Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 04, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | FFBW, Inc. /MD/ | |
Entity Central Index Key | 0001787384 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Amendment Flag | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 7,707,375 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Assets | |||
Cash and due from banks | $ 5,285 | $ 4,101 | |
Fed funds sold | 2,154 | 35,276 | |
Cash and cash equivalents | 7,439 | 39,377 | |
Available for sale securities, stated at fair value | 60,565 | 48,179 | |
Loans held for sale | 776 | 200 | |
Loans, net of allowance for loan and lease losses of $2,604 and $2,264, respectively | 202,642 | 189,291 | |
Premises and equipment, net | 4,615 | 4,807 | |
Foreclosed assets | 84 | ||
Other equity investments | 780 | 780 | |
Accrued interest receivable | 996 | 725 | |
Cash value of life insurance | 7,220 | 7,068 | |
Other assets | 754 | 1,707 | |
TOTAL ASSETS | 285,787 | 292,218 | |
Liabilities and Equity | |||
Deposits | 166,115 | 217,252 | |
Advance payments by borrowers for taxes and insurance | 910 | 46 | |
FHLB advances | 14,500 | 11,500 | |
Accrued interest payable | 436 | 51 | |
Other liabilities | 1,177 | 1,499 | |
Total liabilities | 183,138 | 230,348 | |
Preferred stock ($0.01 par value, 50,000,000 authorized, no shares issued or outstanding as of September 30, 2020 and December 31, 2019, respectively) | |||
Common stock ($0.01 par value, 100,000,000 authorized, 7,707,375 and 7,867,008 issued and 7,707,375 and 7,702,478 shares outstanding as of September 30, 2020 and December 31, 2019, respectively) | [1] | 77 | 67 |
Additional paid in capital | 69,039 | 28,672 | |
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") (587,667 and 270,192 shares at September 30, 2020 and December 31, 2019, respectively) | [1] | (5,888) | (2,303) |
Retained earnings | 37,878 | 36,551 | |
Accumulated other comprehensive income (loss), net of income taxes | 1,543 | 344 | |
Less treasury stock, 0 and 164,530 shares at cost, at September 30, 2020 and December 31, 2019, respectively | [1] | (1,461) | |
Total equity | 102,649 | 61,870 | |
TOTAL LIABILITIES AND EQUITY | $ 285,787 | $ 292,218 | |
[1] | Share and per share amounts related to periods prior to the date of the completion of the Conversion (January 16, 2020) have been restated to give retroactive recognition to the exchange ratio applied to the Conversion (1.1730 to one) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Condensed Consolidated Balance Sheets | ||
Allowance for loan and lease losses | $ | $ 2,604 | $ 2,264 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 7,707,375 | 7,867,008 |
Common stock, outstanding (in shares) | 7,707,375 | 7,702,478 |
Unallocated common stock of Employee Stock Ownership Plan, shares (in shares) | 587,667 | 270,192 |
Treasury stock, at cost (in shares) | 0 | 164,530 |
Exchange ratio applied in the offering | 1.1730 | 1.1730 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest and dividend income: | ||||
Loans, including fees | $ 2,325 | $ 2,499 | $ 7,265 | $ 7,444 |
Securities | ||||
Taxable | 268 | 285 | 825 | 842 |
Tax-exempt | 46 | 5 | 88 | 11 |
Other | 45 | 23 | 131 | 69 |
Total interest and dividend income | 2,684 | 2,812 | 8,309 | 8,366 |
Interest Expense: | ||||
Interest-bearing deposits | 307 | 631 | 1,185 | 1,863 |
Borrowed funds | 40 | 88 | 149 | 267 |
Total interest expense | 347 | 719 | 1,334 | 2,130 |
Net interest income | 2,337 | 2,093 | 6,975 | 6,236 |
Provision for loan losses | 60 | 45 | 315 | 200 |
Net interest income after provision for loan losses | 2,277 | 2,048 | 6,660 | 6,036 |
Noninterest income: | ||||
Service charges and other fees | 71 | 63 | 174 | 162 |
Net gain on sale of loans | 150 | 82 | 297 | 250 |
Net gain (loss) on sale of securities | 15 | (3) | ||
Increase in cash surrender value of insurance | 49 | 50 | 148 | 148 |
Other noninterest income | 23 | 23 | 122 | 72 |
Total noninterest income | 293 | 218 | 756 | 629 |
Noninterest expense: | ||||
Salaries and employee benefits | 1,077 | 1,082 | 3,232 | 3,210 |
Occupancy and equipment | 210 | 223 | 669 | 707 |
Data processing | 236 | 172 | 621 | 516 |
Technology | 68 | 74 | 198 | 231 |
Foreclosed assets, net | 1 | 3 | 4 | 5 |
Professional fees | 159 | 110 | 439 | 326 |
Other noninterest expense | 187 | 111 | 557 | 340 |
Total noninterest expense | 1,938 | 1,775 | 5,720 | 5,335 |
Income before income taxes | 632 | 491 | 1,696 | 1,330 |
Provision for income taxes | 148 | 121 | 369 | 323 |
Net income | $ 484 | $ 370 | $ 1,327 | $ 1,007 |
Earnings Per Share | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.05 | $ 0.19 | $ 0.13 |
Diluted (in dollars per share) | $ 0.07 | $ 0.05 | $ 0.19 | $ 0.13 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Consolidated Statement of Comprehensive Income | ||||
Net income | $ 484 | $ 370 | $ 1,327 | $ 1,007 |
Other comprehensive income (loss): | ||||
Unrealized holding gains (losses) arising during the period | 44 | 306 | 1,659 | 1,438 |
Reclassification adjustment for (gains) losses realized in net income | (15) | 3 | ||
Other comprehensive income before tax effect | 44 | 306 | 1,644 | 1,441 |
Tax effect of other comprehensive income items | (13) | (83) | (445) | (390) |
Other comprehensive income, net of tax | 31 | 223 | 1,199 | 1,051 |
Comprehensive income | $ 515 | $ 593 | $ 2,526 | $ 2,058 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Changes in Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Unallocated Common Stock of ESOP [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2018 | $ 67 | $ 28,326 | $ (2,433) | $ 34,995 | $ (593) | $ 60,362 | |
Balance (in shares) at Dec. 31, 2018 | 6,696,742 | ||||||
Net Income | 1,007 | 1,007 | |||||
ESOP shares committed to be released | 5 | 97 | 102 | ||||
Stock based compensation expense | 249 | 249 | |||||
Other comprehensive loss | 1,051 | 1,051 | |||||
Repurchase of common stock | $ (1,461) | (1,461) | |||||
Repurchase of common stock (in shares) | (29,436) | ||||||
Balance at Sep. 30, 2019 | $ 67 | 28,580 | (2,336) | 36,002 | 458 | (1,461) | 61,310 |
Balance (in shares) at Sep. 30, 2019 | 6,667,306 | ||||||
Balance at Dec. 31, 2019 | $ 67 | 28,672 | (2,303) | 36,551 | 344 | (1,461) | 61,870 |
Balance (in shares) at Dec. 31, 2019 | 7,702,478 | ||||||
Conversion of FFBW, Inc. (net of costs of $1.2 million) | $ 10 | 41,490 | 41,500 | ||||
Conversion of FFBW, Inc. (net of costs of $1.2 million) (in shares) | 2,397 | ||||||
Purchase of 341,485 shares of ESOP | (3,814) | (3,814) | |||||
Treasury stock retired | (1,461) | $ 1,461 | |||||
Contribution of FFBW, MHC | 99 | 99 | |||||
Net Income | 1,327 | 1,327 | |||||
ESOP shares committed to be released | (34) | 229 | 195 | ||||
Stock based compensation expense | 273 | 273 | |||||
Stock based compensation expense (in shares) | 2,500 | ||||||
Other comprehensive loss | 1,199 | 1,199 | |||||
Balance at Sep. 30, 2020 | $ 77 | $ 69,039 | $ (5,888) | $ 37,878 | $ 1,543 | $ 102,649 | |
Balance (in shares) at Sep. 30, 2020 | 7,707,375 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Changes in Equity (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
Condensed Consolidated Statement of Changes in Equity | |
ESOP shares committed to be released (in shares) | 22,941 |
Conversion cost of FFBW, Inc | $ | $ 1.2 |
Purchase of ESOP shares (in shares) | 341,485 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 1,327 | $ 1,007 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 315 | 200 |
Depreciation | 230 | 265 |
Net accretion of loan portfolio discount and deposit premium | (39) | (80) |
Net amortization on securities available for sale | 305 | 283 |
(Gain) loss on sales and impairments of foreclosed assets | (11) | (7) |
(Gain) loss on sale of available for sale securities | (15) | 3 |
Increase in cash surrender value of life insurance | (148) | (148) |
ESOP compensation | 195 | 102 |
Stock based compensation | 273 | 249 |
Changes in operating assets and liabilities: | ||
Accrued interest receivable | (271) | 2 |
Loans held for sale | (576) | (439) |
Other assets | 494 | (239) |
Accrued interest payable | 385 | 770 |
Other liabilities | (322) | (18) |
Net cash provided by operating activities | 2,142 | 1,950 |
Cash flows from investing activities: | ||
Proceeds from sales of available for sale securities | 1,017 | 4,837 |
Maturities, calls, paydowns on available for sale securities | 12,264 | 4,027 |
Purchases of available for sale securities | (24,314) | (8,561) |
Net (increase) decrease in loans | (13,963) | 5,195 |
Purchases of premises and equipment | (38) | (26) |
Proceeds from redemption of FHLB stock | 215 | |
Purchase of Bankers' Bank stock | (206) | |
Proceeds from sale of foreclosed assets | 442 | 76 |
Cash received in MHC merger | 99 | |
Net cash provided by (used in) investing activities | (24,493) | 5,557 |
Cash flows from financing activities: | ||
Net increase in deposits | (51,137) | (4,519) |
Net increase in advance payments by borrowers for taxes and insurance | 864 | 1,070 |
Repayments of FHLB advances | (6,000) | (2,900) |
Proceeds from FHLB advances | 9,000 | |
Repurchase of common stock | (1,461) | |
Purchase of shares of ESOP | (3,814) | |
Net proceeds from issuance of common stock | 41,500 | |
Net cash used in financing activities | (9,587) | (7,810) |
Net increase (decrease) in cash and cash equivalents | (31,938) | (303) |
Cash and cash equivalents at beginning | 39,377 | 4,488 |
Cash and cash equivalents at end | 7,439 | 4,185 |
Supplemental Cash Flow Disclosures: | ||
Cash paid for interest | 855 | 1,360 |
Cash paid for income taxes | 696 | 343 |
Loans transferred to foreclosed assets | $ 347 | $ 84 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Basis of Presentation | NOTE 1 – Basis of Presentation The accompanying unaudited consolidated financial statements of FFBW, Inc. and its wholly-owned subsidiary, First Federal Bank of Wisconsin, (collectively the “Company”) were prepared in accordance with instructions for Form 10‑Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments necessary for a fair presentation of the financial statements have been included. The results of operations for the three and nine month periods ended September 30, 2020 are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the Financial Statements and notes thereto for the year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission (“SEC”) as part of FFBW, Inc.’s Annual Report on Form 10‑K for the year ended December 31, 2019. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | NOTE 2 - Summary of Significan Organization From October 2017 until January 2020, as discussed below, we operated in a two-tier mutual holding company structure. FFBW, Inc. (the “ Old FFBW ” ) was a federal corporation that was the publicly traded stock holding company of First Federal Bank of Wisconsin (the “ Bank ” ). At December 31, 2019, the Old FFBW had 7,702,478 shares of common stock outstanding, of which 3,436,424 shares, or 44.6%, were owned by the public, including 29,325 shares owned by FFBW Community Foundation, and the remaining 4,266,054 shares were held by FFBW, MHC (the “ MHC ” ), a federally chartered mutual holding company and former parent company of Old FFBW. At December 31, 2019, the significant assets of Old FFBW consisted of the capital stock of the Bank. The liabilities of Old FFBW were insignificant. Old FFBW was subject to the financial reporting requirements of the Securities Exchange Act of 1934, as amended. Old FFBW was subject to regulation and examination by the Board of Governors of the Federal Reserve System ( “ the Federal Reserve Board ” ). First Federal Bank of Wisconsin is a community bank headquartered in Waukesha, Wisconsin that provides financial services to individuals and businesses from our offices in Waukesha, Brookfield and the Bay View neighborhood of Milwaukee. FFBW, Inc. (“The Company”), a Maryland corporation that was organized in September 2019, is a savings and loan holding company headquartered in Waukesha, Wisconsin. The Company was formed to be the successor to Old FFBW upon completion of the second step mutual-to-stock conversion (the “Conversion”) of the MHC. Prior to completion of the Conversion, approximately 55.4% of the shares of common stock of Old FFBW were owned by the MHC. In conjunction with the Conversion, the MHC and Old FFBW merged into the Company. The Conversion was completed on January 16, 2020. In the Conversion, the Company sold 4,268,570 shares of common stock at $10.00 per share, for net proceeds of approximately $37.9 million (including purchase of 341,485 ESOP shares), and issued 3,436,430 shares of common stock in exchange for the shares of common stock of the Company, a federal corporation, Old FFBW owned by stockholders of Old FFBW, other than FFBW, MHC, as of the effective date of the conversion. As a result of the conversion, FFBW, MHC and Old FFBW have ceased to exist. The Conversion was conducted pursuant to the MHC’s Plan of Conversion. The Plan of Conversion provided for the establishment, upon the completion of the Conversion, of special “liquidation accounts” for the benefit of certain depositors of the Bank in an amount equal to the MHC’s ownership interest in the stockholders’ equity of Old FFBW as of the date of the latest balance sheet contained in the prospectus plus the MHC’s net assets (excluding its ownership of the Company). Following the completion of the Conversion, the Company and the Bank are not permitted to pay dividends on their capital stock if the shareholders' equity of the Company, or the shareholder's equity of the Bank, would be reduced below the amount of the liquidation accounts. The liquidation accounts will be reduced annually to the extent that eligible accountholders have reduced their qualifying deposits. Subsequent increases will not restore an eligible accountholder's interest in the liquidation accounts. Direct costs of the conversion and public offering, totaling approximately $1.2 million, have been applied against the proceeds from the shares sold in the public offering. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the fair values of securities, fair value of financial instruments, the valuation of other real estate owned and the valuation of deferred income tax assets. Revenue Recognition Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company's revenue-generating transactions are not subject to ASC 606, including all interest and dividend income generated from financial instruments. Certain noninterest income items, including loan servicing income, gain on sales of loans, gain on sales of securities and other noninterest income have been evaluated to not fall within the scope of ASC 606. Elements of noninterest income that are within the scope of ASC 606, are as follows: Service charges and other fees - The Company earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Management reviewed the deposit account agreements and determined that the agreements can be terminated at any time by either the Company or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Company's monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would not require a change in the accounting treatment for these fees under the new revenue standards. Recognition of revenue under ASC 606 did not materially change the timing or magnitude of revenue recognition. Interchange fees - Customers use a Bank-issued debit card to purchase goods and services and the Company earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Company records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. These fees are included in “service charges and other fees” on the Consolidated Statements of Operations. There are no contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods. Recognition of revenue under ASC 606 did not materially change the timing or magnitude of revenue recognition. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks, non-maturity deposits in the Federal Home Loan Bank of Chicago (FHLB) and fed funds sold. The Company has not experienced any losses in such accounts. Available for Sale Securities Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital requirements and other similar factors. Securities classified as available for sale are carried at fair value. Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred tax effect. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method. Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient enough to allow for any anticipated recovery in fair value. Loans Acquired in a Transfer The Company acquires loans (including debt securities) individually and in groups or portfolios. These loans are initially measured at fair value with no allowance for loan losses. The Company’s allowance for loan losses on all acquired loans reflect only those losses incurred subsequent to acquisition. Certain acquired loans may have experienced deterioration of credit quality between origination and the Company’s acquisition of the loans. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration of credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan’s contractual terms. If both conditions exist, the Company determines whether each such loan is to be accounted for individually or whether such loans will be assembled into pools of loans based on common risk characteristics (for example, credit score, loan type and date of origination). The Company considers expected prepayments and estimates the amount and timing of undiscounted principal, interest and other cash flows expected at acquisition for each loan and aggregated pool of loans. The excess of the loan’s or pool’s scheduled contractual principal and interest payments over all cash flows expected at acquisition is calculated as the nonaccretable difference. The excess of cash flows expected to be collected over the fair value of each loan or pool (accretable yield) is accreted into interest income over the remaining life of the loan or pool. At each reporting date, the Company continues to estimate cash flows expected to be collected for each loan or pool. If expected cash flows have decreased from the acquisition date estimate, the Company recognizes an allowance for loan losses. If expected cash flows have increased from the acquisition date estimate, the Company increases the amount of accretable yield to be recognized as interest income over the remaining life of the loan or pool. Loans Held for Sale Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Mortgage loans held for sale are sold with the mortgage servicing rights released by the Company. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loan sold. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances adjusted for deferred loan fees and costs, charge-offs, and an allowance for loan losses. Interest on loans is accrued and credited to income based on the unpaid principal balance. Loan-origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. The accrual of interest on loans is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Allowance for Loan Losses The allowance for loan losses is maintained at the level considered adequate by management to provide for losses that are probable as of the balance sheet date. The allowance for loan losses is established through a provision for loan losses charged to expense as losses are estimated to have occurred. Loan losses are charged against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. In determining the adequacy of the allowance balance, the Company makes evaluations of the loan portfolio and related off-balance sheet commitments, considers current economic conditions and historical loss experience and reviews specific problem loans and other factors. When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories and their relevant risk characteristics are as follows: Commercial development: These loans are secured by vacant land and/or property that are in the process of improvement. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. Construction loans include not only construction of new structures, but loans originated to finance additions to or alterations of existing structures. Until a permanent loan originates, or payoff occurs, all commercial construction loans secured by real estate are reported in this loan pool. Development loans also have the risk that improvements will not be completed on time or in accordance with specifications and projected costs. Commercial real estate: These loans are primarily secured by office and industrial buildings, warehouses, small retail shopping facilities and various special purpose properties, including restaurants. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property. The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type. Commercial and industrial: Commercial and industrial loans are extended primarily to small and middle market customers. Such credits typically comprise working capital loans, asset acquisition loans and loans for other business purposes. Loans to closely held businesses are generally guaranteed in full by the owners of the business. Commercial and industrial loans are made based primarily on the historical and projected cash flow of the borrower and, secondarily, on the underlying collateral provided by the borrower. The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to economic or individual performance factors. Minimum standards and underwriting guidelines have been established for commercial and industrial loans. One-to-four family owner-occupied: These loans are generally to individuals and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations, the underlying collateral and the loan to collateral value. Also included in this category are junior liens on one-to-four family residential properties. Underwriting standards for one-to-four family owner-occupied loans are heavily influenced by statutory requirements, which include, but are not limited to, loan-to-value and affordability ratios, risk-based pricing strategies and documentation requirements. One-to-four family investor-owned: These loans may be to individuals or businesses and are subject to underwriting standards and processes similar to commercial and industrial loans. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property(ies). The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type. Multifamily real estate: These loans include loans to finance non-farm properties with five or more units in structures primarily to accommodate households. Such credits are typically originated to finance the acquisition or refinancing of an apartment building. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the subject multifamily property, with assumptions made for vacancy rates. Cash flows of the borrowers rely on the receipt of rental income from the tenants of the property who are themselves subject to fluctuations in national and local economic conditions and unemployment trends. Consumer: These loans may take the form of installment loans, demand loans, or single payment loans, and are extended to individuals for household, family and other personal expenditures. These loans generally include direct consumer automobile loans and credit card loans. These loans are generally smaller in size and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations. Management regularly evaluates the allowance for loan losses using the Company’s past loan loss experience, known and inherent risks in the loan portfolio, composition of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, current economic conditions and other relevant factors. This evaluation is inherently subjective since it requires material estimates that may be susceptible to significant change. A loan is impaired when, based on current information, it is probable that the Company will not collect all amounts due in accordance with the contractual terms of the loan agreement. Management determines whether a loan is impaired on a case-by-case basis, taking into consideration the payment status, collateral value, length and reason of any payment delays, the borrower’s prior payment record and any other relevant factors. Large groups of smaller-balance homogeneous loans, such as residential mortgage and consumer loans, are collectively evaluated in the allowance for loan losses analysis and are not subject to impairment analysis unless such loans have been subject to a restructuring agreement. Specific allowances for impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent. In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies may require the Company to make additions to the allowance for loan losses based on their judgments of collectability based on information available to them at the time of their examination. Troubled Debt Restructurings Loans are accounted for as troubled debt restructurings when a borrower is experiencing financial difficulties that lead to a restructuring of the loan and the Company grants a “concession” to the borrower that they would not otherwise consider. These concessions include a modification of terms, such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof to facilitate repayment. Troubled debt restructurings are considered impaired loans. Foreclosed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets. Premises and Equipment Depreciable assets are stated at cost less accumulated depreciation. Provisions for depreciation are computed on straight-line and accelerated methods over the estimated useful lives of the assets. Other Equity Investments Other Equity Investments consist of Federal Home Loan Bank of Chicago (“FHLB”) stock and Bankers’ Bank stock. The Company's investment in the FHLB stock is carried at cost, which approximates fair value. The Company is required to hold the stock as a member of the FHLB and transfer of the stock is substantially restricted. The stock is evaluated for impairment on an annual basis. The Company is required to adjust its reported value of Bankers’ Bank stock, which is considered an equity security without a readily determinable market value, if a comparable transaction is observed. Income Taxes Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes. The differences relate principally to the allowances for loan losses, deferred compensation, depreciation, FHLB stock dividends and non-accrual interest. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company’s policy is to recognize interest and penalties related to income tax issues as components of income tax expense. During the periods shown, the Company did not recognize any interest or penalties related to income tax expense in its statements of operations. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Advertising Advertising costs are expensed as incurred. Other Comprehensive Income Other comprehensive income is shown on the statements of comprehensive income. The Company’s accumulated other comprehensive income is composed of the unrealized gains (losses) on securities available for sale, net of tax and is shown on the statements of changes in equity. Reclassification adjustments out of other comprehensive income for losses realized on sales of securities available for sale comprise the entire balance of “net loss on sale of securities” on the statements of operations. Off-Balance Sheet Financial Instruments In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unfunded commitments under lines of credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. Life Insurance The Company has purchased life insurance policies on certain key executives. Life insurance is measured at the amount that could be realized under the insurance contract as of the balance sheet date, which is generally the cash surrender value of the policy. Subsequent Events On October 14, 2020 t he Office of the Comptroller of the Currency approved the Bank’s application to purchase for cash substantially all of the assets and substantially all of the liabilities of Mitchell Bank, a Wisconsin-chartered commercial bank headquartered in Milwaukee, Wisconsin. The Bank anticipates closing the transaction late in the fourth quarter of 2020. Recent Accounting Pronouncements The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the Company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act. The Company recently adopted the following Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB). ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” This ASU modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of, certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. Although this ASU has a significant impact to the Company’s fair value disclosures, there is no additional impact to the financial statements. The following ASUs have been issued by the FASB and may impact the Company's financial statements in future reporting periods: ASU No. 2016-13, “Credit Losses (Topic 326).” ASU No. 2019-04, “Codification Improvements to Topic 326.” ASU No. 2019-05, “Financial Instruments-Credit Losses.” ASU 2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently assessing the impact of adopting ASU 2016-13 on its financial statements. ASU No. 2016-02, “Leases (Topic 842): Amendments to the Leases Analysis.” ASU No. 2018-10, "Codification Improvements to Topic 842." ASU No. 2018-11, "Targeted Improvements" For lessees, Topic 842 requires leases to be recognized on the balance sheet, along with disclosure of key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, 2018-10 and 2018-11. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification expense recognition in the income statement. For lessors, Topic 842 requires lessors to classify leases as sales-type, direct financing or operating leases. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type or direct financing leases are operating leases. The new standard is effective for the Company on January 1, 2022 with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) the new standard's effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard on January 1, 2022 using the effective date as its date of initial application. The Company is evaluating what impact this standard will have on its consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share | |
Earnings Per Share | NOTE 3 – Earnings Per Share Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for weighted average unallocated ESOP shares, during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards and restricted stock units, though no actual shares of common stock related to restricted stock units are issued until the settlement of such units, to the extent holders of these securities receive non-forfeitable dividends or dividend equivalents at the same rate as holders of the Company’s common stock. Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Antidilutive options are disregarded in earnings per share calculations. The following table presents the earnings per share calculations for the three and nine months ended September 30: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Net income $ 484 $ 370 $ 1,327 $ 1,007 Basic potential common shares Weighted average shares outstanding 7,707,375 7,719,070 7,706,025 7,787,302 Weighted average unallocated Employee Stock Ownership Plan Shares (591,355) (276,500) (600,277) (280,263) Basic weighted average shares outstanding 7,116,020 7,442,570 7,105,748 7,507,039 Dilutive potential common shares — — 83 4,482 Dilutive weighted average shares outstanding 7,116,020 7,442,570 7,105,831 7,511,521 Basic earnings per share $ 0.07 $ 0.05 $ 0.19 $ 0.13 Diluted earnings per share $ 0.07 $ 0.05 $ 0.19 $ 0.13 |
Available for Sale Securities
Available for Sale Securities | 9 Months Ended |
Sep. 30, 2020 | |
Available for Sale Securities | |
Available for Sale Securities | NOTE 4 – Available for Sale Securities Amortized costs and fair values of available for sale securities are summarized as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2020 Obligations of the US government and US government sponsored agencies $ 759 $ 40 $ — $ 799 Obligations of states and political subdivisions 15,505 567 (24) 16,048 Mortgage-backed securities 38,856 1,434 (35) 40,255 Certificates of deposit 750 46 — 796 Corporate debt securities 2,581 86 — 2,667 Total available for sale securities $ 58,451 $ 2,173 $ (59) $ 60,565 December 31, 2019 Obligations of the US government and US government sponsored agencies $ 944 $ 14 $ — $ 958 Obligations of states and political subdivisions 8,590 36 (21) 8,605 Mortgage-backed securities 35,095 486 (99) 35,482 Certificates of deposit 1,000 17 — 1,017 Corporate debt securities 2,080 37 — 2,117 Total available for sale securities $ 47,709 $ 590 $ (120) $ 48,179 Fair values of securities are estimated based on financial models or prices paid for similar securities. It is possible interest rates could change considerably, resulting in a material change in estimated fair value. The following table presents the portion of the Company’s portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position: Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2020 Obligations of states and political subdivisions $ 1,936 $ (24) $ — $ — $ 1,936 $ (24) Mortgage-backed securities 4,693 (28) 837 (7) 5,530 (35) Corporate debt securities 254 — — — 254 — Total $ 6,883 $ (52) $ 837 $ (7) $ 7,720 $ (59) December 31, 2019 Obligations of states and political subdivisions $ 2,569 $ (17) $ 1,059 $ (4) $ 3,628 $ (21) Mortgage-backed securities 7,604 (57) 4,372 (42) 11,976 (99) Total $ 10,173 $ (74) $ 5,431 $ (46) $ 15,604 $ (120) At September 30, 2020, the investment portfolio included five securities available for sale, which had been in an unrealized loss position for greater than twelve months, and 13 securities available for sale, which had been in an unrealized loss position for less than twelve months. At December 31, 2019, the investment portfolio included 14 securities available for sale, which had been in an unrealized loss position for greater than twelve months, and 18 securities available for sale, which had been in an unrealized loss position for less than twelve months. Because these securities have a fixed interest rate, their fair value is sensitive to movements in market interest rates. These unrealized losses are considered temporary because the Company does not currently have the intent to sell the securities before recovery of the losses; therefore we expect to collect all contractually due amounts from these securities. Accordingly, these investments were reduced to their fair values through accumulated other comprehensive income, not through earnings. We regularly assess our securities portfolio for OTTI. These assessments are based on the nature of the securities, the underlying collateral, the financial condition of the issuer, the extent and duration of the loss, our intent related to the individual securities and the likelihood that we will have to sell securities prior to expected recovery. We did not have any impairment losses recognized in earnings for the nine months ended September 30, 2020 or September 30, 2019. The amortized cost and fair value of available for sale securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities in mortgage-backed securities since the anticipated maturities are not readily determinable. Therefore, these securities are not included in the maturity categories in the following maturity summary listed below: September 30, 2020 Amortized Cost Fair Value Due in one year or less $ 671 $ 672 Due after one year through 5 years 3,906 4,097 Due after 5 years through 10 years 7,708 8,123 Due after 10 years 7,310 7,418 Subtotal $ 19,595 $ 20,310 Mortgage-backed securities 38,856 40,255 Total $ 58,451 $ 60,565 Proceeds from sales of available for sale securities during the nine months ended September 30, 2020 and 2019 were $1,0 17 and $4,837, respectively. Gross realized gains on these sales amounted to $17 and $22, while gross realized losses on these sales were $2 and $25, respectively. Available for sale securities with a carrying value of $1 ,048 and $1,016 were pledged at September 30, 2020 and December 31, 2019, respectively. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2020 | |
Loans | |
Loans | NOTE 5 - Loans Major classifications of loans are as follows: September 30, December 31, 2020 2019 Commercial Development $ 17,189 $ 18,222 Real estate 74,283 68,621 Commercial and industrial 24,414 13,681 Residential real estate and consumer One-to-four family owner-occupied 27,891 29,380 One-to-four family investor-owned 29,577 28,077 Multifamily 29,165 29,531 Consumer 3,254 4,230 Subtotal $ 205,773 $ 191,742 Deferred loan fees (527) (187) Allowance for loan losses (2,604) (2,264) Net loans $ 202,642 $ 189,291 Deposit accounts in an overdraft position and reclassified as loans approximated $2 and $6 at September 30, 2020 and December 31, 2019, respectively. A summary of the activity in the allowance for loan losses by portfolio segment is as follows: Residential real estate Three Months Ended Commercial and consumer Total Balance at June 30, 2020 $ 1,552 $ 990 $ 2,542 Provision for loan losses 376 (316) 60 Loans charged off — — — Recoveries of loans previously charged off 1 1 2 Balance at September 30, 2020 $ 1,929 $ 675 $ 2,604 Balance at June 30, 2019 $ 1,053 $ 1,199 $ 2,252 Provision for loan losses 44 1 45 Loans charged off — (36) (36) Recoveries of loans previously charged off — 1 1 Balance at September 30, 2019 $ 1,097 $ 1,165 $ 2,262 Residential real estate Nine Months Ended Commercial and consumer Total Balance at December 31, 2019 $ 1,251 $ 1,013 $ 2,264 Provision for loan losses 658 (343) 315 Loans charged off — — — Recoveries of loans previously charged off 20 5 25 Balance at September 30, 2020 $ 1,929 $ 675 $ 2,604 Balance at December 31, 2018 $ 940 $ 1,178 $ 2,118 Provision for loan losses 157 43 200 Loans charged off — (57) (57) Recoveries of loans previously charged off — 1 1 Balance at September 30, 2019 $ 1,097 $ 1,165 $ 2,262 Information about how loans were evaluated for impairment and the related allowance for loan losses follows: Residential Real Estate and September 30, 2020 Commercial Consumer Total Loans: Individually evaluated for impairment $ 714 $ 1,634 $ 2,348 Collectively evaluated for impairment 144,337 59,088 203,425 Total loans $ 145,051 $ 60,722 $ 205,773 Allowance for loan losses: Individually evaluated for impairment $ 300 $ — $ 300 Collectively evaluated for impairment 1,629 675 2,304 Total allowance for loan losses $ 1,929 $ 675 $ 2,604 Residential Real Estate and December 31, 2019 Commercial Consumer Total Loans: Individually evaluated for impairment $ 798 $ 1,457 $ 2,255 Collectively evaluated for impairment 99,726 89,761 189,487 Total loans $ 100,524 $ 91,218 $ 191,742 Allowance for loan losses: Individually evaluated for impairment $ 158 $ 77 $ 235 Collectively evaluated for impairment 1,093 936 2,029 Total allowance for loan losses $ 1,251 $ 1,013 $ 2,264 Information regarding impaired loans follows: Principal Recorded Related Average Interest As of September 30, 2020 Balance Investment Allowance Investment Recognized Loans with related allowance for loan losses: Commercial Commercial and industrial $ 712 $ 704 $ 300 $ 713 $ — Residential real estate and consumer One-to-four family investor-owned — — — — — Total loans with related allowance for loan losses 712 704 300 713 — Loans with no related allowance for loan losses: Commercial Commercial and industrial 12 10 — 13 — Residential real estate and consumer One-to-four family owner-occupied 913 910 — 916 3 One-to-four family investor-owned 738 665 — 742 — Consumer 60 60 — 63 — Total loans with no related allowance for loan losses 1,723 1,645 — 1,734 3 Total impaired loans $ 2,435 $ 2,349 $ 300 $ 2,447 $ 3 Principal Recorded Related Average Interest As of December 31, 2019 Balance Investment Allowance Investment Recognized Loans with related allowance for loan losses: Commercial Commercial and industrial $ 729 $ 729 $ 158 $ 740 $ 19 Residential real estate and consumer One-to-four family investor-owned 415 403 77 412 — Total loans with related allowance for loan losses 1,144 1,132 235 1,152 19 Loans with no related allowance for loan losses: Commercial Commercial and industrial 73 69 — 77 5 Residential real estate and consumer One-to-four family owner-occupied 795 744 — 754 5 One-to-four family investor-owned 243 221 — 231 — Consumer 114 89 — 98 — Total loans with no related allowance for loan losses 1,225 1,123 — 1,160 10 Total impaired loans $ 2,369 $ 2,255 $ 235 $ 2,312 $ 29 There were no additional funds committed to impaired loans as of September 30, 2020 or December 31, 2019. The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for loan losses. The credit quality indicators monitored differ depending on the class of loan. Commercial loans and one-to-four family investor-owned and multifamily loans are generally evaluated using the following internally prepared ratings: “Pass” ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable. “Special mention” ratings are assigned to loans where management has some concern that the collateral or debt service ability may not be adequate, though the collectability of the contractual loan payments is still probable. “Substandard” ratings are assigned to loans that do not have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is no longer probable. “Doubtful” ratings are assigned to loans that do not have adequate collateral and/or debt service ability and collectability of the contractual loan payments is unlikely. Information regarding the credit quality indicators most closely monitored for commercial loans by class follows: Special Pass Mention Substandard Doubtful Totals September 30, 2020 Development $ 17,189 $ — $ — $ — $ 17,189 Real estate 73,652 — — — 73,652 Commercial and industrial 24,249 — 795 — 25,044 One-to-four family investor-owned 28,994 — 658 — 29,652 Multifamily 29,165 — — — 29,165 Totals $ 173,249 $ — $ 1,453 $ — $ 174,702 December 31, 2019 Development $ 18,222 $ — $ — $ — $ 18,222 Real estate 68,036 585 — — 68,621 Commercial and industrial 10,888 2,779 14 — 13,681 One-to-four family investor-owned 27,453 — 624 — 28,077 Multifamily 29,531 — — — 29,531 Totals $ 154,130 $ 3,364 $ 638 $ — $ 158,132 Residential real estate and consumer loans are generally evaluated based on whether or not the loan is performing according to the contractual terms of the loan. Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class follows: Performing Non-performing Totals September 30, 2020 One-to-four family owner-occupied $ 27,891 $ — $ 27,891 Consumer 3,254 — 3,254 $ 31,145 $ — $ 31,145 December 31, 2019 One-to-four family owner-occupied $ 28,636 $ 744 $ 29,380 Consumer 4,141 89 4,230 $ 32,777 $ 833 $ 33,610 Loan aging information follows: Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans September 30, 2020 Commercial Development $ 17,189 $ — $ — $ 17,189 $ — Real estate 74,283 — — 74,283 — Commercial and industrial 24,414 — — 24,414 795 Residential real estate and consumer One-to-four family owner-occupied 27,732 159 — 27,891 — One-to-four family investor-owned 29,577 — — 29,577 658 Multifamily 29,165 — — 29,165 — Consumer 3,254 — — 3,254 — Total $ 205,614 $ 159 $ — $ 205,773 $ 1,453 Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans December 31, 2019 Commercial Development $ 18,222 $ — $ — $ 18,222 $ — Real estate 68,621 — — 68,621 — Commercial and industrial 13,681 — — 13,681 14 Residential real estate and consumer One-to-four family owner-occupied 29,034 — 346 29,380 346 One-to-four family investor-owned 28,077 — — 28,077 624 Multifamily 29,531 — — 29,531 — Consumer 4,230 — — 4,230 86 Total $ 191,396 $ — $ 346 $ 191,742 $ 1,070 There are no loans 90 or more days past due and accruing interest as of September 30, 2020 or December 31, 2019. When, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession to the borrower that the Company would not otherwise consider, the modified loan is classified as a troubled debt-restructuring. Loan modifications may consist of forgiveness of interest and/or principal, a reduction of the interest rate, allowing interest-only payments for a period of time and/or extending amortization terms. During the nine months ended and as of September 30, 2020, there were no new troubled debt restructurings. No troubled debt restructurings defaulted within 12 months of their modification date during the nine months ended September 30, 2020. During the year ended and as of December 31, 2019, there were two commercial and industrial loans totaling $729 and three one-to-four family owner-occupied loans totaling $285 that were restructured. $0 was charged to the allowance for loan losses related to these loans. No troubled debt restructurings defaulted within 12 months of their modifications during the year ended December 31, 2019. Management reg ularly monitors impaired loan relationships. In the event facts and circumstances change, an additional provision for loan losses may be necessary. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2020 | |
Deposits | |
Deposits | NOTE 6 - Deposits The composition of deposits are as follows: September 30, December 31, 2020 2019 Non-interest bearing checking $ 27,156 $ 20,733 Interest bearing checking 8,612 6,941 Money market 55,451 46,673 Statement savings accounts 11,392 12,359 Health savings accounts 14,542 10,670 Deposits held in escrow for stock subscriptions — 52,648 Certificates of deposit 48,962 67,228 Total $ 166,115 $ 217,252 Certificates of deposit that meet or exceed the FDIC insurance limit of $250 totaled $10,444 and $21,5 69 at September 30, 2020 and December 31, 2019, respectively. The scheduled maturities of certificates of deposit are as follows as of September 30, 2020: 2020 $ 9,994 2021 29,711 2022 6,814 2023 962 2024 1,106 2025 375 Total $ 48,962 |
FHLB Advances
FHLB Advances | 9 Months Ended |
Sep. 30, 2020 | |
FHLB Advances | |
FHLB Advances | NOTE 7– FHLB Advances FHLB advances consist of the following: September 30, 2020 December 31, 2019 Rates Amount Rates Amount Fixed rate, fixed term advances 0.0%-1.71% $ 10,500 1.62% - 2.70% $ 7,500 Fixed term advances with floating spread 1.92% - 2.08% 4,000 1.69% - 2.09% 4,000 $ 14,500 $ 11,500 The following is a summary of scheduled maturities of fixed term FHLB advances as of September 30, 2020: Fixed Rate Advances Adjustable Rate Advances Weighted Weighted Total Average Rate Amount Average Rate Amount Amount 2020 0.28 % $ 5,000 1.92 % $ 2,000 $ 7,000 2021 — % 4,000 2.08 % 2,000 6,000 2022 1.71 % 1,500 — % — 1,500 Total 0.38 % $ 10,500 2.00 % $ 4,000 $ 14,500 Actual maturities may differ from the scheduled principal maturities due to call options on the various advances. The Company has a master contract agreement with the FHLB that provides for a borrowing up to the lesser of a determined multiple of FHLB stock owned or a determined percentage of the book value of the Company’s qualifying one-to-four family, multifamily and commercial real estate loans. The Company pledged approximately $147,542 and $147,039 of one-to-four family, multifamily, and commercial real estate loans to secure FHLB advances at September 30, 2020 and December 31, 2019, respectively. FHLB provides both fixed and floating rate advances. Floating rates are tied to short-term market rates of interest, such as LIBOR, Federal funds or Treasury Bill rates. Fixed rate advances are priced in reference to market rates of interest at the time of the advance, namely the rates that FHLB pays to borrowers at various maturities. FHLB advances are subject to a prepayment penalty if they are repaid prior to maturity. FHLB advances are also secured by $574 and $574 of FHLB stock owned by the Company at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020, the Company’s available and unused portion of this borrowing agreement based on the amount of FHLB stock was $2,416. In addition, the Company has a $7,000 federal funds line of credit through Bankers’ Bank of Wisconsin, which was not drawn on as of September 30, 2020. The Company also has the authority to borrow through the Federal Reserve’s Discount Window . |
Employee Stock Ownership Plan
Employee Stock Ownership Plan | 9 Months Ended |
Sep. 30, 2020 | |
Employee Stock Ownership Plan | |
Employee Stock Ownership Plan | NOTE 8 – Employee Stock Ownership Plan The Company maintains a leveraged employee stock ownership plan (“ESOP”) that covers substantially all employees. The ESOP was established in conjunction with the Company’s initial stock offering completed in October 2017 and operates on a plan year ending December 31. The loan to fund the acquisition of stock by the ESOP was made by the Company. Additional shares were purchased by the ESOP in conjunction with the stock offering completed in January 2020, which was also financed by a loan from the Company. The Bank makes annual contributions to the ESOP equal to the ESOP’s debt service. The ESOP shares initially were pledged as collateral for this debt. As the debt is repaid, shares are released from collateral and allocated to active participants based on the proportion of debt service paid in the year. Because the debt is intercompany, it is eliminated in consolidation for presentation in these financial statements. The shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are committed to be released from collateral and allocated to active participants, the Company reports compensation expense equal to the current market price of the shares and the shares will become outstanding for earnings-per-shares (EPS) computations. During the nine-month periods ended September 30, 2020 and 2019, 22,941 and 9,720 shares were committed to be released, respectively. During the nine months ended September 30, 2020 the average fair value per share of stock was $9.20 resulting in total ESOP compensation expense of $195 for the nine months ended September 30, 2020. During the nine months ended September 30, 2019 the average fair value per share of stock was $10.47 resulting in total ESOP compensation expense of $ 102 for the nine months ended September 30, 2019. The ESOP shares as of September 30, 2020 and December 31, 2019 were as follows: September 30, 2020 December 31, 2019 Shares allocated to active participants 33,569 18,659 Shares committed to be released and allocated to participants 22,941 15,202 Shares distributed (1,069) — Total unallocated shares 588,736 270,192 Total ESOP shares 644,177 304,053 Fair value of unallocated shares (based on $9.36 and $11.55 share price at September 30, 2020 and December 31, 2019, respectively) $ 5,511 $ 3,121 Share and per share amounts related to periods prior to the date of the completion of the Conversion (January 16, 2020) have been restated to give retroactive recognition to the exchange ratio applied to the Conversion (1.1730 to one). |
Share-based Compensation Plans
Share-based Compensation Plans | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Compensation Plans | |
Share-based Compensation Plans | NOTE 9 - Share-based Compensation Plans The Company adopted the FFBW, Inc. 2018 Equity Incentive Plan (the “2018 Equity Incentive Plan”) in 2018. ASC Topic 718 requires that the grant date fair value of equity awards to employees and directors be recognized as compensation expense over the period during which they are required to provide service in exchange for such awards. The following table summarizes the impact of the Company’s share-based payment plans in the financial statements for the period shown: Nine Months Ended September 30, 2020 2019 Total cost of stock grant plan during the year $ 154 $ 145 Total cost of stock option plan during the year 119 104 Total cost of share-based payment plans during the year $ 273 $ 249 Amount of related income tax benefit recognized in income $ 74 $ 68 Options are granted with an exercise price equal to no less than the market price of the Company’s shares at the date of grant. Those option awards generally vest pro-rata over five years of service and have 10‑year contractual terms. Restricted shares typically vest pro-rata over a five year period, 20% per year beginning one year from the issuance date. Share amounts related to periods prior to the date of the closing of the Offering on January 16, 2020 have been restated to give retroactive recognition to the 1.1730 exchange ratio applied in the offering. The following table summarizes stock options activity for the nine months ended September 30, 2020: Outstanding Nonvested Weighted Weighted Average Weighted Average Remaining Aggregate Average Stock Option Exercise Contractual Intrinsic Number of Grant Date Fair Awards Price Term (years) Value Options Value Balance at December 31, 2019 260,510 $ 9.20 215,450 $ 2.83 Granted 46,716 9.10 46,716 2.38 Exercised — — — — Forfeited (32,401) 9.31 — — Balance at September 30, 2020 274,825 $ 9.17 8.47 $ — 262,166 $ 2.75 Vested as of September 30, 2020 44,414 $ 8.61 Exercisable as of September 30, 2020 52,098 $ 9.19 8.26 $ — The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model based on certain assumptions. Since the Company does not have sufficient historical fair value estimates of its stock, the Company calculates expected volatility using the historical volatility of the Dow Jones U.S. Financial Services Index. The risk-free interest rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options is estimated based on the assumption that options will be exercised evenly throughout their life after vesting and represents the period of time that options granted are expected to remain outstanding. There were no options granted during the three months ended September 30, 2020. The following is a summary of changes in restricted shares for the nine months ended September 30, 2020: Weighted Average Number of Grant Date Fair Shares Value Nonvested stock awards as of December 31, 2019 90,790 $ 9.20 Granted 2,500 9.10 Vested (18,842) 8.61 Forfeited (12,960) 9.31 Nonvested stock awards as of September 30, 2020 61,488 $ 9.35 As of September 30, 2020, there was $1.4 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including share option and non-vested share awards) granted under the 2018 Equity Incentive Plan. At September 30, 2020, the weighted-average period over which the unrecognized compensation expense is expected to be recognized was approximately 3.39 years. |
Equity and Regulatory Matters
Equity and Regulatory Matters | 9 Months Ended |
Sep. 30, 2020 | |
Equity and Regulatory Matters | |
Equity and Regulatory Matters | NOTE 10 – Equity and Regulatory Matters The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1, Tier 1 and Total capital to risk-weighted assets and of Tier 1 capital to average assets. It is management’s opinion, as of September 30, 2020, that the Bank met all applicable capital adequacy requirements. As of September 30, 2020, the Bank is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum regulatory capital ratios as set forth in the table. There are no conditions or events since September 30, 2020 that management believes have changed the category. The Bank’s actual capital amounts and ratios are presented in the following tables: To Be Well Capitalized Under Prompt For Capital Adequacy Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio September 30, 2020 Common Equity Tier 1 capital (to risk‑weighted assets) $ 73,469 32.9 % $ ≥ 10,055 ≥ 4.5 % $ ≥ 14,524 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 73,469 32.9 ≥ 13,407 ≥ 6.0 ≥ 17,876 ≥ 8.0 Total capital (to risk‑weighted assets) 76,073 34.0 ≥ 17,876 ≥ 8.0 ≥ 22,345 ≥ 10.0 Tier 1 capital (to average assets) 73,469 25.9 ≥ 11,333 ≥ 4.0 ≥ 14,167 ≥ 5.0 December 31, 2019 Common Equity Tier 1 capital (to risk‑weighted assets) $ 50,446 23.7 % $ ≥ 9,591 ≥ 4.5 % $ ≥ 13,854 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 50,446 23.7 ≥ 12,788 ≥ 6.0 ≥ 17,051 ≥ 8.0 Total capital (to risk‑weighted assets) 52,710 24.7 ≥ 17,051 ≥ 8.0 ≥ 21,313 ≥ 10.0 Tier 1 capital (to average assets) 50,446 19.4 ≥ 10,400 ≥ 4.0 ≥ 13,000 ≥ 5.0 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value | |
Fair Value | NOTE 11 – Fair Value Accounting standards describe three levels of inputs that may be used to measure fair value (the fair value hierarchy). The level of an asset or liability within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement of that asset or liability. Following is a brief description of each level of the fair value hierarchy: Level 1 - Fair value measurement is based on quoted prices for identical assets or liabilities in active markets. Level 2 - Fair value measurement is based on: (1) quoted prices for similar assets or liabilities in active markets; (2) quoted prices for identical or similar assets or liabilities in markets that are not active; or (3) valuation models and methodologies for which all significant assumptions are or can be corroborated by observable market data. Level 3 - Fair value measurement is based on valuation models and methodologies that incorporate at least one significant assumption that cannot be corroborated by observable market data. Level 3 measurements reflect the Company’s estimates about assumptions market participants would use in measuring fair value of the asset or liability. Some assets and liabilities, such as securities available for sale, are measured at fair value on a recurring basis under accounting principles generally accepted in the United States. Other assets and liabilities, such as impaired loans, may be measured at fair value on a nonrecurring basis. Following is a description of the Company’s valuation methodology and significant inputs used for each asset and liability measured at fair value on a recurring or nonrecurring basis, as well as the classification of the asset or liability within the fair value hierarchy. Available for sale securities - Available for sale securities may be classified as Level 1 or Level 2 measurements within the fair value hierarchy. Level 1 securities include equity securities traded on a national exchange. The fair value measurement of a Level 1 security is based on the quoted price of the security. Level 2 securities include U.S. government and agency securities, obligations of states and political subdivisions, corporate debt securities and mortgage related securities. The fair value measurement of a Level 2 security is obtained from an independent pricing service and is based on recent sales of similar securities and other observable market data. Fair value measurements prepared internally are based on management’s comparisons to sales of comparable assets, but include significant unobservable data and are therefore considered Level 3 measurements. Loans - Loans are not measured at fair value on a recurring basis. However, loans considered to be impaired may be measured at fair value on a nonrecurring basis. The fair value measurement of an impaired loan that is collateral dependent is based on the fair value of the underlying collateral. Independent appraisals are obtained that utilize one or more valuation methodologies - typically they will incorporate a comparable sales approach and an income approach. Management routinely evaluates the fair value measurements of independent appraisers and adjusts those valuations based on differences noted between actual selling prices of collateral and the most recent appraised value. Such adjustments are usually significant, which results in a Level 3 classification. All other impaired loan measurements are based on the present value of expected future cash flows discounted at the applicable effective interest rate and, thus, are not fair value measurements. Foreclosed assets - Real estate acquired through or in lieu of loan foreclosure are not measured at fair value on a recurring basis. However, foreclosed assets are initially measured at fair value (less estimated costs to sell) when they are acquired and may also be measured at fair value (less estimated costs to sell) if they become subsequently impaired. The fair value measurement for each asset may be obtained from an independent appraiser or prepared internally. Fair value measurements obtained from independent appraisers generally utilize a market approach based on sales of comparable assets and/or an income approach. Such measurements are usually considered Level 2 measurements. However, management routinely evaluates fair value measurements of independent appraisers by comparing actual selling prices to the most recent appraisals. If management determines significant adjustments should be made to the independent appraisals based on these evaluations, these measurements are considered Level 3 measurements. Fair value measurements prepared internally are based on management’s comparisons to sales of comparable assets, but include significant unobservable data and are therefore considered Level 3 measurements. Assets measured at fair value on a recurring basis are summarized below: Recurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of September 30, 2020 Assets: Available for sale securities: $ — $ 60,565 $ — $ 60,565 As of December 31, 2019 Assets: Available for sale securities: $ — $ 48,179 $ — $ 48,179 Information regarding the fair value of assets measured at fair value on a nonrecurring basis follows: Nonrecurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Assets Identical Observable Unobservable Measured at Instruments Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2020 Assets: Loans $ 404 $ — $ — $ 404 Foreclosed assets — — — — As of December 31, 2019 Assets: Loans $ 897 $ — $ — $ 897 Foreclosed assets 84 — — 84 Loans with a carrying amount of $704 were considered impaired and were written down to their estimated fair value of $404 as of September 30, 2020. Loans with a carrying amount of $1,132 were considered impaired and were written down to their estimated fair value of $897 as of December 31, 2019. As a result, the Company recognized a specific valuation allowance against these impaired loans totaling $300 and $235 as of September 30, 2020 and December 31, 2019, respectively. There were no foreclosed assets at September 30, 2020. Foreclosed assets with a carrying amount $84 were determined to be at their fair value as of December 31, 2019. The following presents quantitative information about nonrecurring Level 3 fair value measurements: Range/Weighted Fair Value Valuation Technique Unobservable Input(s) Average As of September 30, 2020 Loans $ Market and/or income approach Management discount on appraised values 10 % - 20 % Foreclosed assets $ Market and/or income approach Management discount on appraised values 10 % - 20 % As of December 31, 2019 Loans $ Market and/or income approach Management discount on appraised values 10 % - 20 % Foreclosed assets $ Market and/or income approach Management discount on appraised values 10 % - 20 % The carrying value and estimated fair value of financial instruments as of September 30, 2020 and December 31, 2019 follow: September 30, 2020 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 7,439 $ 7,439 $ — $ — Available for sale securities 60,565 — 60,565 — Loans held for sale 776 — 776 — Loans 202,642 — — 206,179 Accrued interest receivable 996 996 — — Cash value of life insurance 7,220 — — 7,220 Other equity investments 780 — — 780 Financial liabilities: Deposits 166,115 117,153 — 49,272 Advance payments by borrowers for taxes and insurance 910 910 — — FHLB advances 14,500 — — 14,551 Accrued interest payable 436 436 — — December 31, 2019 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 39,377 $ 39,377 $ — $ — Available for sale securities 48,179 — 48,179 — Loans held for sale 200 — 200 — Loans 189,291 — — 190,561 Accrued interest receivable 725 725 — — Cash value of life insurance 7,068 — — 7,068 Other equity investments 780 — — 780 Financial liabilities: Deposits 217,252 150,024 — 67,391 Advance payments by borrowers for taxes and insurance 46 46 — — FHLB advances 11,500 — — 11,509 Accrued interest payable 51 51 — — Limitations - The fair value of a financial instrument is the current amount that would be exchanged between market participants, other than in a forced liquidation. Fair value is best determined based on quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Organization | Organization From October 2017 until January 2020, as discussed below, we operated in a two-tier mutual holding company structure. FFBW, Inc. (the “ Old FFBW ” ) was a federal corporation that was the publicly traded stock holding company of First Federal Bank of Wisconsin (the “ Bank ” ). At December 31, 2019, the Old FFBW had 7,702,478 shares of common stock outstanding, of which 3,436,424 shares, or 44.6%, were owned by the public, including 29,325 shares owned by FFBW Community Foundation, and the remaining 4,266,054 shares were held by FFBW, MHC (the “ MHC ” ), a federally chartered mutual holding company and former parent company of Old FFBW. At December 31, 2019, the significant assets of Old FFBW consisted of the capital stock of the Bank. The liabilities of Old FFBW were insignificant. Old FFBW was subject to the financial reporting requirements of the Securities Exchange Act of 1934, as amended. Old FFBW was subject to regulation and examination by the Board of Governors of the Federal Reserve System ( “ the Federal Reserve Board ” ). First Federal Bank of Wisconsin is a community bank headquartered in Waukesha, Wisconsin that provides financial services to individuals and businesses from our offices in Waukesha, Brookfield and the Bay View neighborhood of Milwaukee. FFBW, Inc. (“The Company”), a Maryland corporation that was organized in September 2019, is a savings and loan holding company headquartered in Waukesha, Wisconsin. The Company was formed to be the successor to Old FFBW upon completion of the second step mutual-to-stock conversion (the “Conversion”) of the MHC. Prior to completion of the Conversion, approximately 55.4% of the shares of common stock of Old FFBW were owned by the MHC. In conjunction with the Conversion, the MHC and Old FFBW merged into the Company. The Conversion was completed on January 16, 2020. In the Conversion, the Company sold 4,268,570 shares of common stock at $10.00 per share, for net proceeds of approximately $37.9 million (including purchase of 341,485 ESOP shares), and issued 3,436,430 shares of common stock in exchange for the shares of common stock of the Company, a federal corporation, Old FFBW owned by stockholders of Old FFBW, other than FFBW, MHC, as of the effective date of the conversion. As a result of the conversion, FFBW, MHC and Old FFBW have ceased to exist. The Conversion was conducted pursuant to the MHC’s Plan of Conversion. The Plan of Conversion provided for the establishment, upon the completion of the Conversion, of special “liquidation accounts” for the benefit of certain depositors of the Bank in an amount equal to the MHC’s ownership interest in the stockholders’ equity of Old FFBW as of the date of the latest balance sheet contained in the prospectus plus the MHC’s net assets (excluding its ownership of the Company). Following the completion of the Conversion, the Company and the Bank are not permitted to pay dividends on their capital stock if the shareholders' equity of the Company, or the shareholder's equity of the Bank, would be reduced below the amount of the liquidation accounts. The liquidation accounts will be reduced annually to the extent that eligible accountholders have reduced their qualifying deposits. Subsequent increases will not restore an eligible accountholder's interest in the liquidation accounts. Direct costs of the conversion and public offering, totaling approximately $1.2 million, have been applied against the proceeds from the shares sold in the public offering. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the fair values of securities, fair value of financial instruments, the valuation of other real estate owned and the valuation of deferred income tax assets. |
Revenue Recognition | Revenue Recognition Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of the Company's revenue-generating transactions are not subject to ASC 606, including all interest and dividend income generated from financial instruments. Certain noninterest income items, including loan servicing income, gain on sales of loans, gain on sales of securities and other noninterest income have been evaluated to not fall within the scope of ASC 606. Elements of noninterest income that are within the scope of ASC 606, are as follows: Service charges and other fees - The Company earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Management reviewed the deposit account agreements and determined that the agreements can be terminated at any time by either the Company or the account holder. Transaction fees, such as balance transfers, wires and overdraft charges are settled the day the performance obligation is satisfied. The Company's monthly service charges and maintenance fees are for services provided to the customer on a monthly basis and are considered a series of services that have the same pattern of transfer each month. The review of service charges assessed on deposit accounts included the amount of variable consideration that is a part of the monthly charges. It was found that the waiver of service charges due to insufficient funds and dormant account fees is immaterial and would not require a change in the accounting treatment for these fees under the new revenue standards. Recognition of revenue under ASC 606 did not materially change the timing or magnitude of revenue recognition. Interchange fees - Customers use a Bank-issued debit card to purchase goods and services and the Company earns interchange fees on those transactions, typically a percentage of the sale amount of the transaction. The Company records the amount due when it receives the settlement from the payment network. Payments from the payment network are received and recorded into income on a daily basis. These fees are included in “service charges and other fees” on the Consolidated Statements of Operations. There are no contingent debit card interchange fees recorded by the Company that could be subject to a clawback in future periods. Recognition of revenue under ASC 606 did not materially change the timing or magnitude of revenue recognition. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash and balances due from banks, non-maturity deposits in the Federal Home Loan Bank of Chicago (FHLB) and fed funds sold. The Company has not experienced any losses in such accounts. |
Available for Sale Securities | Available for Sale Securities Securities classified as available for sale are those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital requirements and other similar factors. Securities classified as available for sale are carried at fair value. Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred tax effect. Realized gains or losses, determined on the basis of the cost of specific securities sold, are included in earnings. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method. Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient enough to allow for any anticipated recovery in fair value. |
Loans Acquired in a Transfer | Loans Acquired in a Transfer The Company acquires loans (including debt securities) individually and in groups or portfolios. These loans are initially measured at fair value with no allowance for loan losses. The Company’s allowance for loan losses on all acquired loans reflect only those losses incurred subsequent to acquisition. Certain acquired loans may have experienced deterioration of credit quality between origination and the Company’s acquisition of the loans. At acquisition, the Company reviews each loan to determine whether there is evidence of deterioration of credit quality since origination and if it is probable that the Company will be unable to collect all amounts due according to the loan’s contractual terms. If both conditions exist, the Company determines whether each such loan is to be accounted for individually or whether such loans will be assembled into pools of loans based on common risk characteristics (for example, credit score, loan type and date of origination). The Company considers expected prepayments and estimates the amount and timing of undiscounted principal, interest and other cash flows expected at acquisition for each loan and aggregated pool of loans. The excess of the loan’s or pool’s scheduled contractual principal and interest payments over all cash flows expected at acquisition is calculated as the nonaccretable difference. The excess of cash flows expected to be collected over the fair value of each loan or pool (accretable yield) is accreted into interest income over the remaining life of the loan or pool. At each reporting date, the Company continues to estimate cash flows expected to be collected for each loan or pool. If expected cash flows have decreased from the acquisition date estimate, the Company recognizes an allowance for loan losses. If expected cash flows have increased from the acquisition date estimate, the Company increases the amount of accretable yield to be recognized as interest income over the remaining life of the loan or pool. |
Loans Held for Sale | Loans Held for Sale Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Mortgage loans held for sale are sold with the mortgage servicing rights released by the Company. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loan sold. |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances adjusted for deferred loan fees and costs, charge-offs, and an allowance for loan losses. Interest on loans is accrued and credited to income based on the unpaid principal balance. Loan-origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. The accrual of interest on loans is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to make payments as they become due. When loans are placed on nonaccrual status or charged off, all unpaid accrued interest is reversed against interest income. The interest on these loans is subsequently accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is maintained at the level considered adequate by management to provide for losses that are probable as of the balance sheet date. The allowance for loan losses is established through a provision for loan losses charged to expense as losses are estimated to have occurred. Loan losses are charged against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. In determining the adequacy of the allowance balance, the Company makes evaluations of the loan portfolio and related off-balance sheet commitments, considers current economic conditions and historical loss experience and reviews specific problem loans and other factors. When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories and their relevant risk characteristics are as follows: Commercial development: These loans are secured by vacant land and/or property that are in the process of improvement. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. Construction loans include not only construction of new structures, but loans originated to finance additions to or alterations of existing structures. Until a permanent loan originates, or payoff occurs, all commercial construction loans secured by real estate are reported in this loan pool. Development loans also have the risk that improvements will not be completed on time or in accordance with specifications and projected costs. Commercial real estate: These loans are primarily secured by office and industrial buildings, warehouses, small retail shopping facilities and various special purpose properties, including restaurants. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property. The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type. Commercial and industrial: Commercial and industrial loans are extended primarily to small and middle market customers. Such credits typically comprise working capital loans, asset acquisition loans and loans for other business purposes. Loans to closely held businesses are generally guaranteed in full by the owners of the business. Commercial and industrial loans are made based primarily on the historical and projected cash flow of the borrower and, secondarily, on the underlying collateral provided by the borrower. The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to economic or individual performance factors. Minimum standards and underwriting guidelines have been established for commercial and industrial loans. One-to-four family owner-occupied: These loans are generally to individuals and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations, the underlying collateral and the loan to collateral value. Also included in this category are junior liens on one-to-four family residential properties. Underwriting standards for one-to-four family owner-occupied loans are heavily influenced by statutory requirements, which include, but are not limited to, loan-to-value and affordability ratios, risk-based pricing strategies and documentation requirements. One-to-four family investor-owned: These loans may be to individuals or businesses and are subject to underwriting standards and processes similar to commercial and industrial loans. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property(ies). The cash flows of the borrowers, however, may not behave as forecasted and collateral securing loans may fluctuate in value due to the general economic factors or conditions specific to the real estate market, such as geographic location and/or purpose type. Multifamily real estate: These loans include loans to finance non-farm properties with five or more units in structures primarily to accommodate households. Such credits are typically originated to finance the acquisition or refinancing of an apartment building. These loans are subject to underwriting standards and processes similar to commercial and industrial loans. Loans to closely held businesses are generally guaranteed in full by the owners of the business. These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the subject multifamily property, with assumptions made for vacancy rates. Cash flows of the borrowers rely on the receipt of rental income from the tenants of the property who are themselves subject to fluctuations in national and local economic conditions and unemployment trends. Consumer: These loans may take the form of installment loans, demand loans, or single payment loans, and are extended to individuals for household, family and other personal expenditures. These loans generally include direct consumer automobile loans and credit card loans. These loans are generally smaller in size and are underwritten by evaluating the credit history of the borrower, the ability of the borrower to meet the debt service requirements of the loan and total debt obligations. Management regularly evaluates the allowance for loan losses using the Company’s past loan loss experience, known and inherent risks in the loan portfolio, composition of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, current economic conditions and other relevant factors. This evaluation is inherently subjective since it requires material estimates that may be susceptible to significant change. A loan is impaired when, based on current information, it is probable that the Company will not collect all amounts due in accordance with the contractual terms of the loan agreement. Management determines whether a loan is impaired on a case-by-case basis, taking into consideration the payment status, collateral value, length and reason of any payment delays, the borrower’s prior payment record and any other relevant factors. Large groups of smaller-balance homogeneous loans, such as residential mortgage and consumer loans, are collectively evaluated in the allowance for loan losses analysis and are not subject to impairment analysis unless such loans have been subject to a restructuring agreement. Specific allowances for impaired loans are based on discounted cash flows of expected future payments using the loan’s initial effective interest rate or the fair value of the collateral if the loan is collateral dependent. In addition, various regulatory agencies periodically review the allowance for loan losses. These agencies may require the Company to make additions to the allowance for loan losses based on their judgments of collectability based on information available to them at the time of their examination. |
Troubled Debt Restructurings | Troubled Debt Restructurings Loans are accounted for as troubled debt restructurings when a borrower is experiencing financial difficulties that lead to a restructuring of the loan and the Company grants a “concession” to the borrower that they would not otherwise consider. These concessions include a modification of terms, such as a reduction of the stated interest rate or loan balance, a reduction of accrued interest, an extension of the maturity date at an interest rate lower than a current market rate for a new loan with similar risk, or some combination thereof to facilitate repayment. Troubled debt restructurings are considered impaired loans. |
Foreclosed Assets | Foreclosed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less costs to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets. |
Premises and Equipment | Premises and Equipment Depreciable assets are stated at cost less accumulated depreciation. Provisions for depreciation are computed on straight-line and accelerated methods over the estimated useful lives of the assets. |
Other Equity Investments | Other Equity Investments Other Equity Investments consist of Federal Home Loan Bank of Chicago (“FHLB”) stock and Bankers’ Bank stock. The Company's investment in the FHLB stock is carried at cost, which approximates fair value. The Company is required to hold the stock as a member of the FHLB and transfer of the stock is substantially restricted. The stock is evaluated for impairment on an annual basis. The Company is required to adjust its reported value of Bankers’ Bank stock, which is considered an equity security without a readily determinable market value, if a comparable transaction is observed. |
Income Taxes | Income Taxes Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes. The differences relate principally to the allowances for loan losses, deferred compensation, depreciation, FHLB stock dividends and non-accrual interest. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company’s policy is to recognize interest and penalties related to income tax issues as components of income tax expense. During the periods shown, the Company did not recognize any interest or penalties related to income tax expense in its statements of operations. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Advertising | Advertising Advertising costs are expensed as incurred. |
Other Comprehensive Income (Loss) | Other Comprehensive Income Other comprehensive income is shown on the statements of comprehensive income. The Company’s accumulated other comprehensive income is composed of the unrealized gains (losses) on securities available for sale, net of tax and is shown on the statements of changes in equity. Reclassification adjustments out of other comprehensive income for losses realized on sales of securities available for sale comprise the entire balance of “net loss on sale of securities” on the statements of operations. |
Off-Balance Sheet Financial Instruments | Off-Balance Sheet Financial Instruments In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments consisting of commitments to extend credit, unfunded commitments under lines of credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. |
Life Insurance | Life Insurance The Company has purchased life insurance policies on certain key executives. Life insurance is measured at the amount that could be realized under the insurance contract as of the balance sheet date, which is generally the cash surrender value of the policy. |
Subsequent Events | Subsequent Events On October 14, 2020 t he Office of the Comptroller of the Currency approved the Bank’s application to purchase for cash substantially all of the assets and substantially all of the liabilities of Mitchell Bank, a Wisconsin-chartered commercial bank headquartered in Milwaukee, Wisconsin. The Bank anticipates closing the transaction late in the fourth quarter of 2020. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the Company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act. The Company recently adopted the following Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB). ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” This ASU modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of, certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. Although this ASU has a significant impact to the Company’s fair value disclosures, there is no additional impact to the financial statements. The following ASUs have been issued by the FASB and may impact the Company's financial statements in future reporting periods: ASU No. 2016-13, “Credit Losses (Topic 326).” ASU No. 2019-04, “Codification Improvements to Topic 326.” ASU No. 2019-05, “Financial Instruments-Credit Losses.” ASU 2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently assessing the impact of adopting ASU 2016-13 on its financial statements. ASU No. 2016-02, “Leases (Topic 842): Amendments to the Leases Analysis.” ASU No. 2018-10, "Codification Improvements to Topic 842." ASU No. 2018-11, "Targeted Improvements" For lessees, Topic 842 requires leases to be recognized on the balance sheet, along with disclosure of key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, 2018-10 and 2018-11. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification expense recognition in the income statement. For lessors, Topic 842 requires lessors to classify leases as sales-type, direct financing or operating leases. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating the lessor has transferred substantially all the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type or direct financing leases are operating leases. The new standard is effective for the Company on January 1, 2022 with early adoption permitted. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) the new standard's effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company expects to adopt the new standard on January 1, 2022 using the effective date as its date of initial application. The Company is evaluating what impact this standard will have on its consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the earnings per share calculations for the three and nine months ended September 30: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Net income $ 484 $ 370 $ 1,327 $ 1,007 Basic potential common shares Weighted average shares outstanding 7,707,375 7,719,070 7,706,025 7,787,302 Weighted average unallocated Employee Stock Ownership Plan Shares (591,355) (276,500) (600,277) (280,263) Basic weighted average shares outstanding 7,116,020 7,442,570 7,105,748 7,507,039 Dilutive potential common shares — — 83 4,482 Dilutive weighted average shares outstanding 7,116,020 7,442,570 7,105,831 7,511,521 Basic earnings per share $ 0.07 $ 0.05 $ 0.19 $ 0.13 Diluted earnings per share $ 0.07 $ 0.05 $ 0.19 $ 0.13 |
Available for Sale Securities (
Available for Sale Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Available for Sale Securities | |
Schedule of Amortized Costs and Fair Values of Available for Sale Securities | Amortized costs and fair values of available for sale securities are summarized as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2020 Obligations of the US government and US government sponsored agencies $ 759 $ 40 $ — $ 799 Obligations of states and political subdivisions 15,505 567 (24) 16,048 Mortgage-backed securities 38,856 1,434 (35) 40,255 Certificates of deposit 750 46 — 796 Corporate debt securities 2,581 86 — 2,667 Total available for sale securities $ 58,451 $ 2,173 $ (59) $ 60,565 December 31, 2019 Obligations of the US government and US government sponsored agencies $ 944 $ 14 $ — $ 958 Obligations of states and political subdivisions 8,590 36 (21) 8,605 Mortgage-backed securities 35,095 486 (99) 35,482 Certificates of deposit 1,000 17 — 1,017 Corporate debt securities 2,080 37 — 2,117 Total available for sale securities $ 47,709 $ 590 $ (120) $ 48,179 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following table presents the portion of the Company’s portfolio which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position: Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2020 Obligations of states and political subdivisions $ 1,936 $ (24) $ — $ — $ 1,936 $ (24) Mortgage-backed securities 4,693 (28) 837 (7) 5,530 (35) Corporate debt securities 254 — — — 254 — Total $ 6,883 $ (52) $ 837 $ (7) $ 7,720 $ (59) December 31, 2019 Obligations of states and political subdivisions $ 2,569 $ (17) $ 1,059 $ (4) $ 3,628 $ (21) Mortgage-backed securities 7,604 (57) 4,372 (42) 11,976 (99) Total $ 10,173 $ (74) $ 5,431 $ (46) $ 15,604 $ (120) |
Investments Classified by Contractual Maturity Date | The amortized cost and fair value of available for sale securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities in mortgage-backed securities since the anticipated maturities are not readily determinable. Therefore, these securities are not included in the maturity categories in the following maturity summary listed below: September 30, 2020 Amortized Cost Fair Value Due in one year or less $ 671 $ 672 Due after one year through 5 years 3,906 4,097 Due after 5 years through 10 years 7,708 8,123 Due after 10 years 7,310 7,418 Subtotal $ 19,595 $ 20,310 Mortgage-backed securities 38,856 40,255 Total $ 58,451 $ 60,565 |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Loans | |
Major Classifications of Loans | Major classifications of loans are as follows: September 30, December 31, 2020 2019 Commercial Development $ 17,189 $ 18,222 Real estate 74,283 68,621 Commercial and industrial 24,414 13,681 Residential real estate and consumer One-to-four family owner-occupied 27,891 29,380 One-to-four family investor-owned 29,577 28,077 Multifamily 29,165 29,531 Consumer 3,254 4,230 Subtotal $ 205,773 $ 191,742 Deferred loan fees (527) (187) Allowance for loan losses (2,604) (2,264) Net loans $ 202,642 $ 189,291 |
Summary of the Activity in the Allowance for Loan Losses | A summary of the activity in the allowance for loan losses by portfolio segment is as follows: Residential real estate Three Months Ended Commercial and consumer Total Balance at June 30, 2020 $ 1,552 $ 990 $ 2,542 Provision for loan losses 376 (316) 60 Loans charged off — — — Recoveries of loans previously charged off 1 1 2 Balance at September 30, 2020 $ 1,929 $ 675 $ 2,604 Balance at June 30, 2019 $ 1,053 $ 1,199 $ 2,252 Provision for loan losses 44 1 45 Loans charged off — (36) (36) Recoveries of loans previously charged off — 1 1 Balance at September 30, 2019 $ 1,097 $ 1,165 $ 2,262 Residential real estate Nine Months Ended Commercial and consumer Total Balance at December 31, 2019 $ 1,251 $ 1,013 $ 2,264 Provision for loan losses 658 (343) 315 Loans charged off — — — Recoveries of loans previously charged off 20 5 25 Balance at September 30, 2020 $ 1,929 $ 675 $ 2,604 Balance at December 31, 2018 $ 940 $ 1,178 $ 2,118 Provision for loan losses 157 43 200 Loans charged off — (57) (57) Recoveries of loans previously charged off — 1 1 Balance at September 30, 2019 $ 1,097 $ 1,165 $ 2,262 Information about how loans were evaluated for impairment and the related allowance for loan losses follows: Residential Real Estate and September 30, 2020 Commercial Consumer Total Loans: Individually evaluated for impairment $ 714 $ 1,634 $ 2,348 Collectively evaluated for impairment 144,337 59,088 203,425 Total loans $ 145,051 $ 60,722 $ 205,773 Allowance for loan losses: Individually evaluated for impairment $ 300 $ — $ 300 Collectively evaluated for impairment 1,629 675 2,304 Total allowance for loan losses $ 1,929 $ 675 $ 2,604 Residential Real Estate and December 31, 2019 Commercial Consumer Total Loans: Individually evaluated for impairment $ 798 $ 1,457 $ 2,255 Collectively evaluated for impairment 99,726 89,761 189,487 Total loans $ 100,524 $ 91,218 $ 191,742 Allowance for loan losses: Individually evaluated for impairment $ 158 $ 77 $ 235 Collectively evaluated for impairment 1,093 936 2,029 Total allowance for loan losses $ 1,251 $ 1,013 $ 2,264 |
Impairment and the Related Allowance for Loan Losses | Information regarding impaired loans follows: Principal Recorded Related Average Interest As of September 30, 2020 Balance Investment Allowance Investment Recognized Loans with related allowance for loan losses: Commercial Commercial and industrial $ 712 $ 704 $ 300 $ 713 $ — Residential real estate and consumer One-to-four family investor-owned — — — — — Total loans with related allowance for loan losses 712 704 300 713 — Loans with no related allowance for loan losses: Commercial Commercial and industrial 12 10 — 13 — Residential real estate and consumer One-to-four family owner-occupied 913 910 — 916 3 One-to-four family investor-owned 738 665 — 742 — Consumer 60 60 — 63 — Total loans with no related allowance for loan losses 1,723 1,645 — 1,734 3 Total impaired loans $ 2,435 $ 2,349 $ 300 $ 2,447 $ 3 Principal Recorded Related Average Interest As of December 31, 2019 Balance Investment Allowance Investment Recognized Loans with related allowance for loan losses: Commercial Commercial and industrial $ 729 $ 729 $ 158 $ 740 $ 19 Residential real estate and consumer One-to-four family investor-owned 415 403 77 412 — Total loans with related allowance for loan losses 1,144 1,132 235 1,152 19 Loans with no related allowance for loan losses: Commercial Commercial and industrial 73 69 — 77 5 Residential real estate and consumer One-to-four family owner-occupied 795 744 — 754 5 One-to-four family investor-owned 243 221 — 231 — Consumer 114 89 — 98 — Total loans with no related allowance for loan losses 1,225 1,123 — 1,160 10 Total impaired loans $ 2,369 $ 2,255 $ 235 $ 2,312 $ 29 |
Information Regarding the Credit Quality Indicators | Information regarding the credit quality indicators most closely monitored for commercial loans by class follows: Special Pass Mention Substandard Doubtful Totals September 30, 2020 Development $ 17,189 $ — $ — $ — $ 17,189 Real estate 73,652 — — — 73,652 Commercial and industrial 24,249 — 795 — 25,044 One-to-four family investor-owned 28,994 — 658 — 29,652 Multifamily 29,165 — — — 29,165 Totals $ 173,249 $ — $ 1,453 $ — $ 174,702 December 31, 2019 Development $ 18,222 $ — $ — $ — $ 18,222 Real estate 68,036 585 — — 68,621 Commercial and industrial 10,888 2,779 14 — 13,681 One-to-four family investor-owned 27,453 — 624 — 28,077 Multifamily 29,531 — — — 29,531 Totals $ 154,130 $ 3,364 $ 638 $ — $ 158,132 Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class follows: Performing Non-performing Totals September 30, 2020 One-to-four family owner-occupied $ 27,891 $ — $ 27,891 Consumer 3,254 — 3,254 $ 31,145 $ — $ 31,145 December 31, 2019 One-to-four family owner-occupied $ 28,636 $ 744 $ 29,380 Consumer 4,141 89 4,230 $ 32,777 $ 833 $ 33,610 |
Loan Aging Information | Loan aging information follows: Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans September 30, 2020 Commercial Development $ 17,189 $ — $ — $ 17,189 $ — Real estate 74,283 — — 74,283 — Commercial and industrial 24,414 — — 24,414 795 Residential real estate and consumer One-to-four family owner-occupied 27,732 159 — 27,891 — One-to-four family investor-owned 29,577 — — 29,577 658 Multifamily 29,165 — — 29,165 — Consumer 3,254 — — 3,254 — Total $ 205,614 $ 159 $ — $ 205,773 $ 1,453 Loans Past Due Loans Past Due Nonaccrual Current Loans 30-89 Days 90+ Days Total Loans Loans December 31, 2019 Commercial Development $ 18,222 $ — $ — $ 18,222 $ — Real estate 68,621 — — 68,621 — Commercial and industrial 13,681 — — 13,681 14 Residential real estate and consumer One-to-four family owner-occupied 29,034 — 346 29,380 346 One-to-four family investor-owned 28,077 — — 28,077 624 Multifamily 29,531 — — 29,531 — Consumer 4,230 — — 4,230 86 Total $ 191,396 $ — $ 346 $ 191,742 $ 1,070 |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deposits | |
Composition of deposits | The composition of deposits are as follows: September 30, December 31, 2020 2019 Non-interest bearing checking $ 27,156 $ 20,733 Interest bearing checking 8,612 6,941 Money market 55,451 46,673 Statement savings accounts 11,392 12,359 Health savings accounts 14,542 10,670 Deposits held in escrow for stock subscriptions — 52,648 Certificates of deposit 48,962 67,228 Total $ 166,115 $ 217,252 |
Scheduled Maturities of Certificates of Deposit | The scheduled maturities of certificates of deposit are as follows as of September 30, 2020: 2020 $ 9,994 2021 29,711 2022 6,814 2023 962 2024 1,106 2025 375 Total $ 48,962 |
FHLB Advances (Tables)
FHLB Advances (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FHLB Advances | |
Schedule of Federal Home Loan Bank, Advances | FHLB advances consist of the following: September 30, 2020 December 31, 2019 Rates Amount Rates Amount Fixed rate, fixed term advances 0.0%-1.71% $ 10,500 1.62% - 2.70% $ 7,500 Fixed term advances with floating spread 1.92% - 2.08% 4,000 1.69% - 2.09% 4,000 $ 14,500 $ 11,500 |
Maturities of Federal Home Loan Bank Advances | The following is a summary of scheduled maturities of fixed term FHLB advances as of September 30, 2020: Fixed Rate Advances Adjustable Rate Advances Weighted Weighted Total Average Rate Amount Average Rate Amount Amount 2020 0.28 % $ 5,000 1.92 % $ 2,000 $ 7,000 2021 — % 4,000 2.08 % 2,000 6,000 2022 1.71 % 1,500 — % — 1,500 Total 0.38 % $ 10,500 2.00 % $ 4,000 $ 14,500 |
Employee Stock Ownership Plan (
Employee Stock Ownership Plan (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Employee Stock Ownership Plan | |
Employee Stock Ownership Plan (ESOP) Disclosures | September 30, 2020 December 31, 2019 Shares allocated to active participants 33,569 18,659 Shares committed to be released and allocated to participants 22,941 15,202 Shares distributed (1,069) — Total unallocated shares 588,736 270,192 Total ESOP shares 644,177 304,053 Fair value of unallocated shares (based on $9.36 and $11.55 share price at September 30, 2020 and December 31, 2019, respectively) $ 5,511 $ 3,121 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Compensation Plans | |
Impact of the Company’s Share-Based Payment Plans in the Financial Statements | The following table summarizes the impact of the Company’s share-based payment plans in the financial statements for the period shown: Nine Months Ended September 30, 2020 2019 Total cost of stock grant plan during the year $ 154 $ 145 Total cost of stock option plan during the year 119 104 Total cost of share-based payment plans during the year $ 273 $ 249 Amount of related income tax benefit recognized in income $ 74 $ 68 |
Summary Stock Options Activity | The following table summarizes stock options activity for the nine months ended September 30, 2020: Outstanding Nonvested Weighted Weighted Average Weighted Average Remaining Aggregate Average Stock Option Exercise Contractual Intrinsic Number of Grant Date Fair Awards Price Term (years) Value Options Value Balance at December 31, 2019 260,510 $ 9.20 215,450 $ 2.83 Granted 46,716 9.10 46,716 2.38 Exercised — — — — Forfeited (32,401) 9.31 — — Balance at September 30, 2020 274,825 $ 9.17 8.47 $ — 262,166 $ 2.75 Vested as of September 30, 2020 44,414 $ 8.61 Exercisable as of September 30, 2020 52,098 $ 9.19 8.26 $ — |
Summary of Changes in Restricted Shares | The following is a summary of changes in restricted shares for the nine months ended September 30, 2020: Weighted Average Number of Grant Date Fair Shares Value Nonvested stock awards as of December 31, 2019 90,790 $ 9.20 Granted 2,500 9.10 Vested (18,842) 8.61 Forfeited (12,960) 9.31 Nonvested stock awards as of September 30, 2020 61,488 $ 9.35 |
Equity and Regulatory Matters (
Equity and Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity and Regulatory Matters | |
Bank’s Actual Capital Amounts and Ratios | The Bank’s actual capital amounts and ratios are presented in the following tables: To Be Well Capitalized Under Prompt For Capital Adequacy Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio September 30, 2020 Common Equity Tier 1 capital (to risk‑weighted assets) $ 73,469 32.9 % $ ≥ 10,055 ≥ 4.5 % $ ≥ 14,524 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 73,469 32.9 ≥ 13,407 ≥ 6.0 ≥ 17,876 ≥ 8.0 Total capital (to risk‑weighted assets) 76,073 34.0 ≥ 17,876 ≥ 8.0 ≥ 22,345 ≥ 10.0 Tier 1 capital (to average assets) 73,469 25.9 ≥ 11,333 ≥ 4.0 ≥ 14,167 ≥ 5.0 December 31, 2019 Common Equity Tier 1 capital (to risk‑weighted assets) $ 50,446 23.7 % $ ≥ 9,591 ≥ 4.5 % $ ≥ 13,854 ≥ 6.5 % Tier 1 capital (to risk‑weighted assets) 50,446 23.7 ≥ 12,788 ≥ 6.0 ≥ 17,051 ≥ 8.0 Total capital (to risk‑weighted assets) 52,710 24.7 ≥ 17,051 ≥ 8.0 ≥ 21,313 ≥ 10.0 Tier 1 capital (to average assets) 50,446 19.4 ≥ 10,400 ≥ 4.0 ≥ 13,000 ≥ 5.0 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value | |
Assets Measured at Fair Value on Recurring Basis | Assets measured at fair value on a recurring basis are summarized below: Recurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Instruments Inputs Inputs (Level 1) (Level 2) (Level 3) Total As of September 30, 2020 Assets: Available for sale securities: $ — $ 60,565 $ — $ 60,565 As of December 31, 2019 Assets: Available for sale securities: $ — $ 48,179 $ — $ 48,179 |
Assets Measured at Fair Value on Nonrecurring Basis | Information regarding the fair value of assets measured at fair value on a nonrecurring basis follows: Nonrecurring Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Assets Identical Observable Unobservable Measured at Instruments Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) As of September 30, 2020 Assets: Loans $ 404 $ — $ — $ 404 Foreclosed assets — — — — As of December 31, 2019 Assets: Loans $ 897 $ — $ — $ 897 Foreclosed assets 84 — — 84 |
Fair Value Measurement Inputs and Valuation Techniques | The following presents quantitative information about nonrecurring Level 3 fair value measurements: Range/Weighted Fair Value Valuation Technique Unobservable Input(s) Average As of September 30, 2020 Loans $ Market and/or income approach Management discount on appraised values 10 % - 20 % Foreclosed assets $ Market and/or income approach Management discount on appraised values 10 % - 20 % As of December 31, 2019 Loans $ Market and/or income approach Management discount on appraised values 10 % - 20 % Foreclosed assets $ Market and/or income approach Management discount on appraised values 10 % - 20 % |
Carrying Value and Estimated Fair Value of Financial Instruments | The carrying value and estimated fair value of financial instruments as of September 30, 2020 and December 31, 2019 follow: September 30, 2020 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 7,439 $ 7,439 $ — $ — Available for sale securities 60,565 — 60,565 — Loans held for sale 776 — 776 — Loans 202,642 — — 206,179 Accrued interest receivable 996 996 — — Cash value of life insurance 7,220 — — 7,220 Other equity investments 780 — — 780 Financial liabilities: Deposits 166,115 117,153 — 49,272 Advance payments by borrowers for taxes and insurance 910 910 — — FHLB advances 14,500 — — 14,551 Accrued interest payable 436 436 — — December 31, 2019 Carrying Fair Value Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 39,377 $ 39,377 $ — $ — Available for sale securities 48,179 — 48,179 — Loans held for sale 200 — 200 — Loans 189,291 — — 190,561 Accrued interest receivable 725 725 — — Cash value of life insurance 7,068 — — 7,068 Other equity investments 780 — — 780 Financial liabilities: Deposits 217,252 150,024 — 67,391 Advance payments by borrowers for taxes and insurance 46 46 — — FHLB advances 11,500 — — 11,509 Accrued interest payable 51 51 — — |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 16, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Common stock, outstanding (in shares) | 7,707,375 | 7,702,478 | |
Stock issued during period, shares | 4,268,570 | ||
Issuance of common stock, net of issuance costs | $ 37,900 | ||
Purchase of ESOP shares (in shares) | 341,485 | 341,485 | |
Sale of stock, price per share | $ 10 | ||
Direct costs of the conversion and public offering | $ 1,200 | ||
Unrecognized tax benefits, income tax penalties and interest expense | 0 | ||
Customer deposits | 166,115 | $ 217,252 | |
Loans acquired | $ 202,642 | $ 189,291 | |
Owned by Public [Member] | |||
Common stock, outstanding (in shares) | 3,436,424 | ||
Percentage of common stock outstanding to eligible Members | 44.60% | ||
FFBW Community Foundation [Member] | |||
Common stock, outstanding (in shares) | 29,325 | ||
FFBW, MHC [Member] | |||
Common stock, outstanding (in shares) | 4,266,054 | ||
Stock issued during period, shares | 3,436,430 | ||
Percentage of shares held by Mutual Holding Company | 55.40% |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share | ||||
Net income | $ 484 | $ 370 | $ 1,327 | $ 1,007 |
Weighted average shares outstanding (in shares) | 7,707,375 | 7,719,070 | 7,706,025 | 7,787,302 |
Weighted average unallocated Employee Stock Ownership Plan Shares (in shares) | (591,355) | (276,500) | (600,277) | (280,263) |
Basic weighted average shares outstanding (in shares) | 7,116,020 | 7,442,570 | 7,105,748 | 7,507,039 |
Dilutive potential common shares (in shares) | 83 | 4,482 | ||
Diluted weighted average shares outstanding (in shares) | 7,116,020 | 7,442,570 | 7,105,831 | 7,511,521 |
Basic earnings per share (in dollars per share) | $ 0.07 | $ 0.05 | $ 0.19 | $ 0.13 |
Diluted earnings per share (in dollars per share) | $ 0.07 | $ 0.05 | $ 0.19 | $ 0.13 |
Available for Sale Securities_2
Available for Sale Securities (Narrative) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020USD ($)security | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)security | |
Available for Sale Securities | |||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 5 | 14 | |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 13 | 18 | |
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities, Total | $ 0 | $ 0 | |
Security Owned and Pledged as Collateral, Fair Value, Total | 1,048 | $ 1,016 | |
Proceeds from sale of securities | 1,017 | $ 4,837 | |
Gross realized gains on sale of securities | 17 | 22 | |
Gross realized losses on sale of securities | $ 2 | $ 25 |
Available for Sale Securities_3
Available for Sale Securities (Amortized Cost and Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 58,451 | $ 47,709 |
Gross unrealized gains | 2,173 | 590 |
Gross unrealized losses | (59) | (120) |
Estimated fair value | 60,565 | 48,179 |
US Government Corporations and Agencies Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 759 | 944 |
Gross unrealized gains | 40 | 14 |
Estimated fair value | 799 | 958 |
US States and Political Subdivisions Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 15,505 | 8,590 |
Gross unrealized gains | 567 | 36 |
Gross unrealized losses | (24) | (21) |
Estimated fair value | 16,048 | 8,605 |
Collateralized Mortgage Backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 38,856 | 35,095 |
Gross unrealized gains | 1,434 | 486 |
Gross unrealized losses | (35) | (99) |
Estimated fair value | 40,255 | 35,482 |
Certificates of Deposit [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 750 | 1,000 |
Gross unrealized gains | 46 | 17 |
Estimated fair value | 796 | 1,017 |
Corporate Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 2,581 | 2,080 |
Gross unrealized gains | 86 | 37 |
Estimated fair value | $ 2,667 | $ 2,117 |
Available for Sale Securities_4
Available for Sale Securities (Continuous Unrealized Loss Position) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | $ 6,883 | $ 10,173 |
Less Than 12 Months Unrealized Losses | (52) | (74) |
12 Months or More Fair Value | 837 | 5,431 |
12 Months or More Unrealized Losses | (7) | (46) |
Total Fair Value | 7,720 | 15,604 |
Total Unrealized Losses | (59) | (120) |
US States and Political Subdivisions Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 1,936 | 2,569 |
Less Than 12 Months Unrealized Losses | (24) | (17) |
12 Months or More Fair Value | 1,059 | |
12 Months or More Unrealized Losses | (4) | |
Total Fair Value | 1,936 | 3,628 |
Total Unrealized Losses | (24) | (21) |
Collateralized Mortgage Backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 4,693 | 7,604 |
Less Than 12 Months Unrealized Losses | (28) | (57) |
12 Months or More Fair Value | 837 | 4,372 |
12 Months or More Unrealized Losses | (7) | (42) |
Total Fair Value | 5,530 | 11,976 |
Total Unrealized Losses | (35) | $ (99) |
Corporate Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less Than 12 Months Fair Value | 254 | |
Total Fair Value | $ 254 |
Available for Sale Securities_5
Available for Sale Securities (Contractual Maturity) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Due in one year or less, amortized cost | $ 671 | |
Due in one year or less, fair value | 672 | |
Due after one year through 5 years, amortized cost | 3,906 | |
Due after one year through 5 years, fair value | 4,097 | |
Due after 5 years through 10 years, amortized cost | 7,708 | |
Due after 5 years through 10 years, fair value | 8,123 | |
Due after 10 years, amortized cost | 7,310 | |
Due after 10 years, fair value | 7,418 | |
Subtotal, amortized cost | 19,595 | |
Subtotal, fair value | 20,310 | |
Amortized cost | 58,451 | $ 47,709 |
Estimated fair value | 60,565 | 48,179 |
Collateralized Mortgage Backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 38,856 | 35,095 |
Estimated fair value | $ 40,255 | $ 35,482 |
Loans (Narrative) (Details)
Loans (Narrative) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)item | Dec. 31, 2019USD ($)item | |
Deposit Liabilities Reclassified as Loans Receivable | $ 2 | $ 6 |
Loans and Leases Receivable, Commitments to Purchase or Sell | 0 | 0 |
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | $ 0 | $ 0 |
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | item | 0 | 0 |
Residential Real Estate and Consumer [Member] | ||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | ||
Post- Modification Investment | $ 285 | |
Number of Modifications | item | 3 | |
Post- Modification Investment | $ 285 | |
Residential Real Estate and Consumer [Member] | Commercial and Industrial [Member] | ||
Post- Modification Investment | $ 729 | |
Number of Modifications | item | 2 | |
Post- Modification Investment | $ 729 |
Loans (Major Classifications of
Loans (Major Classifications of Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Subtotal loans | $ 205,773 | $ 191,742 | ||||
Deferred loan fees | (527) | (187) | ||||
Allowance for loan losses | (2,604) | $ (2,542) | (2,264) | $ (2,262) | $ (2,252) | $ (2,118) |
Net loans | 202,642 | 189,291 | ||||
Commercial Portfolio Segment [Member] | ||||||
Subtotal loans | 145,051 | 100,524 | ||||
Allowance for loan losses | (1,929) | (1,552) | (1,251) | (1,097) | (1,053) | (940) |
Commercial Portfolio Segment [Member] | Development [Member] | ||||||
Subtotal loans | 17,189 | 18,222 | ||||
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | ||||||
Subtotal loans | 74,283 | 68,621 | ||||
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | ||||||
Subtotal loans | 24,414 | 13,681 | ||||
Residential Real Estate and Consumer [Member] | ||||||
Subtotal loans | 60,722 | 91,218 | ||||
Allowance for loan losses | (675) | $ (990) | (1,013) | $ (1,165) | $ (1,199) | $ (1,178) |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | ||||||
Subtotal loans | 27,891 | 29,380 | ||||
Residential Real Estate and Consumer [Member] | One-to-Four Family Investor-owned [Member] | ||||||
Subtotal loans | 29,577 | 28,077 | ||||
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | ||||||
Subtotal loans | 29,165 | 29,531 | ||||
Residential Real Estate and Consumer [Member] | Consumer [Member] | ||||||
Subtotal loans | $ 3,254 | $ 4,230 |
Loans (Allowance for Loan Losse
Loans (Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Beginning balance | $ 2,542 | $ 2,252 | $ 2,264 | $ 2,118 | ||
Provision for loan losses | 60 | 45 | 315 | 200 | ||
Loans charged off | (36) | (57) | ||||
Recoveries of loans previously charged off | 2 | 1 | 25 | 1 | ||
Total ending allowance balance | 2,604 | 2,262 | 2,604 | 2,262 | ||
Loans, individually evaluated for impairment | $ 2,348 | $ 2,255 | ||||
Loans, collectively evaluated for impairment | 203,425 | 189,487 | ||||
Total loans | 205,773 | 191,742 | ||||
Allowance for loan losses, individually evaluated for impairment | 300 | 235 | ||||
Allowance for loan losses, collectively evaluated for impairment | 2,304 | 2,029 | ||||
Total allowance for loan losses | 2,604 | 2,262 | 2,604 | 2,262 | 2,604 | 2,264 |
Commercial Portfolio Segment [Member] | ||||||
Beginning balance | 1,552 | 1,053 | 1,251 | 940 | ||
Provision for loan losses | 376 | 44 | 658 | 157 | ||
Recoveries of loans previously charged off | 1 | 20 | ||||
Total ending allowance balance | 1,929 | 1,097 | 1,929 | 1,097 | ||
Loans, individually evaluated for impairment | 714 | 798 | ||||
Loans, collectively evaluated for impairment | 144,337 | 99,726 | ||||
Total loans | 145,051 | 100,524 | ||||
Allowance for loan losses, individually evaluated for impairment | 300 | 158 | ||||
Allowance for loan losses, collectively evaluated for impairment | 1,629 | 1,093 | ||||
Total allowance for loan losses | 1,929 | 1,097 | 1,929 | 1,097 | 1,929 | 1,251 |
Residential Real Estate and Consumer [Member] | ||||||
Beginning balance | 990 | 1,199 | 1,013 | 1,178 | ||
Provision for loan losses | (316) | 1 | (343) | 43 | ||
Loans charged off | (36) | (57) | ||||
Recoveries of loans previously charged off | 1 | 1 | 5 | 1 | ||
Total ending allowance balance | 675 | 1,165 | 675 | 1,165 | ||
Loans, individually evaluated for impairment | 1,634 | 1,457 | ||||
Loans, collectively evaluated for impairment | 59,088 | 89,761 | ||||
Total loans | 60,722 | 91,218 | ||||
Allowance for loan losses, individually evaluated for impairment | 77 | |||||
Allowance for loan losses, collectively evaluated for impairment | 675 | 936 | ||||
Total allowance for loan losses | $ 675 | $ 1,165 | $ 675 | $ 1,165 | $ 675 | $ 1,013 |
Loans (Impaired Financing Recei
Loans (Impaired Financing Receivable) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Principal balance with related allowance | $ 712 | $ 1,144 |
Recorded investment with related allowance | 704 | 1,132 |
Related allowance | 300 | 235 |
Average investment with related allowance | 713 | 1,152 |
Interest recognized with related allowance | 19 | |
Principal balance with no related allowance | 1,723 | 1,225 |
Recorded investment with no related allowance | 1,645 | 1,123 |
Average investment with no related allowance | 1,734 | 1,160 |
Interest recognized with no related allowance | 3 | 10 |
Impaired Financing Receivable, Unpaid Principal Balance, Total | 2,435 | 2,369 |
Impaired Financing Receivable, Recorded Investment, Total | 2,349 | 2,255 |
Impaired Financing Receivable, Average Recorded Investment, Total | 2,447 | 2,312 |
Impaired Financing Receivable, Interest Income, Accrual Method, Total | 3 | 29 |
Commercial and Industrial [Member] | Commercial Portfolio Segment [Member] | ||
Principal balance with related allowance | 712 | 729 |
Recorded investment with related allowance | 704 | 729 |
Related allowance | 300 | 158 |
Average investment with related allowance | 713 | 740 |
Interest recognized with related allowance | 19 | |
Principal balance with no related allowance | 12 | 73 |
Recorded investment with no related allowance | 10 | 69 |
Average investment with no related allowance | 13 | 77 |
Interest recognized with no related allowance | 5 | |
One-to-Four Family Owner-occupied [Member] | Residential Real Estate and Consumer [Member] | ||
Principal balance with no related allowance | 913 | 795 |
Recorded investment with no related allowance | 910 | 744 |
Average investment with no related allowance | 916 | 754 |
Interest recognized with no related allowance | 3 | 5 |
One-to-Four Family Investor-owned [Member] | Residential Real Estate and Consumer [Member] | ||
Principal balance with related allowance | 415 | |
Recorded investment with related allowance | 403 | |
Related allowance | 77 | |
Average investment with related allowance | 412 | |
Principal balance with no related allowance | 738 | 243 |
Recorded investment with no related allowance | 665 | 221 |
Average investment with no related allowance | 742 | 231 |
Consumer [Member] | Residential Real Estate and Consumer [Member] | ||
Principal balance with no related allowance | 60 | 114 |
Recorded investment with no related allowance | 60 | 89 |
Average investment with no related allowance | $ 63 | $ 98 |
Loans (Credit Quality Indicator
Loans (Credit Quality Indicators) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Total loans for credit quality indicators | $ 174,702 | $ 158,132 |
Pass [Member] | ||
Total loans for credit quality indicators | 173,249 | 154,130 |
Special Mention [Member] | ||
Total loans for credit quality indicators | 3,364 | |
Substandard [Member] | ||
Total loans for credit quality indicators | 1,453 | 638 |
Commercial Portfolio Segment [Member] | Development [Member] | ||
Total loans for credit quality indicators | 17,189 | 18,222 |
Commercial Portfolio Segment [Member] | Development [Member] | Pass [Member] | ||
Total loans for credit quality indicators | 17,189 | 18,222 |
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | ||
Total loans for credit quality indicators | 73,652 | 68,621 |
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Pass [Member] | ||
Total loans for credit quality indicators | 73,652 | 68,036 |
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | Special Mention [Member] | ||
Total loans for credit quality indicators | 585 | |
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | ||
Total loans for credit quality indicators | 25,044 | 13,681 |
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Pass [Member] | ||
Total loans for credit quality indicators | 24,249 | 10,888 |
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Special Mention [Member] | ||
Total loans for credit quality indicators | 2,779 | |
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | Substandard [Member] | ||
Total loans for credit quality indicators | 795 | 14 |
Residential Real Estate and Consumer [Member] | ||
Total loans for credit quality indicators | 31,145 | 33,610 |
Residential Real Estate and Consumer [Member] | Performing Financial Instruments [Member] | ||
Total loans for credit quality indicators | 31,145 | 32,777 |
Residential Real Estate and Consumer [Member] | Nonperforming Financial Instruments [Member] | ||
Total loans for credit quality indicators | 833 | |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | ||
Total loans for credit quality indicators | 27,891 | 29,380 |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | Performing Financial Instruments [Member] | ||
Total loans for credit quality indicators | 27,891 | 28,636 |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | Nonperforming Financial Instruments [Member] | ||
Total loans for credit quality indicators | 744 | |
Residential Real Estate and Consumer [Member] | Consumer [Member] | ||
Total loans for credit quality indicators | 3,254 | 4,230 |
Residential Real Estate and Consumer [Member] | Consumer [Member] | Performing Financial Instruments [Member] | ||
Total loans for credit quality indicators | 3,254 | 4,141 |
Residential Real Estate and Consumer [Member] | Consumer [Member] | Nonperforming Financial Instruments [Member] | ||
Total loans for credit quality indicators | 89 | |
Residential Real Estate and Consumer [Member] | One-to-Four Family Investor-owned [Member] | ||
Total loans for credit quality indicators | 29,652 | 28,077 |
Residential Real Estate and Consumer [Member] | One-to-Four Family Investor-owned [Member] | Pass [Member] | ||
Total loans for credit quality indicators | 28,994 | 27,453 |
Residential Real Estate and Consumer [Member] | One-to-Four Family Investor-owned [Member] | Substandard [Member] | ||
Total loans for credit quality indicators | 658 | 624 |
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | ||
Total loans for credit quality indicators | 29,165 | 29,531 |
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | Pass [Member] | ||
Total loans for credit quality indicators | $ 29,165 | $ 29,531 |
Loans (Loans Aging Information)
Loans (Loans Aging Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current loans | $ 205,614 | $ 191,396 |
Total loans | 205,773 | 191,742 |
Nonaccrual loans | 1,453 | 1,070 |
Financing Receivables, 30 to 89 Days Past Due [Member] | ||
Loans past due | 159 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Loans past due | 346 | |
Commercial Portfolio Segment [Member] | ||
Total loans | 145,051 | 100,524 |
Commercial Portfolio Segment [Member] | Development [Member] | ||
Current loans | 17,189 | 18,222 |
Total loans | 17,189 | 18,222 |
Commercial Portfolio Segment [Member] | Real Estate Loan [Member] | ||
Current loans | 74,283 | 68,621 |
Total loans | 74,283 | 68,621 |
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member] | ||
Current loans | 24,414 | 13,681 |
Total loans | 24,414 | 13,681 |
Nonaccrual loans | 795 | 14 |
Residential Real Estate and Consumer [Member] | ||
Total loans | 60,722 | 91,218 |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | ||
Current loans | 27,732 | 29,034 |
Total loans | 27,891 | 29,380 |
Nonaccrual loans | 346 | |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | Financing Receivables, 30 to 89 Days Past Due [Member] | ||
Loans past due | 159 | |
Residential Real Estate and Consumer [Member] | One-to-Four Family Owner-occupied [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Loans past due | 346 | |
Residential Real Estate and Consumer [Member] | One-to-Four Family Investor-owned [Member] | ||
Current loans | 29,577 | 28,077 |
Total loans | 29,577 | 28,077 |
Nonaccrual loans | 658 | 624 |
Residential Real Estate and Consumer [Member] | Multifamily Loan [Member] | ||
Current loans | 29,165 | 29,531 |
Total loans | 29,165 | 29,531 |
Residential Real Estate and Consumer [Member] | Consumer [Member] | ||
Current loans | 3,254 | 4,230 |
Total loans | $ 3,254 | 4,230 |
Nonaccrual loans | $ 86 |
Deposits (Narrative) (Details)
Deposits (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Deposits | ||
Time deposits, at or above FDIC insurance limit | $ 10,444 | $ 21,569 |
Deposits (Composition of Deposi
Deposits (Composition of Deposits) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Deposits | ||
Non-interest bearing checking | $ 27,156 | $ 20,733 |
Interest bearing checking | 8,612 | 6,941 |
Money market | 55,451 | 46,673 |
Statement savings accounts | 11,392 | 12,359 |
Health savings accounts | 14,542 | 10,670 |
Deposits held in escrow for stock subscriptions | 52,648 | |
Certificates of deposit | 48,962 | 67,228 |
Total | $ 166,115 | $ 217,252 |
Deposits (Maturities of Certifi
Deposits (Maturities of Certificates of Deposit) (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Deposits | |
2020 | $ 9,994 |
2021 | 29,711 |
2022 | 6,814 |
2023 | 962 |
2024 | 1,106 |
2025 | 375 |
Total | $ 48,962 |
FHLB Advances (Narrative) (Deta
FHLB Advances (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
FHLB Advances | ||
FHLB advances, general debt obligations, Disclosures, Collateral Pledged | $ 147,542 | $ 147,039 |
Amount secured by FHLB stock | 574 | $ 574 |
FHLB advances, general debt obligations, amount of available unused funds | 2,416 | |
Federal funds line of credit not withdrawn | $ 7,000 |
FHLB Advances (FHLB Advances) (
FHLB Advances (FHLB Advances) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fixed rate, fixed term advances, amount | $ 10,500 | $ 7,500 |
Fixed term advances with floating spread, amount | 4,000 | 4,000 |
Total FHLB advances | $ 14,500 | $ 11,500 |
Minimum [Member] | ||
Fixed rate advances, weighted average rate | 0.00% | 1.62% |
Fixed term advances with floating spread | 1.92% | 1.69% |
Maximum [Member] | ||
Fixed rate advances, weighted average rate | (1.71%) | 2.70% |
Fixed term advances with floating spread | 2.08% | 2.09% |
FHLB Advances (Summary of Sched
FHLB Advances (Summary of Scheduled Maturities of Fixed Term FHLB Advances) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fixed rate advances, amount, 2020 | $ 5,000 | |
Adjustable rate advances, amount, 2020 | 2,000 | |
Total Amount, 2020 | 7,000 | |
Fixed rate advances, amount, 2021 | 4,000 | |
Adjustable rate advances, amount, 2021 | 2,000 | |
Total Amount, 2021 | 6,000 | |
Fixed rate advances, amount, 2022 | 1,500 | |
Total Amount, 2022 | 1,500 | |
Federal Home Loan Bank, Advances, Maturities Summary, Fixed Rate, Total | 10,500 | $ 7,500 |
Federal Home Loan Bank, Advances, Maturities Summary, Floating Rate, Total | 4,000 | 4,000 |
Total FHLB advances | $ 14,500 | $ 11,500 |
Weighted Average [Member] | ||
Fixed rate advances, weighted average rate, 2020 | 0.28% | |
Adjustable rate advances, weighted average rate, 2020 | 1.92% | |
Adjustable rate advances, weighted average rate, 2021 | 2.08% | |
Fixed rate advances, weighted average rate, 2022 | 1.71% | |
Fixed rate advances, weighted average rate | 0.38% | |
Adjustable rate advances, weighted average rate, Total | 2.00% |
Employee Stock Ownership Plan_2
Employee Stock Ownership Plan (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Stock Ownership Plan | ||
Employee Stock Ownership Plan (ESOP), number of committed-to-be-released shares | 22,941 | 9,720 |
Average fair value of per share | $ 9.20 | $ 10.47 |
Employee Stock Ownership Plan (ESOP), Compensation expense | $ 195 | $ 102 |
Employee Stock Ownership Plan_3
Employee Stock Ownership Plan (Summary of ESOP Shares) (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Employee Stock Ownership Plan | ||
Shares allocated to active participants (in shares) | 33,569 | 18,659 |
Shares committed to be released and allocated to participants (in shares) | 22,941 | 15,202 |
Shares distributed | (1,069) | |
Total unallocated shares (in shares) | 588,736 | 270,192 |
Total ESOP shares (in shares) | 644,177 | 304,053 |
Fair value of unallocated shares (based on $9.36 and $11.55 share price at September 30, 2020 and December 31, 2019, respectively) | $ | $ 5,511 | $ 3,121 |
Share price (in dollars per share) | $ / shares | $ 9.36 | $ 11.55 |
Exchange ratio applied in the offering | 1.1730 | 1.1730 |
Share-based Compensation Plan_2
Share-based Compensation Plans (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)shares | Sep. 30, 2020USD ($)shares | Dec. 31, 2019 | |
Share based awards granted | shares | 0 | 46,716 | |
Exchange ratio applied in the offering | 1.1730 | 1.1730 | |
The 2018 Equity Incentive Plan [Member] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ | $ 1.4 | $ 1.4 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 4 months 21 days | ||
The 2018 Equity Incentive Plan [Member] | Restricted Stock [Member] | |||
Share based award vesting period | 5 years | ||
The 2018 Equity Incentive Plan [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Tranche One [Member] | |||
Share based award vesting right percentage | 20.00% | ||
The 2018 Equity Incentive Plan [Member] | Employee Stock Option [Member] | |||
Share based award vesting period | 5 years | ||
Share based award expiration period | 10 years |
Share-based Compensation Plan_3
Share-based Compensation Plans (Impact of Share-based Payment Plans in Financial Statements) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cost of share-based payment plans | $ 273 | $ 249 |
Amount of related income tax benefit recognized in income | 74 | 68 |
Restricted Stock [Member] | ||
Cost of share-based payment plans | 154 | 145 |
Employee Stock Option [Member] | ||
Cost of share-based payment plans | $ 119 | $ 104 |
Share-based Compensation Plan_4
Share-based Compensation Plans (Stock Options Activity) (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | |
Stock Option Awards, Outstanding | ||
Beginning Balance (in shares) | shares | 260,510 | |
Granted (in shares) | shares | 0 | 46,716 |
Exercised (in shares) | shares | ||
Forfeited, (in shares) | shares | (32,401) | |
Ending Balance (in shares) | shares | 274,825 | 274,825 |
Vested as of September 30, 2020 (in shares) | shares | 44,414 | 44,414 |
Exercisable as of September 30, 2020 (in shares) | shares | 52,098 | 52,098 |
Stock Option Awards, Weighted Average Exercise Price | ||
Beginning Balance (in dollars per share) | $ / shares | $ 9.20 | |
Granted, (in dollars per share) | $ / shares | 9.10 | |
Exercised, (in dollars per share) | $ / shares | ||
Forfeited, (in dollars per share) | $ / shares | 9.31 | |
Ending Balance (in dollars per share) | $ / shares | $ 9.17 | 9.17 |
Vested as of September 30, 2020, (in dollars per share) | $ / shares | 8.61 | 8.61 |
Exercisable as of September 30, 2020 (in dollars per share) | $ / shares | $ 9.19 | $ 9.19 |
Stock Option Awards, Additional Disclosures | ||
Options outstanding, weighted average remaining contractual term (Year) | 8 years 5 months 19 days | |
Options outstanding, weighted average remaining contractual term, exercisable (Year) | 8 years 3 months 4 days | |
Number of Options, Nonvested | ||
Nonvested options outstanding | shares | 215,450 | |
Granted | shares | 0 | 46,716 |
Nonvested options outstanding | shares | 262,166 | 262,166 |
Nonvested Options, Weighted Average Grant Date Fair Value | ||
Nonvested options outstanding | $ / shares | $ 2.83 | |
Granted | $ / shares | 2.38 | |
Nonvested options outstanding | $ / shares | $ 2.75 | $ 2.75 |
Share-based Compensation Plan_5
Share-based Compensation Plans (Summary of Changes in Restricted Shares) (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Shares outstanding, number of shares (in shares) | shares | 90,790 |
Shares outstanding, weighted average grant date fair value (in dollars per share) | $ / shares | $ 9.20 |
Granted, number of shares (in shares) | shares | 2,500 |
Granted, weighted average grant date fair value (in dollars per share) | $ / shares | $ 9.10 |
Vested, number of shares (in shares) | shares | (18,842) |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | $ 8.61 |
Forfeited, number of shares (in shares) | shares | (12,960) |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | $ 9.31 |
Shares outstanding, number of shares (in shares) | shares | 61,488 |
Shares outstanding, weighted average grant date fair value (in dollars per share) | $ / shares | $ 9.35 |
Equity and Regulatory Matters_2
Equity and Regulatory Matters (Capital Amounts and Ratios) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Equity and Regulatory Matters | ||
Common Equity Tier 1 capital (to risk-weighted assets) | $ 73,469 | $ 50,446 |
Common Equity Tier 1 capital (to risk-weighted assets), ratio | 32.90% | 23.70% |
Common Equity Tier 1 capital (to risk-weighted assets), for capital adequacy | $ 10,055 | $ 9,591 |
Common Equity Tier 1 capital (to risk-weighted assets), for capital adequacy, ratio | 4.50% | 4.50% |
Common Equity Tier 1 capital (to risk-weighted assets), to be capitalized | $ 14,524 | $ 13,854 |
Common Equity Tier 1 capital (to risk-weighted assets), to be capitalized, ratio | 6.50% | 6.50% |
Tier 1 capital (to risk-weighted assets) | $ 73,469 | $ 50,446 |
Tier 1 capital (to risk-weighted assets), ratio | 32.90% | 23.70% |
Tier 1 capital (to risk-weighted assets), for capital adequacy | $ 13,407 | $ 12,788 |
Tier 1 capital (to risk-weighted assets), for capital adequacy, ratio | 6.00% | 6.00% |
Tier 1 capital (to risk-weighted assets), to be capitalized | $ 17,876 | $ 17,051 |
Tier 1 capital (to risk-weighted assets), to be capitalized, ratio | 8.00% | 8.00% |
Total capital (to risk-weighted assets) | $ 76,073 | $ 52,710 |
Total capital (to risk-weighted assets), ratio | 34.00% | 24.70% |
Total capital (to risk-weighted assets), for capital adequacy | $ 17,876 | $ 17,051 |
Total capital (to risk-weighted assets), for capital adequacy, ratio | 8.00% | 8.00% |
Total capital (to risk-weighted assets), to be capitalized | $ 22,345 | $ 21,313 |
Total capital (to risk-weighted assets), to be capitalized, ratio | 10.00% | 10.00% |
Tier 1 capital (to average assets) | $ 73,469 | $ 50,446 |
Tier 1 capital (to average assets), ratio | 25.90% | 19.40% |
Tier 1 capital (to average assets), for capital adequacy | $ 11,333 | $ 10,400 |
Tier 1 capital (to average assets), for capital adequacy, ratio | 4.00% | 4.00% |
Tier 1 capital (to average assets), to be capitalized | $ 14,167 | $ 13,000 |
Tier 1 capital (to average assets), to be capitalized, ratio | 5.00% | 5.00% |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Impaired financing receivable, with related allowance, recorded investment | $ 704 | $ 1,132 |
Loans, fair value | 404 | 897 |
Impaired financing receivable, related allowance | $ 300 | 235 |
Foreclosed asset, fair value | 84 | |
Residential Real Estate and Consumer [Member] | One-to-Four Family Investor-owned [Member] | ||
Impaired financing receivable, with related allowance, recorded investment | 403 | |
Impaired financing receivable, related allowance | $ 77 |
Fair Value (Fair Value of Asset
Fair Value (Fair Value of Assets on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Available for sale securities | $ 60,565 | $ 48,179 |
Fair Value, Measurements, Recurring [Member] | ||
Available for sale securities | 60,565 | 48,179 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available for sale securities | $ 60,565 | $ 48,179 |
Fair Value (Fair Value of Ass_2
Fair Value (Fair Value of Assets on Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Loans, fair value | $ 404 | $ 897 |
Foreclosed asset, fair value | 84 | |
Fair Value, Measurements, Nonrecurring [Member] | ||
Loans, fair value | 404 | 897 |
Foreclosed asset, fair value | 84 | |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Loans, fair value | $ 404 | 897 |
Foreclosed asset, fair value | $ 84 |
Fair Value (Quantitative Inform
Fair Value (Quantitative Information) (Details) $ in Thousands | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 404 | $ 897 |
Foreclosed assets | 84 | |
Measurement Input, Discount Rate [Member] | Valuation, Market and Income Approach [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | 404 | 897 |
Foreclosed assets | $ 0 | $ 84 |
Measurement Input, Discount Rate [Member] | Valuation, Market and Income Approach [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, measurement input | 0.10 | 0.10 |
Foreclosed assets, measurement input | 0.10 | 0.10 |
Measurement Input, Discount Rate [Member] | Valuation, Market and Income Approach [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, measurement input | 0.20 | 0.20 |
Foreclosed assets, measurement input | 0.20 | 0.20 |
Fair Value (Carrying Value and
Fair Value (Carrying Value and Estimated Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Estimated fair value | $ 60,565 | $ 48,179 |
Reported Value Measurement [Member] | ||
Cash and cash equivalents | 7,439 | 39,377 |
Estimated fair value | 60,565 | 48,179 |
Loans held for sale | 776 | 200 |
Loans | 202,642 | 189,291 |
Accrued interest receivable | 996 | 725 |
Cash value of life insurance | 7,220 | 7,068 |
Other equity investments | 780 | 780 |
Deposits | 166,115 | 217,252 |
Advance payments by borrowers for taxes and insurance | 910 | 46 |
FHLB advances | 14,500 | 11,500 |
Accrued interest payable | 436 | 51 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Cash and cash equivalents | 7,439 | 39,377 |
Accrued interest receivable | 996 | 725 |
Deposits | 117,153 | 150,024 |
Advance payments by borrowers for taxes and insurance | 910 | 46 |
Accrued interest payable | 436 | 51 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Estimated fair value | 60,565 | 48,179 |
Loans held for sale | 776 | 200 |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Loans | 206,179 | 190,561 |
Cash value of life insurance | 7,220 | 7,068 |
Other equity investments | 780 | 780 |
Deposits | 49,272 | 67,391 |
FHLB advances | $ 14,551 | $ 11,509 |