Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 13, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | OPBK | |
Entity Registrant Name | OP Bancorp | |
Entity Central Index Key | 1,722,010 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 15,783,338 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 95,786,737 | $ 63,249,952 |
Securities available for sale, at fair value | 46,324,158 | 41,471,711 |
Other investments | 7,220,880 | 4,286,500 |
Loans held for sale | 3,253,500 | 15,739,305 |
Loans receivable, net of allowance of $9,550,768 at September 30, 2018 and $9,139,488 at December 31, 2017 | 840,467,479 | 738,884,413 |
Premises and equipment, net | 4,757,479 | 4,480,792 |
Accrued interest receivable | 2,782,502 | 2,463,486 |
Servicing assets | 7,097,136 | 6,771,097 |
Company owned life insurance | 11,321,086 | 11,089,718 |
Deferred tax assets | 4,257,497 | 3,383,365 |
Other assets | 11,759,730 | 9,178,491 |
Total assets | 1,035,028,184 | 900,998,830 |
Deposits: | ||
Noninterest bearing | 286,347,297 | 289,409,876 |
Interest bearing: | ||
Savings | 3,239,700 | 3,838,353 |
Money market and others | 253,807,061 | 247,324,292 |
Time deposits greater than $250,000 | 157,686,977 | 108,952,059 |
Other time deposits | 195,809,666 | 123,781,434 |
Total deposits | 896,890,701 | 773,306,014 |
Federal Home Loan Bank advances | 0 | 25,000,000 |
Accrued interest payable | 1,195,818 | 423,239 |
Other liabilities | 11,966,512 | 10,789,627 |
Total liabilities | 910,053,031 | 809,518,880 |
Shareholders’ equity | ||
Preferred stock – no par value; 10,000,000 shares authorized; no shares issued or outstanding at September 30, 2018 and December 31, 2017 | ||
Common stock – no par value; 50,000,000 shares authorized; 15,770,576 and 13,190,527 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 91,008,999 | 67,925,860 |
Additional paid-in capital | 5,886,463 | 5,279,991 |
Retained earnings | 29,112,718 | 18,623,952 |
Accumulated other comprehensive loss | (1,033,027) | (349,853) |
Total shareholders’ equity | 124,975,153 | 91,479,950 |
Total liabilities and shareholders' equity | $ 1,035,028,184 | $ 900,998,830 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Loans receivable, allowance | $ 9,550,768 | $ 9,139,488 |
Cash, FDIC insured amount | $ 250,000 | $ 250,000 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares, issued | 15,770,576 | 13,190,527 |
Common stock, shares, outstanding | 15,770,576 | 13,190,527 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest income | ||||
Interest and fees on loans | $ 12,524,220 | $ 10,111,318 | $ 35,041,659 | $ 28,378,286 |
Interest on investment securities | 248,783 | 185,750 | 644,954 | 475,926 |
Other interest income | 232,864 | 122,439 | 561,449 | 350,954 |
Total interest income | 13,005,867 | 10,419,507 | 36,248,062 | 29,205,166 |
Interest expense | ||||
Interest on deposits | 2,477,159 | 1,154,156 | 6,070,578 | 3,126,087 |
Interest on borrowed funds | 43,684 | 57,164 | 146,158 | 70,641 |
Total interest expense | 2,520,843 | 1,211,320 | 6,216,736 | 3,196,728 |
Net interest income | 10,485,024 | 9,208,187 | 30,031,326 | 26,008,438 |
Provision for loan losses | 438,514 | 278,148 | 1,047,179 | 989,231 |
Net interest income after provision for loan losses | 10,046,510 | 8,930,039 | 28,984,147 | 25,019,207 |
Noninterest income | ||||
Service charges on deposits | 483,867 | 393,685 | 1,418,857 | 1,201,075 |
Loan servicing fees, net of amortization | 310,484 | 317,702 | 1,006,097 | 1,057,644 |
Gain on sale of loans | 1,135,351 | 1,191,822 | 3,852,087 | 3,536,854 |
Other income | 354,307 | 351,808 | 1,002,536 | 912,592 |
Total noninterest income | 2,284,009 | 2,255,017 | 7,279,577 | 6,708,165 |
Noninterest expense | ||||
Salaries and employee benefits | 4,802,904 | 4,263,620 | 13,628,703 | 12,412,020 |
Occupancy and equipment | 975,945 | 986,062 | 3,065,238 | 2,918,686 |
Data processing and communication | 320,354 | 330,737 | 947,749 | 996,949 |
Professional fees | 294,000 | 149,000 | 612,100 | 435,220 |
FDIC insurance and regulatory assessments | 105,909 | 100,867 | 305,969 | 300,515 |
Promotion and advertising | 221,756 | 157,596 | 598,481 | 458,027 |
Directors’ fees | 215,676 | 202,044 | 633,597 | 597,936 |
Foundation donation and other contributions | 369,000 | 283,800 | 1,084,000 | 751,800 |
Other expenses | 399,041 | 270,123 | 1,117,574 | 813,503 |
Total noninterest expense | 7,704,585 | 6,743,849 | 21,993,411 | 19,684,656 |
Income before income taxes | 4,625,934 | 4,441,207 | 14,270,313 | 12,042,716 |
Income tax expense | 1,144,471 | 1,713,390 | 3,781,548 | 4,706,144 |
Net income | $ 3,481,463 | $ 2,727,817 | $ 10,488,765 | $ 7,336,572 |
Earnings per share - Basic | $ 0.22 | $ 0.20 | $ 0.68 | $ 0.54 |
Earnings per share - Diluted | $ 0.21 | $ 0.19 | $ 0.66 | $ 0.52 |
Other comprehensive income (loss): | ||||
Change in unrealized income (loss) on securities available for sale | $ (257,328) | $ (27,303) | $ (862,894) | $ 164,798 |
Less tax effect | (76,076) | (11,235) | (179,720) | 67,814 |
Total other comprehensive income (loss) | (181,252) | (16,068) | (683,174) | 96,984 |
Comprehensive income | $ 3,300,211 | $ 2,711,749 | $ 9,805,591 | $ 7,433,556 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings / (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2016 | $ 81,283,787 | $ 67,499,310 | $ 4,611,973 | $ 9,387,470 | $ (214,966) |
Beginning balance, shares at Dec. 31, 2016 | 12,896,548 | ||||
Net income | 7,336,572 | 7,336,572 | |||
Stock issued under stock-based compensation plans | 329,550 | $ 329,550 | |||
Stock issued under stock-based compensation plans, shares | 266,184 | ||||
Stock-based compensation | 431,494 | 431,494 | |||
Change in unrealized loss on securities available for sale net of reclassifications and tax effects | 96,984 | 96,984 | |||
Ending balance at Sep. 30, 2017 | 89,478,387 | $ 67,828,860 | 5,043,467 | 16,724,042 | (117,982) |
Ending balance, shares at Sep. 30, 2017 | 13,162,732 | ||||
Beginning balance at Dec. 31, 2017 | 91,479,950 | $ 67,925,860 | 5,279,991 | 18,623,952 | (349,853) |
Beginning balance, shares at Dec. 31, 2017 | 13,190,527 | ||||
Net income | 10,488,765 | 10,488,765 | |||
Stock issued under stock offering, net of expenses | 22,569,090 | $ 22,569,090 | |||
Stock issued under stock offering, net of expenses, shares | 2,300,000 | ||||
Stock issued under stock-based compensation plans | 514,050 | $ 514,050 | |||
Stock issued under stock-based compensation plans, shares | 280,049 | ||||
Stock-based compensation | 606,472 | 606,472 | |||
Change in unrealized loss on securities available for sale net of reclassifications and tax effects | (683,174) | (683,174) | |||
Ending balance at Sep. 30, 2018 | $ 124,975,153 | $ 91,009,000 | $ 5,886,463 | $ 29,112,717 | $ (1,033,027) |
Ending balance, shares at Sep. 30, 2018 | 15,770,576 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net income | $ 10,488,765 | $ 7,336,572 |
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||
Provision for loan losses | 1,047,179 | 989,231 |
Depreciation and amortization of premises and equipment | 762,383 | 766,848 |
Amortization of net premiums on securities | 183,039 | 222,861 |
Stock-based compensation | 606,472 | 431,494 |
Gain on sales of loans | (3,852,087) | (3,536,854) |
Earnings on company owned life insurance | (231,368) | (242,212) |
Origination of loans held for sale | (51,051,482) | (61,106,203) |
Proceeds from sales of loans held for sale | 65,768,831 | 51,990,640 |
Amortization of servicing assets | 1,294,504 | 1,231,322 |
Net change in: | ||
Accrued interest receivable | (319,016) | (180,605) |
Other assets | (3,275,651) | (3,055,779) |
Accrued interest payable | 772,579 | 55,659 |
Other liabilities | 1,176,885 | 1,837,724 |
Net cash from operating activities | 23,371,033 | (3,259,302) |
Cash flows from investing activities | ||
Net change in loans receivable | (102,630,245) | (61,821,147) |
Proceeds from calls of securities available for sale | 4,845,487 | 4,526,271 |
Purchase of premises and equipment, net | (1,039,070) | (141,546) |
Purchase of securities available for sale | (13,262,365) | (12,698,593) |
Purchase of other investments | (415,882) | (848,900) |
Net cash from investing activities | (112,502,075) | (70,983,915) |
Cash flows from financing activities | ||
Net change in deposits | 123,584,687 | 92,748,774 |
Cash received from stock option exercises | 514,050 | 329,550 |
Repayment of Federal Home Loan Bank advances | (25,000,000) | |
Issuance of common stock, net of expenses | 22,569,090 | 15,000,000 |
Net cash from financing activities | 121,667,827 | 108,078,324 |
Net change in cash and cash equivalents | 32,536,785 | 33,835,107 |
Cash and cash equivalents at beginning of period | 63,249,952 | 20,126,028 |
Cash and cash equivalents at end of period | 95,786,737 | 53,961,135 |
Supplemental cash flow information | ||
Income taxes | 5,379,453 | 5,855,000 |
Interest | 5,444,158 | $ 3,141,069 |
Supplemental noncash disclosure: | ||
Transfer from securities available for sale to other investments | $ 2,485,680 |
Business Description
Business Description | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business Description | Note 1. Business Description OP Bancorp (the “Company”) is a California corporation whose common stock is quoted on the Nasdaq Global Market under the ticker symbol, “OPBK.” The Company was formed to acquire 100% of the voting equity of Open Bank (the “Bank”) and commenced operation as a bank holding company on June 1, 2016. This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of the Company. The Company has no operations other than ownership of the Bank. The Bank is a California state-chartered and FDIC-insured financial institution, which began its operations on June 10, 2005. Headquartered in downtown Los Angeles, California, the Company operates primarily in the traditional banking business arena that includes accepting deposits and making loans and investments. The Company’s primary deposit products are demand and time deposits, and the primary lending products are commercial business loans to small to medium sized businesses. The Company is operating with eight full service branches in Downtown Los Angeles, Los Angeles Fashion District, Los Angeles Koreatown, Gardena, Buena Park and Santa Clara. The Company also has three loan production offices in Seattle, Washington, Dallas, Texas, and Atlanta, Georgia. On March 27, 2018, the Company completed its initial public offering of common stock, pursuant to which an aggregate of 2,300,000 shares of its common stock were sold at a public offering price of $11.00 per share, for aggregate net proceeds of approximately $22.6 million, after deducting underwriter discounts and commissions paid by it of approximately $1.7 million and other offering expenses of approximately $925,000. There has been no material change in the planned use of proceeds from the initial public offering as described in the Company’s Prospectus. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation: The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2017, included in the Companys’ registration statement on Form S-1 (333-223444) filed with the SEC on March 5, 2018 and declared effective on March 27, 2018. Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. Concentration of Risk: Most of the Company’s customers are located within Los Angeles County and the surrounding area. The concentration of loans originated in this area may subject the Company to the risk of adverse impacts of economic, regulatory or other developments that could occur in Southern California. The Company has significant concentration in commercial real estate loans. The Company obtains what it believes to be sufficient collateral to secure potential losses. The extent and value of the collateral obtained varies based upon the details underlying each loan agreement. Cash Flows: Cash and cash equivalents include cash, deposits with other financial institutions with original maturities less than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and Federal Home Loan Bank advances transactions. Securities: Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Other investments: Other investments includes the followings : (i) Federal Home Loan Bank (“FHLB”) Stock - the Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income; (ii) Pacific Coast Bankers Bank (“PCBB”) Stock - the Bank is a member of PCBB. PCBB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income; and (iii) the Company’s investment in a mutual fund to satisfy the Company’s requirements under the Community Reinvestment Act (“CRA”). CRA mutual fund is reported at fair value. Unrealized gains and losses are recognized in other income in the Consolidated Statements of Income and Comprehensive Income. Loans Held for Sale: Certain Small Business Administration (“SBA”) loans that may be sold prior to maturity are designated as held for sale at origination and are recorded at the lower of their cost or fair value less costs to sell, determined on an aggregate basis. A valuation allowance is established if the market value of such loans is lower than their cost, and operations are charged or credited for valuation adjustments. Origination fees on loans held for sale, net of certain costs of processing and closing the loans, are deferred until the time of sale and are included in the computation of the gain or loss from the sales of the related loans. A portion of the premium on sale of SBA loans is recognized as gains on sales of loans at the time of the sale. These loans are generally sold with servicing retained. Loans Receivable: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The recorded investment in loans includes accrued interest receivable, deferred loan fees and costs, and unearned income. The accrual of interest income on commercial real estate and other commercial and industrial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Consumer loans are typically charged off no later than 120 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that in management’s judgment should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial real estate and construction loans. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Income recognition on impaired loans materially conforms to the method the Company uses for income recognition on nonaccrual loans. Allowance for impaired loans is determined based on the present value of the estimated cash flows or on the fair value of the collateral if the loan is collateral dependent, less costs to sell. If the measured fair value is less than the recorded investment in the loan, the deficiency will be charged off against the allowance for loan losses, or alternatively, a specific allocation will be established. For consumer loans, management will generally charge off the balance if the loan is 90 days or more past due. The general component of the allowance covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent two years. For those portfolio segments that the Company does not have sufficient historical data available to track the loss migration, the loss factors are based on the actual loss history experienced by the Company over the most recent five years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.. The following portfolio segments have been identified in the Company’s loan portfolio, and are also representative of the classes within the portfolio: commercial real estate, SBA loans—real estate, SBA loans—non-real estate, commercial and industrial, home mortgage, and consumer. The Company reviews the credit risk exposure of all its portfolio segments by internally assigned grades. The Company categorizes loans into risk grades based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For the home mortgage and consumer portfolio segments, the Company’s primary monitoring tool is reviewing past due listings to determine if the loans are performing. The determination of the allowance for loan losses is based on estimates that are particularly susceptible to changes in the economic environment and market conditions. Management believes that as of September 30, 2018 and December 31, 2017 the allowance for loan losses is adequate based on information currently available. If a deterioration in the economy of the Company’s principal market area occurs, the Company’s loan portfolios could be adversely impacted and higher charge-offs and increases in non-performing assets could result. Such an adverse impact could also require a larger allowance for loan losses. Servicing Assets: When SBA loans are sold with servicing retained, servicing assets are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, prepayment speeds, and default rates and losses. The Company compares the valuation model inputs and results to published industry data in order to validate the model results and assumptions. Servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing assets are evaluated for impairment based upon the fair value of the assets as compared to their carrying amount. Impairment is recognized through a valuation allowance to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the valuation allowance may be recorded as an increase to income. Changes in the valuation allowances are reported with other income on the income statement. The fair values of servicing rights are subject to fluctuations as a result of changes in estimated and actual prepayment speeds, default rates, and losses. Servicing fee income, which is reported on the income statement as other income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of servicing assets is netted against loan servicing fee income. Late fees and ancillary fees related to loan servicing are not material. Company Owned Life Insurance: The Company has purchased life insurance policies on certain key executives. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Transfers of Financial Assets: Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Premises and Equipment: Premises and equipment are stated at cost, less accumulated depreciation. Equipment and furnishings are depreciated over 3 to 10 years, and leasehold improvements are amortized over the lesser of the terms of the respective leases or the estimated useful lives. The straight-line method of depreciation is used for financial reporting purposes. Repairs and maintenance are charged to operating expenses as incurred. Other Real Estate Owned, Net: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when the legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through the completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at the lower of their cost or fair value less estimated costs to sell. If their fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees based on the fair value of the awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Earnings per Common Share: Basic and diluted earnings per share is based on the two-class method prescribed in ASC Topic 260, Earnings Per Share (ASC 260). Stock options and restricted stock awards are considered outstanding for this calculation unless unearned. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock-based compensation plans. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements. Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties recognized in the three and nine months ended September 30, 2018 or 2017. Comprehensive Income/(Loss): Comprehensive income/(loss) consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, which are also recognized as separate components of shareholders’ equity, net of tax. Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements. Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 13—Fair Value of Financial Instruments. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. Operating Segments: While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Discrete financial information is not available other than on a Company-wide basis. Reclassifications: Some items in the prior period financial statements were reclassified to conform to the current presentation. Reclassification had no effect on prior year net income or shareholders’ equity. Recent Accounting Pronouncements: In May 2014, the Financial Accounting Standard Board (FASB) issued Accounting Standard Update (ASU) 2014-9 (ASU 2014-09), Revenue from Contracts with Customers. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 to fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-08 which clarified the revenue recognition implementation guidance on principal versus agent considerations and is effective during the same period as ASU 2014-09. In April 2016, the FASB issued ASU 2016-10 which clarified the revenue recognition guidance regarding the identification of performance obligations and the licensing implementation and is effective during the same period as ASU 2014-09. In May 2016, the FASB issued ASU 2016-12 which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition. ASU 2016-12 is effective during the same period as ASU 2014-09. The majority of the Company’s revenue consists of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. The Company adopted the new standard beginning January 1, 2018. The Company completed its analysis for determining the extent ASU 2014-09 will affect its noninterest income, primarily in the area of fees and service charges on deposit accounts and trade finance activities. Based on the analysis performed, the Company did not have a material change in the timing or measurement of revenues related to noninterest income. This guidance did not have a material impact on the Company’s consolidated financial statements. See Note 12. Revenue Recognition for further details. Effective January 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). The main objective of ASU 2016-01 is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Some of the amendments in ASU 2016-01 include the following: 1) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value. For public business entities, the amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 resulted in a transfer of $2.5 million of a mutual funds from securities available for sale to other investments on the consolidted balance sheet. However, this standard did not have a material impact on the consolidated financial statements. See Note 13 for fair value measurement disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about lease arrangements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. Based on leases outstanding at September 30, 2018, the Company does not expect this ASU to have a material impact on the income statement, but does anticipate an approximately $13 million increase in assets and liabilities once this ASU becomes effective. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The objective of ASU 2016-13 is to provide financial statement users with decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13 includes provisions that require financial assets measured at amortized cost (such as loans and held to maturity (HTM) debt securities) to be presented at the net amount expected to be collected. This will be accomplished through recognition of an estimate of all current expected credit losses. The estimate will include forecasted information for the timeframe that an entity is able to develop reasonable and supportable forecasts. This is a change from the current practice of recognizing incurred losses based on the probable initial recognition threshold under current GAAP. In addition, credit losses on available for sale (AFS) debt securities will be recorded through an allowance for credit losses rather than as a write-down. Under ASU 2016-13, an entity will be able to record reversals of credit losses in current period income when the estimate of credit losses declines, whereas current GAAP prohibits reflecting those improvements in current period earnings. ASU 2016-13 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, and early adoption is permitted for fiscal years, including interim periods, beginning after December 15, 2018. ASU 2016-13 will be applied through a cumulative effect adjustment to retained earnings (modified-retrospective approach), except for debt securities for which an other-than-temporary impairment had been recognized before the effective date. A prospective transition approach is required for these debt securities. The Company is currently evaluating the effects of ASU 2016-13 on its financial statements and disclosures, including software solutions, data requirements and loss estimation methodologies. The company has engaged a third party advisor to develop a new expected loss model. While the effects cannot yet be quantified, the Company expects ASU 2016-13 to add complexity and costs to its current credit loss evaluation process. In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) (ASU 2017-08). ASU 2017-08 amends the amortization period for certain purchased callable debt securities held at a premium. Prior to the issuance of this guidance, premiums were amortized as an adjustment of yield over the contractual life of the instrument. ASU 2017-08 requires premiums on purchased callable debt securities that have explicit, noncontingent call features that are callable at fixed prices to be amortized to the earliest call date. There are no accounting changes for securities held at a discount. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018, and early adoption is permitted. ASU 2017-08 will be applied through a cumulative effect adjustment through equity (modified-retrospective approach). The Company does not expect this ASU to have a material impact on its financial statements and disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting (ASU 2017-09). ASU 2017-09 clarifies when changes to the terms and conditions of share-based payment awards must be treated as modifications. Specifically, the new guidance permits companies to make certain changes to awards without accounting for them as modifications. ASU 2017-09 is effective for annual periods beginning after December 31, 2017 and will be applied prospectively to an award modified after the effective date. There have been no changes to the terms and conditions of share-based payment awards, and as a result the adoption of this standard did not have a material effect on the Company’s operating results or financial condition. In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU permits a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Tax Act. The Company did not elect to apply the provision of ASU 2018-02. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Securities | Note 3. Securities The following table summarizes the amortized cost, fair value, and the corresponding amounts of gross unrealized gains and losses for available for sale securities at September 30, 2018 and December 31, 2017: As of September 30, 2018: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: U.S. Government sponsored agency securities $ 6,992,706 $ — $ (125,777 ) $ 6,866,929 Mortgage-backed securities: residential 15,161,985 — (448,856 ) 14,713,129 Collateralized mortgage obligations 25,636,076 — (891,976 ) 24,744,100 Total available for sale $ 47,790,767 $ — $ (1,466,609 ) $ 46,324,158 As of December 31, 2017: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: U.S. Government sponsored agency securities $ 6,988,681 $ 2,001 $ (58,674 ) $ 6,932,008 Mortgage-backed securities: residential 14,109,433 — (168,908 ) 13,940,525 Collateralized mortgage obligations 18,458,814 — (345,316 ) 18,113,498 Other securities 2,518,498 — (32,818 ) 2,485,680 Total available for sale $ 42,075,426 $ 2,001 $ (605,716 ) $ 41,471,711 There were no sales of securities available for sale in the three or nine months ended September 30, 2018 or 2017. The amortized cost and estimated fair value of securities available for sale at September 30, 2018, by contractual maturity, are shown below. Securities without a contractual maturity are shown separately. As of September 30, 2018: Amortized Cost Fair Value Available for sale: Within one year $ 999,656 $ 990,105 One to five years 5,993,050 5,876,824 Mortgage-backed securities: residential 15,161,985 14,713,129 Collateralized mortgage obligations 25,636,076 24,744,100 Total available for sale $ 47,790,767 $ 46,324,158 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. At September 30, 2018 and December 31, 2017, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity. The following table summarizes securities with unrealized losses at September 30, 2018 and December 31, 2017, aggregated by length of time in a continuous unrealized loss position: Less Than 12 Months 12 Months or Longer Total As of September 30, 2018: Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale: U.S. Government sponsored agency securities $ 1,972,553 $ (21,048 ) $ 4,894,376 $ (104,729 ) $ 6,866,929 $ (125,777 ) Mortgage-backed securities: residential — — 14,713,129 (448,856 ) 14,713,129 (448,856 ) Collateralized mortgage obligations 9,689,390 (112,087 ) 15,054,710 (779,889 ) 24,744,100 (891,976 ) Total available for sale $ 11,661,943 $ (133,135 ) $ 34,662,215 $ (1,333,474 ) $ 46,324,158 $ (1,466,609 ) Less Than 12 Months 12 Months or Longer Total As of December 31, 2017: Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale: U.S. Government sponsored agency securities $ 3,957,340 $ (33,620 ) $ 1,974,139 $ (25,054 ) $ 5,931,479 $ (58,674 ) Mortgage-backed securities: residential 7,954,428 (70,965 ) 5,986,097 (97,943 ) 13,940,525 (168,908 ) Collateralized mortgage obligations 9,642,028 (138,243 ) 8,471,469 (207,073 ) 18,113,497 (345,316 ) Other securities 2,485,680 (32,818 ) — — 2,485,680 (32,818 ) Total available for sale $ 24,039,476 $ (275,646 ) $ 16,431,705 $ (330,070 ) $ 40,471,181 $ (605,716 ) The Company believes that the unrealized losses are temporary, arising mainly from fluctuations in interest rates and do not reflect a deterioration of credit quality of the issuers. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The fair value is expected to recover as the securities approach maturity. Management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery. There were no securities pledged as collateral at September 30, 2018 or December 31, 2017. Other investments at September 30, 2018 and December 31, 2017, consisted of the following: September 30, 2018 December 31, 2017 FHLB stock $ 4,581,700 $ 4,096,500 PCBB stock 190,000 190,000 Mutual fund - CRA qualified 2,449,180 — Total other investments $ 7,220,880 $ 4,286,500 Effective January 2018, the Company adopted ASU 2016-01 and |
Loans
Loans | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Loans | Note 4. Loans The composition of the loan portfolio was as follows at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Real estate: Commercial real estate $ 489,828,043 $ 420,759,900 SBA loans—real estate 121,833,439 106,924,278 Total real estate 611,661,482 527,684,178 SBA loans—non-real estate 10,671,293 8,634,879 Commercial and industrial 104,301,404 103,681,574 Home mortgage 120,261,899 104,067,756 Consumer 3,122,169 3,955,514 Gross loans receivable 850,018,247 748,023,901 Allowance for loan losses (9,550,768 ) (9,139,488 ) Loans receivable, net $ 840,467,479 $ 738,884,413 No loans were outstanding to related parties as of September 30, 2018. The Company had $10,768 in loans to principal officers, directors, and their affiliates at December 31, 2017. The activity in the allowance for loan losses for the three and nine months ended September 30, 2018 and 2017 was as follows: SBA Commercial SBA Loans Loans Non- Commercial Home Real Estate Real Estate Real Estate and Industrial Mortgage Consumer Total Three months ended September 30, 2018: Beginning balance $ 4,804,469 $ 977,635 $ 535,929 $ 1,877,197 $ 1,489,081 $ 39,120 $ 9,723,431 Provision for loan losses 271,117 29,735 88,800 42,502 12,189 (5,829 ) 438,514 Charge-offs — — (57,310 ) (565,607 ) — — (622,917 ) Recoveries — — 6,287 5,453 — — 11,740 Ending balance $ 5,075,586 $ 1,007,370 $ 573,706 $ 1,359,545 $ 1,501,270 $ 33,291 $ 9,550,768 Three months ended September 30, 2017: Beginning balance $ 4,403,116 $ 982,680 $ 450,257 $ 1,318,063 $ 1,353,379 $ 48,648 $ 8,556,143 Provision for loan losses 267,093 33,254 100,577 (51,390 ) 3,820 (75,206 ) 278,148 Charge-offs — — — — — — — Recoveries — — 1,500 — — 73,284 74,784 Ending balance $ 4,670,209 $ 1,015,934 $ 552,334 $ 1,266,673 $ 1,357,199 $ 46,726 $ 8,909,075 SBA Commercial SBA Loans Loans Non- Commercial Home Real Estate Real Estate Real Estate and Industrial Mortgage Consumer Total Nine months ended September 30, 2018: Beginning balance $ 4,801,297 $ 1,082,065 $ 537,967 $ 1,265,456 $ 1,407,742 $ 44,961 $ 9,139,488 Provision for loan losses 274,289 (74,883 ) 111,672 654,243 93,528 (11,670 ) 1,047,179 Charge-offs — — (85,233 ) (565,607 ) — — (650,840 ) Recoveries — 188 9,300 5,453 — — 14,941 Ending balance $ 5,075,586 $ 1,007,370 $ 573,706 $ 1,359,545 $ 1,501,270 $ 33,291 $ 9,550,768 Nine months ended September 30, 2017: Beginning balance $ 4,217,089 $ 892,605 $ 59,032 $ 1,322,294 $ 1,363,628 $ 55,034 $ 7,909,682 Provision for loan losses 453,120 123,329 556,424 (55,621 ) (6,429 ) (81,592 ) 989,231 Charge-offs — — (75,895 ) — — — (75,895 ) Recoveries — — 12,773 — — 73,284 86,057 Ending balance $ 4,670,209 $ 1,015,934 $ 552,334 $ 1,266,673 $ 1,357,199 $ 46,726 $ 8,909,075 The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment as of September 30, 2018 and December 31, 2017: Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment Total As of September 30, 2018: Allowance for loan losses: Commercial real estate $ — $ 5,075,586 $ 5,075,586 SBA loans—real estate — 1,007,370 1,007,370 SBA loans—non-real estate 433,828 139,878 573,706 Commercial and industrial 345,429 1,014,116 1,359,545 Home mortgage — 1,501,270 1,501,270 Consumer — 33,291 33,291 Total $ 779,257 $ 8,771,511 $ 9,550,768 Loans: Commercial real estate $ — $ 491,023,849 $ 491,023,849 SBA loans—real estate 133,674 122,284,378 122,418,052 SBA loans—non-real estate 433,828 10,247,054 10,680,882 Commercial and industrial 1,093,953 103,482,277 104,576,230 Home mortgage — 120,746,233 120,746,233 Consumer — 3,133,834 3,133,834 Total $ 1,661,455 $ 850,917,625 $ 852,579,080 As of December 31, 2017: Allowance for loan losses: Commercial real estate $ — $ 4,801,297 $ 4,801,297 SBA loans—real estate — 1,082,065 1,082,065 SBA loans—non-real estate — 537,967 537,967 Commercial and industrial 353,985 911,471 1,265,456 Home mortgage — 1,407,742 1,407,742 Consumer — 44,961 44,961 Total $ 353,985 $ 8,785,503 $ 9,139,488 Loans: Commercial real estate $ — $ 421,811,734 $ 421,811,734 SBA loans—real estate — 107,427,788 107,427,788 SBA loans—non-real estate — 8,655,808 8,655,808 Commercial and industrial 353,985 103,601,098 103,955,083 Home mortgage 241,164 104,239,551 104,480,715 Consumer 20,763 3,946,491 3,967,254 Total $ 615,912 $ 749,682,470 $ 750,298,382 The following table presents information related to impaired loans by class of loans as of and for the three and nine months ended September 30, 2018 and 2017. The difference between the unpaid principal balance (net of partial charge-offs) and the recorded investment in the loans is not considered to be material. The difference between interest income recognized and cash basis interest recognized was immaterial. Average Interest Recorded Allowance Recorded Income Investment Allocated Investment Recognized As of and for the three months ended September 30, 2018: With no related allowance recorded: SBA loans—real estate $ 133,674 $ — $ 137,664 $ — Commercial and industrial 748,524 — 748,805 11,498 With an allowance recorded: SBA loans—non-real estate 433,828 433,828 433,839 — Commercial and industrial 345,429 345,429 348,225 4,883 Total $ 1,661,455 $ 779,257 $ 1,668,533 $ 16,381 As of and for the three months ended September 30, 2017: With no related allowance recorded: Home mortgage $ — $ — $ — $ — Consumer — — — — With an allowance recorded: SBA loans—non-real estate 486,170 486,170 116,798 6,696 Commercial and industrial 357,206 357,206 358,781 4,357 Total $ 843,376 $ 843,376 $ 475,579 $ 11,053 Average Interest Recorded Allowance Recorded Income Investment Allocated Investment Recognized As of and for the nine months ended September 30, 2018: With no related allowance recorded: SBA loans—real estate $ 133,674 $ — $ 136,740 $ — Commercial and industrial 748,524 — 748,946 32,833 With an allowance recorded: SBA loans—non-real estate 433,828 433,828 442,953 — Commercial and industrial 345,429 345,429 349,707 13,996 Total $ 1,661,455 $ 779,257 $ 1,678,346 $ 46,829 As of and for the nine months ended September 30, 2017: With no related allowance recorded: Home mortgage $ — $ — $ — $ — Consumer — — — — With an allowance recorded: SBA loans—non-real estate 486,170 486,170 118,092 19,311 Commercial and industrial 357,206 357,206 362,263 12,441 Total $ 843,376 $ 843,376 $ 480,355 $ 31,752 The following table presents the recorded investment in nonaccrual loans and loans past due greater than 90 days still accruing interest by class of loans as of September 30, and December 31, 2017: Nonaccrual Loans >90 Days Past Due & Still Accruing Total As of September 30, 2018: SBA loans—real estate $ 534,697 $ — $ 534,697 SBA loans—non-real estate 353,651 — 353,651 Total $ 888,348 $ — $ 888,348 As of December 31, 2017: Home mortgage $ 662,365 $ — $ 662,365 Consumer 20,763 — 20,763 Total $ 683,128 $ — $ 683,128 Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The following table represents the aging of the recorded investment in past due loans as of September 30, 2018 and December 31, 2017: 30-59 Days Past Due 60-89 Days Past Due > 90 Days Past Due Total Past Due Loans Not Past Due Total As of September 30, 2018: Commercial real estate $ — $ — $ — $ — $ 491,023,849 $ 491,023,849 SBA—real estate — — — — 122,418,052 122,418,052 SBA—non-real estate — — 288,365 288,365 10,392,517 10,680,882 Commercial and industrial 748,524 — — 748,524 103,827,706 104,576,230 Home mortgage 258,813 — — 258,813 120,487,420 120,746,233 Consumer — — — — 3,133,834 3,133,834 $ 1,007,337 $ — $ 288,365 $ 1,295,702 $ 851,283,378 $ 852,579,080 As of December 31, 2017: Commercial real estate $ — $ — $ — $ — $ 421,811,734 $ 421,811,734 SBA—real estate 139,806 — — 139,806 107,287,982 107,427,788 SBA—non-real estate 61,611 — — 61,611 8,594,197 8,655,808 Commercial and industrial — — — — 103,955,083 103,955,083 Home mortgage — — 662,365 662,365 103,818,350 104,480,715 Consumer — — — — 3,967,254 3,967,254 $ 201,417 $ — $ 662,365 $ 863,782 $ 749,434,600 $ 750,298,382 Troubled Debt Restructurings Modifications made were primarily extensions of existing payment modifications on loans previously identified as troubled debt restructurings. There were no new loans identified as trouble debt restructurings during the three and nine months ended September 30, 2018 or during the year ended December 31, 2017. There were no payment defaults during the three and nine months ended September 30, 2018 or during the year ended December 31, 2017 of loans that had been modified as troubled debt restructurings within the previous twelve months. Credit Quality Indicators Special Mention—Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard—Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful—Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans. As of September 30, 2018 and December 31, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: Pass Special Mention Substandard Doubtful Total As of September 30, 2018: Commercial real estate $ 491,023,849 $ — $ — $ — $ 491,023,849 SBA loans—real estate 120,800,876 311,034 1,306,142 — 122,418,052 SBA loans—non-real estate 10,592,099 16,692 72,091 — 10,680,882 Commercial and industrial 102,989,462 — 1,586,768 — 104,576,230 Home mortgage 120,746,233 — — — 120,746,233 Consumer 3,133,834 — — — 3,133,834 $ 849,286,353 $ 327,726 $ 2,965,001 $ — $ 852,579,080 As of December 31, 2017: Commercial real estate $ 421,811,734 $ — $ — $ — $ 421,811,734 SBA loans—real estate 106,405,966 — 1,021,822 — 107,427,788 SBA loans—non-real estate 8,594,375 32,702 28,731 — 8,655,808 Commercial and industrial 103,601,098 — 353,985 — 103,955,083 Home mortgage 103,818,350 — 662,365 — 104,480,715 Consumer 3,946,491 — 20,763 — 3,967,254 $ 748,178,014 $ 32,702 $ 2,087,666 $ — $ 750,298,382 |
Premises and Equipment
Premises and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Premises and Equipment | Note 5. Premises and equipment The Company’s premises and equipment consisted of the following at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Leasehold improvements $ 5,502,369 $ 5,061,520 Furniture and fixtures 2,780,563 2,492,623 Equipment and others 1,981,034 1,677,175 Total cost 10,263,966 9,231,318 Accumulated depreciation (5,506,487 ) (4,750,526 ) Net book value $ 4,757,479 $ 4,480,792 Total depreciation expense included in occupancy and equipment expenses was $274,391, and $249,099 for the three months ended September 30, 2018 and 2017, and $762,383 and $766,848 for the nine months ended September 30, 2018 and 2017, respectively. |
Servicing Assets
Servicing Assets | 9 Months Ended |
Sep. 30, 2018 | |
Servicing Asset [Abstract] | |
Servicing Assets | Note 6. Servicing Assets Activity for loan servicing assets during the three and nine months ended September 30, 2018 and 2017 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Beginning balance $ 6,993,723 $ 6,964,002 $ 6,771,097 $ 6,782,555 Additions 588,267 451,349 1,620,543 1,405,399 Amortized to expense (484,854 ) (458,719 ) (1,294,504 ) (1,231,322 ) Ending balance $ 7,097,136 $ 6,956,632 $ 7,097,136 $ 6,956,632 There was no valuation allowance recorded against the carrying value of the servicing assets as of September 30, 2018 or 2017. The fair value of the servicing assets was $8,570,568 at September 30, 2018, which was determined using discount rates ranging from 4.71% to 10.96% and prepayment speeds ranging from 11.4% to 13.3%, depending on the stratification of the specific assets. The fair value of the servicing assets was $8,960,353 at September 30, 2017, which was determined using discount rates ranging from 3.78% to 10.03% and prepayment speeds ranging from 10.5% to 11.0%, depending on the stratification of the specific assets. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2018 | |
Banking And Thrift [Abstract] | |
Deposits | Note 7. Deposits Time deposits that exceed the FDIC insurance limit of $250,000 at September 30, 2018 and December 31, 2017 were $157,686,977 and $108,952,059, respectively. The scheduled maturities of time deposits were as follows at September 30, 2018: September 30, 2018 2018 remaining $ 104,793,369 2019 239,867,093 2020 8,002,710 Thereafter 833,471 Total $ 353,496,643 Deposits from principal officers, directors, and their affiliates at September 30, 2018 and December 31, 2017 were $883,046 and $1,068,580, respectively. |
Borrowing Arrangements
Borrowing Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Borrowing Arrangements | Note 8. Borrowing arrangements As of September 30, 2018, the Company had no The Company had available borrowings from the following institutions as of September 30, 2018: September 30, 2018 Federal Home Loan Bank—San Francisco $ 195,836,500 Federal Reserve Bank 107,677,732 Pacific Coast Bankers Bank 8,000,000 Zions Bank 5,500,000 Total $ 317,014,232 The Company has pledged approximately $716,399,000 of loans as collateral for these lines of credit as of September 30, 2018. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes The Company’s income tax expense was $1.1 million and $1.7 million for the three months ended September 30, 2018 and 2017, and $3.8 million and $4.7 million for the nine months ended September 30, 2018 and 2017, respectively. The effective income tax rate was 24.7 percent and 38.6 percent for the three months ended September 30, 2018 and 2017, and 26.5 percent and 39.1 percent for the nine months ended September 30, 2018 and 2017, respectively. The significant decrease in the effective tax rate for periods of 2018 was due to the enactment of H.R.1, commonly known as the Tax Cuts and Jobs Act, on December 22, 2017. The Company is subject to U.S. Federal income tax as well as various state taxing jurisdictions. The Company is no longer subject to examination by Federal taxing authorities for tax years prior to 2014 and for state taxing authorities for tax years prior to 2013. There were no significant unrealized tax benefits recorded as of September 30, 2018 and 2017, and the Company does not expect any significant increase in unrealized tax benefits in the next twelve months. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies Lease Commitments 2018 remaining $ 426,502 2019 1,882,984 2020 1,973,590 2021 2,024,599 2022 2,019,572 Thereafter 5,146,396 Total $ 13,473,643 Off-Balance-Sheet Credit Risk The Company evaluates the creditworthiness of each customer. Collateral, if deemed necessary by the Company upon the extension of credit, is obtained based on management’s evaluation of the borrower. Collateral for commercial and industrial loans may vary, but may include securities, accounts receivable, inventory, property, plant and equipment, and income producing commercial or other properties. The following table shows the distribution of undisbursed loan commitments as of the dates indicated: September 30, 2018 December 31, 2017 Commitments to extend credit $ 63,461,000 $ 60,748,000 Standby letter of credit 1,952,000 1,627,000 Commercial letter of credit 1,407,000 1,608,000 Total undisbursed loan commitments $ 66,820,000 $ 63,983,000 The majority of these off-balance sheet commitments have a variable interest rate. Management does not anticipate any material losses as a result of these transactions. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | Note 11. Stock-based Compensation The Company has two stock-based compensation plans currently in effect as of September 30, 2018, as described further below. Total compensation cost that has been charged against earnings for these plans was $166,572 and $28,395 in the three months ended September 30, 2018 and 2017, and $606,472 2005 Plan The options, when granted, vest either immediately or ratably over five years from the date of the grant and expire after ten years if not exercised. There were no stock options granted under the 2005 Plan during the nine months ended September 30, 2018 or 2017. A summary of the transactions under the 2005 Plan for the nine months ended September 30, 2018 is as follows: Weighted Number of Average Aggregate Options Exercise Intrinsic Outstanding Price Value Outstanding, as of January 1, 2018 335,000 $ 3.99 Options granted — — Options exercised (60,000 ) 3.25 Options forfeited — — Options expired — — Outstanding, as of September 30, 2018 275,000 3.90 $ 2,116,950 Fully vested and expected to vest 272,000 3.86 $ 2,104,340 Vested 263,000 $ 3.74 $ 2,066,510 Information related to the 2005 Plan for the periods indicated follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Intrinsic value of options exercised $ 234,410 $ — $ 486,860 $ 166,950 Cash received from option exercises 118,750 — 195,000 101,550 Tax benefit realized from option exercised — — — — There were no shares available for grant under the 2005 Plan as of September 30, 2018. The weighted average remaining contractual term of stock options outstanding under the 2005 Plan at September 30, 2018 was 2.84 years. The weighted average remaining contractual term of stock options that were exercisable at September 30, 2018 was 2.73 years. As of September 30, 2018, the Company had approximately $3,058 of unrecognized compensation costs related to unvested stock options under the 2005 Plan. The Company expects to recognize these costs over a weighted average period of 0.13 year. 2010 Plan The exercise prices of stock options granted under the plan may not be less than 100 percent of the fair value of the Company’s stock at the date of grant. The options, when granted, vest ratably over five years from the date of the grant and expire after ten years if not exercised. There were no stock options granted under the 2010 Plan during the nine months ended September 30, 2018 or 2017. Restricted stock awards issued under the 2010 Plan may or may not be subject to vesting provisions. Awards which were granted in the nine months ended September 30, 2018 vest at the end of three years from the date of the grant. No awards were granted in the nine months ended September 30, 2017. Owners of the restricted stock awards shall have all of the rights of a shareholder including the right to vote the shares and to all dividends (cash or stock). Compensation expense related to restricted stock awards will be recognized over the vesting period of the awards based on the fair value of the Company’s common stock at the issue date. A summary of stock options outstandings under the 2010 Plan for the nine months ended September 30, 2018 is as follows: Weighted Number of Average Aggregate Options Exercise Intrinsic Outstanding Price Value Outstanding, as of January 1, 2018 795,000 $ 4.22 Options granted — — Options exercised (105,000 ) 3.04 Options forfeited — — Options expired — — Outstanding, as of September 30, 2018 690,000 4.40 $ 4,969,400 Fully vested and expected to vest 667,500 4.28 $ 4,888,400 Vested 600,000 $ 3.86 $ 4,645,400 Information related to stock options exercised under the 2010 Plan for the periods indicated follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Intrinsic value of options exercised $ — $ — $ 876,050 $ 370,000 Cash received from option exercises — — 319,050 228,000 Tax benefit realized from option exercised — — 159,525 121,609 The weighted average remaining contractual term of stock options outstanding under the 2010 Plan at September 30, 2018 was 3.01 years. The weighted average remaining contractual term of stock options that were exercisable at September 30, 2018 was 2.63 years. A summary of the changes in the Company’s non-vested restricted stock awards under the 2010 Plan for the nine months ended September 30, 2018 is as follows: Shares Issued Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested, as of January 1, 2018 453,500 $ 5.95 Awards granted 148,000 12.71 Awards vested (141,500 ) 5.91 Awards forfeited (15,000 ) 5.75 Non-vested, as of September 30, 2018 445,000 $ 8.22 $ 5,162,000 Information related to non-vested restricted stock awards under the 2010 Plan for the periods indicated follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Tax benefit realized from awards vested $ 272,133 $ 123,406 $ 285,289 $ 211,753 There were 85,605 shares available for grant under the 2010 Plan as of September 30, 2018 (in either stock options or restricted stock awards). As of September 30, 2018, the Company had approximately $3,490,037 of unrecognized compensation cost related to unvested stock options and restricted stock awards under the 2010 Plan. The Company expects to recognize these costs over a weighted average period of 1.96 years. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Note 12. Revenue Recognition Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company’s revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans, letters of credit, and investment securities, as well as revenue related to mortgage servicing activities and revenue on bank owned life insurance, as these activities are subject to other GAAP discussed elsewhere within the disclosures. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC 606, which are presented in the Company’s income statements as components of noninterest income are as follows: Service charges on deposits Wire transfer fee income: Other revenue streams that are recorded in other income in noninterest income include revenue generated from letters of credit and income on bank owned life insurance. These revenue streams are either not material or out of scope of ASC 606. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 13. Fair Value of Financial Instruments Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1—Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate fair value: Securities Available for Sale Impaired Loans Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the credit department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Assets and liabilities measured at fair value on a recurring basis at September 30 2018 and December 31, 2017 are summarized below: Fair Value Measuring Using Quoted Significant Other Significant Prices in Observable Unobservable Total Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2018 : U.S. Government sponsored agency securities $ 6,866,929 $ — $ 6,866,929 $ — Mortgage-backed securities - residential 14,713,129 — 14,713,129 — Collateralized mortgage obligations 24,744,100 — 24,744,100 — Other investments: Mutual fund - CRA qualified 2,449,180 2,449,180 — — As of December 31, 2017 : U.S. Government sponsored agency securities $ 6,932,008 $ — $ 6,932,008 $ — Mortgage-backed securities - residential 13,940,525 — 13,940,525 — Collateralized mortgage obligations 18,113,498 — 18,113,498 — Other investments: Mutual fund - CRA qualified 2,485,680 2,485,680 — — There were no transfers between level 1 and level 2 in the nine months ended September 30, 2018 or 2017. There were no assets or liabilities measured at fair value on a non-recurring basis at September 30, 2018 or 2017. Financial Instruments As of September 30, 2018: Carrying Amount Level 1 Level 2 Level 3 Value Financial Assets: Cash and cash equivalents $ 95,786,737 $ 95,786,737 $ — $ — $ 95,786,737 Loans held for sale 3,253,500 — 3,522,564 — 3,522,564 Loans receivable, net 840,467,479 — — 835,844,908 835,844,908 Accrued interest receivable 2,782,502 456 221,214 2,560,832 2,782,502 Other investments: FHLB and PCBB stock 4,771,700 N/A N/A N/A N/A Financial Liabilities: Deposit $ 896,890,701 $ — $ 896,183,708 $ — $ 896,183,708 Accrued interest payable 1,195,818 — 1,195,818 — 1,195,818 The carrying amounts and estimated fair values of financial instruments not carried at fair value at December 31, 2017 are as follows: As of December 31, 2017: Carrying Amount Level 1 Level 2 Level 3 Value Financial Assets: Cash and cash equivalents $ 63,249,952 $ 63,249,952 $ — $ — $ 63,249,952 Loans held for sale 15,739,305 — 17,203,060 — 17,203,060 Loans receivable, net 738,884,413 — — 731,436,572 731,436,572 Accrued interest receivable 2,463,486 — 189,005 2,274,481 2,463,486 Other investments: FHLB and PCBB stock 4,286,500 N/A N/A N/A N/A Financial Liabilities: Deposit $ 773,306,014 $ — $ 773,071,521 $ — $ 773,071,521 FHLB Advances 25,000,000 — 25,000,000 — 25,000,000 Accrued interest payable 423,239 — 423,239 — 423,239 The methods and assumptions, not previously presented, used to estimate fair value are described as follows: (a) Cash and Cash equivalents The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1. (b) Loans Held for Sale The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification. (c) Loans Receivable, Net Fair values of loans, excluding loans held for sale, are based on the exit price notion set forth by ASU 2016-01 effective January 1, 2018 and estimated using discounted cash flow analyses. The estimation of fair values of loans results in a Level 3 classification as it requires various assumptions and considerable judgement to incorporate factors relevant when selling loans to market participants, such as funding costs, return requirements of likely buyers and performance expectations of the loans given the current market environment and quality of loans. Estimated fair value of loans carried at cost at December 31, 2017 were based on an entry price notion. (d) Other Investments Fair value of CRA qualified mutual fund is readily determinable using quoted prices and is classified as Level 1. It is not practical to determine the fair value of FHLB and PCBB stock due to restrictions placed on their transferability. (e) Deposits The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. (f) Federal Home Loan Bank Advances The fair values of Federal Home Loan Bank Advances are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements, resulting in a Level 2 classification. (g) Accrued Interest Receivable/Payable The carrying amounts of accrued interest approximate fair value and are classified within the same fair value hierarchy level as the related asset or liability. (h) Off-balance Sheet Instruments Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material. |
Regulatory Capital Matters
Regulatory Capital Matters | 9 Months Ended |
Sep. 30, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Regulatory Capital Matters | Note 14. Regulatory Capital Matters Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective for the Company on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is being phased in from 0.0% for 2015 to 2.50% by 2019. The capital conservation buffers for 2016, 2017 and 2018 are 0.625%, 1.25% and 1.875%, respectively. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of September 30, 2018 and December 31, 2017, the Company and Bank meet all capital adequacy requirements to which they are subject. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At December 31, 2017 and 2016, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category. Actual and required capital amounts (in thousands) and ratios, exclusive of the capital conservation buffer, are presented below at September 30, 2018 and December 31, 2017: Required for Minimum Capital Adequacy To be Considered Actual Purposes "Well Capitalized" (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of September 30, 2018: Total capital (to risk-weighted assets) Consolidated $ 135,200 16.16 % $ 66,937 8.00 % N/A N/A Bank 135,109 16.15 % 66,930 8.00 % 83,662 10.00 % Tier 1 capital (to risk-weighted assets) Consolidated 125,586 15.01 % 50,203 6.00 % N/A N/A Bank 125,495 15.00 % 50,197 6.00 % 66,930 8.00 % Common equity Tier 1 capital (to risk-weighted assets) Consolidated 125,586 15.01 % 37,652 4.50 % N/A N/A Bank 125,495 15.00 % 37,648 4.50 % 54,380 6.50 % Tier 1 capital (to average assets) Consolidated 125,586 12.77 % 39,336 4.00 % N/A N/A Bank 125,495 12.76 % 39,332 4.00 % 49,165 5.00 % Required for Minimum Capital Adequacy To be Considered Actual Purposes "Well Capitalized" (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2017: Total capital (to risk-weighted assets) Consolidated $ 100,713 13.49 % $ 59,729 8.00 % N/A N/A Bank 100,648 13.48 % 59,726 8.00 % 74,658 10.00 % Tier 1 capital (to risk-weighted assets) Consolidated 91,510 12.26 % 44,797 6.00 % N/A N/A Bank 91,445 12.25 % 44,795 6.00 % 59,726 8.00 % Common equity Tier 1 capital (to risk-weighted assets) Consolidated 91,510 12.26 % 33,597 4.50 % N/A N/A Bank 91,445 12.25 % 33,596 4.50 % 48,528 6.50 % Tier 1 capital (to average assets) Consolidated 91,510 10.46 % 35,009 4.00 % N/A N/A Bank 91,445 10.45 % 35,007 4.00 % 43,759 5.00 % |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 15. Earnings per Share The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common shares are allocated between common shares and participating securities. The Company’s restricted stock awards are considered participating securities as the unvested awards have non-forfeitable rights to dividends, paid or unpaid, on unvested awards. The factors used in the earnings per share computation follow: Three Months Ended September 30, 2018 2017 Basic Net income $ 3,481,463 $ 2,727,817 Undistributed earnings allocated to participating securities (106,918 ) (98,721 ) Net income allocated to common shares 3,374,545 2,629,096 Weighted average common shares outstanding 15,714,226 13,132,237 Basic earnings per common share $ 0.22 $ 0.20 Diluted Net income allocated to common shares $ 3,374,545 $ 2,629,096 Weighted average common shares outstanding for basic earnings per common share 15,714,226 13,132,237 Add: Dilutive effects of assumed exercises of stock options 520,700 427,903 Average shares and dilutive potential common shares 16,234,926 13,560,140 Diluted earnings per common share $ 0.21 $ 0.19 Nine Months Ended September 30, 2018 2017 Basic Net income $ 10,488,765 $ 7,336,572 Undistributed earnings allocated to participating securities (320,191 ) (306,484 ) Net income allocated to common shares 10,168,574 7,030,088 Weighted average common shares outstanding 14,870,232 13,023,145 Basic earnings per common share $ 0.68 $ 0.54 Diluted Net income allocated to common shares $ 10,168,574 $ 7,030,088 Weighted average common shares outstanding for basic earnings per common share 14,870,232 13,023,145 Add: Dilutive effects of assumed exercises of stock options 506,750 409,601 Average shares and dilutive potential common shares 15,376,982 13,432,746 Diluted earnings per common share $ 0.66 $ 0.52 No share |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2017, included in the Companys’ registration statement on Form S-1 (333-223444) filed with the SEC on March 5, 2018 and declared effective on March 27, 2018. |
Use of Estimates | Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. |
Concentration of Risk | Concentration of Risk: Most of the Company’s customers are located within Los Angeles County and the surrounding area. The concentration of loans originated in this area may subject the Company to the risk of adverse impacts of economic, regulatory or other developments that could occur in Southern California. The Company has significant concentration in commercial real estate loans. The Company obtains what it believes to be sufficient collateral to secure potential losses. The extent and value of the collateral obtained varies based upon the details underlying each loan agreement. |
Cash Flows | Cash Flows: Cash and cash equivalents include cash, deposits with other financial institutions with original maturities less than 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions and Federal Home Loan Bank advances transactions. |
Securities | Securities: Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. |
Other investments | Other investments: Other investments includes the followings : (i) Federal Home Loan Bank (“FHLB”) Stock - the Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income; (ii) Pacific Coast Bankers Bank (“PCBB”) Stock - the Bank is a member of PCBB. PCBB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income; and (iii) the Company’s investment in a mutual fund to satisfy the Company’s requirements under the Community Reinvestment Act (“CRA”). CRA mutual fund is reported at fair value. Unrealized gains and losses are recognized in other income in the Consolidated Statements of Income and Comprehensive Income. |
Loans Held for Sale | Loans Held for Sale: Certain Small Business Administration (“SBA”) loans that may be sold prior to maturity are designated as held for sale at origination and are recorded at the lower of their cost or fair value less costs to sell, determined on an aggregate basis. A valuation allowance is established if the market value of such loans is lower than their cost, and operations are charged or credited for valuation adjustments. Origination fees on loans held for sale, net of certain costs of processing and closing the loans, are deferred until the time of sale and are included in the computation of the gain or loss from the sales of the related loans. A portion of the premium on sale of SBA loans is recognized as gains on sales of loans at the time of the sale. These loans are generally sold with servicing retained. |
Loans Receivable | Loans Receivable: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The recorded investment in loans includes accrued interest receivable, deferred loan fees and costs, and unearned income. The accrual of interest income on commercial real estate and other commercial and industrial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Consumer loans are typically charged off no later than 120 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Allowance for Loan Losses | Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that in management’s judgment should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial real estate and construction loans. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Income recognition on impaired loans materially conforms to the method the Company uses for income recognition on nonaccrual loans. Allowance for impaired loans is determined based on the present value of the estimated cash flows or on the fair value of the collateral if the loan is collateral dependent, less costs to sell. If the measured fair value is less than the recorded investment in the loan, the deficiency will be charged off against the allowance for loan losses, or alternatively, a specific allocation will be established. For consumer loans, management will generally charge off the balance if the loan is 90 days or more past due. The general component of the allowance covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent two years. For those portfolio segments that the Company does not have sufficient historical data available to track the loss migration, the loss factors are based on the actual loss history experienced by the Company over the most recent five years. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.. The following portfolio segments have been identified in the Company’s loan portfolio, and are also representative of the classes within the portfolio: commercial real estate, SBA loans—real estate, SBA loans—non-real estate, commercial and industrial, home mortgage, and consumer. The Company reviews the credit risk exposure of all its portfolio segments by internally assigned grades. The Company categorizes loans into risk grades based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For the home mortgage and consumer portfolio segments, the Company’s primary monitoring tool is reviewing past due listings to determine if the loans are performing. The determination of the allowance for loan losses is based on estimates that are particularly susceptible to changes in the economic environment and market conditions. Management believes that as of September 30, 2018 and December 31, 2017 the allowance for loan losses is adequate based on information currently available. If a deterioration in the economy of the Company’s principal market area occurs, the Company’s loan portfolios could be adversely impacted and higher charge-offs and increases in non-performing assets could result. Such an adverse impact could also require a larger allowance for loan losses. |
Servicing Assets | Servicing Assets: When SBA loans are sold with servicing retained, servicing assets are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, prepayment speeds, and default rates and losses. The Company compares the valuation model inputs and results to published industry data in order to validate the model results and assumptions. Servicing assets are subsequently measured using the amortization method which requires servicing assets to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing assets are evaluated for impairment based upon the fair value of the assets as compared to their carrying amount. Impairment is recognized through a valuation allowance to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the valuation allowance may be recorded as an increase to income. Changes in the valuation allowances are reported with other income on the income statement. The fair values of servicing rights are subject to fluctuations as a result of changes in estimated and actual prepayment speeds, default rates, and losses. Servicing fee income, which is reported on the income statement as other income, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of servicing assets is netted against loan servicing fee income. Late fees and ancillary fees related to loan servicing are not material. |
Company Owned Life Insurance | Company Owned Life Insurance: The Company has purchased life insurance policies on certain key executives. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Transfers of Financial Assets | Transfers of Financial Assets: Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Premises and Equipment | Premises and Equipment: Premises and equipment are stated at cost, less accumulated depreciation. Equipment and furnishings are depreciated over 3 to 10 years, and leasehold improvements are amortized over the lesser of the terms of the respective leases or the estimated useful lives. The straight-line method of depreciation is used for financial reporting purposes. Repairs and maintenance are charged to operating expenses as incurred. |
Other Real Estate Owned, Net | Other Real Estate Owned, Net: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when the legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through the completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at the lower of their cost or fair value less estimated costs to sell. If their fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Stock-Based Compensation | Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees based on the fair value of the awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. |
Earnings per Common Share | Earnings per Common Share: Basic and diluted earnings per share is based on the two-class method prescribed in ASC Topic 260, Earnings Per Share (ASC 260). Stock options and restricted stock awards are considered outstanding for this calculation unless unearned. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock-based compensation plans. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements. |
Income Taxes | Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. There were no interest or penalties recognized in the three and nine months ended September 30, 2018 or 2017. |
Comprehensive Income/(Loss) | Comprehensive Income/(Loss): Comprehensive income/(loss) consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, which are also recognized as separate components of shareholders’ equity, net of tax. |
Loss Contingencies | Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 13—Fair Value of Financial Instruments. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates. |
Operating Segments | Operating Segments: While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Discrete financial information is not available other than on a Company-wide basis. |
Reclassifications | Reclassifications: Some items in the prior period financial statements were reclassified to conform to the current presentation. Reclassification had no effect on prior year net income or shareholders’ equity. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: In May 2014, the Financial Accounting Standard Board (FASB) issued Accounting Standard Update (ASU) 2014-9 (ASU 2014-09), Revenue from Contracts with Customers. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer, as well as enhanced disclosure requirements. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 to fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-08 which clarified the revenue recognition implementation guidance on principal versus agent considerations and is effective during the same period as ASU 2014-09. In April 2016, the FASB issued ASU 2016-10 which clarified the revenue recognition guidance regarding the identification of performance obligations and the licensing implementation and is effective during the same period as ASU 2014-09. In May 2016, the FASB issued ASU 2016-12 which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition. ASU 2016-12 is effective during the same period as ASU 2014-09. The majority of the Company’s revenue consists of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09. The Company adopted the new standard beginning January 1, 2018. The Company completed its analysis for determining the extent ASU 2014-09 will affect its noninterest income, primarily in the area of fees and service charges on deposit accounts and trade finance activities. Based on the analysis performed, the Company did not have a material change in the timing or measurement of revenues related to noninterest income. This guidance did not have a material impact on the Company’s consolidated financial statements. See Note 12. Revenue Recognition for further details. Effective January 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). The main objective of ASU 2016-01 is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Some of the amendments in ASU 2016-01 include the following: 1) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value. For public business entities, the amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of ASU 2016-01 resulted in a transfer of $2.5 million of a mutual funds from securities available for sale to other investments on the consolidted balance sheet. However, this standard did not have a material impact on the consolidated financial statements. See Note 13 for fair value measurement disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about lease arrangements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. Based on leases outstanding at September 30, 2018, the Company does not expect this ASU to have a material impact on the income statement, but does anticipate an approximately $13 million increase in assets and liabilities once this ASU becomes effective. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The objective of ASU 2016-13 is to provide financial statement users with decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13 includes provisions that require financial assets measured at amortized cost (such as loans and held to maturity (HTM) debt securities) to be presented at the net amount expected to be collected. This will be accomplished through recognition of an estimate of all current expected credit losses. The estimate will include forecasted information for the timeframe that an entity is able to develop reasonable and supportable forecasts. This is a change from the current practice of recognizing incurred losses based on the probable initial recognition threshold under current GAAP. In addition, credit losses on available for sale (AFS) debt securities will be recorded through an allowance for credit losses rather than as a write-down. Under ASU 2016-13, an entity will be able to record reversals of credit losses in current period income when the estimate of credit losses declines, whereas current GAAP prohibits reflecting those improvements in current period earnings. ASU 2016-13 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, and early adoption is permitted for fiscal years, including interim periods, beginning after December 15, 2018. ASU 2016-13 will be applied through a cumulative effect adjustment to retained earnings (modified-retrospective approach), except for debt securities for which an other-than-temporary impairment had been recognized before the effective date. A prospective transition approach is required for these debt securities. The Company is currently evaluating the effects of ASU 2016-13 on its financial statements and disclosures, including software solutions, data requirements and loss estimation methodologies. The company has engaged a third party advisor to develop a new expected loss model. While the effects cannot yet be quantified, the Company expects ASU 2016-13 to add complexity and costs to its current credit loss evaluation process. In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) (ASU 2017-08). ASU 2017-08 amends the amortization period for certain purchased callable debt securities held at a premium. Prior to the issuance of this guidance, premiums were amortized as an adjustment of yield over the contractual life of the instrument. ASU 2017-08 requires premiums on purchased callable debt securities that have explicit, noncontingent call features that are callable at fixed prices to be amortized to the earliest call date. There are no accounting changes for securities held at a discount. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018, and early adoption is permitted. ASU 2017-08 will be applied through a cumulative effect adjustment through equity (modified-retrospective approach). The Company does not expect this ASU to have a material impact on its financial statements and disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting (ASU 2017-09). ASU 2017-09 clarifies when changes to the terms and conditions of share-based payment awards must be treated as modifications. Specifically, the new guidance permits companies to make certain changes to awards without accounting for them as modifications. ASU 2017-09 is effective for annual periods beginning after December 31, 2017 and will be applied prospectively to an award modified after the effective date. There have been no changes to the terms and conditions of share-based payment awards, and as a result the adoption of this standard did not have a material effect on the Company’s operating results or financial condition. In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU permits a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Tax Act. The Company did not elect to apply the provision of ASU 2018-02. |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Amortized Cost, Fair Value, and the Corresponding Amounts of Gross Unrealized Gains and Losses | The following table summarizes the amortized cost, fair value, and the corresponding amounts of gross unrealized gains and losses for available for sale securities at September 30, 2018 and December 31, 2017: As of September 30, 2018: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: U.S. Government sponsored agency securities $ 6,992,706 $ — $ (125,777 ) $ 6,866,929 Mortgage-backed securities: residential 15,161,985 — (448,856 ) 14,713,129 Collateralized mortgage obligations 25,636,076 — (891,976 ) 24,744,100 Total available for sale $ 47,790,767 $ — $ (1,466,609 ) $ 46,324,158 As of December 31, 2017: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: U.S. Government sponsored agency securities $ 6,988,681 $ 2,001 $ (58,674 ) $ 6,932,008 Mortgage-backed securities: residential 14,109,433 — (168,908 ) 13,940,525 Collateralized mortgage obligations 18,458,814 — (345,316 ) 18,113,498 Other securities 2,518,498 — (32,818 ) 2,485,680 Total available for sale $ 42,075,426 $ 2,001 $ (605,716 ) $ 41,471,711 |
Schedule of Amortized Cost and Estimated Fair Value of Securities Available for Sale | There were no sales of securities available for sale in the three or nine months ended September 30, 2018 or 2017. The amortized cost and estimated fair value of securities available for sale at September 30, 2018, by contractual maturity, are shown below. Securities without a contractual maturity are shown separately. As of September 30, 2018: Amortized Cost Fair Value Available for sale: Within one year $ 999,656 $ 990,105 One to five years 5,993,050 5,876,824 Mortgage-backed securities: residential 15,161,985 14,713,129 Collateralized mortgage obligations 25,636,076 24,744,100 Total available for sale $ 47,790,767 $ 46,324,158 |
Schedule of Securities With Unrealized Losses | The following table summarizes securities with unrealized losses at September 30, 2018 and December 31, 2017, aggregated by length of time in a continuous unrealized loss position: Less Than 12 Months 12 Months or Longer Total As of September 30, 2018: Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale: U.S. Government sponsored agency securities $ 1,972,553 $ (21,048 ) $ 4,894,376 $ (104,729 ) $ 6,866,929 $ (125,777 ) Mortgage-backed securities: residential — — 14,713,129 (448,856 ) 14,713,129 (448,856 ) Collateralized mortgage obligations 9,689,390 (112,087 ) 15,054,710 (779,889 ) 24,744,100 (891,976 ) Total available for sale $ 11,661,943 $ (133,135 ) $ 34,662,215 $ (1,333,474 ) $ 46,324,158 $ (1,466,609 ) Less Than 12 Months 12 Months or Longer Total As of December 31, 2017: Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale: U.S. Government sponsored agency securities $ 3,957,340 $ (33,620 ) $ 1,974,139 $ (25,054 ) $ 5,931,479 $ (58,674 ) Mortgage-backed securities: residential 7,954,428 (70,965 ) 5,986,097 (97,943 ) 13,940,525 (168,908 ) Collateralized mortgage obligations 9,642,028 (138,243 ) 8,471,469 (207,073 ) 18,113,497 (345,316 ) Other securities 2,485,680 (32,818 ) — — 2,485,680 (32,818 ) Total available for sale $ 24,039,476 $ (275,646 ) $ 16,431,705 $ (330,070 ) $ 40,471,181 $ (605,716 ) |
Schedule of Other Investments | Other investments at September 30, 2018 and December 31, 2017, consisted of the following: September 30, 2018 December 31, 2017 FHLB stock $ 4,581,700 $ 4,096,500 PCBB stock 190,000 190,000 Mutual fund - CRA qualified 2,449,180 — Total other investments $ 7,220,880 $ 4,286,500 |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Composition of Loan Portfolio | The composition of the loan portfolio was as follows at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Real estate: Commercial real estate $ 489,828,043 $ 420,759,900 SBA loans—real estate 121,833,439 106,924,278 Total real estate 611,661,482 527,684,178 SBA loans—non-real estate 10,671,293 8,634,879 Commercial and industrial 104,301,404 103,681,574 Home mortgage 120,261,899 104,067,756 Consumer 3,122,169 3,955,514 Gross loans receivable 850,018,247 748,023,901 Allowance for loan losses (9,550,768 ) (9,139,488 ) Loans receivable, net $ 840,467,479 $ 738,884,413 |
Schedule of Activity in Allowance for Loan Losses | The activity in the allowance for loan losses for the three and nine months ended September 30, 2018 and 2017 was as follows: SBA Commercial SBA Loans Loans Non- Commercial Home Real Estate Real Estate Real Estate and Industrial Mortgage Consumer Total Three months ended September 30, 2018: Beginning balance $ 4,804,469 $ 977,635 $ 535,929 $ 1,877,197 $ 1,489,081 $ 39,120 $ 9,723,431 Provision for loan losses 271,117 29,735 88,800 42,502 12,189 (5,829 ) 438,514 Charge-offs — — (57,310 ) (565,607 ) — — (622,917 ) Recoveries — — 6,287 5,453 — — 11,740 Ending balance $ 5,075,586 $ 1,007,370 $ 573,706 $ 1,359,545 $ 1,501,270 $ 33,291 $ 9,550,768 Three months ended September 30, 2017: Beginning balance $ 4,403,116 $ 982,680 $ 450,257 $ 1,318,063 $ 1,353,379 $ 48,648 $ 8,556,143 Provision for loan losses 267,093 33,254 100,577 (51,390 ) 3,820 (75,206 ) 278,148 Charge-offs — — — — — — — Recoveries — — 1,500 — — 73,284 74,784 Ending balance $ 4,670,209 $ 1,015,934 $ 552,334 $ 1,266,673 $ 1,357,199 $ 46,726 $ 8,909,075 SBA Commercial SBA Loans Loans Non- Commercial Home Real Estate Real Estate Real Estate and Industrial Mortgage Consumer Total Nine months ended September 30, 2018: Beginning balance $ 4,801,297 $ 1,082,065 $ 537,967 $ 1,265,456 $ 1,407,742 $ 44,961 $ 9,139,488 Provision for loan losses 274,289 (74,883 ) 111,672 654,243 93,528 (11,670 ) 1,047,179 Charge-offs — — (85,233 ) (565,607 ) — — (650,840 ) Recoveries — 188 9,300 5,453 — — 14,941 Ending balance $ 5,075,586 $ 1,007,370 $ 573,706 $ 1,359,545 $ 1,501,270 $ 33,291 $ 9,550,768 Nine months ended September 30, 2017: Beginning balance $ 4,217,089 $ 892,605 $ 59,032 $ 1,322,294 $ 1,363,628 $ 55,034 $ 7,909,682 Provision for loan losses 453,120 123,329 556,424 (55,621 ) (6,429 ) (81,592 ) 989,231 Charge-offs — — (75,895 ) — — — (75,895 ) Recoveries — — 12,773 — — 73,284 86,057 Ending balance $ 4,670,209 $ 1,015,934 $ 552,334 $ 1,266,673 $ 1,357,199 $ 46,726 $ 8,909,075 |
Schedule of Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment | The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment as of September 30, 2018 and December 31, 2017: Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment Total As of September 30, 2018: Allowance for loan losses: Commercial real estate $ — $ 5,075,586 $ 5,075,586 SBA loans—real estate — 1,007,370 1,007,370 SBA loans—non-real estate 433,828 139,878 573,706 Commercial and industrial 345,429 1,014,116 1,359,545 Home mortgage — 1,501,270 1,501,270 Consumer — 33,291 33,291 Total $ 779,257 $ 8,771,511 $ 9,550,768 Loans: Commercial real estate $ — $ 491,023,849 $ 491,023,849 SBA loans—real estate 133,674 122,284,378 122,418,052 SBA loans—non-real estate 433,828 10,247,054 10,680,882 Commercial and industrial 1,093,953 103,482,277 104,576,230 Home mortgage — 120,746,233 120,746,233 Consumer — 3,133,834 3,133,834 Total $ 1,661,455 $ 850,917,625 $ 852,579,080 As of December 31, 2017: Allowance for loan losses: Commercial real estate $ — $ 4,801,297 $ 4,801,297 SBA loans—real estate — 1,082,065 1,082,065 SBA loans—non-real estate — 537,967 537,967 Commercial and industrial 353,985 911,471 1,265,456 Home mortgage — 1,407,742 1,407,742 Consumer — 44,961 44,961 Total $ 353,985 $ 8,785,503 $ 9,139,488 Loans: Commercial real estate $ — $ 421,811,734 $ 421,811,734 SBA loans—real estate — 107,427,788 107,427,788 SBA loans—non-real estate — 8,655,808 8,655,808 Commercial and industrial 353,985 103,601,098 103,955,083 Home mortgage 241,164 104,239,551 104,480,715 Consumer 20,763 3,946,491 3,967,254 Total $ 615,912 $ 749,682,470 $ 750,298,382 |
Schedule of Information Related to Impaired Loans by Class of Loans | The following table presents information related to impaired loans by class of loans as of and for the three and nine months ended September 30, 2018 and 2017. The difference between the unpaid principal balance (net of partial charge-offs) and the recorded investment in the loans is not considered to be material. The difference between interest income recognized and cash basis interest recognized was immaterial. Average Interest Recorded Allowance Recorded Income Investment Allocated Investment Recognized As of and for the three months ended September 30, 2018: With no related allowance recorded: SBA loans—real estate $ 133,674 $ — $ 137,664 $ — Commercial and industrial 748,524 — 748,805 11,498 With an allowance recorded: SBA loans—non-real estate 433,828 433,828 433,839 — Commercial and industrial 345,429 345,429 348,225 4,883 Total $ 1,661,455 $ 779,257 $ 1,668,533 $ 16,381 As of and for the three months ended September 30, 2017: With no related allowance recorded: Home mortgage $ — $ — $ — $ — Consumer — — — — With an allowance recorded: SBA loans—non-real estate 486,170 486,170 116,798 6,696 Commercial and industrial 357,206 357,206 358,781 4,357 Total $ 843,376 $ 843,376 $ 475,579 $ 11,053 Average Interest Recorded Allowance Recorded Income Investment Allocated Investment Recognized As of and for the nine months ended September 30, 2018: With no related allowance recorded: SBA loans—real estate $ 133,674 $ — $ 136,740 $ — Commercial and industrial 748,524 — 748,946 32,833 With an allowance recorded: SBA loans—non-real estate 433,828 433,828 442,953 — Commercial and industrial 345,429 345,429 349,707 13,996 Total $ 1,661,455 $ 779,257 $ 1,678,346 $ 46,829 As of and for the nine months ended September 30, 2017: With no related allowance recorded: Home mortgage $ — $ — $ — $ — Consumer — — — — With an allowance recorded: SBA loans—non-real estate 486,170 486,170 118,092 19,311 Commercial and industrial 357,206 357,206 362,263 12,441 Total $ 843,376 $ 843,376 $ 480,355 $ 31,752 |
Schedule of Recorded Investment in Nonaccrual Loans and Loans Past Due Greater Than 90 Days Still Accruing Interest by Class of Loans | The following table presents the recorded investment in nonaccrual loans and loans past due greater than 90 days still accruing interest by class of loans as of September 30, and December 31, 2017: Nonaccrual Loans >90 Days Past Due & Still Accruing Total As of September 30, 2018: SBA loans—real estate $ 534,697 $ — $ 534,697 SBA loans—non-real estate 353,651 — 353,651 Total $ 888,348 $ — $ 888,348 As of December 31, 2017: Home mortgage $ 662,365 $ — $ 662,365 Consumer 20,763 — 20,763 Total $ 683,128 $ — $ 683,128 |
Schedule of Aging of Recorded Investment in Past Due Loans | The following table represents the aging of the recorded investment in past due loans as of September 30, 2018 and December 31, 2017: 30-59 Days Past Due 60-89 Days Past Due > 90 Days Past Due Total Past Due Loans Not Past Due Total As of September 30, 2018: Commercial real estate $ — $ — $ — $ — $ 491,023,849 $ 491,023,849 SBA—real estate — — — — 122,418,052 122,418,052 SBA—non-real estate — — 288,365 288,365 10,392,517 10,680,882 Commercial and industrial 748,524 — — 748,524 103,827,706 104,576,230 Home mortgage 258,813 — — 258,813 120,487,420 120,746,233 Consumer — — — — 3,133,834 3,133,834 $ 1,007,337 $ — $ 288,365 $ 1,295,702 $ 851,283,378 $ 852,579,080 As of December 31, 2017: Commercial real estate $ — $ — $ — $ — $ 421,811,734 $ 421,811,734 SBA—real estate 139,806 — — 139,806 107,287,982 107,427,788 SBA—non-real estate 61,611 — — 61,611 8,594,197 8,655,808 Commercial and industrial — — — — 103,955,083 103,955,083 Home mortgage — — 662,365 662,365 103,818,350 104,480,715 Consumer — — — — 3,967,254 3,967,254 $ 201,417 $ — $ 662,365 $ 863,782 $ 749,434,600 $ 750,298,382 |
Schedule of Risk Category of Loans by Class of Loans | As of September 30, 2018 and December 31, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: Pass Special Mention Substandard Doubtful Total As of September 30, 2018: Commercial real estate $ 491,023,849 $ — $ — $ — $ 491,023,849 SBA loans—real estate 120,800,876 311,034 1,306,142 — 122,418,052 SBA loans—non-real estate 10,592,099 16,692 72,091 — 10,680,882 Commercial and industrial 102,989,462 — 1,586,768 — 104,576,230 Home mortgage 120,746,233 — — — 120,746,233 Consumer 3,133,834 — — — 3,133,834 $ 849,286,353 $ 327,726 $ 2,965,001 $ — $ 852,579,080 As of December 31, 2017: Commercial real estate $ 421,811,734 $ — $ — $ — $ 421,811,734 SBA loans—real estate 106,405,966 — 1,021,822 — 107,427,788 SBA loans—non-real estate 8,594,375 32,702 28,731 — 8,655,808 Commercial and industrial 103,601,098 — 353,985 — 103,955,083 Home mortgage 103,818,350 — 662,365 — 104,480,715 Consumer 3,946,491 — 20,763 — 3,967,254 $ 748,178,014 $ 32,702 $ 2,087,666 $ — $ 750,298,382 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Premises and Equipment | The Company’s premises and equipment consisted of the following at September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Leasehold improvements $ 5,502,369 $ 5,061,520 Furniture and fixtures 2,780,563 2,492,623 Equipment and others 1,981,034 1,677,175 Total cost 10,263,966 9,231,318 Accumulated depreciation (5,506,487 ) (4,750,526 ) Net book value $ 4,757,479 $ 4,480,792 |
Servicing Assets (Tables)
Servicing Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Servicing Asset [Abstract] | |
Schedule of Activity for Loan Servicing Assets | Activity for loan servicing assets during the three and nine months ended September 30, 2018 and 2017 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Beginning balance $ 6,993,723 $ 6,964,002 $ 6,771,097 $ 6,782,555 Additions 588,267 451,349 1,620,543 1,405,399 Amortized to expense (484,854 ) (458,719 ) (1,294,504 ) (1,231,322 ) Ending balance $ 7,097,136 $ 6,956,632 $ 7,097,136 $ 6,956,632 |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Banking And Thrift [Abstract] | |
Schedule of Maturities of Time Deposits | The scheduled maturities of time deposits were as follows at September 30, 2018: September 30, 2018 2018 remaining $ 104,793,369 2019 239,867,093 2020 8,002,710 Thereafter 833,471 Total $ 353,496,643 |
Borrowing Arrangements (Tables)
Borrowing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Borrowings Available to the Company from Institutions | The Company had available borrowings from the following institutions as of September 30, 2018: September 30, 2018 Federal Home Loan Bank—San Francisco $ 195,836,500 Federal Reserve Bank 107,677,732 Pacific Coast Bankers Bank 8,000,000 Zions Bank 5,500,000 Total $ 317,014,232 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Rent Commitments Related to Lease | Rent commitments related to the lease of the Company’s main office and branch facilities, before considering renewal options and additional lessor charges, were as follows: 2018 remaining $ 426,502 2019 1,882,984 2020 1,973,590 2021 2,024,599 2022 2,019,572 Thereafter 5,146,396 Total $ 13,473,643 |
Summary of Distribution of Undisbursed Loan Commitments | The following table shows the distribution of undisbursed loan commitments as of the dates indicated: September 30, 2018 December 31, 2017 Commitments to extend credit $ 63,461,000 $ 60,748,000 Standby letter of credit 1,952,000 1,627,000 Commercial letter of credit 1,407,000 1,608,000 Total undisbursed loan commitments $ 66,820,000 $ 63,983,000 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
2005 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Stock-based Compensation Stock Options Activity | A summary of the transactions under the 2005 Plan for the nine months ended September 30, 2018 is as follows: Weighted Number of Average Aggregate Options Exercise Intrinsic Outstanding Price Value Outstanding, as of January 1, 2018 335,000 $ 3.99 Options granted — — Options exercised (60,000 ) 3.25 Options forfeited — — Options expired — — Outstanding, as of September 30, 2018 275,000 3.90 $ 2,116,950 Fully vested and expected to vest 272,000 3.86 $ 2,104,340 Vested 263,000 $ 3.74 $ 2,066,510 |
Summary of Information Related to Stock Option Plan and Non-vested Restricted Stock Awards | Information related to the 2005 Plan for the periods indicated follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Intrinsic value of options exercised $ 234,410 $ — $ 486,860 $ 166,950 Cash received from option exercises 118,750 — 195,000 101,550 Tax benefit realized from option exercised — — — — |
2010 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Stock-based Compensation Stock Options Activity | A summary of stock options outstandings under the 2010 Plan for the nine months ended September 30, 2018 is as follows: Weighted Number of Average Aggregate Options Exercise Intrinsic Outstanding Price Value Outstanding, as of January 1, 2018 795,000 $ 4.22 Options granted — — Options exercised (105,000 ) 3.04 Options forfeited — — Options expired — — Outstanding, as of September 30, 2018 690,000 4.40 $ 4,969,400 Fully vested and expected to vest 667,500 4.28 $ 4,888,400 Vested 600,000 $ 3.86 $ 4,645,400 |
Summary of Information Related to Stock Option Plan and Non-vested Restricted Stock Awards | Information related to stock options exercised under the 2010 Plan for the periods indicated follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Intrinsic value of options exercised $ — $ — $ 876,050 $ 370,000 Cash received from option exercises — — 319,050 228,000 Tax benefit realized from option exercised — — 159,525 121,609 |
2010 Plan | Restricted Stock Awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Information Related to Stock Option Plan and Non-vested Restricted Stock Awards | Information related to non-vested restricted stock awards under the 2010 Plan for the periods indicated follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Tax benefit realized from awards vested $ 272,133 $ 123,406 $ 285,289 $ 211,753 |
Summary of Changes in Non-vested Restricted Stock Awards | A summary of the changes in the Company’s non-vested restricted stock awards under the 2010 Plan for the nine months ended September 30, 2018 is as follows: Shares Issued Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested, as of January 1, 2018 453,500 $ 5.95 Awards granted 148,000 12.71 Awards vested (141,500 ) 5.91 Awards forfeited (15,000 ) 5.75 Non-vested, as of September 30, 2018 445,000 $ 8.22 $ 5,162,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis at September 30 2018 and December 31, 2017 are summarized below: Fair Value Measuring Using Quoted Significant Other Significant Prices in Observable Unobservable Total Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2018 : U.S. Government sponsored agency securities $ 6,866,929 $ — $ 6,866,929 $ — Mortgage-backed securities - residential 14,713,129 — 14,713,129 — Collateralized mortgage obligations 24,744,100 — 24,744,100 — Other investments: Mutual fund - CRA qualified 2,449,180 2,449,180 — — As of December 31, 2017 : U.S. Government sponsored agency securities $ 6,932,008 $ — $ 6,932,008 $ — Mortgage-backed securities - residential 13,940,525 — 13,940,525 — Collateralized mortgage obligations 18,113,498 — 18,113,498 — Other investments: Mutual fund - CRA qualified 2,485,680 2,485,680 — — |
Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments Not Carried at Fair Value | Financial Instruments As of September 30, 2018: Carrying Amount Level 1 Level 2 Level 3 Value Financial Assets: Cash and cash equivalents $ 95,786,737 $ 95,786,737 $ — $ — $ 95,786,737 Loans held for sale 3,253,500 — 3,522,564 — 3,522,564 Loans receivable, net 840,467,479 — — 835,844,908 835,844,908 Accrued interest receivable 2,782,502 456 221,214 2,560,832 2,782,502 Other investments: FHLB and PCBB stock 4,771,700 N/A N/A N/A N/A Financial Liabilities: Deposit $ 896,890,701 $ — $ 896,183,708 $ — $ 896,183,708 Accrued interest payable 1,195,818 — 1,195,818 — 1,195,818 The carrying amounts and estimated fair values of financial instruments not carried at fair value at December 31, 2017 are as follows: As of December 31, 2017: Carrying Amount Level 1 Level 2 Level 3 Value Financial Assets: Cash and cash equivalents $ 63,249,952 $ 63,249,952 $ — $ — $ 63,249,952 Loans held for sale 15,739,305 — 17,203,060 — 17,203,060 Loans receivable, net 738,884,413 — — 731,436,572 731,436,572 Accrued interest receivable 2,463,486 — 189,005 2,274,481 2,463,486 Other investments: FHLB and PCBB stock 4,286,500 N/A N/A N/A N/A Financial Liabilities: Deposit $ 773,306,014 $ — $ 773,071,521 $ — $ 773,071,521 FHLB Advances 25,000,000 — 25,000,000 — 25,000,000 Accrued interest payable 423,239 — 423,239 — 423,239 |
Regulatory Capital Matters (Tab
Regulatory Capital Matters (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Summary of Actual and Required Capital Amounts and Ratios, Exclusive of Capital Conservation Buffer | Actual and required capital amounts (in thousands) and ratios, exclusive of the capital conservation buffer, are presented below at September 30, 2018 and December 31, 2017: Required for Minimum Capital Adequacy To be Considered Actual Purposes "Well Capitalized" (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of September 30, 2018: Total capital (to risk-weighted assets) Consolidated $ 135,200 16.16 % $ 66,937 8.00 % N/A N/A Bank 135,109 16.15 % 66,930 8.00 % 83,662 10.00 % Tier 1 capital (to risk-weighted assets) Consolidated 125,586 15.01 % 50,203 6.00 % N/A N/A Bank 125,495 15.00 % 50,197 6.00 % 66,930 8.00 % Common equity Tier 1 capital (to risk-weighted assets) Consolidated 125,586 15.01 % 37,652 4.50 % N/A N/A Bank 125,495 15.00 % 37,648 4.50 % 54,380 6.50 % Tier 1 capital (to average assets) Consolidated 125,586 12.77 % 39,336 4.00 % N/A N/A Bank 125,495 12.76 % 39,332 4.00 % 49,165 5.00 % Required for Minimum Capital Adequacy To be Considered Actual Purposes "Well Capitalized" (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2017: Total capital (to risk-weighted assets) Consolidated $ 100,713 13.49 % $ 59,729 8.00 % N/A N/A Bank 100,648 13.48 % 59,726 8.00 % 74,658 10.00 % Tier 1 capital (to risk-weighted assets) Consolidated 91,510 12.26 % 44,797 6.00 % N/A N/A Bank 91,445 12.25 % 44,795 6.00 % 59,726 8.00 % Common equity Tier 1 capital (to risk-weighted assets) Consolidated 91,510 12.26 % 33,597 4.50 % N/A N/A Bank 91,445 12.25 % 33,596 4.50 % 48,528 6.50 % Tier 1 capital (to average assets) Consolidated 91,510 10.46 % 35,009 4.00 % N/A N/A Bank 91,445 10.45 % 35,007 4.00 % 43,759 5.00 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The factors used in the earnings per share computation follow: Three Months Ended September 30, 2018 2017 Basic Net income $ 3,481,463 $ 2,727,817 Undistributed earnings allocated to participating securities (106,918 ) (98,721 ) Net income allocated to common shares 3,374,545 2,629,096 Weighted average common shares outstanding 15,714,226 13,132,237 Basic earnings per common share $ 0.22 $ 0.20 Diluted Net income allocated to common shares $ 3,374,545 $ 2,629,096 Weighted average common shares outstanding for basic earnings per common share 15,714,226 13,132,237 Add: Dilutive effects of assumed exercises of stock options 520,700 427,903 Average shares and dilutive potential common shares 16,234,926 13,560,140 Diluted earnings per common share $ 0.21 $ 0.19 Nine Months Ended September 30, 2018 2017 Basic Net income $ 10,488,765 $ 7,336,572 Undistributed earnings allocated to participating securities (320,191 ) (306,484 ) Net income allocated to common shares 10,168,574 7,030,088 Weighted average common shares outstanding 14,870,232 13,023,145 Basic earnings per common share $ 0.68 $ 0.54 Diluted Net income allocated to common shares $ 10,168,574 $ 7,030,088 Weighted average common shares outstanding for basic earnings per common share 14,870,232 13,023,145 Add: Dilutive effects of assumed exercises of stock options 506,750 409,601 Average shares and dilutive potential common shares 15,376,982 13,432,746 Diluted earnings per common share $ 0.66 $ 0.52 |
Business Description - Addition
Business Description - Additional Information (Details) $ / shares in Units, $ in Millions | Mar. 27, 2018USD ($)$ / sharesshares | Sep. 30, 2018BranchOfficeshares |
Business Description [Line Items] | ||
Operations commenced date | Jun. 1, 2016 | |
Number of full service branches | Branch | 8 | |
Number of loan production offices | Office | 3 | |
Common Stock | ||
Business Description [Line Items] | ||
Stock issued under stock offering, net of expenses, shares | shares | 2,300,000 | |
Proceeds from issuance initial public offering | $ 22.6 | |
Initial Public Offering | ||
Business Description [Line Items] | ||
Underwriting Discounts and Commissions | 1.7 | |
Payments of Stock Issuance Costs | $ 925,000 | |
Initial Public Offering | Common Stock | ||
Business Description [Line Items] | ||
Stock issued under stock offering, net of expenses, shares | shares | 2,300,000 | |
Stock price per shre | $ / shares | $ 11 | |
Open Bank | ||
Business Description [Line Items] | ||
Percentage of voting equity interests acquired | 100.00% | |
Operations commenced date | Jun. 10, 2005 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||||
Interest and/or penalties related to income tax matters | $ 0 | $ 0 | $ 0 | $ 0 | |||
Securities available for sale, at fair value | (46,324,158) | (46,324,158) | $ (41,471,711) | ||||
Other investments | 7,220,880 | 7,220,880 | 4,286,500 | ||||
Assets | 1,035,028,184 | 1,035,028,184 | 900,998,830 | ||||
Liabilities | $ 910,053,031 | $ 910,053,031 | $ 809,518,880 | ||||
ASU 2016-01 | |||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||||
Securities available for sale, at fair value | $ 2,500,000 | ||||||
Other investments | $ 2,500,000 | ||||||
ASU 2016-02 | |||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||||
Assets | $ 13,000,000 | ||||||
Liabilities | $ 13,000,000 | ||||||
Equipment and Furnishings | Minimum | |||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||||
Equipment and furnishings, useful lives | 3 years | ||||||
Equipment and Furnishings | Maximum | |||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||||
Equipment and furnishings, useful lives | 10 years |
Securities - Schedule of Amorti
Securities - Schedule of Amortized Cost, Fair Value, and the Corresponding Amounts of Gross Unrealized Gains and Losses (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 47,790,767 | $ 42,075,426 |
Gross Unrealized Gains | 2,001 | |
Gross Unrealized Losses | (1,466,609) | (605,716) |
Securities available for sale, at fair value | 46,324,158 | 41,471,711 |
U.S. Government Sponsored Agency Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 6,992,706 | 6,988,681 |
Gross Unrealized Gains | 2,001 | |
Gross Unrealized Losses | (125,777) | (58,674) |
Securities available for sale, at fair value | 6,866,929 | 6,932,008 |
Mortgage-backed Securities, Residential | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 15,161,985 | 14,109,433 |
Gross Unrealized Losses | (448,856) | (168,908) |
Securities available for sale, at fair value | 14,713,129 | 13,940,525 |
Collateralized Mortgage Obligations | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 25,636,076 | 18,458,814 |
Gross Unrealized Losses | (891,976) | (345,316) |
Securities available for sale, at fair value | $ 24,744,100 | 18,113,498 |
Other Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 2,518,498 | |
Gross Unrealized Losses | (32,818) | |
Securities available for sale, at fair value | $ 2,485,680 |
Securities - Additional Informa
Securities - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Schedule Of Available For Sale Securities [Line Items] | |||||
Proceeds from sale of available-for-sale securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Mutual fund - CRA qualified | 2,449,180 | 2,449,180 | |||
Other Income | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Unrealized holding losses on investment | 111,041 | ||||
Securities Available For Sale, At Fair Value | ASU 2016-01 | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Mutual fund - CRA qualified | (2,500,000) | (2,500,000) | |||
Other Investments | ASU 2016-01 | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Mutual fund - CRA qualified | 2,500,000 | 2,500,000 | |||
Collateral Pledged | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Number of securities pledged as collateral | $ 0 | $ 0 | $ 0 | ||
Stockholder's Equity | Credit Concentration Risk | Non-US Government and Agency Securities | |||||
Schedule Of Available For Sale Securities [Line Items] | |||||
Concentration risk, percentage | 10.00% | 10.00% |
Securities - Schedule of Amor_2
Securities - Schedule of Amortized Cost and Estimated Fair Value of Securities Available for Sale (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule Of Available For Sale Securities [Line Items] | ||
Within one year | $ 999,656 | |
One to five years, Amortized Cost | 5,993,050 | |
One to five years, Fair Value | 5,876,824 | |
Available for sale, Amortized Cost | 47,790,767 | $ 42,075,426 |
Within one year | 990,105 | |
Securities available for sale, at fair value | 46,324,158 | 41,471,711 |
Mortgage-backed Securities, Residential | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available for sale, Amortized Cost | 15,161,985 | 14,109,433 |
Securities available for sale, at fair value | 14,713,129 | $ 13,940,525 |
Collateralized Mortgage Obligations | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available for sale, Amortized Cost | 25,636,076 | |
Securities available for sale, at fair value | $ 24,744,100 |
Securities - Schedule of Securi
Securities - Schedule of Securities With Unrealized Losses (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | $ 11,661,943 | $ 24,039,476 |
Unrealized Losses, Less Than 12 Months | (133,135) | (275,646) |
Fair Value, 12 Months or Longer | 34,662,215 | 16,431,705 |
Unrealized Losses, 12 Months or Longer | (1,333,474) | (330,070) |
Total Fair Value | 46,324,158 | 40,471,181 |
Total Unrealized Losses | (1,466,609) | (605,716) |
U.S. Government Sponsored Agency Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 1,972,553 | 3,957,340 |
Unrealized Losses, Less Than 12 Months | (21,048) | (33,620) |
Fair Value, 12 Months or Longer | 4,894,376 | 1,974,139 |
Unrealized Losses, 12 Months or Longer | (104,729) | (25,054) |
Total Fair Value | 6,866,929 | 5,931,479 |
Total Unrealized Losses | (125,777) | (58,674) |
Mortgage-backed Securities, Residential | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 7,954,428 | |
Unrealized Losses, Less Than 12 Months | (70,965) | |
Fair Value, 12 Months or Longer | 14,713,129 | 5,986,097 |
Unrealized Losses, 12 Months or Longer | (448,856) | (97,943) |
Total Fair Value | 14,713,129 | 13,940,525 |
Total Unrealized Losses | (448,856) | (168,908) |
Collateralized Mortgage Obligations | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 9,689,390 | 9,642,028 |
Unrealized Losses, Less Than 12 Months | (112,087) | (138,243) |
Fair Value, 12 Months or Longer | 15,054,710 | 8,471,469 |
Unrealized Losses, 12 Months or Longer | (779,889) | (207,073) |
Total Fair Value | 24,744,100 | 18,113,497 |
Total Unrealized Losses | $ (891,976) | (345,316) |
Other Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 2,485,680 | |
Unrealized Losses, Less Than 12 Months | (32,818) | |
Total Fair Value | 2,485,680 | |
Total Unrealized Losses | $ (32,818) |
Securities - Schedule of Other
Securities - Schedule of Other Investments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Investments Debt And Equity Securities [Abstract] | ||
FHLB stock | $ 4,581,700 | $ 4,096,500 |
PCBB stock | 190,000 | 190,000 |
Mutual fund - CRA qualified | 2,449,180 | |
Total other investments | $ 7,220,880 | $ 4,286,500 |
Loans - Composition of Loan Por
Loans - Composition of Loan Portfolio (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | $ 850,018,247 | $ 748,023,901 |
Loans receivable, allowance | 9,550,768 | 9,139,488 |
Loans receivable, net | 840,467,479 | 738,884,413 |
Real Estate | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | 611,661,482 | 527,684,178 |
Real Estate | SBA Loans—Real Estate | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | 121,833,439 | 106,924,278 |
Real Estate | Commercial Real Estate | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | 489,828,043 | 420,759,900 |
SBA Loans—Non-Real Estate | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | 10,671,293 | 8,634,879 |
Commercial and Industrial | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | 104,301,404 | 103,681,574 |
Home Mortgage | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | 120,261,899 | 104,067,756 |
Consumer | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Gross loans receivable | $ 3,122,169 | $ 3,955,514 |
Loans - Additional Information
Loans - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018USD ($)Contract | Sep. 30, 2018USD ($)Contract | Dec. 31, 2017USD ($) | |
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans | $ 0 | $ 0 | |
Recorded investment in troubled debt restructurings | 345,430 | 345,430 | $ 353,985 |
Specific reserves to customers whose loan terms have been modified in troubled debt restructurings | $ 345,430 | $ 345,430 | 353,985 |
Loans identified as trouble debt restructurings | Contract | 0 | 0 | |
Financing receivable, modifications, subsequent default, recorded investment | $ 0 | $ 0 | |
Principal Officers, Directors and Affiliates | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans | $ 10,768 |
Loans - Schedule of Activity in
Loans - Schedule of Activity in Allowance for Loan Losses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning balance | $ 9,723,431 | $ 8,556,143 | $ 9,139,488 | $ 7,909,682 |
Provision for loan losses | 438,514 | 278,148 | 1,047,179 | 989,231 |
Charge-offs | (622,917) | (650,840) | (75,895) | |
Recoveries | 11,740 | 74,784 | 14,941 | 86,057 |
Ending balance | 9,550,768 | 8,909,075 | 9,550,768 | 8,909,075 |
Commercial Real Estate | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning balance | 4,804,469 | 4,403,116 | 4,801,297 | 4,217,089 |
Provision for loan losses | 271,117 | 267,093 | 274,289 | 453,120 |
Ending balance | 5,075,586 | 4,670,209 | 5,075,586 | 4,670,209 |
SBA Loans-Real Estate | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning balance | 977,635 | 982,680 | 1,082,065 | 892,605 |
Provision for loan losses | 29,735 | 33,254 | (74,883) | 123,329 |
Recoveries | 188 | |||
Ending balance | 1,007,370 | 1,015,934 | 1,007,370 | 1,015,934 |
SBA Loans—Non-Real Estate | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning balance | 535,929 | 450,257 | 537,967 | 59,032 |
Provision for loan losses | 88,800 | 100,577 | 111,672 | 556,424 |
Charge-offs | (57,310) | (85,233) | (75,895) | |
Recoveries | 6,287 | 1,500 | 9,300 | 12,773 |
Ending balance | 573,706 | 552,334 | 573,706 | 552,334 |
Commercial and Industrial | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning balance | 1,877,197 | 1,318,063 | 1,265,456 | 1,322,294 |
Provision for loan losses | 42,502 | (51,390) | 654,243 | (55,621) |
Charge-offs | (565,607) | (565,607) | ||
Recoveries | 5,453 | 5,453 | ||
Ending balance | 1,359,545 | 1,266,673 | 1,359,545 | 1,266,673 |
Home Mortgage | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning balance | 1,489,081 | 1,353,379 | 1,407,742 | 1,363,628 |
Provision for loan losses | 12,189 | 3,820 | 93,528 | (6,429) |
Ending balance | 1,501,270 | 1,357,199 | 1,501,270 | 1,357,199 |
Consumer | ||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||
Beginning balance | 39,120 | 48,648 | 44,961 | 55,034 |
Provision for loan losses | (5,829) | (75,206) | (11,670) | (81,592) |
Recoveries | 73,284 | 73,284 | ||
Ending balance | $ 33,291 | $ 46,726 | $ 33,291 | $ 46,726 |
Loans - Schedule of Allowance f
Loans - Schedule of Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable Allowance For Credit Losses [Line Items] | ||||||
Allowance for loan losses Individually Evaluated for Impairment | $ 779,257 | $ 353,985 | ||||
Allowance for Loan Collectively Evaluated for Impairment | 8,771,511 | 8,785,503 | ||||
Total | 9,550,768 | $ 9,723,431 | 9,139,488 | $ 8,909,075 | $ 8,556,143 | $ 7,909,682 |
Loans Individually Evaluated for Impairment | 1,661,455 | 615,912 | ||||
Loans Collectively Evaluated for Impairment | 850,917,625 | 749,682,470 | ||||
Total | 852,579,080 | 750,298,382 | ||||
Commercial Real Estate | ||||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||||
Allowance for Loan Collectively Evaluated for Impairment | 5,075,586 | 4,801,297 | ||||
Total | 5,075,586 | 4,804,469 | 4,801,297 | 4,670,209 | 4,403,116 | 4,217,089 |
Loans Collectively Evaluated for Impairment | 491,023,849 | 421,811,734 | ||||
Total | 491,023,849 | 421,811,734 | ||||
SBA Loans-Real Estate | ||||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||||
Allowance for Loan Collectively Evaluated for Impairment | 1,007,370 | 1,082,065 | ||||
Total | 1,007,370 | 977,635 | 1,082,065 | 1,015,934 | 982,680 | 892,605 |
Loans Individually Evaluated for Impairment | 133,674 | |||||
Loans Collectively Evaluated for Impairment | 122,284,378 | 107,427,788 | ||||
Total | 122,418,052 | 107,427,788 | ||||
SBA Loans—Non-Real Estate | ||||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||||
Allowance for loan losses Individually Evaluated for Impairment | 433,828 | |||||
Allowance for Loan Collectively Evaluated for Impairment | 139,878 | 537,967 | ||||
Total | 573,706 | 535,929 | 537,967 | 552,334 | 450,257 | 59,032 |
Loans Individually Evaluated for Impairment | 433,828 | |||||
Loans Collectively Evaluated for Impairment | 10,247,054 | 8,655,808 | ||||
Total | 10,680,882 | 8,655,808 | ||||
Commercial and Industrial | ||||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||||
Allowance for loan losses Individually Evaluated for Impairment | 345,429 | 353,985 | ||||
Allowance for Loan Collectively Evaluated for Impairment | 1,014,116 | 911,471 | ||||
Total | 1,359,545 | 1,877,197 | 1,265,456 | 1,266,673 | 1,318,063 | 1,322,294 |
Loans Individually Evaluated for Impairment | 1,093,953 | 353,985 | ||||
Loans Collectively Evaluated for Impairment | 103,482,277 | 103,601,098 | ||||
Total | 104,576,230 | 103,955,083 | ||||
Home Mortgage | ||||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||||
Allowance for Loan Collectively Evaluated for Impairment | 1,501,270 | 1,407,742 | ||||
Total | 1,501,270 | 1,489,081 | 1,407,742 | 1,357,199 | 1,353,379 | 1,363,628 |
Loans Individually Evaluated for Impairment | 241,164 | |||||
Loans Collectively Evaluated for Impairment | 120,746,233 | 104,239,551 | ||||
Total | 120,746,233 | 104,480,715 | ||||
Consumer | ||||||
Financing Receivable Allowance For Credit Losses [Line Items] | ||||||
Allowance for Loan Collectively Evaluated for Impairment | 33,291 | 44,961 | ||||
Total | 33,291 | $ 39,120 | 44,961 | $ 46,726 | $ 48,648 | $ 55,034 |
Loans Individually Evaluated for Impairment | 20,763 | |||||
Loans Collectively Evaluated for Impairment | 3,133,834 | 3,946,491 | ||||
Total | $ 3,133,834 | $ 3,967,254 |
Loans - Schedule of Information
Loans - Schedule of Information Related to Impaired Loans by Class of Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Financing Receivable Impaired [Line Items] | ||||
Recorded investment | $ 1,661,455 | $ 843,376 | $ 1,661,455 | $ 843,376 |
Allowance Allocated | 779,257 | 843,376 | 779,257 | 843,376 |
Average Recorded Investment | 1,668,533 | 475,579 | 1,678,346 | 480,355 |
Interest Income Recognized | 16,381 | 11,053 | 46,829 | 31,752 |
SBA Loans—Real Estate | ||||
Financing Receivable Impaired [Line Items] | ||||
Recorded investment, With no related allowance recorded | 133,674 | 133,674 | ||
Average Recorded Investment, With no related allowance recorded | 137,664 | 136,740 | ||
Commercial and Industrial | ||||
Financing Receivable Impaired [Line Items] | ||||
Recorded investment, With no related allowance recorded | 748,524 | 748,524 | ||
Recorded investment, With an allowance recorded | 345,429 | 357,206 | 345,429 | 357,206 |
Allowance Allocated | 345,429 | 357,206 | 345,429 | 357,206 |
Average Recorded Investment, With no related allowance recorded | 748,805 | 748,946 | ||
Average Recorded Investment, With an allowance recorded | 348,225 | 358,781 | 349,707 | 362,263 |
Interest Income Recognized, With no related allowance recorded | 11,498 | 32,833 | ||
Interest Income Recognized, With an allowance recorded | 4,883 | 4,357 | 13,996 | 12,441 |
SBA Loans-Non-Real Estate | ||||
Financing Receivable Impaired [Line Items] | ||||
Recorded investment, With no related allowance recorded | 433,828 | 486,170 | 433,828 | 486,170 |
Allowance Allocated | 433,828 | 486,170 | 433,828 | 486,170 |
Average Recorded Investment, With no related allowance recorded | $ 433,839 | $ 442,953 | ||
Average Recorded Investment, With an allowance recorded | 116,798 | 118,092 | ||
Interest Income Recognized, With an allowance recorded | $ 6,696 | $ 19,311 |
Loans - Schedule of Recorded In
Loans - Schedule of Recorded Investment in Nonaccrual Loans and Loans Past Due Greater Than 90 Days Still Accruing Interest by Class of Loans (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Nonaccrual | $ 888,348 | $ 683,128 |
Total | 888,348 | 683,128 |
SBA Loans—Real Estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Nonaccrual | 534,697 | |
Total | 534,697 | |
SBA Loans-Non-Real Estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Nonaccrual | 353,651 | |
Total | $ 353,651 | |
Home Mortgage | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Nonaccrual | 662,365 | |
Total | 662,365 | |
Consumer | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Nonaccrual | 20,763 | |
Total | $ 20,763 |
Loans - Schedule of Aging of Re
Loans - Schedule of Aging of Recorded Investment in Past Due Loans (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | $ 1,295,702 | $ 863,782 |
Loans Not Past Due | 851,283,378 | 749,434,600 |
Total | 852,579,080 | 750,298,382 |
30-59 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 1,007,337 | 201,417 |
> 90 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 288,365 | 662,365 |
Commercial Real Estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Loans Not Past Due | 491,023,849 | 421,811,734 |
Total | 491,023,849 | 421,811,734 |
SBA Loans-Real Estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 139,806 | |
Loans Not Past Due | 122,418,052 | 107,287,982 |
Total | 122,418,052 | 107,427,788 |
SBA Loans-Real Estate | 30-59 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 139,806 | |
SBA Loans—Non-Real Estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 288,365 | 61,611 |
Loans Not Past Due | 10,392,517 | 8,594,197 |
Total | 10,680,882 | 8,655,808 |
SBA Loans—Non-Real Estate | 30-59 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 61,611 | |
SBA Loans—Non-Real Estate | > 90 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 288,365 | |
Commercial and Industrial | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 748,524 | |
Loans Not Past Due | 103,827,706 | 103,955,083 |
Total | 104,576,230 | 103,955,083 |
Commercial and Industrial | 30-59 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 748,524 | |
Home Mortgage | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 258,813 | 662,365 |
Loans Not Past Due | 120,487,420 | 103,818,350 |
Total | 120,746,233 | 104,480,715 |
Home Mortgage | 30-59 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 258,813 | |
Home Mortgage | > 90 Days Pass Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Past Due Loans | 662,365 | |
Consumer | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Loans Not Past Due | 3,133,834 | 3,967,254 |
Total | $ 3,133,834 | $ 3,967,254 |
Loans - Schedule of Risk Catego
Loans - Schedule of Risk Category of Loans by Class of Loans (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable Recorded Investment [Line Items] | ||
Total | $ 852,579,080 | $ 750,298,382 |
Pass | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 849,286,353 | 748,178,014 |
Special Member | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 327,726 | 32,702 |
Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 2,965,001 | 2,087,666 |
Commercial Real Estate | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 491,023,849 | 421,811,734 |
Commercial Real Estate | Pass | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 491,023,849 | 421,811,734 |
SBA Loans-Real Estate | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 122,418,052 | 107,427,788 |
SBA Loans-Real Estate | Pass | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 120,800,876 | 106,405,966 |
SBA Loans-Real Estate | Special Member | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 311,034 | |
SBA Loans-Real Estate | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 1,306,142 | 1,021,822 |
SBA Loans—Non-Real Estate | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 10,680,882 | 8,655,808 |
SBA Loans—Non-Real Estate | Pass | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 10,592,099 | 8,594,375 |
SBA Loans—Non-Real Estate | Special Member | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 16,692 | 32,702 |
SBA Loans—Non-Real Estate | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 72,091 | 28,731 |
Commercial and Industrial | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 104,576,230 | 103,955,083 |
Commercial and Industrial | Pass | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 102,989,462 | 103,601,098 |
Commercial and Industrial | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 1,586,768 | 353,985 |
Home Mortgage | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 120,746,233 | 104,480,715 |
Home Mortgage | Pass | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 120,746,233 | 103,818,350 |
Home Mortgage | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 662,365 | |
Consumer | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | 3,133,834 | 3,967,254 |
Consumer | Pass | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | $ 3,133,834 | 3,946,491 |
Consumer | Substandard | ||
Financing Receivable Recorded Investment [Line Items] | ||
Total | $ 20,763 |
Premises and Equipment - Schedu
Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Total cost | $ 10,263,966 | $ 9,231,318 |
Accumulated depreciation | (5,506,487) | (4,750,526) |
Net book value | 4,757,479 | 4,480,792 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total cost | 5,502,369 | 5,061,520 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total cost | 2,780,563 | 2,492,623 |
Equipment and Others | ||
Property Plant And Equipment [Line Items] | ||
Total cost | $ 1,981,034 | $ 1,677,175 |
Premises and Equipment - Additi
Premises and Equipment - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | ||||
Depreciation expense | $ 274,391 | $ 249,099 | $ 762,383 | $ 766,848 |
Servicing Assets - Schedule of
Servicing Assets - Schedule of Activity for Loan Servicing Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Servicing Asset [Abstract] | ||||
Beginning balance | $ 6,993,723 | $ 6,964,002 | $ 6,771,097 | $ 6,782,555 |
Additions | 588,267 | 451,349 | 1,620,543 | 1,405,399 |
Amortized to expense | (484,854) | (458,719) | (1,294,504) | (1,231,322) |
Ending balance | $ 7,097,136 | $ 6,956,632 | $ 7,097,136 | $ 6,956,632 |
Servicing Assets - Additional I
Servicing Assets - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Servicing Assets At Amortized Value [Line Items] | ||
Valuation allowance against carrying value of servicing assets | $ 0 | $ 0 |
Servicing asset at fair value, amount | $ 8,570,568 | $ 8,960,353 |
Minimum | ||
Servicing Assets At Amortized Value [Line Items] | ||
Fair value of servicing assets, discount rates | 4.71% | 3.78% |
Fair value of servicing assets, prepayment speed | 11.40% | 10.50% |
Maximum | ||
Servicing Assets At Amortized Value [Line Items] | ||
Fair value of servicing assets, discount rates | 10.96% | 10.03% |
Fair value of servicing assets, prepayment speed | 13.30% | 11.00% |
Deposits - Additional Informati
Deposits - Additional Information (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Time Deposits [Line Items] | ||
Time deposits greater than $250,000 | $ 157,686,977 | $ 108,952,059 |
Principal Officers, Directors and Affiliates | ||
Time Deposits [Line Items] | ||
Deposits from principal officers, directors, and their affiliates | $ 883,046 | $ 1,068,580 |
Deposits - Schedule of Maturiti
Deposits - Schedule of Maturities of Time Deposits (Details) | Sep. 30, 2018USD ($) |
Deposits [Abstract] | |
2018 remaining | $ 104,793,369 |
2,019 | 239,867,093 |
2,020 | 8,002,710 |
Thereafter | 833,471 |
Total | $ 353,496,643 |
Borrowing Arrangements - Additi
Borrowing Arrangements - Additional Information (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Federal Home Loan Bank borrowings | $ 0 | $ 25,000,000 |
Line of Credit Facility, Maximum Borrowing Capacity | 49,000,000 | |
Collateral pledged | $ 716,399,000 |
Borrowing Arrangements - Summar
Borrowing Arrangements - Summary of Borrowings Available to the Company from Institutions (Details) | Sep. 30, 2018USD ($) |
Debt Disclosure [Line Items] | |
Amount of borrowings | $ 317,014,232 |
Federal Home Loan Bank—San Francisco | |
Debt Disclosure [Line Items] | |
Amount of borrowings | 195,836,500 |
Federal Reserve Bank | |
Debt Disclosure [Line Items] | |
Amount of borrowings | 107,677,732 |
Pacific Coast Bankers Bank | |
Debt Disclosure [Line Items] | |
Amount of borrowings | 8,000,000 |
Zions Bank | |
Debt Disclosure [Line Items] | |
Amount of borrowings | $ 5,500,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,144,471 | $ 1,713,390 | $ 3,781,548 | $ 4,706,144 |
Effective income tax rate | 24.70% | 38.60% | 26.50% | 39.10% |
Unrealized tax benefits | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Operating lease rent expense | $ 545,486 | $ 498,122 | $ 1,605,295 | $ 1,451,939 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Rent Commitments Related to Lease (Details) | Sep. 30, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2018 remaining | $ 426,502 |
2,019 | 1,882,984 |
2,020 | 1,973,590 |
2,021 | 2,024,599 |
2,022 | 2,019,572 |
Thereafter | 5,146,396 |
Total | $ 13,473,643 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Distribution of Undisbursed Loan Commitments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Undisbursed loan commitments | $ 66,820,000 | $ 63,983,000 |
Standby Letter of Credit | ||
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Undisbursed loan commitments | 1,952,000 | 1,627,000 |
Commercial Letter of Credit | ||
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Undisbursed loan commitments | 1,407,000 | 1,608,000 |
Commitments to Extend Credit | ||
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Undisbursed loan commitments | $ 63,461,000 | $ 60,748,000 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 166,572 | $ 28,395 | $ 606,472 | $ 431,494 | ||
2005 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based compensation shares authorized under stock option plans | 770,000 | 770,000 | ||||
Percent of the fair value options granted | 100.00% | |||||
Stock options grant and expire | 10 years | |||||
Stock options granted | 0 | 0 | ||||
Shares available for grant | 0 | 0 | ||||
Weighted average remaining contractual term stock options outstanding | 2 years 10 months 2 days | |||||
Weighted average remaining contractual life for options exercisable | 2 years 8 months 23 days | |||||
Unrecognized compensation costs related to unvested stock options | $ 3,058 | $ 3,058 | ||||
Unrecognized compensation costs weighted average period | 1 month 17 days | |||||
2005 Plan | Employee Stock Option | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 5 years | |||||
2010 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based compensation shares authorized under stock option plans | 85,605 | 85,605 | 2,500,000 | 1,350,000 | ||
Percent of the fair value options granted | 100.00% | |||||
Stock options grant and expire | 10 years | |||||
Stock options granted | 0 | 0 | ||||
Weighted average remaining contractual term stock options outstanding | 3 years 3 days | |||||
Weighted average remaining contractual life for options exercisable | 2 years 7 months 17 days | |||||
Unrecognized compensation costs related to unvested stock options | $ 3,490,037 | $ 3,490,037 | ||||
Unrecognized compensation costs weighted average period | 1 year 11 months 15 days | |||||
Restricted stock awards granted | 0 | |||||
2010 Plan | Employee Stock Option | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 5 years | |||||
2010 Plan | Restricted Stock Awards | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Restricted stock awards granted | 148,000 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock-based Compensation Stock Options Activity (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
2005 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding, Beginning of period | 335,000 | |
Stock options granted | 0 | 0 |
Number of options outstanding, Exercised | (60,000) | |
Number of options outstanding, Ending of year | 275,000 | |
Number of options outstanding, Full vested and expected to vest | 272,000 | |
Number of options outstanding, Vested | 263,000 | |
Weighted average exercise price, Outstanding beginning | $ 3.99 | |
Weighted average exercise price, Exercised | 3.25 | |
Weighted average exercise price, Outstanding ending | 3.90 | |
Weighted average exercise price, Full vested and expected to vest | 3.86 | |
Weighted average exercise price, Vested | $ 3.74 | |
Aggregate intrinsic value, Outstanding | $ 2,116,950 | |
Aggregate intrinsic value, Fully vested and expected to vest | 2,104,340 | |
Aggregate intrinsic value, Vested | $ 2,066,510 | |
2010 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding, Beginning of period | 795,000 | |
Stock options granted | 0 | 0 |
Number of options outstanding, Exercised | (105,000) | |
Number of options outstanding, Ending of year | 690,000 | |
Number of options outstanding, Full vested and expected to vest | 667,500 | |
Number of options outstanding, Vested | 600,000 | |
Weighted average exercise price, Outstanding beginning | $ 4.22 | |
Weighted average exercise price, Exercised | 3.04 | |
Weighted average exercise price, Outstanding ending | 4.40 | |
Weighted average exercise price, Full vested and expected to vest | 4.28 | |
Weighted average exercise price, Vested | $ 3.86 | |
Aggregate intrinsic value, Outstanding | $ 4,969,400 | |
Aggregate intrinsic value, Fully vested and expected to vest | 4,888,400 | |
Aggregate intrinsic value, Vested | $ 4,645,400 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Information Related to Stock Option Plan (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Cash received from stock option exercises | $ 514,050 | $ 329,550 | ||
2005 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Intrinsic value of options exercised | $ 234,410 | 486,860 | 166,950 | |
Cash received from stock option exercises | 118,750 | 195,000 | 101,550 | |
2010 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Intrinsic value of options exercised | 876,050 | 370,000 | ||
Cash received from stock option exercises | 319,050 | 228,000 | ||
Tax benefit realized from option exercised | 159,525 | 121,609 | ||
2010 Plan | Restricted Stock Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Tax benefit realized from awards vested | $ 272,133 | $ 123,406 | $ 285,289 | $ 211,753 |
Stock-based Compensation - Su_3
Stock-based Compensation - Summary of Changes in Non-vested Restricted Stock Awards (Details) - 2010 Plan | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares issued, Awards granted | 0 |
Restricted Stock Awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares issued, Non-vested beginning of period | 453,500 |
Shares issued, Awards granted | 148,000 |
Shares issued, Awards vested | (141,500) |
Shares issued, Awards forfeited | (15,000) |
Shares issued, Non-vested end of period | 445,000 |
Weighted average grant date fair value, Non-vested beginning of period | $ / shares | $ 5.95 |
Weighted average grant date fair value, Awards granted | $ / shares | 12.71 |
Weighted average grant date fair value, Awards vested | $ / shares | 5.91 |
Weighted average grant date fair value, Awards forfeited | $ / shares | 5.75 |
Weighted average grant date fair value, Non-vested end of period | $ / shares | $ 8.22 |
Aggregate intrinsic value, Non-vested end of year | $ | $ 5,162,000 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Service charges on deposits | $ 483,867 | $ 393,685 | $ 1,418,857 | $ 1,201,075 |
Noninterest income | $ 2,284,009 | $ 2,255,017 | 7,279,577 | $ 6,708,165 |
Service Fees and Transaction-Based Fees Income | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Service charges on deposits | $ 558,000 | |||
Percentage on revenue | 1.50% | |||
Overdraft and NSF Fees Income | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Service charges on deposits | $ 861,000 | |||
Percentage on revenue | 2.30% | |||
Wire Transfer Fee Income | ||||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||||
Percentage on revenue | 0.70% | |||
Noninterest income | $ 243,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Other investments: | ||
Mutual fund - CRA qualified | $ 2,449,180 | |
Fair Value, Measurements, Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
U.S. Government sponsored agency securities | 6,866,929 | $ 6,932,008 |
Mortgage-backed securities - residential | 14,713,129 | 13,940,525 |
Collateralized mortgage obligations | 24,744,100 | 18,113,498 |
Other investments: | ||
Mutual fund - CRA qualified | 2,449,180 | 2,485,680 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets (Level 1) | ||
Other investments: | ||
Mutual fund - CRA qualified | 2,449,180 | 2,485,680 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
U.S. Government sponsored agency securities | 6,866,929 | 6,932,008 |
Mortgage-backed securities - residential | 14,713,129 | 13,940,525 |
Collateralized mortgage obligations | $ 24,744,100 | $ 18,113,498 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Fair Value Disclosures [Abstract] | ||
Fair value assets transfers between level 1 to level 2 | $ 0 | $ 0 |
Fair value liabilities transfers between level 1 to level 2 | 0 | 0 |
Assets measured at fair value on a nonrecurring basis | 0 | 0 |
Liabilities measured at fair value on a nonrecurring basis | $ 0 | $ 0 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Financial Assets: | ||
Cash and cash equivalents | $ 95,786,737 | $ 63,249,952 |
Loans held for sale | 3,522,564 | 17,203,060 |
Loans receivable, net | 835,844,908 | 731,436,572 |
Accrued interest receivable | 2,782,502 | 2,463,486 |
Other investments: | ||
Mutual fund - CRA qualified | 2,449,180 | |
Financial Liabilities: | ||
Deposit | 896,183,708 | 773,071,521 |
FHLB Advances | 25,000,000 | |
Accrued interest payable | 1,195,818 | 423,239 |
Carrying Amount | ||
Financial Assets: | ||
Cash and cash equivalents | 95,786,737 | 63,249,952 |
Loans held for sale | 3,253,500 | 15,739,305 |
Loans receivable, net | 840,467,479 | 738,884,413 |
Accrued interest receivable | 2,782,502 | 2,463,486 |
Other investments: | ||
FHLB and PCBB stock | 4,771,700 | 4,286,500 |
Financial Liabilities: | ||
Deposit | 896,890,701 | 773,306,014 |
FHLB Advances | 25,000,000 | |
Accrued interest payable | 1,195,818 | 423,239 |
Level 1 | ||
Financial Assets: | ||
Cash and cash equivalents | 95,786,737 | 63,249,952 |
Accrued interest receivable | 456 | |
Level 2 | ||
Financial Assets: | ||
Loans held for sale | 3,522,564 | 17,203,060 |
Accrued interest receivable | 221,214 | 189,005 |
Financial Liabilities: | ||
Deposit | 896,183,708 | 773,071,521 |
FHLB Advances | 25,000,000 | |
Accrued interest payable | 1,195,818 | 423,239 |
Level 3 | ||
Financial Assets: | ||
Loans receivable, net | 835,844,908 | 731,436,572 |
Accrued interest receivable | $ 2,560,832 | $ 2,274,481 |
Regulatory Capital Matters - Ad
Regulatory Capital Matters - Additional Information (Details) | 9 Months Ended | |||||
Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | ||||||
Capital conservation buffer | 1.25% | 0.625% | 0.00% | |||
Capital conservation buffer description | The capital conservation buffer is being phased in from 0.0% for 2015 to 2.50% by 2019. The capital conservation buffers for 2016, 2017 and 2018 are 0.625%, 1.25% and 1.875%, respectively. | |||||
Scenario Forecast | ||||||
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | ||||||
Capital conservation buffer | 2.50% | 1.875% |
Regulatory Capital Matters - Su
Regulatory Capital Matters - Summary of Actual and Required Capital Amounts and Ratios, Exclusive of Capital Conservation Buffer (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | ||||
Capital conservation buffer | 1.25% | 0.625% | 0.00% | |
Consolidated | ||||
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | ||||
Total capital (to risk-weighted assets), Actual Amount | $ 135,200 | $ 100,713 | ||
Tier 1 capital (to risk-weighted assets), Actual Amount | 125,586 | 91,510 | ||
Common equity Tier 1 capital (to risk-weighted assets), Actual Amount | 125,586 | 91,510 | ||
Tier 1 capital (to average assets), Actual Amount | $ 125,586 | $ 91,510 | ||
Total capital (to risk-weighted assets), Actual Ratio | 16.16% | 13.49% | ||
Tier 1 capital (to risk-weighted assets), Actual Ratio | 15.01% | 12.26% | ||
Common equity Tier 1 capital (to risk-weighted assets), Actual Ratio | 15.01% | 12.26% | ||
Tier 1 capital (to average assets), Actual Ratio | 12.77% | 10.46% | ||
Total capital (to risk-weighted assets), Amount, Required for Capital Adequacy Purposes | $ 66,937 | $ 59,729 | ||
Tier 1 capital (to risk-weighted assets), Amount, Required for Capital Adequacy Purposes | 50,203 | 44,797 | ||
Common equity Tier 1 capital (to risk-weighted assets), Amount, Required for Capital Adequacy Purposes | 37,652 | 33,597 | ||
Tier 1 capital (to average assets), Amount, Required for Capital Adequacy Purposes | $ 39,336 | $ 35,009 | ||
Capital conservation buffer | 8.00% | 8.00% | ||
Tier 1 capital (to risk-weighted assets), Ratio, Required for Capital Adequacy Purposes | 6.00% | 6.00% | ||
Common equity Tier 1 capital (to risk-weighted assets), Ratio, Required for Capital Adequacy Purposes | 4.50% | 4.50% | ||
Tier 1 capital (to average assets), Ratio, Required for Capital Adequacy Purposes | 4.00% | 4.00% | ||
Bank | ||||
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items] | ||||
Total capital (to risk-weighted assets), Actual Amount | $ 135,109 | $ 100,648 | ||
Tier 1 capital (to risk-weighted assets), Actual Amount | 125,495 | 91,445 | ||
Common equity Tier 1 capital (to risk-weighted assets), Actual Amount | 125,495 | 91,445 | ||
Tier 1 capital (to average assets), Actual Amount | $ 125,495 | $ 91,445 | ||
Total capital (to risk-weighted assets), Actual Ratio | 16.15% | 13.48% | ||
Tier 1 capital (to risk-weighted assets), Actual Ratio | 15.00% | 12.25% | ||
Common equity Tier 1 capital (to risk-weighted assets), Actual Ratio | 15.00% | 12.25% | ||
Tier 1 capital (to average assets), Actual Ratio | 12.76% | 10.45% | ||
Total capital (to risk-weighted assets), Amount, Required for Capital Adequacy Purposes | $ 66,930 | $ 59,726 | ||
Tier 1 capital (to risk-weighted assets), Amount, Required for Capital Adequacy Purposes | 50,197 | 44,795 | ||
Common equity Tier 1 capital (to risk-weighted assets), Amount, Required for Capital Adequacy Purposes | 37,648 | 33,596 | ||
Tier 1 capital (to average assets), Amount, Required for Capital Adequacy Purposes | $ 39,332 | $ 35,007 | ||
Capital conservation buffer | 8.00% | 8.00% | ||
Tier 1 capital (to risk-weighted assets), Ratio, Required for Capital Adequacy Purposes | 6.00% | 6.00% | ||
Common equity Tier 1 capital (to risk-weighted assets), Ratio, Required for Capital Adequacy Purposes | 4.50% | 4.50% | ||
Tier 1 capital (to average assets), Ratio, Required for Capital Adequacy Purposes | 4.00% | 4.00% | ||
Total capital (to risk-weighted assets), Amount, Minimum To be Considered "Well Capitalized" | $ 83,662 | $ 74,658 | ||
Tier 1 capital (to risk-weighted assets), Amount, Minimum To be Considered "Well Capitalized" | 66,930 | 59,726 | ||
Common equity Tier 1 capital (to risk-weighted assets), Amount, Minimum To be Considered "Well Capitalized" | 54,380 | 48,528 | ||
Tier 1 capital (to average assets), Amount, Minimum To be Considered "Well Capitalized" | $ 49,165 | $ 43,759 | ||
Total capital (to risk-weighted assets), Ratio, Minimum To be Considered "Well Capitalized" | 10.00% | 10.00% | ||
Tier 1 capital (to risk-weighted assets), Ratio, Minimum To be Considered "Well Capitalized" | 8.00% | 8.00% | ||
Common equity Tier 1 capital (to risk-weighted assets), Ratio, Minimum To be Considered "Well Capitalized" | 6.50% | 6.50% | ||
Tier 1 capital (to average assets), Ratio, Minimum To be Considered "Well Capitalized" | 5.00% | 5.00% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic | ||||
Net income | $ 3,481,463 | $ 2,727,817 | $ 10,488,765 | $ 7,336,572 |
Undistributed earnings allocated to participating securities | (106,918) | (98,721) | (320,191) | (306,484) |
Net income allocated to common shares | $ 3,374,545 | $ 2,629,096 | $ 10,168,574 | $ 7,030,088 |
Weighted average common shares outstanding | 15,714,226 | 13,132,237 | 14,870,232 | 13,023,145 |
Basic earnings per common share | $ 0.22 | $ 0.20 | $ 0.68 | $ 0.54 |
Diluted | ||||
Net income allocated to common shares | $ 3,374,545 | $ 2,629,096 | $ 10,168,574 | $ 7,030,088 |
Weighted average common shares outstanding | 15,714,226 | 13,132,237 | 14,870,232 | 13,023,145 |
Add: Dilutive effects of assumed exercises of stock options | 520,700 | 427,903 | 506,750 | 409,601 |
Average shares and dilutive potential common shares | 16,234,926 | 13,560,140 | 15,376,982 | 13,432,746 |
Diluted earnings per common share | $ 0.21 | $ 0.19 | $ 0.66 | $ 0.52 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive shares of common stock excluded from computation of earnings per share | 0 | 0 | ||
Stock Options and Restricted Stock Awards | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive shares of common stock excluded from computation of earnings per share | 445,000 | 450,000 |