Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 04, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | F&M BANK CORP | |
Entity Central Index Key | 0000740806 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2020 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Common Stock Shares Outstanding | 3,196,103 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-13273 | |
Entity Incorporation State Country Code | VA | |
Entity Tax Identification Number | 54-1280811 | |
Entity Address Address Line 1 | P. O. Box 1111 | |
Entity Address City Or Town | Timberville | |
Entity Address State Or Province | VA | |
Entity Address Postal Zip Code | 22853 | |
City Area Code | 540 | |
Local Phone Number | 896-8941 | |
Security 12b Title | Common Stock, par value $5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 16,947 | $ 8,119 |
Money market funds and interest-bearing deposits in other banks | 1,203 | 1,126 |
Federal funds sold | 68,548 | 66,559 |
Cash and cash equivalents | 86,698 | 75,804 |
Securities: | ||
Held to maturity, at amortized cost - fair value of $125 and $124 in 2020 and 2019, respectively | 125 | 124 |
Available for sale, at fair value | 81,044 | 4,366 |
Other investments | 12,212 | 13,525 |
Loans held for sale, at fair value | 90,602 | 66,798 |
Loans held for investment | 661,529 | 603,425 |
Less: allowance for loan losses | (10,033) | (8,390) |
Net loans held for investment | 651,496 | 595,035 |
Other real estate owned, net | 1,160 | 1,489 |
Bank premises and equipment, net | 18,295 | 18,931 |
Bank premises held for sale | 520 | 0 |
Interest receivable | 2,640 | 2,044 |
Goodwill | 2,884 | 2,884 |
Bank owned life insurance | 20,345 | 20,050 |
Other assets | 13,581 | 12,949 |
Total assets | 981,602 | 813,999 |
Deposits: | ||
Noninterest bearing | 225,130 | 168,715 |
Interest bearing | 541,522 | 472,994 |
Total deposits | 766,652 | 641,709 |
Short-term debt | 0 | 10,000 |
Other liabilities | 22,307 | 17,514 |
Long-term debt | 100,585 | 53,201 |
Total liabilities | 889,544 | 722,424 |
Commitments and contingencies | 0 | 0 |
Stockholders' Equity | ||
Preferred Stock $25 par value, 400,000 shares authorized, 206,660 issued and outstanding for June 30, 2020 and December 31, 2019 | 4,592 | 4,592 |
Common stock, $5 par value, 6,000,000 shares authorized, 3,195,938 and 3,208,498 shares issued and outstanding for June 30, 2020 and December 31, 2019, respectively. | 15,980 | 16,042 |
Additional paid in capital - common stock | 6,744 | 7,510 |
Retained earnings | 68,018 | 66,008 |
Non-controlling interest in consolidated subsidiaries | 0 | 634 |
Accumulated other comprehensive loss | (3,276) | (3,211) |
Total stockholders' equity | 92,058 | 91,575 |
Total liabilities and stockholders' equity | $ 981,602 | $ 813,999 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Held to maturity - fair value | $ 125 | $ 124 |
Stockholders' Equity | ||
Common stock, shares par value | $ 5 | $ 5 |
Common stock, shares authorized | 6,000,000 | 6,000,000 |
Common stock, shares issued | 3,195,938 | 3,208,498 |
Common stock, shares outstanding | 3,195,938 | 3,208,498 |
Preferred stock, shares par value | $ 25 | $ 25 |
Preferred stock, shares authorized | 400,000 | 400,000 |
Preferred stock, shares issued | 206,660 | 206,660 |
Preferred stock, shares outstanding | 206,660 | 206,660 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest and Dividend income | ||||
Interest and fees on loans held for investment | $ 8,544,000 | $ 9,107,000 | $ 16,996,000 | $ 18,194,000 |
Interest and fees on loans held for sale | 323,000 | 497,000 | 593,000 | 823,000 |
Interest from money market funds and federal funds sold | 24,000 | 40,000 | 321,000 | 53,000 |
Interest on debt securities - taxable | 101,000 | 138,000 | 192,000 | 243,000 |
Total interest and dividend income | 8,992,000 | 9,782,000 | 18,102,000 | 19,313,000 |
Interest expense | ||||
Total interest on deposits | 1,159,000 | 1,258,000 | 2,611,000 | 2,359,000 |
Interest from short-term debt | 0 | 216,000 | 41,000 | 419,000 |
Interest from long-term debt | 226,000 | 252,000 | 439,000 | 446,000 |
Total interest expense | 1,385,000 | 1,726,000 | 3,091,000 | 3,224,000 |
Net interest income | 7,607,000 | 8,056,000 | 15,011,000 | 16,089,000 |
Provision for Loan Losses | 800,000 | 1,600,000 | 2,300,000 | 3,050,000 |
Net Interest Income After Provision for Loan Losses | 6,807,000 | 6,456,000 | 12,711,000 | 13,039,000 |
Noninterest income | ||||
Service charges on deposit accounts | 225,000 | 417,000 | 586,000 | 803,000 |
Investment services and insurance income, net | 173,000 | 171,000 | ||
Investment services and insurance income | 358,000 | 322,000 | ||
Mortgage banking income, net | 1,971,000 | 815,000 | 2,900,000 | 1,345,000 |
Title insurance income | 472,000 | 406,000 | 843,000 | 682,000 |
Income on bank owned life insurance | 136,000 | 149,000 | 287,000 | 296,000 |
Low income housing partnership losses | (224,000) | (213,000) | (447,000) | (427,000) |
ATM and check card fees | 462,000 | 529,000 | 895,000 | 898,000 |
Other operating income | 143,000 | 201,000 | 365,000 | 346,000 |
Total noninterest income | 3,358,000 | 2,475,000 | 5,787,000 | 4,265,000 |
Noninterest expense | ||||
Salaries | 2,932,000 | 2,633,000 | 5,944,000 | 5,466,000 |
Employee benefits | 1,202,000 | 1,444,000 | 2,224,000 | 2,634,000 |
Occupancy expense | 305,000 | 291,000 | 572,000 | 571,000 |
Equipment expense | 290,000 | 294,000 | 596,000 | 563,000 |
FDIC insurance assessment | 94,000 | 84,000 | 189,000 | 166,000 |
Other real estate owned, net | 121,000 | 25,000 | 140,000 | 299,000 |
Marketing expense | 174,000 | 139,000 | 304,000 | 287,000 |
Legal and professional fees | 132,000 | 196,000 | 281,000 | 350,000 |
ATM and check card fees | 270,000 | 213,000 | 513,000 | 406,000 |
Telecommunication and data processing expense | 542,000 | 426,000 | 1,079,000 | 788,000 |
Directors fees | 113,000 | 102,000 | 229,000 | 204,000 |
Bank franchise tax | 189,000 | 152,000 | 384,000 | 283,000 |
Impairment on long lived assets | 19,000 | 0 | 19,000 | 0 |
Other operating expenses | 901,000 | 1,093,000 | 1,930,000 | 2,105,000 |
Total noninterest expense | 7,284,000 | 7,092,000 | 14,404,000 | 14,122,000 |
Income before income taxes | 2,881,000 | 1,839,000 | 4,094,000 | 3,182,000 |
Income tax expense | 211,000 | 153,000 | 173,000 | 232,000 |
Net Income | 2,670,000 | 1,686,000 | 3,921,000 | 2,950,000 |
Net income attributable to non-controlling interest | 43,000 | 51,000 | 105,000 | 29,000 |
Net Income attributable to F & M Bank Corp. | 2,627,000 | 1,635,000 | 3,816,000 | 2,921,000 |
Dividends paid/accumulated on preferred stock | 66,000 | 79,000 | 132,000 | 157,000 |
Net income available to common stockholders | $ 2,561,000 | $ 1,556,000 | $ 3,684,000 | $ 2,764,000 |
Per Common Share Data | ||||
Net income - basic | $ 0.80 | $ 0.49 | $ 1.15 | $ 0.86 |
Net income - diluted | 0.77 | 0.47 | 1.11 | 0.84 |
Cash dividends on common stock | $ 0.26 | $ 0.25 | $ 0.52 | $ 0.50 |
Weighted average common shares outstanding - basic | 3,194,282 | 3,200,119 | 3,199,183 | 3,200,119 |
Weighted average common shares outstanding - diluted | 3,400,942 | 3,447,148 | 3,428,782 | 3,474,569 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Consolidated Statements of Comprehensive Income (Unaudited) | ||||
Net Income | $ 2,627 | $ 1,635 | $ 3,816 | $ 2,921 |
Other comprehensive (loss) income: | ||||
Unrealized holding (losses) gains on available-for sale securities | 80 | (33) | (82) | 113 |
Tax effect | 17 | 7 | 17 | 24 |
Unrealized holding (losses) gains, net of tax | 63 | (26) | (65) | 89 |
Total other comprehensive (loss) income | (26) | 63 | (65) | 89 |
Comprehensive income attributable to F&M Bank Corp. | 1,698 | 2,601 | 3,751 | 3,010 |
Comprehensive income (loss) attributable to noncontrolling interests | 51 | 43 | 105 | 29 |
Total comprehensive income | $ 1,749 | $ 2,644 | $ 3,856 | $ 3,039 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Noncontrolling Interest | Accumulated Other Comprehensive Loss |
Balance, amount at Dec. 31, 2018 | $ 91,911,000 | $ 5,672,000 | $ 16,066,000 | $ 7,987,000 | $ 65,596,000 | $ 559,000 | $ (3,969,000) |
Net income | 2,950,000 | 0 | 0 | 0 | 2,921,000 | 29,000 | 0 |
Other comprehensive income | 89,000 | 0 | 0 | 0 | 0 | 0 | 89,000 |
Dividends on preferred stock ($1.488 per share) | (157,000) | 0 | 0 | 0 | (157,000) | 0 | 0 |
Dividends on common stock ($.80 per share) | (1,619,000) | 0 | 0 | 0 | (1,619,000) | 0 | 0 |
Common stock repurchased (22,583 shar | (1,187,000) | 0 | (190,000) | (997,000) | 0 | 0 | 0 |
Preferred converted to Common (2,000 pfd shares) | 0 | (50,000) | 11,000 | 39,000 | 0 | 0 | 0 |
Common stock issued (7,494 shares) | 129,000 | 0 | 20,000 | 109,000 | 0 | 0 | 0 |
Preferred stock repurchased (1,200 shares) | (41,000) | (30,000) | 0 | (11,000) | 0 | 0 | 0 |
Balance, amount at Jun. 30, 2019 | 92,075,000 | 5,592,000 | 15,907,000 | 7,127,000 | 66,741,000 | 588,000 | (3,880,000) |
Balance, amount at Mar. 31, 2019 | 91,975,000 | 5,592,000 | 16,019,000 | 7,707,000 | 66,063,000 | 537,000 | (3,943,000) |
Net income | 1,686,000 | 0 | 0 | 0 | 1,635,000 | 51,000 | 0 |
Other comprehensive income | 63,000 | 0 | 0 | 0 | 0 | 0 | 63,000 |
Dividends on preferred stock ($1.488 per share) | (158,000) | 0 | 0 | 0 | (158,000) | 0 | 0 |
Dividends on common stock ($.80 per share) | (799,000) | 0 | 0 | 0 | (799,000) | 0 | 0 |
Common stock repurchased (22,583 shar | (766,000) | 0 | (124,000) | (642,000) | 0 | 0 | 0 |
Common stock issued (7,494 shares) | 74,000 | 0 | 12,000 | 62,000 | 0 | 0 | 0 |
Balance, amount at Jun. 30, 2019 | 92,075,000 | 5,592,000 | 15,907,000 | 7,127,000 | 66,741,000 | 588,000 | (3,880,000) |
Balance, amount at Dec. 31, 2019 | 91,575,000 | 4,592,000 | 16,042,000 | 7,510,000 | 66,008,000 | 634,000 | (3,211,000) |
Net income | 3,921,000 | 0 | 0 | 0 | 3,816,000 | 105,000 | 0 |
Other comprehensive income | (65,000) | 0 | 0 | 0 | 0 | 0 | (65,000) |
Dividends on preferred stock ($1.488 per share) | (132,000) | 0 | 0 | 0 | (132,000) | 0 | 0 |
Distributions to noncontrolling interest | (177,000) | (177,000) | |||||
Dividends on common stock ($.80 per share) | (1,674,000) | 0 | 0 | 0 | (1,674,000) | 0 | 0 |
Common stock repurchased (22,583 shar | (473,000) | 0 | (92,000) | (381,000) | 0 | 0 | 0 |
Common stock issued (7,494 shares) | 133,000 | 0 | 30,000 | 103,000 | 0 | 0 | 0 |
Purchase of noncontrolling interest | (1,050,000) | 0 | 0 | (488,000) | 0 | (562,000) | 0 |
Preferred stock repurchased (1,200 shares) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Balance, amount at Jun. 30, 2020 | 92,058,000 | 4,592,000 | 15,980,000 | 6,744,000 | 68,018,000 | 0 | (3,276,000) |
Balance, amount at Mar. 31, 2020 | 91,434,000 | 4,592,000 | 15,962,000 | 7,184,000 | 66,297,000 | 649,000 | (3,250,000) |
Net income | 2,670,000 | 0 | 0 | 0 | 2,627,000 | 43,000 | 0 |
Other comprehensive income | (26,000) | 0 | 0 | 0 | 0 | (26,000) | |
Dividends on preferred stock ($1.488 per share) | (66,000) | 0 | 0 | 0 | (66,000) | 0 | 0 |
Distributions to noncontrolling interest | (130,000) | (130,000) | |||||
Dividends on common stock ($.80 per share) | (840,000) | 0 | 0 | 0 | (840,000) | 0 | 0 |
Common stock issued (7,494 shares) | 66,000 | 0 | 18,000 | 48,000 | 0 | 0 | 0 |
Purchase of noncontrolling interest | (1,050,000) | 0 | 0 | (488,000) | 0 | (562,000) | 0 |
Balance, amount at Jun. 30, 2020 | $ 92,058,000 | $ 4,592,000 | $ 15,980,000 | $ 6,744,000 | $ 68,018,000 | $ 0 | $ (3,276,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 3,921,000 | $ 2,950,000 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 639,000 | 603,000 |
Amortization of intangibles | 26,000 | 41,000 |
Amortization of securities | 12,000 | 1,000 |
Proceeds from loans held for sale originated | 80,574,000 | 55,011,000 |
Loans held for sale originated | (95,369,000) | (53,685,000) |
Gain on sale of loans held for sale originated | (2,400,000) | (1,326,000) |
Provision for loan losses | 2,300,000 | 3,050,000 |
(Increase) in interest receivable | (596,000) | (69,000) |
(Increase) in other assets | (420,000) | (752,000) |
Increase in other liabilities | 4,264,000 | 1,372,000 |
Amortization of limited partnership investments | 447,000 | 427,000 |
Income from life insurance investment | (303,000) | (296,000) |
(Gain) loss on the sale of fixed assets | (14,000) | 10,000 |
Loss on sale and valuation adjustments for other real estate owned and bank premises held for sale | 150,000 | 274,000 |
Net cash (used in) provided by operating activities | (6,874,000) | 7,582,000 |
Cash flows from investing activities | ||
Purchase of investments available for sale and other investments | (79,003,000) | (2,054,000) |
Proceeds from maturity of investments available for sale | 2,230,000 | 59,000 |
Proceeds from the redemption of restricted stock, net | 866,000 | 0 |
Purchase of investments held to maturity | (125,000) | 0 |
Proceeds from maturity of investments held to maturity | 125,000 | 0 |
Net (increase) decrease in loans held for investment | 58,761,000 | 92,000 |
Net (increase) in loans held for sale participations | (6,609,000) | (22,496,000) |
Proceeds from the sale of fixed assets | 34,000 | 0 |
Proceeds from the sale of other real estate owned | 199,000 | 260,000 |
Cash paid for noncontrolling interest | (806,000) | 0 |
Net purchase of property and equipment | (563,000) | (1,428,000) |
Net cash (used) in investing activities | (142,413,000) | (25,567,000) |
Cash flows from financing activities | ||
Net change in deposits | 124,943,000 | 17,145,000 |
Net change in short-term debt | (10,000,000) | (116,000) |
Dividends paid in cash | (1,806) | (1,776) |
Proceeds from issuance of common stock | 133,000 | 129,000 |
Repurchase of preferred stock | 0 | (41,000) |
Repurchase of common stock | (473,000) | (1,187,000) |
Issuance of long-term debt | 59,603,000 | 10,000,000 |
Repayments of long-term debt | (12,219,000) | (2,301,000) |
Net cash provided by financing activities | 160,181,000 | 21,853,000 |
Net increase in Cash and Cash Equivalents | 10,894,000 | 3,868,000 |
Cash and cash equivalents, beginning of period | 75,804,000 | 10,912,000 |
Cash and cash equivalents, end of period | 86,698,000 | 14,780,000 |
Supplemental Cash Flow information: | ||
Cash paid for: Interest | 3,106 | 3,201 |
Cash paid for: Taxes | 275,000 | 0 |
Supplemental non-cash disclosures: | ||
Change in unrealized (loss) gain on securities available for sale | (82,000) | 113,000 |
Right of Use asset and lease liability, upon adoption | 0 | 1,034,000 |
Bank premises and equipment transferred to held for sale | 520,000 | 0 |
Liability to former noncontrolling interest for remainder of purchase price | $ 244,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Note 1. Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC (dba F&M Mortgage), (net of non-controlling interest) and VSTitle, LLC and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). On May 1, 2020 the Bank purchased the noncontrolling interest of VBS Mortgage, LLC. Accordingly, these financial statements do not include all of the information and footnotes required by U. S. GAAP for complete financial statements. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). During the second quarter of 2020, the Company purchased the minority interest in F&M Mortgage. The accompanying unaudited consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Nature of Operations The Company, through its subsidiary Farmers & Merchants Bank (the “Bank”), operates under a charter issued by the Commonwealth of Virginia and provides commercial banking services. As a state chartered bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve Bank. The Bank provides services to customers primarily located in Rockingham, Shenandoah, Page and Augusta Counties in Virginia. Services are provided at eleven (as of August 1, 2020) branch offices and a Dealer Finance Division. The Company offers insurance, mortgage lending, title insurance and financial services through its subsidiaries, TEB Life Insurance, Inc., Farmers & Merchants Financial Services, Inc. (FMFS), F&M Mortgage, and VSTitle, LLC (VST). Basis of Presentation The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, fair value, and pension accounting and the valuation of foreclosed real estate. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the results of operations in these financial statements, have been made. Risk and Uncertainties The coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. The government and private sector responses to contain its spread began to significantly affect our operating businesses in March with branch lobby closings, operations and administrative staff working remotely and the use of virtual meetings. These changes will likely affect our operations throughout the remainder of 2020, although the extent and significance are unknown. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic that may affect our future earnings, cash flows and financial condition include the nature and duration of the long-term effect on our borrowers’ ability to repay. Accordingly, significant estimates used in the preparation of our financial statements including those associated with evaluations of goodwill for impairment, and allowance for loan losses may be subject to adjustments in future periods. Reclassification Certain reclassifications have been made to prior period amounts to conform to current period presentation. None of these reclassifications are considered material and have no impact on net income. Note 1. Summary of Significant Accounting Policies, continued Earnings per Share Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. In calculating diluted EPS, net income available to common stockholders is used as the numerator and the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per share calculation for the three and six month periods ended June 30, 2020 and 2019. Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared. The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented: For the Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2020 June 30, 2020 June 30, 2019 June 30, 2019 Earnings available to com mon stockholders: Net income $ 3,921 $ 2,670 $ 2,950 $ 1,686 Non-controlling interest income (loss) 105 43 29 51 Preferred stock dividends 132 66 157 79 Net income available to common stockholders $ 3,684 $ 2,561 $ 2,764 $ 1,556 The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated: Six months ended June 30, 2020 Six months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,684 3,199,183 $ 1.15 $ 2,764 3,200,119 $ .86 Effect of Dilutive Securities: Convertible Preferred Stock 132 229,599 (.04 ) 157 274,450 (.02 ) Diluted EPS $ 3,816 3,428,782 $ 1.11 $ 2,921 3,474,569 $ .84 Three months ended June 30, 2020 Three months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 2,561 3,194,282 $ .80 $ 1,556 3,200,119 $ .49 Effect of Dilutive Securities: Convertible Preferred Stock 66 206,660 (.04 ) 79 247,029 (.02 ) Diluted EPS $ 2,627 3,400,942 $ .77 $ 1,635 3,447,148 $ .47 |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2020 | |
Investment Securities | |
Note 2. Investment Securities | Note 2. Investment Securities Investment securities available for sale are carried in the consolidated balance sheets at their approximate fair value. Investment securities held to maturity are carried in the consolidated balance sheets at their amortized cost at June 30, 2020 and December 31, 2019 are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2020 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2019 U. S. Treasuries $ 124 $ - $ - $ 124 The amortized cost and fair value of securities available for sale are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2020 U. S. Treasuries $ 3,000 $ - $ - $ 3,000 U. S. Government sponsored enterprises 21,003 5 - 21,008 Securities issued by States and political subdivisions in the U.S. 8,876 86 (11 ) 8,951 Mortgage-backed obligations of federal agencies 45,211 10 (225 ) 44,996 Corporate debt security 3,045 44 - 3,089 Total Securities Available for Sale $ 81,135 $ 145 $ (236 ) $ 81,044 December 31, 2019 U. S. Government sponsored enterprises $ 2,000 $ - $ (11 ) $ 1,989 Mortgage-backed obligations of federal agencies 317 2 - 319 Corporate debt security 2,059 - (1 ) 2,058 Total Securities Available for Sale $ 4,376 $ 2 $ (12 ) $ 4,366 The amortized cost and fair value of securities at June 30, 2020, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities Held to Maturity Securities Available for Sale Amortized Fair Amortized Fair (dollars in thousands) Cost Value Cost Value Due in one year or less $ 125 $ 125 $ 3,000 $ 3,000 Due after one year through five years - - 18,551 18,601 Due after five years - - 16,019 16,029 Due after ten years - - 43,565 43,414 Total $ 125 $ 125 $ 81,135 $ 81,044 There were no sales of available for sale securities in the first or second quarters of 2020 or 2019. Securities held that are U.S. Agency and Government Sponsored Entities and Agency MBS which carry an implicit government guarantee and are not subject to other than temporary impairment evaluation. Other securities were reviewed for impairment and there were no securities with other than temporary impairment. Note 2. Investment Securities, continued A summary of unrealized losses (in thousands) and the length of time in a continuous loss position, by security type of June 30, 2020 and December 31, 2019 were as follows: Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2020 Securities issued by States and political subdivisions in the U.S. $ 21,008 $ (11 ) $ - $ - $ 21,008 $ (11 ) Mortgage-backed obligations of federal agencies 44,996 (225 ) - - 44,996 (225 ) Total $ 66,004 $ (236 ) $ - $ - $ 66,004 $ (236 ) Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2019 U. S. Government sponsored enterprises $ 1,989 $ (11 ) $ - $ - $ 1,989 $ (11 ) Corporate debt security 2,058 (1 ) - - 2,058 (1 ) Total $ 4,047 $ (12 ) $ - $ - $ 4,047 $ (12 ) As of June 30, 2020, other investments consist of investments in twenty low-income housing and historic equity partnerships (carrying basis of $8,082), stock in the Federal Home Loan Bank (carrying basis $2,526 and various other investments (carrying basis $1,604). The interests in low-income housing and historic equity partnerships have limited transferability and the interests in the other stocks are restricted as to sales. The fair values of these securities are estimated to approximate their carrying value as of June 30, 2020. At June 30, 2020, the Company was committed to invest an additional $2,831 in six low-income housing limited partnerships. These funds will be paid as requested by the general partner to complete the projects. This additional investment has been reflected in the above carrying basis and in other liabilities on the consolidated balance sheet. The Company does not have any pledged securities. |
Loans
Loans | 6 Months Ended |
Jun. 30, 2020 | |
Loans | |
Note 3. Loans | Note 3. Loans As of June 30, 2020, we had executed 922 modifications allowing principal and interest deferrals of no more than 6 months in connection with COVID-19 relief. Of those, 155 of those modifications remain in deferral as of June 30, 2020 with balances of $24.5 million. These modifications and deferrals were not considered troubled debt restructurings pursuant to interagency guidance issued in March 2020 and the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. Loans held for investment outstanding at June 30, 2020 and December 31, 2019 are summarized as follows: (dollars in thousands) 2020 2019 Construction/Land Development $ 73,783 $ 77,131 Farmland 36,966 29,718 Real Estate 172,205 178,267 Multi-Family 6,065 5,364 Commercial Real Estate 128,763 129,850 Home Equity – closed end 9,069 9,523 Home Equity – open end 46,510 47,774 Commercial & Industrial – Non-Real Estate 90,103 33,535 Consumer 10,072 10,165 Dealer Finance 85,257 78,976 Credit Cards 2,736 3,122 Total $ 661,529 $ 603,425 The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $170,970 and $178,253 as of June 30, 2020 and December 31, 2019, respectively. The Company maintains a blanket lien on certain loans in its residential real estate, commercial and home equity portfolios. Note 3. Loans, continued Loans held for sale consists of loans originated by F&M Mortgage for sale in the secondary market, and the Bank’s commitment to purchase residential mortgage loan participations from Northpointe Bank. The volume of loans purchased from Northpointe fluctuates due to a number of factors including changes in secondary market rates, which affects demand for mortgage loans; the number of participating banks involved in the program; the number of mortgage loan originators selling loans to the lead bank and the funding capabilities of the lead bank. Loans held for sale as of June 30, 2020 and December 31, 2019 were $90,602 and $66,798, respectively. The following is a summary of information pertaining to impaired loans (dollars in thousand): June 30, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment(1) Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 1,428 $ 1,428 $ - $ 2,042 $ 2,042 $ - Farmland - - - - - - Real Estate 4,899 4,899 - 5,131 5,131 - Multi-Family - - - - - - Commercial Real Estate 2,298 2,298 - 1,302 1,302 - Home Equity – closed end 703 703 - 716 716 - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate 14 14 - 17 17 - Consumer - - - - - - Credit cards - - - - - - Dealer Finance 42 42 - 79 79 - $ 9,384 $ 9,384 - $ 9,287 $ 9,287 $ - Impaired loans with a valuation allowance Construction/Land Development 356 356 3 1,036 2,061 85 Farmland 1,774 1,774 110 1,933 1,933 537 Real Estate 9,619 9,619 617 10,404 10,404 569 Multi-Family - - - - - - Commercial Real Estate 2,840 2,840 515 638 638 213 Home Equity – closed end - - - - - - Home Equity – open end 151 151 13 151 151 151 Commercial & Industrial – Non-Real Estate - - - 192 192 192 Consumer 1 1 - 4 4 1 Credit cards - - - - - - Dealer Finance 131 131 12 136 136 7 14,872 14,872 1,270 14,494 15,519 1,755 Total impaired loans $ 24,256 $ 24,256 $ 1,270 $ 23,781 $ 24,806 $ 1,755 ______________ 1 Note 3. Loans Held for Investment, continued The following is a summary of the average investment and interest income recognized for impaired loans (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Investment Recognized Investment Recognized Investment Recognized Investment Recognized Impaired loans without a valuation allowance: Construction/Land Development $ 1,518 $ 15 $ 2,011 $ 84 $ 1,736 $ 40 $ 2,195 $ 123 Farmland 352 - 1,942 1 352 - 1,942 1 Real Estate 5,258 60 2,013 (7 ) 5,015 136 2,020 22 Multi-Family - - - - - - - - Commercial Real Estate 1,883 29 1,901 189 1,800 49 4,076 228 Home Equity – closed end - 21 360 - 358 21 360 - Home Equity – open end - - - - - - - - Commercial & Industrial – Non-Real Estate 101 - 12 - 16 - - - Consumer and credit cards 21 - - - 21 - 12 - Dealer Finance 14 1 45 (1 ) 40 2 33 - 9,147 126 8,284 266 9,338 248 10,638 374 Impaired loans with a valuation allowance: Construction/Land Development $ 356 $ - $ 2,651 $ (27 ) $ 696 $ - $ 3,445 $ 31 Farmland 964 178 - - 967 184 - - Real Estate 9,695 122 417 58 10,012 262 419 65 Multi-Family - - - - - - - - Commercial Real Estate 2,338 21 4,152 (104 ) 1,739 49 2,056 33 Home Equity – closed end 429 (10 ) - 41 76 - - 41 Home Equity – open end 76 2 - - 76 4 - - Commercial & Industrial – Non-Real Estate 35 (1 ) - 2 96 - - 1 Consumer and credit card 67 - 5 - 68 - 6 - Dealer Finance 964 1 176 5 955 5 194 9 14,924 313 7,401 (25 ) 14,685 504 6,120 180 Total Impaired Loans $ 24,071 $ 439 $ 15,685 $ 241 $ 24,023 $ 752 $ 16,758 $ 554 Note 3. Loans, continued The following table presents the aging of the recorded investment of past due loans (dollars in thousands) as of June 30, 2020 and December 31, 2019: 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing June 30, 2020 Construction/Land Development $ - $ - $ 374 $ 374 $ 73,409 $ 73,783 $ 414 $ - Farmland - 26 - 26 36,940 36,966 1,774 - Real Estate 1,421 366 558 2,345 169,860 172,205 734 - Multi-Family - - - - 6,065 6,065 - - Commercial Real Estate - 156 - 156 128,607 128,763 1,125 - Home Equity – closed end - - 31 31 9,038 9,069 - 31 Home Equity – open end 179 8 217 404 46,106 46,510 240 - Commercial & Industrial – Non- Real Estate 25 - - 25 90,078 90,103 7 - Consumer 20 1 - 21 10,051 10,072 - - Dealer Finance 839 139 24 1,002 84,255 85,257 135 6 Credit Cards 22 - - 22 2,714 2,736 - - Total $ 2,506 $ 696 $ 1,204 $ 4,406 $ 657,123 $ 661,529 $ 4,429 $ 37 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2019 Construction/Land Development $ 117 $ 45 $ 1,255 $ 1,417 $ 75,714 $ 77,131 $ 1,301 $ - Farmland 27 - 1,933 1,960 27,758 29,718 1,933 - Real Estate 2,440 1,035 837 4,312 173,955 178,267 420 619 Multi-Family - - - - 5,364 5,364 - - Commercial Real Estate 563 - 137 700 129,150 129,850 900 - Home Equity – closed end - - - - 9,523 9,523 - - Home Equity – open end 429 296 15 740 47,034 47,774 - 15 Commercial & Industrial – Non- Real Estate 726 4 - 730 32,805 33,535 203 - Consumer 89 14 - 103 10,062 10,165 1 - Dealer Finance 1,943 400 198 2,541 76,435 78,976 249 84 Credit Cards 31 - 4 35 3,087 3,122 - 4 Total $ 6,365 $ 1,794 $ 4,379 $ 12,538 $ 590,887 $ 603,425 $ 5,007 $ 722 On June 30, 2020 other real estate owned did not include any foreclosed residential real estate and December 31, 2019 included $133 of foreclosed residential real estate. The Company has $878 of consumer mortgages for which foreclosure is in process on June 30, 2020. Nonaccrual loans on June 30, 2020 would have earned approximately $52 in interest income for the quarter had they been accruing loans. |
Allowance for Loan Losses
Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for Loan Losses | |
Note 4. Allowance for Loan Losses | Note 4. Allowance for Loan Losses A summary of changes in the allowance for loan losses (dollars in thousands) for June 30, 2020 and December 31, 2019 is as follows: June 30, 2020 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,190 $ 7 $ - $ 254 $ 1,437 $ 3 $ 1,435 Farmland 668 - - (333 ) 335 110 225 Real Estate 1,573 36 4 396 1,937 617 1,319 Multi-Family 20 - - 36 56 - 56 Commercial Real Estate 1,815 - - 1,106 2,921 515 2,406 Home Equity – closed end 42 - - 18 60 - 61 Home Equity – open end 457 - - (25 ) 434 13 422 Commercial & Industrial – Non-Real Estate 585 64 10 (154 ) 377 - 377 Consumer 186 67 38 279 436 - 433 Dealer Finance 1,786 971 465 685 1,965 12 1,952 Credit Cards 68 59 30 38 77 - 78 Total $ 8,390 $ 1,204 $ 547 $ 2,300 $ 10,033 $ 1,270 $ 8,764 December 31, 2019 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 2,094 $ 2,319 $ 50 $ 1,365 $ 1,190 $ 85 $ 1,105 Farmland 15 - - 653 668 537 131 Real Estate 292 32 4 1,309 1,573 569 1,004 Multi-Family 10 - - 10 20 - 20 Commercial Real Estate 416 677 16 2,060 1,815 213 1,602 Home Equity – closed end 13 1 2 28 42 - 42 Home Equity – open end 126 126 1 456 457 151 306 Commercial & Industrial – Non-Real Estate 192 127 81 439 585 192 393 Consumer 70 116 44 188 186 1 185 Dealer Finance 1,974 2,118 1,144 786 1,786 7 1,779 Credit Cards 38 110 29 111 68 - 68 Total $ 5,240 $ 5,626 $ 1,371 $ 7,405 $ 8,390 $ 1,755 $ 6,635 Note 4. Allowance for Loan Losses, continued The following table presents the recorded investment in loans (dollars in thousands) based on impairment method as of June 30, 2020 and December 31, 2019: June 30, 2020 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 73,783 $ 1,784 $ 71,999 Farmland 36,966 1,774 35,192 Real Estate 172,205 14,518 157,687 Multi-Family 6,065 - 6,065 Commercial Real Estate 128,763 5,138 123,625 Home Equity – closed end 9,069 703 8,366 Home Equity –open end 46,510 151 46,359 Commercial & Industrial – Non-Real Estate 90,103 14 90,089 Consumer 10,072 1 10,071 Dealer Finance 85,257 173 85,084 Credit Cards 2,736 - 2,736 Total $ 661,529 $ 24,256 $ 637,273 December 31, 2019 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 77,131 $ 3,078 $ 74,053 Farmland 29,718 1,933 27,785 Real Estate 178,267 15,535 162,732 Multi-Family 5,364 - 5,364 Commercial Real Estate 129,850 1,940 127,910 Home Equity – closed end 9,523 716 8,807 Home Equity –open end 47,774 151 47,623 Commercial & Industrial – Non-Real Estate 33,535 209 33,326 Consumer 10,165 4 10,161 Dealer Finance 78,976 215 78,761 Credit Cards 3,122 - 3,122 Total $ 603,425 $ 23,781 $ 579,644 Note 4. Allowance for Loan Losses, continued The following table shows the Company’s loan portfolio broken down by internal loan grade (dollars in thousands) as of June 30, 2020 and December 31, 2019: June 30, 2020 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 146 $ 12,664 $ 39,099 $ 8,487 $ 12,390 $ 997 $ - $ 73,783 Farmland 59 489 12,922 15,974 5,080 668 1,774 - 36,966 Real Estate - 2,459 43,527 77,176 27,790 4,196 17,057 - 172,205 Multi-Family - - 1,095 3,612 1,358 - - - 6,065 Commercial Real Estate - 1,898 31,680 63,007 6,770 21,934 3,474 - 128,763 Home Equity – closed end - 176 2,703 3,669 1,240 1,250 31 - 9,069 Home Equity – open end - 1,732 18,693 20,907 3,616 826 736 - 46,510 Commercial & Industrial (Non-Real Estate) 113 1,508 8,965 13,148 65,037 1,279 53 - 90,103 Consumer (excluding dealer) 3 191 3,870 4,270 1,729 9 - - 10,072 Total $ 175 $ 8,599 $ 136,119 $ 240,862 $ 121,107 $ 42,552 $ 24,122 $ - $ 573,536 Credit Cards Dealer Finance Performing $ 2,736 $ 85,109 Non-performing - 148 Total $ 2,736 $ 85,257 Note 4. Allowance for Loan Losses, continued December 31, 2019 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 615 $ 21,904 $ 41,693 $ 8,218 $ 2,434 $ 2,267 $ - $ 77,131 Farmland 60 363 9,479 13,754 2,942 1,188 1,932 - 29,718 Real Estate - 1,900 48,308 81,371 23,876 5,635 17,177 - 178,267 Multi-Family - - 1,327 3,711 153 173 - - 5,364 Commercial Real Estate - 2,465 40,227 67,626 14,139 4,397 996 - 129,850 Home Equity – closed end - 189 2,999 3,816 1,154 1,365 - - 9,523 Home Equity – open end 17 1,965 17,789 22,705 3,769 1,198 331 - 47,774 Commercial & Industrial (Non-Real Estate) 142 2,042 12,818 15,035 2,877 373 248 - 33,535 Consumer (excluding dealer) 6 170 3,476 4,726 1,729 56 2 - 10,165 Total $ 225 $ 9,709 $ 158,327 $ 254,437 $ 58,857 $ 16,819 $ 22,953 $ - $ 521,327 Credit Cards Dealer Finance Performing $ 3,118 $ 78,529 Non-performing 4 447 Total $ 3,122 $ 78,976 Description of internal loan grades: Grade 1 – Minimal Risk Grade 2 – Modest Risk Grade 3 – Average Risk Grade 4 – Acceptable Risk Grade 5 – Marginally acceptable s Note 4. Allowance for Loan Losses, continued Grade 6 – Watch Grade 7 – Substandard Grade 8 – Doubtful Credit card and dealer finance loans are classified as performing or nonperforming. A loan is nonperforming when payments of principal and interest are past due 90 days or more. |
Employee Benefit Plan
Employee Benefit Plan | 6 Months Ended |
Jun. 30, 2020 | |
Employee Benefit Plan | |
Note 5. Employee Benefit Plan | Note 5. Employee Benefit Plan The Bank has a qualified noncontributory defined benefit pension plan which covers substantially all of its full-time employees hired before April 1, 2012. The benefits are primarily based on years of service and earnings. The Company uses December 31 st The following is a summary of net periodic pension costs for the three and six month periods ended June 30, 2020 and 2019: Six Months Ended Three Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Service cost $ 404 $ 369 $ 202 $ 184 Interest cost 209 274 105 137 Expected return on plan assets (367 ) (403 ) (183 ) (201 ) Amortization of prior service cost (6 ) (8 ) (3 ) (4 ) Amortization of net loss 111 141 55 7 Net periodic pension cost $ 351 $ 373 $ 176 $ 187 |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value | |
Note 6. Fair Value | Note 6. Fair Value The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Accounting guidance for fair value excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Note 6. Fair Value, continued The Company records fair value adjustments to certain assets and liabilities and determines fair value disclosures utilizing a definition of fair value of assets and liabilities that states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Additional considerations are involved to determine the fair value of financial assets in markets that are not active. The Company uses a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy based on these two types of inputs are as follows: Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 – Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the market. Level 3 – Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements: Securities Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. The carrying value of restricted Federal Reserve Bank and Federal Home Loan Bank stock approximates fair value based upon the redemption provisions of each entity and is therefore excluded from the following table. Loans Held for Sale During the second quarter of 2020, simultaneous with the purchase of the minority interest in F&M Mortgage, the Company elected to begin using fair value accounting for its entire portfolio of loans held for sale in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value of the Company’s loans held for sale is based on observable market prices for similar instruments traded in the secondary mortgage loan markets in which the Company conducts business. The Company’s portfolio of loans held for sale is classified as Level 2. At December 31, 2019, these loans were carried at the lower of cost or estimated fair value on an aggregate basis as determined by outstanding commitments from investors. Gains and losses on the sale of loans are recorded within mortgage banking income, net on the Consolidated Statements of Income. Derivative assets – IRLCs Beginning with the second quarter of 2020, simultaneous with the purchase of the minority interest in F&M Mortgage, the Company elected to recognize IRLCs at fair value based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate lock commitments will close. All of the Company’s IRLCs are classified as Level 2. The fair value of interest rate lock commitments was considered immaterial at December 31, 2019. Note 6. Fair Value, continued Derivative Asset/Liability – Forward Sale Commitments Beginning with the second quarter of 2020, simultaneous with the purchase of the minority interest in F&M Mortgage, the Company elected to begin using fair value accounting for its forward sales commitments related to IRLCs and LHFS. Best efforts sales commitments are entered into for loans intended for sale in the secondary market at the time the borrower commitment is made. The best efforts commitments are valued using the committed price to the counter-party against the current market price of the interest rate lock commitment or mortgage loan held for sale. All the Company’s forward sale commitments are classified Level 2. Derivative Asset/Liability – Indexed Certificate of Deposit The Company’s derivatives, which are associated with the Indexed Certificate of Deposit (ICD) product once offered, are recorded at fair value based on third party vendor supplied information using discounted cash flow analysis from observable-market based inputs, which are considered Level 2 inputs. This product is no longer offered, however there are a few certificates of deposits that have not matured. The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 (dollars in thousands): June 30, 2020 Total Level 1 Level 2 Level 3 Assets: Loans held for sale $ 90,602 $ - $ 90,602 $ - IRLC 1,012 - 1,012 - U. S. Treasury securities 3,000 - 3,000 - U. S. Government sponsored enterprises 21,008 - 21,008 - Securities issued by States and political subdivisions in the U. S. 8,951 - 8,951 - Mortgage-backed obligations of federal agencies 44,996 - 44,996 - Corporate debt securities 3,089 - 3,089 - Assets at Fair Value $ 172,658 $ - $ 172,658 $ - Liabilities: Derivatives - ICD $ 45 $ - $ 45 $ - Forward sales commitments 554 - 554 - Liabilities at Fair Value $ 599 $ - $ 599 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Assets: U. S. Government sponsored enterprises $ 1,989 $ - $ 1,989 $ - Mortgage-backed obligations of federal agencies 319 - 319 - Other debt securities 2,058 - 2,058 - Assets at Fair Value $ 4,366 $ - $ 4,366 $ - Derivatives - ICD $ 72 $ - $ 72 $ - Liabilities at Fair Value $ 72 $ - $ 72 $ - Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements: Note 6. Fair Value, continued Impaired Loans Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. Troubled debt restructurings are impaired loans. Impaired loans are measured at fair value on a nonrecurring basis. If an individually-evaluated impaired loan’s balance exceeds fair value, the amount is allocated to the allowance for loan losses. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income. The fair value of an impaired loan and measurement of associated loss is based on one of three methods: the observable market price of the loan, the present value of projected cash flows, or the fair value of the collateral. The observable market price of a loan is categorized as a Level 1 input. The present value of projected cash flows method results in a Level 3 categorization because the calculation relies on the Company’s judgment to determine projected cash flows, which are then discounted at the current rate of the loan, or the rate prior to modification if the loan is a troubled debt restructure. Loans measured using the fair value of collateral method are categorized in Level 3. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. Most collateral is real estate. The Company bases collateral method fair valuation upon the “as-is” value of independent appraisals or evaluations. The value of real estate collateral is determined by an independent appraisal utilizing an income or market valuation approach. Appraisals conducted by an independent, licensed appraiser outside of the Company as observable market data is categorized as Level 3. The value of business equipment is based upon an outside appraisal (Level 3) if deemed significant, or the net book value on the applicable business’ financial statements (Level 3) if not considered significant. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). As of June 30, 2020 and December 31, 2019, the fair value measurements for impaired loans with specific allocations were primarily based upon the fair value of the collateral. The following table summarizes the Company’s financial assets that were measured at fair value on a nonrecurring basis during the period (dollars in thousands): June 30, 2020 Total Level 1 Level 2 Level 3 Construction/Land Development $ 353 $ - $ - $ 353 Farmland 1,664 - - 1,664 Real Estate 9,002 - - 9,002 Commercial Real Estate 2,325 - - 2,325 Consumer 1 - - 1 Home Equity – open end 138 - - 138 Dealer Finance 119 - - 119 Impaired loans $ 13,602 $ - $ - $ 13,602 December 31, 2019 Total Level 1 Level 2 Level 3 Construction/Land Development $ 951 - - $ 951 Farmland 1,396 - - 1,396 Real Estate 9,835 - - 9,835 Commercial Real Estate 425 - - 425 Consumer 3 - - 3 Dealer Finance 129 - - 129 Impaired loans $ 12,739 $ - $ - $ 12,739 Note 6. Fair Value, continued The following table presents information about Level 3 Fair Value Measurements for June 30, 2020: Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 13,602 Discounted appraised value Discount for selling costs and marketability 3%-45% (Average 23.58%) Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 12,739 Discounted appraised value Discount for selling costs and marketability 0%-58.98% (Average 24.04%) Assets Held for Sale Assets held for sale were transferred from bank premises at the lower of cost less accumulated depreciation or fair value at the date of transfer. The Company periodically evaluates the value of assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the assets held for sale as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the asset held for sale a s nonrecurring Level 3. Other Real Estate Owned Certain assets such as other real estate owned (OREO) are measured at fair value less cost to sell. Valuation of other real estate owned is determined using current appraisals from independent parties, a level two input. If current appraisals cannot be obtained prior to reporting dates, or if declines in value are identified after a recent appraisal is received, appraisal values are discounted, resulting in Level 3 estimates. If the Company markets the property with a realtor, estimated selling costs reduce the fair value, resulting in a valuation based on Level 3 inputs. The Company markets other real estate owned and assets held for sale both independently and with local realtors. Properties marketed by realtors are discounted by selling costs. Properties that the Company markets independently are not discounted by selling costs. The following table summarizes the Company’s other real estate owned and assets held for sale that were measured at fair value on a nonrecurring basis as of June 30, 2020 and December 31, 2019 (dollars in thousands). June 30, 2020 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,160 $ - $ - $ 1,160 Assets held for sale $ 520 $ - $ 520 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,489 $ - $ - $ 1,489 The following table presents information about Level 3 Fair Value Measurements for June 30, 2020: Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,160 Discounted appraised value Discount for selling costs 6%-10% (Average 8%) Note 6. Fair Value, continued The following table presents information about Level 3 Fair Value Measurements for December 31, 2019: Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,489 Discounted appraised value Discount for selling costs 5%-10% (Average 8%) |
Disclosures About Fair Value of
Disclosures About Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Disclosures About Fair Value of Financial Instruments | |
Note 7. Disclosures about Fair Value of Financial Instruments | N ote 7. Disclosures about Fair Value of Financial Instruments The following presents the carrying amount, fair value and placement in the fair value hierarchy of the Company’s financial instruments as of June 30, 2020 and December 31, 2019. Fair values for June 30, 2020 and December 31, 2019 are estimated under the exit price notion in accordance with the prospective adoption of ASU 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities The estimated fair values, and related carrying amounts (dollars in thousands), of the Company’s financial instruments are as follows: Fair Value Measurements at June 30, 2020 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at June 30, 2020 Assets: Cash and cash equivalents $ 86,698 $ 86,698 $ - - $ 86,698 Securities 81,169 - 81,169 - 81,169 Loans held for sale 90,602 - 90,602 - 90,602 Loans held for investment, net 651,496 - - 638,433 638,433 Interest receivable 2,640 - 2,640 - 2,640 Bank owned life insurance 20,345 - 20,345 - 20,345 Total $ 932,920 $ 86,698 $ 194,756 $ 638,433 $ 919,887 Liabilities: Deposits $ 766,652 $ - $ 639,064 $ 131,165 $ 770,229 Short-term debt - - - - - Long-term debt 100,585 - - 101,717 101,717 Interest payable 338 - 338 - 338 Total $ 867,575 $ - $ 639,402 $ 232,882 $ 872,284 Note 7. Disclosures About Fair Value of Financial Instruments, continued Fair Value Measurements at December 31, 2019 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2019 Assets: Cash and cash equivalents $ 75,804 $ 75,804 $ - $ - $ 75,804 Securities 4,490 - 4,490 - 4,490 Loans held for sale 66,798 - 66,798 - 66,798 Loans held for investment, net 595,035 - - 580,903 580,903 Interest receivable 2,044 - 2,044 - 2,044 Bank owned life insurance 20,050 - 20,050 - 20,050 Total $ 764,221 $ 75,804 $ 93,382 $ 580,903 $ 750,089 Liabilities: Deposits $ 641,709 $ - $ 504,522 $ 139,713 $ 644,235 Short-term debt 10,000 - 10,000 - 10,000 Long-term debt 53,201 - - 53,543 53,543 Interest payable 354 - 354 - 354 Total $ 705,264 $ - $ 514,876 $ 193,256 $ 708,132 |
Troubled Debt Restructuring
Troubled Debt Restructuring | 6 Months Ended |
Jun. 30, 2020 | |
Troubled Debt Restructuring | |
Note 8. Troubled Debt Restructuring | Note 8. Troubled Debt Restructuring In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which are considered in the qualitative factors within the allowance. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance for loan loss methodology. Additionally, specific reserves may be established on restructured loans which are evaluated individually for impairment. During the six months ended June 30, 2020, there were two loan modifications that were considered to be troubled debt restructurings. One of these loans was modified during the three months ended June 30, 2020 and one loan modification that would be considered a troubled debt restructuring was modified during the first quarter of 2020. Modifications may have included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof. June 30, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 2 $ 11 $ 11 Total 2 $ 11 $ 11 Note 8. Troubled Debt Restructuring, continued On June 30, 2020, there was one loan restructured in the previous 12 months in default or on nonaccrual status. A restructured loan is considered in default when it becomes 90 days past due. June 30, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 1 $ 3 $ 3 Total 1 $ 3 $ 3 During the six months ended June 30, 2019, there were nine loan modifications that were considered to be troubled debt restructurings. Seven of these loans were modified during the three months ended June 30, 2019 and two loan modifications that would be considered a troubled debt restructuring were modified during the first quarter of 2019. Modifications may have included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof. Six months ended June 30, 2019 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Commercial Real Estate 1 $ 182 $ 182 Real Estate 1 193 193 Home Equity 1 720 720 Commercial and Industrial 1 23 23 Consumer 5 35 35 Total 9 $ 1,153 $ 1,153 On June 30, 2019, there were no loans restructured in the previous 12 months in default or on nonaccrual status. A restructured loan is considered in default when it becomes 90 days past due. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Loss | |
Note 9. Accumulated Other Comprehensive Loss | Note 9. Accumulated Other Comprehensive Loss The balances in accumulated other comprehensive loss are shown in the following tables for June 30, 2020 and 2019: (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2019 $ (7 ) $ (3,204 ) $ (3,211 ) Change in unrealized securities gains (losses), net of tax (65 ) - (65 ) Balance at June 30, 2020 $ (72 ) $ (3,204 ) $ (3,276 ) (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2018 $ (94 ) $ (3,875 ) $ (3,969 ) Change in unrealized securities gains (losses), net of tax 89 - 89 Balance at June 30, 2019 $ (5 ) $ (3,875 ) $ (3,880 ) There were no reclassifications adjustments reported on the consolidated statements of income during the three or six months ended June 30, 2020 or 2019. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2020 | |
Business Segments | |
Note 10. Business Segments | Note 10. Business Segments The Company utilizes its subsidiaries to provide multiple business segments including retail banking, mortgage banking, title insurance services, investment services and credit life and accident and health insurance products related to lending.Revenues from retail banking operations consist primarily of interest earned on loans and investment securities and service charges on deposit accounts. Mortgage banking operating revenues consist principally of gains on sales of loans in the secondary market, loan origination fee income and interest earned on mortgage loans held for sale. Revenues from title insurance services, investment services and insurance products consist of commissions on products provided. The Company purchased the noncontrolling interest of F&M Mortgage and VSTitle during the second quarter of 2020. The following tables represent revenues and expenses by segment for the three and six months ended June 30, 2020 and June 30, 2019. Six Months Ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 18,036 $ 120 $ 80 $ - $ - $ (134 ) $ 18,102 Service charges on deposits 586 - - - - - 586 Investment services and insurance income - - 368 - - (10 ) 358 Mortgage banking income, net - 2,900 - - - - 2,900 Title insurance income - - - 843 - - 843 Other operating income (loss) 1,097 56 - - (53 ) - 1100 Total income (loss) 19,719 3,076 448 843 (53 ) (144 ) 23889 Expenses: Interest Expense $ 3,111 $ 114 $ - $ - $ - $ (134 ) $ 3,091 Provision for loan losses 2,300 - - - - - 2,300 Salary and benefit expense 6,366 1,151 157 494 - - 8,168 Other operating expenses 5,724 352 28 127 15 (10 ) 6,236 Total expense 17,501 1,617 185 621 15 (144 ) 19,795 Net income (loss) before taxes 2,218 1,459 263 222 (68 ) - 4,094 Income tax expense 190 - 39 - (56 ) - 173 Net income (loss) 2,028 1,459 224 222 (12 ) - 3,921 Net income attributable to non-controlling interest - 105 - - - - 105 Net Income attributable to F & M Bank Corp. $ 2,028 $ 1,354 $ 224 $ 222 $ (12 ) $ - $ 3816 Total Assets $ 983,611 $ 25,546 $ 7,875 $ 3,855 $ 92,418 $ (131,702 ) $ 981,602 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Three months ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,965 $ 84 $ 36 $ - $ - $ (93 ) $ 8,992 Service charges on deposits 225 - - - - - 225 Investment services and insurance income - - 178 - - (5 ) 173 Mortgage banking income, net - 1,971 - - - - 1,971 Title insurance income - - - 472 - - 472 Other operating income (loss) 516 54 - - (53 ) - 517 Total income (loss) 9,706 2,109 214 472 (53 ) (98 ) 12,350 Expenses: Interest Expense 1,392 86 - - - (93 ) $ 1,385 Provision for loan losses 800 - - - - - 800 Salary and benefit expense 3,200 626 72 236 - - 4,134 Other operating expenses 2,937 134 18 62 4 (5 ) 3,150 Total expense 8,329 846 90 298 4 (98 ) 9,469 Net income (loss) before taxes 1,377 1,263 124 174 (57 ) - 2,881 Income tax expense 260 - 21 - (70 ) - 211 Net income (loss) 1,117 1,263 103 174 13 - 2,670 Net income attributable to non-controlling interest - 43 - (11 ) 11 - 43 Net Income attributable to F & M Bank Corp. $ 1,117 $ 1,220 $ 103 $ 185 $ 2 $ - $ 2,627 Note 10. Business Segments, continued Six Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 19,254 $ 68 $ 75 $ - $ - $ (84 ) $ 19,313 Service charges on deposits 803 - - - - - 803 Investment services and insurance income - - 325 - - (3 ) 322 Mortgage banking income, net - 1,345 - - - - 1,345 Title insurance income - - - 682 - - 682 Other operating income (loss) 1,110 28 - - (24 ) (1 ) 1,113 Total income (loss) 21,167 1,441 400 682 (24 ) (88 ) 23,578 Expenses: Interest Expense 3,233 75 - - - (84 ) 3,224 Provision for loan losses 3,050 - - - - - 3,050 Salary and benefit expense 6,576 917 150 457 - - 8,100 Other operating expenses 5,489 354 28 124 31 (4 ) 6,022 Total expense 18,348 1,346 178 581 31 (88 ) 20,396 Net income (loss) before taxes 2,819 95 222 101 (55 ) - 3,182 Income tax expense 158 - 33 - 41 - 232 Net income (loss) $ 2,661 $ 95 $ 189 $ 101 $ (96 ) $ - $ 2,950 Net income attributable to non-controlling interest - 29 - 24 (24 ) - 29 Net Income attributable to F & M Bank Corp. $ 2,661 $ 66 $ 189 $ 77 $ (72 ) $ - $ 2,921 Total Assets $ 809,712 $ 11,210 $ 7,332 $ 1,615 $ 91,674 $ (114,594 ) $ 806,949 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Note 10. Business Segments, continued Three Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 9,754 $ 43 $ 41 $ - $ - $ (56 ) $ 9,782 Service charges on deposits 417 - - - - - 417 Investment services and insurance income - - 174 - - (3 ) 171 Mortgage banking income, net - 815 - - - - 815 Title insurance income - - - 406 - - 406 Other operating income (loss) 665 28 - - (27 ) - 666 Total income (loss) 10,836 886 215 406 (27 ) (59 ) 12,257 Expenses: Interest Expense 1,732 50 - - - (56 ) 1,726 Provision for loan losses 1,600 - - - - - 1,600 Salary and benefit expense 3,285 489 69 234 - - 4,077 Other operating expenses 2,739 177 16 62 24 (3 ) 3,015 Total expense 9,356 716 85 296 24 (59 ) 10,418 Net income (loss) before taxes 1,480 170 130 110 (51 ) - 1,839 Income tax expense 112 - 19 - 22 - 153 Net income (loss) $ 1,368 $ 170 $ 111 $ 110 $ (73 ) $ - $ 1,686 Net income attributable to non-controlling interest - 51 - 27 (27 ) - 51 Net Income attributable to F & M Bank Corp. $ 1,368 $ 119 $ 111 $ 83 $ (46 ) $ - $ 1,635 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt | |
Note 11. Debt | Note 11. Debt Short-term Debt The Company utilizes short-term debt such as Federal funds purchased and Federal Home Loan Bank of Atlanta (FHLB) short term borrowings to support the loans held for sale participation program and provide liquidity. Federal funds purchased are unsecured overnight borrowings from other financial institutions. FHLB short term debt, which is secured by the loan portfolio, can be a daily rate variable loan that acts as a line of credit or a fixed rate advance, depending on the need of the Company. There was no short term debt at June 30, 2020 and $10,000 at December 31, 2019. Long-term Debt The Company utilizes the FHLB advance program to fund loan growth and provide liquidity. The interest rates on long-term debt are fixed at the time of the advance and range from .80% to 2.56%; the weighted average interest rate was 1.82% at June 30, 2020 and 1.85% at December 31, 2019.The balance of these obligations at June 30, 2020 and December 31, 2019 were $40,982 and $53,197 respectively. FHLB advances include a $6,000 letter of credit at FHLB that is pledged to the Commonwealth of Virginia to secure public funds. The Company utilized the Federal Reserve Paycheck Protection Program Liquidity Facility to fund the Paycheck Protection Program (“PPP”) loans funded in the second quarter. This funding facility is secured by the PPP loans and interest is set at a fixed rate of .35%.On June 30, 2020 the balances totaled $59,603; there were no borrowings under this program on December 31, 2019. VSTitle, LLC had a note payable to purchase vehicles that totaled $4 at December 31, 2019 and was paid off by June 30, 2020. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Recognition | |
Note 12. Revenue Recognition | Note 12. Revenue Recognition Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Investment Services and Insurance Income Investment services and insurance income primarily consists of commissions received on mutual funds and other investment sales.Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. Title Insurance Income VSTitle provides title insurance and real estate settlement services. Revenue is recognized at the time the real estate transaction is completed ATM and Check Card Fees ATM and Check Card Fees are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other Other noninterest income consists of other recurring revenue streams such as safe deposit box rental fees, and other service charges. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Other service charges include revenue from processing wire transfers, online payment fees, cashier’s checks, mobile banking fees and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Note 12. Revenue Recognition, continued The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three and six months ended June 30, 2020 and 2019. Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Noninterest Income (in thousands) In-scope of Topic 606: Service Charges on Deposits $ 586 $ 803 $ 225 $ 417 Investment Services and Insurance Income 358 322 173 171 Title Insurance Income 843 682 472 406 ATM and check card fees 894 898 462 529 Other 283 281 123 153 Noninterest Income (in-scope of Topic 606) 2,964 2,986 1,455 1,676 Noninterest Income (out-of-scope of Topic 606) 2,823 1,279 1,903 799 Total Noninterest Income $ 5,787 $ 4,265 $ 3,358 $ 2,475 Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of June 30, 2020 and December 31, 2019, the Company did not have any significant contract balances. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition cost. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases | |
Note 13. Leases | Note 13. Leases On January 1, 2019, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. The following tables present information about the Company’s leases: (Dollars in thousands) June 30, 2020 Lease Liabilities $ 882 Right-of-use assets 867 Weighted average remaining lease term 4.58 Weighted average discount rate 3.46 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Lease cost (in thousands) Operating lease cost $ 25 $ 32 $ 58 $ 64 Total lease cost $ 25 $ 32 $ 58 $ 64 Cash paid for amounts included in the measurement of lease liabilities $ 31 $ 38 $ 69 $ 75 A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows: As of June 30, 2020 Six months ending December 31, 2020 $ 52 Twelve months ending December 31, 2021 127 Twelve months ending December 31, 2022 129 Twelve months ending December 31, 2023 93 Twelve months ending December 31, 2024 92 Thereafter 611 Total undiscounted cash flows $ 1,104 Discount 222 Lease liabilities $ 882 |
Mortgage Banking and Derivative
Mortgage Banking and Derivatives | 6 Months Ended |
Jun. 30, 2020 | |
Mortgage Banking and Derivatives | |
Note 14. Mortgage Banking and Derivatives | Note 14. Mortgage Banking and Derivatives Loans Held for Sale The Company, through the Bank’s mortgage banking subsidiary, F&M Mortgage Company, originates residential mortgage loans for sale in the secondary market. Residential mortgage loans held for sale are sold to the permanent investor with the mortgage servicing rights released. During the second quarter of 2020, the Company elected to begin using fair value accounting for its entire portfolio of loans held for sale (LHFS) in accordance with ASC 820 – Fair Value Measurement and Disclosures. Fair value of the Company’s LHFS is based on observable market prices for the identical instruments traded in the secondary mortgage loan markets in which the Company conducts business total $20.0 million as of June 30, 2020 of which $19.8 million is related to unpaid principal. The Company’s portfolio of LHFS is classified as Level 2. These loans were previously carried as of December 31, 2019 at the lower of cost or estimated fair value on an aggregate basis as determined by outstanding commitments from investors and totaled $3.0 million. Interest Rate Lock Commitments and Forward Sales Commitments The Company, through F&M Mortgage Company, enters into commitments to originate residential mortgage loans in which the interest rate on the loan is determined prior to funding, termed interest rate lock commitments (IRLCs). Such rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. Upon entering into a commitment to originate a loan, the Company protects itself from changes in interest rates during the period prior to sale by requiring a firm purchase agreement from a permanent investor before a loan can be closed (forward sales commitment). The Company locks in the loan and rate with an investor and commits to deliver the loan if settlement occurs on a best efforts basis, thus limiting interest rate risk. Certain additional risks exist if the investor fails to meet its purchase obligation; however, based on historical performance and the size and nature of the investors the Company does not expect them to fail to meet their obligation. The Company determines the fair value of the IRLCs based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate loan commitments will close. The fair value of these derivative instruments is reported in “Other Assets” in the Consolidated Balance Sheet at June 30, 2020, and totaled $1.0 million, with a notional amount of $43.8 million and total positions of 207. The fair value of the IRLCs was considered immaterial at December 31, 2019. Changes in fair value are recorded as a component of “Mortgage banking, net” in the Consolidated Income Statement for the period ended June 30, 2020. The Company’s IRLCs are classified as Level 2. At June 30, 2020 and December 31, 2019, each IRLC and all LHFS were subject to a forward sales commitment on a best efforts basis. During the second quarter of 2020, the Company elected to begin using fair value accounting for its forward sales commitments related to IRLCs and LHFS under ASC 825-10-15-4(b). The fair value of forward sales commitments is reported in “Other Liabilities” in the Consolidated Balance Sheet at June 30, 2020, and totaled $554 thousand, with a notional amount of $63.8 million and total positions of 286. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Mortgage Banking and Derivatives | |
Note 15. Subsequent Events | Note 15. Subsequent Events On July 29, 2020, the Company entered into Subordinated Note Purchase Agreements (collectively, the “Purchase Agreement”) with certain institutional accredited investors pursuant to which the Company sold and issued $5.0 million in aggregate principal amount of 5.75% fixed rated subordinated notes due July 31, 2027 (the “2027 Notes”) and $7.0 million in aggregate principal amount of 6.00% fixed to floating rate subordinated notes due July 31, 2030 (the “2030 Notes and, together with the 2027 Notes, the “Notes”).Raymond James & Associates, Inc. served as the sole placement agent. The 2027 Notes will bear interest at 5.75% per annum, payable semi-annually in arrears. Beginning on July 31, 2022 through maturity, the 2027 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2027 Notes will mature on July 31, 2027. The 2030 Notes will initially bear interest at 6.00% per annum, beginning July 29, 2020 to but excluding July 31, 2025, payable semi-annually in arrears. From and including July 31, 2025 through July 30, 2030, or up to an early redemption date, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 593 basis points, payable quarterly in arrears. Beginning on July 31, 2025 through maturity, the 2030 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2030 Notes will mature on July 31, 2030. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bank, TEB Life Insurance Company, Farmers & Merchants Financial Services, Inc., VBS Mortgage, LLC (dba F&M Mortgage), (net of non-controlling interest) and VSTitle, LLC and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for the interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). On May 1, 2020 the Bank purchased the noncontrolling interest of VBS Mortgage, LLC. Accordingly, these financial statements do not include all of the information and footnotes required by U. S. GAAP for complete financial statements. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). During the second quarter of 2020, the Company purchased the minority interest in F&M Mortgage. The accompanying unaudited consolidated financial statements include the accounts of the Company, the Bank and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Nature of Operations | The Company, through its subsidiary Farmers & Merchants Bank (the “Bank”), operates under a charter issued by the Commonwealth of Virginia and provides commercial banking services. As a state chartered bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions and the Federal Reserve Bank. The Bank provides services to customers primarily located in Rockingham, Shenandoah, Page and Augusta Counties in Virginia. Services are provided at eleven (as of August 1, 2020) branch offices and a Dealer Finance Division. The Company offers insurance, mortgage lending, title insurance and financial services through its subsidiaries, TEB Life Insurance, Inc., Farmers & Merchants Financial Services, Inc. (FMFS), F&M Mortgage, and VSTitle, LLC (VST). |
Basis of Presentation | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, fair value, and pension accounting and the valuation of foreclosed real estate. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for fair presentation of the results of operations in these financial statements, have been made. |
Risk and Uncertainties | The coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. The government and private sector responses to contain its spread began to significantly affect our operating businesses in March with branch lobby closings, operations and administrative staff working remotely and the use of virtual meetings. These changes will likely affect our operations throughout the remainder of 2020, although the extent and significance are unknown. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic that may affect our future earnings, cash flows and financial condition include the nature and duration of the long-term effect on our borrowers’ ability to repay. Accordingly, significant estimates used in the preparation of our financial statements including those associated with evaluations of goodwill for impairment, and allowance for loan losses may be subject to adjustments in future periods. |
Reclassification | Certain reclassifications have been made to prior period amounts to conform to current period presentation. None of these reclassifications are considered material and have no impact on net income. |
Earnings per Share | Accounting guidance specifies the computation, presentation and disclosure requirements for earnings per share (“EPS”) for entities with publicly held common stock or potential common stock such as options, warrants, convertible securities or contingent stock agreements if those securities trade in a public market. Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. In calculating diluted EPS, net income available to common stockholders is used as the numerator and the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive common shares had been issued. The dilutive effect of conversion of preferred stock is reflected in the diluted earnings per share calculation for the three and six month periods ended June 30, 2020 and 2019. Net income available to common stockholders represents consolidated net income adjusted for preferred dividends declared. The following table provides a reconciliation of net income to net income available to common stockholders for the periods presented: For the Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2020 June 30, 2020 June 30, 2019 June 30, 2019 Earnings available to com mon stockholders: Net income $ 3,921 $ 2,670 $ 2,950 $ 1,686 Non-controlling interest income (loss) 105 43 29 51 Preferred stock dividends 132 66 157 79 Net income available to common stockholders $ 3,684 $ 2,561 $ 2,764 $ 1,556 The following table shows the effect of dilutive preferred stock conversion on the Company's earnings per share for the periods indicated: Six months ended June 30, 2020 Six months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,684 3,199,183 $ 1.15 $ 2,764 3,200,119 $ .86 Effect of Dilutive Securities: Convertible Preferred Stock 132 229,599 (.04 ) 157 274,450 (.02 ) Diluted EPS $ 3,816 3,428,782 $ 1.11 $ 2,921 3,474,569 $ .84 Three months ended June 30, 2020 Three months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 2,561 3,194,282 $ .80 $ 1,556 3,200,119 $ .49 Effect of Dilutive Securities: Convertible Preferred Stock 66 206,660 (.04 ) 79 247,029 (.02 ) Diluted EPS $ 2,627 3,400,942 $ .77 $ 1,635 3,447,148 $ .47 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of earnings per share | For the Six months ended For the Three months ended For the Six months ended For the Three months ended June 30, 2020 June 30, 2020 June 30, 2019 June 30, 2019 Earnings available to com mon stockholders: Net income $ 3,921 $ 2,670 $ 2,950 $ 1,686 Non-controlling interest income (loss) 105 43 29 51 Preferred stock dividends 132 66 157 79 Net income available to common stockholders $ 3,684 $ 2,561 $ 2,764 $ 1,556 |
Schedule of effect of dilutive preferred stock conversion | Six months ended June 30, 2020 Six months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 3,684 3,199,183 $ 1.15 $ 2,764 3,200,119 $ .86 Effect of Dilutive Securities: Convertible Preferred Stock 132 229,599 (.04 ) 157 274,450 (.02 ) Diluted EPS $ 3,816 3,428,782 $ 1.11 $ 2,921 3,474,569 $ .84 Three months ended June 30, 2020 Three months ended June 30, 2019 Income Weighted Average Shares Per Share Amounts Income Weighted Average Shares Per Share Amounts Basic EPS $ 2,561 3,194,282 $ .80 $ 1,556 3,200,119 $ .49 Effect of Dilutive Securities: Convertible Preferred Stock 66 206,660 (.04 ) 79 247,029 (.02 ) Diluted EPS $ 2,627 3,400,942 $ .77 $ 1,635 3,447,148 $ .47 |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investment Securities | |
Schedule of amortized cost and fair value for securities | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2020 U. S. Treasuries $ 125 $ - $ - $ 125 December 31, 2019 U. S. Treasuries $ 124 $ - $ - $ 124 |
Schedule of amortized cost and fair value of securities current | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 30, 2020 U. S. Treasuries $ 3,000 $ - $ - $ 3,000 U. S. Government sponsored enterprises 21,003 5 - 21,008 Securities issued by States and political subdivisions in the U.S. 8,876 86 (11 ) 8,951 Mortgage-backed obligations of federal agencies 45,211 10 (225 ) 44,996 Corporate debt security 3,045 44 - 3,089 Total Securities Available for Sale $ 81,135 $ 145 $ (236 ) $ 81,044 December 31, 2019 U. S. Government sponsored enterprises $ 2,000 $ - $ (11 ) $ 1,989 Mortgage-backed obligations of federal agencies 317 2 - 319 Corporate debt security 2,059 - (1 ) 2,058 Total Securities Available for Sale $ 4,376 $ 2 $ (12 ) $ 4,366 |
Schedule of unrealized losses | Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses June 30, 2020 Securities issued by States and political subdivisions in the U.S. $ 21,008 $ (11 ) $ - $ - $ 21,008 $ (11 ) Mortgage-backed obligations of federal agencies 44,996 (225 ) - - 44,996 (225 ) Total $ 66,004 $ (236 ) $ - $ - $ 66,004 $ (236 ) Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2019 U. S. Government sponsored enterprises $ 1,989 $ (11 ) $ - $ - $ 1,989 $ (11 ) Corporate debt security 2,058 (1 ) - - 2,058 (1 ) Total $ 4,047 $ (12 ) $ - $ - $ 4,047 $ (12 ) |
Schedule amortized cost and fair value of securities, maturity | Securities Held to Maturity Securities Available for Sale Amortized Fair Amortized Fair (dollars in thousands) Cost Value Cost Value Due in one year or less $ 125 $ 125 $ 3,000 $ 3,000 Due after one year through five years - - 18,551 18,601 Due after five years - - 16,019 16,029 Due after ten years - - 43,565 43,414 Total $ 125 $ 125 $ 81,135 $ 81,044 |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Loans | |
Summary of information pertaining to impaired loans | June 30, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment(1) Balance Allowance Investment Balance Allowance Impaired loans without a valuation allowance: Construction/Land Development $ 1,428 $ 1,428 $ - $ 2,042 $ 2,042 $ - Farmland - - - - - - Real Estate 4,899 4,899 - 5,131 5,131 - Multi-Family - - - - - - Commercial Real Estate 2,298 2,298 - 1,302 1,302 - Home Equity – closed end 703 703 - 716 716 - Home Equity – open end - - - - - - Commercial & Industrial – Non-Real Estate 14 14 - 17 17 - Consumer - - - - - - Credit cards - - - - - - Dealer Finance 42 42 - 79 79 - $ 9,384 $ 9,384 - $ 9,287 $ 9,287 $ - Impaired loans with a valuation allowance Construction/Land Development 356 356 3 1,036 2,061 85 Farmland 1,774 1,774 110 1,933 1,933 537 Real Estate 9,619 9,619 617 10,404 10,404 569 Multi-Family - - - - - - Commercial Real Estate 2,840 2,840 515 638 638 213 Home Equity – closed end - - - - - - Home Equity – open end 151 151 13 151 151 151 Commercial & Industrial – Non-Real Estate - - - 192 192 192 Consumer 1 1 - 4 4 1 Credit cards - - - - - - Dealer Finance 131 131 12 136 136 7 14,872 14,872 1,270 14,494 15,519 1,755 Total impaired loans $ 24,256 $ 24,256 $ 1,270 $ 23,781 $ 24,806 $ 1,755 ______________ |
Summary of the average investment and interest income | Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Average Recorded Interest Income Investment Recognized Investment Recognized Investment Recognized Investment Recognized Impaired loans without a valuation allowance: Construction/Land Development $ 1,518 $ 15 $ 2,011 $ 84 $ 1,736 $ 40 $ 2,195 $ 123 Farmland 352 - 1,942 1 352 - 1,942 1 Real Estate 5,258 60 2,013 (7 ) 5,015 136 2,020 22 Multi-Family - - - - - - - - Commercial Real Estate 1,883 29 1,901 189 1,800 49 4,076 228 Home Equity – closed end - 21 360 - 358 21 360 - Home Equity – open end - - - - - - - - Commercial & Industrial – Non-Real Estate 101 - 12 - 16 - - - Consumer and credit cards 21 - - - 21 - 12 - Dealer Finance 14 1 45 (1 ) 40 2 33 - 9,147 126 8,284 266 9,338 248 10,638 374 Impaired loans with a valuation allowance: Construction/Land Development $ 356 $ - $ 2,651 $ (27 ) $ 696 $ - $ 3,445 $ 31 Farmland 964 178 - - 967 184 - - Real Estate 9,695 122 417 58 10,012 262 419 65 Multi-Family - - - - - - - - Commercial Real Estate 2,338 21 4,152 (104 ) 1,739 49 2,056 33 Home Equity – closed end 429 (10 ) - 41 76 - - 41 Home Equity – open end 76 2 - - 76 4 - - Commercial & Industrial – Non-Real Estate 35 (1 ) - 2 96 - - 1 Consumer and credit card 67 - 5 - 68 - 6 - Dealer Finance 964 1 176 5 955 5 194 9 14,924 313 7,401 (25 ) 14,685 504 6,120 180 Total Impaired Loans $ 24,071 $ 439 $ 15,685 $ 241 $ 24,023 $ 752 $ 16,758 $ 554 |
Schedule of recorded investment of past due loans | 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing June 30, 2020 Construction/Land Development $ - $ - $ 374 $ 374 $ 73,409 $ 73,783 $ 414 $ - Farmland - 26 - 26 36,940 36,966 1,774 - Real Estate 1,421 366 558 2,345 169,860 172,205 734 - Multi-Family - - - - 6,065 6,065 - - Commercial Real Estate - 156 - 156 128,607 128,763 1,125 - Home Equity – closed end - - 31 31 9,038 9,069 - 31 Home Equity – open end 179 8 217 404 46,106 46,510 240 - Commercial & Industrial – Non- Real Estate 25 - - 25 90,078 90,103 7 - Consumer 20 1 - 21 10,051 10,072 - - Dealer Finance 839 139 24 1,002 84,255 85,257 135 6 Credit Cards 22 - - 22 2,714 2,736 - - Total $ 2,506 $ 696 $ 1,204 $ 4,406 $ 657,123 $ 661,529 $ 4,429 $ 37 30-59 Days Past due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loan Receivable Non-Accrual Loans Recorded Investment >90 days & accruing December 31, 2019 Construction/Land Development $ 117 $ 45 $ 1,255 $ 1,417 $ 75,714 $ 77,131 $ 1,301 $ - Farmland 27 - 1,933 1,960 27,758 29,718 1,933 - Real Estate 2,440 1,035 837 4,312 173,955 178,267 420 619 Multi-Family - - - - 5,364 5,364 - - Commercial Real Estate 563 - 137 700 129,150 129,850 900 - Home Equity – closed end - - - - 9,523 9,523 - - Home Equity – open end 429 296 15 740 47,034 47,774 - 15 Commercial & Industrial – Non- Real Estate 726 4 - 730 32,805 33,535 203 - Consumer 89 14 - 103 10,062 10,165 1 - Dealer Finance 1,943 400 198 2,541 76,435 78,976 249 84 Credit Cards 31 - 4 35 3,087 3,122 - 4 Total $ 6,365 $ 1,794 $ 4,379 $ 12,538 $ 590,887 $ 603,425 $ 5,007 $ 722 |
Schedule of loans outstanding | (dollars in thousands) 2020 2019 Construction/Land Development $ 73,783 $ 77,131 Farmland 36,966 29,718 Real Estate 172,205 178,267 Multi-Family 6,065 5,364 Commercial Real Estate 128,763 129,850 Home Equity – closed end 9,069 9,523 Home Equity – open end 46,510 47,774 Commercial & Industrial – Non-Real Estate 90,103 33,535 Consumer 10,072 10,165 Dealer Finance 85,257 78,976 Credit Cards 2,736 3,122 Total $ 661,529 $ 603,425 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Allowance for Loan Losses | |
Schedule of recorded investment in loans | June 30, 2020 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 73,783 $ 1,784 $ 71,999 Farmland 36,966 1,774 35,192 Real Estate 172,205 14,518 157,687 Multi-Family 6,065 - 6,065 Commercial Real Estate 128,763 5,138 123,625 Home Equity – closed end 9,069 703 8,366 Home Equity –open end 46,510 151 46,359 Commercial & Industrial – Non-Real Estate 90,103 14 90,089 Consumer 10,072 1 10,071 Dealer Finance 85,257 173 85,084 Credit Cards 2,736 - 2,736 Total $ 661,529 $ 24,256 $ 637,273 December 31, 2019 Loan Receivable Individually Evaluated for Impairment Collectively Evaluated for Impairment Construction/Land Development $ 77,131 $ 3,078 $ 74,053 Farmland 29,718 1,933 27,785 Real Estate 178,267 15,535 162,732 Multi-Family 5,364 - 5,364 Commercial Real Estate 129,850 1,940 127,910 Home Equity – closed end 9,523 716 8,807 Home Equity –open end 47,774 151 47,623 Commercial & Industrial – Non-Real Estate 33,535 209 33,326 Consumer 10,165 4 10,161 Dealer Finance 78,976 215 78,761 Credit Cards 3,122 - 3,122 Total $ 603,425 $ 23,781 $ 579,644 |
Schedule of loan portfolio | June 30, 2020 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 146 $ 12,664 $ 39,099 $ 8,487 $ 12,390 $ 997 $ - $ 73,783 Farmland 59 489 12,922 15,974 5,080 668 1,774 - 36,966 Real Estate - 2,459 43,527 77,176 27,790 4,196 17,057 - 172,205 Multi-Family - - 1,095 3,612 1,358 - - - 6,065 Commercial Real Estate - 1,898 31,680 63,007 6,770 21,934 3,474 - 128,763 Home Equity – closed end - 176 2,703 3,669 1,240 1,250 31 - 9,069 Home Equity – open end - 1,732 18,693 20,907 3,616 826 736 - 46,510 Commercial & Industrial (Non-Real Estate) 113 1,508 8,965 13,148 65,037 1,279 53 - 90,103 Consumer (excluding dealer) 3 191 3,870 4,270 1,729 9 - - 10,072 Total $ 175 $ 8,599 $ 136,119 $ 240,862 $ 121,107 $ 42,552 $ 24,122 $ - $ 573,536 Credit Cards Dealer Finance Performing $ 2,736 $ 85,109 Non-performing - 148 Total $ 2,736 $ 85,257 December 31, 2019 Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average Risk Grade 4 Acceptable Risk Grade 5 Marginally Acceptable Grade 6 Watch Grade 7 Substandard Grade 8 Doubtful Total Construction/Land Development $ - $ 615 $ 21,904 $ 41,693 $ 8,218 $ 2,434 $ 2,267 $ - $ 77,131 Farmland 60 363 9,479 13,754 2,942 1,188 1,932 - 29,718 Real Estate - 1,900 48,308 81,371 23,876 5,635 17,177 - 178,267 Multi-Family - - 1,327 3,711 153 173 - - 5,364 Commercial Real Estate - 2,465 40,227 67,626 14,139 4,397 996 - 129,850 Home Equity – closed end - 189 2,999 3,816 1,154 1,365 - - 9,523 Home Equity – open end 17 1,965 17,789 22,705 3,769 1,198 331 - 47,774 Commercial & Industrial (Non-Real Estate) 142 2,042 12,818 15,035 2,877 373 248 - 33,535 Consumer (excluding dealer) 6 170 3,476 4,726 1,729 56 2 - 10,165 Total $ 225 $ 9,709 $ 158,327 $ 254,437 $ 58,857 $ 16,819 $ 22,953 $ - $ 521,327 Credit Cards Dealer Finance Performing $ 3,118 $ 78,529 Non-performing 4 447 Total $ 3,122 $ 78,976 |
Summary loan loss allowance transactions | June 30, 2020 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 1,190 $ 7 $ - $ 254 $ 1,437 $ 3 $ 1,435 Farmland 668 - - (333 ) 335 110 225 Real Estate 1,573 36 4 396 1,937 617 1,319 Multi-Family 20 - - 36 56 - 56 Commercial Real Estate 1,815 - - 1,106 2,921 515 2,406 Home Equity – closed end 42 - - 18 60 - 61 Home Equity – open end 457 - - (25 ) 434 13 422 Commercial & Industrial – Non-Real Estate 585 64 10 (154 ) 377 - 377 Consumer 186 67 38 279 436 - 433 Dealer Finance 1,786 971 465 685 1,965 12 1,952 Credit Cards 68 59 30 38 77 - 78 Total $ 8,390 $ 1,204 $ 547 $ 2,300 $ 10,033 $ 1,270 $ 8,764 December 31, 2019 Beginning Balance Charge-offs Recoveries Provision Ending Balance Individually Evaluated for Impairment Collectively Evaluated for Impairment Allowance for loan losses: Construction/Land Development $ 2,094 $ 2,319 $ 50 $ 1,365 $ 1,190 $ 85 $ 1,105 Farmland 15 - - 653 668 537 131 Real Estate 292 32 4 1,309 1,573 569 1,004 Multi-Family 10 - - 10 20 - 20 Commercial Real Estate 416 677 16 2,060 1,815 213 1,602 Home Equity – closed end 13 1 2 28 42 - 42 Home Equity – open end 126 126 1 456 457 151 306 Commercial & Industrial – Non-Real Estate 192 127 81 439 585 192 393 Consumer 70 116 44 188 186 1 185 Dealer Finance 1,974 2,118 1,144 786 1,786 7 1,779 Credit Cards 38 110 29 111 68 - 68 Total $ 5,240 $ 5,626 $ 1,371 $ 7,405 $ 8,390 $ 1,755 $ 6,635 |
Employee Benefit Plan (Tables)
Employee Benefit Plan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Employee Benefit Plan | |
Schedule of employee benefit plan | Six Months Ended Three Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Service cost $ 404 $ 369 $ 202 $ 184 Interest cost 209 274 105 137 Expected return on plan assets (367 ) (403 ) (183 ) (201 ) Amortization of prior service cost (6 ) (8 ) (3 ) (4 ) Amortization of net loss 111 141 55 7 Net periodic pension cost $ 351 $ 373 $ 176 $ 187 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value | |
Summarizes measured at fair value on a nonrecurring basis | June 30, 2020 Total Level 1 Level 2 Level 3 Construction/Land Development $ 353 $ - $ - $ 353 Farmland 1,664 - - 1,664 Real Estate 9,002 - - 9,002 Commercial Real Estate 2,325 - - 2,325 Consumer 1 - - 1 Home Equity – open end 138 - - 138 Dealer Finance 119 - - 119 Impaired loans $ 13,602 $ - $ - $ 13,602 December 31, 2019 Total Level 1 Level 2 Level 3 Construction/Land Development $ 951 - - $ 951 Farmland 1,396 - - 1,396 Real Estate 9,835 - - 9,835 Commercial Real Estate 425 - - 425 Consumer 3 - - 3 Dealer Finance 129 - - 129 Impaired loans $ 12,739 $ - $ - $ 12,739 |
Schedule Fair Value Measurements Level 3 | Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 13,602 Discounted appraised value Discount for selling costs and marketability 3%-45% (Average 23.58%) Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Impaired Loans $ 12,739 Discounted appraised value Discount for selling costs and marketability 0%-58.98% (Average 24.04%) |
Summary of Other Real Estate Owned | June 30, 2020 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,160 $ - $ - $ 1,160 Assets held for sale $ 520 $ - $ 520 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Other real estate owned $ 1,489 $ - $ - $ 1,489 The following table presents information about Level 3 Fair Value Measurements for June 30, 2020: Fair Value at June 30, 2020 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,160 Discounted appraised value Discount for selling costs 6%-10% (Average 8%) Fair Value at December 31, 2019 Valuation Technique Significant Unobservable Inputs Range (dollars in thousands) Other real estate owned $ 1,489 Discounted appraised value Discount for selling costs 5%-10% (Average 8%) |
Schedule of assets and liabilities at fair value on recurring basis | June 30, 2020 Total Level 1 Level 2 Level 3 Assets: Loans held for sale $ 90,602 $ - $ 90,602 $ - IRLC 1,012 - 1,012 - U. S. Treasury securities 3,000 - 3,000 - U. S. Government sponsored enterprises 21,008 - 21,008 - Securities issued by States and political subdivisions in the U. S. 8,951 - 8,951 - Mortgage-backed obligations of federal agencies 44,996 - 44,996 - Corporate debt securities 3,089 - 3,089 - Assets at Fair Value $ 172,658 $ - $ 172,658 $ - Liabilities: Derivatives - ICD $ 45 $ - $ 45 $ - Forward sales commitments 554 - 554 - Liabilities at Fair Value $ 599 $ - $ 599 $ - December 31, 2019 Total Level 1 Level 2 Level 3 Assets: U. S. Government sponsored enterprises $ 1,989 $ - $ 1,989 $ - Mortgage-backed obligations of federal agencies 319 - 319 - Other debt securities 2,058 - 2,058 - Assets at Fair Value $ 4,366 $ - $ 4,366 $ - Derivatives - ICD $ 72 $ - $ 72 $ - Liabilities at Fair Value $ 72 $ - $ 72 $ - |
Disclosures About Fair Value _2
Disclosures About Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosures About Fair Value of Financial Instruments | |
Schedule of carrying value and estimated fair value for financial instruments | Fair Value Measurements at June 30, 2020 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at June 30, 2020 Assets: Cash and cash equivalents $ 86,698 $ 86,698 $ - - $ 86,698 Securities 81,169 - 81,169 - 81,169 Loans held for sale 90,602 - 90,602 - 90,602 Loans held for investment, net 651,496 - - 638,433 638,433 Interest receivable 2,640 - 2,640 - 2,640 Bank owned life insurance 20,345 - 20,345 - 20,345 Total $ 932,920 $ 86,698 $ 194,756 $ 638,433 $ 919,887 Liabilities: Deposits $ 766,652 $ - $ 639,064 $ 131,165 $ 770,229 Short-term debt - - - - - Long-term debt 100,585 - - 101,717 101,717 Interest payable 338 - 338 - 338 Total $ 867,575 $ - $ 639,402 $ 232,882 $ 872,284 Fair Value Measurements at December 31, 2019 Using (dollars in thousands) Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at December 31, 2019 Assets: Cash and cash equivalents $ 75,804 $ 75,804 $ - $ - $ 75,804 Securities 4,490 - 4,490 - 4,490 Loans held for sale 66,798 - 66,798 - 66,798 Loans held for investment, net 595,035 - - 580,903 580,903 Interest receivable 2,044 - 2,044 - 2,044 Bank owned life insurance 20,050 - 20,050 - 20,050 Total $ 764,221 $ 75,804 $ 93,382 $ 580,903 $ 750,089 Liabilities: Deposits $ 641,709 $ - $ 504,522 $ 139,713 $ 644,235 Short-term debt 10,000 - 10,000 - 10,000 Long-term debt 53,201 - - 53,543 53,543 Interest payable 354 - 354 - 354 Total $ 705,264 $ - $ 514,876 $ 193,256 $ 708,132 |
Troubled Debt Restructuring (Ta
Troubled Debt Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Troubled Debt Restructuring | |
Schedule of loan restructured | Six months ended June 30, 2019 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Commercial Real Estate 1 $ 182 $ 182 Real Estate 1 193 193 Home Equity 1 720 720 Commercial and Industrial 1 23 23 Consumer 5 35 35 Total 9 $ 1,153 $ 1,153 |
Schedule of troubled debt restructuring | June 30, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 2 $ 11 $ 11 Total 2 $ 11 $ 11 June 30, 2020 Pre-Modification Post-Modification Outstanding Outstanding (dollars in thousands) Troubled Debt Restructurings Number of Contracts Recorded Investment Recorded Investment Consumer 1 $ 3 $ 3 Total 1 $ 3 $ 3 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Loss | |
Schedule of accumulated other comprehensive loss | (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2019 $ (7 ) $ (3,204 ) $ (3,211 ) Change in unrealized securities gains (losses), net of tax (65 ) - (65 ) Balance at June 30, 2020 $ (72 ) $ (3,204 ) $ (3,276 ) (dollars in thousands) Unrealized Securities Gains (Losses) Adjustments Related to Pension Plan Accumulated Other Comprehensive Loss Balance at December 31, 2018 $ (94 ) $ (3,875 ) $ (3,969 ) Change in unrealized securities gains (losses), net of tax 89 - 89 Balance at June 30, 2019 $ (5 ) $ (3,875 ) $ (3,880 ) |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Segments | |
Schedule of business segments | Six Months Ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 18,036 $ 120 $ 80 $ - $ - $ (134 ) $ 18,102 Service charges on deposits 586 - - - - - 586 Investment services and insurance income - - 368 - - (10 ) 358 Mortgage banking income, net - 2,900 - - - - 2,900 Title insurance income - - - 843 - - 843 Other operating income (loss) 1,097 56 - - (53 ) - 1100 Total income (loss) 19,719 3,076 448 843 (53 ) (144 ) 23889 Expenses: Interest Expense $ 3,111 $ 114 $ - $ - $ - $ (134 ) $ 3,091 Provision for loan losses 2,300 - - - - - 2,300 Salary and benefit expense 6,366 1,151 157 494 - - 8,168 Other operating expenses 5,724 352 28 127 15 (10 ) 6,236 Total expense 17,501 1,617 185 621 15 (144 ) 19,795 Net income (loss) before taxes 2,218 1,459 263 222 (68 ) - 4,094 Income tax expense 190 - 39 - (56 ) - 173 Net income (loss) 2,028 1,459 224 222 (12 ) - 3,921 Net income attributable to non-controlling interest - 105 - - - - 105 Net Income attributable to F & M Bank Corp. $ 2,028 $ 1,354 $ 224 $ 222 $ (12 ) $ - $ 3816 Total Assets $ 983,611 $ 25,546 $ 7,875 $ 3,855 $ 92,418 $ (131,702 ) $ 981,602 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Three months ended June 30, 2020 F&M Bank F&M Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 8,965 $ 84 $ 36 $ - $ - $ (93 ) $ 8,992 Service charges on deposits 225 - - - - - 225 Investment services and insurance income - - 178 - - (5 ) 173 Mortgage banking income, net - 1,971 - - - - 1,971 Title insurance income - - - 472 - - 472 Other operating income (loss) 516 54 - - (53 ) - 517 Total income (loss) 9,706 2,109 214 472 (53 ) (98 ) 12,350 Expenses: Interest Expense 1,392 86 - - - (93 ) $ 1,385 Provision for loan losses 800 - - - - - 800 Salary and benefit expense 3,200 626 72 236 - - 4,134 Other operating expenses 2,937 134 18 62 4 (5 ) 3,150 Total expense 8,329 846 90 298 4 (98 ) 9,469 Net income (loss) before taxes 1,377 1,263 124 174 (57 ) - 2,881 Income tax expense 260 - 21 - (70 ) - 211 Net income (loss) 1,117 1,263 103 174 13 - 2,670 Net income attributable to non-controlling interest - 43 - (11 ) 11 - 43 Net Income attributable to F & M Bank Corp. $ 1,117 $ 1,220 $ 103 $ 185 $ 2 $ - $ 2,627 Six Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 19,254 $ 68 $ 75 $ - $ - $ (84 ) $ 19,313 Service charges on deposits 803 - - - - - 803 Investment services and insurance income - - 325 - - (3 ) 322 Mortgage banking income, net - 1,345 - - - - 1,345 Title insurance income - - - 682 - - 682 Other operating income (loss) 1,110 28 - - (24 ) (1 ) 1,113 Total income (loss) 21,167 1,441 400 682 (24 ) (88 ) 23,578 Expenses: Interest Expense 3,233 75 - - - (84 ) 3,224 Provision for loan losses 3,050 - - - - - 3,050 Salary and benefit expense 6,576 917 150 457 - - 8,100 Other operating expenses 5,489 354 28 124 31 (4 ) 6,022 Total expense 18,348 1,346 178 581 31 (88 ) 20,396 Net income (loss) before taxes 2,819 95 222 101 (55 ) - 3,182 Income tax expense 158 - 33 - 41 - 232 Net income (loss) $ 2,661 $ 95 $ 189 $ 101 $ (96 ) $ - $ 2,950 Net income attributable to non-controlling interest - 29 - 24 (24 ) - 29 Net Income attributable to F & M Bank Corp. $ 2,661 $ 66 $ 189 $ 77 $ (72 ) $ - $ 2,921 Total Assets $ 809,712 $ 11,210 $ 7,332 $ 1,615 $ 91,674 $ (114,594 ) $ 806,949 Goodwill $ 2,670 $ 47 $ - $ 3 $ 164 $ - $ 2,884 Three Months Ended June 30, 2019 F&M Bank VBS Mortgage TEB Life/FMFS VS Title Parent Only Eliminations F&M Bank Corp. Consolidated Revenues: Interest Income $ 9,754 $ 43 $ 41 $ - $ - $ (56 ) $ 9,782 Service charges on deposits 417 - - - - - 417 Investment services and insurance income - - 174 - - (3 ) 171 Mortgage banking income, net - 815 - - - - 815 Title insurance income - - - 406 - - 406 Other operating income (loss) 665 28 - - (27 ) - 666 Total income (loss) 10,836 886 215 406 (27 ) (59 ) 12,257 Expenses: Interest Expense 1,732 50 - - - (56 ) 1,726 Provision for loan losses 1,600 - - - - - 1,600 Salary and benefit expense 3,285 489 69 234 - - 4,077 Other operating expenses 2,739 177 16 62 24 (3 ) 3,015 Total expense 9,356 716 85 296 24 (59 ) 10,418 Net income (loss) before taxes 1,480 170 130 110 (51 ) - 1,839 Income tax expense 112 - 19 - 22 - 153 Net income (loss) $ 1,368 $ 170 $ 111 $ 110 $ (73 ) $ - $ 1,686 Net income attributable to non-controlling interest - 51 - 27 (27 ) - 51 Net Income attributable to F & M Bank Corp. $ 1,368 $ 119 $ 111 $ 83 $ (46 ) $ - $ 1,635 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Recognition | |
Summary of noninterest income, segregated by revenue streams | Six Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 Noninterest Income (in thousands) In-scope of Topic 606: Service Charges on Deposits $ 586 $ 803 $ 225 $ 417 Investment Services and Insurance Income 358 322 173 171 Title Insurance Income 843 682 472 406 ATM and check card fees 894 898 462 529 Other 283 281 123 153 Noninterest Income (in-scope of Topic 606) 2,964 2,986 1,455 1,676 Noninterest Income (out-of-scope of Topic 606) 2,823 1,279 1,903 799 Total Noninterest Income $ 5,787 $ 4,265 $ 3,358 $ 2,475 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases | |
Schedule of operating lease liabilities and reconciliation | As of June 30, 2020 Six months ending December 31, 2020 $ 52 Twelve months ending December 31, 2021 127 Twelve months ending December 31, 2022 129 Twelve months ending December 31, 2023 93 Twelve months ending December 31, 2024 92 Thereafter 611 Total undiscounted cash flows $ 1,104 Discount 222 Lease liabilities $ 882 |
Schedule of leases | (Dollars in thousands) June 30, 2020 Lease Liabilities $ 882 Right-of-use assets 867 Weighted average remaining lease term 4.58 Weighted average discount rate 3.46 % For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Lease cost (in thousands) Operating lease cost $ 25 $ 32 $ 58 $ 64 Total lease cost $ 25 $ 32 $ 58 $ 64 Cash paid for amounts included in the measurement of lease liabilities $ 31 $ 38 $ 69 $ 75 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings available to common stockholders: | ||||
Net income | $ 2,670 | $ 1,686 | $ 3,921 | $ 2,950 |
Non-controlling interest (income) loss | 43 | 51 | 105 | 29 |
Preferred stock dividends | 66 | 79 | 132 | 157 |
Net income (loss) available to common stockholders | $ 2,561 | $ 1,556 | $ 3,684 | $ 2,764 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of Significant Accounting Policies | ||||
Basic EPS, income | $ 2,561 | $ 1,556 | $ 3,684 | $ 2,764 |
Effect of dilutive securities convertible preferred stock, income | 66 | 79 | 132 | 157 |
Net Income | $ 2,627 | $ 1,635 | $ 3,816 | $ 2,921 |
Basic EPS, shares | 3,194,282 | 3,200,119 | 3,199,183 | 3,200,119 |
Effect of dilutive securities convertible preferred stock, shares | 206,660 | 247,029 | 229,599 | 274,450 |
Diluted EPS, shares | 3,400,942 | 3,447,148 | 3,428,782 | 3,474,569 |
Basic EPS, per shares | $ 0.80 | $ 0.49 | $ 1.15 | $ 0.86 |
Effect of dilutive securities convertible preferred stock, per shares | (0.04) | (0.02) | (0.04) | (0.02) |
Diluted EPS, per shares | $ 0.77 | $ 0.47 | $ 1.11 | $ 0.84 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Securities available for sale | ||
Cost | $ 81,135,000 | $ 4,376,000 |
Unrealized gains | 145,000 | 2,000 |
Unrealized losses | (236,000) | (12,000) |
Market value | 81,044,000 | 4,366,000 |
Securities issued by state and political subdivision | ||
Securities available for sale | ||
Cost | 8,876,000 | |
Unrealized gains | 86,000 | |
Unrealized losses | 11,000 | |
Market value | 8,951,000 | |
U. S. Treasury and agency obligations | ||
Securities available for sale | ||
Cost | 3,000,000 | |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | 0 |
Market value | 3,000,000 | |
Cost | 125,000 | 124,000 |
Market value | 125,000 | 124,000 |
Mortgage-backed securities | ||
Securities available for sale | ||
Cost | 45,211,000 | 317,000 |
Unrealized gains | 10,000 | 2,000 |
Unrealized losses | (225,000) | 0 |
Market value | 44,996,000 | 319,000 |
Government Sponsored Enterprises | ||
Securities available for sale | ||
Cost | 21,003,000 | 2,000,000 |
Unrealized gains | 5,000 | 0 |
Unrealized losses | 0 | (11,000) |
Market value | 21,008,000 | 1,989,000 |
Corporate debt security | ||
Securities available for sale | ||
Cost | 3,045,000 | 2,059,000 |
Unrealized gains | 44,000 | 0 |
Unrealized losses | 0 | (1,000) |
Market value | $ 3,089,000 | $ 2,058,000 |
Investment Securities (Details
Investment Securities (Details 1) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Total, amortized cost | $ 125,000 | $ 124,000 |
Securities Held to Maturity | ||
Due in one year or less, amortized cost | 125,000 | |
Due after one year through five years, amortized cost | 0 | |
Due after five years, amortized cost | 0 | |
Due after ten years, amortized cost | 0 | |
Total, amortized cost | 125,000 | |
Due in one year or less, fair value | 125,000 | |
Due after one year through five years, fair value | 0 | |
Due after five years, fair value | 0 | |
Due after ten years, fair value | 0 | |
Market value | 125,000 | |
Securities Available for Sale | ||
Due in one year or less, amortized cost | 3,000,000 | |
Due after one year through five years, amortized cost | 18,551,000 | |
Due after five years, amortized cost | 16,019,000 | |
Due after ten years, amortized cost | 43,565,000 | |
Total, amortized cost | 81,135,000 | |
Due in one year or less, fair value | 3,000,000 | |
Due after one year through five years, fair value | 18,601,000 | |
Due after five years, fair value | 16,029,000 | |
Due after ten years, fair value | 43,414,000 | |
Market value | $ 81,044,000 |
Investment Securities (Detail_2
Investment Securities (Details 2) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Fair value less than 12 months | $ 66,004,000 | $ 4,047,000 |
Unrealized losses less than 12 months | (236,000) | (12,000) |
Fair value more than 12 months | 0 | 0 |
Unrealized losses more than 12 months | 0 | 0 |
Fair value total | (66,004,000) | 4,047,000 |
Unrealized losses total | (236,000) | (12,000) |
Mortgage-backed securities | ||
Fair value less than 12 months | 44,996,000 | |
Unrealized losses less than 12 months | (225,000) | |
Fair value more than 12 months | 0 | |
Unrealized losses more than 12 months | 0 | |
Fair value total | 44,996,000 | |
Unrealized losses total | (225,000) | |
Government Sponsored Enterprises | ||
Fair value less than 12 months | 1,989,000 | |
Unrealized losses less than 12 months | (11,000) | |
Fair value more than 12 months | 0 | |
Unrealized losses more than 12 months | 0 | |
Fair value total | 1,989,000 | |
Unrealized losses total | (11,000) | |
Corporate debt security | ||
Fair value less than 12 months | 2,058,000 | |
Unrealized losses less than 12 months | (1,000) | |
Fair value more than 12 months | 0 | |
Unrealized losses more than 12 months | 0 | |
Fair value total | 2,058,000 | |
Unrealized losses total | $ (1,000) | |
Securities issued by States and political subdivisions [Member] | ||
Fair value less than 12 months | 21,008,000 | |
Unrealized losses less than 12 months | (11,000) | |
Fair value more than 12 months | 0 | |
Unrealized losses more than 12 months | 0 | |
Fair value total | 21,008,000 | |
Unrealized losses total | $ (11,000) |
Investment Securities (Detail_3
Investment Securities (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other investments | $ 12,212 | $ 13,525 |
Federal Home Loan Bank [Member] | ||
Stock | 2,526 | |
Other investments | 1,604 | |
Twenty Low-Income housing [Member] | ||
Other investments | 8,082 | |
Six low-income housing limited partnerships [Member] | ||
Other investments | $ 2,831 |
Loans (Details)
Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Loans outstanding | $ 661,529 | $ 603,425 |
Consumer [Member] | ||
Loans outstanding | 10,072 | 10,165 |
Construction/Land Development [Member] | ||
Loans outstanding | 73,783 | 77,131 |
Farmland [Member] | ||
Loans outstanding | 36,966 | 29,718 |
Real Estate [Member] | ||
Loans outstanding | 172,205 | 178,267 |
Multi-Family [Member] | ||
Loans outstanding | 6,065 | 5,364 |
Commercial Real Estate [Member] | ||
Loans outstanding | 128,763 | 129,850 |
Home Equity - Closed End | ||
Loans outstanding | 9,069 | 9,523 |
Home Equity | ||
Loans outstanding | 46,510 | 47,774 |
Commercial & Industrial - Non-Real Estate | ||
Loans outstanding | 90,103 | 33,535 |
Credit Cards | ||
Loans outstanding | 2,736 | 3,122 |
Dealer Finance | ||
Loans outstanding | $ 85,257 | $ 78,976 |
Loans (Details 1)
Loans (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Impaired loans without a valuation allowance | |||||
Recorded investment | $ 9,384,000 | $ 9,384,000 | $ 9,287,000 | ||
Unpaid principal balance | 9,384,000 | 9,384,000 | 9,287,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 9,147,000 | $ 8,284,000 | 9,338,000 | $ 10,638,000 | |
Interest income recognized | 126,000 | 266,000 | 248,000 | 374,000 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 14,872,000 | 14,872,000 | 14,494,000 | ||
Unpaid principal balance | 14,872,000 | 14,872,000 | 15,519,000 | ||
Related Allowance | 1,270,000 | 1,270,000 | 1,755,000 | ||
Average recorded investment | 14,924,000 | 7,401,000 | 14,685,000 | 6,120,000 | |
Interest income recognized | 313,000 | (25,000) | 504,000 | 180,000 | |
Total impaired loans | |||||
Recorded investment | 24,256,000 | 24,256,000 | 23,781,000 | ||
Unpaid principal balance | 24,256,000 | 24,256,000 | 24,806,000 | ||
Related allowance | 1,270,000 | 1,270,000 | 1,755,000 | ||
Average recorded investment | 24,071,000 | 15,685,000 | 24,023,000 | 16,758,000 | |
Interest income recognized | 439,000 | 241,000 | 752,000 | 554,000 | |
Consumer [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | 0 | 0 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 21,000 | 0 | 21,000 | 12,000 | |
Interest income recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 1,000 | 1,000 | 4,000 | ||
Unpaid principal balance | 1,000 | 1,000 | 4,000 | ||
Related Allowance | 1,000 | ||||
Average recorded investment | 5 | 68,000 | 6 | ||
Interest income recognized | 0 | 0 | 0 | 0 | |
Home Equity - Close End [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 703,000 | 703,000 | 716,000 | ||
Unpaid principal balance | 703,000 | 703,000 | 716,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 0 | 360,000 | 358,000 | 360,000 | |
Interest income recognized | 21,000 | 0 | 21,000 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | 0 | 0 | ||
Average recorded investment | 429,000 | 0 | 76,000 | 0 | |
Interest income recognized | (10,000) | 41,000 | 0 | 41,000 | |
Home Equity Open End [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | 0 | 0 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 0 | 0 | 0 | 0 | |
Interest income recognized | 2,000 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 151,000 | 151,000 | 151,000 | ||
Unpaid principal balance | 151,000 | 151,000 | 151,000 | ||
Related Allowance | 13,000 | 13,000 | 151,000 | ||
Average recorded investment | 0 | 0 | 76,000 | 0 | |
Interest income recognized | 0 | 0 | 4,000 | 0 | |
Credit Card [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | 0 | 0 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 67,000 | 5,000 | 21 | 6,000 | |
Interest income recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | ||||
Average recorded investment | 68 | ||||
Interest income recognized | 0 | ||||
Dealers Finance [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 42,000 | 42,000 | 79,000 | ||
Unpaid principal balance | 42,000 | 42,000 | 79,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 14,000 | 45,000 | 40,000 | 33,000 | |
Interest income recognized | 1,000 | (1,000) | 2,000 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 131,000 | 131,000 | 136,000 | ||
Unpaid principal balance | 131,000 | 131,000 | |||
Related Allowance | 12,000 | 12,000 | 7,000 | ||
Average recorded investment | 964,000 | 176,000 | 955,000 | 194,000 | |
Interest income recognized | 1,000 | 5,000 | 5,000 | 9,000 | |
Construction/Land Development [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 1,428,000 | 1,428,000 | 2,042,000 | ||
Unpaid principal balance | 1,428,000 | 1,428,000 | 2,042,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 1,518,000 | 2,011,000 | 1,736,000 | 2,195,000 | |
Interest income recognized | 15,000 | 84,000 | 40,000 | 123,000 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 356,000 | 356,000 | 1,036,000 | ||
Unpaid principal balance | 356,000 | 356,000 | 2,061,000 | ||
Related Allowance | 3,000 | 3,000 | 85,000 | ||
Average recorded investment | 352 | 2,651,000 | 696,000 | 3,445,000 | |
Interest income recognized | (27,000) | 0 | 31,000 | ||
Farmland [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | 0 | 0 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 352,000 | 1,942,000 | 352,000 | 1,942,000 | |
Interest income recognized | 0 | 1,000 | 0 | 1,000 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 1,774,000 | 1,774,000 | 1,933,000 | ||
Unpaid principal balance | 1,774,000 | 1,774,000 | 1,933,000 | ||
Related Allowance | 110,000 | 110,000 | 537,000 | ||
Average recorded investment | 964,000 | 0 | 967,000 | 0 | |
Interest income recognized | 178,000 | 0 | 184,000 | 0 | |
Real Estate [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 4,899,000 | 4,899,000 | 5,131,000 | ||
Unpaid principal balance | 4,899,000 | 4,899,000 | 5,131,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 5,258,000 | 2,013,000 | 5,015,000 | 2,020,000 | |
Interest income recognized | 60,000 | (7,000) | 136,000 | 22,000 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 9,619,000 | 9,619,000 | 10,404,000 | ||
Unpaid principal balance | 9,619,000 | 9,619,000 | 10,404,000 | ||
Related Allowance | 617,000 | 617,000 | 569,000 | ||
Average recorded investment | 9,695,000 | 417,000 | 10,012,000 | 419,000 | |
Interest income recognized | 122,000 | 58,000 | 262,000 | 65,000 | |
Multi-Family [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | 0 | 0 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 0 | 0 | 0 | 0 | |
Interest income recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 0 | 0 | 0 | ||
Unpaid principal balance | 0 | 0 | 0 | ||
Related Allowance | 0 | 0 | 0 | ||
Average recorded investment | 0 | 0 | 0 | 0 | |
Interest income recognized | 0 | 0 | 0 | 0 | |
Commercial Real Estate [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 2,298,000 | 2,298,000 | 1,302,000 | ||
Unpaid principal balance | 2,298,000 | 2,298,000 | 1,302,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 1,883,000 | 1,901,000 | 1,800,000 | 4,076,000 | |
Interest income recognized | 29,000 | 189,000 | 49,000 | 228,000 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 2,840,000 | 2,840,000 | 638,000 | ||
Unpaid principal balance | 2,840,000 | 2,840,000 | 638,000 | ||
Related Allowance | 515,000 | 515,000 | 213,000 | ||
Average recorded investment | 2,338,000 | 4,152,000 | 1,739,000 | 2,056,000 | |
Interest income recognized | 21,000 | (104,000) | 49,000 | 33,000 | |
Commercial & Industrial - Non Real Estate [Member] | |||||
Impaired loans without a valuation allowance | |||||
Recorded investment | 14,000 | 14,000 | 17,000 | ||
Unpaid principal balance | 14,000 | 14,000 | 17,000 | ||
Related allowance | 0 | 0 | 0 | ||
Average recorded investment | 101,000 | 12,000 | 16,000 | 0 | |
Interest income recognized | 0 | 0 | 0 | 0 | |
Impaired loans with a valuation allowance | |||||
Recorded investment | 0 | 0 | 192,000 | ||
Unpaid principal balance | 0 | 0 | 192,000 | ||
Related Allowance | $ 192,000 | ||||
Average recorded investment | 35,000 | 0 | 96,000 | 0 | |
Interest income recognized | $ (1,000) | $ 2,000 | $ 0 | $ 1,000 |
Loans (Details 2)
Loans (Details 2) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
30-59 days past due | $ 2,506,000 | $ 6,365,000 |
60-89 days past due | 696,000 | 1,794,000 |
Greater than 90 days (excluding non-accrual) | 1,204,000 | 4,379,000 |
Total past due | 4,406,000 | 12,538,000 |
Current | 657,123,000 | 590,887,000 |
Total loans receivable | 661,529,000 | 603,425,000 |
Non-accrual loans | 4,429,000 | 5,007,000 |
Recorded investment 90 days & accruing | 37,000 | 722,000 |
Construction/Land Development [Member] | ||
30-59 days past due | 0 | 117,000 |
60-89 days past due | 0 | 45,000 |
Greater than 90 days (excluding non-accrual) | 374,000 | 1,255,000 |
Total past due | 374,000 | 1,417,000 |
Current | 73,409,000 | 75,714,000 |
Total loans receivable | 73,783,000 | 77,131,000 |
Non-accrual loans | 414,000 | 1,301,000 |
Recorded investment 90 days & accruing | 0 | 0 |
Farmland [Member] | ||
30-59 days past due | 0 | 27,000 |
60-89 days past due | 26,000 | 0 |
Greater than 90 days (excluding non-accrual) | 0 | 1,933,000 |
Total past due | 26,000 | 1,960,000 |
Current | 36,940,000 | 27,758,000 |
Total loans receivable | 36,966,000 | 29,718,000 |
Non-accrual loans | 1,774,000 | 1,933,000 |
Recorded investment 90 days & accruing | 0 | 0 |
Real Estate [Member] | ||
30-59 days past due | 1,421,000 | 2,440,000 |
60-89 days past due | 366,000 | 1,035,000 |
Greater than 90 days (excluding non-accrual) | 558,000 | 837,000 |
Total past due | 2,345,000 | 4,312,000 |
Current | 169,860,000 | 173,955,000 |
Total loans receivable | 172,205,000 | 178,267,000 |
Non-accrual loans | 734,000 | 420,000 |
Recorded investment 90 days & accruing | 0 | 619,000 |
Multi-Family [Member] | ||
30-59 days past due | 0 | 0 |
60-89 days past due | 0 | 0 |
Greater than 90 days (excluding non-accrual) | 0 | 0 |
Total past due | 0 | 0 |
Current | 6,065,000 | 5,364,000 |
Total loans receivable | 6,065,000 | 5,364,000 |
Non-accrual loans | 0 | 0 |
Recorded investment 90 days & accruing | 0 | 0 |
Commercial Real Estate [Member] | ||
30-59 days past due | 0 | 563,000 |
60-89 days past due | 156,000 | 0 |
Greater than 90 days (excluding non-accrual) | 0 | 137,000 |
Total past due | 156,000 | 700,000 |
Current | 128,607,000 | 129,150,000 |
Total loans receivable | 128,763,000 | 129,850,000 |
Non-accrual loans | 1,125,000 | 900,000 |
Recorded investment 90 days & accruing | 0 | 0 |
Commercial & Industrial - Non Real Estate [Member] | ||
30-59 days past due | 25,000 | 726,000 |
60-89 days past due | 0 | 4,000 |
Greater than 90 days (excluding non-accrual) | 0 | 0 |
Total past due | 25,000 | 730,000 |
Current | 90,078,000 | 32,805,000 |
Total loans receivable | 90,103,000 | 33,535,000 |
Non-accrual loans | 7,000 | 203,000 |
Recorded investment 90 days & accruing | 0 | 0 |
Home Equity - Close End [Member] | ||
30-59 days past due | 0 | 0 |
60-89 days past due | 0 | 0 |
Greater than 90 days (excluding non-accrual) | 31,000 | 0 |
Total past due | 31,000 | 0 |
Current | 9,038,000 | 9,523,000 |
Total loans receivable | 9,069,000 | 9,523,000 |
Non-accrual loans | 0 | 0 |
Recorded investment 90 days & accruing | 31,000 | 0 |
Home Equity Open End [Member] | ||
30-59 days past due | 179,000 | 429,000 |
60-89 days past due | 8,000 | 296,000 |
Greater than 90 days (excluding non-accrual) | 217,000 | 15,000 |
Total past due | 404,000 | 740,000 |
Current | 46,106,000 | 47,034,000 |
Total loans receivable | 46,510,000 | 47,774,000 |
Non-accrual loans | 240,000 | 0 |
Recorded investment 90 days & accruing | 0 | 15,000 |
Credit Card [Member] | ||
30-59 days past due | 22,000 | 31,000 |
60-89 days past due | 0 | 0 |
Greater than 90 days (excluding non-accrual) | 0 | 4,000 |
Total past due | 22,000 | 35,000 |
Current | 2,714,000 | 3,087,000 |
Total loans receivable | 2,736,000 | 3,122,000 |
Non-accrual loans | 0 | 0 |
Recorded investment 90 days & accruing | 0 | 4,000 |
Dealers Finance [Member] | ||
30-59 days past due | 839,000 | 1,943,000 |
60-89 days past due | 139,000 | 400,000 |
Greater than 90 days (excluding non-accrual) | 24,000 | 198,000 |
Total past due | 1,002,000 | 2,541,000 |
Current | 84,255,000 | 76,435,000 |
Total loans receivable | 85,257,000 | 78,976,000 |
Non-accrual loans | 135,000 | 249,000 |
Recorded investment 90 days & accruing | 6,000 | 84,000 |
Consumer | ||
30-59 days past due | 20,000 | 89,000 |
60-89 days past due | 1,000 | 14,000 |
Greater than 90 days (excluding non-accrual) | 0 | 0 |
Total past due | 21,000 | 103,000 |
Current | 10,051,000 | 10,062,000 |
Total loans receivable | 10,072,000 | 10,165,000 |
Non-accrual loans | 0 | 1,000 |
Recorded investment 90 days & accruing | $ 0 | $ 0 |
Loans (Details Narrative)
Loans (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Loans | ||
Pledged loans | $ 170,970,000 | $ 178,253,000 |
Loans held for sale | 90,602,000 | 66,798,000 |
Foreclosed residential real estate in other real estate | 0 | $ 133,000 |
Interest income | 52,000 | |
Consumer mortgages | $ 878,000 |
Allowance for Loan Losses (Deta
Allowance for Loan Losses (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Beginning balance | $ 8,390,000 | $ 5,240,000 |
Charge-offs | 1,204,000 | 5,626,000 |
Recoveries | 547,000 | 1,371,000 |
Provision | 2,300,000 | 7,405,000 |
Ending balance | 10,033,000 | 8,390,000 |
Individually evaluated for impairment | 1,270,000 | 1,755,000 |
Collectively evaluated for impairment | 8,764,000 | 6,635,000 |
Home Equity - Close End [Member] | ||
Beginning balance | 42,000 | 13,000 |
Charge-offs | 0 | 1,000 |
Recoveries | 0 | 2,000 |
Provision | 18,000 | 28,000 |
Ending balance | 60,000 | 42,000 |
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 61,000 | 42,000 |
Home Equity Open End [Member] | ||
Beginning balance | 457,000 | 126,000 |
Charge-offs | 0 | 126,000 |
Recoveries | 1 | 1,000 |
Provision | 25,000 | 456,000 |
Ending balance | 434,000 | 457,000 |
Individually evaluated for impairment | 13,000 | 151,000 |
Collectively evaluated for impairment | 422,000 | 306,000 |
Credit Card [Member] | ||
Beginning balance | 68,000 | 38,000 |
Charge-offs | 59,000 | 110,000 |
Recoveries | 30,000 | 29,000 |
Provision | 38,000 | 111,000 |
Ending balance | 77,000 | 68,000 |
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 78,000 | 68,000 |
Dealers Finance [Member] | ||
Beginning balance | 1,786,000 | 1,974,000 |
Charge-offs | 971,000 | 2,118,000 |
Recoveries | 465,000 | 1,144,000 |
Provision | 685,000 | 786,000 |
Ending balance | 1,965,000 | 1,786,000 |
Individually evaluated for impairment | 12,000 | 7,000 |
Collectively evaluated for impairment | 1,952,000 | 1,779,000 |
Consumers | ||
Beginning balance | 186,000 | 70,000 |
Charge-offs | 67,000 | 116,000 |
Recoveries | 38,000 | 44,000 |
Provision | 279,000 | 188,000 |
Ending balance | 436,000 | 186,000 |
Individually evaluated for impairment | 0 | 1,000 |
Collectively evaluated for impairment | 433,000 | 185,000 |
Construction/Land Development [Member] | ||
Beginning balance | 1,190,000 | 2,094,000 |
Charge-offs | 7,000 | 2,319,000 |
Recoveries | 0 | 50,000 |
Provision | 254,000 | 1,365,000 |
Ending balance | 1,437,000 | 1,190,000 |
Individually evaluated for impairment | 3,000 | 85,000 |
Collectively evaluated for impairment | 1,435,000 | 1,105,000 |
Farmland [Member] | ||
Beginning balance | 668,000 | 15,000 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | 333,000 | 653,000 |
Ending balance | 335,000 | 668,000 |
Individually evaluated for impairment | 110,000 | 537,000 |
Collectively evaluated for impairment | 225,000 | 131,000 |
Real Estate [Member] | ||
Beginning balance | 1,573,000 | 292,000 |
Charge-offs | 36,000 | 32,000 |
Recoveries | 4,000 | 4,000 |
Provision | 396,000 | 1,309,000 |
Ending balance | 1,937,000 | 1,573,000 |
Individually evaluated for impairment | 617,000 | 569,000 |
Collectively evaluated for impairment | 1,319,000 | 1,004,000 |
Multi-Family [Member] | ||
Beginning balance | 20,000 | 10,000 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | 36,000 | 10,000 |
Ending balance | 56,000 | 20,000 |
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 56,000 | 20,000 |
Commercial Real Estate [Member] | ||
Beginning balance | 1,815,000 | 416,000 |
Charge-offs | 0 | 677,000 |
Recoveries | 0 | 16,000 |
Provision | 1,106,000 | 2,060,000 |
Ending balance | 2,921,000 | 1,815,000 |
Individually evaluated for impairment | 515,000 | 213,000 |
Collectively evaluated for impairment | 2,406,000 | 1,602,000 |
Commercial & Industrial - Non Real Estate [Member] | ||
Beginning balance | 585,000 | 192,000 |
Charge-offs | 64,000 | 127,000 |
Recoveries | 10,000 | 81,000 |
Provision | 154,000 | 439,000 |
Ending balance | 377,000 | 585,000 |
Individually evaluated for impairment | 0 | 192,000 |
Collectively evaluated for impairment | $ 377,000 | $ 393,000 |
Allowance for Loan Losses (De_2
Allowance for Loan Losses (Details 1) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Loan receivable | $ 661,529,000 | $ 603,425,000 |
Loans individually evaluated for impairment | 24,256,000 | 23,781,000 |
Loans collectively evaluated for impairment | 637,273,000 | 579,644,000 |
Construction/Land Development [Member] | ||
Loan receivable | 73,783,000 | 77,131,000 |
Loans individually evaluated for impairment | 1,784,000 | 3,078,000 |
Loans collectively evaluated for impairment | 71,999,000 | 74,053,000 |
Farmland [Member] | ||
Loan receivable | 36,966,000 | 29,718,000 |
Loans individually evaluated for impairment | 1,774,000 | 1,933,000 |
Loans collectively evaluated for impairment | 35,192,000 | 27,785,000 |
Real Estate [Member] | ||
Loan receivable | 172,205,000 | 178,267,000 |
Loans individually evaluated for impairment | 14,518,000 | 15,535,000 |
Loans collectively evaluated for impairment | 157,687,000 | 162,732,000 |
Multi-Family [Member] | ||
Loan receivable | 6,065,000 | 5,364,000 |
Loans individually evaluated for impairment | 0 | 0 |
Loans collectively evaluated for impairment | 6,065,000 | 5,364,000 |
Commercial Real Estate [Member] | ||
Loan receivable | 128,763,000 | 129,850,000 |
Loans individually evaluated for impairment | 5,138,000 | 1,940,000 |
Loans collectively evaluated for impairment | 123,625,000 | 127,910,000 |
Commercial & Industrial - Non Real Estate [Member] | ||
Loan receivable | 90,103,000 | 33,535,000 |
Loans individually evaluated for impairment | 14,000 | 209,000 |
Loans collectively evaluated for impairment | 90,089,000 | 33,326,000 |
Home Equity - Close End [Member] | ||
Loan receivable | 9,069,000 | 9,523,000 |
Loans individually evaluated for impairment | 703,000 | 716,000 |
Loans collectively evaluated for impairment | 8,366,000 | 8,807,000 |
Home Equity Open End [Member] | ||
Loan receivable | 46,510,000 | 47,774,000 |
Loans individually evaluated for impairment | 151,000 | 151,000 |
Loans collectively evaluated for impairment | 46,359,000 | 47,623,000 |
Credit Card [Member] | ||
Loan receivable | 2,736,000 | 3,122,000 |
Loans individually evaluated for impairment | 0 | 0 |
Loans collectively evaluated for impairment | 2,736,000 | 3,122,000 |
Dealers Finance [Member] | ||
Loan receivable | 85,257,000 | 78,976,000 |
Loans individually evaluated for impairment | 173,000 | 215,000 |
Loans collectively evaluated for impairment | 85,084,000 | 78,761,000 |
Consumers | ||
Loan receivable | 10,072,000 | 10,165,000 |
Loans individually evaluated for impairment | 1,000 | 4,000 |
Loans collectively evaluated for impairment | $ 10,071,000 | $ 10,161,000 |
Allowance for Loan Losses (De_3
Allowance for Loan Losses (Details 2) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Construction/Land Development | $ 73,783,000 | $ 77,131,000 |
Farmland | 36,966,000 | 29,718,000 |
Real Estate | 172,205,000 | 178,267,000 |
Multi-Family | 6,065,000 | 5,364,000 |
Commercial Real Estate | 128,763,000 | 129,850,000 |
Home Equity - closed end | 9,069,000 | 9,523,000 |
Home Equity - open end | 46,510,000 | 47,774,000 |
Commercial & Industrial (Non-Real Estate) | 90,103,000 | 33,535,000 |
Consumer (excluding dealer) | 10,072,000 | 10,165,000 |
Total | 573,536,000 | 521,327,000 |
Grade 8 Doubtful | ||
Construction/Land Development | 0 | 0 |
Farmland | 0 | 0 |
Real Estate | 0 | 0 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 0 | 0 |
Home Equity - closed end | 0 | 0 |
Home Equity - open end | 0 | 0 |
Commercial & Industrial (Non-Real Estate) | 0 | 0 |
Consumer (excluding dealer) | 0 | 0 |
Total | 0 | 0 |
Grade 6 Watch | ||
Construction/Land Development | 12,390,000 | 2,434,000 |
Farmland | 668,000 | 1,188,000 |
Real Estate | 4,196,000 | 5,635,000 |
Multi-Family | 0 | 173,000 |
Commercial Real Estate | 21,934,000 | 4,397,000 |
Home Equity - closed end | 1,250,000 | 1,365,000 |
Home Equity - open end | 826,000 | 1,198,000 |
Commercial & Industrial (Non-Real Estate) | 1,279,000 | 373,000 |
Consumer (excluding dealer) | 9,000 | 56,000 |
Total | 42,552,000 | 16,819,000 |
Grade 1 Minimal Risk | ||
Construction/Land Development | 0 | 0 |
Farmland | 59,000 | 60,000 |
Real Estate | 0 | 0 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 0 | 0 |
Home Equity - closed end | 0 | 0 |
Home Equity - open end | 0 | 17,000 |
Commercial & Industrial (Non-Real Estate) | 113,000 | 142,000 |
Consumer (excluding dealer) | 3,000 | 6,000 |
Total | 175,000 | 225,000 |
Grade 2 Modest Risk | ||
Construction/Land Development | 146,000 | 615,000 |
Farmland | 489,000 | 363,000 |
Real Estate | 2,459,000 | 1,900,000 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 1,898,000 | 2,465,000 |
Home Equity - closed end | 176,000 | 189,000 |
Home Equity - open end | 1,732,000 | 1,965,000 |
Commercial & Industrial (Non-Real Estate) | 1,508,000 | 2,042,000 |
Consumer (excluding dealer) | 191,000 | 170,000 |
Total | 8,599,000 | 9,709,000 |
Grade 3 Average Risk | ||
Construction/Land Development | 12,664,000 | 21,904,000 |
Farmland | 12,922,000 | 9,479,000 |
Real Estate | 43,527,000 | 48,308,000 |
Multi-Family | 1,095,000 | 1,327,000 |
Commercial Real Estate | 31,680,000 | 40,227,000 |
Home Equity - closed end | 2,703,000 | 2,999,000 |
Home Equity - open end | 18,693,000 | 17,789,000 |
Commercial & Industrial (Non-Real Estate) | 8,965,000 | 12,818,000 |
Consumer (excluding dealer) | 3,870,000 | 3,476,000 |
Total | 136,119,000 | 158,327,000 |
Grade 4 Acceptable Risk | ||
Construction/Land Development | 39,099,000 | 41,693,000 |
Farmland | 15,974,000 | 13,754,000 |
Real Estate | 77,176,000 | 81,371,000 |
Multi-Family | 3,612,000 | 3,711,000 |
Commercial Real Estate | 63,007,000 | 67,626,000 |
Home Equity - closed end | 3,669,000 | 3,816,000 |
Home Equity - open end | 20,907,000 | 22,705,000 |
Commercial & Industrial (Non-Real Estate) | 13,148,000 | 15,035,000 |
Consumer (excluding dealer) | 4,270,000 | 4,726,000 |
Total | 240,862,000 | 254,437,000 |
Grade 5 Marginally Acceptable | ||
Construction/Land Development | 8,487,000 | 8,218,000 |
Farmland | 5,080,000 | 2,942,000 |
Real Estate | 27,790,000 | 23,876,000 |
Multi-Family | 1,358,000 | 153,000 |
Commercial Real Estate | 6,770,000 | 14,139,000 |
Home Equity - closed end | 1,240,000 | 1,154,000 |
Home Equity - open end | 3,616,000 | 3,769,000 |
Commercial & Industrial (Non-Real Estate) | 65,037,000 | 2,877,000 |
Consumer (excluding dealer) | 1,729,000 | 1,729,000 |
Total | 121,107,000 | 58,857,000 |
Grade 7 Substandard | ||
Construction/Land Development | 997,000 | 2,267,000 |
Farmland | 1,774,000 | 1,932,000 |
Real Estate | 17,057,000 | 17,177,000 |
Multi-Family | 0 | 0 |
Commercial Real Estate | 3,474,000 | 996,000 |
Home Equity - closed end | 31,000 | 0 |
Home Equity - open end | 736,000 | 331,000 |
Commercial & Industrial (Non-Real Estate) | 53,000 | 248,000 |
Consumer (excluding dealer) | 0 | 2,000 |
Total | $ 24,122,000 | $ 22,953,000 |
Allowance for Loan Losses (De_4
Allowance for Loan Losses (Details 3) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Credit cards | $ 2,736,000 | $ 3,122,000 |
Dealer finance | 85,257,000 | 78,976,000 |
Performing | ||
Credit cards | 2,736,000 | 3,118,000 |
Dealer finance | 85,109,000 | 78,529,000 |
Non performing | ||
Credit cards | 0 | 4,000 |
Dealer finance | $ 148,000 | $ 447,000 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Benefit Plan | ||||
Service cost | $ 202 | $ 184 | $ 404 | $ 369 |
Interest cost | 105 | 137 | 209 | 274 |
Expected return on plan assets | 183 | 201 | 367 | 403 |
Amortization of prior service cost | (3) | (4) | (6) | (8) |
Amortization of net loss | 55 | 7 | 111 | 141 |
Net periodic pension cost | $ 176 | $ 187 | $ 351 | $ 373 |
Fair Value (Details)
Fair Value (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Loans held for sale | $ 90,602,000 | |
IRLC | 1,012,000 | |
U.S. Treasury securities | 3,000,000 | |
U. S. Government sponsored enterprises | 21,008,000 | $ 1,989,000 |
Securities issued by States and political subdivisions in the U. S. | 8,951,000 | |
Mortgage-backed obligations of federal agencies | 44,996,000 | 319,000 |
Corporate debt securities | 3,089,000 | |
Other debt securities | 2,058,000 | |
Total securities available for sale | 172,658,000 | 4,366,000 |
Derivatives (Indexed CD product) | 45 | 72 |
Forward sales commitments | 554,000 | |
Total fair value of liabilities | 599 | |
Fair Value Inputs Level 1 | ||
Loans held for sale | 0 | |
IRLC | 0 | |
U.S. Treasury securities | 0 | |
U. S. Government sponsored enterprises | 0 | 0 |
Securities issued by States and political subdivisions in the U. S. | 0 | |
Mortgage-backed obligations of federal agencies | 0 | 0 |
Corporate debt securities | 0 | |
Other debt securities | 0 | |
Total securities available for sale | 0 | 0 |
Derivatives (Indexed CD product) | 0 | 0 |
Forward sales commitments | 0 | |
Total fair value of liabilities | 0 | 0 |
Fair Value Inputs Level 2 | ||
Loans held for sale | 90,602,000 | |
IRLC | 1,012,000 | |
U.S. Treasury securities | 3,000,000 | |
U. S. Government sponsored enterprises | 21,008,000 | 1,989,000 |
Securities issued by States and political subdivisions in the U. S. | 8,951,000 | |
Mortgage-backed obligations of federal agencies | 44,996,000 | 319,000 |
Corporate debt securities | 3,089,000 | |
Other debt securities | 2,058,000 | |
Total securities available for sale | 172,658,000 | 4,366,000 |
Derivatives (Indexed CD product) | 45 | 72 |
Forward sales commitments | 554,000 | |
Total fair value of liabilities | 599,000 | 72,000 |
Fair Value Inputs Level 3 | ||
Loans held for sale | 0 | |
IRLC | 0 | |
U.S. Treasury securities | 0 | |
U. S. Government sponsored enterprises | 0 | 0 |
Securities issued by States and political subdivisions in the U. S. | 0 | |
Mortgage-backed obligations of federal agencies | 0 | 0 |
Corporate debt securities | 0 | |
Other debt securities | 0 | |
Total securities available for sale | 0 | 0 |
Derivatives (Indexed CD product) | 0 | 72 |
Forward sales commitments | 0 | |
Total fair value of liabilities | $ 0 | $ 0 |
Fair Value (Details 1)
Fair Value (Details 1) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Impaired loans | $ 13,602,000 | $ 12,739,000 |
Consumer [Member] | ||
Impaired loans | 1,000 | 3,000 |
Dealers Finance [Member] | ||
Impaired loans | 119,000 | 129,000 |
Construction/Land Development [Member] | ||
Impaired loans | 353,000 | 951,000 |
Farmland [Member] | ||
Impaired loans | 1,664,000 | 1,396,000 |
Real Estate [Member] | ||
Impaired loans | 9,002,000 | 9,835,000 |
Commercial Real Estate [Member] | ||
Impaired loans | 2,325,000 | 425,000 |
Home Equity | ||
Impaired loans | 138,000 | |
Fair Value Inputs Level 1 | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Home Equity | ||
Impaired loans | 0 | |
Fair Value Inputs Level 1 | Consumer | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Dealers Finance [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Farmland | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Construction/Land Development [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 1 | Commercial Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Home Equity | ||
Impaired loans | 0 | |
Fair Value Inputs Level 2 | Consumer | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Dealers Finance [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Farmland | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Construction/Land Development [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 2 | Commercial Real Estate [Member] | ||
Impaired loans | 0 | 0 |
Fair Value Inputs Level 3 | ||
Impaired loans | 13,602,000 | 12,739,000 |
Fair Value Inputs Level 3 | Home Equity | ||
Impaired loans | 138,000 | |
Fair Value Inputs Level 3 | Consumer | ||
Impaired loans | 1,000 | 3,000 |
Fair Value Inputs Level 3 | Dealers Finance [Member] | ||
Impaired loans | 119,000 | 129,000 |
Fair Value Inputs Level 3 | Farmland | ||
Impaired loans | 1,664,000 | 1,396,000 |
Fair Value Inputs Level 3 | Construction/Land Development [Member] | ||
Impaired loans | 353,000 | 951,000 |
Fair Value Inputs Level 3 | Real Estate [Member] | ||
Impaired loans | 9,002,000 | 9,835,000 |
Fair Value Inputs Level 3 | Commercial Real Estate [Member] | ||
Impaired loans | $ 2,325,000 | $ 425,000 |
Fair Value (Details 2)
Fair Value (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Other real estate owned | $ 1,160,000 | $ 1,489,000 |
Assets held for sale | 520,000 | |
Impaired loans | 13,602,000 | 12,739,000 |
Fair Value Inputs Level 1 | ||
Assets held for sale | 0 | |
Impaired loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Fair Value Inputs Level 2 | ||
Assets held for sale | 520,000 | |
Impaired loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Fair Value Inputs Level 3 | ||
Assets held for sale | 0 | |
Impaired loans | 13,602,000 | 12,739,000 |
Other real estate owned | $ 1,160,000 | $ 1,489,000 |
Valuation technique impaired loans | Discounted appraised value | Discounted appraised value |
Valuation technique other real estate owned | Discounted appraised value | Discounted appraised value |
Significant unobservable inputs lmpaired loans | Discount for selling costs and marketability | Discount for selling costs and marketability |
Significant unobservable inputs other real estate owned | Discount for selling costs | Discount for selling costs |
Average impaired loans | 23.58% | 24.04% |
Average other real estate owned | 800.00% | 800.00% |
Fair Value Inputs Level 3 | Maximum | ||
Range impaired loans | 4500.00% | 58.98% |
Range other real estate owned | 1000.00% | 1000.00% |
Fair Value Inputs Level 3 | Minimum | ||
Range impaired loans | 300.00% | 0.00% |
Range other real estate owned | 600.00% | 500.00% |
Disclosures About Fair Value _3
Disclosures About Fair Value of Financial Instruments (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Cash and cash equivalents | $ 86,698,000 | $ 75,804,000 |
Cash and cash equivalents, fair value | 86,698,000 | 75,804,000 |
Securities, carrying amount | 81,169,000 | 4,490,000 |
Securities, fair value | 81,169,000 | 4,490,000 |
Loans held for sale, carrying amount | 90,602,000 | 66,798,000 |
Loans held for sale, fair value | 90,602,000 | 66,798,000 |
Loans held for investment, net, carrying amount | 651,496,000 | 595,035,000 |
Loans held for investment, net, fair value | 638,433,000 | 580,903,000 |
Interest receivable, carrying amount | 2,640,000 | 2,044,000 |
Interest receivable, fair value | 2,640,000 | 2,044,000 |
Bank owned life insurance, carrying amount | 20,345,000 | 20,050,000 |
Bank owned life insurance, fair value | 20,345,000 | 20,050,000 |
Total assets, carrying amount | 932,920,000 | 764,221,000 |
Total assets, fair value | 919,887,000 | 750,089,000 |
Liabilities | ||
Deposits, carrying amount | 766,652,000 | 641,709,000 |
Deposits, fair value | 770,229,000 | 644,235,000 |
Short-term debt, carrying amount | 0 | 10,000,000 |
Short-term debt, fair value | 0 | 10,000,000 |
Long-term debt, carrying amount | 100,585,000 | 53,201,000 |
Long-term debt, fair value | 101,717,000 | 53,543,000 |
Interest payable, carrying amount | 338,000 | 354,000 |
Interest payable, fair value | 338,000 | 354,000 |
Total liabilities, carrying amount | 867,575,000 | 705,264,000 |
Total liabilities, fair value | 872,284,000 | 708,132,000 |
Fair Value Inputs Level 1 | ||
Assets: | ||
Cash and cash equivalents, fair value | 86,698,000 | 75,804,000 |
Securities, fair value | 0 | 0 |
Loans held for sale, fair value | 0 | 0 |
Loans held for investment, net, fair value | 0 | 0 |
Interest receivable, fair value | 0 | 0 |
Bank owned life insurance, fair value | 0 | 0 |
Total assets, fair value | 86,698,000 | 75,804,000 |
Liabilities | ||
Deposits, fair value | 0 | 0 |
Short-term debt, fair value | 0 | 0 |
Long-term debt, fair value | 0 | 0 |
Interest payable, fair value | 0 | 0 |
Total liabilities, fair value | 0 | 0 |
Fair Value Inputs Level 2 | ||
Assets: | ||
Cash and cash equivalents, fair value | 0 | 0 |
Securities, fair value | 81,169,000 | 4,490,000 |
Loans held for sale, fair value | 90,602,000 | 66,798,000 |
Loans held for investment, net, fair value | 0 | 0 |
Interest receivable, fair value | 2,640,000 | 2,044,000 |
Bank owned life insurance, fair value | 20,345,000 | 20,050,000 |
Total assets, fair value | 194,756,000 | 93,382,000 |
Liabilities | ||
Deposits, fair value | 639,064,000 | 504,522,000 |
Short-term debt, fair value | 0 | 10,000,000 |
Long-term debt, fair value | 0 | 0 |
Interest payable, fair value | 338,000 | 354,000 |
Total liabilities, fair value | 639,402,000 | 514,876,000 |
Fair Value Inputs Level 3 | ||
Assets: | ||
Cash and cash equivalents, fair value | 0 | 0 |
Securities, fair value | 0 | 0 |
Loans held for sale, fair value | 0 | 0 |
Loans held for investment, net, fair value | 638,433,000 | 580,903,000 |
Interest receivable, fair value | 0 | 0 |
Bank owned life insurance, fair value | 0 | 0 |
Total assets, fair value | 638,433,000 | 580,903,000 |
Liabilities | ||
Deposits, fair value | 131,165,000 | 139,713,000 |
Short-term debt, fair value | 0 | 0 |
Long-term debt, fair value | 101,717,000 | 53,543,000 |
Interest payable, fair value | 0 | 0 |
Total liabilities, fair value | $ 232,882,000 | $ 193,256,000 |
Troubled Debt Restructuring (De
Troubled Debt Restructuring (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020USD ($)integer | Jun. 30, 2019USD ($)integer | |
Number of contracts | integer | 2 | 9 |
Pre-modification outstanding recorded investment | $ 11 | $ 1,153 |
Post-modification outstanding recorded investment | $ 11 | $ 1,153 |
In Default | ||
Number of contracts | integer | 1 | |
Pre-modification outstanding recorded investment | $ 3 | |
Post-modification outstanding recorded investment | $ 3 | |
Real Estate [Member] | ||
Number of contracts | integer | 1 | |
Pre-modification outstanding recorded investment | $ 193 | |
Post-modification outstanding recorded investment | $ 193 | |
Commercial Real Estate [Member] | ||
Number of contracts | integer | 1 | |
Pre-modification outstanding recorded investment | $ 182 | |
Post-modification outstanding recorded investment | $ 182 | |
Home Equity | ||
Number of contracts | integer | 1 | |
Pre-modification outstanding recorded investment | $ 720 | |
Post-modification outstanding recorded investment | $ 720 | |
Consumers | ||
Number of contracts | integer | 2 | 5 |
Pre-modification outstanding recorded investment | $ 11 | $ 35 |
Post-modification outstanding recorded investment | $ 11 | $ 35 |
Consumers | In Default | ||
Number of contracts | integer | 1 | |
Pre-modification outstanding recorded investment | $ 3 | |
Post-modification outstanding recorded investment | $ 3 | |
Commercial & Industrial | ||
Number of contracts | integer | 1 | |
Pre-modification outstanding recorded investment | $ 23 | |
Post-modification outstanding recorded investment | $ 23 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Beginning Balance | $ (3,211,000) | |
Ending Balance | (3,276,000) | |
Unrealized Securities Gains (Losses) [Member] | ||
Beginning Balance | (7,000) | $ (94,000) |
Change in unrealized securities gains (losses), net of tax | (65,000) | 89,000 |
Ending Balance | (72,000) | (5,000) |
Adjustments Related to Pension Plan [Member] | ||
Beginning Balance | (3,204,000) | (3,875,000) |
Change in unrealized securities gains (losses), net of tax | 0 | 0 |
Ending Balance | (3,204,000) | (3,875,000) |
Accumulated Other Comprehensive Loss [Member] | ||
Beginning Balance | (3,211,000) | (3,969,000) |
Change in unrealized securities gains (losses), net of tax | (65,000) | 89,000 |
Ending Balance | $ 3,276,000 | $ (3,880,000) |
Business Segments (Details)
Business Segments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Interest Income | $ 8,992,000 | $ 9,782,000 | $ 18,102,000 | $ 19,313,000 | |
Service charges on deposits | 225,000 | 417,000 | 586,000 | 803,000 | |
Investment services and insurance income | 358,000 | 322,000 | |||
Mortgage banking income, net | 1,971,000 | 815,000 | 2,900,000 | 1,345,000 | |
Title insurance income | 472,000 | 406,000 | 843,000 | 682,000 | |
Interest expense | 1,385,000 | 1,726,000 | 3,091,000 | 3,224,000 | |
Provision for loan losses | 800,000 | 1,600,000 | 2,300,000 | 3,050,000 | |
Income tax expense | 211,000 | 153,000 | 173,000 | 232,000 | |
Net income (loss) | 2,670,000 | 1,686,000 | 3,921,000 | 2,950,000 | |
Total assets | 981,602,000 | 981,602,000 | $ 813,999,000 | ||
Goodwill | 2,884,000 | 2,884,000 | $ 2,884,000 | ||
F&M Bank Member | |||||
Interest Income | 8,965,000 | 9,754,000 | 18,036,000 | 19,254,000 | |
Service charges on deposits | 225,000 | 417,000 | 586,000 | 803,000 | |
Investment services and insurance income | 0 | 0 | 0 | 0 | |
Mortgage banking income, net | 0 | 0 | 0 | 0 | |
Title insurance income | 0 | 0 | 0 | 0 | |
Other operating income (loss) | 516,000 | 665,000 | 1,097,000 | 1,110,000 | |
Total income (loss) | 9,706,000 | 10,836,000 | 19,719,000 | 21,167,000 | |
Interest expense | 1,392,000 | 1,732,000 | 3,111,000 | 3,233,000 | |
Provision for loan losses | 800,000 | 1,600,000 | 2,300,000 | 3,050,000 | |
Salary and benefit expense | 3,200,000 | 3,285,000 | 6,366,000 | 6,576,000 | |
Other operating expenses | 2,937,000 | 2,739,000 | 5,724,000 | 5,489,000 | |
Total expense | 8,329,000 | 9,356,000 | 17,501,000 | 18,348,000 | |
Net income (loss) before taxes | 1,377,000 | 1,480,000 | 2,218,000 | 2,819,000 | |
Income tax expense | 260,000 | 112,000 | 190,000 | 158,000 | |
Net income (loss) | 1,117,000 | 1,368,000 | 2,028,000 | 2,661,000 | |
Net income attributable to non-controlling interest | 0 | 0 | 0 | 0 | |
Net Income attributable to F & M Bank Corp. | 1,117,000 | 1,368,000 | 2,028,000 | 2,661,000 | |
Total assets | 983,611,000 | 809,712,000 | 983,611,000 | 809,712,000 | |
Goodwill | 2,670,000 | 2,670,000 | 2,670,000 | 2,670,000 | |
VBS Mortgage | |||||
Interest Income | 43,000 | 68,000 | |||
Service charges on deposits | 0 | 0 | |||
Investment services and insurance income | 0 | 0 | |||
Mortgage banking income, net | 815,000 | 1,345,000 | |||
Title insurance income | 0 | 0 | |||
Other operating income (loss) | 28,000 | 28,000 | |||
Total income (loss) | 886,000 | 1,441,000 | |||
Interest expense | 50,000 | 75,000 | |||
Provision for loan losses | 0 | 0 | |||
Salary and benefit expense | 489,000 | 917,000 | |||
Other operating expenses | 177,000 | 354,000 | |||
Total expense | 716,000 | 1,346,000 | |||
Net income (loss) before taxes | 170,000 | 95,000 | |||
Income tax expense | 0 | 0 | |||
Net income (loss) | 170,000 | 95,000 | |||
Net income attributable to non-controlling interest | 51,000 | 29,000 | |||
Net Income attributable to F & M Bank Corp. | 119,000 | 66,000 | |||
Total assets | 11,210,000 | 11,210,000 | |||
Goodwill | 47,000 | 47,000 | |||
TEB Life/FMFS | |||||
Interest Income | 36,000 | 41,000 | 80,000 | 75,000 | |
Service charges on deposits | 0 | 0 | 0 | 0 | |
Investment services and insurance income | 178,000 | 174,000 | 368,000 | 325,000 | |
Mortgage banking income, net | 0 | 0 | 0 | 0 | |
Title insurance income | 0 | 0 | 0 | 0 | |
Other operating income (loss) | 0 | 0 | 0 | 0 | |
Total income (loss) | 214,000 | 215,000 | 448,000 | 400,000 | |
Interest expense | 0 | 0 | 0 | 0 | |
Provision for loan losses | 0 | 0 | 0 | 0 | |
Salary and benefit expense | 72,000 | 69,000 | 157,000 | 150,000 | |
Other operating expenses | 18,000 | 16,000 | 28,000 | 28,000 | |
Total expense | 90,000 | 85,000 | 185,000 | 178,000 | |
Net income (loss) before taxes | 124,000 | 130,000 | 263,000 | 222,000 | |
Income tax expense | 21,000 | 19,000 | 39,000 | 33,000 | |
Net income (loss) | 103,000 | 111,000 | 224,000 | 189,000 | |
Net income attributable to non-controlling interest | 0 | 0 | 0 | 0 | |
Net Income attributable to F & M Bank Corp. | 103,000 | 111,000 | 224,000 | 189,000 | |
Total assets | 7,875,000 | 7,332,000 | 7,875,000 | 7,332,000 | |
Goodwill | 0 | 0 | 0 | 0 | |
VS Title | |||||
Interest Income | 0 | 0 | 0 | 0 | |
Service charges on deposits | 0 | 0 | 0 | 0 | |
Investment services and insurance income | 0 | 0 | 0 | 0 | |
Mortgage banking income, net | 0 | 0 | 0 | 0 | |
Title insurance income | 472,000 | 406,000 | 843,000 | 682,000 | |
Other operating income (loss) | 0 | 0 | 0 | 0 | |
Total income (loss) | 472,000 | 406,000 | 843,000 | 682,000 | |
Interest expense | 0 | 0 | 0 | 0 | |
Provision for loan losses | 0 | 0 | 0 | 0 | |
Salary and benefit expense | 236,000 | 234,000 | 494,000 | 457,000 | |
Other operating expenses | 62,000 | 62,000 | 127,000 | 124,000 | |
Total expense | 298,000 | 296,000 | 621,000 | 581,000 | |
Net income (loss) before taxes | 174,000 | 110,000 | 222,000 | 101,000 | |
Income tax expense | 0 | 0 | 0 | 0 | |
Net income (loss) | 174,000 | 110,000 | 222,000 | 101,000 | |
Net income attributable to non-controlling interest | (11,000) | 27,000 | 0 | 24,000 | |
Net Income attributable to F & M Bank Corp. | 185,000 | 83,000 | 222,000 | 77,000 | |
Total assets | 3,855,000 | 1,615,000 | 3,855,000 | 1,615,000 | |
Goodwill | 3,000 | 3,000 | 3,000 | 3,000 | |
Parent Only | |||||
Interest Income | 0 | 0 | 0 | 0 | |
Service charges on deposits | 0 | 0 | 0 | 0 | |
Investment services and insurance income | 0 | 0 | 0 | 0 | |
Mortgage banking income, net | 0 | 0 | 0 | 0 | |
Title insurance income | 0 | 0 | 0 | 0 | |
Other operating income (loss) | (53,000) | (27,000) | (53,000) | (24,000) | |
Total income (loss) | (53,000) | (27,000) | (53,000) | (24,000) | |
Interest expense | 0 | 0 | 0 | 0 | |
Provision for loan losses | 0 | 0 | 0 | 0 | |
Salary and benefit expense | 0 | 0 | 0 | 0 | |
Other operating expenses | 4,000 | 24,000 | 15,000 | 31,000 | |
Total expense | 4,000 | 24,000 | 15,000 | 31,000 | |
Net income (loss) before taxes | (57,000) | (51,000) | (68,000) | (55,000) | |
Income tax expense | 70,000 | 22,000 | 56,000 | 41,000 | |
Net income (loss) | 13,000 | (73,000) | (12,000) | (96,000) | |
Net income attributable to non-controlling interest | 11,000 | (27,000) | 0 | (24,000) | |
Net Income attributable to F & M Bank Corp. | 2,000 | (46,000) | (12,000) | (72,000) | |
Total assets | 92,418,000 | 91,674,000 | 92,418,000 | 91,674,000 | |
Goodwill | 164,000 | 164,000 | 164,000 | 164,000 | |
Eliminations | |||||
Interest Income | (93,000) | (56,000) | (134,000) | (84,000) | |
Service charges on deposits | 0 | 0 | 0 | ||
Investment services and insurance income | (5,000) | (3,000) | (10,000) | (3,000) | |
Mortgage banking income, net | 0 | 0 | 0 | ||
Title insurance income | 0 | 0 | 0 | ||
Other operating income (loss) | 0 | 0 | 0 | (1,000) | |
Total income (loss) | (98,000) | (59,000) | (144,000) | (88,000) | |
Interest expense | 93,000 | 56,000 | 134,000 | 84,000 | |
Provision for loan losses | 0 | 0 | 0 | 0 | |
Salary and benefit expense | 0 | 0 | 0 | ||
Other operating expenses | (5,000) | (3,000) | (10,000) | (4,000) | |
Total expense | 98,000 | 59,000 | 144,000 | 88,000 | |
Net income (loss) before taxes | 0 | 0 | 0 | 0 | |
Income tax expense | 0 | 0 | 0 | 0 | |
Net income (loss) | 0 | 0 | 0 | 0 | |
Net income attributable to non-controlling interest | 0 | 0 | 0 | 0 | |
Net Income attributable to F & M Bank Corp. | 0 | 0 | 0 | ||
Total assets | (131,702,000) | (114,594,000) | (131,702,000) | (114,594,000) | |
Goodwill | 0 | 0 | 0 | 0 | |
F&M Bank Corp Consolidated | |||||
Interest Income | 8,992,000 | 9,782,000 | 18,102,000 | 19,313,000 | |
Service charges on deposits | 225,000 | 417,000 | 586,000 | 803,000 | |
Investment services and insurance income | 173,000 | 171,000 | 358,000 | 322,000 | |
Mortgage banking income, net | 1,971,000 | 815,000 | 2,900,000 | 1,345,000 | |
Title insurance income | 472,000 | 406,000 | 843,000 | 682,000 | |
Other operating income (loss) | 517,000 | 666,000 | 1,100,000 | 1,113,000 | |
Total income (loss) | 12,350,000 | 12,257,000 | 23,889,000 | 23,578,000 | |
Interest expense | 1,385,000 | 1,726,000 | 3,091,000 | 3,224,000 | |
Provision for loan losses | 800,000 | 1,600,000 | 2,300,000 | 3,050,000 | |
Salary and benefit expense | 4,134,000 | 4,077,000 | 8,168,000 | 8,100,000 | |
Other operating expenses | 3,150,000 | 3,015,000 | 6,236,000 | 6,022,000 | |
Total expense | 9,469,000 | 10,418,000 | 19,795,000 | 20,396,000 | |
Net income (loss) before taxes | 2,881,000 | 1,839,000 | 4,094,000 | 3,182,000 | |
Income tax expense | 211,000 | 153,000 | 173,000 | 232,000 | |
Net income (loss) | 2,670,000 | 1,686,000 | 3,921,000 | 2,950,000 | |
Net income attributable to non-controlling interest | 43,000 | 51,000 | 105,000 | 29,000 | |
Net Income attributable to F & M Bank Corp. | 2,627,000 | 1,635,000 | 3,816,000 | 2,921,000 | |
Total assets | 981,602,000 | 806,949,000 | 981,602,000 | 806,949,000 | |
Goodwill | 2,884,000 | $ 2,884,000 | 2,884,000 | $ 2,884,000 | |
F&M Mortgage | |||||
Interest Income | 84,000 | 120,000 | |||
Service charges on deposits | 0 | 0 | |||
Investment services and insurance income | 0 | 0 | |||
Mortgage banking income, net | 1,971,000 | 2,900,000 | |||
Title insurance income | 0 | 0 | |||
Other operating income (loss) | 54,000 | 56,000 | |||
Total income (loss) | 2,109,000 | 3,076,000 | |||
Interest expense | 86,000 | 114,000 | |||
Provision for loan losses | 0 | 0 | |||
Salary and benefit expense | 626,000 | 1,151,000 | |||
Other operating expenses | 134,000 | 352,000 | |||
Total expense | 846,000 | 1,617,000 | |||
Net income (loss) before taxes | 1,263,000 | 1,459,000 | |||
Income tax expense | 0 | 0 | |||
Net income (loss) | 1,263,000 | 1,459,000 | |||
Net income attributable to non-controlling interest | 43,000 | 105,000 | |||
Net Income attributable to F & M Bank Corp. | 1,220,000 | 1,354,000 | |||
Total assets | 25,546,000 | 25,546,000 | |||
Goodwill | $ 47,000 | $ 47,000 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Short term debt | $ 0 | $ 10,000,000 |
Weighted average interest rate | 1.82% | 1.85% |
Debt obligations | $ 40,982,000 | $ 53,197,000 |
Note payable balance | 0 | 4,000 |
Debt amount | 59,603,000 | $ 0 |
FHLB [Member] | ||
Line of credit | $ 6,000,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Total noninterest income | $ 3,358 | $ 2,475 | $ 5,787 | $ 4,265 |
Service Charges on Deposits | ||||
Total noninterest income | 225 | 417 | 586 | 803 |
Investment Services and Insurance Income | ||||
Total noninterest income | 173 | 171 | 358 | 322 |
Title Insurance Income | ||||
Total noninterest income | 472 | 406 | 843 | 682 |
ATM and check card fees | ||||
Total noninterest income | 462 | 529 | 894 | 898 |
Other | ||||
Total noninterest income | 123 | 153 | 283 | 281 |
Noninterest Income (in-scope of Topic 606) | ||||
Total noninterest income | 1,455 | 1,676 | 2,964 | 2,986 |
Noninterest Income (out-of-scope of Topic 606) | ||||
Total noninterest income | $ 1,903 | $ 799 | $ 2,823 | $ 1,279 |
Leases (Details)
Leases (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Leases | |
Lease liabilities | $ 882 |
Right-of-use assets | $ 867 |
Weighted average remaining lease term | 4 years 6 months 29 days |
Weighted average discount rate | 3.46% |
Leases (Details 1)
Leases (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases | ||||
Operating lease cost | $ 25 | $ 32 | $ 58 | $ 64 |
Total lease cost | 25 | 32 | 58 | 64 |
Cash paid for amounts included in the measurement of lease liabilities | $ 31 | $ 38 | $ 69 | $ 75 |
Leases (Details 2)
Leases (Details 2) $ in Thousands | Jun. 30, 2020USD ($) |
Leases | |
Six months ending December 31, 2020 | $ 52 |
Twelve months ending December 31, 2021 | 127 |
Twelve months ending December 31, 2022 | 129 |
Twelve months ending December 31, 2023 | 93 |
Twelve months ending December 31, 2024 | 92 |
Thereafter | 611 |
Total undiscounted cash flows | 1,104 |
Discount | 222 |
Lease liabilities | $ 882 |
Leases (Details Narrative)
Leases (Details Narrative) | Jun. 30, 2020USD ($) |
Right-of-use asset | $ 867,000 |
Lease liability | 882,000 |
January 1, 2019 [Member] | |
Right-of-use asset | 1.03 |
Lease liability | $ 1,030,000 |
Mortgage Banking and Derivati_2
Mortgage Banking and Derivatives (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Unpaid principal | $ 3,000 | ||
Outstanding debt | $ 19,800 | ||
Mortgage loan | 20,000 | ||
Fair value of derivative instruments | $ 1,000 | ||
Notional amount | 43,800 | ||
Other Liabilities | |||
Fair value of forward sales | 554 | 554 | |
Notional debt amount | $ 63,800 | $ 63,800 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] $ in Millions | 1 Months Ended |
Jul. 29, 2020USD ($) | |
Subordinated Note Purchase Agreements One [Member] | |
Note issued | $ 7 |
Interest rate | 6.00% |
Note description | The 2027 Notes will bear interest at 5.75% per annum, payable semi-annually in arrears. Beginning on July 31, 2022 through maturity, the 2027 Notes may be redeemed, at the Company’s option, on any scheduled interest payment date. The 2027 Notes will mature on July 31, 2027 |
Subordinated Note Purchase Agreements [Member] | |
Note issued | $ 5 |
Interest rate | 5.75% |