evaluated for impairment | 2,969 | 2,846 |
Ending Balance: Collectively evaluated for impairment | 133,892 | 95,304 |
Loans receivables | 137,328 | 98,150 |
Commercial | Commercial and Industrial | Purchased credit impaired | ||
Loans receivables: | ||
Loans receivables | 467 | |
Commercial | Construction | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Allowance, Beginning Balance | 1,191 | 375 |
Provision | 94 | 816 |
Loans and Leases Receivable, Allowance, Ending Balance | 1,285 | 1,191 |
Ending Balance: Collectively evaluated for impairment | 1,285 | 1,191 |
Loans receivables: | ||
Ending Balance: Collectively evaluated for impairment | 152,918 | 123,444 |
Loans receivables | 153,339 | 123,444 |
Commercial | Construction | Purchased credit impaired | ||
Loans receivables: | ||
Loans receivables | 421 | |
Consumer | Residential | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Allowance, Beginning Balance | 626 | 500 |
Charge-offs | (187) | |
Recoveries | 1 | |
Provision | 78 | 126 |
Loans and Leases Receivable, Allowance, Ending Balance | 518 | 626 |
Ending Balance: Individually evaluated for impairment | 1 | |
Ending Balance: Collectively evaluated for impairment | 517 | 626 |
Loans receivables: | ||
Ending Balance: Individually evaluated for impairment | 182 | 587 |
Ending Balance: Collectively evaluated for impairment | 130,875 | 108,339 |
Loans receivables | 131,431 | 108,926 |
Consumer | Residential | Purchased credit impaired | ||
Loans receivables: | ||
Loans receivables | 374 | |
Consumer | Nonresidential | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Allowance, Beginning Balance | 268 | 121 |
Charge-offs | (292) | (33) |
Recoveries | 52 | 33 |
Provision | 306 | 147 |
Loans and Leases Receivable, Allowance, Ending Balance | 334 | 268 |
Ending Balance: Collectively evaluated for impairment | 334 | 268 |
Loans receivables: | ||
Ending Balance: Individually evaluated for impairment | 5 | |
Ending Balance: Collectively evaluated for impairment | 32,308 | 32,227 |
Loans receivables | 32,308 | 32,232 |
Unallocated | ||
Allowance for loan losses | ||
Loans and Leases Receivable, Allowance, Beginning Balance | 40 | 158 |
Provision | $ (40) | (118) |
Loans and Leases Receivable, Allowance, Ending Balance | 40 | |
Ending Balance: Collectively evaluated for impairment | $ 40 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Recorded Investment | ||
With no related allowance | $ 5,320 | |
Unpaid Principal Balance | ||
With no related allowance | 5,334 | |
Average Recorded Investment | ||
With no related allowance | 5,005 | |
Interest Income Recognized | ||
With no related allowance | 283 | |
Commercial | Real Estate | ||
Recorded Investment | ||
With no related allowance | 1,882 | |
Unpaid Principal Balance | ||
With no related allowance | 1,882 | |
Average Recorded Investment | ||
With no related allowance | 1,894 | |
Interest Income Recognized | ||
With no related allowance | 108 | |
Commercial | Commercial and Industrial | ||
Recorded Investment | ||
With no related allowance | 2,846 | |
Unpaid Principal Balance | ||
With no related allowance | 2,860 | |
Average Recorded Investment | ||
With no related allowance | 2,516 | |
Interest Income Recognized | ||
With no related allowance | 150 | |
Consumer | Residential | ||
Recorded Investment | ||
With no related allowance | 587 | |
Unpaid Principal Balance | ||
With no related allowance | 587 | |
Average Recorded Investment | ||
With no related allowance | 587 | |
Interest Income Recognized | ||
With no related allowance | 24 | |
Consumer | Nonresidential | ||
Recorded Investment | ||
With no related allowance | 5 | |
Unpaid Principal Balance | ||
With no related allowance | 5 | |
Average Recorded Investment | ||
With no related allowance | 8 | |
Interest Income Recognized | ||
With no related allowance | $ 1 | |
Originated Loan Portfolio | ||
Recorded Investment | ||
With an allowance recorded | $ 1,975 | |
With no related allowance | 2,462 | |
Unpaid Principal Balance | ||
With an allowance recorded | 1,975 | |
With no related allowance | 2,489 | |
Related Allowance | 373 | |
Average Recorded Investment | ||
With an allowance recorded | 1,985 | |
With no related allowance | 2,699 | |
Interest Income Recognized | ||
With an allowance recorded | 112 | |
With no related allowance | 149 | |
Originated Loan Portfolio | Commercial | Real Estate | ||
Recorded Investment | ||
With no related allowance | 1,306 | |
Unpaid Principal Balance | ||
With no related allowance | 1,319 | |
Average Recorded Investment | ||
With no related allowance | 1,321 | |
Interest Income Recognized | ||
With no related allowance | 68 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | ||
Recorded Investment | ||
With an allowance recorded | 1,793 | |
With no related allowance | 1,156 | |
Unpaid Principal Balance | ||
With an allowance recorded | 1,793 | |
With no related allowance | 1,170 | |
Related Allowance | 372 | |
Average Recorded Investment | ||
With an allowance recorded | 1,801 | |
With no related allowance | 1,378 | |
Interest Income Recognized | ||
With an allowance recorded | 100 | |
With no related allowance | 81 | |
Originated Loan Portfolio | Consumer | Residential | ||
Recorded Investment | ||
With an allowance recorded | 182 | |
Unpaid Principal Balance | ||
With an allowance recorded | 182 | |
Related Allowance | 1 | |
Average Recorded Investment | ||
With an allowance recorded | 184 | |
Interest Income Recognized | ||
With an allowance recorded | 12 | |
Acquired Loan Portfolio | ||
Recorded Investment | ||
With no related allowance | 20 | |
Unpaid Principal Balance | ||
With no related allowance | 20 | |
Average Recorded Investment | ||
With no related allowance | 58 | |
Interest Income Recognized | ||
With no related allowance | 3 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | ||
Recorded Investment | ||
With no related allowance | 20 | |
Unpaid Principal Balance | ||
With no related allowance | 20 | |
Average Recorded Investment | ||
With no related allowance | 58 | |
Interest Income Recognized | ||
With no related allowance | $ 3 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses - Risk category (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loans and allowance - Risk category of loans | ||
Loans, gross | $ 1,138,008 | $ 889,409 |
Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 883,291 | |
Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 2,901 | |
Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 3,217 | |
Commercial | Real Estate | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 683,602 | 526,657 |
Commercial | Real Estate | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 525,808 | |
Commercial | Real Estate | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 695 | |
Commercial | Real Estate | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 154 | |
Commercial | Commercial and Industrial | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 137,328 | 98,150 |
Commercial | Commercial and Industrial | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 95,131 | |
Commercial | Commercial and Industrial | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 543 | |
Commercial | Commercial and Industrial | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 2,476 | |
Commercial | Construction | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 153,339 | 123,444 |
Commercial | Construction | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 123,444 | |
Consumer | Residential | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 131,431 | 108,926 |
Consumer | Residential | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 106,700 | |
Consumer | Residential | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 1,639 | |
Consumer | Residential | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 587 | |
Consumer | Nonresidential | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 32,308 | 32,232 |
Consumer | Nonresidential | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 32,208 | |
Consumer | Nonresidential | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | $ 24 | |
Originated Loan Portfolio | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 1,007,010 | |
Originated Loan Portfolio | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 995,655 | |
Originated Loan Portfolio | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 8,578 | |
Originated Loan Portfolio | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 2,777 | |
Originated Loan Portfolio | Commercial | Real Estate | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 616,614 | |
Originated Loan Portfolio | Commercial | Real Estate | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 610,580 | |
Originated Loan Portfolio | Commercial | Real Estate | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 6,034 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 128,909 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 124,349 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 1,783 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 2,777 | |
Originated Loan Portfolio | Commercial | Construction | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 141,694 | |
Originated Loan Portfolio | Commercial | Construction | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 141,694 | |
Originated Loan Portfolio | Consumer | Residential | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 87,609 | |
Originated Loan Portfolio | Consumer | Residential | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 86,848 | |
Originated Loan Portfolio | Consumer | Residential | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 761 | |
Originated Loan Portfolio | Consumer | Nonresidential | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 32,184 | |
Originated Loan Portfolio | Consumer | Nonresidential | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 32,184 | |
Acquired Loan Portfolio | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 130,998 | |
Acquired Loan Portfolio | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 129,960 | |
Acquired Loan Portfolio | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 477 | |
Acquired Loan Portfolio | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 561 | |
Acquired Loan Portfolio | Commercial | Real Estate | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 66,988 | |
Acquired Loan Portfolio | Commercial | Real Estate | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 66,849 | |
Acquired Loan Portfolio | Commercial | Real Estate | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 56 | |
Acquired Loan Portfolio | Commercial | Real Estate | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 83 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 8,419 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 7,952 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 467 | |
Acquired Loan Portfolio | Commercial | Construction | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 11,645 | |
Acquired Loan Portfolio | Commercial | Construction | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 11,224 | |
Acquired Loan Portfolio | Commercial | Construction | Special mention | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 421 | |
Acquired Loan Portfolio | Consumer | Residential | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 43,822 | |
Acquired Loan Portfolio | Consumer | Residential | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 43,811 | |
Acquired Loan Portfolio | Consumer | Residential | Substandard | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 11 | |
Acquired Loan Portfolio | Consumer | Nonresidential | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | 124 | |
Acquired Loan Portfolio | Consumer | Nonresidential | Pass | ||
Loans and allowance - Risk category of loans | ||
Loans, gross | $ 124 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses - Past due and Non accrual of loans (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loans and Allowance for Loan Losses | ||
Total past due | $ 1,975 | |
Current | 887,434 | |
Total loans | $ 1,138,008 | 889,409 |
90 days past due and still accruing | 48 | |
Nonaccruals | 741 | |
Loans, net | 1,127,584 | 880,952 |
Federal Home Loan Bank of Atlanta | ||
Loans and Allowance for Loan Losses | ||
Loans pledged | 173,000 | 128,700 |
Adjustment | ||
Loans and Allowance for Loan Losses | ||
Loans, net | 28 | 162 |
Deposits | (28) | (162) |
30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 275 | |
60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 911 | |
90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 789 | |
Commercial | Real Estate | ||
Loans and Allowance for Loan Losses | ||
Total past due | 154 | |
Current | 526,503 | |
Total loans | 683,602 | 526,657 |
Nonaccruals | 154 | |
Commercial | Real Estate | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 154 | |
Commercial | Commercial and Industrial | ||
Loans and Allowance for Loan Losses | ||
Total past due | 48 | |
Current | 98,102 | |
Total loans | 137,328 | 98,150 |
90 days past due and still accruing | 48 | |
Commercial | Commercial and Industrial | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 48 | |
Commercial | Construction | ||
Loans and Allowance for Loan Losses | ||
Total past due | 911 | |
Current | 122,533 | |
Total loans | 153,339 | 123,444 |
Commercial | Construction | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 911 | |
Consumer | Residential | ||
Loans and Allowance for Loan Losses | ||
Total past due | 862 | |
Current | 108,064 | |
Total loans | 131,431 | 108,926 |
Nonaccruals | 587 | |
Consumer | Residential | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 275 | |
Consumer | Residential | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 587 | |
Consumer | Nonresidential | ||
Loans and Allowance for Loan Losses | ||
Current | 32,232 | |
Total loans | 32,308 | $ 32,232 |
Originated Loan Portfolio | ||
Loans and Allowance for Loan Losses | ||
Total past due | 9,503 | |
Current | 997,507 | |
Total loans | 1,007,010 | |
90 days past due and still accruing | 1,031 | |
Nonaccruals | 1,951 | |
Loans, net | 996,586 | |
Originated Loan Portfolio | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 4,084 | |
Originated Loan Portfolio | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 2,718 | |
Originated Loan Portfolio | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 2,701 | |
Originated Loan Portfolio | Commercial | Real Estate | ||
Loans and Allowance for Loan Losses | ||
Total past due | 5,210 | |
Current | 611,404 | |
Total loans | 616,614 | |
Originated Loan Portfolio | Commercial | Real Estate | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 3,062 | |
Originated Loan Portfolio | Commercial | Real Estate | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 2,148 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | ||
Loans and Allowance for Loan Losses | ||
Total past due | 2,950 | |
Current | 125,959 | |
Total loans | 128,909 | |
90 days past due and still accruing | 1,031 | |
Nonaccruals | 1,769 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 68 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 181 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 2,701 | |
Originated Loan Portfolio | Commercial | Construction | ||
Loans and Allowance for Loan Losses | ||
Current | 141,694 | |
Total loans | 141,694 | |
Originated Loan Portfolio | Consumer | Residential | ||
Loans and Allowance for Loan Losses | ||
Total past due | 1,188 | |
Current | 86,421 | |
Total loans | 87,609 | |
Nonaccruals | 182 | |
Originated Loan Portfolio | Consumer | Residential | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 843 | |
Originated Loan Portfolio | Consumer | Residential | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 345 | |
Originated Loan Portfolio | Consumer | Nonresidential | ||
Loans and Allowance for Loan Losses | ||
Total past due | 155 | |
Current | 32,029 | |
Total loans | 32,184 | |
Originated Loan Portfolio | Consumer | Nonresidential | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 111 | |
Originated Loan Portfolio | Consumer | Nonresidential | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 44 | |
Acquired Loan Portfolio | ||
Loans and Allowance for Loan Losses | ||
Total past due | 5,342 | |
Current | 125,656 | |
Total loans | 130,998 | |
Nonaccruals | 229 | |
Loans, net | 130,998 | |
Acquired Loan Portfolio | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 4,418 | |
Acquired Loan Portfolio | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 695 | |
Acquired Loan Portfolio | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 229 | |
Acquired Loan Portfolio | Commercial | Real Estate | ||
Loans and Allowance for Loan Losses | ||
Total past due | 1,140 | |
Current | 65,848 | |
Total loans | 66,988 | |
Nonaccruals | 56 | |
Acquired Loan Portfolio | Commercial | Real Estate | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 1,001 | |
Acquired Loan Portfolio | Commercial | Real Estate | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 83 | |
Acquired Loan Portfolio | Commercial | Real Estate | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 56 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | ||
Loans and Allowance for Loan Losses | ||
Total past due | 446 | |
Current | 7,973 | |
Total loans | 8,419 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 446 | |
Acquired Loan Portfolio | Commercial | Construction | ||
Loans and Allowance for Loan Losses | ||
Total past due | 186 | |
Current | 11,459 | |
Total loans | 11,645 | |
Acquired Loan Portfolio | Commercial | Construction | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 186 | |
Acquired Loan Portfolio | Consumer | Residential | ||
Loans and Allowance for Loan Losses | ||
Total past due | 3,570 | |
Current | 40,252 | |
Total loans | 43,822 | |
Nonaccruals | 173 | |
Acquired Loan Portfolio | Consumer | Residential | 30-59 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 2,785 | |
Acquired Loan Portfolio | Consumer | Residential | 60-89 days past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 612 | |
Acquired Loan Portfolio | Consumer | Residential | 90 days or more past due | ||
Loans and Allowance for Loan Losses | ||
Total past due | 173 | |
Acquired Loan Portfolio | Consumer | Nonresidential | ||
Loans and Allowance for Loan Losses | ||
Current | 124 | |
Total loans | $ 124 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses - Troubled debt restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)contractloan | Dec. 31, 2017USD ($) | |
Loans and Allowance for Loan Losses - Troubled debt restructurings | ||
Number of defaults | loan | 0 | |
Number of Contracts | contract | 2 | |
Pre-Modification Outstanding Recorded Investment | $ 213 | |
Post-Modification Outstanding Recorded Investment | 192 | |
Recorded investment in troubled debt restructurings | $ 203 | $ 1,700 |
Commercial | Commercial and Industrial | ||
Loans and Allowance for Loan Losses - Troubled debt restructurings | ||
Number of Contracts | contract | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 204 | |
Post-Modification Outstanding Recorded Investment | $ 187 | |
Consumer | Nonresidential | ||
Loans and Allowance for Loan Losses - Troubled debt restructurings | ||
Number of Contracts | contract | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 9 | |
Post-Modification Outstanding Recorded Investment | $ 5 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)property | Dec. 31, 2017USD ($)property | |
Other Real Estate Owned | ||
Beginning Balance | $ 3,866,000 | |
Other real estate acquired in acquisition | 358,000 | |
Loans transferred to real estate owned | $ 2,790,000 | |
Gain on foreclosure | 1,076,000 | |
Ending Balance | $ 4,224,000 | $ 3,866,000 |
Properties foreclosed (in properties) | property | 0 | 1 |
Number of residential real estate properties foreclosure proceedings in process | property | 0 | 0 |
Impairment charges | $ 0 | $ 0 |
Residential | ||
Other Real Estate Owned | ||
Properties foreclosed (in properties) | property | 1 | 0 |
Goodwill and Intangibles - Amor
Goodwill and Intangibles - Amortizable intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 2,154 | $ 204 | $ 204 |
Amortization during the period | 118 | 20 | |
Accumulated Amortization | 223 | 105 | 85 |
1st Commonwealth | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 204 | 204 | 204 |
Amortization during the period | 20 | 20 | |
Accumulated Amortization | 125 | $ 105 | $ 85 |
Colombo | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,950 | ||
Amortization during the period | 98 | ||
Acquisition during the period | 1,950 | ||
Accumulated Amortization | $ 98 |
Goodwill and Intangibles - Esti
Goodwill and Intangibles - Estimated amortization expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangibles | ||
Amortization during the period | $ 118 | $ 20 |
Estimated amortization expense | ||
2019 | 385 | |
2020 | 345 | |
2021 | 305 | |
2022 | 262 | |
2023 | 205 | |
Thereafter | $ 429 |
Goodwill and Intangibles - Carr
Goodwill and Intangibles - Carrying amount of goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Carrying amount of goodwill | |
Acquisition of Colombo Bank | $ 6,512 |
Ending balance | $ 6,512 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Premises and Equipment | ||
Premises and equipment, Gross | $ 7,727 | $ 6,201 |
Less: accumulated depreciation | 5,456 | 4,965 |
Property, Plant and Equipment, Net, Total | 2,271 | 1,236 |
Depreciation expense | 497 | 536 |
Leasehold improvements | ||
Premises and Equipment | ||
Premises and equipment, Gross | 2,915 | 2,586 |
Furniture, fixtures and equipment | ||
Premises and Equipment | ||
Premises and equipment, Gross | 3,799 | 3,246 |
Computer software | ||
Premises and Equipment | ||
Premises and equipment, Gross | 756 | $ 369 |
Land | ||
Premises and Equipment | ||
Premises and equipment, Gross | 61 | |
Buildings | ||
Premises and Equipment | ||
Premises and equipment, Gross | $ 196 |
Premises and Equipment - Rent e
Premises and Equipment - Rent expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Premises and Equipment | ||
Rent expense | $ 1,300 | $ 1,100 |
Minimum base rent for remainder of leases | ||
2019 | 1,533 | |
2020 | 1,381 | |
2021 | 1,244 | |
2022 | 1,207 | |
2023 | 848 | |
Thereafter | 2,485 | |
Total | $ 8,699 |
Deposits (Details)
Deposits (Details) $ in Thousands | Dec. 31, 2018USD ($)customer | Dec. 31, 2017USD ($)customer |
Maturities on certificates of deposits | ||
2019 | $ 245,576 | |
2020 | 73,096 | |
2021 | 11,952 | |
2022 | 7,500 | |
2023 | 7,262 | |
Time Deposits, Total | 345,386 | $ 373,616 |
Time deposits of $250,000 and greater | $ 135,600 | $ 119,800 |
Customer relationships, balance on deposit exceeded 5% of outstanding deposits | customer | 2 | 1 |
Customer relationships deposits to outstanding deposits (in percent) | 13.00% | 9.00% |
Brokered deposits | $ 84,400 | $ 115,500 |
Other Borrowed Funds - Other bo
Other Borrowed Funds - Other borrowed funds (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Borrowed Funds | ||
Subordinated debt | $ 24,407 | $ 24,327 |
Total borrowings | $ 24,407 | |
Subordinated debt, weighted average rate (as a percent) | 6.00% | |
FHLB advances, weighted average rate (as a percent) | 6.00% |
Other Borrowed Funds (Details)
Other Borrowed Funds (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 20, 2016 | |
Other Borrowed Funds | |||
FHLB advances | $ 0 | $ 0 | |
Remaining amount of available line of credit | 126,800,000 | ||
Amount of letter of credit obtained | 80,000,000 | ||
Remaining lendable collateral value | 213,200,000 | ||
Line of credit borrowing capacity | $ 169,000,000 | 44,000,000 | |
Subordinated Notes | |||
Other Borrowed Funds | |||
Face amount | $ 25,000,000 | ||
Interest rate | 6.00% | ||
Redemption price percentage of outstanding principal amount | 100.00% | ||
Proceeds from subordinated notes included in the Bank's Tier 1 capital | $ 21,000,000 | $ 21,000,000 | |
Subordinated Notes | Minimum | |||
Other Borrowed Funds | |||
Notice period for redeem the subordinated notes | 30 days | ||
Subordinated Notes | Maximum | |||
Other Borrowed Funds | |||
Notice period for redeem the subordinated notes | 60 days | ||
Subordinated Notes | LIBOR | |||
Other Borrowed Funds | |||
Variable interest rate (as a percent) | 4.87% | ||
1-4 family residential loans | |||
Other Borrowed Funds | |||
Book value of loans pledged against available line of credit | $ 1,800,000 | ||
Multi-family residential loans | |||
Other Borrowed Funds | |||
Book value of loans pledged against available line of credit | 11,000,000 | ||
Home equity lines of credit | |||
Other Borrowed Funds | |||
Book value of loans pledged against available line of credit | 14,200,000 | ||
Commercial real estate loans | |||
Other Borrowed Funds | |||
Book value of loans pledged against available line of credit | $ 99,700,000 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and deferred tax liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets: | ||
Allowance for loan losses | $ 2,132 | $ 1,622 |
Net operating loss carryforward - federal and state | 4,270 | 259 |
Bank premises and equipment and deferred rent | 213 | 280 |
Unrealized loss on securities available for sale | 732 | 450 |
Nonqualified stock options and restricted stock | 496 | 261 |
Organizational and start-up expenses | 61 | 68 |
Acquisition accounting adjustments | 372 | 58 |
Non-accrual loan interest | 20 | 3 |
Deferred loan (fees) costs | 295 | 154 |
Net Deferred Tax Assets | $ 8,591 | $ 3,155 |
Income Taxes - Charged to opera
Income Taxes - Charged to operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | ||
Current tax expense | $ 3,104 | $ 5,519 |
Deferred income tax (benefit) | (866) | 1,327 |
Income Tax Expense (Benefit), Total | $ 2,238 | $ 6,846 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | ||
Computed "expected" tax expense | $ 2,753 | $ 5,023 |
Increase (decrease) in income taxes resulting from: | ||
State income tax benefit | (86) | |
Non-deductible expense | 141 | 154 |
Tax free income | (112) | (328) |
Tax benefits from exercise of stock options | (308) | (39) |
Deferred tax asset adjustment for enacted change in tax rate | 2,036 | |
Other | (150) | |
Income Tax Expense (Benefit), Total | $ 2,238 | $ 6,846 |
Income Taxes - Net operating lo
Income Taxes - Net operating loss carryforwards (Details) - Internal Revenue Code $ in Thousands | Dec. 31, 2018USD ($) |
Income Taxes | |
Net operating loss carryforwards | $ 16,500 |
Net operating loss carryforwards taxable income | $ 762 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)agreement | Dec. 31, 2017agreement | |
Swap agreements | ||
Derivative Financial Instruments | ||
Number of swap agreements outstanding not included in the offsetting | agreement | 8 | 0 |
Collateralized amount | $ 1,600 | |
Receive Fixed/Pay Variable Swaps | ||
Derivative Financial Instruments | ||
Notional Amount | 47,381 | |
Fair Value, Liability | (1,705) | |
Pay Fixed/Receive Variable Swaps | ||
Derivative Financial Instruments | ||
Notional Amount | 47,381 | |
Fair Value, Asset | $ 1,705 |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financial Instruments with Off-Balance Sheet Risk | ||
Cash on deposit in correspondent banks exceeding the federally insured limits | $ 5,100 | $ 608 |
Commitments to grant loans | Contract credit risk | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Financial instruments outstanding | 22,349 | 23,078 |
Unused commitments to fund loans and lines of credit | Contract credit risk | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Financial instruments outstanding | 216,043 | 170,802 |
Commercial and standby letters of credit | Contract credit risk | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Financial instruments outstanding | $ 9,383 | $ 9,725 |
Letters of credit expiration period (in years) | 1 year |
Minimum Regulatory Capital Re_3
Minimum Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Conservation buffer | 1.875% | 0.625% | ||
Forecast | ||||
Conservation buffer | 2.50% | |||
FVC bank | ||||
Total Risk Based Capital - to Risk Weighted Assets Amount | $ 172,975 | $ 127,020 | ||
Total Risk Based Capital - to Risk Weighted Assets Ratio | 14.02% | 12.83% | ||
Tier 1 Capital - to Risk Weighted Assets Amount | $ 163,804 | $ 119,295 | ||
Tier 1 Capital - to Risk Weighted Assets Ratio | 13.27% | 12.05% | ||
Common Tier 1 (CET1) - to Risk Weighted Assets Amount | $ 163,804 | $ 119,295 | ||
Common Tier 1 (CET1) - to Risk Weighted Assets Ratio | 13.27% | 12.05% | ||
Tier 1 Capital - to Average Assets Amount | $ 163,804 | $ 119,295 | ||
Tier 1 Capital - to Average Assets Ratio | 12.41% | 11.79% | ||
Total Risk Based Capital - to Risk Weighted Assets Minimum Capital Requirement Amount | $ 121,861 | $ 91,594 | ||
Total Risk Based Capital - to Risk Weighted Assets Minimum Capital Requirement Ratio | 9.875% | 9.25% | ||
Tier 1 Capital - to Risk Weighted Assets Minimum Capital Requirement Amount | $ 97,180 | $ 71,790 | ||
Tier 1 Capital - to Risk Weighted Assets Minimum Capital Requirement Ratio | 7.875% | 7.25% | ||
Common Tier 1 (CET1) - to Risk Weighted Assets Minimum Capital Requirement Amount | $ 78,670 | $ 56,937 | ||
Common Tier 1 (CET1) - to Risk Weighted Assets Minimum Capital Requirement Ratio | 6.375% | 5.75% | ||
Tier 1 Capital - to Average Assets Minimum Capital Requirement Amount | $ 52,771 | $ 40,456 | ||
Tier 1 Capital - to Average Assets Minimum Capital Requirement Ratio | 4.00% | 4.00% | ||
Total Risk Based Capital - to Risk Weighted Assets Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 123,404 | $ 99,021 | ||
Total Risk Based Capital - to Risk Weighted Assets Well Capitalized Under Prompt Corrective Action Provisions Ratio | 10.00% | 10.00% | ||
Tier 1 Capital - to Risk Weighted Assets Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 98,723 | $ 79,217 | ||
Tier 1 Capital - to Risk Weighted Assets Well Capitalized Under Prompt Corrective Action Provisions Ratio | 8.00% | 8.00% | ||
Common Tier 1 (CET1) - to Risk Weighted Assets Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 80,213 | $ 64,364 | ||
Common Tier 1 (CET1) - to Risk Weighted Assets Well Capitalized Under Prompt Corrective Action Provisions Ratio | 6.50% | 6.50% | ||
Tier 1 Capital - to Average Assets Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 65,971 | $ 50,571 | ||
Tier 1 Capital - to Average Assets Well Capitalized Under Prompt Corrective Action Provisions Ratio | 5.00% | 5.00% | ||
Retained earnings available to pay dividends | $ 30,900 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions | ||
Related party deposits | $ 36,800 | $ 23,000 |
Officers, directors and their affiliates | ||
Related Party Transactions | ||
Borrowings | 14,800 | 11,500 |
Principle additions | 4,200 | 3,100 |
Principle payments | $ 898 | $ 485 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plan (Details) - Amended and Restated 2008 Option Plan - Stock option - shares | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation Plan | |||
Additional shares authorized for issuance (in shares) | 200,000 | ||
Maximum shares authorized (in shares) | 2,529,296 | ||
Vesting period (in years) | 4 years | ||
Contractual term (in years) | 10 years | ||
Shares available for grant (in shares) | 238,315 | ||
Options granted (in shares) | 0 | 625 | |
Number of options withheld to cover the cost of the exercise | 7,643 |
Stock-Based Compensation Plan -
Stock-Based Compensation Plan - Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted-Average Exercise Price | ||
Granted (in dollars per share) | $ 15.20 | |
Stock option | ||
Additional disclosures | ||
Compensation cost | $ 707,000 | $ 627,000 |
Unamortized compensation cost | $ 296,000 | |
Amortization period (in months) | 20 months | |
Tax benefits recognized for qualified and non-qualified stock options | $ 308,000 | $ 39,000 |
Amended and Restated 2008 Option Plan | Stock option | ||
Shares | ||
Outstanding at the beginning of the year (in shares) | 2,218,210 | |
Granted (in shares) | 0 | 625 |
Exercised (in shares) | (228,562) | |
Forfeited or expired (in shares) | (13,401) | |
Outstanding at the end of the year (in shares) | 1,976,247 | 2,218,210 |
Exercisable at the end of the year (in shares) | 1,714,299 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the year (in dollars per share) | $ 7.74 | |
Exercised (in dollars per share) | 5.56 | |
Forfeited or expired (in dollars per share) | 7.45 | |
Outstanding at the end of the year (in dollars per share) | 8 | $ 7.74 |
Exercisable at the end of the year (in dollars per share) | $ 7.62 | |
Additional disclosures | ||
Outstanding Weighted-Average Remaining Contractual Term (in years) | 4 years 11 months 23 days | 5 years 6 months 4 days |
Exercisable Weighted-Average Remaining Contractual Term (in years) | 4 years 8 months 5 days | |
Outstanding Aggregate Intrinsic Value | $ 18,993,554 | |
Exercisable Aggregate Intrinsic Value | $ 17,125,767 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plan - Restricted stock (Details) - Restricted stock $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Weighted Average Grant Date Fair Value | |
Unrecognized compensation cost | $ | $ 862 |
Weighted-average recognition period (in months) | 46 months |
Amended and Restated 2008 Option Plan | |
Number of Shares | |
Balance at the beginning of the year (in shares) | shares | 66,155 |
Granted (in shares) | shares | 2,000 |
Vested (in shares) | shares | (16,206) |
Forfeited (in shares) | shares | (1,320) |
Balance at the end of the year (in shares) | shares | 50,629 |
Weighted Average Grant Date Fair Value | |
Outstanding at the beginning of the year (in dollars per share) | $ / shares | $ 17.50 |
Granted (in dollars per share) | $ / shares | 19.11 |
Vested (in dollars per share) | $ / shares | 17.50 |
Forfeited (in dollars per share) | $ / shares | 17.55 |
Outstanding at the end of the year (in dollars per share) | $ / shares | $ 17.57 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial assets and liabilities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Total Available-for-Sale Securities | $ 123,537 | $ 115,952 |
Level 2 | ||
Assets | ||
Total Available-for-Sale Securities | 123,537 | 115,952 |
Recurring | ||
Assets | ||
Total Available-for-Sale Securities | 123,537 | 115,952 |
Recurring | Securities of U.S. government and federal agencies | ||
Assets | ||
Total Available-for-Sale Securities | 956 | 968 |
Recurring | Securities of state and local municipalities tax exempt | ||
Assets | ||
Total Available-for-Sale Securities | 3,639 | 3,716 |
Recurring | Securities of state and local municipalities taxable | ||
Assets | ||
Total Available-for-Sale Securities | 2,308 | 2,553 |
Recurring | Corporate bonds | ||
Assets | ||
Total Available-for-Sale Securities | 5,013 | 4,996 |
Recurring | Certificates of deposit | ||
Assets | ||
Total Available-for-Sale Securities | 244 | 490 |
Recurring | SBA pass-through securities | ||
Assets | ||
Total Available-for-Sale Securities | 195 | 246 |
Recurring | Mortgage-backed securities | ||
Assets | ||
Total Available-for-Sale Securities | 88,037 | 83,213 |
Recurring | Collateralized mortgage obligations | ||
Assets | ||
Total Available-for-Sale Securities | 23,145 | 19,770 |
Recurring | Level 2 | ||
Assets | ||
Total Available-for-Sale Securities | 123,537 | 115,952 |
Recurring | Level 2 | Securities of U.S. government and federal agencies | ||
Assets | ||
Total Available-for-Sale Securities | 956 | 968 |
Recurring | Level 2 | Securities of state and local municipalities tax exempt | ||
Assets | ||
Total Available-for-Sale Securities | 3,639 | 3,716 |
Recurring | Level 2 | Securities of state and local municipalities taxable | ||
Assets | ||
Total Available-for-Sale Securities | 2,308 | 2,553 |
Recurring | Level 2 | Corporate bonds | ||
Assets | ||
Total Available-for-Sale Securities | 5,013 | 4,996 |
Recurring | Level 2 | Certificates of deposit | ||
Assets | ||
Total Available-for-Sale Securities | 244 | 490 |
Recurring | Level 2 | SBA pass-through securities | ||
Assets | ||
Total Available-for-Sale Securities | 195 | 246 |
Recurring | Level 2 | Mortgage-backed securities | ||
Assets | ||
Total Available-for-Sale Securities | 88,037 | 83,213 |
Recurring | Level 2 | Collateralized mortgage obligations | ||
Assets | ||
Total Available-for-Sale Securities | $ 23,145 | $ 19,770 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets measured at fair value on a nonrecurring basis (Details) - Nonrecurring $ in Thousands | Dec. 31, 2018USD ($) |
Assets | |
Impaired loans | $ 1,602 |
Other real estate owned | 4,224 |
Level 2 | |
Assets | |
Other real estate owned | 358 |
Level 3 | |
Assets | |
Impaired loans | 1,602 |
Other real estate owned | $ 3,866 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative information about Level 3 fair value measurements (Details) | Dec. 31, 2018USD ($)item |
Nonrecurring | |
Quantitative information about Level 3 Fair Value Measurements | |
Impaired loans | $ 1,602,000 |
Other real estate owned | $ 4,224,000 |
Level 3 | |
Quantitative information about Level 3 Fair Value Measurements | |
Impaired loans, Range | 10.89 |
Impaired loans, Valuation Technique | fvcb:ValuationTechniqueDiscountedValueMember |
Impaired loans, Measurement Input | us-gaap:MeasurementInputMarketabilitySellingCostsMember |
Other real estate owned, Range | item | 10.51 |
Other real estate owned, Valuation Technique | fvcb:ValuationTechniqueDiscountedAppraisedValueMember |
Other real estate owned, Unobservable input | us-gaap:MeasurementInputCostToSellMember |
Level 3 | Minimum | |
Quantitative information about Level 3 Fair Value Measurements | |
Impaired loans, Range | item | 0.60 |
Level 3 | Maximum | |
Quantitative information about Level 3 Fair Value Measurements | |
Impaired loans, Range | item | 8 |
Level 3 | Nonrecurring | |
Quantitative information about Level 3 Fair Value Measurements | |
Impaired loans | $ 1,602,000 |
Other real estate owned | $ 3,866,000 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying amount, fair value and placement in the fair value hierarchy of financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets: | ||
Cash and due from banks | $ 9,435 | $ 7,428 |
Interest-bearing deposits at other institutions | 34,060 | 15,139 |
Amortized Cost | 1,761 | 1,760 |
Total Available-for-Sale Securities | 123,537 | 115,952 |
Restricted stock | 5,299 | 3,438 |
Loans, net | 1,127,584 | 880,952 |
Bank owned life insurance | 16,406 | 15,969 |
Accrued interest receivable | 4,050 | 2,964 |
Financial liabilities: | ||
Time deposits | 345,386 | 373,616 |
Subordinated notes | 24,407 | 24,327 |
Accrued interest payable | 811 | 417 |
Carrying Amount | ||
Financial assets: | ||
Cash and due from banks | 9,435 | 7,428 |
Interest-bearing deposits at other institutions | 34,060 | 15,139 |
Amortized Cost | 1,761 | 1,760 |
Total Available-for-Sale Securities | 123,537 | 115,952 |
Restricted stock | 5,299 | 3,438 |
Loans, net | 1,127,584 | 880,952 |
Bank owned life insurance | 16,406 | 15,969 |
Accrued interest receivable | 4,050 | 2,964 |
Financial liabilities: | ||
Checking, savings and money market accounts | 817,054 | 554,547 |
Time deposits | 345,386 | 373,616 |
Subordinated notes | 24,407 | 24,327 |
Accrued interest payable | 811 | 417 |
Level 1 | ||
Financial assets: | ||
Cash and due from banks | 9,435 | 7,428 |
Interest-bearing deposits at other institutions | 34,060 | 15,139 |
Level 2 | ||
Financial assets: | ||
Amortized Cost | 1,735 | 1,762 |
Total Available-for-Sale Securities | 123,537 | 115,952 |
Restricted stock | 5,299 | 3,438 |
Bank owned life insurance | 16,406 | 15,969 |
Accrued interest receivable | 4,050 | 2,964 |
Financial liabilities: | ||
Checking, savings and money market accounts | 817,054 | 554,547 |
Time deposits | 344,877 | 371,782 |
Subordinated notes | 24,515 | 23,462 |
Accrued interest payable | 811 | 417 |
Level 3 | ||
Financial assets: | ||
Loans, net | $ 1,116,012 | $ 876,569 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share | ||
Number of anti-dilutive shares excluded from the calculation | 313 | 625 |
Net income | $ 10,869 | $ 7,690 |
Weighted average number of shares | 11,715 | 10,435 |
Options effect of dilutive securities | 1,107 | 1,110 |
Weighted average diluted shares | 12,822 | 11,545 |
Basic EPS | $ 0.93 | $ 0.74 |
Diluted EPS | $ 0.85 | $ 0.67 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest on deposits and borrowed funds | $ 11,611 | $ 7,949 |
Income taxes | 5,892 | 5,934 |
Supplemental Disclosures of Noncash Investing Activity | ||
Transfer of loans to other real estate owned | 2,790 | |
Unrealized gain (loss) on securities available-for-sale | (999) | $ (158) |
Assets acquired: | ||
Interest bearing deposits | 3,829 | |
Investment securities available-for-sale | 12,732 | |
Restricted stock | 1,391 | |
Loans | 142,593 | |
Premises and equipment | 789 | |
Deferred tax assets, net | 4,289 | |
Goodwill | 6,512 | |
Core deposit intangible, net | 1,950 | |
Accrued interest receivable | 406 | |
Prepaid expenses | 161 | |
Other real estate owned (OREO) | 358 | |
Other assets | 638 | |
Liabilities assumed: | ||
Non-interest bearing | 19,080 | |
Interest-bearing checking, savings, and money market | 48,426 | |
Time deposits | 70,778 | |
FHLB advances | 27,577 | |
Accrued interest payable | 294 | |
Other liabilities | 127 | |
Consideration, Issuance of common stock | $ 14,579 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)component | Dec. 31, 2017USD ($)component | |
Number of securities component | component | 1 | 1 |
Changes in accumulated other comprehensive income | ||
Balance, beginning of period | $ (1,693) | $ (1,299) |
Net unrealized gains (losses) during the period | (1,072) | 2 |
Net reclassification adjustment for losses (gains) realized in income | 354 | (107) |
Other comprehensive loss, net of tax | (718) | (105) |
Balance, end of period | (2,411) | (1,693) |
Reclassifications from accumulated other comprehensive income | ||
Losses (gains) on sale of available-for-sale securities | 462 | (164) |
Income tax expense (benefit) | (108) | 57 |
Total | 354 | (107) |
Accumulated Other Comprehensive Loss, net | ||
Changes in accumulated other comprehensive income | ||
Other comprehensive loss, net of tax | $ (718) | (105) |
Reclassification of stranded effects from change in tax rate | $ (289) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition | ||
Total noninterest income | $ 1,661 | $ 2,975 |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract | true | |
Before adoption of ASU 2014-09 | ||
Revenue Recognition | ||
Noninterest Income (in-scope of Topic 606) | $ 946 | 1,862 |
Noninterest Income (out-scope of Topic 606) | 715 | 1,113 |
Total noninterest income | 1,661 | 2,975 |
Service Charges on Deposit Accounts | Before adoption of ASU 2014-09 | ||
Revenue Recognition | ||
Noninterest Income (in-scope of Topic 606) | 635 | 546 |
Fees, Exchange, and Other Service Charges | Before adoption of ASU 2014-09 | ||
Revenue Recognition | ||
Noninterest Income (in-scope of Topic 606) | 284 | 211 |
Gain on foreclosure of other real estate owned | Before adoption of ASU 2014-09 | ||
Revenue Recognition | ||
Noninterest Income (in-scope of Topic 606) | 1,076 | |
Other | Before adoption of ASU 2014-09 | ||
Revenue Recognition | ||
Noninterest Income (in-scope of Topic 606) | $ 27 | $ 29 |
Parent Company Only Financial_3
Parent Company Only Financial Statements - Balance sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||
Securities available-for-sale, at fair value | $ 123,537 | $ 115,952 | |
Other assets | 5,023 | 568 | |
Total assets | 1,351,576 | 1,053,224 | |
Liabilities and Stockholders' Equity | |||
Subordinated notes | 24,407 | 24,327 | |
Total liabilities | 1,193,240 | 954,941 | |
Total stockholders' equity | 158,336 | 98,283 | $ 79,812 |
Total liabilities and stockholders' equity | 1,351,576 | 1,053,224 | |
Parent Company | Reportable Entity | |||
Assets | |||
Cash and cash equivalents | 6,252 | 2,454 | |
Securities available-for-sale, at fair value | 988 | 1,015 | |
Investment in subsidiary | 173,873 | 118,211 | |
Other assets | 1,682 | 940 | |
Total assets | 182,795 | 122,620 | |
Liabilities and Stockholders' Equity | |||
Subordinated notes | 24,407 | 24,327 | |
Other liabilities | 52 | 10 | |
Total liabilities | 24,459 | 24,337 | |
Total stockholders' equity | 158,336 | 98,283 | |
Total liabilities and stockholders' equity | $ 182,795 | $ 122,620 |
Parent Company Only Financial_4
Parent Company Only Financial Statements - Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Expense: | ||
Interest on subordinated notes | $ (1,580) | $ (1,580) |
Salaries and employee benefits | (14,008) | (11,659) |
Occupancy and equipment expense | (2,524) | (2,259) |
Audit, legal and consulting fees | (649) | (513) |
Merger expenses | (3,339) | |
Income tax benefit | 2,238 | 6,846 |
Net income | 10,869 | 7,690 |
Parent Company | Reportable Entity | ||
Income: | ||
Interest on securities available-for-sale | 65 | 65 |
Gains on sale of securities available-for-sale | 119 | |
Total income | 65 | 184 |
Expense: | ||
Interest on subordinated notes | (1,580) | (1,580) |
Salaries and employee benefits | (715) | (596) |
Occupancy and equipment expense | (80) | (80) |
Audit, legal and consulting fees | (225) | (108) |
Merger expenses | (781) | |
Other operating expenses | (128) | (104) |
Total expense | (3,509) | (2,468) |
Net (loss) before income tax benefit and equity in undistributed earnings of subsidiary | (3,444) | (2,284) |
Income tax benefit | (835) | (788) |
Equity in undistributed earnings of subsidiary | 13,478 | 9,186 |
Net income | $ 10,869 | $ 7,690 |
Parent Company Only Financial_5
Parent Company Only Financial Statements - Statement of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities | ||
Net income | $ 10,869 | $ 7,690 |
Deferred income tax expense | (866) | 1,327 |
Amortization of subordinated debt issuance costs | 80 | 80 |
Net cash provided by operating activities | 13,341 | 10,494 |
Cash Flows From Investing Activities | ||
Proceeds from sales of securities available-for-sale | 23,012 | 2,631 |
Cash acquired in acquisition, net | (5,172) | |
Net cash used in investing activities | (114,261) | (143,670) |
Cash Flows From Financing Activities | ||
Cash paid in lieu of fractional shares | (4) | |
Common stock issuance | 34,616 | 10,263 |
Net cash provided by financing activities | 102,927 | 135,430 |
Net increase in cash and cash equivalents | 2,007 | 2,254 |
Cash and cash equivalents, beginning of year | 7,428 | 5,174 |
Cash and cash equivalents, end of year | 9,435 | 7,428 |
Parent Company | Reportable Entity | ||
Cash Flows From Operating Activities | ||
Net income | 10,869 | 7,690 |
Equity in undistributed earnings of subsidiary | (13,478) | (9,186) |
Deferred income tax expense | 111 | 158 |
Amortization of subordinated debt issuance costs | 80 | |
Stock-based compensation expense | 707 | 627 |
Realized gains on securities sales | (119) | |
Change in other assets and liabilities | (806) | (820) |
Net cash provided by operating activities | (2,517) | (1,650) |
Cash Flows From Investing Activities | ||
Proceeds from sales of securities available-for-sale | 596 | |
Cash acquired in acquisition, net | 5,172 | |
Cash contributed to banking subsidiary | (33,473) | (7,500) |
Net cash used in investing activities | (28,301) | (6,904) |
Cash Flows From Financing Activities | ||
Cash paid in lieu of fractional shares | (4) | |
Stock options exercised | 1,141 | 263 |
Common stock issuance | 33,475 | 10,000 |
Net cash provided by financing activities | 34,616 | 10,259 |
Net increase in cash and cash equivalents | 3,798 | 1,705 |
Cash and cash equivalents, beginning of year | 2,454 | 749 |
Cash and cash equivalents, end of year | $ 6,252 | $ 2,454 |