Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 13, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-55983 | |
Entity Registrant Name | Meridian Corp | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 83-1561918 | |
Entity Address, Address Line One | 9 Old Lincoln Highway | |
Entity Address, City or Town | Malvern | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19355 | |
City Area Code | 484 | |
Local Phone Number | 568-5000 | |
Title of 12(b) Security | Common Stock, $1 par value | |
Trading Symbol | MRBK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,168,623 | |
Entity Central Index Key | 0001750735 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Cash and due from banks | $ 26,902 | $ 34,190 |
Federal funds sold | 2,554 | |
Cash and cash equivalents | 26,902 | 36,744 |
Securities available-for-sale (amortized cost of $139,242 and $120,215 as of June 30, 2021 and December 31, 2020) | 141,909 | 123,562 |
Securities held-to-maturity (fair value of $6,726 and $6,857 as of June 30, 2021 and December 31, 2020) | 6,441 | 6,510 |
Equity investments | 1,016 | 1,031 |
Mortgage loans held for sale (amortized cost of $130,789 and $225,007 as of June 30, 2021 and December 31, 2020), at fair value | 132,348 | 229,199 |
Loans, net of fees and costs (includes $15,129 and $12,182 of loans at fair value, amortized cost of $14,539 and $11,514 as of June 30, 2021 and December 31, 2020) | 1,362,750 | 1,284,764 |
Allowance for loan and lease losses | (18,361) | (17,767) |
Loans, net of the allowance for loan and lease losses | 1,344,389 | 1,266,997 |
Restricted investment in bank stock | 5,357 | 7,861 |
Bank premises and equipment, net | 8,160 | 7,777 |
Bank owned life insurance | 12,269 | 12,138 |
Accrued interest receivable | 5,519 | 5,482 |
Deferred income taxes | 1,047 | 62 |
Servicing assets | 10,327 | 5,617 |
Goodwill | 899 | 899 |
Intangible assets | 3,481 | 3,601 |
Other assets | 8,946 | 12,717 |
Total assets | 1,709,010 | 1,720,197 |
Deposits: | ||
Non-interest bearing | 261,806 | 203,843 |
Interest bearing | 1,151,474 | 1,037,492 |
Total deposits | 1,413,280 | 1,241,335 |
Short-term borrowings | 33,542 | 106,862 |
Long-term debt | 48,614 | 165,546 |
Subordinated debentures | 40,730 | 40,671 |
Accrued interest payable | 120 | 1,154 |
Other liabilities | 19,839 | 23,007 |
Total liabilities | 1,556,125 | 1,578,575 |
Stockholders' equity: | ||
Common stock, $1 par value. Authorized 25,000,000 and 10,000,000 shares as of June 30, 2021 and December 31, 2020; issued 6,492,900 and 6,455,566 as of June 30, 2021 and December 31, 2020 | 6,493 | 6,456 |
Surplus | 82,198 | 81,196 |
Treasury stock - 320,000 shares at June 30, 2021 and December 31, 2020 | (5,828) | (5,828) |
Unearned common stock held by employee stock ownership plan | (1,768) | (1,768) |
Retained earnings | 69,739 | 59,010 |
Accumulated other comprehensive income | 2,051 | 2,556 |
Total stockholders' equity | 152,885 | 141,622 |
Total liabilities and stockholders' equity | $ 1,709,010 | $ 1,720,197 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Available-for-sale, Amortized Cost | $ 139,242 | $ 120,215 |
Securities held-to-maturity | 6,726 | 6,857 |
Mortgage loans held for sale, amortized cost | 130,789 | 225,007 |
Loans at fair value | 15,129 | 12,182 |
Loans at amortized cost | $ 14,539 | $ 11,514 |
Common stock, par value | $ 1 | $ 1 |
Common stock, Authorized shares | 25,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 6,492,900 | 6,455,566 |
Common Stock, Shares, Outstanding | 6,492,900 | 6,455,566 |
Treasury stock shares held | 320,000 | 320,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Interest income: | ||||
Loans, including fees | $ 16,839 | $ 14,457 | $ 33,662 | $ 27,727 |
Securities: | ||||
Taxable | 280 | 305 | 553 | 669 |
Tax-exempt | 393 | 290 | 746 | 392 |
Cash and cash equivalents | 5 | 3 | 8 | 61 |
Total interest income | 17,517 | 15,055 | 34,969 | 28,849 |
Interest expense: | ||||
Deposits | 1,368 | 2,575 | 2,934 | 5,829 |
Borrowings | 737 | 883 | 1,502 | 1,757 |
Total interest expense | 2,105 | 3,458 | 4,436 | 7,586 |
Net interest income | 15,412 | 11,597 | 30,533 | 21,263 |
Provision for loan losses | 96 | 1,631 | 695 | 3,183 |
Net interest income after provision for loan losses | 15,316 | 9,966 | 29,838 | 18,080 |
Non-interest income: | ||||
Mortgage banking income | 19,467 | 16,788 | 43,567 | 23,583 |
SBA loan income | 1,490 | 638 | 2,735 | 1,180 |
Earnings on investment in life insurance | 65 | 69 | 131 | 139 |
Net change in the fair value of derivative instruments | (2,148) | 2,364 | (3,092) | 3,318 |
Net change in the fair value of loans held-for-sale | 1,235 | 633 | (2,632) | 1,493 |
Net change in the fair value of loans held-for-investment | 41 | 143 | (61) | 81 |
Net gain (loss) on hedging activity | (674) | (3,301) | 3,587 | (4,726) |
Net gain on sale of investment securities available-for-sale | 55 | 48 | 55 | |
Other | 1,060 | 428 | 2,134 | 866 |
Total non-interest income | 21,732 | 18,691 | 48,780 | 27,912 |
Non-interest expenses: | ||||
Salaries and employee benefits | 20,213 | 16,198 | 42,352 | 26,082 |
Occupancy and equipment | 1,175 | 1,127 | 2,326 | 2,051 |
Professional fees | 816 | 770 | 1,756 | 1,437 |
Advertising and promotion | 921 | 605 | 1,707 | 1,214 |
Data processing | 520 | 456 | 1,136 | 800 |
Information technology | 464 | 388 | 889 | 706 |
Pennsylvania bank shares tax | 163 | 254 | 326 | 480 |
Other | 1,974 | 1,456 | 4,018 | 2,548 |
Total non-interest expenses | 26,246 | 21,254 | 54,510 | 35,318 |
Income before income taxes | 10,802 | 7,403 | 24,108 | 10,674 |
Income tax expense | 2,544 | 1,690 | 5,680 | 2,445 |
Net income | $ 8,258 | $ 5,713 | $ 18,428 | $ 8,229 |
Basic earnings per common share | $ 1.37 | $ 0.94 | $ 3.06 | $ 1.33 |
Diluted earnings per common share | $ 1.33 | $ 0.94 | $ 2.98 | $ 1.32 |
Wealth Management Income | ||||
Non-interest income: | ||||
Revenue from contracts with customers | $ 1,163 | $ 853 | $ 2,299 | $ 1,874 |
Service Charges | ||||
Non-interest income: | ||||
Revenue from contracts with customers | $ 33 | $ 21 | $ 64 | $ 49 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income: | $ 8,258 | $ 5,713 | $ 18,428 | $ 8,229 |
Net change in unrealized gains on investment securities available for sale: | ||||
Net unrealized (losses) gains arising during the period, net of tax expense of $429, $515, ($163), and $617, respectively | 1,414 | 1,756 | (469) | 2,185 |
Less: reclassification adjustment for net gains on sales realized in net income, net of tax expense of $0, $12, ($12), and $12, respectively | (43) | (36) | (43) | |
Unrealized investment (losses) gains, net of tax expense of $429, $503, ($175), and $605, respectively | 1,414 | 1,713 | (505) | 2,142 |
Total other comprehensive (loss) income | 1,414 | 1,713 | (505) | 2,142 |
Total comprehensive income | $ 9,672 | $ 7,426 | $ 17,923 | $ 10,371 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Tax expense (benefit) on unrealized gains arising during the period | $ 429 | $ 515 | $ (163) | $ 617 |
Tax expense (benefit) on reclassification adjustment for net gains on sales realized in net income | 0 | 12 | (12) | 12 |
Tax expense (benefit) on unrealized investment gains (losses) | $ 429 | $ 503 | $ (175) | $ 605 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common stock | Surplus | Treasury Stock | Unearned Common Stock ESOP | Retained Earnings | Accumulated Other Comprehensive Income (loss) | Total |
Balance beginning of the period at Dec. 31, 2019 | $ 6,408 | $ 80,255 | $ (62) | $ 34,097 | $ (3) | $ 120,695 | |
Comprehensive income: | |||||||
Net income | 2,516 | 2,516 | |||||
Change in unrealized gains (losses) on securities available-for-sale, net of tax | 429 | 429 | |||||
Total comprehensive income | 2,945 | ||||||
Common stock issued through share-based awards and exercises | 6 | 26 | 32 | ||||
Net purchase of treasury stock through publicly announced plans | 63 | (5,766) | (5,703) | ||||
Stock based compensation | 64 | 64 | |||||
Balance ending of the period at Mar. 31, 2020 | 6,414 | 80,408 | (5,828) | 36,613 | 426 | 118,033 | |
Balance beginning of the period at Dec. 31, 2019 | 6,408 | 80,255 | (62) | 34,097 | (3) | 120,695 | |
Comprehensive income: | |||||||
Net income | 8,229 | ||||||
Change in unrealized gains (losses) on securities available-for-sale, net of tax | 2,142 | ||||||
Total comprehensive income | 10,371 | ||||||
Balance ending of the period at Jun. 30, 2020 | 6,414 | 80,467 | (5,828) | 42,326 | 2,139 | 125,518 | |
Balance beginning of the period at Mar. 31, 2020 | 6,414 | 80,408 | (5,828) | 36,613 | 426 | 118,033 | |
Comprehensive income: | |||||||
Net income | 5,713 | 5,713 | |||||
Change in unrealized gains (losses) on securities available-for-sale, net of tax | 1,713 | 1,713 | |||||
Total comprehensive income | 7,426 | ||||||
Stock based compensation | 59 | 59 | |||||
Balance ending of the period at Jun. 30, 2020 | 6,414 | 80,467 | (5,828) | 42,326 | 2,139 | 125,518 | |
Balance beginning of the period at Dec. 31, 2020 | 6,456 | 81,196 | (5,828) | $ (1,768) | 59,010 | 2,556 | 141,622 |
Comprehensive income: | |||||||
Net income | 10,170 | 10,170 | |||||
Change in unrealized gains (losses) on securities available-for-sale, net of tax | (1,919) | (1,919) | |||||
Total comprehensive income | 8,251 | ||||||
Dividends paid or accrued, $1.125 per share | (6,931) | (6,931) | |||||
Common stock issued through share-based awards and exercises | 32 | 302 | 334 | ||||
Stock based compensation | 229 | 229 | |||||
Balance ending of the period at Mar. 31, 2021 | 6,488 | 81,727 | (5,828) | (1,768) | 62,249 | 637 | 143,505 |
Balance beginning of the period at Dec. 31, 2020 | 6,456 | 81,196 | (5,828) | (1,768) | 59,010 | 2,556 | 141,622 |
Comprehensive income: | |||||||
Net income | 18,428 | ||||||
Change in unrealized gains (losses) on securities available-for-sale, net of tax | (505) | ||||||
Total comprehensive income | 17,923 | ||||||
Balance ending of the period at Jun. 30, 2021 | 6,493 | 82,198 | (5,828) | (1,768) | 69,739 | 2,051 | 152,885 |
Balance beginning of the period at Mar. 31, 2021 | 6,488 | 81,727 | (5,828) | (1,768) | 62,249 | 637 | 143,505 |
Comprehensive income: | |||||||
Net income | 8,258 | 8,258 | |||||
Change in unrealized gains (losses) on securities available-for-sale, net of tax | 1,414 | 1,414 | |||||
Total comprehensive income | 9,672 | ||||||
Dividends paid or accrued, $1.125 per share | (768) | (768) | |||||
Common stock issued through share-based awards and exercises | 5 | 52 | 57 | ||||
Stock based compensation | 419 | 419 | |||||
Balance ending of the period at Jun. 30, 2021 | $ 6,493 | $ 82,198 | $ (5,828) | $ (1,768) | $ 69,739 | $ 2,051 | $ 152,885 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2021 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||
Dividends declared | $ 0.125 | $ 1.125 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Net income | $ 18,428 | $ 8,229 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Gain on sale of investment securities | (48) | (55) |
Depreciation and amortization, net | (2,822) | (281) |
Net amortization of investment premiums and discounts and change in fair value of equity securities | 664 | 97 |
Provision for loan losses | 695 | 3,183 |
Amortization of issuance costs on subordinated debt | 59 | 53 |
Share-based compensation | 648 | 123 |
Net change in fair value of derivative instruments | 3,092 | (3,318) |
Net change in fair value of loans held for sale | 2,632 | (1,493) |
Net change in fair value of loans held for investment | 61 | (81) |
Gain on sale of OREO | (6) | |
Amortization and net impairment of servicing rights | 364 | 334 |
Capitalization of servicing rights, net | (5,074) | (1,478) |
SBA loan income | (2,735) | (1,180) |
Proceeds from sale of loans | 1,477,702 | 731,636 |
Loans originated for sale | (1,339,916) | (790,926) |
Mortgage banking income | (43,567) | (23,583) |
Increase in accrued interest receivable | (37) | (977) |
Increase in other assets | (494) | (1,839) |
Earnings from investment in life insurance | (131) | (139) |
(Decrease) income in deferred income tax | (810) | 809 |
(Decrease) increase in accrued interest payable | (1,034) | 517 |
(Decrease) Increase in other liabilities | (1,994) | 1,023 |
Net cash provided by (used in) operating activities | 105,683 | (79,352) |
Activity in available-for-sale securities: | ||
Maturities, repayments and calls | 4,421 | 3,733 |
Sales | 13,639 | 18,212 |
Purchases | (37,620) | (57,501) |
Activity in held-to-maturity securities: | ||
Maturities, repayments and calls | 2,140 | |
Proceeds from sale of OREO | 126 | |
Decrease in restricted stock | 2,504 | 838 |
Net increase in loans | (71,761) | (295,701) |
Purchases of premises and equipment | (1,093) | (469) |
Net cash used in investing activities | (89,910) | (328,622) |
Cash flows from financing activities: | ||
Net increase in deposits | 171,945 | 315,529 |
(Decrease) increase in short-term borrowings | (5,465) | 10,001 |
Decrease in short-term borrowings with original maturity > 90 days | (67,855) | (46,220) |
Repayment of long-term debt (subordinated debt) | (413) | |
(Repayment) proceeds from long-term debt, net | (116,932) | 142,324 |
Issuance costs on subordinated debt | (206) | |
Net purchase of treasury stock | (5,703) | |
Dividends paid | (7,699) | |
Share based awards and exercises | 391 | 32 |
Net cash (used in) provided by financing activities | (25,615) | 415,344 |
Net change in cash and cash equivalents | (9,842) | 7,370 |
Cash and cash equivalents at beginning of period | 36,744 | 39,371 |
Cash and cash equivalents at end of period | 26,902 | 46,741 |
Supplemental disclosure of cash flow information: | ||
Interest | 5,471 | 7,069 |
Income taxes | 8,009 | $ 1,195 |
Supplemental disclosure of cash flow information: | ||
Transfers from loans held for sale to loans held for investment | $ 4,193 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The Corporation’s unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position and the results of operations for the interim periods presented have been included. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Amounts subject to significant estimates are items such as the allowance for loan losses and lending related commitments, the fair value of financial instruments, other-than-temporary impairments of investment securities, and the valuations of goodwill and intangible assets, and servicing assets. These unaudited consolidated financial statements should be read in conjunction with the Corporation’s filings with the Securities and Exchange Commission (including our Annual Report on Form 10-K for the year ended December 31, 2020) and, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in Form 10-K and Form 10-Q filings, if any. Certain prior period amounts have been reclassified to conform with current period presentation. Reclassifications had no effect on net income or stockholders’ equity. Operating results for the three months ended June 30, 2021 are not necessarily indicative of the results for the year ending December 31, 2021 or for any other period. Estimates for the allowance for loan and lease losses at June 30, 2021 include probable losses related to the COVID-19 pandemic. While there have been signals of economic recovery and a resumption of many types of business activity, there remains significant uncertainty involved in the measurement of these losses. If economic conditions deteriorate further, then additional provision for loan losses may be required in future periods. It is unknown how long these conditions will last and what the ultimate financial impact will be to the Corporation. |
Earnings per Common Share
Earnings per Common Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings per Common Share | |
Earnings per Common Share | (2) Earnings per Common Share Basic earnings per common share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period reduced by unearned ESOP Plan shares and treasury shares. Diluted earnings per common share takes into account the potential dilution computed pursuant to the treasury stock method that could occur if stock options were exercised and converted into common stock and if restricted stock awards were vested. The effects of stock options are excluded from the computation of diluted earnings per share in periods in which the effect would be anti-dilutive. Three Months Ended Six Months Ended June 30, June 30, (dollars in thousands, except per share data) 2021 2020 2021 2020 Numerator: Net income available to common stockholders $ 8,258 5,713 $ 18,428 8,229 Denominator for basic earnings per share Weighted average shares outstanding 6,147 6,094 6,135 6,210 Average unearned ESOP shares (115) — (117) — Basic weighted averages shares outstanding 6,032 6,094 6,018 6,210 Effect of dilutive common shares 171 13 159 25 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 6,203 6,107 6,177 6,235 Basic earnings per share $ 1.37 0.94 $ 3.06 1.33 Diluted earnings per share $ 1.33 0.94 $ 2.98 1.32 Antidilutive shares excluded from computation of average dilutive earnings per share 140 281 140 204 |
Securities
Securities | 6 Months Ended |
Jun. 30, 2021 | |
Securities | |
Securities | (3) Securities The amortized cost and fair value of securities as of June 30, 2021 and December 31, 2020 are as follows: June 30, 2021 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 26,300 468 (33) 26,735 8 U.S. government agency mortgage-backed securities 3,750 155 ─ 3,905 ─ U.S. government agency collateralized mortgage obligations 21,501 627 (104) 22,024 6 State and municipal securities 73,750 1,590 (159) 75,181 11 U.S. Treasuries 7,991 38 ─ 8,029 ─ Corporate bonds 5,950 95 (10) 6,035 2 Total securities available-for-sale $ 139,242 2,973 (306) 141,909 27 Securities held-to-maturity: State and municipal securities 6,441 285 — 6,726 — Total securities held-to-maturity $ 6,441 285 — 6,726 — December 31, 2020 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 25,303 364 (75) 25,592 8 U.S. government agency mortgage-backed securities 3,854 192 — 4,046 — U.S. government agency collateralized mortgage obligations 23,010 916 (17) 23,909 1 State and municipal securities 63,848 2,025 (63) 65,810 3 Corporate bonds 4,200 7 (2) 4,205 2 Total securities available-for-sale $ 120,215 3,504 (157) 123,562 14 Securities held-to-maturity: State and municipal securities 6,510 347 — 6,857 — Total securities held-to-maturity $ 6,510 347 — 6,857 — Although the Corporation’s investment portfolio overall is in a net unrealized gain position at June 30, 2021, the temporary impairment in the above noted securities is primarily the result of changes in market interest rates subsequent to purchase and the Corporation does not intend to sell these securities prior to recovery and it is more likely than not that the Corporation will not be required to sell these securities prior to recovery to satisfy liquidity needs, and therefore, no securities are deemed to be other-than-temporarily impaired. As of June 30, 2021 and December 31, 2020, securities having a fair value of $63.6 million and $55.9 million, respectively, were specifically pledged as collateral for public funds, the FRB discount window program, FHLB borrowings and other purposes. The FHLB has a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB. The following table shows the Corporation’s investment gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at June 30, 2021 and December 31, 2020: June 30, 2021 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 4,304 (19) 4,746 (14) 9,050 (33) U.S. government agency collateralized mortgage obligations 6,673 (104) — — 6,673 (104) State and municipal securities 14,039 (159) — — 14,039 (159) Corporate bonds 940 (10) — — 940 (10) Total securities available-for-sale $ 25,956 (292) 4,746 (14) 30,702 (306) December 31, 2020 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 2,884 (4) 7,443 (71) 10,327 (75) U.S. government agency collateralized mortgage obligations 2,284 (17) — — 2,284 (17) State and municipal securities 4,163 (63) — — 4,163 (63) Corporate bonds 1,198 (2) — — 1,198 (2) Total securities available-for-sale $ 10,529 (86) 7,443 (71) 17,972 (157) The amortized cost and carrying value of securities at June 30, 2021 and December 31, 2020 are shown below by contractual maturities. Actual maturities may differ from contractual maturities as issuers may have the right to call or repay obligations with or without call or prepayment penalties. June 30, 2021 December 31, 2020 Available-for-sale Held-to-maturity Available-for-sale Held-to-maturity Amortized Fair Amortized Fair Amortized Fair Amortized Fair (dollars in thousands) cost value cost value cost value cost value Investment securities: Due in one year or less $ — — — — $ — — — — Due after one year through five years — — 3,149 3,228 — — 3,181 3,288 Due after five years through ten years 20,009 20,157 3,292 3,498 12,035 12,095 3,329 3,569 Due after ten years 93,982 95,822 — — 81,316 83,512 — — Subtotal 113,991 115,979 6,441 6,726 93,351 95,607 6,510 6,857 Mortgage-related securities 25,251 25,930 — — 26,864 27,955 — — Total $ 139,242 141,909 6,441 6,726 $ 120,215 123,562 6,510 6,857 Proceeds from the sale of available for sale investment securities totaled $0 for the three months ended June 30, 2021 and $13.6 milllion for the six months ended June 30, 2021, resulting in a gross gain on sale of $248 thousand and a gross loss on sale of $200 thousand for the six months ended June 30, 2021. Proceeds from the sale of available for sale investment securities totaled $18.2 million for the three and six months ended June 30, 2020, resulting in a gross gain on sale of $257 thousand and a gross loss on sale of $202 thousand for the periods. |
Loans Receivable
Loans Receivable | 6 Months Ended |
Jun. 30, 2021 | |
Loans Receivable | |
Loans Receivable | (4) Loans Receivable Loans and leases outstanding at June 30, 2021 and December 31, 2020 are detailed by category as follows: June 30, December 31, (dollars in thousands) 2021 2020 Mortgage loans held for sale $ 132,348 229,199 Real estate loans: Commercial mortgage 530,163 485,103 Home equity lines and loans 54,076 64,987 Residential mortgage (1) 55,497 52,454 Construction 132,547 140,246 Total real estate loans 772,283 742,790 Commercial and industrial 263,030 261,750 Small business loans 74,987 49,542 Paycheck Protection Program loans ("PPP") 189,337 203,543 Main Street Lending Program Loans ("MSLP") 588 580 Consumer 526 511 Leases, net 64,542 31,040 Total portfolio loans and leases 1,365,293 1,289,756 Total loans and leases $ 1,497,641 1,518,955 Loans with predetermined rates $ 607,507 658,458 Loans with adjustable or floating rates 890,134 860,497 Total loans and leases $ 1,497,641 1,518,955 Net deferred loan origination (fees) costs $ (2,543) (4,992) (1) Includes $15,129 and $12,182 of loans at fair value as of June 30, 2021 and December 31, 2020, respectively. Components of the net investment in leases at June 30, 2021 and December 31, 2020 are detailed as follows: June 30, December 31, (dollars in thousands) 2021 2020 Minimum lease payments receivable $ 78,233 37,919 Unearned lease income (13,691) (6,879) Total $ 64,542 31,040 Age Analysis of Past Due Loans and Leases The following tables present an aging of the Corporation’s loan and lease portfolio as of June 30, 2021 and December 31, 2020, respectively: Total 90+ days Accruing Nonaccrual Total loans June 30, 2021 30-89 days past due and Total past Loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 530,163 530,163 — 530,163 — % Home equity lines and loans — — — 53,160 53,160 916 54,076 1.69 Residential mortgage (1) — — — 52,795 52,795 2,702 55,497 4.87 Construction 231 — 231 132,316 132,547 — 132,547 0.17 Commercial and industrial 1,856 — 1,856 257,514 259,370 3,660 263,030 2.10 Small business loans — — — 74,070 74,070 917 74,987 1.22 Paycheck Protection Program loans — — — 189,337 189,337 — 189,337 — Main Street Lending Program loans — — — 588 588 — 588 — Consumer — — — 526 526 — 526 — Leases, net 155 — 155 64,387 64,542 — 64,542 0.24 Total $ 2,242 — 2,242 1,354,856 1,357,098 8,195 1,365,293 0.76 % (1) Includes $15,129 of loans at fair value as of June 30, 2021 ($14,235 are current and $894 are nonaccrual). Total 90+ days Accruing Nonaccrual Total loans December 31, 2020 30-89 days past due and Total past Loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 482,042 482,042 3,061 485,103 0.63 % Home equity lines and loans — — — 64,128 64,128 859 64,987 1.32 Residential mortgage (1) 3,595 — 3,595 46,134 49,729 2,725 52,454 12.05 Construction — — — 140,246 140,246 — 140,246 — Commercial and industrial — — — 260,465 260,465 1,285 261,750 0.49 Small business loans — — — 49,542 49,542 — 49,542 — Paycheck Protection Program loans — — — 203,543 203,543 — 203,543 — Main Street Lending Program loans — — — 580 580 — 580 — Consumer — — — 511 511 — 511 — Leases, net 109 — 109 30,931 31,040 — 31,040 0.35 Total $ 3,704 — 3,704 1,278,122 1,281,826 7,930 1,289,756 0.90 % (1) Includes $12,182 of loans at fair value as of December 31, 2020 ($10,314 are current, $958 are 30-89 days past due and $910 are nonaccrual). |
Allowance for Loan Losses (the
Allowance for Loan Losses (the Allowance) | 6 Months Ended |
Jun. 30, 2021 | |
Allowance for Loan Losses (the Allowance) | |
Allowance for Loan Losses (the Allowance) | (5) Allowance for Loan Losses (the “Allowance”) The Allowance is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the Allowance, and subsequent recoveries, if any, are credited to the Allowance. The Allowance is maintained at a level considered adequate to provide for losses that are probable and estimatable. Management’s periodic evaluation of the adequacy of the Allowance is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available. Estimates for the allowance for loan and lease losses at June 30, 2021 include probable losses related to the COVID-19 pandemic. Roll-Forward of Allowance by Portfolio Segment The following tables detail the roll-forward of the Corporation’s Allowance, by portfolio segment, for the three and six month periods ended June 30, 2021 and 2020, respectively: Balance, Balance, (dollars in thousands) March 31, 2021 Charge-offs Recoveries Provision June 30, 2021 Commercial mortgage $ 7,655 — — (509) 7,146 Home equity lines and loans 310 — 2 (31) 281 Residential mortgage 314 — 2 8 324 Construction 2,311 — — (70) 2,241 Commercial and industrial 5,286 — 13 61 5,360 Small business loans 1,920 — — 315 2,235 Consumer 4 — 1 (1) 4 Leases 576 (129) — 323 770 Total $ 18,376 (129) 18 96 18,361 Balance, Balance, (dollars in thousands) December 31, 2020 Charge-offs Recoveries Provision June 30, 2021 Commercial mortgage $ 7,451 — — (305) 7,146 Home equity lines and loans 434 — 4 (157) 281 Residential mortgage 385 — 4 (65) 324 Construction 2,421 — — (180) 2,241 Commercial and industrial 5,431 — 18 (89) 5,360 Small business loans 1,259 — — 976 2,235 Consumer 4 — 2 (2) 4 Leases 382 (129) — 517 770 Total $ 17,767 (129) 28 695 18,361 Balance, Balance, (dollars in thousands) March 31, 2020 Charge-offs Recoveries Provision June 30, 2020 Commercial mortgage $ 4,112 — — 1,165 5,277 Home equity lines and loans 484 (13) 2 199 672 Residential mortgage 219 — 2 125 346 Construction 2,381 — — (362) 2,019 Commercial and industrial 3,169 (9) 4 442 3,606 Small business loans 725 — — 22 747 Consumer 4 (10) 1 9 4 Leases 4 — — 31 35 Total $ 11,098 (32) 9 1,631 12,706 Balance, Balance, (dollars in thousands) December 31, 2019 Charge-offs Recoveries Provision June 30, 2020 Commercial mortgage $ 3,426 — — 1,851 5,277 Home equity lines and loans 342 (13) 4 339 672 Residential mortgage 179 — 4 163 346 Construction 2,362 — — (343) 2,019 Commercial and industrial 2,684 (9) 32 899 3,606 Small business loans 509 — — 238 747 Consumer 6 (10) 2 6 4 Leases 5 — — 30 35 Total $ 9,513 (32) 42 3,183 12,706 Allowance Allocated by Portfolio Segment The following tables detail the allocation of the allowance for loan and lease losses and the carrying value for loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of June 30, 2021 and December 31, 2020. Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively June 30, 2021 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 7,146 7,146 $ 722 529,441 530,163 Home equity lines and loans 6 275 281 916 53,160 54,076 Residential mortgage 68 256 324 1,808 38,560 40,368 Construction — 2,241 2,241 1,206 131,341 132,547 Commercial and industrial 1,528 3,832 5,360 4,062 258,968 263,030 Small business loans 376 1,859 2,235 1,072 73,915 74,987 Paycheck Protection Program loans — — — — 189,337 189,337 (2) Main Street Lending Program — — — — 588 588 (2) Consumer — 4 4 — 526 526 Leases, net — 770 770 — 64,542 64,542 Total $ 1,978 16,383 18,361 $ 9,786 1,340,378 1,350,164 (1) Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2020 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 7,451 7,451 $ 1,606 483,497 485,103 Home equity lines and loans 9 425 434 921 64,066 64,987 Residential mortgage 73 312 385 1,817 38,455 40,272 Construction — 2,421 2,421 1,206 139,040 140,246 Commercial and industrial 1,563 3,868 5,431 4,645 257,105 261,750 Small business loans — 1,259 1,259 185 49,357 49,542 Paycheck Protection Program loans — — — — 203,543 203,543 (2) Main Street Lending Program — — — — 580 580 (2) Consumer — 4 4 — 511 511 Leases, net — 382 382 — 31,040 31,040 Total $ 1,645 16,122 17,767 $ 10,380 1,267,194 1,277,574 (1) (1) Excludes deferred fees and loans carried at fair value. (2) PPP and MSLP loans are not reserved against as they are 100% guaranteed. Loans and Leases by Credit Ratings As part of the process of determining the Allowance to the different segments of the loan and lease portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by Management. The results of these reviews are reflected in the risk grade assigned to each loan. These internally assigned grades are as follows: ● Pass – Loans considered to be satisfactory with no indications of deterioration. ● Special mention – Loans classified as special mention have a potential weakness that deserves Management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. ● Substandard – Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Substandard loans 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. Loan balances classified as doubtful have been reduced by partial charge-offs and are carried at their net realizable values. The following tables detail the carrying value of loans and leases by portfolio segment based on the credit quality indicators used to determine the allowance for loan and lease losses as of June 30, 2021 and December 31, 2020: June 30, 2021 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 492,532 34,509 3,122 — 530,163 Home equity lines and loans 52,677 — 1,399 — 54,076 Construction 123,389 9,158 — — 132,547 Commercial and industrial 207,105 36,451 16,133 3,341 263,030 Small business loans 71,459 — 3,528 — 74,987 Paycheck Protection Program loans 189,337 — — — 189,337 Main Street Lending Program loans 588 — — — 588 Total $ 1,137,087 80,118 24,182 3,341 1,244,728 December 31, 2020 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 449,545 32,059 3,499 — 485,103 Home equity lines and loans 63,923 — 1,064 — 64,987 Construction 132,286 7,960 — — 140,246 Commercial and industrial 227,349 21,721 9,000 3,680 261,750 Small business loans 46,789 — 2,753 — 49,542 Paycheck Protection Program loans 203,543 — — — 203,543 Main Street Lending Program loans 580 — — — 580 Total $ 1,124,015 61,740 16,316 3,680 1,205,751 In addition to credit quality indicators as shown in the above tables, allowance allocations for residential mortgages, consumer loans and leases are also applied based on their performance status as of June 30, 2021 and December 31, 2020. No troubled debt restructurings performing according to modified terms are included in performing residential mortgages below as of June 30, 2021 and December 31, 2020. June 30, 2021 December 31, 2020 (dollars in thousands) Performing Nonperforming Total Performing Nonperforming Total Residential mortgage $ 38,560 1,808 40,368 $ 38,457 1,815 40,272 Consumer 526 — 526 511 — 511 Leases, net 64,542 — 64,542 31,040 — 31,040 Total $ 103,628 1,808 105,436 $ 70,008 1,815 71,823 There were five nonperforming residential mortgage loans at June 30, 2021 and five nonperforming residential mortgage loans at December 31, 2020 with a combined outstanding principal balance of $894 thousand and $910 thousand, respectively, which were carried at fair value and not included in the table above. Impaired Loans The following table details the recorded investment and principal balance of impaired loans by portfolio segment, and their related allowance for loan and lease losses. As of June 30, 2021 As of December 31, 2020 Recorded Principal Related Recorded Principal Related (dollars in thousands) investment balance allowance investment balance allowance Impaired loans with related allowance: Commercial and industrial $ 3,271 3,362 1,528 3,860 3,902 1,563 Small business loans 916 3,415 376 — — — Home equity lines and loans 92 104 6 95 105 9 Residential mortgage 684 684 68 689 689 73 Total $ 4,963 7,565 1,978 4,644 4,696 1,645 Impaired loans without related allowance: Commercial mortgage $ 722 722 — 1,606 1,642 — Commercial and industrial 791 896 — 785 862 — Small business loans 156 1,091 — 185 185 — Home equity lines and loans 824 837 — 826 839 — Residential mortgage 1,124 1,124 — 1,128 1,128 — Construction 1,206 1,206 — 1,206 1,206 — Leases — — — — — — Total 4,823 5,876 — 5,736 5,862 — Grand Total $ 9,786 13,441 1,978 10,380 10,558 1,645 The following table details the average recorded investment and interest income recognized on impaired loans by portfolio segment. Three Months Ended Three Months Ended June 30, 2021 June 30, 2020 Average Interest Average Interest recorded Income recorded Income (dollars in thousands) investment Recognized investment Recognized Impaired loans with related allowance: Commercial and industrial $ 3,309 5 446 5 Small business loans 917 — — — Home equity lines and loans 93 — 357 — Residential mortgage 686 — — — Total $ 5,005 5 803 5 Impaired loans without related allowance: Commercial mortgage $ 726 8 2,106 21 Commercial and industrial 969 — 1,109 4 Small business loans 161 4 220 5 Home equity lines and loans 824 — 400 — Residential mortgage 1,125 3 4,310 92 Construction 1,206 14 1,206 15 Leases 39 — — — Total $ 5,050 29 9,351 137 Grand Total $ 10,055 34 10,154 142 Six Months Ended Six Months Ended June 30, 2021 June 30, 2020 Average Interest Average Interest recorded Income recorded Income (dollars in thousands) investment Recognized investment Recognized Impaired loans with related allowance: Commercial and industrial $ 3,339 10 449 10 Small business loans 917 — — — Home equity lines and loans 94 — 360 — Residential mortgage 687 — — — Total $ 5,037 10 809 10 Impaired loans without related allowance: Commercial mortgage $ 730 16 2,117 42 Commercial and industrial 1,002 — 1,122 8 Small business loans 169 8 227 11 Home equity lines and loans 824 — 400 — Residential mortgage 1,126 3 4,317 92 Construction 1,206 29 1,210 32 Leases 80 — — — Total $ 5,137 56 9,393 185 Grand Total $ 10,174 66 10,202 195 Troubled Debt Restructuring The restructuring of a loan is considered a “troubled debt restructuring” (“TDR”) if both of the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the creditor has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan, and (e) for leases, a reduced lease payment. A less common concession granted is the forgiveness of a portion of the principal. The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower were a concession not granted. The determination of whether a concession has been granted is subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender. The balance of TDRs at June 30, 2021 and December 31, 2020 are as follows: June 30, December 31, (dollars in thousands) 2021 2020 TDRs included in nonperforming loans and leases $ 239 244 TDRs in compliance with modified terms 2,486 3,362 Total TDRs $ 2,725 3,606 There were no loan and lease modifications granted during the three and six months ended June 30, 2021 and 1 loan and lease modification granted during the three and six months ended June 30, 2020 that were categorized as a TDR. No loan and lease modifications granted during the three and six months ended June 30, 2021 and 2020 subsequently defaulted during the same time period. In accordance with Section 4013 of the CARES Act, loan deferrals granted to customers that resulted from the impact of COVID-19 and who were not past due at the time of deferral were not considered trouble debt restructurings under ASC 310-40 as of June 30, 2021. COVID-19 loan modifications provided to borrowers amounted to $29.0 million as of June 30, 2021, up slightly from $26.9 million as of December 31, 2020, while down from the $144.1 million as of June 30, 2020. This provision was extended to January 1, 2022 under the Consolidated Appropriations Act, 2021. Management continues to monitor these deferrals and has adequately considered these credits in the June 30, 2021 allowance for loan losses balance. These modified loans are classified as performing and are not considered past due. Loans are to be placed on non-accrual when it becomes apparent that payment of interest or recovery of all principal is questionable, and the COVID-19 related modification is no longer considered short-term or the modification is deemed ineffective. |
Short-Term Borrowings and Long
Short-Term Borrowings and Long -Term Debt | 6 Months Ended |
Jun. 30, 2021 | |
Short-Term Borrowings and Long-Term Debt | |
Short-Term Borrowings and Long-Term Debt | (6) Short-Term Borrowings and Long-Term Debt The Corporation’s short-term borrowings generally consist of federal funds purchased and short-term borrowings extended under agreements with the Federal Home Loan Bank of Pittsburgh (“FHLB”). The Corporation has two unsecured Federal Funds borrowing facilities with correspondent banks: one of $24 million and one of $15 million. Federal Funds purchased generally represent one-day borrowings. The Corporation had no Federal Funds purchased at June 30, 2021 and December 31, 2020. The Corporation also has a facility with the Federal Reserve Bank (“FRB”) of Philadelphia discount window of $3.7 million. This facility is fully secured by investment securities. There were no borrowings under this at June 30, 2021 and $10 million at December 31, 2020. Short-term borrowings at June 30, 2021 and December 31, 2020 consisted of the following notes: Balance as of Maturity Interest June 30, December 31, (dollars in thousands) date rate 2021 2020 Open Repo Plus Weekly 05/31/2022 0.33 % 13,542 60,416 Federal Reserve Discount Window 03/31/2021 0.25 — 10,000 Mid-term Repo-fixed 01/13/2021 0.36 — 4,605 Mid-term Repo-fixed 06/10/2021 0.10 — 6,376 Mid-term Repo-fixed 09/10/2021 0.11 10,000 10,000 Mid-term Repo-fixed 12/10/2021 0.16 10,000 10,000 Mid-term Repo-fixed 01/27/2021 0.23 — 5,465 Total $ 33,542 106,862 As part of the CARES Act, the FRB of Philadelphia offered secured discounted borrowings to banks who originated PPP loans through the Paycheck Protection Program Liquidity Facility or PPPLF program. Advances from this facility are secured 100% by the aggregate face value of pools comprised of loans with common maturity dates. PPPLF advances mature concurrently with the loans in a given pool. At June 30, 2021, the Corporation pledged $36.3 million of PPP loans to the FRB of Philadelphia to borrow $36.3 million of funds at a rate of 0.35%. Advances made on the PPPLF can be made through July 30, 2021. Long-term debt at June 30, 2021 and December 31, 2020 consisted of the following notes: Balance as of Maturity Interest June 30, December 31, (dollars in thousands) date rate 2021 2020 PPPLF Advances 2022 0.35 % — 153,269 PPPLF Advances 2026 0.35 $ 36,337 — Mid-term Repo-fixed 06/29/2022 0.32 7,392 7,392 Mid-term Repo-fixed 09/12/2022 0.23 4,885 4,885 Total ` $ 48,614 165,546 The FHLB of Pittsburgh has also issued $108 million of letters of credit to the Corporation for the benefit of the Corporation’s public deposit funds and loan customers. These letters of credit expire throughout 2021. The Corporation has a maximum borrowing capacity with the FHLB of $549.0 million as of June 30, 2021 and $638.9 million as of December 31, 2020. All advances and letters of credit from the FHLB are secured by a blanket lien on non-pledged, mortgage-related loans and securities as part of the Corporation’s borrowing agreement with the FHLB. |
Servicing Assets
Servicing Assets | 6 Months Ended |
Jun. 30, 2021 | |
Servicing Assets | |
Servicing Assets | (7) Servicing Assets The Corporation sells certain residential mortgage loans and the guaranteed portion of certain small business loans (“SBA loans”) to third parties and retains servicing rights and receives servicing fees. All such transfers are accounted for as sales. When the Corporation sells a residential mortgage loan, it does not retain any portion of that loan and its continuing involvement in such transfers is limited to certain servicing responsibilities. While the Corporation may retain a portion of certain sold SBA loans, its continuing involvement in the portion of the loan that was sold is limited to certain servicing responsibilities. When the contractual servicing fees on loans sold with servicing retained are expected to be more than adequate compensation to a servicer for performing the servicing, a capitalized servicing asset is recognized. The Corporation accounts for the transfers and servicing of financial assets in accordance with ASC 860, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. Residential Mortgage Loans The mortgage servicing rights (“MSRs”) are amortized over the period of the estimated future net servicing life of the underlying assets. MSR’s are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the MSR. The Corporation serviced $863.2 million and $506.0 million of residential mortgage loans as of June 30, 2021 and December 31, 2020, respectively. During the three and six months ended June 30, 2021, the Corporation recognized servicing fee income of $481 thousand and $842 thousand, respectively, compared to $67 thousand and $107 thousand during the three and six months ended June 30, 2020, respectively. Changes in the MSR balance are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Balance at beginning of the period $ 7,118 423 $ 4,647 446 Servicing rights capitalized 2,154 952 4,496 1,136 Amortization of servicing rights (271) (50) (470) (83) Change in valuation allowance (59) (31) 269 (205) Balance at end of the period $ 8,942 1,294 $ 8,942 1,294 Activity in the valuation allowance for MSR’s was as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Valuation allowance, beginning of period $ (107) (272) $ (435) (98) Impairment (59) (31) — (205) Recovery — — 269 — Valuation allowance, end of period $ (166) (303) $ (166) (303) The Corporation uses assumptions and estimates in determining the fair value of MSRs. These assumptions include prepayment speeds and discount rates. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. At June 30, 2021, the key assumptions used to determine the fair value of the Corporation’s MSRs included a lifetime constant prepayment rate equal to 7.61% and a discount rate equal to 9.00%. At December 31, 2020, the key assumptions used to determine the fair value of the Corporation’s MSRs included a lifetime constant prepayment rate equal to 9.39% and a discount rate equal to 9.00%. The prepayment speed assumption has declined from December 31, 2020 to June 30, 2021 as interest rates have started to increase and the number of mortgage refinancings have started to decline, while the discount rate assumption is unchanged over this period as the underlying credit quality of the loans sold in each period is relatively unchanged. At June 30, 2021 and December 31, 2020, the sensitivity of the current fair value of the residential mortgage servicing rights to immediate 10% and 20% favorable and unfavorable changes in key economic assumptions are included in the following table. (dollars in thousands) June 30, 2021 December 31, 2020 Fair value of residential mortgage servicing rights $ 9,024 $ 4,647 Weighted average life (years) 7.0 5.0 Prepayment speed 7.61% 9.39% Impact on fair value: 10% adverse change $ (321) $ (183) 20% adverse change (629) (354) Discount rate 9.00% 9.00% Impact on fair value: 10% adverse change $ (347) $ (168) 20% adverse change (669) (329) The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of an adverse variation in a particular assumption on the fair value of the MSRs is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change. SBA Loans SBA loan servicing assets are amortized over the period of the estimated future net servicing life of the underlying assets. SBA loan servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to their amortized cost. Impairment is recognized on the income statement to the extent the fair value is less than the capitalized amount of the SBA loan servicing asset. The Corporation serviced $79.5 million and $55.9 million of SBA loans, as of June 30, 2021 and December 31, 2020, respectively. Changes in the SBA loan servicing asset balance are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Balance at beginning of the period $ 1,160 469 $ 970 337 Servicing rights capitalized 304 183 578 342 Amortization of servicing rights (87) (28) (154) (47) Change in valuation allowance 8 8 (9) — Balance at end of the period $ 1,385 632 $ 1,385 632 Activity in the valuation allowance for SBA loan servicing assets was as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Valuation allowance, beginning of period $ (56) (34) $ (39) (26) Impairment — — (9) — Recovery 8 8 — — Valuation allowance, end of period $ (48) (26) $ (48) (26) The Corporation uses assumptions and estimates in determining the fair value of SBA loan servicing rights. These assumptions include prepayment speeds, discount rates, and other assumptions. The assumptions used in the valuation were based on input from buyers, brokers and other qualified personnel, as well as market knowledge. At June 30, 2021, the key assumptions used to determine the fair value of the Corporation’s SBA loan servicing rights included a lifetime constant prepayment rate equal to 13.28%, and a discount rate equal to 5.82%. At December 31, 2020, the key assumptions used to determine the fair value of the Corporation’s SBA loan servicing rights included a lifetime constant prepayment rate equal to 12.73%, and a discount rate equal to 8.33%. At June 30, 2021 and December 31, 2020, the sensitivity of the current fair value of the SBA loan servicing rights to immediate 10% and 20% favorable and unfavorable changes in key economic assumptions are included in the following table. (dollars in thousands) June 30, 2021 December 31, 2020 Fair value of SBA loan servicing rights $ 1,520 $ 1,010 Weighted average life (years) 3.6 3.7 Prepayment speed 13.28% 12.73% Impact on fair value: 10% adverse change $ (62) $ (37) 20% adverse change (118) (71) Discount rate 5.82% 8.33% Impact on fair value: 10% adverse change $ (41) $ (25) 20% adverse change (79) (49) The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of an adverse variation in a particular assumption on the fair value of the SBA servicing rights is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change. |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements and Disclosures | |
Fair Value Measurements and Disclosures | (8) Fair Value Measurements and Disclosures The Corporation uses fair value measurements to record fair value adjustments to certain assets and liabilities. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Corporation’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation techniques or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Corporation groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on 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 for substantially the full term of the asset or liability. Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation. Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis. Securities The fair value of securities available-for-sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. Mortgage Loans Held for Sale The fair value of loans held for sale is based on secondary market prices. Mortgage Loans Held for Investment The fair value of mortgage loans held for investment is based on the price secondary markets are currently offering for similar loans using observable market data. Derivative Financial Instruments The fair values of forward commitments and interest rate swaps are based on market pricing and therefore are considered Level 2. Derivatives classified as Level 3 consist of interest rate lock commitments related to mortgage loan commitments. The determination of fair value includes assumptions related to the likelihood that a commitment will ultimately result in a closed loan, which is a significant unobservable assumption. A significant increase or decrease in the external market price would result in a significantly higher or lower fair value measurement. For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2021 and December 31, 2020 are as follows : June 30, 2021 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 26,735 — 26,735 — U.S. government agency mortgage-backed securities 3,905 — 3,905 — U.S. government agency collateralized mortgage obligations 22,024 — 22,024 — State and municipal securities 75,181 — 75,181 — U.S. Treasuries 8,029 8,029 Corporate bonds 6,035 — 6,035 — Equity investments 1,016 — 1,016 — Mortgage loans held for sale 132,348 — 132,348 — Mortgage loans held for investment 15,129 — 15,129 — Interest rate lock commitments 2,667 — — 2,667 Forward commitments 13 — 13 — Customer derivatives - interest rate swaps 1,118 — 1,118 — Total $ 294,200 — 291,533 2,667 Liabilities Interest rate lock commitments 259 — — 259 Forward commitments 291 — 291 — Customer derivatives - interest rate swaps 1,181 — 1,181 — $ 1,731 — 1,472 259 December 31, 2020 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 25,592 — 25,592 — U.S. government agency mortgage-backed securities 4,046 — 4,046 — U.S. government agency collateralized mortgage obligations 23,909 — 23,909 — State and municipal securities 65,810 — 65,810 — Corporate bonds 4,205 — 4,205 — Equity investments 1,031 — 1,031 — Mortgage loans held for sale 229,199 — 229,199 — Mortgage loans held for investment 12,182 — 12,182 — Interest rate lock commitments 6,932 — — 6,932 Forward commitments — — — — Customer derivatives - interest rate swaps 1,118 — 1,118 — Total $ 374,024 — 367,092 6,932 Liabilities Interest rate lock commitments 100 — — 100 Forward commitments 1,572 — 1,572 — Customer derivatives - interest rate swaps 1,219 — 1,219 — $ 2,891 — 2,791 100 Financial assets measured at fair value on a nonrecurring basis, are considered Level 3 assets in the fair value hierarchy. The fair value used at June 30, 2021 and December 31, 2020 are as follows: June 30, 2021 December 31, 2020 (dollars in thousands) Fair Value Fair Value Mortgage servicing rights $ 8,942 4,647 SBA loan servicing rights 1,385 970 Impaired loans (1) 2,985 2,998 Total $ 13,312 8,615 (1) Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values. Below is management’s estimate of the fair value of all financial instruments, whether carried at cost or fair value on the Corporation’s balance sheet. The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a fair value calculation is only provided for a limited portion of the Corporation’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair value of the Corporation’s financial instruments: Cash and Cash Equivalents The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values. Loans Receivable The fair value of loans receivable is estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value below is reflective of an exit price. Loan Servicing Rights The Corporation estimates the fair value of mortgage servicing rights and SBA loan servicing rights using discounted cash flow models that calculate the present value of estimated future net servicing income. The model uses readily available prepayment speed assumptions for the interest rates of the portfolios serviced. These servicing rights are classified within Level 3 in the fair value hierarchy based upon management’s assessment of the inputs. The Corporation reviews the servicing rights portfolios on a quarterly basis for impairment. Impaired Loans Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Accrued Interest Receivable and Payable The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value. Deposit Liabilities The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. Short-Term Borrowings The carrying amounts of short-term borrowings approximate their fair values. Long-Term Debt Fair values of FHLB advances are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party. Subordinated Debt Fair values of junior subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity. Off-Balance Sheet Financial Instruments Off-balance sheet instruments are primarily comprised of loan commitments, which are generally priced at market at the time of funding. Fees on commitments to extend credit and stand-by letters of credit are deemed to be immaterial and these instruments are expected to be settled at face value or expire unused. It is impractical to assign any fair value to these instruments and as a result they are not included in the table below. Fair values assigned to the notional value of interest rate lock commitments and forward sale contracts are based on market quotes. The estimated fair values of the Corporation’s financial instruments at June 30, 2021 and December 31, 2020 are as follows: June 30, 2021 December 31, 2020 Fair Value Carrying Carrying (dollars in thousands) Hierarchy Level amount Fair value amount Fair value Financial assets: Cash and cash equivalents Level 1 $ 26,902 26,902 36,744 36,744 Securities available-for-sale Level 2 141,909 141,909 123,562 123,562 Securities held-to-maturity Level 2 6,441 6,726 6,510 6,857 Equity investments Level 2 1,016 1,016 1,031 1,031 Mortgage loans held for sale Level 2 132,348 132,348 229,199 229,199 Loans receivable, net of the allowance for loan and lease losses Level 3 1,329,260 1,376,721 1,272,582 1,289,776 Mortgage loans held for investment Level 2 15,129 15,129 12,182 12,182 Interest rate lock commitments Level 3 2,667 2,667 6,932 6,932 Forward commitments Level 2 13 13 — — Restricted investment in bank stock NA 5,357 NA 7,861 NA Accrued interest receivable Level 3 5,519 5,519 5,482 5,482 Customer derivatives - interest rate swaps Level 2 1,118 1,118 1,118 1,118 Financial liabilities: Deposits Level 2 1,413,280 1,523,900 1,241,335 1,392,500 Short-term borrowings Level 2 33,542 33,542 106,862 106,862 Long-term debt Level 2 48,614 49,102 165,546 168,000 Subordinated debentures Level 2 40,730 41,961 40,671 38,375 Accrued interest payable Level 2 120 120 1,154 1,154 Interest rate lock commitments Level 3 259 259 100 100 Forward commitments Level 2 291 291 1,572 1,572 Customer derivatives - interest rate swaps Level 2 1,181 1,181 1,219 1,219 Notional Notional Off-balance sheet financial instruments: amount Fair value amount Fair value Commitments to extend credit Level 2 $ 461,207 2,667 421,399 6,932 Letters of credit Level 2 16,975 — 8,928 — The following table includes a rollforward of interest rate lock commitments for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the three and six month peiods ended June 30, 2021 and 2020. Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Balance at beginning of the period $ 4,595 4,021 $ 6,932 504 (Decrease) increase in value (1,928) 574 (4,265) 4,091 Balance at end of the period $ 2,667 4,595 $ 2,667 4,595 The following table details the valuation techniques for Level 3 interest rate lock commitments. Significant Fair Value Unobservable Range of Weighted Level 3 Valuation Technique Input Inputs Average June 30, 2021 $ 2,667 Market comparable pricing Pull through 1 - 99 % 89.91 % December 31, 2020 6,932 Market comparable pricing Pull through 1 - 99 83.08 Net realized gains and losses due to changes in the fair value of interest rate lock commitments, which are classified as Level 3 assets and liabilities, are recorded in non-interest income as net change in the fair value of derivative instruments in the Corporation’s consolidated statements of income. Net realized gains of $13 thousand and net realized losses of $4.4 million were recorded for the three and six months ended June 30, 2021, respsectively, while net realized gains of $724 thousand and $4.1 million were recorded for the three and six months ended June 30, 2020, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | (9) Derivative Financial Instruments Risk Management Objective of Using Derivatives The Corporation is exposed to certain risk arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Corporation’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Corporation’s known or expected cash receipts and its known or expected cash payments principally related to the Corporation’s loan portfolio. Mortgage Banking Derivatives In connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans or interest rate locks at a fixed price at a future date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. The fair value of interest rate lock commitments and forward commitments are recorded within other assets/liabilities on the consolidated balance sheets, with changes in fair values during the period recorded within net change in the fair value of derivative instruments on the unaudited consolidated statements of income. Customer Derivatives – Interest Rate Swaps Derivatives not designated as hedges are not speculative and result from a service the Corporation provides to certain customers to swap a fixed rate product for a variable rate product, or vice versa. The Corporation executes interest rate derivatives with commercial banking customers to facilitate their respective risk management strategies. Those interest rate derivatives are simultaneously hedged by offsetting derivatives that the Corporation executes with a third party, such that the Corporation minimizes its net interest rate risk exposure resulting from such transactions. The fair value of interest rate derivatives are recorded within other assets/liabilities on the consolidated balance sheets. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. The following table presents a summary of the notional amounts and fair values of derivative financial instruments: June 30, 2021 December 31, 2020 (dollars in thousands) Balance Sheet Line Item Notional Asset Notional Asset Interest Rate Lock Commitments Positive fair values Other assets $ 202,834 2,667 406,422 6,932 Negative fair values Other liabilities 45,797 (259) 22,406 (100) Total 248,631 2,408 428,828 6,832 Forward Commitments Positive fair values Other assets 10,500 13 — — Negative fair values Other liabilities 119,000 (291) 218,000 (1,572) Total 129,500 (278) 218,000 (1,572) Customer Derivatives - Interest Rate Swaps Positive fair values Other assets 36,132 1,118 20,979 1,118 Negative fair values Other liabilities 36,132 (1,181) 20,979 (1,219) Total 72,264 (63) 41,958 (101) Total derivative financial instruments $ 450,395 2,067 688,786 5,159 Interest rate lock commitments are considered Level 3 in the fair value hierarchy, while the forward commitments and interest rate swaps are considered Level 2 in the fair value hierarchy. The following table presents a summary of the fair value gains and losses on derivative financial instruments: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Interest Rate Lock Commitments $ 13 724 $ (4,424) 4,065 Forward Commitments (2,102) 1,638 1,294 (672) Customer Derivatives - Interest Rate Swaps (59) 2 38 (75) Net fair value (losses) gains on derivative financial instruments $ (2,148) 2,364 $ (3,092) 3,318 Net realized losses on derivatives were $674 thousand and net realized gains were $3.6 million for the three and six months ended June 30, 2021, and net realized losses on derivatives were $3.3 million and $4.7 million for the three and six months ended June 30, 2020, respectively. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2021 | |
Segments | |
Segments | (10) Segments ASC Topic 280 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations. Our Banking segment (“Bank”) consists of commercial and retail banking. The Banking segment generates interest income from its lending, including leasing, and investing activities and is dependent on the gathering of lower cost deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including gains on the sale of investment securities, gains on the sale of loans, SBA income, service charges on deposit accounts, cash sweep fees, overdraft fees, BOLI income, title insurance fees, and other less significant non-interest income. Meridian Wealth Partners (“Wealth”), is a registered investment advisor and wholly-owned subsidiary of the Bank, that provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future. The unit generates non-interest income through advisory fees. Meridian Mortgage (“Mortgage”) consists of 16 loan production offices located throughout the Delaware Valley and Maryland. The Mortgage segment originates 1 – 4 family residential mortgages and sells nearly all of its production to third party investors. The unit generates net interest income on the loans it originates and holds temporarily, then earns fee income (primarily gain on sales) at the time of the sale. The unit also recognizes income from document preparation fees, changes in portfolio pipeline fair values and related net hedging gains. The table below summarizes income and expenses, directly attributable to each business line, which has been included in the statement of operations. Segment Information Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 14,824 2 586 15,412 $ 11,101 (2) 498 11,597 Provision for loan losses 96 — — 96 1,631 — — 1,631 Net interest income after provision 14,728 2 586 15,316 9,470 (2) 498 9,966 Non-interest Income Mortgage banking income 408 — 19,059 19,467 297 — 16,491 16,788 Wealth management income — 1,163 — 1,163 — 853 — 853 SBA income 1,490 — — 1,490 638 — — 638 Net change in fair values (59) — (813) (872) 2 — 3,138 3,140 Net loss on hedging activity — — (674) (674) — — (3,301) (3,301) Other 563 — 595 1,158 442 14 117 573 Non-interest income 2,402 1,163 18,167 21,732 1,379 867 16,445 18,691 Non-interest expense 9,415 789 16,042 26,246 7,572 788 12,894 21,254 Income before income taxes $ 7,715 376 2,711 10,802 $ 3,277 77 4,049 7,403 Total Assets $ 1,560,040 5,946 143,024 1,709,010 $ 1,462,449 5,206 111,428 1,579,083 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 29,324 (11) 1,220 30,533 $ 20,619 (4) 648 21,263 Provision for loan losses 695 — — 695 3,183 — — 3,183 Net interest income after provision 28,629 (11) 1,220 29,838 17,436 (4) 648 18,080 Non-interest Income Mortgage banking income 676 — 42,891 43,567 399 — 23,184 23,583 Wealth management income — 2,299 — 2,299 — 1,874 — 1,874 SBA income 2,735 — — 2,735 1,180 — — 1,180 Net change in fair values 39 — (5,824) (5,785) (63) — 4,955 4,892 Net gain (loss) on hedging activity — — 3,587 3,587 — — (4,726) (4,726) Other 1,274 — 1,103 2,377 886 14 209 1,109 Non-interest income 4,724 2,299 41,757 48,780 2,402 1,888 23,622 27,912 Non-interest expense 18,348 1,684 34,478 54,510 14,510 1,575 19,233 35,318 Income before income taxes $ 15,005 604 8,499 24,108 $ 5,328 309 5,037 10,674 Total Assets $ 1,560,040 5,946 143,024 1,709,010 $ 1,462,449 5,206 111,428 1,579,083 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | (11) Stockholders’ Equity On January 28, 2021, the Corporation announced that its Board of Directors declared a cash dividend of $0.125 per share, payable on February 22, 2021 to shareholders of record as of February 8, 2021. On February 16, 2021, the Corporation announced that its Board of Directors declared a special dividend of $1.00 per share. The special dividend was paid on March 15, 2021 to shareholders of record as of March 1, 2021. During the first quarter of 2021, the Corporation paid a quarterly dividend of $0.125 per share and the special dividend of $1.00 per share noted above. On April 22, 2021, the Corporation’s Board of Directors declared a cash dividend of $0.125 per common share, payable on May 17, 2021 to shareholders of record as of May 10, 2021. On July 22, 2021, the Board of Directors declared a quarterly cash dividend of $0.125 per common share, payable August 16, 2021, to shareholders of record as of August 9, 2021. On April 26, 2021, the Corporation announced that its Board of Directors has authorized a stock repurchase plan pursuant to which the Corporation may repurchase up to $6 million of the company’s outstanding common stock, par value $1.00 per share. Stock will be purchased from time to time in the open market or through privately negotiated transactions, or otherwise, at the discretion of management of the company in accordance with legal requirements. This program is subject to applicable regulatory protocol. While no shares were repurchased under the plan for the three months-ended June 30, 2021, there were 13,755 shares repurchased between July 1, 2021 and August 13, 2021. At the Annual Meeting of Shareholders held on June 17, 2021, the shareholders of the Corporation approved to amend the Corporation’s Articles of Incorporation to increase the authorized numbers of shares of common stock of the Corporation from 10,000,000 shares to 25,000,000 shares. The Articles of Amendment of the Corporation were filed with the Secretary of State of the Commonwealth of Pennsylvania on June 21, 2021. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2021 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | (12) Recent Accounting Pronouncements As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), the Bank is permitted an extended transition period for complying with new or revised accounting standards affecting public companies. We will remain an emerging growth company until the earliest of (i) the end of the fiscal year during which we have total annual gross revenues of $1,070,000,000 or more, (ii) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering (December 31, 2022), (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt and (iv) the end of the fiscal year in which the market value of our equity securities that are held by non-affiliates exceeds $700 million as of June 30 of that year. We have elected to take advantage of this extended transition period, which means that the financial statements included herein, as well as any financial statements that we file in the future, will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period for so long as we remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act. If we do so, we will prominently disclose this decision in the first periodic report following our decision, and such decision is irrevocable. As a filer under the JOBS Act, we will implement new accounting standards subject to the effective dates required for non-public entities. FASB ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments” Issued in June 2016, ASU 2016-13 significantly changes how companies measure and recognize credit impairment for many financial assets. This ASU requires businesses and other organizations to measure the current expected credit losses (“CECL”) on financial assets, such as loans, net investments in leases, certain debt securities, bond insurance and other receivables. The amendments affect entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. Current GAAP requires an incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The amendments in this ASU replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonableness and supportable information to inform credit loss estimates. An entity should apply the amendments through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (modified retrospective approach). Acquired credit impaired loans for which the guidance in Accounting Standards Codification (ASC) Topic 310-30 has been previously applied should prospectively apply the guidance in this ASU. A prospective transition approach is required for debt securities for which an other-than-temporary impairment has been recognized before the effective date. In October 2019, the FASB approved a delay for the implementation of the ASU. Accordingly, as an emerging growth company, the Corporation’s effective date for the implementation of the ASU will be January 1, 2023. The Corporation is currently determining under which method we will adopt this ASU. The Corporation has assembled a cross-functional team from Finance, Credit, and IT that is leading the implementation efforts to evaluate the impact of this guidance on the Corporation's consolidated financial statements and related disclosures, internal systems, accounting policies, processes and related internal controls. At this time the Corporation cannot yet estimate the impact to the consolidated financial statements. FASB ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” Issued in April 2019, ASU 2019-04 clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments (addressed by ASUs 2016-13, 2017-12, and 2016-01, respectively). The amendments to estimating expected credit losses (ASU 2016-13), in particular, how a company considers recoveries and extension options when estimating expected credit losses, are the most relevant to the Corporation. The ASU clarifies that (1) the estimate of expected credit losses should include expected recoveries of financial assets, including recoveries of amounts expected to be written off and those previously written off, and (2) that contractual extension or renewal options that are not unconditionally cancellable by the lender are considered when determining the contractual term over which expected credit losses are measured. Management will consider the impact of ASU 2019-04 when considering the impact of ASU 2016-13 as discussed above. FASB ASU 2016-02 (Topic 842), “Leases” Issued in February 2016, ASU 2016-02 revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. In June 2020, the FASB approved a delay for the implementation of the ASU. Accordingly, the amendments in this update are effective for the Corporation for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Under ASU 2016-02, the Corporation will recognize a right-of-use asset and a lease obligation liability on the consolidated statement of financial condition, which will increase the Corporation’s assets and liabilities. The Corporation is evaluating other potential impacts of ASU 2016-02 on its consolidated financial statements. FASB ASU 2020-04 (Topic 848), “Reference Rate Reform (“ASC 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” Issued in March 2020, ASU 2020-04 contains optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The Corporation does not have a significant concentration of loans, derivative contracts, borrowings or other financial instruments with attributes that are either directly or indirectly dependent on LIBOR. The guidance under ASC-848 will be available for a limited time, generally through December 31, 2022. The Corporation expects to adopt the LIBOR transition relief allowed under this standard. FASB ASU 2018-15 (Topic 350), "Intangibles - Goodwill and Other - Internal-Use Software" Issued in August 2018, ASU 2018-15 provides clarity on capitalizing and expensing implementation costs for cloud computing arrangements in a service contract. If an implementation cost is capitalized, the cost should be recognized over the noncancellable term and periodically assessed for impairment. The guidance is effective in annual and interim periods in fiscal years beginning after December 15, 2020 and interim periods within annual periods beginning after December 15, 2021. Adoption should be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Corporation does not expect the adoption of this ASU to have a material impact on our consolidated financial statements and related disclosures. FASB ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” Issued in December 2019, ASU 2019-12 adds new guidance to simplify accounting for income taxes, changes the accounting for certain income tax transactions and makes minor improvements to the codification. The guidance is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures. FASB ASU 2020-06, “Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ” This ASU clarifies the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature models. For public business entities that meet the definition of an SEC filer (excluding smaller reporting entities), the amendments are effective for fiscal years beginning after Dec. 15, 2021, and interim periods within. For all other entities, the amendments are effective for fiscal years beginning after Dec. 15, 2023, and interim periods within. Early adoption is permitted, but no earlier than for fiscal years beginning after Dec. 15, 2020. |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings per Common Share | |
Schedule of basic and diluted earnings per common share | Three Months Ended Six Months Ended June 30, June 30, (dollars in thousands, except per share data) 2021 2020 2021 2020 Numerator: Net income available to common stockholders $ 8,258 5,713 $ 18,428 8,229 Denominator for basic earnings per share Weighted average shares outstanding 6,147 6,094 6,135 6,210 Average unearned ESOP shares (115) — (117) — Basic weighted averages shares outstanding 6,032 6,094 6,018 6,210 Effect of dilutive common shares 171 13 159 25 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 6,203 6,107 6,177 6,235 Basic earnings per share $ 1.37 0.94 $ 3.06 1.33 Diluted earnings per share $ 1.33 0.94 $ 2.98 1.32 Antidilutive shares excluded from computation of average dilutive earnings per share 140 281 140 204 |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Securities | |
Schedule of amortized cost and fair value of securities | June 30, 2021 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 26,300 468 (33) 26,735 8 U.S. government agency mortgage-backed securities 3,750 155 ─ 3,905 ─ U.S. government agency collateralized mortgage obligations 21,501 627 (104) 22,024 6 State and municipal securities 73,750 1,590 (159) 75,181 11 U.S. Treasuries 7,991 38 ─ 8,029 ─ Corporate bonds 5,950 95 (10) 6,035 2 Total securities available-for-sale $ 139,242 2,973 (306) 141,909 27 Securities held-to-maturity: State and municipal securities 6,441 285 — 6,726 — Total securities held-to-maturity $ 6,441 285 — 6,726 — December 31, 2020 Gross Gross # of Securities Amortized unrealized unrealized Fair in unrealized (dollars in thousands) cost gains losses value loss position Securities available-for-sale: U.S. asset backed securities $ 25,303 364 (75) 25,592 8 U.S. government agency mortgage-backed securities 3,854 192 — 4,046 — U.S. government agency collateralized mortgage obligations 23,010 916 (17) 23,909 1 State and municipal securities 63,848 2,025 (63) 65,810 3 Corporate bonds 4,200 7 (2) 4,205 2 Total securities available-for-sale $ 120,215 3,504 (157) 123,562 14 Securities held-to-maturity: State and municipal securities 6,510 347 — 6,857 — Total securities held-to-maturity $ 6,510 347 — 6,857 — |
Schedule of investment gross unrealized loss in continuous unrealized loss position | June 30, 2021 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 4,304 (19) 4,746 (14) 9,050 (33) U.S. government agency collateralized mortgage obligations 6,673 (104) — — 6,673 (104) State and municipal securities 14,039 (159) — — 14,039 (159) Corporate bonds 940 (10) — — 940 (10) Total securities available-for-sale $ 25,956 (292) 4,746 (14) 30,702 (306) December 31, 2020 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. asset backed securities $ 2,884 (4) 7,443 (71) 10,327 (75) U.S. government agency collateralized mortgage obligations 2,284 (17) — — 2,284 (17) State and municipal securities 4,163 (63) — — 4,163 (63) Corporate bonds 1,198 (2) — — 1,198 (2) Total securities available-for-sale $ 10,529 (86) 7,443 (71) 17,972 (157) |
Schedule of amortized cost and carrying value of held-to-maturity securities and available-for-sale securities by contractual maturity | June 30, 2021 December 31, 2020 Available-for-sale Held-to-maturity Available-for-sale Held-to-maturity Amortized Fair Amortized Fair Amortized Fair Amortized Fair (dollars in thousands) cost value cost value cost value cost value Investment securities: Due in one year or less $ — — — — $ — — — — Due after one year through five years — — 3,149 3,228 — — 3,181 3,288 Due after five years through ten years 20,009 20,157 3,292 3,498 12,035 12,095 3,329 3,569 Due after ten years 93,982 95,822 — — 81,316 83,512 — — Subtotal 113,991 115,979 6,441 6,726 93,351 95,607 6,510 6,857 Mortgage-related securities 25,251 25,930 — — 26,864 27,955 — — Total $ 139,242 141,909 6,441 6,726 $ 120,215 123,562 6,510 6,857 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Loans Receivable | |
Summary of loans and leases outstanding | June 30, December 31, (dollars in thousands) 2021 2020 Mortgage loans held for sale $ 132,348 229,199 Real estate loans: Commercial mortgage 530,163 485,103 Home equity lines and loans 54,076 64,987 Residential mortgage (1) 55,497 52,454 Construction 132,547 140,246 Total real estate loans 772,283 742,790 Commercial and industrial 263,030 261,750 Small business loans 74,987 49,542 Paycheck Protection Program loans ("PPP") 189,337 203,543 Main Street Lending Program Loans ("MSLP") 588 580 Consumer 526 511 Leases, net 64,542 31,040 Total portfolio loans and leases 1,365,293 1,289,756 Total loans and leases $ 1,497,641 1,518,955 Loans with predetermined rates $ 607,507 658,458 Loans with adjustable or floating rates 890,134 860,497 Total loans and leases $ 1,497,641 1,518,955 Net deferred loan origination (fees) costs $ (2,543) (4,992) (1) Includes $15,129 and $12,182 of loans at fair value as of June 30, 2021 and December 31, 2020, respectively. |
Schedule of components of the net investment in leases | June 30, December 31, (dollars in thousands) 2021 2020 Minimum lease payments receivable $ 78,233 37,919 Unearned lease income (13,691) (6,879) Total $ 64,542 31,040 |
Schedule of age analysis of past due loans and leases | Total 90+ days Accruing Nonaccrual Total loans June 30, 2021 30-89 days past due and Total past Loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 530,163 530,163 — 530,163 — % Home equity lines and loans — — — 53,160 53,160 916 54,076 1.69 Residential mortgage (1) — — — 52,795 52,795 2,702 55,497 4.87 Construction 231 — 231 132,316 132,547 — 132,547 0.17 Commercial and industrial 1,856 — 1,856 257,514 259,370 3,660 263,030 2.10 Small business loans — — — 74,070 74,070 917 74,987 1.22 Paycheck Protection Program loans — — — 189,337 189,337 — 189,337 — Main Street Lending Program loans — — — 588 588 — 588 — Consumer — — — 526 526 — 526 — Leases, net 155 — 155 64,387 64,542 — 64,542 0.24 Total $ 2,242 — 2,242 1,354,856 1,357,098 8,195 1,365,293 0.76 % (1) Includes $15,129 of loans at fair value as of June 30, 2021 ($14,235 are current and $894 are nonaccrual). Total 90+ days Accruing Nonaccrual Total loans December 31, 2020 30-89 days past due and Total past Loans and loans and portfolio Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 482,042 482,042 3,061 485,103 0.63 % Home equity lines and loans — — — 64,128 64,128 859 64,987 1.32 Residential mortgage (1) 3,595 — 3,595 46,134 49,729 2,725 52,454 12.05 Construction — — — 140,246 140,246 — 140,246 — Commercial and industrial — — — 260,465 260,465 1,285 261,750 0.49 Small business loans — — — 49,542 49,542 — 49,542 — Paycheck Protection Program loans — — — 203,543 203,543 — 203,543 — Main Street Lending Program loans — — — 580 580 — 580 — Consumer — — — 511 511 — 511 — Leases, net 109 — 109 30,931 31,040 — 31,040 0.35 Total $ 3,704 — 3,704 1,278,122 1,281,826 7,930 1,289,756 0.90 % (1) Includes $12,182 of loans at fair value as of December 31, 2020 ($10,314 are current, $958 are 30-89 days past due and $910 are nonaccrual). |
Allowance for Loan Losses (th_2
Allowance for Loan Losses (the Allowance) (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Allowance for Loan Losses (the Allowance) | |
Roll-forward of allowance for loan and lease losses by portfolio segment | Balance, Balance, (dollars in thousands) March 31, 2021 Charge-offs Recoveries Provision June 30, 2021 Commercial mortgage $ 7,655 — — (509) 7,146 Home equity lines and loans 310 — 2 (31) 281 Residential mortgage 314 — 2 8 324 Construction 2,311 — — (70) 2,241 Commercial and industrial 5,286 — 13 61 5,360 Small business loans 1,920 — — 315 2,235 Consumer 4 — 1 (1) 4 Leases 576 (129) — 323 770 Total $ 18,376 (129) 18 96 18,361 Balance, Balance, (dollars in thousands) December 31, 2020 Charge-offs Recoveries Provision June 30, 2021 Commercial mortgage $ 7,451 — — (305) 7,146 Home equity lines and loans 434 — 4 (157) 281 Residential mortgage 385 — 4 (65) 324 Construction 2,421 — — (180) 2,241 Commercial and industrial 5,431 — 18 (89) 5,360 Small business loans 1,259 — — 976 2,235 Consumer 4 — 2 (2) 4 Leases 382 (129) — 517 770 Total $ 17,767 (129) 28 695 18,361 Balance, Balance, (dollars in thousands) March 31, 2020 Charge-offs Recoveries Provision June 30, 2020 Commercial mortgage $ 4,112 — — 1,165 5,277 Home equity lines and loans 484 (13) 2 199 672 Residential mortgage 219 — 2 125 346 Construction 2,381 — — (362) 2,019 Commercial and industrial 3,169 (9) 4 442 3,606 Small business loans 725 — — 22 747 Consumer 4 (10) 1 9 4 Leases 4 — — 31 35 Total $ 11,098 (32) 9 1,631 12,706 Balance, Balance, (dollars in thousands) December 31, 2019 Charge-offs Recoveries Provision June 30, 2020 Commercial mortgage $ 3,426 — — 1,851 5,277 Home equity lines and loans 342 (13) 4 339 672 Residential mortgage 179 — 4 163 346 Construction 2,362 — — (343) 2,019 Commercial and industrial 2,684 (9) 32 899 3,606 Small business loans 509 — — 238 747 Consumer 6 (10) 2 6 4 Leases 5 — — 30 35 Total $ 9,513 (32) 42 3,183 12,706 |
Schedule of allocation of the allowance for loan and lease losses | Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively June 30, 2021 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 7,146 7,146 $ 722 529,441 530,163 Home equity lines and loans 6 275 281 916 53,160 54,076 Residential mortgage 68 256 324 1,808 38,560 40,368 Construction — 2,241 2,241 1,206 131,341 132,547 Commercial and industrial 1,528 3,832 5,360 4,062 258,968 263,030 Small business loans 376 1,859 2,235 1,072 73,915 74,987 Paycheck Protection Program loans — — — — 189,337 189,337 (2) Main Street Lending Program — — — — 588 588 (2) Consumer — 4 4 — 526 526 Leases, net — 770 770 — 64,542 64,542 Total $ 1,978 16,383 18,361 $ 9,786 1,340,378 1,350,164 (1) Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2020 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 7,451 7,451 $ 1,606 483,497 485,103 Home equity lines and loans 9 425 434 921 64,066 64,987 Residential mortgage 73 312 385 1,817 38,455 40,272 Construction — 2,421 2,421 1,206 139,040 140,246 Commercial and industrial 1,563 3,868 5,431 4,645 257,105 261,750 Small business loans — 1,259 1,259 185 49,357 49,542 Paycheck Protection Program loans — — — — 203,543 203,543 (2) Main Street Lending Program — — — — 580 580 (2) Consumer — 4 4 — 511 511 Leases, net — 382 382 — 31,040 31,040 Total $ 1,645 16,122 17,767 $ 10,380 1,267,194 1,277,574 (1) (1) Excludes deferred fees and loans carried at fair value. (2) PPP and MSLP loans are not reserved against as they are 100% guaranteed. |
Schedule of carrying value of loans and leases by portfolio segment based on the credit quality indicators | June 30, 2021 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 492,532 34,509 3,122 — 530,163 Home equity lines and loans 52,677 — 1,399 — 54,076 Construction 123,389 9,158 — — 132,547 Commercial and industrial 207,105 36,451 16,133 3,341 263,030 Small business loans 71,459 — 3,528 — 74,987 Paycheck Protection Program loans 189,337 — — — 189,337 Main Street Lending Program loans 588 — — — 588 Total $ 1,137,087 80,118 24,182 3,341 1,244,728 December 31, 2020 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 449,545 32,059 3,499 — 485,103 Home equity lines and loans 63,923 — 1,064 — 64,987 Construction 132,286 7,960 — — 140,246 Commercial and industrial 227,349 21,721 9,000 3,680 261,750 Small business loans 46,789 — 2,753 — 49,542 Paycheck Protection Program loans 203,543 — — — 203,543 Main Street Lending Program loans 580 — — — 580 Total $ 1,124,015 61,740 16,316 3,680 1,205,751 |
Schedule of allocations based on the credit quality indicators | June 30, 2021 December 31, 2020 (dollars in thousands) Performing Nonperforming Total Performing Nonperforming Total Residential mortgage $ 38,560 1,808 40,368 $ 38,457 1,815 40,272 Consumer 526 — 526 511 — 511 Leases, net 64,542 — 64,542 31,040 — 31,040 Total $ 103,628 1,808 105,436 $ 70,008 1,815 71,823 |
Schedule of recorded investment and principal balance of impaired loans | As of June 30, 2021 As of December 31, 2020 Recorded Principal Related Recorded Principal Related (dollars in thousands) investment balance allowance investment balance allowance Impaired loans with related allowance: Commercial and industrial $ 3,271 3,362 1,528 3,860 3,902 1,563 Small business loans 916 3,415 376 — — — Home equity lines and loans 92 104 6 95 105 9 Residential mortgage 684 684 68 689 689 73 Total $ 4,963 7,565 1,978 4,644 4,696 1,645 Impaired loans without related allowance: Commercial mortgage $ 722 722 — 1,606 1,642 — Commercial and industrial 791 896 — 785 862 — Small business loans 156 1,091 — 185 185 — Home equity lines and loans 824 837 — 826 839 — Residential mortgage 1,124 1,124 — 1,128 1,128 — Construction 1,206 1,206 — 1,206 1,206 — Leases — — — — — — Total 4,823 5,876 — 5,736 5,862 — Grand Total $ 9,786 13,441 1,978 10,380 10,558 1,645 |
Schedule of average recorded investment on impaired loans | Three Months Ended Three Months Ended June 30, 2021 June 30, 2020 Average Interest Average Interest recorded Income recorded Income (dollars in thousands) investment Recognized investment Recognized Impaired loans with related allowance: Commercial and industrial $ 3,309 5 446 5 Small business loans 917 — — — Home equity lines and loans 93 — 357 — Residential mortgage 686 — — — Total $ 5,005 5 803 5 Impaired loans without related allowance: Commercial mortgage $ 726 8 2,106 21 Commercial and industrial 969 — 1,109 4 Small business loans 161 4 220 5 Home equity lines and loans 824 — 400 — Residential mortgage 1,125 3 4,310 92 Construction 1,206 14 1,206 15 Leases 39 — — — Total $ 5,050 29 9,351 137 Grand Total $ 10,055 34 10,154 142 Six Months Ended Six Months Ended June 30, 2021 June 30, 2020 Average Interest Average Interest recorded Income recorded Income (dollars in thousands) investment Recognized investment Recognized Impaired loans with related allowance: Commercial and industrial $ 3,339 10 449 10 Small business loans 917 — — — Home equity lines and loans 94 — 360 — Residential mortgage 687 — — — Total $ 5,037 10 809 10 Impaired loans without related allowance: Commercial mortgage $ 730 16 2,117 42 Commercial and industrial 1,002 — 1,122 8 Small business loans 169 8 227 11 Home equity lines and loans 824 — 400 — Residential mortgage 1,126 3 4,317 92 Construction 1,206 29 1,210 32 Leases 80 — — — Total $ 5,137 56 9,393 185 Grand Total $ 10,174 66 10,202 195 |
Schedule of TDRs | June 30, December 31, (dollars in thousands) 2021 2020 TDRs included in nonperforming loans and leases $ 239 244 TDRs in compliance with modified terms 2,486 3,362 Total TDRs $ 2,725 3,606 |
Short-Term Borrowings and Long-
Short-Term Borrowings and Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Short-Term Borrowings and Long-Term Debt | |
Schedule of short term borrowings | Balance as of Maturity Interest June 30, December 31, (dollars in thousands) date rate 2021 2020 Open Repo Plus Weekly 05/31/2022 0.33 % 13,542 60,416 Federal Reserve Discount Window 03/31/2021 0.25 — 10,000 Mid-term Repo-fixed 01/13/2021 0.36 — 4,605 Mid-term Repo-fixed 06/10/2021 0.10 — 6,376 Mid-term Repo-fixed 09/10/2021 0.11 10,000 10,000 Mid-term Repo-fixed 12/10/2021 0.16 10,000 10,000 Mid-term Repo-fixed 01/27/2021 0.23 — 5,465 Total $ 33,542 106,862 |
Schedule of long term debt | Balance as of Maturity Interest June 30, December 31, (dollars in thousands) date rate 2021 2020 PPPLF Advances 2022 0.35 % — 153,269 PPPLF Advances 2026 0.35 $ 36,337 — Mid-term Repo-fixed 06/29/2022 0.32 7,392 7,392 Mid-term Repo-fixed 09/12/2022 0.23 4,885 4,885 Total ` $ 48,614 165,546 |
Servicing Assets (Tables)
Servicing Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Mortgage Servicing Rights | |
Servicing Assets at Fair Value [Line Items] | |
Schedule of servicing assets | Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Balance at beginning of the period $ 7,118 423 $ 4,647 446 Servicing rights capitalized 2,154 952 4,496 1,136 Amortization of servicing rights (271) (50) (470) (83) Change in valuation allowance (59) (31) 269 (205) Balance at end of the period $ 8,942 1,294 $ 8,942 1,294 |
Schedule of valuation allowance for servicing assets | Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Valuation allowance, beginning of period $ (107) (272) $ (435) (98) Impairment (59) (31) — (205) Recovery — — 269 — Valuation allowance, end of period $ (166) (303) $ (166) (303) |
Schedule of sensitivity of fair value of servicing assets | (dollars in thousands) June 30, 2021 December 31, 2020 Fair value of residential mortgage servicing rights $ 9,024 $ 4,647 Weighted average life (years) 7.0 5.0 Prepayment speed 7.61% 9.39% Impact on fair value: 10% adverse change $ (321) $ (183) 20% adverse change (629) (354) Discount rate 9.00% 9.00% Impact on fair value: 10% adverse change $ (347) $ (168) 20% adverse change (669) (329) |
SBA Loan Servicing Rights | |
Servicing Assets at Fair Value [Line Items] | |
Schedule of servicing assets | Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Balance at beginning of the period $ 1,160 469 $ 970 337 Servicing rights capitalized 304 183 578 342 Amortization of servicing rights (87) (28) (154) (47) Change in valuation allowance 8 8 (9) — Balance at end of the period $ 1,385 632 $ 1,385 632 |
Schedule of valuation allowance for servicing assets | Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Valuation allowance, beginning of period $ (56) (34) $ (39) (26) Impairment — — (9) — Recovery 8 8 — — Valuation allowance, end of period $ (48) (26) $ (48) (26) |
Schedule of sensitivity of fair value of servicing assets | (dollars in thousands) June 30, 2021 December 31, 2020 Fair value of SBA loan servicing rights $ 1,520 $ 1,010 Weighted average life (years) 3.6 3.7 Prepayment speed 13.28% 12.73% Impact on fair value: 10% adverse change $ (62) $ (37) 20% adverse change (118) (71) Discount rate 5.82% 8.33% Impact on fair value: 10% adverse change $ (41) $ (25) 20% adverse change (79) (49) |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements and Disclosures | |
Schedule of financial assets measured at fair value on a recurring basis | June 30, 2021 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 26,735 — 26,735 — U.S. government agency mortgage-backed securities 3,905 — 3,905 — U.S. government agency collateralized mortgage obligations 22,024 — 22,024 — State and municipal securities 75,181 — 75,181 — U.S. Treasuries 8,029 8,029 Corporate bonds 6,035 — 6,035 — Equity investments 1,016 — 1,016 — Mortgage loans held for sale 132,348 — 132,348 — Mortgage loans held for investment 15,129 — 15,129 — Interest rate lock commitments 2,667 — — 2,667 Forward commitments 13 — 13 — Customer derivatives - interest rate swaps 1,118 — 1,118 — Total $ 294,200 — 291,533 2,667 Liabilities Interest rate lock commitments 259 — — 259 Forward commitments 291 — 291 — Customer derivatives - interest rate swaps 1,181 — 1,181 — $ 1,731 — 1,472 259 December 31, 2020 (dollars in thousands) Total Level 1 Level 2 Level 3 Assets Securities available for sale: U.S. asset backed securities $ 25,592 — 25,592 — U.S. government agency mortgage-backed securities 4,046 — 4,046 — U.S. government agency collateralized mortgage obligations 23,909 — 23,909 — State and municipal securities 65,810 — 65,810 — Corporate bonds 4,205 — 4,205 — Equity investments 1,031 — 1,031 — Mortgage loans held for sale 229,199 — 229,199 — Mortgage loans held for investment 12,182 — 12,182 — Interest rate lock commitments 6,932 — — 6,932 Forward commitments — — — — Customer derivatives - interest rate swaps 1,118 — 1,118 — Total $ 374,024 — 367,092 6,932 Liabilities Interest rate lock commitments 100 — — 100 Forward commitments 1,572 — 1,572 — Customer derivatives - interest rate swaps 1,219 — 1,219 — $ 2,891 — 2,791 100 |
Schedule of financial assets measured at fair value on non-recurring basis | June 30, 2021 December 31, 2020 (dollars in thousands) Fair Value Fair Value Mortgage servicing rights $ 8,942 4,647 SBA loan servicing rights 1,385 970 Impaired loans (1) 2,985 2,998 Total $ 13,312 8,615 (1) Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values. |
Schedule of estimated fair values of financial instruments | June 30, 2021 December 31, 2020 Fair Value Carrying Carrying (dollars in thousands) Hierarchy Level amount Fair value amount Fair value Financial assets: Cash and cash equivalents Level 1 $ 26,902 26,902 36,744 36,744 Securities available-for-sale Level 2 141,909 141,909 123,562 123,562 Securities held-to-maturity Level 2 6,441 6,726 6,510 6,857 Equity investments Level 2 1,016 1,016 1,031 1,031 Mortgage loans held for sale Level 2 132,348 132,348 229,199 229,199 Loans receivable, net of the allowance for loan and lease losses Level 3 1,329,260 1,376,721 1,272,582 1,289,776 Mortgage loans held for investment Level 2 15,129 15,129 12,182 12,182 Interest rate lock commitments Level 3 2,667 2,667 6,932 6,932 Forward commitments Level 2 13 13 — — Restricted investment in bank stock NA 5,357 NA 7,861 NA Accrued interest receivable Level 3 5,519 5,519 5,482 5,482 Customer derivatives - interest rate swaps Level 2 1,118 1,118 1,118 1,118 Financial liabilities: Deposits Level 2 1,413,280 1,523,900 1,241,335 1,392,500 Short-term borrowings Level 2 33,542 33,542 106,862 106,862 Long-term debt Level 2 48,614 49,102 165,546 168,000 Subordinated debentures Level 2 40,730 41,961 40,671 38,375 Accrued interest payable Level 2 120 120 1,154 1,154 Interest rate lock commitments Level 3 259 259 100 100 Forward commitments Level 2 291 291 1,572 1,572 Customer derivatives - interest rate swaps Level 2 1,181 1,181 1,219 1,219 Notional Notional Off-balance sheet financial instruments: amount Fair value amount Fair value Commitments to extend credit Level 2 $ 461,207 2,667 421,399 6,932 Letters of credit Level 2 16,975 — 8,928 — |
Schedule of level 3 inputs reconciliation | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Balance at beginning of the period $ 4,595 4,021 $ 6,932 504 (Decrease) increase in value (1,928) 574 (4,265) 4,091 Balance at end of the period $ 2,667 4,595 $ 2,667 4,595 |
Schedule of measurement inputs | Significant Fair Value Unobservable Range of Weighted Level 3 Valuation Technique Input Inputs Average June 30, 2021 $ 2,667 Market comparable pricing Pull through 1 - 99 % 89.91 % December 31, 2020 6,932 Market comparable pricing Pull through 1 - 99 83.08 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Financial Instruments | |
Summary of the notional amounts and fair values of derivative financial instruments | June 30, 2021 December 31, 2020 (dollars in thousands) Balance Sheet Line Item Notional Asset Notional Asset Interest Rate Lock Commitments Positive fair values Other assets $ 202,834 2,667 406,422 6,932 Negative fair values Other liabilities 45,797 (259) 22,406 (100) Total 248,631 2,408 428,828 6,832 Forward Commitments Positive fair values Other assets 10,500 13 — — Negative fair values Other liabilities 119,000 (291) 218,000 (1,572) Total 129,500 (278) 218,000 (1,572) Customer Derivatives - Interest Rate Swaps Positive fair values Other assets 36,132 1,118 20,979 1,118 Negative fair values Other liabilities 36,132 (1,181) 20,979 (1,219) Total 72,264 (63) 41,958 (101) Total derivative financial instruments $ 450,395 2,067 688,786 5,159 |
Summary of the fair value gains and losses on derivative financial instruments | Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2021 2020 2021 2020 Interest Rate Lock Commitments $ 13 724 $ (4,424) 4,065 Forward Commitments (2,102) 1,638 1,294 (672) Customer Derivatives - Interest Rate Swaps (59) 2 38 (75) Net fair value (losses) gains on derivative financial instruments $ (2,148) 2,364 $ (3,092) 3,318 |
Segment (Tables)
Segment (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segments | |
Schedule of business segment financial information | Segment Information Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 14,824 2 586 15,412 $ 11,101 (2) 498 11,597 Provision for loan losses 96 — — 96 1,631 — — 1,631 Net interest income after provision 14,728 2 586 15,316 9,470 (2) 498 9,966 Non-interest Income Mortgage banking income 408 — 19,059 19,467 297 — 16,491 16,788 Wealth management income — 1,163 — 1,163 — 853 — 853 SBA income 1,490 — — 1,490 638 — — 638 Net change in fair values (59) — (813) (872) 2 — 3,138 3,140 Net loss on hedging activity — — (674) (674) — — (3,301) (3,301) Other 563 — 595 1,158 442 14 117 573 Non-interest income 2,402 1,163 18,167 21,732 1,379 867 16,445 18,691 Non-interest expense 9,415 789 16,042 26,246 7,572 788 12,894 21,254 Income before income taxes $ 7,715 376 2,711 10,802 $ 3,277 77 4,049 7,403 Total Assets $ 1,560,040 5,946 143,024 1,709,010 $ 1,462,449 5,206 111,428 1,579,083 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 (Dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 29,324 (11) 1,220 30,533 $ 20,619 (4) 648 21,263 Provision for loan losses 695 — — 695 3,183 — — 3,183 Net interest income after provision 28,629 (11) 1,220 29,838 17,436 (4) 648 18,080 Non-interest Income Mortgage banking income 676 — 42,891 43,567 399 — 23,184 23,583 Wealth management income — 2,299 — 2,299 — 1,874 — 1,874 SBA income 2,735 — — 2,735 1,180 — — 1,180 Net change in fair values 39 — (5,824) (5,785) (63) — 4,955 4,892 Net gain (loss) on hedging activity — — 3,587 3,587 — — (4,726) (4,726) Other 1,274 — 1,103 2,377 886 14 209 1,109 Non-interest income 4,724 2,299 41,757 48,780 2,402 1,888 23,622 27,912 Non-interest expense 18,348 1,684 34,478 54,510 14,510 1,575 19,233 35,318 Income before income taxes $ 15,005 604 8,499 24,108 $ 5,328 309 5,037 10,674 Total Assets $ 1,560,040 5,946 143,024 1,709,010 $ 1,462,449 5,206 111,428 1,579,083 |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net income available to common stockholders | $ 8,258 | $ 5,713 | $ 18,428 | $ 8,229 |
Denominator for basic earnings per share - weighted average shares outstanding | 6,147 | 6,094 | 6,135 | 6,210 |
Average unearned ESOP shares | (115) | (117) | ||
Basic weighted averages shares outstanding | 6,032 | 6,094 | 6,018 | 6,210 |
Effect of dilutive common shares | 171 | 13 | 159 | 25 |
Denominator for diluted earnings per share - adjusted weighted average shares outstanding | 6,203 | 6,107 | 6,177 | 6,235 |
Basic earnings per share (in dollars per share) | $ 1.37 | $ 0.94 | $ 3.06 | $ 1.33 |
Diluted earnings per share (in dollars per share) | $ 1.33 | $ 0.94 | $ 2.98 | $ 1.32 |
Antidilutive shares excluded from computation of average dilutive earnings per share | 140 | 281 | 140 | 204 |
Securities - Amortized cost and
Securities - Amortized cost and fair value (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021USD ($)security | Dec. 31, 2020USD ($)security | |
Securities available-for-sale: | ||
Amortized Cost | $ 139,242 | $ 120,215 |
Available-for-sale, Gross Unrealized Gains | 2,973 | 3,504 |
Available-for-sale, Gross Unrealized Losses | (306) | (157) |
Fair value | 141,909 | 123,562 |
Securities held to maturity: | ||
Held-to-maturity, Amortized Cost | 6,441 | 6,510 |
Held-to-maturity, Gross Unrealized Gains | 285 | 347 |
Fair Value | $ 6,726 | $ 6,857 |
Number of securities in unrealized loss positions | security | 27 | 14 |
Number of securities deemed other-than-temporarily impaired | security | 0 | |
Securities pledged as collateral fair value | $ 63,600 | $ 55,900 |
U.S. asset backed securities | ||
Securities available-for-sale: | ||
Amortized Cost | 26,300 | 25,303 |
Available-for-sale, Gross Unrealized Gains | 468 | 364 |
Available-for-sale, Gross Unrealized Losses | (33) | (75) |
Fair value | $ 26,735 | $ 25,592 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 8 | 8 |
U.S. government agency mortgage-backed securities | ||
Securities available-for-sale: | ||
Amortized Cost | $ 3,750 | $ 3,854 |
Available-for-sale, Gross Unrealized Gains | 155 | 192 |
Fair value | 3,905 | 4,046 |
U.S. government agency collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Amortized Cost | 21,501 | 23,010 |
Available-for-sale, Gross Unrealized Gains | 627 | 916 |
Available-for-sale, Gross Unrealized Losses | (104) | (17) |
Fair value | $ 22,024 | $ 23,909 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 6 | 1 |
State and municipal securities | ||
Securities available-for-sale: | ||
Amortized Cost | $ 73,750 | $ 63,848 |
Available-for-sale, Gross Unrealized Gains | 1,590 | 2,025 |
Available-for-sale, Gross Unrealized Losses | (159) | (63) |
Fair value | 75,181 | 65,810 |
Securities held to maturity: | ||
Held-to-maturity, Amortized Cost | 6,441 | 6,510 |
Held-to-maturity, Gross Unrealized Gains | 285 | 347 |
Fair Value | $ 6,726 | $ 6,857 |
Number of securities in unrealized loss positions | security | 11 | 3 |
U.S. Treasuries | ||
Securities available-for-sale: | ||
Amortized Cost | $ 7,991 | |
Available-for-sale, Gross Unrealized Gains | 38 | |
Fair value | 8,029 | |
Corporate bonds | ||
Securities available-for-sale: | ||
Amortized Cost | 5,950 | $ 4,200 |
Available-for-sale, Gross Unrealized Gains | 95 | 7 |
Available-for-sale, Gross Unrealized Losses | (10) | (2) |
Fair value | $ 6,035 | $ 4,205 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 2 | 2 |
Securities - Continuous Unreali
Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Securities | |||||
Proceeds from the sale of available for sale investments | $ 0 | $ 18,200 | $ 13,639 | $ 18,212 | |
Gross gain on sale of available for sale investments | 248 | 257 | |||
Gross loss on sale of available for sale investments | 200 | $ 202 | |||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 25,956 | 25,956 | $ 10,529 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 4,746 | 4,746 | 7,443 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 30,702 | 30,702 | 17,972 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (292) | (292) | (86) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (14) | (14) | (71) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (306) | (306) | (157) | ||
U.S. asset backed securities | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 4,304 | 4,304 | 2,884 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 4,746 | 4,746 | 7,443 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 9,050 | 9,050 | 10,327 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (19) | (19) | (4) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (14) | (14) | (71) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (33) | (33) | (75) | ||
U.S. government agency collateralized mortgage obligations | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 6,673 | 6,673 | 2,284 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 6,673 | 6,673 | 2,284 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (104) | (104) | (17) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (104) | (104) | (17) | ||
State and municipal securities | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 14,039 | 14,039 | 4,163 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 14,039 | 14,039 | 4,163 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (159) | (159) | (63) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (159) | (159) | (63) | ||
Corporate bonds | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 940 | 940 | 1,198 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 940 | 940 | 1,198 | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | |||||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (10) | (10) | (2) | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | $ (10) | $ (10) | $ (2) |
Securities - Contractual Maturi
Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Contractual Maturities, Available-for-sale, Amortized Cost | ||
Amortized Cost | $ 139,242 | $ 120,215 |
Contractual Maturities, Available-for-sale, Fair Value | ||
Fair Value | 141,909 | 123,562 |
Contractual Maturities, Held-to-maturity, Amortized Cost | ||
Amortized Cost | 6,441 | 6,510 |
Contractual Maturities, Held-to-maturity, Fair Value | ||
Fair Value | 6,726 | 6,857 |
U.S. Asset Backed And State And Municipal Securities | ||
Contractual Maturities, Available-for-sale, Amortized Cost | ||
Due after five years through ten years | 20,009 | 12,035 |
Due after ten years | 93,982 | 81,316 |
Amortized Cost | 113,991 | 93,351 |
Contractual Maturities, Available-for-sale, Fair Value | ||
Due after five years through ten year | 20,157 | 12,095 |
Due after ten years | 95,822 | 83,512 |
Fair Value | 115,979 | 95,607 |
Contractual Maturities, Held-to-maturity, Amortized Cost | ||
Due after one year through five years | 3,149 | 3,181 |
Due after five years through ten years | 3,292 | 3,329 |
Amortized Cost | 6,441 | 6,510 |
Contractual Maturities, Held-to-maturity, Fair Value | ||
Due after one year through five years | 3,228 | 3,288 |
Due after five years through ten years | 3,498 | 3,569 |
Fair Value | 6,726 | 6,857 |
Mortgage-related securities | ||
Contractual Maturities, Available-for-sale, Amortized Cost | ||
Amortized Cost | 25,251 | 26,864 |
Contractual Maturities, Available-for-sale, Fair Value | ||
Fair Value | $ 25,930 | $ 27,955 |
Loans Receivable - Loans and le
Loans Receivable - Loans and leases outstanding by category (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Loans Receivable | ||
Mortgage loans held for sale | $ 132,348 | $ 229,199 |
Total portfolio loans and leases | 1,365,293 | 1,289,756 |
Total loans and leases | 1,497,641 | 1,518,955 |
Loans at fair value | 15,129 | 12,182 |
Real estate loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 772,283 | 742,790 |
Commercial mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 530,163 | 485,103 |
Home equity lines and loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 54,076 | 64,987 |
Residential mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 55,497 | 52,454 |
Loans at fair value | 15,129 | 12,182 |
Loans at fair value | 15,129 | |
Construction | ||
Loans Receivable | ||
Total portfolio loans and leases | 132,547 | 140,246 |
Commercial and industrial | ||
Loans Receivable | ||
Total portfolio loans and leases | 263,030 | 261,750 |
Small business loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 74,987 | 49,542 |
Paycheck Protection Program loans ("PPP") | ||
Loans Receivable | ||
Total portfolio loans and leases | 189,337 | 203,543 |
MainStreet Lending Program Loans ("PPP") | ||
Loans Receivable | ||
Total portfolio loans and leases | 588 | 580 |
Consumer | ||
Loans Receivable | ||
Total portfolio loans and leases | 526 | 511 |
Leases, net | ||
Loans Receivable | ||
Total portfolio loans and leases | $ 64,542 | $ 31,040 |
Loans Receivable - Loans and _2
Loans Receivable - Loans and leases outstanding by rate type (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Loans Receivable | ||
Loans with predetermined rates | $ 607,507 | $ 658,458 |
Loans with adjustable or floating rates | 890,134 | 860,497 |
Total loans and leases | 1,497,641 | 1,518,955 |
Net deferred loan origination (fees) costs | $ (2,543) | $ (4,992) |
Loans Receivable - Components o
Loans Receivable - Components of the net investment in leases (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Loans Receivable | ||
Minimum lease payments receivable | $ 78,233 | $ 37,919 |
Unearned income | 13,691 | 6,879 |
Total | $ 64,542 | $ 31,040 |
Loans Receivable - Age analysis
Loans Receivable - Age analysis of past due loans and leases (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 2,242 | $ 3,704 |
Current | 1,354,856 | 1,278,122 |
Total Accruing Loans and leases | 1,357,098 | 1,281,826 |
Nonaccrual loans and leases | 8,195 | 7,930 |
Loans and Leases Receivable, Gross, Total | $ 1,365,293 | $ 1,289,756 |
Delinquency percentage | 0.76% | 0.90% |
Loans at fair value | $ 15,129 | $ 12,182 |
Commercial mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Current | 530,163 | 482,042 |
Total Accruing Loans and leases | 530,163 | 482,042 |
Nonaccrual loans and leases | 3,061 | |
Loans and Leases Receivable, Gross, Total | 530,163 | $ 485,103 |
Delinquency percentage | 0.63% | |
Home equity lines and loans | ||
Age Analysis of Past Due Loans and Leases | ||
Current | 53,160 | $ 64,128 |
Total Accruing Loans and leases | 53,160 | 64,128 |
Nonaccrual loans and leases | 916 | 859 |
Loans and Leases Receivable, Gross, Total | $ 54,076 | $ 64,987 |
Delinquency percentage | 1.69% | 1.32% |
Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 3,595 | |
Current | $ 52,795 | 46,134 |
Total Accruing Loans and leases | 52,795 | 49,729 |
Nonaccrual loans and leases | 2,702 | 2,725 |
Loans and Leases Receivable, Gross, Total | $ 55,497 | $ 52,454 |
Delinquency percentage | 4.87% | 12.05% |
Loans at fair value | $ 15,129 | $ 12,182 |
Loans at fair value | 15,129 | |
Construction | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 231 | |
Current | 132,316 | 140,246 |
Total Accruing Loans and leases | 132,547 | 140,246 |
Loans and Leases Receivable, Gross, Total | $ 132,547 | 140,246 |
Delinquency percentage | 0.17% | |
Commercial and industrial | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 1,856 | |
Current | 257,514 | 260,465 |
Total Accruing Loans and leases | 259,370 | 260,465 |
Nonaccrual loans and leases | 3,660 | 1,285 |
Loans and Leases Receivable, Gross, Total | $ 263,030 | $ 261,750 |
Delinquency percentage | 2.10% | 0.49% |
Small business loans | ||
Age Analysis of Past Due Loans and Leases | ||
Current | $ 74,070 | $ 49,542 |
Total Accruing Loans and leases | 74,070 | 49,542 |
Nonaccrual loans and leases | 917 | |
Loans and Leases Receivable, Gross, Total | $ 74,987 | 49,542 |
Delinquency percentage | 1.22% | |
Paycheck Protection Program loans ("PPP") | ||
Age Analysis of Past Due Loans and Leases | ||
Current | $ 189,337 | 203,543 |
Total Accruing Loans and leases | 189,337 | 203,543 |
Loans and Leases Receivable, Gross, Total | 189,337 | 203,543 |
MainStreet Lending Program Loans ("PPP") | ||
Age Analysis of Past Due Loans and Leases | ||
Current | 588 | 580 |
Total Accruing Loans and leases | 588 | 580 |
Loans and Leases Receivable, Gross, Total | 588 | 580 |
Consumer | ||
Age Analysis of Past Due Loans and Leases | ||
Current | 526 | 511 |
Total Accruing Loans and leases | 526 | 511 |
Loans and Leases Receivable, Gross, Total | 526 | 511 |
Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 155 | 109 |
Current | 64,387 | 30,931 |
Total Accruing Loans and leases | 64,542 | 31,040 |
Loans and Leases Receivable, Gross, Total | $ 64,542 | $ 31,040 |
Delinquency percentage | 0.24% | 0.35% |
Current | Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Loans at fair value | $ 10,314 | |
Loans at fair value | $ 14,235 | |
30-89 days past due | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 2,242 | 3,704 |
30-89 days past due | Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 3,595 | |
Loans at fair value | 958 | |
30-89 days past due | Construction | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 231 | |
30-89 days past due | Commercial and industrial | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 1,856 | |
30-89 days past due | Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 155 | 109 |
Nonaccrual | Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Loans at fair value | $ 910 | |
Loans at fair value | $ 894 |
Allowance for Loan Losses (th_3
Allowance for Loan Losses (the Allowance) - Roll-forward of allowance by portfolio segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | $ 18,376 | $ 11,098 | $ 17,767 | $ 9,513 |
Charge-offs | (129) | (32) | (129) | (32) |
Recoveries | 18 | 9 | 28 | 42 |
Provision | 96 | 1,631 | 695 | 3,183 |
Balance at end of period | 18,361 | 12,706 | 18,361 | 12,706 |
Commercial mortgage | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 7,655 | 4,112 | 7,451 | 3,426 |
Provision | (509) | 1,165 | (305) | 1,851 |
Balance at end of period | 7,146 | 5,277 | 7,146 | 5,277 |
Home equity lines and loans | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 310 | 484 | 434 | 342 |
Charge-offs | (13) | (13) | ||
Recoveries | 2 | 2 | 4 | 4 |
Provision | (31) | 199 | (157) | 339 |
Balance at end of period | 281 | 672 | 281 | 672 |
Residential mortgage | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 314 | 219 | 385 | 179 |
Recoveries | 2 | 2 | 4 | 4 |
Provision | 8 | 125 | (65) | 163 |
Balance at end of period | 324 | 346 | 324 | 346 |
Construction | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 2,311 | 2,381 | 2,421 | 2,362 |
Provision | (70) | (362) | (180) | (343) |
Balance at end of period | 2,241 | 2,019 | 2,241 | 2,019 |
Commercial and industrial | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 5,286 | 3,169 | 5,431 | 2,684 |
Charge-offs | (9) | (9) | ||
Recoveries | 13 | 4 | 18 | 32 |
Provision | 61 | 442 | (89) | 899 |
Balance at end of period | 5,360 | 3,606 | 5,360 | 3,606 |
Small business loans | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 1,920 | 725 | 1,259 | 509 |
Provision | 315 | 22 | 976 | 238 |
Balance at end of period | 2,235 | 747 | 2,235 | 747 |
Consumer | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 4 | 4 | 4 | 6 |
Charge-offs | (10) | (10) | ||
Recoveries | 1 | 1 | 2 | 2 |
Provision | (1) | 9 | (2) | 6 |
Balance at end of period | 4 | 4 | 4 | 4 |
Leases, net | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 576 | 4 | 382 | 5 |
Charge-offs | (129) | (129) | ||
Provision | 323 | 31 | 517 | 30 |
Balance at end of period | $ 770 | $ 35 | $ 770 | $ 35 |
Allowance for Loan Losses (th_4
Allowance for Loan Losses (the Allowance) - Allowance allocated by portfolio segment (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Impaired Loans | ||||||
Allowance on loans and leases individually evaluated for impairment | $ 1,978 | $ 1,645 | ||||
Allowance on loans and leases collectively evaluated for impairment | 16,383 | 16,122 | ||||
Total | 18,361 | 17,767 | $ 18,376 | $ 12,706 | $ 11,098 | $ 9,513 |
Carrying value of loans and leases individually evaluated for impairment | 9,786 | 10,380 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 1,340,378 | 1,267,194 | ||||
Total | 1,350,164 | 1,277,574 | ||||
Commercial mortgage | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 7,146 | 7,451 | ||||
Total | 7,146 | 7,451 | 7,655 | 5,277 | 4,112 | 3,426 |
Carrying value of loans and leases individually evaluated for impairment | 722 | 1,606 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 529,441 | 483,497 | ||||
Total | 530,163 | 485,103 | ||||
Home equity lines and loans | ||||||
Impaired Loans | ||||||
Allowance on loans and leases individually evaluated for impairment | 6 | 9 | ||||
Allowance on loans and leases collectively evaluated for impairment | 275 | 425 | ||||
Total | 281 | 434 | 310 | 672 | 484 | 342 |
Carrying value of loans and leases individually evaluated for impairment | 916 | 921 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 53,160 | 64,066 | ||||
Total | 54,076 | 64,987 | ||||
Residential mortgage | ||||||
Impaired Loans | ||||||
Allowance on loans and leases individually evaluated for impairment | 68 | 73 | ||||
Allowance on loans and leases collectively evaluated for impairment | 256 | 312 | ||||
Total | 324 | 385 | 314 | 346 | 219 | 179 |
Carrying value of loans and leases individually evaluated for impairment | 1,808 | 1,817 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 38,560 | 38,455 | ||||
Total | 40,368 | 40,272 | ||||
Construction | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 2,241 | 2,421 | ||||
Total | 2,241 | 2,421 | 2,311 | 2,019 | 2,381 | 2,362 |
Carrying value of loans and leases individually evaluated for impairment | 1,206 | 1,206 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 131,341 | 139,040 | ||||
Total | 132,547 | 140,246 | ||||
Commercial and industrial | ||||||
Impaired Loans | ||||||
Allowance on loans and leases individually evaluated for impairment | 1,528 | 1,563 | ||||
Allowance on loans and leases collectively evaluated for impairment | 3,832 | 3,868 | ||||
Total | 5,360 | 5,431 | 5,286 | 3,606 | 3,169 | 2,684 |
Carrying value of loans and leases individually evaluated for impairment | 4,062 | 4,645 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 258,968 | 257,105 | ||||
Total | 263,030 | 261,750 | ||||
Small business loans | ||||||
Impaired Loans | ||||||
Allowance on loans and leases individually evaluated for impairment | 376 | |||||
Allowance on loans and leases collectively evaluated for impairment | 1,859 | 1,259 | ||||
Total | 2,235 | 1,259 | 1,920 | 747 | 725 | 509 |
Carrying value of loans and leases individually evaluated for impairment | 1,072 | 185 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 73,915 | 49,357 | ||||
Total | 74,987 | 49,542 | ||||
Paycheck Protection Program loans ("PPP") | ||||||
Impaired Loans | ||||||
Carrying value of loans and leases collectively evaluated for impairment | 189,337 | 203,543 | ||||
Total | 189,337 | 203,543 | ||||
MainStreet Lending Program Loans ("PPP") | ||||||
Impaired Loans | ||||||
Carrying value of loans and leases collectively evaluated for impairment | 588 | 580 | ||||
Total | $ 588 | $ 580 | ||||
Paycheck Protection Program And Main Street Lending Program Loans | ||||||
Impaired Loans | ||||||
Percentage Guaranteed | 100.00% | 100.00% | ||||
Consumer | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | $ 4 | $ 4 | ||||
Total | 4 | 4 | 4 | 4 | 4 | 6 |
Carrying value of loans and leases collectively evaluated for impairment | 526 | 511 | ||||
Total | 526 | 511 | ||||
Leases, net | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 770 | 382 | ||||
Total | 770 | 382 | $ 576 | $ 35 | $ 4 | $ 5 |
Carrying value of loans and leases collectively evaluated for impairment | 64,542 | 31,040 | ||||
Total | $ 64,542 | $ 31,040 |
Allowance for Loan Losses (th_5
Allowance for Loan Losses (the Allowance) - Carrying value based on credit quality indicators (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | $ 1,244,728 | $ 1,205,751 |
Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 1,137,087 | 1,124,015 |
Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 80,118 | 61,740 |
Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 24,182 | 16,316 |
Doubtful | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 3,341 | 3,680 |
Commercial mortgage | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 530,163 | 485,103 |
Commercial mortgage | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 492,532 | 449,545 |
Commercial mortgage | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 34,509 | 32,059 |
Commercial mortgage | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 3,122 | 3,499 |
Home equity lines and loans | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 54,076 | 64,987 |
Home equity lines and loans | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 52,677 | 63,923 |
Home equity lines and loans | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 1,399 | 1,064 |
Construction | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 132,547 | 140,246 |
Construction | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 123,389 | 132,286 |
Construction | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 9,158 | 7,960 |
Commercial and industrial | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 263,030 | 261,750 |
Commercial and industrial | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 207,105 | 227,349 |
Commercial and industrial | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 36,451 | 21,721 |
Commercial and industrial | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 16,133 | 9,000 |
Commercial and industrial | Doubtful | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 3,341 | 3,680 |
Small business loans | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 74,987 | 49,542 |
Small business loans | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 71,459 | 46,789 |
Small business loans | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 3,528 | 2,753 |
Paycheck Protection Program loans ("PPP") | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 189,337 | 203,543 |
Paycheck Protection Program loans ("PPP") | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 189,337 | 203,543 |
MainStreet Lending Program Loans ("PPP") | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 588 | 580 |
MainStreet Lending Program Loans ("PPP") | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | $ 588 | $ 580 |
Allowance for Loan Losses (th_6
Allowance for Loan Losses (the Allowance) - Carrying value based on performance status (Details) $ in Thousands | Jun. 30, 2021USD ($)loan | Dec. 31, 2020USD ($)loan |
Loans and Leases by Credit Ratings | ||
Troubled debt restructurings | $ 2,725 | $ 3,606 |
Evaluated by performance status | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 105,436 | 71,823 |
Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 103,628 | 70,008 |
Nonperforming | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 1,808 | 1,815 |
Residential mortgage | Evaluated by performance status | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 40,368 | 40,272 |
Residential mortgage | Performing | ||
Loans and Leases by Credit Ratings | ||
Troubled debt restructurings | 0 | 0 |
Carrying value of residential mortgage, consumer and leases | 38,560 | 38,457 |
Residential mortgage | Nonperforming | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | $ 1,808 | $ 1,815 |
Number of loans | loan | 5 | 5 |
Loans receivable, net of the allowance and lease losses | $ 894 | $ 910 |
Consumer | Evaluated by performance status | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 526 | 511 |
Consumer | Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 526 | 511 |
Leases, net | Evaluated by performance status | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 64,542 | 31,040 |
Leases, net | Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | $ 64,542 | $ 31,040 |
Allowance for Loan Losses (th_7
Allowance for Loan Losses (the Allowance) - Impaired loans (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Impaired loans with related allowance: | ||
Recorded investment | $ 4,963 | $ 4,644 |
Principal balance | 7,565 | 4,696 |
Related allowance | 1,978 | 1,645 |
Impaired loans without related allowance: | ||
Recorded investment | 4,823 | 5,736 |
Principal balance | 5,876 | 5,862 |
Grand Total | ||
Recorded investment | 9,786 | 10,380 |
Principal balance | 13,441 | 10,558 |
Related allowance | 1,978 | 1,645 |
Commercial mortgage | ||
Impaired loans without related allowance: | ||
Recorded investment | 722 | 1,606 |
Principal balance | 722 | 1,642 |
Commercial and industrial | ||
Impaired loans with related allowance: | ||
Recorded investment | 3,271 | 3,860 |
Principal balance | 3,362 | 3,902 |
Related allowance | 1,528 | 1,563 |
Impaired loans without related allowance: | ||
Recorded investment | 791 | 785 |
Principal balance | 896 | 862 |
Small business loans | ||
Impaired loans with related allowance: | ||
Recorded investment | 916 | |
Principal balance | 3,415 | |
Related allowance | 376 | |
Impaired loans without related allowance: | ||
Recorded investment | 156 | 185 |
Principal balance | 1,091 | 185 |
Home equity lines and loans | ||
Impaired loans with related allowance: | ||
Recorded investment | 92 | 95 |
Principal balance | 104 | 105 |
Related allowance | 6 | 9 |
Impaired loans without related allowance: | ||
Recorded investment | 824 | 826 |
Principal balance | 837 | 839 |
Residential mortgage | ||
Impaired loans with related allowance: | ||
Recorded investment | 684 | 689 |
Principal balance | 684 | 689 |
Related allowance | 68 | 73 |
Impaired loans without related allowance: | ||
Recorded investment | 1,124 | 1,128 |
Principal balance | 1,124 | 1,128 |
Construction | ||
Impaired loans without related allowance: | ||
Recorded investment | 1,206 | 1,206 |
Principal balance | $ 1,206 | $ 1,206 |
Allowance for Loan Losses (th_8
Allowance for Loan Losses (the Allowance) - Impaired Loan Average Recorded Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Impaired loans with related allowance: | ||||
Average recorded investment | $ 5,005 | $ 803 | $ 5,037 | $ 809 |
Interest income recognized | 5 | 5 | 10 | 10 |
Impaired loans without related allowance: | ||||
Average recorded investment | 5,050 | 9,351 | 5,137 | 9,393 |
Interest income recognized | 29 | 137 | 56 | 185 |
Grand Total | ||||
Average recorded investment | 10,055 | 10,154 | 10,174 | 10,202 |
Total interest income recognized | 34 | 142 | 66 | 195 |
Commercial mortgage | ||||
Impaired loans without related allowance: | ||||
Average recorded investment | 726 | 2,106 | 730 | 2,117 |
Interest income recognized | 8 | 21 | 16 | 42 |
Commercial and industrial | ||||
Impaired loans with related allowance: | ||||
Average recorded investment | 3,309 | 446 | 3,339 | 449 |
Interest income recognized | 5 | 5 | 10 | 10 |
Impaired loans without related allowance: | ||||
Average recorded investment | 969 | 1,109 | 1,002 | 1,122 |
Interest income recognized | 4 | 8 | ||
Small business loans | ||||
Impaired loans with related allowance: | ||||
Average recorded investment | 917 | 917 | ||
Impaired loans without related allowance: | ||||
Average recorded investment | 161 | 220 | 169 | 227 |
Interest income recognized | 4 | 5 | 8 | 11 |
Home equity lines and loans | ||||
Impaired loans with related allowance: | ||||
Average recorded investment | 93 | 357 | 94 | 360 |
Impaired loans without related allowance: | ||||
Average recorded investment | 824 | 400 | 824 | 400 |
Residential mortgage | ||||
Impaired loans with related allowance: | ||||
Average recorded investment | 686 | 687 | ||
Impaired loans without related allowance: | ||||
Average recorded investment | 1,125 | 4,310 | 1,126 | 4,317 |
Interest income recognized | 3 | 92 | 3 | 92 |
Construction | ||||
Impaired loans without related allowance: | ||||
Average recorded investment | 1,206 | 1,206 | 1,206 | 1,210 |
Interest income recognized | 14 | $ 15 | 29 | $ 32 |
Leases, net | ||||
Impaired loans without related allowance: | ||||
Average recorded investment | $ 39 | $ 80 |
Allowance for Loan Losses (th_9
Allowance for Loan Losses (the Allowance) - Troubled debt restructuring (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Allowance for Loan Losses (the Allowance) | ||
TDRs included in nonperforming loans and leases | $ 239 | $ 244 |
TDRs in compliance with modified terms | 2,486 | 3,362 |
Total TDRs | $ 2,725 | $ 3,606 |
Allowance for Loan Losses (t_10
Allowance for Loan Losses (the Allowance) - Loan and lease modifications granted categorized as TDRs (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)contract | Jun. 30, 2020USD ($)contract | Jun. 30, 2021USD ($)contract | Jun. 30, 2020USD ($)contract | Dec. 31, 2020USD ($) | |
Allowance for Loan Losses (the Allowance) | |||||
Number of Contracts | contract | 0 | 1 | 0 | 1 | |
Loan and lease modifications granted and subsequently defaulted | $ 0 | $ 0 | $ 0 | $ 0 | |
Loan modifications provided to borrowers | $ 29,000 | $ 144,100 | $ 29,000 | $ 144,100 | $ 26,900 |
Short-Term Borrowings and Lon_2
Short-Term Borrowings and Long-Term Debt - Short-term borrowings (Details) | 6 Months Ended | |
Jun. 30, 2021USD ($)item | Dec. 31, 2020USD ($) | |
Short-Term Borrowings | ||
Short term borrowings | $ 33,542,000 | $ 106,862,000 |
Federal funds purchased | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Number of borrowing facilities | item | 2 | |
Short term borrowings | $ 0 | 0 |
Federal funds purchased, facility one | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Maximum borrowing capacity | 24,000,000 | |
Federal funds purchased, facility two | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Maximum borrowing capacity | $ 15,000,000 | |
Open Repo Plus Weekly 0.33 Percent Maturing On 05/31/2022 | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.33% | |
Short term borrowings | $ 13,542,000 | 60,416,000 |
Federal Reserve discount window | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Maximum borrowing capacity | $ 3,700,000 | |
Interest rate (as a percent) | 0.25% | |
Short term borrowings | $ 0 | 10,000,000 |
PPPLF Advance | ||
Short-Term Borrowings | ||
Advances secured percentage | 100.00% | |
Interest rate (as a percent) | 0.35% | |
Short term borrowings | $ 36,300,000 | |
Mid-term Repo-fixed 0.36%, Maturing On 01/13/2021 | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.36% | |
Short term borrowings | 4,605,000 | |
Mid-term Repo-fixed 0.10%, Maturing On 06/10/2021 | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.10% | |
Short term borrowings | 6,376,000 | |
Mid-term Repo-fixed 0.11%, Maturing On 09/10/2021 | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.11% | |
Short term borrowings | $ 10,000,000 | 10,000,000 |
Mid-term Repo-fixed 0.16%, Maturing On 12/10/2021 | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.16% | |
Short term borrowings | $ 10,000,000 | 10,000,000 |
Mid-term Repo-fixed 0.23%, Maturing On 01/27/2021 | Federal Home Loan Bank of Pittsburgh | ||
Short-Term Borrowings | ||
Interest rate (as a percent) | 0.23% | |
Short term borrowings | $ 5,465,000 |
Short-Term Borrowings and Lon_3
Short-Term Borrowings and Long-Term Debt - Long-term debt (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Long Term Debt | ||
Long-term debt | $ 48,614 | $ 165,546 |
PPPLF Advances | ||
Long Term Debt | ||
Fixed interest rate (as a percent) | 0.35% | |
Long-term debt | 153,269 | |
PPPLF Advances 2026 | ||
Long Term Debt | ||
Fixed interest rate (as a percent) | 0.35% | |
Long-term debt | $ 36,337 | |
Federal Home Loan Bank of Pittsburgh | Mid-term Repo-fixed Maturing On 06/29/2022 | ||
Long Term Debt | ||
Fixed interest rate (as a percent) | 0.32% | |
Long-term debt | $ 7,392 | 7,392 |
Federal Home Loan Bank of Pittsburgh | Mid-term Repo-fixed Maturing On 09/12/2022 | ||
Long Term Debt | ||
Fixed interest rate (as a percent) | 0.23% | |
Long-term debt | $ 4,885 | 4,885 |
Federal Home Loan Bank of Pittsburgh | Letters of credit | ||
Long Term Debt | ||
Proceeds from long term debt | 108,000 | |
Maximum borrowing capacity | $ 549,000 | $ 638,900 |
Servicing Assets - Residential
Servicing Assets - Residential Mortgage Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Balance at beginning of the period | $ 5,617 | ||||
Balance at end of the period | $ 10,327 | 10,327 | |||
Mortgage Servicing Rights | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Loans serviced | 863,200 | 863,200 | $ 506,000 | ||
Servicing fee income | 481 | $ 67 | 842 | $ 107 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Balance at beginning of the period | 7,118 | 423 | 4,647 | 446 | |
Servicing rights capitalized | 2,154 | 952 | 4,496 | 1,136 | |
Amortization of servicing rights | (271) | (50) | (470) | (83) | |
Change in valuation allowance | (59) | (31) | 269 | (205) | |
Balance at end of the period | 8,942 | 1,294 | 8,942 | 1,294 | |
Valuation Allowance for Impairment of Recognized Servicing Assets [Roll Forward] | |||||
Valuation allowance, beginning of period | 107 | 272 | 435 | 98 | |
Impairment | (59) | (31) | (205) | ||
Recovery | 269 | ||||
Valuation allowance, end of the period | $ 166 | $ 303 | $ 166 | $ 303 |
Servicing Assets - MSR Sensitiv
Servicing Assets - MSR Sensitivity Analysis (Details) - Mortgage Servicing Rights - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Fair value of residential mortgage servicing rights | $ 9,024 | $ 4,647 |
Weighted average life (years) | 7 years | 5 years |
Prepayment speed | 7.61% | 9.39% |
Impact on fair value of a 10% adverse change in prepayment speed | $ (321) | $ (183) |
Impact on fair value of a 20% adverse change in prepayment speed | $ (629) | $ (354) |
Discount rate | 9.00% | 9.00% |
Impact on fair value of a 10% adverse change in the discount rate | $ (347) | $ (168) |
Impact on fair value of a 20% adverse change in the discount rate | $ (669) | $ (329) |
Servicing Assets - SBA Loans (D
Servicing Assets - SBA Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Balance at beginning of the period | $ 5,617 | ||||
Balance at end of the period | $ 10,327 | 10,327 | |||
SBA Loan Servicing Rights | |||||
Servicing Assets at Fair Value [Line Items] | |||||
Loans serviced | 79,500 | 79,500 | $ 55,900 | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||||
Balance at beginning of the period | 1,160 | $ 469 | 970 | $ 337 | |
Servicing rights capitalized | 304 | 183 | 578 | 342 | |
Amortization of servicing rights | (87) | (28) | (154) | (47) | |
Change in valuation allowance | 8 | 8 | (9) | ||
Balance at end of the period | 1,385 | 632 | 1,385 | 632 | |
Valuation Allowance for Impairment of Recognized Servicing Assets [Roll Forward] | |||||
Valuation allowance, beginning of period | (56) | (34) | (39) | (26) | |
Impairment | (9) | ||||
Recovery | 8 | 8 | |||
Valuation allowance, end of the period | $ (48) | $ (26) | $ (48) | $ (26) |
Servicing Assets - SBA Sensitiv
Servicing Assets - SBA Sensitivity Analysis (Details) - SBA Loan Servicing Rights - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Fair value of SBA loan servicing rights | $ 1,520 | $ 1,010 |
Weighted average life (years) | 3 years 7 months 6 days | 3 years 8 months 12 days |
Prepayment speed | 13.28% | 12.73% |
Impact on fair value of a 10% adverse change in prepayment speed | $ (62) | $ (37) |
Impact on fair value of a 20% adverse change in prepayment speed | $ (118) | $ (71) |
Discount rate | 5.82% | 8.33% |
Impact on fair value of a 10% adverse change in the discount rate | $ (41) | $ (25) |
Impact on fair value of a 20% adverse change in the discount rate | $ (79) | $ (49) |
Fair Value Measurements and D_3
Fair Value Measurements and Disclosures - Financial assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Securities available-for-sale | $ 141,909 | $ 123,562 |
Equity investments | 1,016 | 1,031 |
Mortgage loans held-for-investment | 15,129 | 12,182 |
U.S. asset backed securities | ||
Assets | ||
Securities available-for-sale | 26,735 | 25,592 |
U.S. government agency mortgage-backed securities | ||
Assets | ||
Securities available-for-sale | 3,905 | 4,046 |
U.S. government agency collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 22,024 | 23,909 |
State and municipal securities | ||
Assets | ||
Securities available-for-sale | 75,181 | 65,810 |
Corporate bonds | ||
Assets | ||
Securities available-for-sale | 6,035 | 4,205 |
Level 3 | Interest rate lock commitments | ||
Assets | ||
Derivative assets, Fair value | 2,667 | 6,932 |
Recurring | ||
Assets | ||
Equity investments | 1,016 | 1,031 |
Mortgage loans held-for-sale | 132,348 | 229,199 |
Mortgage loans held-for-investment | 15,129 | 12,182 |
Total | 294,200 | 374,024 |
Liabilities | ||
Total | 1,731 | 2,891 |
Recurring | U.S. asset backed securities | ||
Assets | ||
Securities available-for-sale | 26,735 | 25,592 |
Recurring | U.S. government agency mortgage-backed securities | ||
Assets | ||
Securities available-for-sale | 3,905 | 4,046 |
Recurring | U.S. government agency collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 22,024 | 23,909 |
Recurring | State and municipal securities | ||
Assets | ||
Securities available-for-sale | 75,181 | 65,810 |
Recurring | U.S. Treasuries | ||
Assets | ||
Securities available-for-sale | 8,029 | |
Recurring | Corporate bonds | ||
Assets | ||
Securities available-for-sale | 6,035 | 4,205 |
Recurring | Interest rate lock commitments | ||
Assets | ||
Derivative assets, Fair value | 2,667 | 6,932 |
Liabilities | ||
Derivative Liability | 259 | 100 |
Recurring | Forward Commitments | ||
Assets | ||
Derivative assets, Fair value | 13 | |
Liabilities | ||
Derivative Liability | 291 | 1,572 |
Recurring | Customer derivatives - interest rate swaps | ||
Assets | ||
Derivative assets, Fair value | 1,118 | 1,118 |
Liabilities | ||
Derivative Liability | 1,181 | 1,219 |
Recurring | Level 2 | ||
Assets | ||
Equity investments | 1,016 | 1,031 |
Mortgage loans held-for-sale | 132,348 | 229,199 |
Mortgage loans held-for-investment | 15,129 | 12,182 |
Total | 291,533 | 367,092 |
Liabilities | ||
Total | 1,472 | 2,791 |
Recurring | Level 2 | U.S. asset backed securities | ||
Assets | ||
Securities available-for-sale | 26,735 | 25,592 |
Recurring | Level 2 | U.S. government agency mortgage-backed securities | ||
Assets | ||
Securities available-for-sale | 3,905 | 4,046 |
Recurring | Level 2 | U.S. government agency collateralized mortgage obligations | ||
Assets | ||
Securities available-for-sale | 22,024 | 23,909 |
Recurring | Level 2 | State and municipal securities | ||
Assets | ||
Securities available-for-sale | 75,181 | 65,810 |
Recurring | Level 2 | U.S. Treasuries | ||
Assets | ||
Securities available-for-sale | 8,029 | |
Recurring | Level 2 | Corporate bonds | ||
Assets | ||
Securities available-for-sale | 6,035 | 4,205 |
Recurring | Level 2 | Forward Commitments | ||
Assets | ||
Derivative assets, Fair value | 13 | |
Liabilities | ||
Derivative Liability | 291 | 1,572 |
Recurring | Level 2 | Customer derivatives - interest rate swaps | ||
Assets | ||
Derivative assets, Fair value | 1,118 | 1,118 |
Liabilities | ||
Derivative Liability | 1,181 | 1,219 |
Recurring | Level 3 | ||
Assets | ||
Total | 2,667 | 6,932 |
Liabilities | ||
Total | 259 | 100 |
Recurring | Level 3 | Interest rate lock commitments | ||
Assets | ||
Derivative assets, Fair value | 2,667 | 6,932 |
Liabilities | ||
Derivative Liability | $ 259 | $ 100 |
Fair Value Measurements and D_4
Fair Value Measurements and Disclosures - Financial assets measured at fair value on non-recurring basis (Details) - Nonrecurring - Level 3 - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financial assets measured at fair value on a nonrecurring basis | ||
Mortgage servicing rights | $ 8,942 | $ 4,647 |
SBA loan servicing rights | 1,385 | 970 |
Impaired loans | 2,985 | 2,998 |
Total | $ 13,312 | $ 8,615 |
Fair Value Measurements and D_5
Fair Value Measurements and Disclosures - Estimated fair values of financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financial assets: | ||
Securities available-for-sale | $ 141,909 | $ 123,562 |
Securities held-to-maturity | 6,726 | 6,857 |
Equity investments | 1,016 | 1,031 |
Mortgage loans held-for-investment | 15,129 | 12,182 |
Carrying amount | ||
Financial assets: | ||
Restricted investment in bank stock | 5,357 | 7,861 |
Level 1 | Carrying amount | ||
Financial assets: | ||
Cash and cash equivalents | 26,902 | 36,744 |
Level 1 | Fair value | ||
Financial assets: | ||
Cash and cash equivalents | 26,902 | 36,744 |
Level 2 | Carrying amount | ||
Financial assets: | ||
Securities available-for-sale | 141,909 | 123,562 |
Securities held-to-maturity | 6,441 | 6,510 |
Equity investments | 1,016 | 1,031 |
Mortgage loans held-for-sale | 132,348 | 229,199 |
Mortgage loans held-for-investment | 15,129 | 12,182 |
Financial liabilities: | ||
Deposits | 1,413,280 | 1,241,335 |
Short-term borrowings | 33,542 | 106,862 |
Long-term debt | 48,614 | 165,546 |
Subordinated debentures | 40,730 | 40,671 |
Accrued interest payable | 120 | 1,154 |
Level 2 | Carrying amount | Forward Commitments | ||
Financial assets: | ||
Derivative asset | 13 | |
Financial liabilities: | ||
Derivatives | 291 | 1,572 |
Level 2 | Carrying amount | Customer derivatives - interest rate swaps | ||
Financial assets: | ||
Derivative asset | 1,118 | 1,118 |
Financial liabilities: | ||
Derivatives | 1,181 | 1,219 |
Level 2 | Fair value | ||
Financial assets: | ||
Securities available-for-sale | 141,909 | 123,562 |
Securities held-to-maturity | 6,726 | 6,857 |
Equity investments | 1,016 | 1,031 |
Mortgage loans held-for-sale | 132,348 | 229,199 |
Mortgage loans held-for-investment | 15,129 | 12,182 |
Financial liabilities: | ||
Deposits | 1,523,900 | 1,392,500 |
Short-term borrowings | 33,542 | 106,862 |
Long-term debt | 49,102 | 168,000 |
Subordinated debentures | 41,961 | 38,375 |
Accrued interest payable | 120 | 1,154 |
Level 2 | Fair value | Forward Commitments | ||
Financial assets: | ||
Derivative asset | 13 | |
Financial liabilities: | ||
Derivatives | 291 | 1,572 |
Level 2 | Fair value | Customer derivatives - interest rate swaps | ||
Financial assets: | ||
Derivative asset | 1,118 | 1,118 |
Financial liabilities: | ||
Derivatives | 1,181 | 1,219 |
Level 3 | Interest rate lock commitments | ||
Financial assets: | ||
Derivative asset | 2,667 | 6,932 |
Level 3 | Carrying amount | ||
Financial assets: | ||
Loans receivable, net of the allowance and lease losses | 1,329,260 | 1,272,582 |
Accrued interest receivable | 5,519 | 5,482 |
Level 3 | Carrying amount | Interest rate lock commitments | ||
Financial assets: | ||
Derivative asset | 2,667 | 6,932 |
Financial liabilities: | ||
Derivatives | 259 | 100 |
Level 3 | Fair value | ||
Financial assets: | ||
Loans receivable, net of the allowance and lease losses | 1,376,721 | 1,289,776 |
Accrued interest receivable | 5,519 | 5,482 |
Level 3 | Fair value | Interest rate lock commitments | ||
Financial assets: | ||
Derivative asset | 2,667 | 6,932 |
Financial liabilities: | ||
Derivatives | $ 259 | $ 100 |
Fair Value Measurements and D_6
Fair Value Measurements and Disclosures - Off-balance sheet financial instruments (Details) - Level 2 - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Carrying amount | Commitments to extend credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | $ 461,207 | $ 421,399 |
Carrying amount | Letters of credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | 16,975 | 8,928 |
Fair value | Commitments to extend credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | $ 2,667 | $ 6,932 |
Fair Value Measurements and D_7
Fair Value Measurements and Disclosures - Fair value on a recurring basis (Details) - Interest rate lock commitments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Balance at beginning of the period | $ 4,595 | $ 4,021 | $ 6,932 | $ 504 |
(Decrease) Increase in value | (1,928) | 574 | (4,265) | 4,091 |
Balance at end of the period | $ 2,667 | $ 4,595 | $ 2,667 | $ 4,595 |
Fair Value Measurements and D_8
Fair Value Measurements and Disclosures - Valuation Techniques for Level 3 interest rate lock (Details) - Interest rate lock commitments - Level 3 $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Derivative asset | $ 2,667 | $ 2,667 | $ 6,932 | ||
Valuation technique extensible list | us-gaap:ValuationTechniqueConsensusPricingModelMember | us-gaap:ValuationTechniqueConsensusPricingModelMember | us-gaap:ValuationTechniqueConsensusPricingModelMember | ||
Measurement input extensible list | mrbk:LoanOriginationSucessRateMember | mrbk:LoanOriginationSucessRateMember | mrbk:LoanOriginationSucessRateMember | ||
Net realized gains (losses) | $ 13 | $ 724 | $ (4,400) | $ 4,100 | |
Minimum | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Measurement input | 1 | 1 | 1 | ||
Maximum | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Measurement input | 99 | 99 | 99 | ||
Weighted Average | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Measurement input | 89.91 | 89.91 | 83.08 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Notional amounts and fair values of derivative financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative Financial Instruments | ||
Notional Amount | $ 450,395 | $ 688,786 |
Asset (Liability) Fair Value | 2,067 | 5,159 |
Interest rate lock commitments | ||
Derivative Financial Instruments | ||
Notional Amount | 248,631 | 428,828 |
Asset (Liability) Fair Value | 2,408 | 6,832 |
Interest rate lock commitments | Other Assets | ||
Derivative Financial Instruments | ||
Notional Amount | 202,834 | 406,422 |
Asset (Liability) Fair Value | 2,667 | 6,932 |
Interest rate lock commitments | Other Liabilities | ||
Derivative Financial Instruments | ||
Notional Amount | 45,797 | 22,406 |
Asset (Liability) Fair Value | (259) | (100) |
Forward Commitments | ||
Derivative Financial Instruments | ||
Notional Amount | 129,500 | 218,000 |
Asset (Liability) Fair Value | (278) | (1,572) |
Forward Commitments | Other Assets | ||
Derivative Financial Instruments | ||
Notional Amount | 10,500 | |
Asset (Liability) Fair Value | 13 | |
Forward Commitments | Other Liabilities | ||
Derivative Financial Instruments | ||
Notional Amount | 119,000 | 218,000 |
Asset (Liability) Fair Value | (291) | (1,572) |
Customer derivatives - interest rate swaps | ||
Derivative Financial Instruments | ||
Notional Amount | 72,264 | 41,958 |
Asset (Liability) Fair Value | (63) | (101) |
Customer derivatives - interest rate swaps | Other Assets | ||
Derivative Financial Instruments | ||
Notional Amount | 36,132 | 20,979 |
Asset (Liability) Fair Value | 1,118 | 1,118 |
Customer derivatives - interest rate swaps | Other Liabilities | ||
Derivative Financial Instruments | ||
Notional Amount | 36,132 | 20,979 |
Asset (Liability) Fair Value | $ (1,181) | $ (1,219) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair value gains and losses on derivative financial instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Summary of the fair value gains and losses on derivative financial instruments | ||||
Net fair value (losses) gains on derivative financial instruments | $ (2,148) | $ 2,364 | $ (3,092) | $ 3,318 |
Realized gain (losses) on derivatives | (674) | (3,301) | 3,587 | (4,726) |
Interest rate lock commitments | ||||
Summary of the fair value gains and losses on derivative financial instruments | ||||
Net fair value (losses) gains on derivative financial instruments | 13 | 724 | (4,424) | 4,065 |
Forward Commitments | ||||
Summary of the fair value gains and losses on derivative financial instruments | ||||
Net fair value (losses) gains on derivative financial instruments | (2,102) | 1,638 | 1,294 | (672) |
Customer derivatives - interest rate swaps | ||||
Summary of the fair value gains and losses on derivative financial instruments | ||||
Net fair value (losses) gains on derivative financial instruments | $ (59) | $ 2 | $ 38 | $ (75) |
Segments (Details)
Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)Office | Jun. 30, 2020USD ($)Office | Jun. 30, 2021USD ($)Office | Jun. 30, 2020USD ($)Office | Dec. 31, 2020USD ($) | |
Net-interest Income: | |||||
Net interest income | $ 15,412 | $ 11,597 | $ 30,533 | $ 21,263 | |
Provision for loan losses | 96 | 1,631 | 695 | 3,183 | |
Net interest income after provision for loan losses | 15,316 | 9,966 | 29,838 | 18,080 | |
Non-Interest Income: | |||||
Mortgage banking income | 19,467 | 16,788 | 43,567 | 23,583 | |
Wealth management income | 1,163 | 853 | 2,299 | 1,874 | |
SBA income | 1,490 | 638 | 2,735 | 1,180 | |
Net change in fair values | (872) | 3,140 | (5,785) | 4,892 | |
Net loss on hedging activity | (674) | (3,301) | 3,587 | (4,726) | |
Other | 1,158 | 573 | 2,377 | 1,109 | |
Total non-interest income | 21,732 | 18,691 | 48,780 | 27,912 | |
Non-interest expenses: | |||||
Total non-interest expenses | 26,246 | 21,254 | 54,510 | 35,318 | |
Income before income taxes | 10,802 | 7,403 | 24,108 | 10,674 | |
Total Assets | 1,709,010 | 1,579,083 | 1,709,010 | 1,579,083 | $ 1,720,197 |
Bank | |||||
Net-interest Income: | |||||
Net interest income | 14,824 | 11,101 | 29,324 | 20,619 | |
Provision for loan losses | 96 | 1,631 | 695 | 3,183 | |
Net interest income after provision for loan losses | 14,728 | 9,470 | 28,629 | 17,436 | |
Non-Interest Income: | |||||
Mortgage banking income | 408 | 297 | 676 | 399 | |
SBA income | 1,490 | 638 | 2,735 | 1,180 | |
Net change in fair values | (59) | 2 | 39 | (63) | |
Other | 563 | 442 | 1,274 | 886 | |
Total non-interest income | 2,402 | 1,379 | 4,724 | 2,402 | |
Non-interest expenses: | |||||
Total non-interest expenses | 9,415 | 7,572 | 18,348 | 14,510 | |
Income before income taxes | 7,715 | 3,277 | 15,005 | 5,328 | |
Total Assets | 1,560,040 | 1,462,449 | 1,560,040 | 1,462,449 | |
Wealth | |||||
Net-interest Income: | |||||
Net interest income | 2 | (2) | (11) | (4) | |
Net interest income after provision for loan losses | 2 | (2) | (11) | (4) | |
Non-Interest Income: | |||||
Wealth management income | 1,163 | 853 | 2,299 | 1,874 | |
Other | 14 | 14 | |||
Total non-interest income | 1,163 | 867 | 2,299 | 1,888 | |
Non-interest expenses: | |||||
Total non-interest expenses | 789 | 788 | 1,684 | 1,575 | |
Income before income taxes | 376 | 77 | 604 | 309 | |
Total Assets | $ 5,946 | $ 5,206 | $ 5,946 | $ 5,206 | |
Mortgage | |||||
Segments | |||||
Number of central loan production | Office | 16 | 16 | 16 | 16 | |
Net-interest Income: | |||||
Net interest income | $ 586 | $ 498 | $ 1,220 | $ 648 | |
Net interest income after provision for loan losses | 586 | 498 | 1,220 | 648 | |
Non-Interest Income: | |||||
Mortgage banking income | 19,059 | 16,491 | 42,891 | 23,184 | |
Net change in fair values | (813) | 3,138 | (5,824) | 4,955 | |
Net loss on hedging activity | (674) | (3,301) | 3,587 | (4,726) | |
Other | 595 | 117 | 1,103 | 209 | |
Total non-interest income | 18,167 | 16,445 | 41,757 | 23,622 | |
Non-interest expenses: | |||||
Total non-interest expenses | 16,042 | 12,894 | 34,478 | 19,233 | |
Income before income taxes | 2,711 | 4,049 | 8,499 | 5,037 | |
Total Assets | 143,024 | 111,428 | 143,024 | 111,428 | |
Wealth Management Income | |||||
Non-Interest Income: | |||||
Revenue from contracts with customers | $ 1,163 | $ 853 | $ 2,299 | $ 1,874 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 22, 2021 | Apr. 22, 2021 | Feb. 16, 2021 | Jan. 28, 2021 | Aug. 13, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 17, 2021 | Jun. 16, 2021 | Apr. 26, 2021 | Dec. 31, 2020 |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||||||||
Cash dividend declared per common share | $ 0.125 | $ 0.125 | $ 0.125 | ||||||||
Cash dividends paid | $ 0.125 | ||||||||||
Common Stock, Special Dividends, Per Share, Declared | $ 1 | ||||||||||
Common stock special dividend paid | $ 1 | ||||||||||
Stock Repurchase Program, Authorized Amount | $ 6 | ||||||||||
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 | $ 1 | ||||||||
Common Stock, Shares, Outstanding | 6,492,900 | 6,455,566 | |||||||||
Common stock, Authorized shares | 25,000,000 | 25,000,000 | 10,000,000 | 10,000,000 | |||||||
Shares repurchased | 0 | ||||||||||
Subsequent event | |||||||||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||||||||||
Shares repurchased | 13,755 |