Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Entity Registrant Name | FVCBankcorp, Inc. | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38647 | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 47-5020283 | |
Entity Address, Address Line One | 11325 Random Hills Road | |
Entity Address, City or Town | Fairfax | |
Entity Address, Country | VA | |
Entity Address, Postal Zip Code | 22030 | |
City Area Code | 703 | |
Local Phone Number | 436-3800 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Trading Symbol | FVCB | |
Entity Common Stock, Shares Outstanding | 13,478,459 | |
Entity Central Index Key | 0001675644 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | ||
Assets | ||||
Cash and due from banks | $ 25,613 | $ 14,916 | [1] | |
Interest-bearing deposits at other financial institutions | 64,989 | 18,226 | [1] | |
Securities held-to-maturity (fair value of $0.3 million for both June 30, 2020 and December 31, 2019) | 264 | 264 | [1] | |
Securities available-for-sale, at fair value | 121,818 | 141,325 | [1] | |
Restricted stock, at cost | 6,608 | 6,017 | [1] | |
Loans held for sale, at fair value | 8,800 | 11,198 | [1] | |
Loans, net of allowance for loan losses of $12.9 million and $10.2 million at June 30, 2020 and December 31, 2019, respectively | 1,465,226 | 1,260,295 | [1] | |
Premises and equipment, net | 1,818 | 2,084 | [1] | |
Accrued interest receivable | 7,186 | 4,094 | [1] | |
Prepaid expenses | 1,689 | 546 | [1] | |
Deferred tax assets, net | 7,256 | 7,683 | [1] | |
Goodwill and intangibles, net | 8,525 | 8,689 | [1] | |
Bank owned life insurance (BOLI) | 37,633 | 37,069 | [1] | |
Other real estate owned (OREO) | 3,866 | 3,866 | [1] | |
Operating lease right-of-use assets | 11,724 | 13,279 | [1] | |
Other assets | 16,934 | 7,744 | [1] | |
Total assets | 1,781,149 | 1,537,295 | [1] | |
Deposits: | ||||
Noninterest-bearing | 442,443 | 306,235 | [1] | |
Interest-bearing checking, savings and money market | 675,965 | 557,148 | [1] | |
Time deposits | 400,628 | 422,339 | [1] | |
Total deposits | 1,519,036 | 1,285,722 | [1] | |
Federal Funds Purchased | [1] | 10,000 | ||
FHLB advances | 25,000 | 15,000 | [1] | |
Subordinated notes, net of issuance costs | 24,527 | 24,487 | [1] | |
Accrued interest payable | 524 | 605 | [1] | |
Operating lease liabilities | 12,704 | 13,686 | [1] | |
Accrued expenses and other liabilities | 18,706 | 8,717 | [1] | |
Total liabilities | 1,600,497 | 1,358,217 | [1] | |
Commitments and Contingent Liabilities | [1] | |||
Stockholders' Equity | ||||
Common stock, $0.01 par value | 135 | 139 | [1] | |
Additional paid-in capital | 119,139 | 125,779 | [1] | |
Retained earnings | 59,083 | 52,470 | [1] | |
Accumulated other comprehensive income, net | 2,295 | 690 | [1] | |
Total stockholders' equity | 180,652 | 179,078 | [1] | |
Total liabilities and stockholders' equity | $ 1,781,149 | $ 1,537,295 | [1] | |
[1] | Derived from audited consolidated financial statements. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Securities held to maturity, fair value | $ 274 | $ 270 |
Allowance for loan losses | $ 12,894 | $ 10,231 |
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 | 13,459,317 | 13,902,067 |
Common stock, shares outstanding | 13,459,317 | 13,902,067 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest and Dividend Income | ||||
Interest and fees on loans | $ 15,414 | $ 15,819 | $ 31,299 | $ 30,686 |
Interest and dividends on securities held-to-maturity | 1 | 13 | 3 | 26 |
Interest and dividends on securities available-for-sale | 753 | 886 | 1,627 | 1,777 |
Dividends on restricted stock | 92 | 79 | 181 | 146 |
Interest on deposits at other financial institutions | 21 | 193 | 102 | 315 |
Total interest and dividend income | 16,281 | 16,990 | 33,212 | 32,950 |
Interest Expense | ||||
Interest on deposits | 3,125 | 4,192 | 7,301 | 7,932 |
Interest on federal funds purchased | 32 | 79 | 93 | |
Interest on short-term debt | 66 | 136 | ||
Interest on subordinated notes | 395 | 395 | 790 | 790 |
Total interest expense | 3,586 | 4,619 | 8,306 | 8,815 |
Net Interest Income | 12,695 | 12,371 | 24,906 | 24,135 |
Provision for loan losses | 1,750 | 505 | 2,816 | 1,020 |
Net interest income after provision for loan losses | 10,945 | 11,866 | 22,090 | 23,115 |
Noninterest Income | ||||
Service charges on deposit accounts | 223 | 229 | 463 | 411 |
Gain on sale of securities available-for-sale | 97 | |||
Loss on loans held for sale | (451) | |||
BOLI income | 282 | 110 | 565 | 215 |
Other income | 182 | 200 | 707 | 651 |
Total Noninterest Income | 687 | 539 | 1,381 | 1,277 |
Noninterest Expenses | ||||
Salaries and employee benefits | 3,982 | 4,245 | 8,010 | 8,183 |
Occupancy and equipment expense | 859 | 873 | 1,715 | 1,700 |
Data processing and network administration | 494 | 343 | 928 | 782 |
State franchise taxes | 466 | 426 | 932 | 848 |
Audit, legal and consulting fees | 207 | 274 | 432 | 404 |
Merger and acquisition expense | 16 | 83 | ||
Loan related expenses | 273 | 99 | 484 | 168 |
FDIC insurance | 180 | 111 | 345 | 222 |
Marketing, business development and advertising | 25 | 131 | 128 | 289 |
Director fees | 138 | 122 | 278 | 243 |
Postage, courier and telephone | 42 | 41 | 86 | 94 |
Internet banking | 123 | 101 | 243 | 208 |
Core deposits intangible amortization | 88 | 97 | 178 | 198 |
Impairment loss on long lived assets | 676 | 676 | ||
Other operating expenses | 445 | 397 | 772 | 758 |
Total noninterest expenses | 7,998 | 7,276 | 15,207 | 14,180 |
Net income before income tax expense | 3,634 | 5,129 | 8,264 | 10,212 |
Income tax expense | 754 | 1,044 | 1,651 | 2,201 |
Net income | $ 2,880 | $ 4,085 | $ 6,613 | $ 8,011 |
Earnings per share, basic | $ 0.21 | $ 0.30 | $ 0.49 | $ 0.58 |
Earnings per share, diluted | $ 0.21 | $ 0.28 | $ 0.46 | $ 0.54 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 2,880 | $ 4,085 | $ 6,613 | $ 8,011 |
Other comprehensive income (loss): | ||||
Unrealized gain on securities available for sale, net of tax expense of $8 and $617 for the three and six months ended June 30, 2020, respectively, net of tax expense of $367 and $734 for the three and six months ended June 30, 2019, respectively | 32 | 1,382 | 2,324 | 2,762 |
Unrealized loss on interest rate swaps, net of tax benefit of $46 and $171 for the three and six months ended June 30, 2020, respectively | (174) | (642) | ||
Reclassification adjustment for gains realized in income, net of tax expense of $0 and $20 for three and six months ended June 30, 2020, respectively | 77 | |||
Total other comprehensive income (loss) | (142) | 1,382 | 1,605 | 2,762 |
Total comprehensive income | $ 2,738 | $ 5,467 | $ 8,218 | $ 10,773 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Consolidated Statements of Comprehensive Income | ||||
Tax expense securities available for sale | $ 8 | $ 367 | $ 617 | $ 734 |
Unrealized loss on interest rate swaps, tax benefit | 46 | 171 | ||
Reclassification adjustment for (gain) loss realized in income, tax | $ 0 | $ 20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net income | $ 6,613 | $ 8,011 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 312 | 321 |
Provision for loan losses | 2,816 | 1,020 |
Net amortization of premium of securities | 214 | 178 |
Net amortization of deferred loan costs and purchase premiums | 963 | 293 |
Net accretion of acquisition accounting adjustments | 277 | 310 |
Gain on sale of available-for-sale securities | (97) | |
Loss on loans held for sale | 451 | |
Impairment loss on lived assets | 676 | |
Payments received on loans held for sale, net | 1,107 | |
Amortization of subordinated debt issuance costs | 40 | 40 |
Core deposits intangible amortization | 178 | 198 |
Equity-based compensation expense | 376 | 272 |
BOLI income | (565) | (215) |
Changes in assets and liabilities: | ||
Increase in accrued interest receivable, prepaid expenses and other assets | (11,872) | (3,415) |
Increase in accrued interest payable, accrued expenses and other liabilities | 7,596 | 1,892 |
Net cash provided by operating activities | 9,085 | 8,905 |
Cash Flows From Investing Activities | ||
(Increase) decrease in interest-bearing deposits at other financial institutions | (46,763) | 4,911 |
Purchases of securities available-for-sale | (2,996) | (16,535) |
Proceeds from sales of securities available-for-sale | 10,206 | |
Proceeds from maturities and calls of securities available-for-sale | 1,000 | |
Proceeds from redemptions of securities available-for-sale | 14,023 | 8,919 |
Net purchase of restricted stock | (591) | (80) |
Net increase in loans | (199,359) | (98,573) |
Proceeds from sale of OREO | 358 | |
Purchases of BOLI | (10,000) | |
Purchases of premises and equipment, net | (214) | (99) |
Net cash used in investing activities | (224,694) | (111,099) |
Cash Flows From Financing Activities | ||
Net increase in noninterest-bearing, interest-bearing checking, savings, and money market deposits | 255,025 | 50,358 |
Net (decrease) increase in time deposits | (21,699) | 56,734 |
Decrease in federal funds purchased | (10,000) | |
Net increase in FHLB advances | 10,000 | |
Repurchase of shares of common stock | (7,280) | |
Common stock issuance | 260 | 868 |
Net cash provided by financing activities | 226,306 | 107,960 |
Net increase in cash and cash equivalents | 10,697 | 5,766 |
Cash and cash equivalents, beginning of year | 14,916 | 9,435 |
Cash and cash equivalents, end of year | $ 25,613 | $ 15,201 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), net | Total | |
Balance at the beginning of the period at Dec. 31, 2018 | $ 137 | $ 123,882 | $ 36,728 | $ (2,411) | $ 158,336 | |
Balance at the beginning of the period (in shares) at Dec. 31, 2018 | 13,713 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 8,011 | 8,011 | ||||
Adoption of lease accounting standard | (86) | (86) | ||||
Other comprehensive income (loss), net of tax | 2,762 | 2,762 | ||||
Common stock issuance for options exercised, net | $ 1 | 867 | 868 | |||
Common stock issuance for options exercised, net (in shares) | 127 | |||||
Stock-based compensation expense | 272 | 272 | ||||
Balance at the end of the period at Jun. 30, 2019 | $ 138 | 125,021 | 44,653 | 351 | 170,163 | |
Balance at the end of the period (in shares) at Jun. 30, 2019 | 13,840 | |||||
Balance at the beginning of the period at Mar. 31, 2019 | $ 138 | 124,318 | 40,568 | (1,031) | 163,993 | |
Balance at the beginning of the period (in shares) at Mar. 31, 2019 | 13,755 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 4,085 | 4,085 | ||||
Other comprehensive income (loss), net of tax | 1,382 | 1,382 | ||||
Common stock issuance for options exercised, net | 596 | 596 | ||||
Common stock issuance for options exercised, net (in shares) | 85 | |||||
Stock-based compensation expense | 107 | 107 | ||||
Balance at the end of the period at Jun. 30, 2019 | $ 138 | 125,021 | 44,653 | 351 | 170,163 | |
Balance at the end of the period (in shares) at Jun. 30, 2019 | 13,840 | |||||
Balance at the beginning of the period at Dec. 31, 2019 | $ 139 | 125,779 | 52,470 | 690 | 179,078 | [1] |
Balance at the beginning of the period (in shares) at Dec. 31, 2019 | 13,902 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 6,613 | 6,613 | ||||
Other comprehensive income (loss), net of tax | 1,605 | 1,605 | ||||
Repurchase of common stock | $ (5) | (7,275) | (7,280) | |||
Repurchase of common stock (in shares) | (487) | |||||
Common stock issuance for options exercised, net | $ 1 | 259 | 260 | |||
Common stock issuance for options exercised, net (in shares) | 44 | |||||
Stock-based compensation expense | 376 | 376 | ||||
Balance at the end of the period at Jun. 30, 2020 | $ 135 | 119,139 | 59,083 | 2,295 | 180,652 | |
Balance at the end of the period (in shares) at Jun. 30, 2020 | 13,459 | |||||
Balance at the beginning of the period at Mar. 31, 2020 | $ 135 | 118,913 | 56,203 | 2,437 | 177,688 | |
Balance at the beginning of the period (in shares) at Mar. 31, 2020 | 13,452 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 2,880 | 2,880 | ||||
Other comprehensive income (loss), net of tax | (142) | (142) | ||||
Common stock issuance for options exercised, net | 56 | 56 | ||||
Common stock issuance for options exercised, net (in shares) | 7 | |||||
Stock-based compensation expense | 170 | 170 | ||||
Balance at the end of the period at Jun. 30, 2020 | $ 135 | $ 119,139 | $ 59,083 | $ 2,295 | $ 180,652 | |
Balance at the end of the period (in shares) at Jun. 30, 2020 | 13,459 | |||||
[1] | Derived from audited consolidated financial statements. |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
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 (the Federal Reserve) and the Federal Deposit Insurance Corporation (FDIC). It is subject to the regulations of the Board of Governors of the Federal Reserve and the State Corporation Commission of Virginia. Consequently, it undergoes periodic examinations by these regulatory authorities. Basis of Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and follow general practice within the banking industry. Accordingly, the unaudited consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements; however, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s audited financial statements for the year ended December 31, 2019. Certain prior period amounts have been reclassified to conform to current period presentation. Principles of Consolidation The consolidated financial statements include the accounts of the Company. All material intercompany balances and transactions have been eliminated in consolidation. 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. Risks and Uncertainties The outbreak of COVID-19 has adversely impacted a broad range of industries in which our customers operate and could impair their ability to fulfill their financial obligations to us. The World Health Organization has declared COVID-19 to be a global pandemic indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed with the goal of decreasing the rate of new infections. The spread of the outbreak has caused significant disruptions to the U.S. economy and has disrupted banking and other financial activity in the areas we operate. While there has been no material impact to our employees to date, COVID-19 could also potentially create widespread business continuity issues for us. The U.S. Congress, the President, and the Federal Reserve have taken several actions designed to cushion the economic fallout. Most notably, the CARES Act was signed into law at the end of March 2020 as a $2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. The package also includes extensive emergency funding for hospitals and providers. In addition to the general impact of COVID-19, certain provisions of the CARES Act as well as other recent legislative and regulatory relief efforts are expected to have a material impact on our operations. Our business is dependent upon the willingness and ability of our employees and customers to conduct banking and other financial transactions. If the global response to contain COVID-19 escalates further or is unsuccessful, we could experience a material adverse effect on our business, financial condition, results of operations and cash flows. While it is not possible to know the full universe or extent that the impact of COVID-19, and resulting measures to curtail its spread, will have on our operations, we are aware of the following matters that are potentially material to us and our operations. Financial Condition and Results of Operations Our interest income could be reduced due to COVID-19. Consistent with guidance from regulators, we are actively working with COVID-19 affected borrowers to defer their payments, interest, and fees. While interest and fees will still accrue to income, through normal GAAP accounting, should eventual credit losses on these deferred payments emerge, interest income and fees accrued would need to be reversed. In such a scenario, interest income in future periods could be negatively impacted. At this time, we are unable to project the materiality of such an impact, but recognize the breadth of the economic impact may affect our borrowers' ability to repay in future periods. Our fee income could be reduced due to COVID-19. Consistent with guidance from regulators, we are actively working with COVID-19 affected customers to waive fees from a variety of sources, such as, but not limited to, insufficient funds and overdraft fees, ATM fees, account maintenance fees, etc. These reductions in fees are thought, at this time, to be temporary in conjunction with the length of the expected COVID-19 related economic crisis. At this time, we are unable to project the materiality of such an impact, but recognize the breadth of the economic impact is likely to impact our fee income in future periods. Capital and Liquidity While we believe that we have sufficient capital to withstand an extended economic recession brought about by COVID-19, our regulatory capital ratios could be adversely impacted by future credit losses. We rely on cash on hand as well as dividends from our subsidiary bank to service our debt when necessary. If our capital deteriorates such that our subsidiary bank is unable to pay dividends to us for an extended period of time, we may not be able to service our debt. We maintain access to multiple sources of liquidity. Wholesale funding markets have remained open to us, but rates for short term funding have recently been volatile. If funding costs are elevated for an extended period of time, it could have an adverse effect on our net interest margin. If an extended recession caused large numbers of our deposit customers to withdraw their funds, we might become more reliant on volatile or more expensive sources of funding. Asset Valuation Currently, we do not expect COVID-19 to affect our ability to account timely for the valuation of assets on our balance sheet; however, this could change in future periods. While certain valuation assumptions and judgments will change to account for pandemic-related circumstances such as widening credit spreads, we do not anticipate significant changes in methodology used to determine the fair value of assets measured in accordance with GAAP. COVID-19 could cause a further and sustained decline in our stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform a goodwill impairment test and could result in an impairment charge being recorded for that period. In the event that we conclude that all or a portion of our goodwill is impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. It is possible that the lingering effects of COVID-19 could cause the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform an intangible asset impairment test and could result in an impairment charge being recorded for that period. In the event that we conclude that all or a portion of our intangible assets are impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. Processes, Controls and Business Continuity Plan We have invoked our Board approved Pandemic Preparedness Plan that includes a remote working strategy. We do not anticipate incurring additional material cost related to our continued deployment of the remote working strategy. No material operational or internal control challenges or risks have been identified to date. We do not anticipate significant challenges to our ability to maintain our systems and controls in light of the measures we have taken to prevent the spread of COVID-19. We do not currently face any material resource constraint through the implementation of our business continuity plans. Lending Operations and Accommodations to Borrowers Consistent with regulatory guidance to work with borrowers during this unprecedented situation and as outlined in the CARES Act, we are executing a payment deferral program for our commercial lending clients that are adversely affected by the pandemic. Depending on the demonstrated need of the client, we are deferring either the full loan payment or the principal component of the loan payment generally for 90 days. During the first and second quarter of 2020, we modified 277 loans for a total outstanding principal balance of $360.2 million, or 24.4% of the total loan portfolio. As of July 31, 2020, loans modified have reduced to 165 loans for a total outstanding principal balance of $226.7 million, or 15.3% of the total loan portfolio. As of July 31, 2020, customers requesting a second 90-day deferral had a total outstanding principal balance of $28.2 million, representing 15 loans. In accordance with interagency guidance issued in March 2020, these short term deferrals are not considered troubled debt restructurings (TDRs). With the passage of the PPP, administered by the SBA, we actively participated in assisting our customers with applications for resources through the program. The majority of the PPP loans we originated have a two-year term and earn interest at 1%. We believe that the majority of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. As of June 30, 2020, we have closed or approved with the SBA 755 PPP loans representing $169.4 million in funding , net of deferred fees. It is our understanding that loans funded through the PPP program are fully guaranteed by the U.S. government. Should those circumstances change, we could be required to establish additional allowance for loan losses through a charge to earnings. Credit We are working with customers directly affected by COVID-19. We are prepared to offer short-term assistance in accordance with regulator guidelines. As a result of the current economic environment caused by the COVID-19 virus, we are engaging in more frequent communications with borrowers to better understand their situation and the challenges faced, allowing us to respond proactively as needs and issues arise. Should economic conditions worsen, we could experience further increases in our required allowance for loan losses and record additional provision for loan loss expense. It is possible that our asset quality measures could worsen at future measurement periods if the effects of COVID-19 are prolonged. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASUs 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (SEC), such as the Company, and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The Company has identified a third party vendor to assist in the measurement of expected credit losses under this standard. The implementation committee has completed the data collection process, validated the data inputs, and is in the initial phases of evaluating various allowance methodologies for certain loan segments within the Company’s loan portfolio. The Company is currently evaluating the implementation of ASU 2016-13 due to the change in implementation dates for smaller reporting companies. Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin (SAB) 119. SAB 119 updated portions of SEC interpretative guidance to align with FASB Accounting Standards Codification (ASC) 326, "Financial Instruments - Credit Losses." It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes." The ASU is expected to reduce cost and complexity related to the accounting for income taxes by removing specific exceptions to general principles in Topic 740 (eliminating the need for an organization to analyze whether certain exceptions apply in a given period) and improving financial statement preparers' application of certain income tax-related guidance. This ASU is part of the FASB's simplification initiative to make narrow-scope simplifications and improvements to accounting standards through a series of short-term projects. For public business entities, such as the Company, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact that ASU 2019-12 will have on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, such as the Company, the amendments in the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2020-01 to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. To facilitate an orderly transition from interbank offered rates (IBORs) and other benchmark rates to alternative reference rates (ARRs), the Company has established an enterprise-wide initiative led by senior management. The objective of this initiative is to identify, assess and monitor risks associated with the expected discontinuation or unavailability of benchmarks, including LIBOR, achieve operational readiness and engage impacted clients in connection with the transition to ARRs. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments. On March 12, 2020, the SEC finalized amendments to the definitions of its "accelerated filer" and "large accelerated filer" definitions. The amendments increase the threshold criteria for meeting these filer classifications and are effective on April 27, 2020. Any changes in filer status are to be applied beginning with the filer's first annual report filed with the SEC subsequent to the effective date. Prior to these changes, the Company was required to comply with section 404(b) of the Sarbanes Oxley Act concerning auditor attestation over internal control over financial reporting as an "accelerated filer" as it had more than $75 million in public float but less than $700 million at the end of the Company's most recent second quarter. The rule change expands the definition of "smaller reporting companies" to include entities with public float of less than $700 million and less than $100 million in annual revenues. The Company expects to meet this expanded category of small reporting company and will no longer be considered an accelerated filer. If the Company's annual revenues exceed $100 million, its category will change back to "accelerated filer". The classifications of "accelerated filer" and "large accelerated filer" require a public company to obtain an auditor attestation concerning the effectiveness of internal control over financial reporting (ICFR) and include the opinion on ICFR in its annual report on Form 10-K. Smaller reporting companies also have additional time to file quarterly and annual financial statements. All are required to obtain and file annual financial statement audits, as well as provide management's assertion on effectiveness of (ICFR), but the external auditor attestation of ICFR is not required for smaller reporting companies. As the Company has total assets exceeding $1.0 billion, it remains subject to the Federal Deposit Insurance Corporation Act, which requires an auditor attestation concerning ICFR. As such, other than the additional time provided to file quarterly and annual financial statements, this change does not significantly change the Company’s annual reporting and audit requirements. In March 2020 (Revised in April 2020), various regulatory agencies, including the Federal Reserve and the FDIC, (the agencies ), |
Securities
Securities | 6 Months Ended |
Jun. 30, 2020 | |
Securities | |
Securities | Note 2. Amortized cost and fair values of securities held-to-maturity and securities available-for-sale as of June 30, 2020 and December 31, 2019, are as follows: June 30, 2020 Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 264 $ 10 $ — $ 274 Total Held-to-maturity Securities $ 264 $ 10 $ — $ 274 Available-for-sale Securities of U.S. government and federal agencies $ 3,000 $ 12 $ — $ 3,012 Securities of state and local municipalities tax exempt 3,655 106 — 3,761 Securities of state and local municipalities taxable 903 — (9) 894 Corporate bonds 9,977 30 (322) 9,685 SBA pass-through securities 149 1 — 150 Mortgage-backed securities 74,892 3,117 — 78,009 Collateralized mortgage obligations 25,444 863 — 26,307 Total Available-for-sale Securities $ 118,020 $ 4,129 $ (331) $ 121,818 December 31, 2019 Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 264 $ 6 $ — 270 Total Held-to-maturity Securities $ 264 $ — $ — $ 270 Available-for-sale Securities of U.S. government and federal agencies $ 4,000 $ — $ (4) $ 3,996 Securities of state and local municipalities tax exempt 3,662 76 — 3,738 Securities of state and local municipalities taxable 969 — (14) 955 Corporate bonds 6,984 78 (81) 6,981 SBA pass-through securities 163 — (4) 159 Mortgage-backed securities 96,358 1,077 (246) 97,189 Collateralized mortgage obligations 28,236 290 (219) 28,307 Total Available-for-sale Securities $ 140,372 $ 1,521 $ (568) $ 141,325 The Company had $11.6 million and $11.3 million in securities pledged with the Federal Reserve Bank of Richmond (FRB) to collateralize certain municipal deposits at June 30, 2020 and December 31, 2019, respectively. 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 June 30, 2020 and December 31, 2019, 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. Available-for-sale and held-to-maturity securities that have been in a continuous unrealized loss position are as follows: Less Than 12 Months 12 Months or Longer Total (In thousands) Fair Unrealized Fair Unrealized Fair Unrealized At June 30, 2020 Value Losses Value Losses Value Losses Securities of state and local municipalities taxable $ — $ — $ 894 $ (9) $ 894 $ (9) Corporate bonds 4,216 (261) 940 (61) 5,156 (322) Total $ 4,216 $ (261) $ 1,834 $ (70) $ 6,050 $ (331) Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized At December 31, 2019 Value Losses Value Losses Value Losses Securities of U.S. government and federal agencies $ 2,997 $ (3) $ 999 $ (1) $ 3,996 $ (4) Securities of state and local municipalities taxable — — 955 (14) 955 (14) Corporate bonds 2,463 (22) 941 (59) 3,404 (81) SBA pass-through securities — — 159 (4) 159 (4) Mortgage-backed securities 15,529 (73) 20,475 (173) 36,004 (246) Collateralized mortgage obligations 7,479 (94) 7,975 (125) 15,454 (219) Total $ 28,468 $ (192) $ 31,504 $ (376) $ 59,972 $ (568) Securities of state and local municipalities: Corporate bonds: The amortized cost and fair value of securities as of June 30, 2020, 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. June 30, 2020 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair (In thousands) Cost Value Cost Value After 1 year through 5 years $ — $ — $ 2,025 $ 2,017 After 5 years through 10 years 264 274 29,175 29,670 After 10 years — — 86,820 90,131 Total $ 264 $ 274 $ 118,020 $ 121,818 For the six months ended June 30, 2020 and 2019, proceeds from principal repayments of securities were $14.0 million and $8.9 million, respectively. During the six months ended June 30, 2020, proceeds from calls and maturities of securities were $1.0 million. There were gross realized gains of approximately $97,000 during the six months ended June 30, 2020 resulting from the sale of available-for-sale securities with a book value of approximately $10.1 million. There were no realized losses on the sale of securities for the six months ended June 30, 2020. During the six months ended June 30, 2019, there wDoneere no proceeds from sales of securities available-for-sale, no gross realized gains, and no realized losses. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2020 | |
Loans and Allowance for Loan Losses | |
Loans and Allowance for Loan Losses | Note 3. A summary of loan balances by type follows: June 30, 2020 December 31, 2019 (In thousands) Originated Acquired Total Originated Acquired Total Commercial real estate $ 748,723 $ 30,185 $ 778,908 $ 709,046 $ 38,629 $ 747,675 Commercial and industrial 274,671 5,248 279,919 107,698 7,405 115,103 Commercial construction 226,960 1,681 228,641 210,933 5,050 215,983 Consumer real estate 138,955 39,710 178,665 136,762 46,050 182,812 Consumer nonresidential 18,747 48 18,795 11,205 85 11,290 $ 1,408,056 $ 76,872 $ 1,484,928 $ 1,175,644 $ 97,219 $ 1,272,863 Less: Allowance for loan losses 12,828 66 12,894 10,202 29 10,231 Unearned income and (unamortized premiums), net 6,808 — 6,808 2,337 — 2,337 Loans, net $ 1,388,420 $ 76,806 $ 1,465,226 $ 1,163,105 $ 97,190 $ 1,260,295 During 2018, as a result of the Company’s acquisition of Colombo Bank (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 310-30 or ASC 310-20. The outstanding principal balance and related carrying amount of acquired loans included in the consolidated balance sheets as of June 30, 2020 and December 31, 2019 are as follows: (In thousands) June 30, 2020 Purchased credit impaired acquired loans evaluated individually for future credit losses Outstanding principal balance $ 5,183 Carrying amount 3,537 Other acquired loans Outstanding principal balance 74,274 Carrying amount 73,335 Total acquired loans Outstanding principal balance 79,457 Carrying amount 76,872 (In thousands) December 31, 2019 Purchased credit impaired acquired loans evaluated individually for future credit losses Outstanding principal balance $ 5,605 Carrying amount 4,810 Other acquired loans Outstanding principal balance 93,587 Carrying amount 92,409 Total acquired loans Outstanding principal balance 99,192 Carrying amount 97,219 The following table presents changes during the six months ended June 30, 2020 and the year ended December 31, 2019, respectively, in the accretable yield on purchased credit impaired loans for which the Company applies ASC 310-30. (In thousands) Balance at January 1, 2020 $ 371 Accretion (89) Reclassification of nonaccretable difference due to improvement in expected cash flows 31 Other changes, net (21) Balance at June 30, 2020 $ 292 (In thousands) Balance at January 1, 2019 $ 357 Accretion (136) Reclassification of nonaccretable difference due to improvement in expected cash flows 78 Other changes, net 72 Balance at December 31, 2019 $ 371 An analysis of the allowance for loan losses for the three and six months ended June 30, 2020 and 2019, and for the year ended December 31, 2019, follows: Allowance for Loan Losses For the three months ended June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, April 1 $ 7,667 $ 1,170 $ 1,904 $ 427 $ 58 $ 11,226 Charge-offs (23) — — — (64) (87) Recoveries — — — 1 4 5 Provision 1,211 86 201 121 131 1,750 Ending Balance $ 8,855 $ 1,256 $ 2,105 $ 549 $ 129 $ 12,894 Allowance for Loan Losses For the six months ended June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, January 1 $ 6,399 $ 1,275 $ 2,067 $ 417 $ 73 $ 10,231 Charge-offs (113) — — (3) (64) (180) Recoveries — 19 — 2 6 27 Provision 2,569 (38) 38 133 114 2,816 Ending Balance $ 8,855 $ 1,256 $ 2,105 $ 549 $ 129 $ 12,894 Allowance for Loan Losses For the three months ended June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, April 1 $ 5,812 $ 1,480 $ 1,491 $ 495 $ 234 $ 9,512 Charge-offs — — — — (21) (21) Recoveries — — — — — — Provision 177 (69) 397 (1) 1 505 Ending Balance $ 5,989 $ 1,411 $ 1,888 $ 494 $ 214 $ 9,996 Allowance for Loan Losses For the six months ended June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, January 1 $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ 9,159 Charge-offs — — — — (183) (183) Recoveries — — — — — — Provision 441 (63) 603 (24) 63 1,020 Ending Balance $ 5,989 $ 1,411 $ 1,888 $ 494 $ 214 $ 9,996 Allowance for Loan Losses For the year ended December 31, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ 9,159 Charge-offs (20) — — — (692) (712) Recoveries 4 35 — 2 23 64 Provision 867 (234) 782 (103) 408 1,720 Ending Balance $ 6,399 $ 1,275 $ 2,067 $ 417 $ 73 $ 10,231 The following tables present the recorded investment in loans and impairment method as of June 30, 2020 and 2019, and at December 31, 2019, by portfolio segment: Allowance for Loan Losses At June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ 252 $ — $ 114 $ — $ 366 Purchased credit impaired — — — — — — Collectively evaluated for impairment 8,855 1,004 2,105 435 129 12,528 $ 8,855 $ 1,256 $ 2,105 $ 549 $ 129 $ 12,894 Loans Receivable At June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Financing receivables: Ending Balance Individually evaluated for impairment $ 993 $ 4,143 $ 820 $ 538 $ — $ 6,494 Purchased credit impaired 3,177 305 — 55 — 3,537 Collectively evaluated for impairment 774,738 275,471 227,821 178,072 18,795 1,474,897 $ 778,908 $ 279,919 $ 228,641 $ 178,665 $ 18,795 $ 1,484,928 Allowance for Loan Losses At June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ 26 $ 343 $ — $ 29 $ — $ 398 Purchased credit impaired — — — — — — Collectively evaluated for impairment 5,963 1,068 1,888 465 214 9,598 $ 5,989 $ 1,411 $ 1,888 $ 494 $ 214 $ 9,996 Loans Receivable At June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Financing receivables: Ending Balance Individually evaluated for impairment $ 5,493 $ 2,905 $ — $ 169 $ — $ 8,567 Purchased credit impaired 1,019 461 — 366 — 1,846 Collectively evaluated for impairment 657,739 131,352 218,182 194,363 24,249 1,225,885 $ 664,251 $ 134,718 $ 218,182 $ 194,898 $ 24,249 $ 1,236,298 Allowance for Loan Losses At December 31, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ 364 $ — $ 29 $ — $ 393 Purchased credit impaired — — — — — — Collectively evaluated for impairment 6,399 911 2,067 388 73 9,838 $ 6,399 $ 1,275 $ 2,067 $ 417 $ 73 $ 10,231 Loans Receivable At December 31, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Financing receivables: Ending Balance Individually evaluated for impairment $ 12,962 $ 5,208 $ 820 $ 1,260 $ — $ 20,250 Purchased credit impaired 4,043 400 — 367 — 4,810 Collectively evaluated for impairment 730,670 109,495 215,163 181,185 11,290 1,247,803 $ 747,675 $ 115,103 $ 215,983 $ 182,812 $ 11,290 $ 1,272,863 Impaired loans by class excluding purchased credit impaired, at June 30, 2020 and December 31, 2019, are summarized as follows: Impaired Loans – Originated Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized June 30, 2020 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 1,751 1,752 252 1,752 55 Commercial construction — — — — — Consumer real estate 339 339 48 280 10 Consumer nonresidential — — — — — $ 2,090 $ 2,091 $ 300 $ 2,032 $ 65 June 30, 2020 With no related allowance: Commercial real estate $ 834 $ 838 $ — $ 847 $ 23 Commercial and industrial 2,392 2,392 — 2,784 85 Commercial construction 820 820 — 820 25 Consumer real estate — — — — — Consumer nonresidential — — — — — $ 4,046 $ 4,050 $ — $ 4,451 $ 133 Impaired Loans – Acquired Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized June 30, 2020 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 169 163 66 163 5 Consumer nonresidential — — — — — $ 169 $ 163 $ 66 $ 163 $ 5 June 30, 2020 With no related allowance: Commercial real estate $ 159 $ 165 $ — $ 165 $ 7 Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 30 31 — 31 1 Consumer nonresidential — — — — — $ 189 $ 196 $ — $ 196 $ 8 Impaired Loans – Originated Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized December 31, 2019 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 2,040 2,040 364 2,081 157 Commercial construction — — — — — Consumer real estate — — — — — Consumer nonresidential — — — — — $ 2,040 $ 2,040 $ 364 $ 2,081 $ 157 December 31, 2019 With no related allowance: Commercial real estate $ 12,792 $ 12,796 $ — $ 13,617 $ 661 Commercial and industrial 3,168 3,323 — 5,387 340 Commercial construction 820 820 — 816 56 Consumer real estate 940 940 — 940 38 Consumer nonresidential — — — — — $ 17,720 $ 17,879 $ — $ 20,760 $ 1,095 Impaired Loans – Acquired Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized December 31, 2019 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 169 163 29 163 10 Consumer nonresidential — — — — — $ 169 $ 163 29 $ 163 $ 10 December 31, 2019 With no related allowance: Commercial real estate $ 170 $ 165 $ — $ 165 $ 13 Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 151 152 — 155 8 Consumer nonresidential — — — — — $ 321 $ 317 $ — $ 320 $ 21 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 Special Mention Substandard Doubtful Loss Based on the most recent analysis performed, the risk category of loans by class of loans was as follows as of June 30, 2020 and December 31, 2019: As of June 30, 2020 – Originated Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 742,788 $ 270,274 $ 226,140 $ 137,313 $ 18,747 $ 1,395,262 Special mention 5,659 355 — 1,543 — 7,557 Substandard 276 4,042 820 99 — 5,237 Doubtful — — — — — — Loss — — — — — — Total $ 748,723 $ 274,671 $ 226,960 $ 138,955 $ 18,747 $ 1,408,056 As of June 30, 2020 – Acquired Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 27,705 $ 4,873 $ 1,681 $ 39,456 $ 48 $ 73,763 Special mention — — — — — — Substandard 2,480 375 — 254 — 3,109 Doubtful — — — — — — Loss — — — — — — Total $ 30,185 $ 5,248 $ 1,681 $ 39,710 $ 48 $ 76,872 As of December 31, 2019 – Originated Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 690,082 $ 102,491 $ 210,113 $ 134,913 $ 11,186 $ 1,148,785 Special mention 14,772 476 — 1,748 19 17,015 Substandard 4,192 4,731 820 101 — 9,844 Doubtful — — — — — — Loss — — — — — — Total $ 709,046 $ 107,698 $ 210,933 $ 136,762 $ 11,205 $ 1,175,644 As of December 31, 2019 – Acquired Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 35,284 $ 7,005 $ 5,050 $ 45,365 $ 85 $ 92,789 Special mention 3,089 — — 139 — 3,228 Substandard 256 400 — 546 — 1,202 Doubtful — — — — — — Loss — — — — — — Total $ 38,629 $ 7,405 $ 5,050 $ 46,050 $ 85 $ 97,219 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 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. At June 30, 2020, the Company had $7.6 million in loans identified as special mention within the originated loan portfolio, a decrease of $9.5 million from December 31, 2019. Special mention rated loans are loans that have a potential weakness that deserves management's close attention. These loans do not have a specific reserve and are considered well-secured. At June 30, 2020, the Company had $5.2 million in loans identified as substandard within the originated loan portfolio, a decrease of $4.6 million from December 31, 2019. Substandard rated loans are loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. For each of these substandard loans, a liquidation analysis is completed. As of June 30, 2020, specific reserves on originated and acquired loans totaling $366 thousand, has been allocated within the allowance for loan losses to supplement any shortfall of collateral. Past due and nonaccrual loans presented by loan class were as follows at June 30, 2020 and December 31, 2019: As of June 30, 2020 – Originated Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ 610 $ 1,197 $ 1,807 $ 746,916 $ 748,723 $ 1,197 $ 150 Commercial and industrial — — — — 274,671 274,671 — 3,184 Commercial construction — — — — 226,960 226,960 — 820 Consumer real estate 240 465 — 705 138,250 138,955 — — Consumer nonresidential — 75 8 83 18,664 18,747 8 — Total $ 240 $ 1,150 $ 1,205 $ 2,595 $ 1,405,461 $ 1,408,056 $ 1,205 $ 4,154 As of June 30, 2020 – Acquired Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ 444 $ — $ 444 $ 29,741 $ 30,185 $ — $ 2,321 Commercial and industrial — — — — 5,248 5,248 — 253 Commercial construction — — — — 1,681 1,681 — — Consumer real estate — — 235 235 39,475 39,710 235 325 Consumer nonresidential — — — — 48 48 — — Total $ — $ 444 $ 235 $ 679 $ 76,193 $ 76,872 $ 235 $ 2,899 As of December 31, 2019 – Originated Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ 8,443 $ — $ 498 $ 8,941 $ 700,105 $ 709,046 $ 753 $ 3,903 Commercial and industrial 1,184 — 48 1,232 106,466 107,698 48 3,822 Commercial construction 2,000 — — 2,000 208,933 210,933 — 820 Consumer real estate 396 153 356 905 135,857 136,762 101 — Consumer nonresidential 77 56 12 145 11,060 11,205 12 — Total $ 12,100 $ 209 $ 914 $ 13,223 $ 1,162,421 $ 1,175,644 $ 914 $ 8,545 As of December 31, 2019 – Acquired Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ — $ — $ — $ 38,629 $ 38,629 $ — $ 256 Commercial and industrial — — — — 7,405 7,405 — 272 Commercial construction — — — — 5,050 5,050 — — Consumer real estate 1,138 241 118 1,497 44,553 46,050 118 620 Consumer nonresidential — — — — 85 85 — — Total $ 1,138 $ 241 $ 118 $ 1,497 $ 95,722 $ 97,219 $ 118 $ 1,148 As of June 30, 2020, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. There were $177 thousand of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process as of December 31, 2019. There were overdrafts of $407 thousand and $181 thousand at June 30, 2020 and December 31, 2019, respectively, which have been reclassified deposits There were no defaults of TDRs during the twelve months since restructuring for the six months ended June 30, 2020 and 2019. The following table presents loans designated as TDRs during the six months ended June 30, 2020 and 2019, respectively: For the six months ended June 30, 2020 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Troubled Debt Restructurings Contracts Investment Investment (Dollars in thousands) Commercial real estate 1 $ 99 $ 99 Total 1 $ 99 $ 99 For the six months ended June 30, 2019 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Troubled Debt Restructurings Contracts Investment Investment (Dollars in thousands) Commercial real estate 1 $ 3,903 $ 3,903 Total 1 $ 3,903 $ 3,903 As of June 30, 2020, and December 31, 2019, the Company has a recorded investment in TDRs of $99 thousand and $3.9 million, respectively. The concession made in the TDRs were related to the reduction in the stated interest rate for the remaining life of the debt. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | Note 4. 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 balance sheets (asset positions are included in other assets and liability positions are included in other liabilities) as of June 30, 2020 and December 31, 2019. 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 June 30, 2020, the Company entered into 21 interest rate swap agreements which are collateralized with $15.8 million in cash. There were 17 interest rate swap agreements outstanding as of December 31, 2019 which were collateralized with $6.1 million in cash. The notional amount and fair value of the Company’s derivative financial instruments as of June 30, 2020 and December 31, 2019 were as follows: June 30, 2020 Notional Amount Fair Value Interest Rate Swap Agreements (In thousands) Receive Fixed/Pay Variable Swaps $ 158,010 $ 15,755 Pay Fixed/Receive Variable Swaps 158,010 (15,755) December 31, 2019 Notional Amount Fair Value Interest Rate Swap Agreements (In thousands) Receive Fixed/Pay Variable Swaps $ 94,755 $ (6,001) Pay Fixed/Receive Variable Swaps 94,755 6,001 Interest Rate Risk Management—Cash Flow Hedging Instruments The Company uses FHLB advances and other wholesale funding from time to time as a source of funds for use in the Company's lending and investment activities and other general business purposes. This wholesale funding exposes the Company to increased interest rate risk as a result of the variability in cash flows (future interest payments). The Company believes it is prudent to reduce this interest rate risk. To meet this objective, the Company entered into interest rate swap agreements whereby the Company reduces the interest rate risk associated with the Company’s variable rate advances (or other wholesale funding) from the designation date and going through the maturity date. At June 30, 2020, the information pertaining to outstanding interest rate swap agreements used to hedge variability in cash flows (FHLB advance which is included in other borrowed funds on the consolidated balance sheet) is as follows: (Dollars in thousands) Notional amount $ 60,000 Weighted average pay rate 0.87 % Weighted average receive rate 0.30 % Weighted average maturity in years 2.6 years Unrealized loss relating to interest rate swaps $ (893) These agreements provided for the Company to receive payments determined by a specific index (three month LIBOR) in exchange for making payments at a fixed rate. At June 30, 2020, the unrealized loss relating to interest rate swaps designated as hedging instruments of the variability of cash flows associated with FHLB advances are reported in other comprehensive income. These amounts are subsequently reclassified into interest expense as a yield adjustment in the same period in which the related interest on the advance affects earnings. The Company measures cash flow hedging relationships for effectiveness on a monthly basis, and at June 30, 2020, the hedges were highly effective and the amount of ineffectiveness reflected in earnings was de minimus. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 6 Months Ended |
Jun. 30, 2020 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | Note 5. 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 June 30, 2020 and December 31, 2019, the following financial instruments were outstanding which contract amounts represent credit risk: (In thousands) June 30, 2020 December 31, 2019 Commitments to grant loans $ 33,900 $ 27,260 Unused commitments to fund loans and lines of credit 193,531 244,367 Commercial and standby letters of credit 8,208 9,002 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. Substantially 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 FRB and correspondent banks. The total amount of cash on deposit in correspondent banks exceeding the federally insured limits was $20.8 million and $10.6 million at June 30, 2020 and December 31, 2019, respectively. |
Stock-Based Compensation Plan
Stock-Based Compensation Plan | 6 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation Plan | |
Stock-Based Compensation Plan | Note 6. The Company’s Amended and Restated 2008 Option Plan (the Plan), which is stockholder-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 stockholders approved an amendment to Plan to extend the term and increase the number of shares authorized for issuance under the Plan by 200,000 shares. The Company has granted stock options and restricted stock units under the Plan. 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 June 30, 2020, 165,211 shares were available to grant under the Plan. No options were granted during the six months ended June 30, 2020 and 2019, respectively. For the three and six months ended June 30, 2020,there were 0 and 2,737, respectively, shares withheld from issuance upon exercise of options in order to cover the cost of the exercise by the participant. There were no shares withheld from issuance upon exercise of options in order to cover the cost of the exercise by the participant during the three and six months ended June 30, 2019. A summary of option activity under the Plan as of June 30, 2020, and changes during the six months ended is presented below: Weighted- Weighted- Average Number Average Remaining Aggregate of Exercise Contractual Intrinsic Options Shares Price Term Value (1) Outstanding at January 1, 2020 1,797,516 $ 8.09 4.10 Granted — — Exercised (47,268) 6.46 Forfeited or expired (3,139) 10.62 Outstanding and Exercisable at June 30, 2020 1,747,109 $ 8.13 3.65 $ 3,936,397 (1) The compensation cost that has been charged to income for the Plan was $170 thousand and $107 thousand for the three months ended June 30, 2020 and 2019, respectively. Total compensation cost for the six months ended June 30, 2020 and 2019 was $376 thousand and $272 thousand, respectively. As of June 30, 2020, all outstanding shares of the stock option plan are fully vested and amortized. The total income tax benefit related to stock options exercised and recognized in the income statement for share-based compensation arrangements was $6 thousand and $0 for the three months June 30, 2020 and 2019, respectively. Tax benefits recognized for nonqualified stock options during the six months ended June 30, 2020 and 2019 totaled $82 thousand and $108 thousand, respectively. There were no restricted stock units granted during the six months ended June 30, 2020. 1,000 restricted stock units were granted during the six months ended June 30, 2019. A summary of the Company’s restricted stock unit grant activity as of June 30, 2020 is shown below. Weighted Average Number of Grant Date Shares Fair Value Nonvested at January 1, 2020 109,718 $ 18.70 Granted — — Vested (375) 17.21 Forfeited (1,740) 18.70 Balance at June 30, 2020 107,603 $ 18.70 As of June 30, 2020, there was $1.5 million of total unrecognized compensation cost related to nonvested restricted stock units granted under the Plan. The cost is expected to be recognized over a weighted-average period of 31 months. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 7. 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 the principal or most advantageous market for the asset or 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 Cash flow hedges: The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019: Fair Value Measurements at June 30, 2020 Using Quoted Prices in Active Significant Markets for Other Significant Balance as of Identical Observable Unobservable (In thousands) June 30, Assets Inputs Inputs Description 2020 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 3,012 $ — $ 3,012 $ — Securities of state and local municipalities tax exempt 3,761 — 3,761 — Securities of state and local municipalities taxable 894 — 894 — Corporate bonds 9,685 — 9,685 — SBA pass-through securities 150 — 150 — Mortgage-backed securities 78,009 — 78,009 — Collateralized mortgage obligations 26,307 — 26,307 — Total Available-for-Sale Securities $ 121,818 $ — $ 121,818 $ — Fair Value Measurements at December 31, 2019 Using Quoted Prices in Active Significant Markets for Other Significant Balance as of Identical Observable Unobservable (In thousands) December 31, Assets Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 3,996 $ — $ 3,996 $ — Securities of state and local municipalities tax exempt 3,738 — 3,738 — Securities of state and local municipalities taxable 955 — 955 — Corporate bonds 6,981 — 6,981 — SBA pass-through securities 159 — 159 — Mortgage-backed securities 97,189 — 97,189 — Collateralized mortgage obligations 28,307 — 28,307 — Total Available-for-Sale Securities $ 141,325 $ — $ 141,325 $ — 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 Held for Sale: Other Real Estate Owned: The following table summarizes the Company’s assets that were measured at fair value on a nonrecurring basis at June 30, 2020 and December 31, 2019: Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Balance as of Identical Observable Unobservable (In thousands) June 30, Assets Inputs Inputs Description 2020 (Level 1) (Level 2) (Level 3) Assets Impaired loans $ 1,893 $ — $ — $ 1,893 Loans held for sale $ — $ — $ — $ — Other real estate owned $ 3,866 $ — $ — $ 3,866 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Balance as of Identical Observable Unobservable (In thousands) December 31, Assets Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Assets Impaired loans $ 1,816 $ — $ — $ 1,816 Loans held for sale $ 11,198 $ — $ 11,198 $ — Other real estate owned $ 3,866 $ — $ — $ 3,866 The following table displays quantitative information about Level 3 Fair Value Measurements for June 30, 2020 and December 31, 2019: Quantitative information about Level 3 Fair Value Measurements for June 30, 2020 (In thousands) Assets Fair Value Valuation Technique(s) Unobservable input Range (Avg.) Impaired loans $ 1,893 Discounted value Marketability/Selling costs 0% - 8% (8%) Other real estate owned $ 3,866 Discounted appraised value Selling costs 10.51 % Quantitative information about Level 3 Fair Value Measurements for December 31, 2019 (In thousands) Assets Fair Value Valuation Technique(s) Unobservable input Range (Avg.) Impaired loans $ 1,816 Discounted appraised value Marketability/Selling costs 5% - 8% (7.84%) 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 June 30, 2020 and December 31, 2019. Fair values for June 30, 2020 and December 31, 2019 are estimated under the exit price notion in accordance with ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” Fair Value Measurements as of June 30, 2020, using Quoted Prices in Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 25,613 $ 25,613 $ — $ — Interest-bearing deposits at other institutions 64,989 64,989 — — Securities held-to-maturity 264 — 274 — Securities available-for-sale 121,818 — 121,818 — Restricted stock 6,608 — 6,608 — Loans held for sale — — — — Loans, net 1,465,226 — — 1,444,258 Bank owned life insurance 37,633 — 37,633 — Accrued interest receivable 7,186 — 7,186 — Financial liabilities: Checking, savings and money market accounts $ 1,118,408 $ — $ 1,118,408 $ — Time deposits 400,628 — 404,130 — FHLB advances 25,000 — 25,000 — Subordinated notes 24,527 — 24,291 — Accrued interest payable 524 — 524 — Fair Value Measurements as of December 31, 2019, using Quoted Prices in Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 14,916 $ 14,916 $ — $ — Interest-bearing deposits at other institutions 18,226 18,226 — — Securities held-to-maturity 264 — 270 — Securities available-for-sale 141,325 — 141,325 — Restricted stock 6,017 — 6,017 — Loans held for sale 11,198 — 11,198 — Loans, net 1,260,295 — — 1,254,685 Bank owned life insurance 37,069 — 37,069 — Accrued interest receivable 4,094 — 4,094 — Financial liabilities: Checking, savings and money market accounts $ 863,383 $ — $ 863,383 $ — Time deposits 422,339 — 424,398 — Federal funds purchased 10,000 — 10,000 — FHLB advances 15,000 — 15,000 — Subordinated notes 24,487 — 24,564 — Accrued interest payable 605 — 605 — |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share | |
Earnings Per Share | Note 8. 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.Holders of the Company's restricted stock units do not have voting rights during the vesting period and therefore, restricted stock units are not included in the computation of basic earnings per share. Weighted average shares - diluted includes only the potential dilution of stock options as of June 30, 2020 and 2019, respectively. 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 stockholders. There were 321,560 shares excluded from the calculation for the period ended June 30, 2020, as they were anti-dilutive. There were no anti-dilutive shares for the period ended June 30, 2019. Three Months Ended Six Months Ended June 30, June 30, (In thousands, except per share data) 2020 2019 2020 2019 Net income $ 2,880 $ 4,085 $ 6,613 $ 8,011 Weighted average number of shares 13,455 13,803 13,603 13,763 Effect of dilutive securities, restricted stock units and options 469 1,014 657 1,036 Weighted average diluted shares 13,924 14,817 14,260 14,799 Basic EPS $ 0.21 $ 0.30 $ 0.49 $ 0.58 Diluted EPS $ 0.21 $ 0.28 $ 0.46 $ 0.54 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | Note 9. Changes in accumulated other comprehensive income (AOCI) for the three and six months ended June 30, 2020 and 2019 are shown in the following table. The Company has two components, which are available-for-sale securities and cash flow hedges, for the periods presented. (In thousands) Three Months Ended June 30, 2020 Available-for-Sale Securities Cash Flow Hedges Total Balance, beginning of period $ 2,968 $ (531) $ 2,437 Net unrealized gains (losses) during the period 32 (174) (142) Net reclassification adjustment for gains realized in income — — — Other comprehensive income (loss), net of tax 32 (174) (142) Balance, end of period $ 3,000 $ (705) $ 2,295 (In thousands) Six Months Ended June 30, 2020 Available-for-Sale Securities Cash Flow Hedges Total Balance, beginning of period $ 753 $ (63) $ 690 Net unrealized gains (losses) during the period 2,324 (642) 1,682 Net reclassification adjustment for gains realized in income (77) — (77) Other comprehensive income (loss), net of tax 2,247 (642) 1,605 Balance, end of period $ 3,000 $ (705) $ 2,295 (In thousands) Three Months June 30, Six Months June 30, Available-for-Sale Securities 2019 2019 Balance, beginning of period $ (1,031) $ (2,411) Net unrealized gains (losses) during the period 1,382 2,762 Other comprehensive income (loss), net of tax 1,382 2,762 Balance, end of period $ 351 $ 351 The following table presents information related to reclassifications from accumulated other comprehensive income: |
Subordinated Notes
Subordinated Notes | 6 Months Ended |
Jun. 30, 2020 | |
Subordinated Notes | |
Subordinated Notes | Note 10. On June 20, 2016, the Company issued $25 million of fixed-to-floating rate subordinated notes due June 30, 2026, in a private placement to accredited investors. 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 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. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Recognition | |
Revenue Recognition | Note 11. 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. 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 and are included in other income on our consolidated statements of income. 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 loan swap fees, insurance commissions, and other miscellaneous revenue streams not meeting the criteria above. When the Company enters into an interest rate swap agreement, the Company may receive an additional one-time payment fee which is recognized as income when received. The Company receives monthly recurring commissions based on 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 three and six months ended June 30, 2020 and 2019: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2020 2019 2020 2019 Noninterest Income In-scope of Topic 606 Service Charges on Deposit Accounts $ 223 $ 229 $ 463 $ 411 Fees, Exchange, and Other Service Charges 76 123 159 198 Other income 23 11 31 25 Noninterest Income (in-scope of Topic 606) 322 363 653 634 Noninterest Income (out-scope of Topic 606) 365 176 728 643 Total Noninterest Income $ 687 $ 539 $ 1,381 $ 1,277 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 June 30, 2020 and 2019, 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 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | Note 12. Supplemental Cash Flow Information Below is additional information regarding the Company's cash flows for the six months ended June 30, 2020 and 2019. For the Six Months Ended June 30, (In thousands) 2020 2019 Supplemental Disclosure of Cash Flow Information: Cash paid for: Interest on deposits and borrowed funds $ 8,375 $ 8,817 Income taxes 455 939 Noncash investing and financing activities: Unrealized gain on securities available-for-sale 2,845 3,496 Unrealized loss on interest rate swaps (813) — Transfer of loans held for sale to loans, net 9,641 — Initial right of use asset - operating leases — 12,249 Initial lease liability - operating leases — 12,656 Right-of-use assets obtained in the exchange for lease liabilities during the current period 59 — Derecognition of right-of-use assets and lease liability 458 — |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases | |
Leases | Note 13. Leases Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. Lease payments Lease payments for short-term leases are recognized as lease expense on a straight-line basis over the lease term, or for variable lease payments, in the period in which the obligation was incurred. Payments for leases with terms longer than twelve months are included in the determination of the lease liability. Payments may be fixed for the term of the lease or variable. If the lease agreement provides a known escalator, such as a specified percentage increase per year or a stated increase at a specified time, the variable payment is included in the cash flows used to determine the lease liability. If the variable payment is based upon an unknown escalator, such as the consumer price index at a future date, the increase is not included in the cash flows used to determine the lease liability. The Company’s leases provide known escalators that are included in the determination of the lease liability, with the exception of three lease agreements. Options to Extend, Residual Value Guarantees, and Restrictions and Covenants The Company’s leases offer the option to extend the lease liability. None of the Company’s leases provide for residual value The following tables present information about leases: (Dollars in thousands) June 30, 2020 December 31, 2019 Right-of-Use-Asset $ 11,724 $ 13,279 Lease Liability $ 12,704 $ 13,686 Weighted Average Remaining Lease Term (Years) 10.17 11.1 Weighted Average discount rate 3.22 % 3.32 % For the Three Months Ended June 30, For the Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Operating Lease Expense $ 428 $ 445 $ 862 $ 915 Cash paid for amounts included in lease liabilities $ 401 $ 405 $ 805 $ 843 Impairment loss on right-of-use asset 508 — 508 — Derecognition of right-of-use asset and lease liabilities 458 — 458 — Right-of-use assets obtained in exchange for operating lease liabilities — — 59 — The following table presents a maturity schedule of undiscounted cash flows that contribute to the lease liability: (In thousands) June 30, 2020 Six months ending December 31, 2020 $ 776 Twelve months ending December 31, 2021 1,559 Twelve months ending December 31, 2022 1,599 Twelve months ending December 31, 2023 1,596 Twelve months ending December 31, 2024 1,566 Twelve months ending December 31, 2025 1,441 Thereafter 6,462 Total $ 14,999 Less: discount (2,295) $ 12,704 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization and Summary of Significant Accounting Policies | |
Risks and Uncertainties | Risks and Uncertainties The outbreak of COVID-19 has adversely impacted a broad range of industries in which our customers operate and could impair their ability to fulfill their financial obligations to us. The World Health Organization has declared COVID-19 to be a global pandemic indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed with the goal of decreasing the rate of new infections. The spread of the outbreak has caused significant disruptions to the U.S. economy and has disrupted banking and other financial activity in the areas we operate. While there has been no material impact to our employees to date, COVID-19 could also potentially create widespread business continuity issues for us. The U.S. Congress, the President, and the Federal Reserve have taken several actions designed to cushion the economic fallout. Most notably, the CARES Act was signed into law at the end of March 2020 as a $2 trillion legislative package. The goal of the CARES Act is to prevent a severe economic downturn through various measures, including direct financial aid to American families and economic stimulus to significantly impacted industry sectors. The package also includes extensive emergency funding for hospitals and providers. In addition to the general impact of COVID-19, certain provisions of the CARES Act as well as other recent legislative and regulatory relief efforts are expected to have a material impact on our operations. Our business is dependent upon the willingness and ability of our employees and customers to conduct banking and other financial transactions. If the global response to contain COVID-19 escalates further or is unsuccessful, we could experience a material adverse effect on our business, financial condition, results of operations and cash flows. While it is not possible to know the full universe or extent that the impact of COVID-19, and resulting measures to curtail its spread, will have on our operations, we are aware of the following matters that are potentially material to us and our operations. Financial Condition and Results of Operations Our interest income could be reduced due to COVID-19. Consistent with guidance from regulators, we are actively working with COVID-19 affected borrowers to defer their payments, interest, and fees. While interest and fees will still accrue to income, through normal GAAP accounting, should eventual credit losses on these deferred payments emerge, interest income and fees accrued would need to be reversed. In such a scenario, interest income in future periods could be negatively impacted. At this time, we are unable to project the materiality of such an impact, but recognize the breadth of the economic impact may affect our borrowers' ability to repay in future periods. Our fee income could be reduced due to COVID-19. Consistent with guidance from regulators, we are actively working with COVID-19 affected customers to waive fees from a variety of sources, such as, but not limited to, insufficient funds and overdraft fees, ATM fees, account maintenance fees, etc. These reductions in fees are thought, at this time, to be temporary in conjunction with the length of the expected COVID-19 related economic crisis. At this time, we are unable to project the materiality of such an impact, but recognize the breadth of the economic impact is likely to impact our fee income in future periods. Capital and Liquidity While we believe that we have sufficient capital to withstand an extended economic recession brought about by COVID-19, our regulatory capital ratios could be adversely impacted by future credit losses. We rely on cash on hand as well as dividends from our subsidiary bank to service our debt when necessary. If our capital deteriorates such that our subsidiary bank is unable to pay dividends to us for an extended period of time, we may not be able to service our debt. We maintain access to multiple sources of liquidity. Wholesale funding markets have remained open to us, but rates for short term funding have recently been volatile. If funding costs are elevated for an extended period of time, it could have an adverse effect on our net interest margin. If an extended recession caused large numbers of our deposit customers to withdraw their funds, we might become more reliant on volatile or more expensive sources of funding. Asset Valuation Currently, we do not expect COVID-19 to affect our ability to account timely for the valuation of assets on our balance sheet; however, this could change in future periods. While certain valuation assumptions and judgments will change to account for pandemic-related circumstances such as widening credit spreads, we do not anticipate significant changes in methodology used to determine the fair value of assets measured in accordance with GAAP. COVID-19 could cause a further and sustained decline in our stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform a goodwill impairment test and could result in an impairment charge being recorded for that period. In the event that we conclude that all or a portion of our goodwill is impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. It is possible that the lingering effects of COVID-19 could cause the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform an intangible asset impairment test and could result in an impairment charge being recorded for that period. In the event that we conclude that all or a portion of our intangible assets are impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital. Processes, Controls and Business Continuity Plan We have invoked our Board approved Pandemic Preparedness Plan that includes a remote working strategy. We do not anticipate incurring additional material cost related to our continued deployment of the remote working strategy. No material operational or internal control challenges or risks have been identified to date. We do not anticipate significant challenges to our ability to maintain our systems and controls in light of the measures we have taken to prevent the spread of COVID-19. We do not currently face any material resource constraint through the implementation of our business continuity plans. Lending Operations and Accommodations to Borrowers Consistent with regulatory guidance to work with borrowers during this unprecedented situation and as outlined in the CARES Act, we are executing a payment deferral program for our commercial lending clients that are adversely affected by the pandemic. Depending on the demonstrated need of the client, we are deferring either the full loan payment or the principal component of the loan payment generally for 90 days. During the first and second quarter of 2020, we modified 277 loans for a total outstanding principal balance of $360.2 million, or 24.4% of the total loan portfolio. As of July 31, 2020, loans modified have reduced to 165 loans for a total outstanding principal balance of $226.7 million, or 15.3% of the total loan portfolio. As of July 31, 2020, customers requesting a second 90-day deferral had a total outstanding principal balance of $28.2 million, representing 15 loans. In accordance with interagency guidance issued in March 2020, these short term deferrals are not considered troubled debt restructurings (TDRs). With the passage of the PPP, administered by the SBA, we actively participated in assisting our customers with applications for resources through the program. The majority of the PPP loans we originated have a two-year term and earn interest at 1%. We believe that the majority of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program. As of June 30, 2020, we have closed or approved with the SBA 755 PPP loans representing $169.4 million in funding , net of deferred fees. It is our understanding that loans funded through the PPP program are fully guaranteed by the U.S. government. Should those circumstances change, we could be required to establish additional allowance for loan losses through a charge to earnings. Credit We are working with customers directly affected by COVID-19. We are prepared to offer short-term assistance in accordance with regulator guidelines. As a result of the current economic environment caused by the COVID-19 virus, we are engaging in more frequent communications with borrowers to better understand their situation and the challenges faced, allowing us to respond proactively as needs and issues arise. Should economic conditions worsen, we could experience further increases in our required allowance for loan losses and record additional provision for loan loss expense. It is possible that our asset quality measures could worsen at future measurement periods if the effects of COVID-19 are prolonged. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASUs 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASUs have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (SEC), such as the Company, and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The Company has identified a third party vendor to assist in the measurement of expected credit losses under this standard. The implementation committee has completed the data collection process, validated the data inputs, and is in the initial phases of evaluating various allowance methodologies for certain loan segments within the Company’s loan portfolio. The Company is currently evaluating the implementation of ASU 2016-13 due to the change in implementation dates for smaller reporting companies. Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin (SAB) 119. SAB 119 updated portions of SEC interpretative guidance to align with FASB Accounting Standards Codification (ASC) 326, "Financial Instruments - Credit Losses." It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes." The ASU is expected to reduce cost and complexity related to the accounting for income taxes by removing specific exceptions to general principles in Topic 740 (eliminating the need for an organization to analyze whether certain exceptions apply in a given period) and improving financial statement preparers' application of certain income tax-related guidance. This ASU is part of the FASB's simplification initiative to make narrow-scope simplifications and improvements to accounting standards through a series of short-term projects. For public business entities, such as the Company, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact that ASU 2019-12 will have on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, such as the Company, the amendments in the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2020-01 to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. To facilitate an orderly transition from interbank offered rates (IBORs) and other benchmark rates to alternative reference rates (ARRs), the Company has established an enterprise-wide initiative led by senior management. The objective of this initiative is to identify, assess and monitor risks associated with the expected discontinuation or unavailability of benchmarks, including LIBOR, achieve operational readiness and engage impacted clients in connection with the transition to ARRs. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments. On March 12, 2020, the SEC finalized amendments to the definitions of its "accelerated filer" and "large accelerated filer" definitions. The amendments increase the threshold criteria for meeting these filer classifications and are effective on April 27, 2020. Any changes in filer status are to be applied beginning with the filer's first annual report filed with the SEC subsequent to the effective date. Prior to these changes, the Company was required to comply with section 404(b) of the Sarbanes Oxley Act concerning auditor attestation over internal control over financial reporting as an "accelerated filer" as it had more than $75 million in public float but less than $700 million at the end of the Company's most recent second quarter. The rule change expands the definition of "smaller reporting companies" to include entities with public float of less than $700 million and less than $100 million in annual revenues. The Company expects to meet this expanded category of small reporting company and will no longer be considered an accelerated filer. If the Company's annual revenues exceed $100 million, its category will change back to "accelerated filer". The classifications of "accelerated filer" and "large accelerated filer" require a public company to obtain an auditor attestation concerning the effectiveness of internal control over financial reporting (ICFR) and include the opinion on ICFR in its annual report on Form 10-K. Smaller reporting companies also have additional time to file quarterly and annual financial statements. All are required to obtain and file annual financial statement audits, as well as provide management's assertion on effectiveness of (ICFR), but the external auditor attestation of ICFR is not required for smaller reporting companies. As the Company has total assets exceeding $1.0 billion, it remains subject to the Federal Deposit Insurance Corporation Act, which requires an auditor attestation concerning ICFR. As such, other than the additional time provided to file quarterly and annual financial statements, this change does not significantly change the Company’s annual reporting and audit requirements. In March 2020 (Revised in April 2020), various regulatory agencies, including the Federal Reserve and the FDIC, (the agencies ), |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Securities | |
Schedule of amortized cost and fair values of securities held-to-maturity and securities available-for-sale | June 30, 2020 Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 264 $ 10 $ — $ 274 Total Held-to-maturity Securities $ 264 $ 10 $ — $ 274 Available-for-sale Securities of U.S. government and federal agencies $ 3,000 $ 12 $ — $ 3,012 Securities of state and local municipalities tax exempt 3,655 106 — 3,761 Securities of state and local municipalities taxable 903 — (9) 894 Corporate bonds 9,977 30 (322) 9,685 SBA pass-through securities 149 1 — 150 Mortgage-backed securities 74,892 3,117 — 78,009 Collateralized mortgage obligations 25,444 863 — 26,307 Total Available-for-sale Securities $ 118,020 $ 4,129 $ (331) $ 121,818 December 31, 2019 Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains (Losses) Value Held-to-maturity Securities of state and local municipalities tax exempt $ 264 $ 6 $ — 270 Total Held-to-maturity Securities $ 264 $ — $ — $ 270 Available-for-sale Securities of U.S. government and federal agencies $ 4,000 $ — $ (4) $ 3,996 Securities of state and local municipalities tax exempt 3,662 76 — 3,738 Securities of state and local municipalities taxable 969 — (14) 955 Corporate bonds 6,984 78 (81) 6,981 SBA pass-through securities 163 — (4) 159 Mortgage-backed securities 96,358 1,077 (246) 97,189 Collateralized mortgage obligations 28,236 290 (219) 28,307 Total Available-for-sale Securities $ 140,372 $ 1,521 $ (568) $ 141,325 |
Schedule of available-for-sale securities that have been in a continuous unrealized loss position | Less Than 12 Months 12 Months or Longer Total (In thousands) Fair Unrealized Fair Unrealized Fair Unrealized At June 30, 2020 Value Losses Value Losses Value Losses Securities of state and local municipalities taxable $ — $ — $ 894 $ (9) $ 894 $ (9) Corporate bonds 4,216 (261) 940 (61) 5,156 (322) Total $ 4,216 $ (261) $ 1,834 $ (70) $ 6,050 $ (331) Less Than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized At December 31, 2019 Value Losses Value Losses Value Losses Securities of U.S. government and federal agencies $ 2,997 $ (3) $ 999 $ (1) $ 3,996 $ (4) Securities of state and local municipalities taxable — — 955 (14) 955 (14) Corporate bonds 2,463 (22) 941 (59) 3,404 (81) SBA pass-through securities — — 159 (4) 159 (4) Mortgage-backed securities 15,529 (73) 20,475 (173) 36,004 (246) Collateralized mortgage obligations 7,479 (94) 7,975 (125) 15,454 (219) Total $ 28,468 $ (192) $ 31,504 $ (376) $ 59,972 $ (568) |
Schedule of amortized cost and fair value of held-to-maturity securities and available-for-sale securities by contractual maturity | June 30, 2020 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair (In thousands) Cost Value Cost Value After 1 year through 5 years $ — $ — $ 2,025 $ 2,017 After 5 years through 10 years 264 274 29,175 29,670 After 10 years — — 86,820 90,131 Total $ 264 $ 274 $ 118,020 $ 121,818 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Loans and Allowance for Loan Losses | |
Schedule of loan balances | June 30, 2020 December 31, 2019 (In thousands) Originated Acquired Total Originated Acquired Total Commercial real estate $ 748,723 $ 30,185 $ 778,908 $ 709,046 $ 38,629 $ 747,675 Commercial and industrial 274,671 5,248 279,919 107,698 7,405 115,103 Commercial construction 226,960 1,681 228,641 210,933 5,050 215,983 Consumer real estate 138,955 39,710 178,665 136,762 46,050 182,812 Consumer nonresidential 18,747 48 18,795 11,205 85 11,290 $ 1,408,056 $ 76,872 $ 1,484,928 $ 1,175,644 $ 97,219 $ 1,272,863 Less: Allowance for loan losses 12,828 66 12,894 10,202 29 10,231 Unearned income and (unamortized premiums), net 6,808 — 6,808 2,337 — 2,337 Loans, net $ 1,388,420 $ 76,806 $ 1,465,226 $ 1,163,105 $ 97,190 $ 1,260,295 |
Schedule of acquired loans | (In thousands) June 30, 2020 Purchased credit impaired acquired loans evaluated individually for future credit losses Outstanding principal balance $ 5,183 Carrying amount 3,537 Other acquired loans Outstanding principal balance 74,274 Carrying amount 73,335 Total acquired loans Outstanding principal balance 79,457 Carrying amount 76,872 (In thousands) December 31, 2019 Purchased credit impaired acquired loans evaluated individually for future credit losses Outstanding principal balance $ 5,605 Carrying amount 4,810 Other acquired loans Outstanding principal balance 93,587 Carrying amount 92,409 Total acquired loans Outstanding principal balance 99,192 Carrying amount 97,219 |
Schedule of accretable yield on purchased credit impaired loans | (In thousands) Balance at January 1, 2020 $ 371 Accretion (89) Reclassification of nonaccretable difference due to improvement in expected cash flows 31 Other changes, net (21) Balance at June 30, 2020 $ 292 (In thousands) Balance at January 1, 2019 $ 357 Accretion (136) Reclassification of nonaccretable difference due to improvement in expected cash flows 78 Other changes, net 72 Balance at December 31, 2019 $ 371 |
Schedule of allowance for loan losses | Allowance for Loan Losses For the three months ended June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, April 1 $ 7,667 $ 1,170 $ 1,904 $ 427 $ 58 $ 11,226 Charge-offs (23) — — — (64) (87) Recoveries — — — 1 4 5 Provision 1,211 86 201 121 131 1,750 Ending Balance $ 8,855 $ 1,256 $ 2,105 $ 549 $ 129 $ 12,894 Allowance for Loan Losses For the six months ended June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, January 1 $ 6,399 $ 1,275 $ 2,067 $ 417 $ 73 $ 10,231 Charge-offs (113) — — (3) (64) (180) Recoveries — 19 — 2 6 27 Provision 2,569 (38) 38 133 114 2,816 Ending Balance $ 8,855 $ 1,256 $ 2,105 $ 549 $ 129 $ 12,894 Allowance for Loan Losses For the three months ended June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, April 1 $ 5,812 $ 1,480 $ 1,491 $ 495 $ 234 $ 9,512 Charge-offs — — — — (21) (21) Recoveries — — — — — — Provision 177 (69) 397 (1) 1 505 Ending Balance $ 5,989 $ 1,411 $ 1,888 $ 494 $ 214 $ 9,996 Allowance for Loan Losses For the six months ended June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance, January 1 $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ 9,159 Charge-offs — — — — (183) (183) Recoveries — — — — — — Provision 441 (63) 603 (24) 63 1,020 Ending Balance $ 5,989 $ 1,411 $ 1,888 $ 494 $ 214 $ 9,996 Allowance for Loan Losses For the year ended December 31, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Beginning Balance $ 5,548 $ 1,474 $ 1,285 $ 518 $ 334 $ 9,159 Charge-offs (20) — — — (692) (712) Recoveries 4 35 — 2 23 64 Provision 867 (234) 782 (103) 408 1,720 Ending Balance $ 6,399 $ 1,275 $ 2,067 $ 417 $ 73 $ 10,231 |
Schedule of recorded investment in loans and impairment by portfolio segment | Allowance for Loan Losses At June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ 252 $ — $ 114 $ — $ 366 Purchased credit impaired — — — — — — Collectively evaluated for impairment 8,855 1,004 2,105 435 129 12,528 $ 8,855 $ 1,256 $ 2,105 $ 549 $ 129 $ 12,894 Loans Receivable At June 30, 2020 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Financing receivables: Ending Balance Individually evaluated for impairment $ 993 $ 4,143 $ 820 $ 538 $ — $ 6,494 Purchased credit impaired 3,177 305 — 55 — 3,537 Collectively evaluated for impairment 774,738 275,471 227,821 178,072 18,795 1,474,897 $ 778,908 $ 279,919 $ 228,641 $ 178,665 $ 18,795 $ 1,484,928 Allowance for Loan Losses At June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ 26 $ 343 $ — $ 29 $ — $ 398 Purchased credit impaired — — — — — — Collectively evaluated for impairment 5,963 1,068 1,888 465 214 9,598 $ 5,989 $ 1,411 $ 1,888 $ 494 $ 214 $ 9,996 Loans Receivable At June 30, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Financing receivables: Ending Balance Individually evaluated for impairment $ 5,493 $ 2,905 $ — $ 169 $ — $ 8,567 Purchased credit impaired 1,019 461 — 366 — 1,846 Collectively evaluated for impairment 657,739 131,352 218,182 194,363 24,249 1,225,885 $ 664,251 $ 134,718 $ 218,182 $ 194,898 $ 24,249 $ 1,236,298 Allowance for Loan Losses At December 31, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Allowance for credit losses: Ending Balance: Individually evaluated for impairment $ — $ 364 $ — $ 29 $ — $ 393 Purchased credit impaired — — — — — — Collectively evaluated for impairment 6,399 911 2,067 388 73 9,838 $ 6,399 $ 1,275 $ 2,067 $ 417 $ 73 $ 10,231 Loans Receivable At December 31, 2019 (In thousands) Commercial Commercial and Commercial Consumer Consumer Real Estate Industrial Construction Real Estate Nonresidential Total Financing receivables: Ending Balance Individually evaluated for impairment $ 12,962 $ 5,208 $ 820 $ 1,260 $ — $ 20,250 Purchased credit impaired 4,043 400 — 367 — 4,810 Collectively evaluated for impairment 730,670 109,495 215,163 181,185 11,290 1,247,803 $ 747,675 $ 115,103 $ 215,983 $ 182,812 $ 11,290 $ 1,272,863 |
Schedule of Impaired loans | Impaired Loans – Originated Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized June 30, 2020 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 1,751 1,752 252 1,752 55 Commercial construction — — — — — Consumer real estate 339 339 48 280 10 Consumer nonresidential — — — — — $ 2,090 $ 2,091 $ 300 $ 2,032 $ 65 June 30, 2020 With no related allowance: Commercial real estate $ 834 $ 838 $ — $ 847 $ 23 Commercial and industrial 2,392 2,392 — 2,784 85 Commercial construction 820 820 — 820 25 Consumer real estate — — — — — Consumer nonresidential — — — — — $ 4,046 $ 4,050 $ — $ 4,451 $ 133 Impaired Loans – Acquired Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized June 30, 2020 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 169 163 66 163 5 Consumer nonresidential — — — — — $ 169 $ 163 $ 66 $ 163 $ 5 June 30, 2020 With no related allowance: Commercial real estate $ 159 $ 165 $ — $ 165 $ 7 Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 30 31 — 31 1 Consumer nonresidential — — — — — $ 189 $ 196 $ — $ 196 $ 8 Impaired Loans – Originated Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized December 31, 2019 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial 2,040 2,040 364 2,081 157 Commercial construction — — — — — Consumer real estate — — — — — Consumer nonresidential — — — — — $ 2,040 $ 2,040 $ 364 $ 2,081 $ 157 December 31, 2019 With no related allowance: Commercial real estate $ 12,792 $ 12,796 $ — $ 13,617 $ 661 Commercial and industrial 3,168 3,323 — 5,387 340 Commercial construction 820 820 — 816 56 Consumer real estate 940 940 — 940 38 Consumer nonresidential — — — — — $ 17,720 $ 17,879 $ — $ 20,760 $ 1,095 Impaired Loans – Acquired Loan Portfolio Unpaid Average Interest Recorded Principal Related Recorded Income (In thousands) Investment Balance Allowance Investment Recognized December 31, 2019 With an allowance recorded: Commercial real estate $ — $ — $ — $ — $ — Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 169 163 29 163 10 Consumer nonresidential — — — — — $ 169 $ 163 29 $ 163 $ 10 December 31, 2019 With no related allowance: Commercial real estate $ 170 $ 165 $ — $ 165 $ 13 Commercial and industrial — — — — — Commercial construction — — — — — Consumer real estate 151 152 — 155 8 Consumer nonresidential — — — — — $ 321 $ 317 $ — $ 320 $ 21 |
Schedule of risk category of loans | As of June 30, 2020 – Originated Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 742,788 $ 270,274 $ 226,140 $ 137,313 $ 18,747 $ 1,395,262 Special mention 5,659 355 — 1,543 — 7,557 Substandard 276 4,042 820 99 — 5,237 Doubtful — — — — — — Loss — — — — — — Total $ 748,723 $ 274,671 $ 226,960 $ 138,955 $ 18,747 $ 1,408,056 As of June 30, 2020 – Acquired Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 27,705 $ 4,873 $ 1,681 $ 39,456 $ 48 $ 73,763 Special mention — — — — — — Substandard 2,480 375 — 254 — 3,109 Doubtful — — — — — — Loss — — — — — — Total $ 30,185 $ 5,248 $ 1,681 $ 39,710 $ 48 $ 76,872 As of December 31, 2019 – Originated Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 690,082 $ 102,491 $ 210,113 $ 134,913 $ 11,186 $ 1,148,785 Special mention 14,772 476 — 1,748 19 17,015 Substandard 4,192 4,731 820 101 — 9,844 Doubtful — — — — — — Loss — — — — — — Total $ 709,046 $ 107,698 $ 210,933 $ 136,762 $ 11,205 $ 1,175,644 As of December 31, 2019 – Acquired Loan Portfolio Commercial Real Commercial and Commercial Consumer Consumer (In thousands) Estate Industrial Construction Real Estate Nonresidential Total Grade: Pass $ 35,284 $ 7,005 $ 5,050 $ 45,365 $ 85 $ 92,789 Special mention 3,089 — — 139 — 3,228 Substandard 256 400 — 546 — 1,202 Doubtful — — — — — — Loss — — — — — — Total $ 38,629 $ 7,405 $ 5,050 $ 46,050 $ 85 $ 97,219 |
Schedule of past due and nonaccrual loans | As of June 30, 2020 – Originated Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ 610 $ 1,197 $ 1,807 $ 746,916 $ 748,723 $ 1,197 $ 150 Commercial and industrial — — — — 274,671 274,671 — 3,184 Commercial construction — — — — 226,960 226,960 — 820 Consumer real estate 240 465 — 705 138,250 138,955 — — Consumer nonresidential — 75 8 83 18,664 18,747 8 — Total $ 240 $ 1,150 $ 1,205 $ 2,595 $ 1,405,461 $ 1,408,056 $ 1,205 $ 4,154 As of June 30, 2020 – Acquired Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ 444 $ — $ 444 $ 29,741 $ 30,185 $ — $ 2,321 Commercial and industrial — — — — 5,248 5,248 — 253 Commercial construction — — — — 1,681 1,681 — — Consumer real estate — — 235 235 39,475 39,710 235 325 Consumer nonresidential — — — — 48 48 — — Total $ — $ 444 $ 235 $ 679 $ 76,193 $ 76,872 $ 235 $ 2,899 As of December 31, 2019 – Originated Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ 8,443 $ — $ 498 $ 8,941 $ 700,105 $ 709,046 $ 753 $ 3,903 Commercial and industrial 1,184 — 48 1,232 106,466 107,698 48 3,822 Commercial construction 2,000 — — 2,000 208,933 210,933 — 820 Consumer real estate 396 153 356 905 135,857 136,762 101 — Consumer nonresidential 77 56 12 145 11,060 11,205 12 — Total $ 12,100 $ 209 $ 914 $ 13,223 $ 1,162,421 $ 1,175,644 $ 914 $ 8,545 As of December 31, 2019 – Acquired Loan Portfolio 30-59 days 60-89 days 90 days or more Total 90 days past due (In thousands) past due past due past due past due Current Total loans and still accruing Nonaccruals Commercial real estate $ — $ — $ — $ — $ 38,629 $ 38,629 $ — $ 256 Commercial and industrial — — — — 7,405 7,405 — 272 Commercial construction — — — — 5,050 5,050 — — Consumer real estate 1,138 241 118 1,497 44,553 46,050 118 620 Consumer nonresidential — — — — 85 85 — — Total $ 1,138 $ 241 $ 118 $ 1,497 $ 95,722 $ 97,219 $ 118 $ 1,148 |
Schedule of TDR's originated | Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Troubled Debt Restructurings Contracts Investment Investment (Dollars in thousands) Commercial real estate 1 $ 99 $ 99 Total 1 $ 99 $ 99 For the six months ended June 30, 2019 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Troubled Debt Restructurings Contracts Investment Investment (Dollars in thousands) Commercial real estate 1 $ 3,903 $ 3,903 Total 1 $ 3,903 $ 3,903 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Financial Instruments | |
Schedule of notional amount and fair value of derivative financial instruments | June 30, 2020 Notional Amount Fair Value Interest Rate Swap Agreements (In thousands) Receive Fixed/Pay Variable Swaps $ 158,010 $ 15,755 Pay Fixed/Receive Variable Swaps 158,010 (15,755) December 31, 2019 Notional Amount Fair Value Interest Rate Swap Agreements (In thousands) Receive Fixed/Pay Variable Swaps $ 94,755 $ (6,001) Pay Fixed/Receive Variable Swaps 94,755 6,001 At June 30, 2020, the information pertaining to outstanding interest rate swap agreements used to hedge variability in cash flows (FHLB advance which is included in other borrowed funds on the consolidated balance sheet) is as follows: (Dollars in thousands) Notional amount $ 60,000 Weighted average pay rate 0.87 % Weighted average receive rate 0.30 % Weighted average maturity in years 2.6 years Unrealized loss relating to interest rate swaps $ (893) |
Financial Instruments with Of_2
Financial Instruments with Off-Balance Sheet Risk (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Financial Instruments with Off-Balance Sheet Risk | |
Schedule of financial instruments outstanding which contract amounts represent credit risk | (In thousands) June 30, 2020 December 31, 2019 Commitments to grant loans $ 33,900 $ 27,260 Unused commitments to fund loans and lines of credit 193,531 244,367 Commercial and standby letters of credit 8,208 9,002 |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation Plan | |
Schedule of option activity | Weighted- Weighted- Average Number Average Remaining Aggregate of Exercise Contractual Intrinsic Options Shares Price Term Value (1) Outstanding at January 1, 2020 1,797,516 $ 8.09 4.10 Granted — — Exercised (47,268) 6.46 Forfeited or expired (3,139) 10.62 Outstanding and Exercisable at June 30, 2020 1,747,109 $ 8.13 3.65 $ 3,936,397 (1) |
Schedule of restricted stock grant activity | Weighted Average Number of Grant Date Shares Fair Value Nonvested at January 1, 2020 109,718 $ 18.70 Granted — — Vested (375) 17.21 Forfeited (1,740) 18.70 Balance at June 30, 2020 107,603 $ 18.70 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements at June 30, 2020 Using Quoted Prices in Active Significant Markets for Other Significant Balance as of Identical Observable Unobservable (In thousands) June 30, Assets Inputs Inputs Description 2020 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 3,012 $ — $ 3,012 $ — Securities of state and local municipalities tax exempt 3,761 — 3,761 — Securities of state and local municipalities taxable 894 — 894 — Corporate bonds 9,685 — 9,685 — SBA pass-through securities 150 — 150 — Mortgage-backed securities 78,009 — 78,009 — Collateralized mortgage obligations 26,307 — 26,307 — Total Available-for-Sale Securities $ 121,818 $ — $ 121,818 $ — Fair Value Measurements at December 31, 2019 Using Quoted Prices in Active Significant Markets for Other Significant Balance as of Identical Observable Unobservable (In thousands) December 31, Assets Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Assets Available-for-sale Securities of U.S. government and federal agencies $ 3,996 $ — $ 3,996 $ — Securities of state and local municipalities tax exempt 3,738 — 3,738 — Securities of state and local municipalities taxable 955 — 955 — Corporate bonds 6,981 — 6,981 — SBA pass-through securities 159 — 159 — Mortgage-backed securities 97,189 — 97,189 — Collateralized mortgage obligations 28,307 — 28,307 — Total Available-for-Sale Securities $ 141,325 $ — $ 141,325 $ — |
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 Balance as of Identical Observable Unobservable (In thousands) June 30, Assets Inputs Inputs Description 2020 (Level 1) (Level 2) (Level 3) Assets Impaired loans $ 1,893 $ — $ — $ 1,893 Loans held for sale $ — $ — $ — $ — Other real estate owned $ 3,866 $ — $ — $ 3,866 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Balance as of Identical Observable Unobservable (In thousands) December 31, Assets Inputs Inputs Description 2019 (Level 1) (Level 2) (Level 3) Assets Impaired loans $ 1,816 $ — $ — $ 1,816 Loans held for sale $ 11,198 $ — $ 11,198 $ — 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 for June 30, 2020 (In thousands) Assets Fair Value Valuation Technique(s) Unobservable input Range (Avg.) Impaired loans $ 1,893 Discounted value Marketability/Selling costs 0% - 8% (8%) Other real estate owned $ 3,866 Discounted appraised value Selling costs 10.51 % Quantitative information about Level 3 Fair Value Measurements for December 31, 2019 (In thousands) Assets Fair Value Valuation Technique(s) Unobservable input Range (Avg.) Impaired loans $ 1,816 Discounted appraised value Marketability/Selling costs 5% - 8% (7.84%) 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 June 30, 2020, using Quoted Prices in Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 25,613 $ 25,613 $ — $ — Interest-bearing deposits at other institutions 64,989 64,989 — — Securities held-to-maturity 264 — 274 — Securities available-for-sale 121,818 — 121,818 — Restricted stock 6,608 — 6,608 — Loans held for sale — — — — Loans, net 1,465,226 — — 1,444,258 Bank owned life insurance 37,633 — 37,633 — Accrued interest receivable 7,186 — 7,186 — Financial liabilities: Checking, savings and money market accounts $ 1,118,408 $ — $ 1,118,408 $ — Time deposits 400,628 — 404,130 — FHLB advances 25,000 — 25,000 — Subordinated notes 24,527 — 24,291 — Accrued interest payable 524 — 524 — Fair Value Measurements as of December 31, 2019, using Quoted Prices in Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Amount Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 14,916 $ 14,916 $ — $ — Interest-bearing deposits at other institutions 18,226 18,226 — — Securities held-to-maturity 264 — 270 — Securities available-for-sale 141,325 — 141,325 — Restricted stock 6,017 — 6,017 — Loans held for sale 11,198 — 11,198 — Loans, net 1,260,295 — — 1,254,685 Bank owned life insurance 37,069 — 37,069 — Accrued interest receivable 4,094 — 4,094 — Financial liabilities: Checking, savings and money market accounts $ 863,383 $ — $ 863,383 $ — Time deposits 422,339 — 424,398 — Federal funds purchased 10,000 — 10,000 — FHLB advances 15,000 — 15,000 — Subordinated notes 24,487 — 24,564 — Accrued interest payable 605 — 605 — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share | |
Schedule of earning per share | Three Months Ended Six Months Ended June 30, June 30, (In thousands, except per share data) 2020 2019 2020 2019 Net income $ 2,880 $ 4,085 $ 6,613 $ 8,011 Weighted average number of shares 13,455 13,803 13,603 13,763 Effect of dilutive securities, restricted stock units and options 469 1,014 657 1,036 Weighted average diluted shares 13,924 14,817 14,260 14,799 Basic EPS $ 0.21 $ 0.30 $ 0.49 $ 0.58 Diluted EPS $ 0.21 $ 0.28 $ 0.46 $ 0.54 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in accumulated other comprehensive income (AOCI) | (In thousands) Three Months Ended June 30, 2020 Available-for-Sale Securities Cash Flow Hedges Total Balance, beginning of period $ 2,968 $ (531) $ 2,437 Net unrealized gains (losses) during the period 32 (174) (142) Net reclassification adjustment for gains realized in income — — — Other comprehensive income (loss), net of tax 32 (174) (142) Balance, end of period $ 3,000 $ (705) $ 2,295 (In thousands) Six Months Ended June 30, 2020 Available-for-Sale Securities Cash Flow Hedges Total Balance, beginning of period $ 753 $ (63) $ 690 Net unrealized gains (losses) during the period 2,324 (642) 1,682 Net reclassification adjustment for gains realized in income (77) — (77) Other comprehensive income (loss), net of tax 2,247 (642) 1,605 Balance, end of period $ 3,000 $ (705) $ 2,295 (In thousands) Three Months June 30, Six Months June 30, Available-for-Sale Securities 2019 2019 Balance, beginning of period $ (1,031) $ (2,411) Net unrealized gains (losses) during the period 1,382 2,762 Other comprehensive income (loss), net of tax 1,382 2,762 Balance, end of period $ 351 $ 351 |
Schedule of reclassifications from accumulated other comprehensive income | Amount Reclassified from AOCI Amount Reclassified from AOCI Affected Line Item into Income into Income in the Consolidated For the Three Months Ended June 30, For the Six Months Ended June 30, Statements of Details about AOCI 2020 2019 2020 2019 Income Gains on sale of available-for-sale securities $ — $ — $ 97 $ — Gain on sale of securities available-for-sale Income tax expense — — (20) — Income tax expense Total $ — $ — $ 77 $ — Net of tax |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Recognition | |
Schedule of noninterest income | Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2020 2019 2020 2019 Noninterest Income In-scope of Topic 606 Service Charges on Deposit Accounts $ 223 $ 229 $ 463 $ 411 Fees, Exchange, and Other Service Charges 76 123 159 198 Other income 23 11 31 25 Noninterest Income (in-scope of Topic 606) 322 363 653 634 Noninterest Income (out-scope of Topic 606) 365 176 728 643 Total Noninterest Income $ 687 $ 539 $ 1,381 $ 1,277 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Information | |
Schedule of supplemental cash flow information | For the Six Months Ended June 30, (In thousands) 2020 2019 Supplemental Disclosure of Cash Flow Information: Cash paid for: Interest on deposits and borrowed funds $ 8,375 $ 8,817 Income taxes 455 939 Noncash investing and financing activities: Unrealized gain on securities available-for-sale 2,845 3,496 Unrealized loss on interest rate swaps (813) — Transfer of loans held for sale to loans, net 9,641 — Initial right of use asset - operating leases — 12,249 Initial lease liability - operating leases — 12,656 Right-of-use assets obtained in the exchange for lease liabilities during the current period 59 — Derecognition of right-of-use assets and lease liability 458 — |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases | |
Schedule of information about leases | (Dollars in thousands) June 30, 2020 December 31, 2019 Right-of-Use-Asset $ 11,724 $ 13,279 Lease Liability $ 12,704 $ 13,686 Weighted Average Remaining Lease Term (Years) 10.17 11.1 Weighted Average discount rate 3.22 % 3.32 % For the Three Months Ended June 30, For the Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Operating Lease Expense $ 428 $ 445 $ 862 $ 915 Cash paid for amounts included in lease liabilities $ 401 $ 405 $ 805 $ 843 Impairment loss on right-of-use asset 508 — 508 — Derecognition of right-of-use asset and lease liabilities 458 — 458 — Right-of-use assets obtained in exchange for operating lease liabilities — — 59 — |
Schedule of maturity schedule of undiscounted cash flows that contribute to the lease liability | (In thousands) June 30, 2020 Six months ending December 31, 2020 $ 776 Twelve months ending December 31, 2021 1,559 Twelve months ending December 31, 2022 1,599 Twelve months ending December 31, 2023 1,596 Twelve months ending December 31, 2024 1,566 Twelve months ending December 31, 2025 1,441 Thereafter 6,462 Total $ 14,999 Less: discount (2,295) $ 12,704 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies- Organization (Details) $ in Millions | Jul. 31, 2020USD ($)loan | Jun. 30, 2020USD ($)loan | Mar. 31, 2020USD ($)loan | Jun. 30, 2020USD ($)loan |
Deferral period of the loans granted | 90 days | 90 days | ||
Number of loans deferred | loan | 15 | 277 | ||
Number of loans modified | loan | 165 | 277 | 277 | |
Outstanding principal balance of loan portfolio | $ | $ 226.7 | $ 360.2 | $ 360.2 | $ 360.2 |
Percentage of loan portfolio | 15.30% | 24.40% | 24.40% | 24.40% |
Outstanding loan balances deferred | $ | $ 28.2 | $ 360.2 | $ 360.2 | |
PPP loans | ||||
Term of the loans granted | 2 years | |||
Interest rate (as a percent) | 1.00% | |||
Number of loans approved | loan | 755 | 755 | ||
Value of loans approved | $ | $ 169.4 | $ 169.4 |
Securities (Details)
Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Held-to-maturity | |||
Securities held-to-maturity | $ 264 | $ 264 | [1] |
Gross Unrealized Gains | 10 | ||
Fair Value | 274 | 270 | |
Available-for-sale | |||
Amortized Cost | 118,020 | 140,372 | |
Gross Unrealized Gains | 4,129 | 1,521 | |
Gross Unrealized (Losses) | (331) | (568) | |
Fair Value | 121,818 | 141,325 | |
Securities of U.S. government and federal agencies | |||
Available-for-sale | |||
Amortized Cost | 3,000 | 4,000 | |
Gross Unrealized Gains | 12 | ||
Gross Unrealized (Losses) | (4) | ||
Fair Value | 3,012 | 3,996 | |
Securities of state and local municipalities tax exempt | |||
Held-to-maturity | |||
Securities held-to-maturity | 264 | 264 | |
Gross Unrealized Gains | 10 | 6 | |
Fair Value | 274 | 270 | |
Available-for-sale | |||
Amortized Cost | 3,655 | 3,662 | |
Gross Unrealized Gains | 106 | 76 | |
Fair Value | 3,761 | 3,738 | |
Securities of state and local municipalities taxable | |||
Available-for-sale | |||
Amortized Cost | 903 | 969 | |
Gross Unrealized (Losses) | (9) | (14) | |
Fair Value | 894 | 955 | |
Corporate bonds | |||
Available-for-sale | |||
Amortized Cost | 9,977 | 6,984 | |
Gross Unrealized Gains | 30 | 78 | |
Gross Unrealized (Losses) | (322) | (81) | |
Fair Value | 9,685 | 6,981 | |
SBA pass-through securities | |||
Available-for-sale | |||
Amortized Cost | 149 | 163 | |
Gross Unrealized Gains | 1 | ||
Gross Unrealized (Losses) | (4) | ||
Fair Value | 150 | 159 | |
Mortgage-backed securities | |||
Available-for-sale | |||
Amortized Cost | 74,892 | 96,358 | |
Gross Unrealized Gains | 3,117 | 1,077 | |
Gross Unrealized (Losses) | (246) | ||
Fair Value | 78,009 | 97,189 | |
Collateralized mortgage obligations | |||
Available-for-sale | |||
Amortized Cost | 25,444 | 28,236 | |
Gross Unrealized Gains | 863 | 290 | |
Gross Unrealized (Losses) | (219) | ||
Fair Value | 26,307 | 28,307 | |
Federal Reserve Bank | |||
Available-for-sale | |||
Pledged securities | $ 11,600 | $ 11,300 | |
[1] | Derived from audited consolidated financial statements. |
Securities - Continuous Unreali
Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | $ 4,216 | $ 28,468 |
Fair Value, 12 Months or Longer | 1,834 | 31,504 |
Fair Value, Total | 6,050 | 59,972 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (261) | (192) |
Unrealized Losses, 12 Months or Longer | (70) | (376) |
Unrealized Losses, Total | (331) | (568) |
Securities of U.S. government and federal agencies | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 2,997 | |
Fair Value, 12 Months or Longer | 999 | |
Fair Value, Total | 3,996 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (3) | |
Unrealized Losses, 12 Months or Longer | (1) | |
Unrealized Losses, Total | (4) | |
Securities of state and local municipalities taxable | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, 12 Months or Longer | 894 | |
Fair Value, Total | 894 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, 12 Months or Longer | (9) | |
Unrealized Losses, Total | (9) | |
Securities of state and local municipalities tax exempt | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, 12 Months or Longer | 955 | |
Fair Value, Total | 955 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, 12 Months or Longer | (14) | |
Unrealized Losses, Total | (14) | |
Corporate bonds | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 4,216 | 2,463 |
Fair Value, 12 Months or Longer | 940 | 941 |
Fair Value, Total | 5,156 | 3,404 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (261) | (22) |
Unrealized Losses, 12 Months or Longer | (61) | (59) |
Unrealized Losses, Total | $ (322) | (81) |
SBA pass-through securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, 12 Months or Longer | 159 | |
Fair Value, Total | 159 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, 12 Months or Longer | (4) | |
Unrealized Losses, Total | (4) | |
Mortgage-backed securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 15,529 | |
Fair Value, 12 Months or Longer | 20,475 | |
Fair Value, Total | 36,004 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (73) | |
Unrealized Losses, 12 Months or Longer | (173) | |
Unrealized Losses, Total | (246) | |
Collateralized mortgage obligations | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Fair Value, Less than 12 Months | 7,479 | |
Fair Value, 12 Months or Longer | 7,975 | |
Fair Value, Total | 15,454 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | (94) | |
Unrealized Losses, 12 Months or Longer | (125) | |
Unrealized Losses, Total | $ (219) |
Securities - Continuous Unrea_2
Securities - Continuous Unrealized Loss Position - Additional information (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Schedule Of Available For Sale Securities | ||
Securities held to maturity, fair value | $ | $ 274 | $ 270 |
No rating | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 7 | |
Securities of state and local municipalities | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 7 | |
Securities of state and local municipalities | AA+ | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 3 | |
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 | A- | ||
Schedule Of Available For Sale Securities | ||
Number of investment securities | 1 |
Securities - Contractual Maturi
Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Held-to-maturity, Amortized Cost | |||
After 5 years through 10 years | $ 264 | ||
Amortized Cost | 264 | $ 264 | [1] |
Held-to-maturity, Fair Value | |||
After 5 years through 10 years | 274 | ||
Fair Value | 274 | 270 | |
Available-for-sale, Amortized Cost | |||
After 1 year through 5 years | 2,025 | ||
After 5 years through 10 years | 29,175 | ||
After 10 years | 86,820 | ||
Amortized Cost | 118,020 | ||
Available-for-sale, Fair Value | |||
After 1 year through 5 years | 2,017 | ||
After 5 years through 10 years | 29,670 | ||
After 10 years | 90,131 | ||
Fair Value | $ 121,818 | $ 141,325 | [1] |
[1] | Derived from audited consolidated financial statements. |
Securities - Contractual Matu_2
Securities - Contractual Maturities - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Securities | ||
Proceeds from maturities, calls and principal repayments of securities | $ 14,000,000 | $ 8,900,000 |
Gross realized gains on available-for-sale securities | 0 | |
Realized losses | $ 0 | |
Proceeds from calls and maturities of securities | 1,000,000 | |
Gross realized gains on securities | 97,000 | |
Book value of available-for-sale securities committed to sell | 10,100,000 | |
Gross realized loss on securities | $ 0 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses - Summary of loan balances by type (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Loans and Allowance for Loan Losses | |||||||
Loans, gross | $ 1,484,928 | $ 1,272,863 | $ 1,236,298 | ||||
Allowance for loan losses | 12,894 | $ 11,226 | 10,231 | 9,996 | $ 9,512 | $ 9,159 | |
Unearned income and (unamortized premiums), net | 6,808 | 2,337 | |||||
Loans, net | 1,465,226 | 1,260,295 | [1] | ||||
Commercial | Real Estate | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 778,908 | 747,675 | 664,251 | ||||
Allowance for loan losses | 8,855 | 7,667 | 6,399 | 5,989 | 5,812 | 5,548 | |
Commercial | Commercial and Industrial | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 279,919 | 115,103 | 134,718 | ||||
Allowance for loan losses | 1,256 | 1,170 | 1,275 | 1,411 | 1,480 | 1,474 | |
Commercial | Construction | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 228,641 | 215,983 | 218,182 | ||||
Allowance for loan losses | 2,105 | 1,904 | 2,067 | 1,888 | 1,491 | 1,285 | |
Consumer | Real Estate | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 178,665 | 182,812 | 194,898 | ||||
Allowance for loan losses | 549 | 427 | 417 | 494 | 495 | 518 | |
Consumer | Nonresidential | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 18,795 | 11,290 | 24,249 | ||||
Allowance for loan losses | 129 | $ 58 | 73 | $ 214 | $ 234 | $ 334 | |
Originated Loan Portfolio | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 1,408,056 | 1,175,644 | |||||
Allowance for loan losses | 12,828 | 10,202 | |||||
Unearned income and (unamortized premiums), net | 6,808 | 2,337 | |||||
Loans, net | 1,388,420 | 1,163,105 | |||||
Originated Loan Portfolio | Commercial | Real Estate | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 748,723 | 709,046 | |||||
Originated Loan Portfolio | Commercial | Commercial and Industrial | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 274,671 | 107,698 | |||||
Originated Loan Portfolio | Commercial | Construction | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 226,960 | 210,933 | |||||
Originated Loan Portfolio | Consumer | Real Estate | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 138,955 | 136,762 | |||||
Originated Loan Portfolio | Consumer | Nonresidential | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 18,747 | 11,205 | |||||
Acquired Loan Portfolio | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 76,872 | 97,219 | |||||
Allowance for loan losses | 66 | 29 | |||||
Loans, net | 76,806 | 97,190 | |||||
Acquired Loan Portfolio | Commercial | Real Estate | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 30,185 | 38,629 | |||||
Acquired Loan Portfolio | Commercial | Commercial and Industrial | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 5,248 | 7,405 | |||||
Acquired Loan Portfolio | Commercial | Construction | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 1,681 | 5,050 | |||||
Acquired Loan Portfolio | Consumer | Real Estate | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | 39,710 | 46,050 | |||||
Acquired Loan Portfolio | Consumer | Nonresidential | |||||||
Loans and Allowance for Loan Losses | |||||||
Loans, gross | $ 48 | $ 85 | |||||
[1] | Derived from audited consolidated financial statements. |
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 | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Loans and Allowance for Loan Losses | |||
Carrying amount | $ 6,494 | $ 20,250 | $ 8,567 |
Changes in the accretable yield on purchased credit impaired loans | |||
Balance at the beginning of the period | 371 | 357 | |
Accretion | (89) | (136) | |
Reclassification of nonaccretable difference due to improvement in expected cash flows | 31 | 78 | |
Other changes, net | (21) | 72 | |
Balance at the end of the period | 292 | 371 | |
Purchased credit impaired | |||
Loans and Allowance for Loan Losses | |||
Outstanding principal balance | 5,183 | 5,605 | |
Carrying amount | 3,537 | 4,810 | |
Other acquired loans | |||
Loans and Allowance for Loan Losses | |||
Outstanding principal balance | 74,274 | 93,587 | |
Carrying amount | 73,335 | 92,409 | |
Acquired Loan Portfolio | |||
Loans and Allowance for Loan Losses | |||
Outstanding principal balance | 79,457 | 99,192 | |
Carrying amount | $ 76,872 | $ 97,219 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses - Allowance for loan losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Allowance for loan losses | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | $ 11,226 | $ 9,512 | $ 10,231 | $ 9,159 | $ 9,159 |
Charge-offs | (87) | (21) | (180) | (183) | (712) |
Recoveries | 5 | 27 | 64 | ||
Provision | 1,750 | 505 | 2,816 | 1,020 | 1,720 |
Loans and Leases Receivable, Allowance, Ending Balance | 12,894 | 9,996 | 12,894 | 9,996 | 10,231 |
Ending Balance: Individually evaluated for impairment | 366 | 398 | 366 | 398 | 393 |
Ending Balance: Collectively evaluated for impairment | 12,528 | 9,598 | 12,528 | 9,598 | 9,838 |
Loans receivables: | |||||
Ending Balance: Individually evaluated for impairment | 6,494 | 8,567 | 6,494 | 8,567 | 20,250 |
Ending Balance: Collectively evaluated for impairment | 1,474,897 | 1,225,885 | 1,474,897 | 1,225,885 | 1,247,803 |
Loans receivables | 1,484,928 | 1,236,298 | 1,484,928 | 1,236,298 | 1,272,863 |
Purchased credit impaired | |||||
Loans receivables: | |||||
Ending Balance: Individually evaluated for impairment | 3,537 | 3,537 | 4,810 | ||
Loans receivables | 3,537 | 1,846 | 3,537 | 1,846 | 4,810 |
Commercial | Real Estate | |||||
Allowance for loan losses | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 7,667 | 5,812 | 6,399 | 5,548 | 5,548 |
Charge-offs | (23) | (113) | (20) | ||
Recoveries | 4 | ||||
Provision | 1,211 | 177 | 2,569 | 441 | 867 |
Loans and Leases Receivable, Allowance, Ending Balance | 8,855 | 5,989 | 8,855 | 5,989 | 6,399 |
Ending Balance: Individually evaluated for impairment | 26 | 26 | |||
Ending Balance: Collectively evaluated for impairment | 8,855 | 5,963 | 8,855 | 5,963 | 6,399 |
Loans receivables: | |||||
Ending Balance: Individually evaluated for impairment | 993 | 5,493 | 993 | 5,493 | 12,962 |
Ending Balance: Collectively evaluated for impairment | 774,738 | 657,739 | 774,738 | 657,739 | 730,670 |
Loans receivables | 778,908 | 664,251 | 778,908 | 664,251 | 747,675 |
Commercial | Real Estate | Purchased credit impaired | |||||
Loans receivables: | |||||
Loans receivables | 3,177 | 1,019 | 3,177 | 1,019 | 4,043 |
Commercial | Commercial and Industrial | |||||
Allowance for loan losses | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 1,170 | 1,480 | 1,275 | 1,474 | 1,474 |
Recoveries | 19 | 35 | |||
Provision | 86 | (69) | (38) | (63) | (234) |
Loans and Leases Receivable, Allowance, Ending Balance | 1,256 | 1,411 | 1,256 | 1,411 | 1,275 |
Ending Balance: Individually evaluated for impairment | 252 | 343 | 252 | 343 | 364 |
Ending Balance: Collectively evaluated for impairment | 1,004 | 1,068 | 1,004 | 1,068 | 911 |
Loans receivables: | |||||
Ending Balance: Individually evaluated for impairment | 4,143 | 2,905 | 4,143 | 2,905 | 5,208 |
Ending Balance: Collectively evaluated for impairment | 275,471 | 131,352 | 275,471 | 131,352 | 109,495 |
Loans receivables | 279,919 | 134,718 | 279,919 | 134,718 | 115,103 |
Commercial | Commercial and Industrial | Purchased credit impaired | |||||
Loans receivables: | |||||
Loans receivables | 305 | 461 | 305 | 461 | 400 |
Commercial | Construction | |||||
Allowance for loan losses | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 1,904 | 1,491 | 2,067 | 1,285 | 1,285 |
Provision | 201 | 397 | 38 | 603 | 782 |
Loans and Leases Receivable, Allowance, Ending Balance | 2,105 | 1,888 | 2,105 | 1,888 | 2,067 |
Ending Balance: Collectively evaluated for impairment | 2,105 | 1,888 | 2,105 | 1,888 | 2,067 |
Loans receivables: | |||||
Ending Balance: Individually evaluated for impairment | 820 | 820 | 820 | ||
Ending Balance: Collectively evaluated for impairment | 227,821 | 218,182 | 227,821 | 218,182 | 215,163 |
Loans receivables | 228,641 | 218,182 | 228,641 | 218,182 | 215,983 |
Consumer | Real Estate | |||||
Allowance for loan losses | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 427 | 495 | 417 | 518 | 518 |
Charge-offs | (3) | ||||
Recoveries | 1 | 2 | 2 | ||
Provision | 121 | (1) | 133 | (24) | (103) |
Loans and Leases Receivable, Allowance, Ending Balance | 549 | 494 | 549 | 494 | 417 |
Ending Balance: Individually evaluated for impairment | 114 | 29 | 114 | 29 | 29 |
Ending Balance: Collectively evaluated for impairment | 435 | 465 | 435 | 465 | 388 |
Loans receivables: | |||||
Ending Balance: Individually evaluated for impairment | 538 | 169 | 538 | 169 | 1,260 |
Ending Balance: Collectively evaluated for impairment | 178,072 | 194,363 | 178,072 | 194,363 | 181,185 |
Loans receivables | 178,665 | 194,898 | 178,665 | 194,898 | 182,812 |
Consumer | Real Estate | Purchased credit impaired | |||||
Loans receivables: | |||||
Loans receivables | 55 | 366 | 55 | 366 | 367 |
Consumer | Nonresidential | |||||
Allowance for loan losses | |||||
Loans and Leases Receivable, Allowance, Beginning Balance | 58 | 234 | 73 | 334 | 334 |
Charge-offs | (64) | (21) | (64) | (183) | (692) |
Recoveries | 4 | 6 | 23 | ||
Provision | 131 | 1 | 114 | 63 | 408 |
Loans and Leases Receivable, Allowance, Ending Balance | 129 | 214 | 129 | 214 | 73 |
Ending Balance: Collectively evaluated for impairment | 129 | 214 | 129 | 214 | 73 |
Loans receivables: | |||||
Ending Balance: Collectively evaluated for impairment | 18,795 | 24,249 | 18,795 | 24,249 | 11,290 |
Loans receivables | $ 18,795 | $ 24,249 | $ 18,795 | $ 24,249 | $ 11,290 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Originated Loan Portfolio | ||
Recorded Investment | ||
With an allowance recorded | $ 2,090 | $ 2,040 |
With no related allowance | 4,046 | 17,720 |
Unpaid Principal Balance | ||
With an allowance recorded | 2,091 | 2,040 |
With no related allowance | 4,050 | 17,879 |
Related Allowance | 300 | 364 |
Average Recorded Investment | ||
With an allowance recorded | 2,032 | 2,081 |
With no related allowance | 4,451 | 20,760 |
Interest Income Recognized | ||
With an allowance recorded | 65 | 157 |
With no related allowance | 133 | 1,095 |
Originated Loan Portfolio | Commercial | Real Estate | ||
Recorded Investment | ||
With no related allowance | 834 | 12,792 |
Unpaid Principal Balance | ||
With no related allowance | 838 | 12,796 |
Average Recorded Investment | ||
With no related allowance | 847 | 13,617 |
Interest Income Recognized | ||
With no related allowance | 23 | 661 |
Originated Loan Portfolio | Commercial | Commercial and Industrial | ||
Recorded Investment | ||
With an allowance recorded | 1,751 | 2,040 |
With no related allowance | 2,392 | 3,168 |
Unpaid Principal Balance | ||
With an allowance recorded | 1,752 | 2,040 |
With no related allowance | 2,392 | 3,323 |
Related Allowance | 252 | 364 |
Average Recorded Investment | ||
With an allowance recorded | 1,752 | 2,081 |
With no related allowance | 2,784 | 5,387 |
Interest Income Recognized | ||
With an allowance recorded | 55 | 157 |
With no related allowance | 85 | 340 |
Originated Loan Portfolio | Commercial | Construction | ||
Recorded Investment | ||
With no related allowance | 820 | 820 |
Unpaid Principal Balance | ||
With no related allowance | 820 | 820 |
Average Recorded Investment | ||
With no related allowance | 820 | 816 |
Interest Income Recognized | ||
With no related allowance | 25 | 56 |
Originated Loan Portfolio | Consumer | Real Estate | ||
Recorded Investment | ||
With an allowance recorded | 339 | |
With no related allowance | 940 | |
Unpaid Principal Balance | ||
With an allowance recorded | 339 | |
With no related allowance | 940 | |
Related Allowance | 48 | |
Average Recorded Investment | ||
With an allowance recorded | 280 | |
With no related allowance | 940 | |
Interest Income Recognized | ||
With an allowance recorded | 10 | |
With no related allowance | 38 | |
Acquired Loan Portfolio | ||
Recorded Investment | ||
With an allowance recorded | 169 | 169 |
With no related allowance | 189 | 321 |
Unpaid Principal Balance | ||
With an allowance recorded | 163 | 163 |
With no related allowance | 196 | 317 |
Related Allowance | 66 | 29 |
Average Recorded Investment | ||
With an allowance recorded | 163 | 163 |
With no related allowance | 196 | 320 |
Interest Income Recognized | ||
With an allowance recorded | 5 | 10 |
With no related allowance | 8 | 21 |
Acquired Loan Portfolio | Commercial | Real Estate | ||
Recorded Investment | ||
With no related allowance | 159 | 170 |
Unpaid Principal Balance | ||
With no related allowance | 165 | 165 |
Average Recorded Investment | ||
With no related allowance | 165 | 165 |
Interest Income Recognized | ||
With no related allowance | 7 | 13 |
Acquired Loan Portfolio | Consumer | Real Estate | ||
Recorded Investment | ||
With an allowance recorded | 169 | 169 |
With no related allowance | 30 | 151 |
Unpaid Principal Balance | ||
With an allowance recorded | 163 | 163 |
With no related allowance | 31 | 152 |
Related Allowance | 66 | 29 |
Average Recorded Investment | ||
With an allowance recorded | 163 | 163 |
With no related allowance | 31 | 155 |
Interest Income Recognized | ||
With an allowance recorded | 5 | 10 |
With no related allowance | $ 1 | $ 8 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses - Risk category (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Loans and allowance - Risk category of loans | |||
Loans, gross | $ 1,484,928 | $ 1,272,863 | $ 1,236,298 |
Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 366 | ||
Commercial | Real Estate | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 778,908 | 747,675 | 664,251 |
Commercial | Commercial and Industrial | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 279,919 | 115,103 | 134,718 |
Commercial | Construction | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 228,641 | 215,983 | 218,182 |
Consumer | Real Estate | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 178,665 | 182,812 | 194,898 |
Consumer | Nonresidential | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 18,795 | 11,290 | $ 24,249 |
Originated Loan Portfolio | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 1,408,056 | 1,175,644 | |
Originated Loan Portfolio | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 1,395,262 | 1,148,785 | |
Originated Loan Portfolio | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 7,557 | 17,015 | |
Originated Loan Portfolio | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 5,237 | 9,844 | |
Originated Loan Portfolio | Commercial | Real Estate | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 748,723 | 709,046 | |
Originated Loan Portfolio | Commercial | Real Estate | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 742,788 | 690,082 | |
Originated Loan Portfolio | Commercial | Real Estate | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 5,659 | 14,772 | |
Originated Loan Portfolio | Commercial | Real Estate | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 276 | 4,192 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 274,671 | 107,698 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 270,274 | 102,491 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 355 | 476 | |
Originated Loan Portfolio | Commercial | Commercial and Industrial | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 4,042 | 4,731 | |
Originated Loan Portfolio | Commercial | Construction | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 226,960 | 210,933 | |
Originated Loan Portfolio | Commercial | Construction | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 226,140 | 210,113 | |
Originated Loan Portfolio | Commercial | Construction | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 820 | 820 | |
Originated Loan Portfolio | Consumer | Real Estate | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 138,955 | 136,762 | |
Originated Loan Portfolio | Consumer | Real Estate | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 137,313 | 134,913 | |
Originated Loan Portfolio | Consumer | Real Estate | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 1,543 | 1,748 | |
Originated Loan Portfolio | Consumer | Real Estate | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 99 | 101 | |
Originated Loan Portfolio | Consumer | Nonresidential | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 18,747 | 11,205 | |
Originated Loan Portfolio | Consumer | Nonresidential | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 18,747 | 11,186 | |
Originated Loan Portfolio | Consumer | Nonresidential | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 19 | ||
Acquired Loan Portfolio | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 76,872 | 97,219 | |
Acquired Loan Portfolio | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 73,763 | 92,789 | |
Acquired Loan Portfolio | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 3,228 | ||
Acquired Loan Portfolio | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 3,109 | 1,202 | |
Acquired Loan Portfolio | Commercial | Real Estate | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 30,185 | 38,629 | |
Acquired Loan Portfolio | Commercial | Real Estate | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 27,705 | 35,284 | |
Acquired Loan Portfolio | Commercial | Real Estate | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 3,089 | ||
Acquired Loan Portfolio | Commercial | Real Estate | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 2,480 | 256 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 5,248 | 7,405 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 4,873 | 7,005 | |
Acquired Loan Portfolio | Commercial | Commercial and Industrial | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 375 | 400 | |
Acquired Loan Portfolio | Commercial | Construction | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 1,681 | 5,050 | |
Acquired Loan Portfolio | Commercial | Construction | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 1,681 | 5,050 | |
Acquired Loan Portfolio | Consumer | Real Estate | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 39,710 | 46,050 | |
Acquired Loan Portfolio | Consumer | Real Estate | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 39,456 | 45,365 | |
Acquired Loan Portfolio | Consumer | Real Estate | Special mention | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 139 | ||
Acquired Loan Portfolio | Consumer | Real Estate | Substandard | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 254 | 546 | |
Acquired Loan Portfolio | Consumer | Nonresidential | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | 48 | 85 | |
Acquired Loan Portfolio | Consumer | Nonresidential | Pass | |||
Loans and allowance - Risk category of loans | |||
Loans, gross | $ 48 | $ 85 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses - Past due and Non accrual of loans (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | ||
Loans and Allowance for Loan Losses | ||||
Total loans | $ 1,484,928 | $ 1,272,863 | $ 1,236,298 | |
Loans, net | 1,465,226 | 1,260,295 | [1] | |
Loans for which formal foreclosure proceedings are in process | 0 | 177 | ||
Federal Home Loan Bank of Atlanta | ||||
Loans and Allowance for Loan Losses | ||||
Loans pledged | 143,700 | 154,000 | ||
Adjustment | ||||
Loans and Allowance for Loan Losses | ||||
Loans, net | 407 | 181 | ||
Deposits | 407 | 181 | ||
Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 366 | |||
Commercial | Real Estate | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 778,908 | 747,675 | 664,251 | |
Commercial | Commercial and Industrial | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 279,919 | 115,103 | 134,718 | |
Commercial | Construction | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 228,641 | 215,983 | 218,182 | |
Consumer | Real Estate | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 178,665 | 182,812 | 194,898 | |
Consumer | Nonresidential | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 18,795 | 11,290 | $ 24,249 | |
Originated Loan Portfolio | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 2,595 | 13,223 | ||
Current | 1,405,461 | 1,162,421 | ||
Total loans | 1,408,056 | 1,175,644 | ||
90 days past due and still accruing | 1,205 | 914 | ||
Nonaccruals | 4,154 | 8,545 | ||
Loans, net | 1,388,420 | 1,163,105 | ||
Originated Loan Portfolio | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 7,557 | 17,015 | ||
Leases receivable | 9,500 | |||
Originated Loan Portfolio | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 5,237 | 9,844 | ||
Leases receivable | 4,600 | |||
Originated Loan Portfolio | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 240 | 12,100 | ||
Originated Loan Portfolio | 60-89 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,150 | 209 | ||
Originated Loan Portfolio | 90 days or more past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,205 | 914 | ||
Originated Loan Portfolio | Commercial | Real Estate | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,807 | 8,941 | ||
Current | 746,916 | 700,105 | ||
Total loans | 748,723 | 709,046 | ||
90 days past due and still accruing | 1,197 | 753 | ||
Nonaccruals | 150 | 3,903 | ||
Originated Loan Portfolio | Commercial | Real Estate | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 5,659 | 14,772 | ||
Originated Loan Portfolio | Commercial | Real Estate | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 276 | 4,192 | ||
Originated Loan Portfolio | Commercial | Real Estate | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 8,443 | |||
Originated Loan Portfolio | Commercial | Real Estate | 60-89 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 610 | |||
Originated Loan Portfolio | Commercial | Real Estate | 90 days or more past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,197 | 498 | ||
Originated Loan Portfolio | Commercial | Commercial and Industrial | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,232 | |||
Current | 274,671 | 106,466 | ||
Total loans | 274,671 | 107,698 | ||
90 days past due and still accruing | 48 | |||
Nonaccruals | 3,184 | 3,822 | ||
Originated Loan Portfolio | Commercial | Commercial and Industrial | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 355 | 476 | ||
Originated Loan Portfolio | Commercial | Commercial and Industrial | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 4,042 | 4,731 | ||
Originated Loan Portfolio | Commercial | Commercial and Industrial | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,184 | |||
Originated Loan Portfolio | Commercial | Commercial and Industrial | 90 days or more past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 48 | |||
Originated Loan Portfolio | Commercial | Construction | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 2,000 | |||
Current | 226,960 | 208,933 | ||
Total loans | 226,960 | 210,933 | ||
Nonaccruals | 820 | 820 | ||
Originated Loan Portfolio | Commercial | Construction | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 820 | 820 | ||
Originated Loan Portfolio | Commercial | Construction | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 2,000 | |||
Originated Loan Portfolio | Consumer | Real Estate | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 705 | 905 | ||
Current | 138,250 | 135,857 | ||
Total loans | 138,955 | 136,762 | ||
90 days past due and still accruing | 101 | |||
Originated Loan Portfolio | Consumer | Real Estate | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 1,543 | 1,748 | ||
Originated Loan Portfolio | Consumer | Real Estate | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 99 | 101 | ||
Originated Loan Portfolio | Consumer | Real Estate | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 240 | 396 | ||
Originated Loan Portfolio | Consumer | Real Estate | 60-89 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 465 | 153 | ||
Originated Loan Portfolio | Consumer | Real Estate | 90 days or more past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 356 | |||
Originated Loan Portfolio | Consumer | Nonresidential | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 83 | 145 | ||
Current | 18,664 | 11,060 | ||
Total loans | 18,747 | 11,205 | ||
90 days past due and still accruing | 8 | 12 | ||
Originated Loan Portfolio | Consumer | Nonresidential | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 19 | |||
Originated Loan Portfolio | Consumer | Nonresidential | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 77 | |||
Originated Loan Portfolio | Consumer | Nonresidential | 60-89 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 75 | 56 | ||
Originated Loan Portfolio | Consumer | Nonresidential | 90 days or more past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 8 | 12 | ||
Acquired Loan Portfolio | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 679 | 1,497 | ||
Current | 76,193 | 95,722 | ||
Total loans | 76,872 | 97,219 | ||
90 days past due and still accruing | 235 | 118 | ||
Nonaccruals | 2,899 | 1,148 | ||
Loans, net | 76,806 | 97,190 | ||
Acquired Loan Portfolio | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 3,228 | |||
Acquired Loan Portfolio | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 3,109 | 1,202 | ||
Acquired Loan Portfolio | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,138 | |||
Acquired Loan Portfolio | 60-89 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 444 | 241 | ||
Acquired Loan Portfolio | 90 days or more past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 235 | 118 | ||
Acquired Loan Portfolio | Commercial | Real Estate | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 444 | |||
Current | 29,741 | 38,629 | ||
Total loans | 30,185 | 38,629 | ||
Nonaccruals | 2,321 | 256 | ||
Acquired Loan Portfolio | Commercial | Real Estate | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 3,089 | |||
Acquired Loan Portfolio | Commercial | Real Estate | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 2,480 | 256 | ||
Acquired Loan Portfolio | Commercial | Real Estate | 60-89 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 444 | |||
Acquired Loan Portfolio | Commercial | Commercial and Industrial | ||||
Loans and Allowance for Loan Losses | ||||
Current | 5,248 | 7,405 | ||
Total loans | 5,248 | 7,405 | ||
Nonaccruals | 253 | 272 | ||
Acquired Loan Portfolio | Commercial | Commercial and Industrial | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 375 | 400 | ||
Acquired Loan Portfolio | Commercial | Construction | ||||
Loans and Allowance for Loan Losses | ||||
Current | 1,681 | 5,050 | ||
Total loans | 1,681 | 5,050 | ||
Acquired Loan Portfolio | Consumer | Real Estate | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 235 | 1,497 | ||
Current | 39,475 | 44,553 | ||
Total loans | 39,710 | 46,050 | ||
90 days past due and still accruing | 235 | 118 | ||
Nonaccruals | 325 | 620 | ||
Acquired Loan Portfolio | Consumer | Real Estate | Special mention | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 139 | |||
Acquired Loan Portfolio | Consumer | Real Estate | Substandard | ||||
Loans and Allowance for Loan Losses | ||||
Total loans | 254 | 546 | ||
Acquired Loan Portfolio | Consumer | Real Estate | 30-59 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 1,138 | |||
Acquired Loan Portfolio | Consumer | Real Estate | 60-89 days past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 241 | |||
Acquired Loan Portfolio | Consumer | Real Estate | 90 days or more past due | ||||
Loans and Allowance for Loan Losses | ||||
Total past due | 235 | 118 | ||
Acquired Loan Portfolio | Consumer | Nonresidential | ||||
Loans and Allowance for Loan Losses | ||||
Current | 48 | 85 | ||
Total loans | $ 48 | $ 85 | ||
[1] | Derived from audited consolidated financial statements. |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses - Troubled debt restructurings (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020USD ($)contract | Jun. 30, 2019USD ($)contract | Dec. 31, 2019USD ($) | |
Loans and Allowance for Loan Losses - Troubled debt restructurings | |||
Number of Contracts | contract | 1 | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 99 | $ 3,903 | |
Post-Modification Outstanding Recorded Investment | 99 | $ 3,903 | |
Recorded investment in troubled debt restructurings | $ 99 | $ 3,900 | |
Commercial | Real Estate | |||
Loans and Allowance for Loan Losses - Troubled debt restructurings | |||
Number of Contracts | contract | 1 | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 99 | $ 3,903 | |
Post-Modification Outstanding Recorded Investment | $ 99 | $ 3,903 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) $ in Thousands | Jun. 30, 2020USD ($)agreement | Dec. 31, 2019USD ($)agreement |
Swap agreements | ||
Derivative Financial Instruments | ||
Number of swap agreements outstanding not included in the offsetting | agreement | 21 | 17 |
Collateralized amount | $ 15,800 | $ 6,100 |
Receive Fixed/Pay Variable Swaps | ||
Derivative Financial Instruments | ||
Notional amount | 158,010 | 94,755 |
Fair Value, Liability | 15,755 | (6,001) |
Pay Fixed/Receive Variable Swaps | ||
Derivative Financial Instruments | ||
Notional amount | 158,010 | 94,755 |
Fair Value, Asset | $ (15,755) | $ 6,001 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Interest Rate Risk Management-Cash Flow Hedging Instruments (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Derivatives, Fair Value [Line Items] | |
Unrealized loss relating to interest rate swaps | $ (813) |
Cash flow hedge | |
Derivatives, Fair Value [Line Items] | |
Notional amount | $ 60,000 |
Weighted average pay rate | 0.87% |
Weighted average receive rate | 0.30% |
Weighted average maturity in years | 2 years 7 months 6 days |
Unrealized loss relating to interest rate swaps | $ (893) |
Financial Instruments with Of_3
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Financial Instruments with Off-Balance Sheet Risk | ||
Cash on deposit in correspondent banks exceeding the federally insured limits | $ 20,800 | $ 10,600 |
Commitments to grant loans | Contract credit risk | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Financial instruments outstanding | 33,900 | 27,260 |
Unused commitments to fund loans and lines of credit | Contract credit risk | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Financial instruments outstanding | 193,531 | 244,367 |
Commercial and standby letters of credit | Contract credit risk | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Financial instruments outstanding | $ 8,208 | $ 9,002 |
Letters of credit expiration period (in years) | 1 year |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plan (Details) - shares | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation Plan | ||||
Number of shares withheld to cover the cost of the exercise | 0 | 2,737 | 0 | |
Amended and Restated 2008 Option Plan | Stock option | ||||
Stock-Based Compensation Plan | ||||
Additional shares authorized for issuance (in shares) | 200,000 | |||
Maximum shares authorized (in shares) | 2,529,296 | 2,529,296 | ||
Vesting period (in years) | 4 years | |||
Contractual term (in years) | 10 years | |||
Shares available for grant (in shares) | 165,211 | 165,211 | ||
Options granted (in shares) | 0 | 0 |
Stock-Based Compensation Plan -
Stock-Based Compensation Plan - Options (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | ||
Additional disclosures | ||||||
Total income tax benefits related to stock options exercised | $ 82,000 | $ 108,000 | ||||
Stock option | ||||||
Additional disclosures | ||||||
Compensation cost | $ 170,000 | $ 107,000 | $ 376,000 | $ 272,000 | ||
Total income tax benefits related to stock options exercised | $ 6,000 | $ 0 | ||||
Amended and Restated 2008 Option Plan | Stock option | ||||||
Shares | ||||||
Outstanding at the beginning of the year (in shares) | 1,797,516 | |||||
Granted (in shares) | 0 | 0 | ||||
Exercised (in shares) | (47,268) | |||||
Forfeited or expired (in shares) | (3,139) | |||||
Outstanding at the end of the year (in shares) | 1,797,516 | |||||
Exercisable at the end of the year (in shares) | 1,747,109 | 1,747,109 | ||||
Weighted-Average Exercise Price | ||||||
Outstanding at the beginning of the year (in dollars per share) | $ 8.09 | |||||
Exercised (in dollars per share) | 6.46 | |||||
Forfeited or expired (in dollars per share) | 10.62 | |||||
Outstanding at the end of the year (in dollars per share) | $ 8.09 | |||||
Exercisable at the end of the year (in dollars per share) | $ 8.13 | $ 8.13 | ||||
Additional disclosures | ||||||
Outstanding Weighted-Average Remaining Contractual Term (in years) | 4 years 1 month 6 days | |||||
Exercisable Weighted-Average Remaining Contractual Term (in years) | 3 years 7 months 24 days | |||||
Exercisable Aggregate Intrinsic Value | [1] | $ 3,936,397 | ||||
[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 June 30, 2020. This amount changes based on changes in the market value of the Company’s common stock. |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plan - Restricted stock (Details) - Restricted stock - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Weighted Average Grant Date Fair Value | ||
Unrecognized compensation cost | $ 1.5 | |
Weighted-average recognition period (in months) | 31 months | |
Amended and Restated 2008 Option Plan | ||
Number of Shares | ||
Balance at the beginning of the year (in shares) | 109,718 | |
Granted (in shares) | 0 | 1,000 |
Vested (in shares) | (375) | |
Forfeited (in shares) | (1,740) | |
Balance at the end of the year (in shares) | 107,603 | |
Weighted Average Grant Date Fair Value | ||
Outstanding at the beginning of the year (in dollars per share) | $ 18.70 | |
Vested (in dollars per share) | 17.21 | |
Forfeited (in dollars per share) | 18.70 | |
Outstanding at the end of the year (in dollars per share) | $ 18.70 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial assets and liabilities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | ||
Assets | |||
Securities available-for-sale | $ 121,818 | $ 141,325 | [1] |
Loans held for sale, at fair value | 8,800 | 11,198 | [1] |
Loss on loans held for sale | (451) | ||
Level 2 | |||
Assets | |||
Securities available-for-sale | 121,818 | 141,325 | |
Recurring | |||
Assets | |||
Securities available-for-sale | 121,818 | 141,325 | |
Recurring | Securities of U.S. government and federal agencies | |||
Assets | |||
Securities available-for-sale | 3,012 | 3,996 | |
Recurring | Securities of state and local municipalities tax exempt | |||
Assets | |||
Securities available-for-sale | 3,761 | 3,738 | |
Recurring | Securities of state and local municipalities taxable | |||
Assets | |||
Securities available-for-sale | 894 | 955 | |
Recurring | Corporate bonds | |||
Assets | |||
Securities available-for-sale | 9,685 | 6,981 | |
Recurring | SBA pass-through securities | |||
Assets | |||
Securities available-for-sale | 150 | 159 | |
Recurring | Mortgage-backed securities | |||
Assets | |||
Securities available-for-sale | 78,009 | 97,189 | |
Recurring | Collateralized mortgage obligations | |||
Assets | |||
Securities available-for-sale | 26,307 | 28,307 | |
Recurring | Level 2 | |||
Assets | |||
Securities available-for-sale | 121,818 | 141,325 | |
Recurring | Level 2 | Securities of U.S. government and federal agencies | |||
Assets | |||
Securities available-for-sale | 3,012 | 3,996 | |
Recurring | Level 2 | Securities of state and local municipalities tax exempt | |||
Assets | |||
Securities available-for-sale | 3,761 | 3,738 | |
Recurring | Level 2 | Securities of state and local municipalities taxable | |||
Assets | |||
Securities available-for-sale | 894 | 955 | |
Recurring | Level 2 | Corporate bonds | |||
Assets | |||
Securities available-for-sale | 9,685 | 6,981 | |
Recurring | Level 2 | SBA pass-through securities | |||
Assets | |||
Securities available-for-sale | 150 | 159 | |
Recurring | Level 2 | Mortgage-backed securities | |||
Assets | |||
Securities available-for-sale | 78,009 | 97,189 | |
Recurring | Level 2 | Collateralized mortgage obligations | |||
Assets | |||
Securities available-for-sale | $ 26,307 | $ 28,307 | |
[1] | Derived from audited consolidated financial statements. |
Fair Value Measurements - Asset
Fair Value Measurements - Assets measured at fair value on a nonrecurring basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Assets | |||
Loans held for sale | $ 8,800 | $ 11,198 | [1] |
Nonrecurring | |||
Assets | |||
Impaired loans | 1,893 | 1,816 | |
Loans held for sale | 11,198 | ||
Other real estate owned | 3,866 | 3,866 | |
Level 2 | Nonrecurring | |||
Assets | |||
Loans held for sale | 11,198 | ||
Level 3 | Nonrecurring | |||
Assets | |||
Impaired loans | 1,893 | 1,816 | |
Other real estate owned | $ 3,866 | $ 3,866 | |
[1] | Derived from audited consolidated financial statements. |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative information about Level 3 fair value measurements (Details) $ in Thousands | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Nonrecurring | ||
Quantitative information about Level 3 Fair Value Measurements | ||
Impaired loans | $ 1,893 | $ 1,816 |
Other real estate owned | $ 3,866 | $ 3,866 |
Level 3 | ||
Quantitative information about Level 3 Fair Value Measurements | ||
Impaired loans, Valuation Technique | fvcb:ValuationTechniqueDiscountedValueMember | fvcb:ValuationTechniqueDiscountedValueMember |
Impaired loans, Measurement Input | us-gaap:MeasurementInputMarketabilitySellingCostsMember | us-gaap:MeasurementInputMarketabilitySellingCostsMember |
Other real estate owned, Range | 10.51 | 10.51 |
Other real estate owned, Valuation Technique | fvcb:ValuationTechniqueDiscountedAppraisedValueMember | fvcb:ValuationTechniqueDiscountedAppraisedValueMember |
Other real estate owned, Unobservable input | us-gaap:MeasurementInputCostToSellMember | us-gaap:MeasurementInputCostToSellMember |
Level 3 | Minimum | ||
Quantitative information about Level 3 Fair Value Measurements | ||
Impaired loans, Range | 0 | 5 |
Level 3 | Maximum | ||
Quantitative information about Level 3 Fair Value Measurements | ||
Impaired loans, Range | 8 | 8 |
Level 3 | Avg | ||
Quantitative information about Level 3 Fair Value Measurements | ||
Impaired loans, Range | 8 | 7.84 |
Level 3 | Nonrecurring | ||
Quantitative information about Level 3 Fair Value Measurements | ||
Impaired loans | $ 1,893 | $ 1,816 |
Other real estate owned | $ 3,866 | $ 3,866 |
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 | Jun. 30, 2020 | Dec. 31, 2019 | ||
Financial assets: | ||||
Cash and due from banks | $ 25,613 | $ 14,916 | [1] | |
Interest-bearing deposits at other institutions | 64,989 | 18,226 | [1] | |
Securities held-to-maturity | 264 | 264 | [1] | |
Securities available-for-sale | 121,818 | 141,325 | [1] | |
Restricted stock | 6,608 | 6,017 | [1] | |
Loans, net | 1,465,226 | 1,260,295 | [1] | |
Bank owned life insurance | 37,633 | 37,069 | [1] | |
Accrued interest receivable | 7,186 | 4,094 | [1] | |
Financial liabilities: | ||||
Time deposits | 400,628 | 422,339 | [1] | |
Federal funds purchased | [1] | 10,000 | ||
FHLB advances | 25,000 | 15,000 | [1] | |
Subordinated notes | 24,527 | 24,487 | [1] | |
Accrued interest payable | 524 | 605 | [1] | |
Carrying Amount | ||||
Financial assets: | ||||
Cash and due from banks | 25,613 | 14,916 | ||
Interest-bearing deposits at other institutions | 64,989 | 18,226 | ||
Securities held-to-maturity | 264 | 264 | ||
Securities available-for-sale | 121,818 | 141,325 | ||
Restricted stock | 6,608 | 6,017 | ||
Loans held for sale | 11,198 | |||
Loans, net | 1,465,226 | 1,260,295 | ||
Bank owned life insurance | 37,633 | 37,069 | ||
Accrued interest receivable | 7,186 | 4,094 | ||
Financial liabilities: | ||||
Checking, savings and money market accounts | 1,118,408 | 863,383 | ||
Time deposits | 400,628 | 422,339 | ||
Federal funds purchased | 10,000 | |||
FHLB advances | 25,000 | 15,000 | ||
Subordinated notes | 24,527 | 24,487 | ||
Accrued interest payable | 524 | 605 | ||
Level 1 | ||||
Financial assets: | ||||
Cash and due from banks | 25,613 | 14,916 | ||
Interest-bearing deposits at other institutions | 64,989 | 18,226 | ||
Level 2 | ||||
Financial assets: | ||||
Securities held-to-maturity | 274 | 270 | ||
Securities available-for-sale | 121,818 | 141,325 | ||
Restricted stock | 6,608 | 6,017 | ||
Loans held for sale | 11,198 | |||
Bank owned life insurance | 37,633 | 37,069 | ||
Accrued interest receivable | 7,186 | 4,094 | ||
Financial liabilities: | ||||
Checking, savings and money market accounts | 1,118,408 | 863,383 | ||
Time deposits | 404,130 | 424,398 | ||
Federal funds purchased | 10,000 | |||
FHLB advances | 25,000 | 15,000 | ||
Subordinated notes | 24,291 | 24,564 | ||
Accrued interest payable | 524 | 605 | ||
Level 3 | ||||
Financial assets: | ||||
Loans, net | $ 1,444,258 | $ 1,254,685 | ||
[1] | Derived from audited consolidated financial statements. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share | ||||
Number of anti-dilutive shares excluded from the calculation | 321,560 | 0 | ||
Net income | $ 2,880 | $ 4,085 | $ 6,613 | $ 8,011 |
Weighted average number of shares | 13,455 | 13,803 | 13,603 | 13,763 |
Effect of dilutive securities, restricted stock units and options | 469 | 1,014 | 657 | 1,036 |
Weighted average diluted shares | 13,924 | 14,817 | 14,260 | 14,799 |
Basic EPS | $ 0.21 | $ 0.30 | $ 0.49 | $ 0.58 |
Diluted EPS | $ 0.21 | $ 0.28 | $ 0.46 | $ 0.54 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)component | Jun. 30, 2019USD ($) | |
Changes in accumulated other comprehensive income | ||||
Balance, beginning of period | $ 2,437 | $ 690 | ||
Net unrealized gains (losses) during the period | (142) | 1,682 | ||
Net reclassification adjustment for gains realized in income | (77) | |||
Other comprehensive income (loss), net of tax | (142) | $ 1,382 | 1,605 | $ 2,762 |
Balance, end of period | 2,295 | 2,295 | ||
Reclassifications From Accumulated Other Comprehensive Income | ||||
Income tax expense | 0 | 20 | ||
Total | $ (77) | |||
Accumulated Other Comprehensive Income (Loss), net | ||||
Number of securities component of AOCI | component | 2 | |||
Changes in accumulated other comprehensive income | ||||
Other comprehensive income (loss), net of tax | (142) | 1,382 | $ 1,605 | 2,762 |
Available-for-Sale Securities | ||||
Changes in accumulated other comprehensive income | ||||
Balance, beginning of period | 2,968 | (1,031) | 753 | (2,411) |
Net unrealized gains (losses) during the period | 32 | 1,382 | 2,324 | 2,762 |
Net reclassification adjustment for gains realized in income | (77) | |||
Other comprehensive income (loss), net of tax | 32 | 1,382 | 2,247 | 2,762 |
Balance, end of period | 3,000 | $ 351 | 3,000 | $ 351 |
Reclassifications From Accumulated Other Comprehensive Income | ||||
Gains on sale of available-for-sale securities | 97 | |||
Income tax expense | (20) | |||
Total | (77) | |||
Cash Flow Hedges | ||||
Changes in accumulated other comprehensive income | ||||
Balance, beginning of period | (531) | (63) | ||
Net unrealized gains (losses) during the period | (174) | (642) | ||
Other comprehensive income (loss), net of tax | (174) | (642) | ||
Balance, end of period | $ (705) | $ (705) |
Subordinated Notes (Details)
Subordinated Notes (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 20, 2016 | |
Subordinated Notes | ||
Face amount | $ 25 | |
Interest rate | 6.00% | |
Redemption price percentage of outstanding principal amount | 100.00% | |
LIBOR | ||
Subordinated Notes | ||
Variable interest rate (as a percent) | 4.87% | |
Minimum | ||
Subordinated Notes | ||
Notice period for redeem the subordinated notes | 30 days | |
Maximum | ||
Subordinated Notes | ||
Notice period for redeem the subordinated notes | 60 days |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue Recognition | ||||
Total Noninterest Income | $ 687 | $ 539 | $ 1,381 | $ 1,277 |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract | true | |||
Before adoption of ASU 2014-09 | ||||
Revenue Recognition | ||||
Noninterest Income (in-scope of Topic 606) | 322 | 363 | $ 653 | 634 |
Noninterest Income (out-scope of Topic 606) | 365 | 176 | 728 | 643 |
Total Noninterest Income | 687 | 539 | 1,381 | 1,277 |
Other Income | Before adoption of ASU 2014-09 | ||||
Revenue Recognition | ||||
Noninterest Income (in-scope of Topic 606) | 23 | 11 | 31 | 25 |
Service Charges on Deposit Accounts | Before adoption of ASU 2014-09 | ||||
Revenue Recognition | ||||
Noninterest Income (in-scope of Topic 606) | 223 | 229 | 463 | 411 |
Fees, Exchange, and Other Service Charges | Before adoption of ASU 2014-09 | ||||
Revenue Recognition | ||||
Noninterest Income (in-scope of Topic 606) | $ 76 | $ 123 | $ 159 | $ 198 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid for interest on deposits and borrowed funds | $ 8,375 | $ 8,817 | |
Cash paid for income taxes | 455 | 939 | |
Noncash investing and financing activities: | |||
Transfer of loans to other real estate owned | 9,641 | ||
Unrealized gain on securities available-for-sale | 2,845 | 3,496 | |
Unrealized loss relating to interest rate swaps | (813) | ||
Initial right of use asset - operating leases | 12,249 | ||
Initial lease liability - operating leases | $ 12,656 | ||
Right-of-use assets obtained in the exchange for lease liabilities during the current period | 59 | ||
Derecognition of right-of-use asset and lease liabilities | $ 458 | $ 458 |
Leases (Details)
Leases (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Leases | |
Existence of option to extend | true |
Existence of residual value guarantees | false |
Leases - Information about leas
Leases - Information about leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | ||
Leases | ||||||
Right-of-Use-Asset | $ 11,724 | $ 11,724 | $ 13,279 | [1] | ||
Lease Liability | $ 12,704 | $ 12,704 | $ 13,686 | [1] | ||
Weighted Average Remaining Lease Term | 10 years 2 months 1 day | 10 years 2 months 1 day | 11 years 1 month 6 days | |||
Weighted Average discount rate | 3.22% | 3.22% | 3.32% | |||
Operating Lease Expense | $ 428 | $ 445 | $ 862 | $ 915 | ||
Cash paid for amounts included in lease liabilities | 401 | $ 405 | 805 | $ 843 | ||
Impairment loss on right-of-use asset | 508 | 508 | ||||
Derecognition of right-of-use asset and lease liabilities | $ 458 | 458 | ||||
Right-of-use assets obtained in exchange for operating lease liabilities | $ 59 | |||||
[1] | Derived from audited consolidated financial statements. |
Leases - Maturity schedule of u
Leases - Maturity schedule of undiscounted cash flows that contribute to the lease liability (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | [1] |
Schedule of undiscounted cash flows | |||
Six months ending December 31, 2020 | $ 776 | ||
Twelve months ending December 31, 2021 | 1,559 | ||
Twelve months ending December 31, 2022 | 1,599 | ||
Twelve months ending December 31, 2023 | 1,596 | ||
Twelve months ending December 31, 2024 | 1,566 | ||
Twelve months ending December 31, 2025 | 1,441 | ||
Thereafter | 6,462 | ||
Total | 14,999 | ||
Less: discount | (2,295) | ||
Operating lease liabilities | $ 12,704 | $ 13,686 | |
[1] | Derived from audited consolidated financial statements. |