Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 14, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SEVERN BANCORP INC | |
Entity Central Index Key | 868,271 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,688,626 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and due from banks | $ 2,291 | $ 2,382 |
Federal funds sold and interest-bearing deposits in other banks | 16,016 | 19,471 |
Cash and cash equivalents | 18,307 | 21,853 |
Certificates of deposit held for investment | 8,780 | 8,780 |
Debt securities available for sale, at fair value | 12,011 | 10,119 |
Securities held to maturity (fair value of $49,026 and $54,004 at March 31, 2018 and December 31, 2017, respectively) | 49,911 | 54,303 |
Loans held for sale, at fair value | 5,803 | 4,530 |
Loans receivable | 669,912 | 668,151 |
Allowance for loan losses | (8,169) | (8,055) |
Loans, net | 661,743 | 660,096 |
Real estate acquired through foreclosure | 237 | 403 |
Restricted stock investments | 4,844 | 4,489 |
Premises and equipment, net | 23,121 | 23,139 |
Accrued interest receivable | 2,454 | 2,640 |
Deferred income taxes | 4,565 | 5,302 |
Bank owned life insurance | 5,104 | 5,064 |
Goodwill | 1,104 | 1,099 |
Other assets | 3,101 | 2,970 |
Total assets | 801,085 | 804,787 |
Deposits: | ||
Noninterest bearing | 73,670 | 72,833 |
Interest-bearing | 516,246 | 529,395 |
Total deposits | 589,916 | 602,228 |
Short-term borrowings | 8,000 | |
Long-term borrowings | 88,500 | 88,500 |
Subordinated debentures | 20,619 | 20,619 |
Accrued expenses and other liabilities | 1,633 | 2,340 |
Total liabilities | 708,668 | 713,687 |
Stockholders' Equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized: Preferred stock series ''A,'' 437,500 shares issued and outstanding and $3,500 liquidation preference at both March 31, 2018 and December 31, 2017 | 4 | 4 |
Common stock, $0.01 par value, 20,000,000 shares authorized; 12,247,626 and 12,233,424 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 122 | 122 |
Additional paid-in capital | 65,060 | 65,137 |
Retained earnings | 27,320 | 25,872 |
Accumulated other comprehensive loss | (89) | (35) |
Total stockholders' equity | 92,417 | 91,100 |
Total liabilities and stockholders' equity | $ 801,085 | $ 804,787 |
CONSOLIDATED STATEMENTS OF FIN3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Securities held to maturity fair value | $ 49,026 | $ 54,004 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 12,247,626 | 12,233,424 |
Common stock, shares outstanding (in shares) | 12,247,626 | 12,233,424 |
Series A Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred stock, shares issued (in shares) | 437,500 | 437,500 |
Preferred stock, shares outstanding (in shares) | 437,500 | 437,500 |
Preferred stock, liquidation preference | $ 3,500 | $ 3,500 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest income: | ||
Loans | $ 8,371,000 | $ 7,131,000 |
Securities | 320,000 | 269,000 |
Other earning assets | 186,000 | 157,000 |
Total interest income | 8,877,000 | 7,557,000 |
Interest expense: | ||
Deposits | 1,133,000 | 975,000 |
Long-term borrowings and subordinated debentures | 760,000 | 996,000 |
Total interest expense | 1,893,000 | 1,971,000 |
Net interest income | 6,984,000 | 5,586,000 |
Reversal of provision for loan losses | (275,000) | |
Net interest income after reversal of provision for loan losses | 6,984,000 | 5,861,000 |
Noninterest income: | ||
Mortgage-banking revenue | 595,000 | 535,000 |
Real estate commissions | 385,000 | 380,000 |
Real estate management fees | 183,000 | 194,000 |
Credit report and appraisal fees | 76,000 | 70,000 |
Deposit service charges | 295,000 | 34,000 |
Title company revenue | 142,000 | |
Other noninterest income | 193,000 | 145,000 |
Total noninterest income | 1,869,000 | 1,358,000 |
Noninterest expense: | ||
Compensation and related expenses | 4,278,000 | 3,757,000 |
Occupancy | 344,000 | 336,000 |
Legal fees | 11,000 | 28,000 |
Write-downs, losses, and costs of real estate acquired through foreclosure, net | 32,000 | 33,000 |
Federal Deposit Insurance Corporation insurance premiums | 55,000 | (2,000) |
Professional fees | 109,000 | 135,000 |
Advertising | 233,000 | 206,000 |
Data processing | 264,000 | 196,000 |
Credit report and appraisal fees | 70,000 | 103,000 |
Licensing and software | 121,000 | 75,000 |
Mortgage leads purchased | 95,000 | |
Other noninterest expense | 706,000 | 713,000 |
Total noninterest expense | 6,223,000 | 5,675,000 |
Net income before income tax provision | 2,630,000 | 1,544,000 |
Income tax provision | 745,000 | 619,000 |
Net income | 1,885,000 | 925,000 |
Dividends on preferred stock | (70,000) | (70,000) |
Net income available to common stockholders | $ 1,815,000 | $ 855,000 |
Net income per common share - basic (in dollars per share) | $ 0.15 | $ 0.07 |
Net income per common share - diluted (in dollars per share) | $ 0.15 | $ 0.07 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | ||
Net income | $ 1,885 | $ 925 |
Other comprehensive loss items: | ||
Unrealized holding losses on available-for-sale securities arising during the period (net of tax benefit of $19 and $9 in 2018 and 2017) | (54) | (15) |
Total other comprehensive loss | (54) | (15) |
Total comprehensive income | $ 1,831 | $ 910 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other comprehensive loss items: | ||
Unrealized holding losses on available-for-sale securities arising during the period, income taxes | $ (19) | $ (9) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Comprehensive Loss [Member] | Total |
Beginning balance at Dec. 31, 2016 | $ 4 | $ 121 | $ 64,471 | $ 23,334 | $ 87,930 | |
Balance (in shares) at Dec. 31, 2016 | 437,500 | 12,123,179 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 925 | 925 | ||||
Stock-based compensation | 53 | 53 | ||||
Dividend declared | (70) | (70) | ||||
Exercise of stock options | 17 | $ 17 | ||||
Exercise of stock options (in shares) | 5,025 | 5,025 | ||||
Other comprehensive loss | $ (15) | $ (15) | ||||
Ending balance at Mar. 31, 2017 | $ 4 | $ 121 | 64,541 | 24,189 | (15) | 88,840 |
Balance (in shares) at Mar. 31, 2017 | 437,500 | 12,128,204 | ||||
Beginning balance at Dec. 31, 2017 | $ 4 | $ 122 | 65,137 | 25,872 | (35) | 91,100 |
Balance (in shares) at Dec. 31, 2017 | 437,500 | 12,233,424 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 1,885 | 1,885 | ||||
Stock-based compensation | 56 | 56 | ||||
Dividend declared | (70) | (70) | ||||
Dividends paid on common stock | (367) | (367) | ||||
Exercise of stock options | 56 | $ 56 | ||||
Exercise of stock options (in shares) | 14,202 | 14,202 | ||||
Other | (189) | $ (189) | ||||
Other comprehensive loss | (54) | (54) | ||||
Ending balance at Mar. 31, 2018 | $ 4 | $ 122 | $ 65,060 | $ 27,320 | $ (89) | $ 92,417 |
Balance (in shares) at Mar. 31, 2018 | 437,500 | 12,247,626 |
CONSOLIDATED STATEMENTS OF CHA8
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) | 3 Months Ended |
Mar. 31, 2018$ / shares | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) [Abstract] | |
Dividend paid on common stock | $ 0.03 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 1,885 | $ 925 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 307 | 298 |
Amortization of deferred loan fees | (409) | (264) |
Net amortization of premiums and discounts | 57 | (76) |
Reversal of provision for loan losses | (275) | |
Write-downs and losses on real estate acquired through foreclosure, net of gains | 44 | 40 |
Gain on sale of mortgage loans | (595) | (535) |
Proceeds from sale of mortgage loans held for sale | 15,195 | 10,757 |
Originations of loans held for sale | (15,873) | (2,670) |
Stock-based compensation | 56 | 53 |
Increase in cash surrender value of bank-owned life insurance | (40) | |
Deferred income taxes | 757 | 619 |
(Decrease) increase in accrued interest receivable | 186 | (13) |
(Increase) decrease in other assets | (328) | 447 |
Decrease in accrued expenses and other liabilities | (707) | (1,541) |
Net cash provided by operating activities | 535 | 7,765 |
Cash flows from investing activities: | ||
Loan principal (disbursements), net of repayments | (1,238) | (76) |
Redemption of restricted stock investments | (355) | 402 |
Purchases of premises and equipment, net | (288) | (60) |
Activity in securities held to maturity: | ||
Maturities/calls/repayments | 4,356 | 3,542 |
Activity in available-for-sale securities: | ||
Purchases | (2,000) | (7,176) |
Maturities/calls/repayments | 15 | 8 |
Proceeds from sales of real estate acquired through foreclosure | 122 | 205 |
Net cash provided by (used in) investing activities | 612 | (3,155) |
Cash flows from financing activities: | ||
Net (decrease) increase in deposits | (12,312) | 21,816 |
Net increase in short-term borrowings | 8,000 | |
Additional long-term borrowings | 5,000 | |
Repayments of long-term borrowings | (5,000) | (10,000) |
Common stock dividends | (367) | |
Preferred stock dividends | (70) | |
Proceeds from common stock issuance | 56 | 17 |
Net cash (used in) provided by financing activities | (4,693) | 11,833 |
(Decrease) increase in cash and cash equivalents | (3,546) | 16,443 |
Cash and cash equivalents at beginning of period | 21,853 | 67,014 |
Cash and cash equivalents at end of period | 18,307 | 83,457 |
Supplemental Information: | ||
Interest paid on deposits and borrowed funds | 1,872 | 2,002 |
Income taxes paid | $ 12 | 52 |
Real estate acquired in satisfaction of loans | $ 515 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 - Summary of Significant Accounting Policies Basis of Presentation The accounting and reporting policies of Severn Bancorp, Inc. and subsidiaries (the “Company”) conform to accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) and prevailing practices within the financial services industry for interim financial information and Rule 8‑01 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete financial statements and prevailing practices within the banking industry. In the opinion of management, all adjustments (comprising only of those of a normal recurring nature) necessary for a fair presentation of the results of operations for the interim periods presented have been made. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018 or any other interim or future period. Events occurring after the date of the financial statements up to the date the financial statements were available to be issued, were considered in the preparation of the consolidated financial statements. These statements should be read in conjunction with the financial statements and accompanying notes included in the Company’s 2017 Annual Report on Form 10‑K as filed with the Securities and Exchange Commission (“SEC”). Principles of Consolidation The unaudited consolidated financial statements include the accounts of Severn Bancorp, Inc., and its wholly-owned subsidiaries, Mid-Maryland Title Company, Inc., SBI Mortgage Company and SBI Mortgage Company’s subsidiary, Crownsville Development Corporation, and its subsidiary, Crownsville Holdings I, LLC, and Severn Savings Bank, FSB (the “Bank”), and the Bank’s subsidiaries, Louis Hyatt, Inc., Homeowners Title and Escrow Corporation, Severn Financial Services Corporation, SSB Realty Holdings, LLC, SSB Realty Holdings II, LLC, and HS West, LLC. All intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and affect the reported amounts of revenues earned and expenses incurred during the reporting period. Actual results could differ from those estimates. Estimates that could change significantly relate to the provision for loan losses and the related allowance for loan losses (“Allowance”), determination of impaired loans and the related measurement of impairment, valuation of investment securities, valuation of real estate acquired through foreclosure, valuation of stock-based compensation, the assessment that a liability should be recognized with respect to any matters under litigation, and the calculation of current and deferred income taxes and the realizability of net deferred tax assets. Cash Flows We consider all highly liquid securities with original maturities of three months or less to be cash equivalents. For reporting purposes, assets grouped in the Consolidated Statements of Financial Condition under the captions “Cash and due from banks” and “Federal funds sold and interest-bearing deposits in other banks” are considered cash or cash equivalents. For financial statement purposes, these assets are carried at cost. Federal funds sold and interest-bearing deposits in other banks generally have overnight maturities and are in excess of amounts that would be recoverable under Federal Deposit Insurance Corporation (“FDIC”) insurance. Reclassifications Certain reclassifications have been made to amounts previously reported to conform to current period presentation. Revenue Recognition Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue related to our mortgage-banking and mortgage servicing activities. Our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of noninterest income, are service charges on deposit accounts, real estate commissions, and real estate management fees. Service Charges on Deposit Accounts Service charges on deposit accounts represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. Real Estate Commissions Real Estate Commissions represent commissions received on properties sold. Revenue is recognized when our performance obligation is completed, which is generally the time the property is sold and payment has been received. Real Estate Management Fees Real Estate Management Fees represent monthly fees received on property maintenance and management. We perform daily services for these fees and bill for those services on a monthly basis. We have determined that each day of the performance of the services represents a distinct service. The overall service of property management each day is substantially the same and has the same pattern of transfer (daily) over the term of the contract. Further, each distinct day of service represents a performance obligation that would be satisfied over time (over the length of the contract, not at a point in time) and has the same measure of progress (elapsed time). Management has therefore determined that property management services are a single performance obligation composed of a series of distinct services. In performing the daily management activities, the customer is simultaneously receiving and consuming the benefits provided by our performance of the contract. Revenue is earned evenly and daily over the life of the contract. For purposes of expedience, we record the fees when monthly invoices are processed. Each month contains 1/12 of the contract revenue. Recent Accounting Pronouncements Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers, as amended by ASU 2015‑14, Revenue from Contracts with Customers: Deferral of the Effective Date, ASU 2016‑08 , Revenue from Contracts with Customers: Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), ASU 2016‑10 , Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016‑12 , Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, ASU 2016‑20 , Technical Corrections and Improvements to Topic 606, Revenue form Contracts with Customers, that provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to customers. The guidance also provides for a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property and equipment, including real estate. We adopted the pronouncement on January 1, 2018. Our accounting policies and revenue recognition principles did not change materially as the principles of ASC 606 are largely consistent with the previous revenue recognition practices. In January 2016, FASB issued ASU No. 2016‑01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which requires entities to measure equity investments at fair value and recognize changes on fair value in net income. The guidance also provides a new measurement alternative for equity investments that do not have readily determinable fair values and don’t qualify for the net asset value practical expedient. The standard requires entities to record changes in instrument–specific credit risk for financial liabilities measured under the fair value option in other comprehensive income, except for certain financial liabilities of consolidated collateralized financing entities. Entities also have to reassess the realizability of a deferred tax asset related to an available-for-sale (“AFS”) debt security in combination with their other deferred tax assets. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations, or cash flows. In August 2016, FASB issued ASU No. 2016‑15, Classification of Certain Cash Receipts and Cash Payments, which provides guidance regarding the presentation of certain cash receipts and cash payments in the statement of cash flows, addressing eight specific cash flow classification issues, in order to reduce existing diversity in practice. The adoption of ASC No. 2016‑15 did not have a material impact on our financial position, results of operations, or cash flows. Pronouncements Issued In February 2016, FASB issued ASU 2016‑02, Leases , which requires a lessee to recognize the assets and liabilities that arise from all leases with a term greater than 12 months. The core principle requires the lessee to recognize a liability to make lease payments and a “right-of-use” asset. The accounting applied by the lessor is relatively unchanged. The ASU also requires expanded qualitative and quantitative disclosures. For public business entities, the guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and mandates a modified retrospective transition for all entities. Early application is permitted. We have determined that the provisions of ASU No. 2016‑02 may result in an increase in assets to recognize the present value of the lease obligations, with a corresponding increase in liabilities, however, we do not expect this to have a material impact on our financial position, results of operations, or cash flows. In June 2016, FASB issued ASU No. 2016‑13, Financial Instruments – Credit Losses , which sets forth a current expected credit loss (“CECL”) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. While we are currently in the process of evaluating the impact of the amended guidance on our Consolidated Financial Statements, we currently expect the Allowance to increase upon adoption given that the Allowance will be required to cover the full remaining expected life of the portfolio upon adoption, rather than the incurred loss model under current U.S. GAAP. The extent of this increase is still being evaluated and will depend on economic conditions and the composition of our loan and lease portfolio at the time of adoption. In March 2017, FASB issued ASU No. 2017‑08, Receivables - Nonrefundable Fees and Other costs, which provides guidance that calls for the shortening of the amortization period for certain callable debt securities held at a premium. The standard is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of ASC No. 2017‑08 to have a material impact on our financial position, results of operations, or cash flows. |
Correction of an Immaterial Pri
Correction of an Immaterial Prior Year Error | 3 Months Ended |
Mar. 31, 2018 | |
Correction of an Immaterial Prior Year Error [Abstract] | |
Correction of an Immaterial Prior Year Error | Note 2 – Correction of an Immaterial Prior Year Error In 2016, we redeemed the Series B preferred stock sold in 2008 to the U.S. Department of the Treasury (the “TARP Shares”). At the time of the redemption, the remaining unamortized discount of $511,000 should have been fully amortized into additional paid-in capital and retained earnings and reflected as a reduction to net income available to common stockholders. This treatment was not reflected in the consolidated financial statements included in the March 31, 2017 Quarterly Report on Form 10‑Q. We determined that this amount was not material to the 2017 consolidated financial statements. Our March 31, 2017 consolidated financial statements within these consolidated financial statements have been adjusted to reflect the proper recognition of the remaining discount at the time of the redemption as a $68,000 adjustment to net income available to common stockholders, revising the originally reported amount from $787,000 to $855,000. The adjustment had no impact on total assets at March 31, 2017 or December 31, 2017 and no impact on net income for the three months ended March 31, 2017. |
Securities
Securities | 3 Months Ended |
Mar. 31, 2018 | |
Securities [Abstract] | |
Securities | Note 3 - Securities The amortized cost and fair values of our AFS securities portfolio were as follows as of March 31, 2018: March 31, 2018 Amortized Unrealized Unrealized Cost Gains Losses Fair Value (dollars in thousands) U.S. Treasury securities $ 1,985 $ — $ 10 $ 1,975 U.S. government agency notes 10,149 — 113 10,036 $ 12,134 $ — $ 123 $ 12,011 December 31, 2017 Amortized Unrealized Unrealized Cost Gains Losses Fair Value (dollars in thousands) U.S. government agency notes $ 10,169 $ — $ 50 $ 10,119 $ 10,169 $ — $ 50 $ 10,119 The amortized cost and fair values of our held-to-maturity (“HTM”) securities portfolio were as follows: March 31, 2018 Amortized Unrealized Unrealized Fair Cost Gains Losses Value (dollars in thousands) U.S. Treasury securities $ 4,993 $ 40 $ 8 $ 5,025 U.S. government agency notes 15,999 40 143 15,896 Mortgage-backed securities 28,919 11 825 28,105 $ 49,911 $ 91 $ 976 $ 49,026 December 31, 2017 Amortized Unrealized Unrealized Fair Cost Gains Losses Value (dollars in thousands) U.S. Treasury securities $ 4,994 $ 68 $ 6 $ 5,056 U.S. government agency notes 19,004 81 99 18,986 Mortgage-backed securities 30,305 27 370 29,962 $ 54,303 $ 176 $ 475 $ 54,004 Gross unrealized losses and fair value by length of time that the individual AFS securities have been in an unrealized loss position at the dates indicated are presented in the following tables: March 31, 2018 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. Treasury securities $ 1,975 $ 10 $ — $ — $ 1,975 $ 10 U.S. government agency notes 9,021 103 1,015 10 10,036 113 $ 10,996 $ 113 $ 1,015 $ 10 $ 12,011 $ 123 December 31, 2017 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. government agency notes $ 10,119 $ 50 $ — $ — $ 10,119 $ 50 $ 10,119 $ 50 $ — $ — $ 10,119 $ 50 Gross unrealized losses and fair value by length of time that the individual HTM securities have been in an unrealized loss position at the dates indicated are presented in the following tables: March 31, 2018 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. Treasury securities $ 1,992 $ 8 $ — $ — $ 1,992 $ 8 U.S. government agency notes 8,953 41 4,935 102 13,888 143 Mortgage-backed securities 21,284 568 6,557 257 27,841 825 $ 32,229 $ 617 $ 11,492 $ 359 $ 43,721 $ 976 December 31, 2017 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. Treasury securities $ 1,993 $ 6 $ — $ — $ 1,993 $ 6 U.S. government agency notes 6,977 23 6,964 76 13,941 99 Mortgage-backed securities 20,993 217 7,046 153 28,039 370 $ 29,963 $ 246 $ 14,010 $ 229 $ 43,973 $ 475 In the AFS securities portfolio , 10 securities were in a loss position as of March 31, 2018, with the largest single unrealized loss in any one security amounting to $24,000. In the HTM securities portfolio , 34 securities were in a loss position as of March 31, 2018, with the largest single unrealized loss in any one security amounting to $114,000. All of the securities that are currently in a gross unrealized loss position are so due to declines in fair values resulting from changes in interest rates or increased liquidity spreads since the time they were purchased. We have the intent and ability to hold these debt securities to maturity (including the AFS securities) and do not intend to sell, nor do we believe it will be more likely than not that we will be required to sell, any impaired securities prior to a recovery of amortized cost. We expect these securities will be repaid in full, with no losses realized. As such, management considers any impairment to be temporary. Contractual maturities of debt securities at March 31, 2018 are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. AFS Securities HTM Securities Amortized Fair Amortized Fair Cost Value Cost Value (dollars in thousands) Due in one year or less $ 1,025 $ 1,015 $ 9,006 $ 8,980 Due after one through five years 11,109 10,996 10,978 10,909 Due after five years through ten years — — 1,008 1,032 Mortgage-backed securities — — 28,919 28,105 $ 12,134 $ 12,011 $ 49,911 $ 49,026 We did not sell any securities d uring the three months ended March 31, 2018 or 2017. There were no securities pledged as collateral as of March 31, 2018 or December 31, 2017. |
Loans Receivable and Allowance
Loans Receivable and Allowance for Loan Losses | 3 Months Ended |
Mar. 31, 2018 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Loans Receivable and Allowance for Loan Losses | Note 4 - Loans Receivable and Allowance for Loan Losses Loans receivable are summarized as follows: March 31, 2018 December 31, 2017 (dollars in thousands) Residential mortgage $ 288,061 $ 287,656 Commercial 39,015 37,356 Commercial real estate 230,336 236,302 Construction, land acquisition, and development 100,635 93,060 Home equity/2nds 13,853 15,703 Consumer 1,050 1,084 Total loans receivable 672,950 671,161 Unearned loan fees (3,038) (3,010) Loans receivable $ 669,912 $ 668,151 Certain loans in the amount of $190.8 million have been pledged under a blanket floating lien to the Federal Home Loan Bank of Atlanta (“FHLB”) as collateral against advances. At March 31, 2018, the Bank was servicing $32.7 million in loans for the Federal National Mortgage Association and $15.6 million in loans for the Federal Home Loan Mortgage Corporation. Credit Quality An Allowance is provided through charges to income in an amount that management believes will be adequate to absorb losses on existing loans that may become uncollectible based on evaluations of the collectability of loans and prior loan loss experience. Management has an established methodology to determine the adequacy of the Allowance that assesses the risks and losses inherent in the loan portfolio. The methodology takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, and current economic conditions that may affect the borrowers’ ability to pay. Determining the amount of the Allowance requires the use of estimates and assumptions. Actual results could differ significantly from those estimates. While management uses all available information to estimate losses on loans, future additions to the Allowance may be necessary based on changes in economic conditions and our actual loss experience. In addition, various regulatory agencies periodically review the Allowance as an integral part of their examination process. Such agencies may require us to recognize additions to the Allowance based on their judgments about information available to them at the time of their examination. Management believes the Allowance is adequate as of March 31, 2018 and December 31, 2017. For purposes of determining the Allowance, we have segmented our loan portfolio by product type. Our portfolio loan segments are residential mortgage, commercial, commercial real estate, construction, land acquisition, and development (“ADC”), Home equity/2nds, and consumer. We have looked at all segments and have determined that no additional subcategorization is warranted based upon our credit review methodology and our portfolio classes are the same as our portfolio segments. Inherent Credit Risks The inherent credit risks within the loan portfolio vary depending upon the loan class as follows: Residential mortgage - secured by one to four family dwelling units. The loans have limited risk as they are secured by first mortgages on the unit, which are generally the primary residence of the borrower, at a loan-to-value ratio (“LTV”) of 80% or less. Commercial - underwritten in accordance with our policies and include evaluating historical and projected profitability and cash flow to determine the borrower’s ability to repay the obligation as agreed. Commercial loans are made primarily based on the identified cash flow of the borrower and secondarily on the underlying collateral supporting the loan. Accordingly, the repayment of a commercial loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment. Additionally, lines of credit are subject to the underwriting standards and processes similar to commercial loans, in addition to those underwriting standards for real estate loans. These loans are viewed primarily as cash flow dependent and, secondarily, as loans secured by real-estate and/or other assets. Repayment of these loans is generally dependent upon the principal business conducted on the property securing the loan. Line of credit loans may be adversely affected by conditions in the real estate markets or the economy in general. Management monitors and evaluates line of credit loans based on collateral and risk-rating criteria. Commercial real estate - subject to the underwriting standards and processes similar to commercial, in addition to those underwriting standards for real estate loans. These loans are viewed primarily as loans secured by real estate and secondarily as cash flow dependent. Repayment of these loans is generally dependent upon the successful operation of the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or the economy in general. Management monitors and evaluates commercial real estate loans based on collateral and risk-rating criteria. The Bank also utilizes third-party experts to provide environmental and market valuations. The nature of commercial real estate loans makes them more difficult to monitor and evaluate. ADC - underwritten in accordance with our underwriting policies which include a financial analysis of the developers, property owners, construction cost estimates, and independent appraisal valuations. These loans will rely on the value associated with the project upon completion. These cost and valuation estimates may be inaccurate. Construction loans generally involve the disbursement of substantial funds over a short period of time with repayment substantially dependent upon the success of the completed project rather than the ability of the borrower or guarantor to repay principal and interest. Additionally, land is underwritten according to our policies which include independent appraisal valuations as well as the estimated value associated with the land upon completion of development. These cost and valuation estimates may be inaccurate. The sources of repayment of these loans is typically permanent financing expected to be obtained upon completion or sales of developed property. These loans are closely monitored by onsite inspections and are considered to be of a higher risk than other real estate loans due to their ultimate repayment being sensitive to general economic conditions, availability of long-term financing, interest rate sensitivity, and governmental regulation of real property. If the Bank is forced to foreclose on a project prior to or at completion due to a default, there can be no assurance that the Bank will be able to recover all of the unpaid balance of the loan as well as related foreclosure and holding costs. In addition, the Bank may be required to fund additional amounts to complete the project and may have to hold the property for an unspecified period of time. Home equity/2nds - subject to the underwriting standards and processes similar to residential mortgages and secured by one to four family dwelling units. Home equity/2nds loans have greater risk than residential mortgages as a result of the Bank generally being in a second lien position. Consumer - consist of loans to individuals through the Bank’s retail network and typically unsecured or secured by personal property. Consumer loans have a greater credit risk than residential loans because of the lower value of the underlying collateral, if any. The following tables present, by portfolio segment, the changes in the Allowance and the recorded investment in loans: Three Months Ended March 31, 2018 Residential Commercial Home Equity/ Mortgage Commercial Real Estate ADC 2nds Consumer Total (dollars in thousands) Beginning Balance $ 3,099 $ 527 $ 2,805 $ 1,236 $ 386 $ 2 $ 8,055 Charge-offs (323) — — (13) — — (336) Recoveries 221 — 211 — 18 — 450 Net (charge-offs) recoveries (102) — 211 (13) 18 — 114 Provision for (reversal of) loan losses 304 (13) (21) (163) (107) — — Ending Balance $ 3,301 $ 514 $ 2,995 $ 1,060 $ 297 $ 2 $ 8,169 Ending balance - individually evaluated for impairment $ 1,285 $ — $ 318 $ 47 $ 2 $ 1 $ 1,653 Ending balance - collectively evaluated for impairment 2,016 514 2,677 1,013 295 1 6,516 $ 3,301 $ 514 $ 2,995 $ 1,060 $ 297 $ 2 $ 8,169 Ending loan balance -individually evaluated for impairment $ 17,439 $ 296 $ 2,820 $ 981 $ 1,260 $ 82 $ 22,878 Ending loan balance -collectively evaluated for impairment 267,584 38,719 227,516 99,654 12,593 968 647,034 $ 285,023 $ 39,015 $ 230,336 $ 100,635 $ 13,853 $ 1,050 $ 669,912 December 31, 2017 Residential Commercial Home Equity/ Mortgage Commercial Real Estate ADC 2nds Consumer Total (dollars in thousands) Ending balance - individually evaluated for impairment $ 1,181 $ — $ 182 $ 48 $ — $ 2 $ 1,413 Ending balance - collectively evaluated for impairment 1,918 527 2,623 1,188 386 — 6,642 $ 3,099 $ 527 $ 2,805 $ 1,236 $ 386 $ 2 $ 8,055 Ending loan balance - individually evaluated for impairment $ 18,219 $ — $ 2,917 $ 991 $ — $ 84 $ 22,211 Ending loan balance - collectively evaluated for impairment 266,427 37,356 233,385 92,069 15,703 1,000 645,940 $ 284,646 $ 37,356 $ 236,302 $ 93,060 $ 15,703 $ 1,084 $ 668,151 Three Months Ended March 31, 2017 Residential Commercial Home Equity/ Mortgage Commercial Real Estate ADC 2nds Consumer Total (dollars in thousands) Beginning Balance $ 3,833 $ 478 $ 2,535 $ 1,390 $ 728 $ 5 $ 8,969 Charge-offs (499) — — — — — (499) Recoveries 107 27 — — 3 — 137 Net (charge-offs) recoveries (392) 27 — — 3 — (362) Provision for (reversal of) loan losses 348 (32) (20) (293) (278) — (275) Ending Balance $ 3,789 $ 473 $ 2,515 $ 1,097 $ 453 $ 5 $ 8,332 Ending balance - individually evaluated for impairment $ 1,757 $ — $ 191 $ 52 $ 81 $ 3 $ 2,084 Ending balance - collectively evaluated for impairment 2,032 473 2,324 1,045 372 2 6,248 $ 3,789 $ 473 $ 2,515 $ 1,097 $ 453 $ 5 $ 8,332 Ending loan balance - individually evaluated for impairment $ 19,008 $ — $ 3,130 $ 818 $ 2,438 $ 92 $ 25,486 Ending loan balance - collectively evaluated for impairment 231,891 48,554 187,831 98,897 15,584 1,498 584,255 $ 250,899 $ 48,554 $ 190,961 $ 99,715 $ 18,022 $ 1,590 $ 609,741 The following tables present the credit quality breakdown of our loan portfolio by class: March 31, 2018 Special Pass Mention Substandard Total (dollars in thousands) Residential mortgage $ 278,721 $ 1,367 $ 4,935 $ 285,023 Commercial 38,981 34 — 39,015 Commercial real estate 224,274 4,185 1,877 230,336 ADC 99,455 — 1,180 100,635 Home equity/2nds 12,542 457 854 13,853 Consumer 1,050 — — 1,050 $ 655,023 $ 6,043 $ 8,846 $ 669,912 December 31, 2017 Special Pass Mention Substandard Total (dollars in thousands) Residential mortgage $ 277,867 $ 1,563 $ 5,216 $ 284,646 Commercial 37,312 44 — 37,356 Commercial real estate 228,746 4,615 2,941 236,302 ADC 91,868 — 1,192 93,060 Home equity/2nds 14,384 465 854 15,703 Consumer 1,084 — — 1,084 $ 651,261 $ 6,687 $ 10,203 $ 668,151 Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans: March 31, 2018 30-59 60-89 90+ Days Days Days Total Non- Past Due Past Due Past Due Past Due Current Total Accrual (dollars in thousands) Residential mortgage $ 99 $ 95 $ 2,652 $ 2,846 $ 282,177 $ 285,023 $ 3,619 Commercial — 16 225 241 38,774 39,015 296 Commercial real estate — — 216 216 230,120 230,336 216 ADC — — 239 239 100,396 100,635 310 Home equity/2nds 76 — 1,136 1,212 12,641 13,853 1,260 Consumer 36 — — 36 1,014 1,050 — $ 211 $ 111 $ 4,468 $ 4,790 $ 665,122 $ 669,912 $ 5,701 December 31, 2017 30-59 60-89 90+ Days Days Days Total Non- Past Due Past Due Past Due Past Due Current Total Accrual (dollars in thousands) Residential mortgage $ 1,006 $ — $ — $ 1,006 $ 283,640 $ 284,646 $ 3,891 Commercial — — — — 37,356 37,356 78 Commercial real estate 948 — — 948 235,354 236,302 159 ADC — — — — 93,060 93,060 314 Home equity/2nds — — — — 15,703 15,703 1,268 Consumer — — — — 1,084 1,084 — $ 1,954 $ — $ — $ 1,954 $ 666,197 $ 668,151 $ 5,710 We did not have any loans greater than 90 days past due and still accruing as of March 31, 2018 or December 31, 2017. The interest which would have been recorded on the above nonaccrual loans if those loans had been performing in accordance with their contractual terms was approximately $462,000 and $172,000 for the three months ended March 31, 2018 and 2017, respectively. The actual interest income recorded on those loans was approximately $34,000 and $71,000 for the three months ended March 31, 2018 and 2017, respectively. The following tables summarize impaired loans: March 31, 2018 December 31, 2017 Unpaid Unpaid Principal Recorded Related Principal Recorded Related Balance Investment Allowance Balance Investment Allowance With no related Allowance: (dollars in thousands) Residential mortgage $ 11,610 $ 9,958 $ — $ 12,929 $ 11,572 $ — Commercial 349 296 — — — — Commercial real estate 1,262 1,148 — 1,562 1,507 — ADC 633 633 — 636 636 — Home equity/2nds 1,684 1,247 — — — — Consumer — — — — — — With a related Allowance: Residential mortgage 7,596 7,481 1,285 6,761 6,647 1,181 Commercial — — — — — — Commercial real estate 1,566 1,672 318 1,410 1,410 182 ADC 387 348 47 392 355 48 Home equity/2nds 14 13 2 — — — Consumer 82 82 1 84 84 2 Totals: Residential mortgage 19,206 17,439 1,285 19,690 18,219 1,181 Commercial 349 296 — — — — Commercial real estate 2,828 2,820 318 2,972 2,917 182 ADC 1,020 981 47 1,028 991 48 Home equity/2nds 1,698 1,260 2 — — — Consumer 82 82 1 84 84 2 Three Months Ended March 31, 2018 2017 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized With no related Allowance: (dollars in thousands) Residential mortgage $ 10,765 $ 110 $ 10,592 $ 117 Commercial 148 13 87 8 Commercial real estate 1,328 10 2,494 39 ADC 634 8 438 6 Home equity/2nds 623 4 1,615 15 Consumer — — — — With a related Allowance: Residential mortgage 7,064 58 8,839 97 Commercial — — — — Commercial real estate 1,541 19 1,925 24 ADC 351 4 383 5 Home equity/2nds 7 — 1,338 48 Consumer 83 1 93 1 Totals: Residential mortgage 17,829 168 19,431 214 Commercial 148 13 87 8 Commercial real estate 2,869 29 4,419 63 ADC 985 12 821 11 Home equity/2nds 630 4 2,953 63 Consumer 83 1 93 1 Residential mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction totaled $4.0 million as of March 31, 2018. Troubled Debt Restructure Loans (“TDR” or “TDRs”) Our portfolio of TDRs was accounted for under the following methods: March 31, 2018 Total Total Number of Accrual Number of Nonaccrual Number of Balance of Modifications Status Modifications Status Modifications Modifications (dollars in thousands) Residential mortgage 40 $ 10,692 4 $ 811 44 $ 11,503 Commercial real estate 3 1,848 — — 3 1,848 ADC 1 136 — — 1 136 Consumer 3 82 — — 3 82 47 $ 12,758 4 $ 811 51 $ 13,569 December 31, 2017 Total Total Number of Accrual Number of Nonaccrual Number of Balance of Modifications Status Modifications Status Modifications Modifications (dollars in thousands) Residential mortgage 42 $ 11,631 2 $ 736 44 $ 12,367 Commercial real estate 3 1,862 1 78 4 1,940 ADC 1 137 1 6 2 143 Consumer 4 84 — — 4 84 50 $ 13,714 4 $ 820 54 $ 14,534 There were no TDRs that defaulted during the three month periods ended March 31, 2018 or 2017 which were modified during the previous 12 month period. We did not modify any loans during the three months ended March 31, 2018 or 2017. |
Regulatory Matters
Regulatory Matters | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Matters [Abstract] | |
Regulatory Matters | Note 5 - Regulatory Matters The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on our financial condition. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. In July 2013, federal bank regulatory agencies issued final results to revise their risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act (“Basel III”). On January 1, 2015, the Basel III rules became effective and include transition provisions which implement certain portions of the rules through January 1, 2019. Under the final rules, the effects of certain accumulated other comprehensive items are not excluded, however, banking organizations like us that are not considered “advanced approaches” banking organizations may make a one-time permanent election to continue to exclude these items. With the submission of the Call Report for the first quarter of 2015, we made this election in order to avoid significant variations in the level of capital that can be caused by interest rate fluctuations on the fair value of the Bank’s AFS securities portfolio. The Basel III rules also establish a “capital conservation buffer” of 2.5% above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital. The new capital conservation buffer requirements began to phase in effective January 2016 at 0.625% of risk-weighted assets and increase by that amount each year until fully implemented in January 2019. In 2018 the capital conservation buffer is 1.875% . An institution would be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses to executive officers if its capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions. As of the date of the last regulatory exam, the Bank was considered “well capitalized” and as of March 31, 2018, the Bank continued to meet the requirements to be considered “well capitalized” based on applicable U.S. regulatory capital ratio requirements. The Bank’s regulatory capital amounts and ratios were as follows: Minimum Minimum To be Well Requirements Requirements Capitalized Under for Capital Adequacy with Capital Prompt Corrective Actual Purposes Conservation Buffer Action Provision Amount Ratio Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) March 31, 2018 Common Equity Tier 1 Capital (to risk-weighted assets) $ 107,618 16.8 % $ 28,750 4.5 % $ 40,729 6.4 % $ 41,527 6.5 % Total capital (to risk-weighted assets) 115,614 18.1 % 51,111 8.0 % 63,090 9.9 % 63,888 10.0 % Tier 1 capital (to risk-weighted assets) 107,618 16.8 % 38,333 6.0 % 50,312 7.9 % 51,111 8.0 % Tier 1 capital (to average quarterly assets) 107,618 13.5 % 31,835 4.0 % 46,757 5.9 % 39,793 5.0 % December 31, 2017 Common Equity Tier 1 Capital (to risk-weighted assets) $ 105,721 16.5 % $ 28,904 4.5 % $ 36,933 5.8 % $ 41,750 6.5 % Total capital (to risk-weighted assets) 113,758 17.7 % 51,385 8.0 % 59,414 9.3 % 64,231 10.0 % Tier 1 capital (to risk-weighted assets) 105,721 16.5 % 38,539 6.0 % 46,567 7.3 % 51,385 8.0 % Tier 1 capital (to average quarterly assets) 105,721 13.5 % 31,440 4.0 % 41,264 5.3 % 39,300 5.0 % |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 6 - Earnings Per Share Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding for each period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued by the Company relate to outstanding stock options, warrants, and convertible preferred stock, and are determined using the treasury stock method. Not included in the diluted earnings per share calculation for 2018 and 2017 because they were anti-dilutive, were 22,000 and 20,000 shares, respectively, of common stock issuable upon exercise of outstanding stock options and 437,500 shares of common stock issuable upon conversion of the Company’s Series A Preferred Stock. Information relating to the calculations of our income per common share is summarized as follows: Three Months Ended March 31, 2018 2017 (dollars in thousands, except for per share data) Weighted-average shares outstanding - basic 12,241,554 12,125,553 Dilution 93,083 85,027 Weighted-average share outstanding - diluted 12,334,637 12,210,580 Net income available to common stockholders $ 1,815 $ 855 Net income per share - basic $ 0.15 $ 0.07 Net income per share - diluted $ 0.15 $ 0.07 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 7 - Stock-Based Compensation We maintain a stock-based compensation plan for directors, officers, and other key employees of the Company. The aggregate number of shares of common stock that may be issued with respect to the awards granted under the plan is 500,000 plus any shares forfeited under the Company’s old stock-based compensation plan. Under the terms of the stock-based compensation plan, the Company has the ability to grant various stock compensation incentives, including stock options, stock appreciation rights, and restricted stock. The stock-based compensation is granted under terms and conditions determined by the Compensation Committee of the Board of Directors. Under the stock-based compensation plan, stock options generally have a maximum term of ten years, and are granted with an exercise price at least equal to the fair market value of the common stock on the date the options are granted. Generally, options granted to directors, officers, and employees of the Company vest over a five-year period, although the Compensation Committee has the authority to provide for different vesting schedules. We account for stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense in the statement of operations at fair value. Additionally, we are required to recognize the expense of employee services received in share-based payment transactions and measure the expense based on the grant date fair value of the award. The expense is recognized over the period during which an employee is required to provide service in exchange for the award. Stock-based compensation expense included in the consolidated statements of operations for the three months ended March 31, 2018 and 2017 totaled $56,000 and $53,000, respectively. Information regarding our stock-based compensation plan is as follows as of and for the three months ended March 31: 2018 2017 Weighted- Weighted- Weighted- Average Aggregate Weighted- Average Aggregate Average Remaining Intrinsic Average Remaining Intrinsic Number Exercise Contractual Value Number Exercise Contractual Value of Shares Price Term (in years) (in thousands) of Shares Price Term (in years) (in thousands) Outstanding at beginning of period 434,275 $ 5.87 339,500 $ 5.31 Granted 6,500 7.41 — — Exercised (14,202) 3.95 (5,025) 3.37 Forfeited (250) 7.10 — — Outstanding at end of period 426,323 $ 5.96 6.2 $ 549 334,475 $ 5.34 7.7 $ 627 Exercisable at end of period 200,028 $ 5.03 6.1 $ 453 151,249 $ 4.61 6.8 $ 397 The fair values of options at the time of the grants were derived using the Black-Scholes option-pricing model. The followings weighted average assumptions were used to value options granted for the three months ended March 31, 2018: 2018 Expected life 5.5 years Risk-free interest rate 2.67 % Expected volatility 32.20 % Expected dividend yield — Weighted average per share fair value of options granted $ 2.57 As of March 31,2018, there was $662,000 of total unrecognized stock-based compensation expense related to nonvested stock options, which is expected to be recognized over the next 60 months. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 8 - Commitments and Contingencies Off-Balance Sheet Instruments The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated statements of financial condition. The contract amounts of these instruments express the extent of involvement we have in each class of financial instruments. Our exposure to credit loss from nonperformance by the other party to the above mentioned financial instruments is represented by the contractual amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Unless otherwise noted, we require collateral or other security to support financial instruments with off-balance sheet credit risk. March 31, December 31, 2018 2017 (dollars in thousands) Standby letters of credit $ 3,434 $ 3,480 Home equity lines of credit 14,221 13,321 Unadvanced construction commitments 50,021 74,720 Mortgage loan commitments 3,148 595 Lines of credit 16,796 16,612 Loans sold and serviced with limited repurchase provisions 24,592 21,409 Standby letters of credit are conditional commitments issued by the Bank guaranteeing performance by a customer to various municipalities. These guarantees are issued primarily to support performance arrangements and are limited to real estate transactions. The majority of these standby letters of credit expire within twelve months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Bank requires collateral supporting these letters of credit as deemed necessary. Management believes, except for certain standby letters of credit, that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. The current amount of the liability as of March 31, 2018 and December 31, 2017 for guarantees under standby letters of credit issued was $44,000 and $42,000, respectively. Home equity lines of credit are loan commitments to individuals as long as there is no violation of any condition established in the contract. Commitments under home equity lines expire ten years after the date the loan closes and are secured by real estate. We evaluate each customer’s credit worthiness on a case-by-case basis. Unadvanced construction commitments are loan commitments made to borrowers for both residential and commercial projects that are either in process or are expected to begin construction shortly. Mortgage loan commitments not reflected in the accompanying statements of financial condition at March 31, 2018 included three loans totaling $3.1 million. Such commitments at December 31, 2017 consisted of two loans totaling $595,000. Lines of credit are loan commitments to individuals and companies as long as there is no violation of any condition established in the contract. Lines of credit have a fixed expiration date. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The Bank has entered into several agreements to sell mortgage loans to third parties. These agreements contain limited provisions that require the Bank to repurchase a loan if the loan becomes delinquent within a period ranging generally from 120 to 180 days after the sale date depending on the investor’s agreement. The credit risk involved in these financial instruments is essentially the same as that involved in extending loan facilities to customers. We established a reserve for potential repurchases for these loans, which amounted to $67,000 at March 31, 2018 and $63,000 at December 31, 2017. We did not repurchase any loans during the three months ended March 31, 2018 or 2017. Other Contingencies The Company provides banking services to customers who do business in the medical-use cannabis industry. While the growing, processing, and sales of medical-use cannabis is legal in the state of Maryland, the business currently violates Federal law. The Company may be deemed to be aiding and abetting illegal activities through the services that it provides to these customers. The strict enforcement of Federal laws regarding medical-use cannabis would likely result in the Company’s inability to continue to provide banking services to these customers and the Company could have legal action taken against it by the Federal government, including imprisonment and fines. There is an uncertainty of the potential impact to the Company’s consolidated financial statements if the Federal government takes actions against the Company. As of March 31, 2018, the Company has not accrued an amount for the potential impact of any such actions. Following is a summary of the level of business activities with our medical-use cannabis customers: • Deposit and loan balances at March 31, 2018 were approximately $16.5 million, 2.8% of total deposits, and $12.7 million, 1.9% of total loans, respectively. Deposit and loan balances at December 31, 2017 were approximately $19.2 million, 3.2% of total deposits, and $11.9 million, 1.8% of total loans, respectively. • • |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 9 - Fair Value of Financial Instruments A fair value hierarchy that prioritizes the inputs to valuation methods is used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair market hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity). An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. We record transfers between levels at the end of the reporting period in which the change in significant inputs occurs. Assets Measured on a Recurring Basis The following tables present fair value measurements for assets that are measured at fair value on a recurring basis as of and for the three months ended March 31, 2018: Significant Other Significant Total Changes Quoted Observable Unobservable In Fair Values Carrying Prices Inputs Inputs Included In Value (Level 1) (Level 2) (Level 3) Period Income Assets: (dollars in thousands) AFS Securities - U.S. Treasury and government agency notes $ 12,011 $ 1,975 $ 10,036 $ — $ — Loans held for sale ("LHFS") 5,803 — 5,803 — 38 Mortgage servicing rights ("MSRs") 499 — — 499 22 Interest-rate lock commitments ("IRLCs") 184 — — 184 162 Mandatory forward contracts 41 — 41 — 28 Best efforts forward contracts 15 — 15 — 12 The following tables present fair value measurements for assets and liabilities that are measured at fair value on a recurring basis as of and for the year ended December 31, 2017: Significant Other Significant Total Changes Quoted Observable Unobservable In Fair Values Carrying Prices Inputs Inputs Included In Value (Level 1) (Level 2) (Level 3) Period Income Assets: (dollars in thousands) AFS Securities - U.S. Treasury and government agency notes $ 10,119 $ — $ 10,119 $ — $ — LHFS 4,530 — 4,530 — 131 MSRs 477 — — 477 (80) IRLCs 22 — — 22 (140) Mandatory forward contracts 13 — 13 — (140) Best efforts forward contracts 3 — 3 — 3 The following table provides additional quantitative information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value: Fair Value Valuation Unobservable Range Estimate Technique Input (Weighted-Average) (dollars in thousands) March 31, 2018: MSRs $ 499 Market Approach Weighted average prepayment speed 3.97 % IRLCs 184 Market Approach Average pull through rate 90.00 % December 31, 2017: MSRs $ 477 Market Approach Weighted average prepayment speed 3.94 % IRLCs 22 Market Approach Average pull through rate 90.00 % AFS Securities The estimated fair values of AFS debt securities are obtained from a nationally-recognized pricing service. This pricing service develops estimated fair values by analyzing like securities and applying available market information through processes such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to prepare valuations. Matrix pricing is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the bond’s terms and conditions, among other things, and are based on market data obtained from sources independent from the Bank. The Level 2 investments in the Bank’s portfolio are priced using those inputs that, based on the analysis prepared by the pricing service, reflect the assumptions that market participants would use to price the assets. The Bank has determined that the Level 2 designation is appropriate for these securities because, as with most fixed-income securities, those in the Bank’s portfolio are not exchange-traded, and such nonexchange-traded fixed income securities are typically priced by correlation to observed market data. LHFS LHFS are carried at fair value, which is determined based on outstanding investor commitments or, in the absence of such commitments, on current investor yield requirements or third party pricing models. MSRs The fair value of MSRs is determined using a valuation model administered by a third party that calculates the present value of estimated future net servicing income. The model incorporates assumptions that market participants use in estimating future net servicing income, including estimates of prepayment speeds, discount rate, default rates, cost to service (including delinquency and foreclosure costs), escrow account earnings, contractual servicing fee income, and other ancillary income such as late fees. Management reviews all significant assumptions on a monthly basis. Mortgage loan prepayment speed, a key assumption in the model, is the annual rate at which borrowers are forecasted to repay their mortgage loan principal. The discount rate used to determine the present value of estimated future net servicing income, another key assumption in the model, is an estimate of the required rate of return investors in the market would require for an asset with similar risk. Both assumptions can, and generally will, change as market conditions and interest rates change. IRLCs We utilize a third party specialist model to estimate the fair value of our IRLCs, which are valued based upon mandatory pricing quotes from correspondent lenders less estimated costs to process and settle the loan. Fair value is adjusted for the estimated probability of the loan closing with the borrower. Forward Contracts To avoid interest rate risk, we enter into best efforts forward sales commitments with investors at the time we make an IRLC to a borrower. Once a loan has been closed and funded, the best efforts commitments convert to mandatory forward sales commitments. The mandatory commitments are derivatives, and the bank measures and reports them at fair value. Fair value is based on the gain or loss that would occur if we were to pair-off the transaction with the investor at the measurement date. This is a level 2 input. We have elected to measure and report best efforts commitments at fair value using a valuation methodology similar to that used for our mandatory commitments. Assets Measured on a Nonrecurring Basis We may be required, from time to time, to measure certain other assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market value (“LCM”) accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis, the following tables provide the level of valuation assumptions used to determine each adjustment and the carrying value of assets: March 31, 2018 Significant Other Significant Quoted Observable Unobservable Carrying Prices Inputs Inputs Range of Weighted Value (Level 1) (Level 2) (Level 3) Discount (1) Average (dollars in thousands) Impaired loans $ 8,697 $ — $ — $ 8,697 0% - 19% 8.2 % Real estate acquired through foreclosure 23 — — 23 0% - 36% 36.0 % December 31, 2017 Significant Other Significant Quoted Observable Unobservable Carrying Prices Inputs Inputs Range of Weighted Value (Level 1) (Level 2) (Level 3) Discount (1) Average (dollars in thousands) Impaired loans $ 2,793 $ — $ — $ 2,793 0% - 33% 14.5 % Real estate acquired through foreclosure 178 — — 178 0% - 22% 11.5 % (1) Discount based on current market conditions and estimated selling costs Impaired Loans Impaired loans are those for which we have measured impairment based on the present value of expected future cash flows or on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. If it is determined that the repayment of the loan will be provided solely by the underlying collateral, and there are no other available and reliable sources of repayment, the loan is considered collateral dependent. Impaired loans that are considered collateral dependent are carried at LCM. Collateral may be in the form of real estate or business assets including equipment, inventory, and/or accounts receivable. The use of independent appraisals and management’s best judgment are significant inputs in arriving at the fair value measure of the underlying collateral and impaired loans are therefore classified within level 3 of the fair value hierarchy. For such loans that are classified as impaired, an Allowance is established when the present value of the expected future cash flows of the impaired loan is lower than the carrying value of that loan. For such impaired loans that are classified as collateral dependent, an Allowance is established when the current market value of the underlying collateral less its estimated disposal costs has not been finalized, but management determines that it is likely that the value is lower than the carrying value of that loan. Once the net collateral value has been determined, a charge-off is taken for the difference between the net collateral value and the carrying value of the loan. Real Estate Acquired Through Foreclosure We record foreclosed real estate assets at the fair value less estimated selling costs on their acquisition dates and at the lower of such initial amount or estimated fair value less estimated selling costs thereafter. We generally obtain certified external appraisals of real estate acquired through foreclosure and estimate fair value using those appraisals. Other valuation sources may be used, including broker price opinions, letters of intent, and executed sale agreements. Fair Value of All Financial Instruments The carrying value and fair value of all financial instruments are summarized in the following tables. The descriptions of the fair value calculations for AFS securities, LHFS, MSRs, IRLCs, best efforts forward contracts, mandatory forward contracts, and impaired loans are included in the discussions above. March 31, 2018 Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: (dollars in thousands) Cash and cash equivalents $ 18,307 $ 18,307 $ — $ — $ 18,307 Certificates of deposit held for investment 8,780 8,780 — — 8,780 AFS securities 12,011 1,975 10,036 — 12,011 HTM securities 49,911 5,025 44,001 — 49,026 LHFS 5,803 — 5,803 — 5,803 Loans receivable, net 661,743 — — 668,451 668,451 Restricted stock investments 4,844 — 4,844 — 4,844 Accrued interest receivable 2,454 — 2,454 — 2,454 MSRs 499 — — 499 499 IRLCs 184 — — 184 184 Mandatory forward contracts 41 — 41 — 41 Best effort forward contracts 15 — 15 — 15 Liabilities: Deposits 589,916 — 578,257 — 578,257 Accrued interest payable 416 — 416 — 416 Borrowings 96,500 — 89,198 — 89,198 Subordinated debentures 20,619 — — 20,619 20,619 December 31, 2017 Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: (dollars in thousands) Cash and cash equivalents $ 21,853 $ 21,853 $ — $ — $ 21,853 Certificates of deposit held for investment 8,780 8,780 — — 8,780 AFS securities 10,119 — 10,119 — 10,119 HTM securities 54,303 5,056 48,948 — 54,004 LHFS 4,530 — 4,530 — 4,530 Loans receivable, net 660,096 — — 672,349 672,349 Restricted stock investments 4,489 — 4,489 — 4,489 Accrued interest receivable 2,640 — 2,640 — 2,640 MSRs 477 — — 477 477 IRLCs 22 — — 22 22 Mandatory forward contracts 13 — 13 — 13 Best effort forward contracts 3 — 3 — 3 Liabilities: Deposits 602,228 — 594,659 — 594,659 Accrued interest payable 395 — 395 — 395 Borrowings 88,500 — 81,303 — 81,303 Subordinated debentures 20,169 — — 20,619 20,619 At March 31,2018 and December 31, 2017, the Bank had loan funding commitments of $84.2 million and $105.2 million, respectively, and standby letters of credit outstanding of $3.4 million and $3.5 million, respectively. The fair value of these commitments is nominal. Cash and Cash Equivalents The carrying amount reported in the consolidated statements of financial condition for cash and cash equivalents approximate those assets’ fair values. Certificates Held for Investment The carrying amount reported in the consolidated statements of financial condition for Certificates of Deposit Held for Investment approximate those assets’ fair values. HTM securities The Company utilizes a third party source to determine the fair value of its securities. The methodology consists of pricing models based on asset class and includes available trade, bid, other market information, broker quotes, proprietary models, various databases, and trading desk quotes. U.S Treasury Securities are considered Level 1 and all of our other securities are considered Level 2. Loans Receivable As of March 31, 2018, the fair value of loans receivable was estimated using an exit price analysis, in accordance with current FASB guidance, contracted through a third party service provider. As of December 31, 2017, the fair value of loans receivable was estimated using discounted cash flow analyses, using market interest rates then offered for loans with similar terms to borrowers of similar credit quality. These rates were used for each aggregated category of loans. Restricted Stock Investments The carrying value of restricted stock investments is a reasonable estimate of fair value as these investments do not have a readily available market. Accrued Interest Receivable and Payable The carrying amount of accrued interest receivable and accrued interest payable approximates fair value. Deposits The fair values disclosed for demand deposit accounts, savings accounts, and money market accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. Borrowings Long-term and short-term borrowings were segmented into categories with similar financial characteristics. Carrying values were discounted using a cash flow approach based on market rates. Subordinated debentures Current economic conditions have rendered the market for this liability inactive. As such, the Company is unable to determine a good estimate of fair value. Since the rate paid on the debentures held is lower than what would be required to secure an interest in the same debt at year end and we are unable to obtain a current fair value, we consider the carrying value of these instruments to approximate the fair value. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about financial instruments. These estimates do not reflect any premium or discount that could result from a one-time sale of our total holdings of a particular financial instrument. Because no market exists for a significant portion of our financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect estimates. The above information should not be interpreted as an estimate of the fair value of the Company since a fair value calculation is only provided for a limited portion of our assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between our disclosures and those of other companies may not be meaningful. There were no transfers between any of Levels 1, 2, and 3 for the three months ended March 31, 2018 or 2017 or for the year ended December 31, 2017. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 10 - Subsequent Event On April 2, 2018, the Company exercised its option to convert all 437,500 outstanding shares of Preferred Stock into shares of the Company’s common stock. The conversion ratio was one share of Preferred Stock for one share of common stock. As of April 2, 2018, the Preferred Stock was no longer deemed outstanding and all rights with respect to such stock ceased and terminated. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements include the accounts of Severn Bancorp, Inc., and its wholly-owned subsidiaries, Mid-Maryland Title Company, Inc., SBI Mortgage Company and SBI Mortgage Company’s subsidiary, Crownsville Development Corporation, and its subsidiary, Crownsville Holdings I, LLC, and Severn Savings Bank, FSB (the “Bank”), and the Bank’s subsidiaries, Louis Hyatt, Inc., Homeowners Title and Escrow Corporation, Severn Financial Services Corporation, SSB Realty Holdings, LLC, SSB Realty Holdings II, LLC, and HS West, LLC. All intercompany accounts and transactions have been eliminated in the accompanying consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and affect the reported amounts of revenues earned and expenses incurred during the reporting period. Actual results could differ from those estimates. Estimates that could change significantly relate to the provision for loan losses and the related allowance for loan losses (“Allowance”), determination of impaired loans and the related measurement of impairment, valuation of investment securities, valuation of real estate acquired through foreclosure, valuation of stock-based compensation, the assessment that a liability should be recognized with respect to any matters under litigation, and the calculation of current and deferred income taxes and the realizability of net deferred tax assets. |
Cash Flows | Cash Flows We consider all highly liquid securities with original maturities of three months or less to be cash equivalents. For reporting purposes, assets grouped in the Consolidated Statements of Financial Condition under the captions “Cash and due from banks” and “Federal funds sold and interest-bearing deposits in other banks” are considered cash or cash equivalents. For financial statement purposes, these assets are carried at cost. Federal funds sold and interest-bearing deposits in other banks generally have overnight maturities and are in excess of amounts that would be recoverable under Federal Deposit Insurance Corporation (“FDIC”) insurance. |
Reclassifications | Reclassifications Certain reclassifications have been made to amounts previously reported to conform to current period presentation. |
Revenue Recognition | Revenue Recognition Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans, letters of credit, derivatives and investment securities, as well as revenue related to our mortgage-banking and mortgage servicing activities. Our revenue-generating activities that are within the scope of ASC 606, which are presented in our income statements as components of noninterest income, are service charges on deposit accounts, real estate commissions, and real estate management fees. Service Charges on Deposit Accounts Service charges on deposit accounts represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied. Real Estate Commissions Real Estate Commissions represent commissions received on properties sold. Revenue is recognized when our performance obligation is completed, which is generally the time the property is sold and payment has been received. Real Estate Management Fees Real Estate Management Fees represent monthly fees received on property maintenance and management. We perform daily services for these fees and bill for those services on a monthly basis. We have determined that each day of the performance of the services represents a distinct service. The overall service of property management each day is substantially the same and has the same pattern of transfer (daily) over the term of the contract. Further, each distinct day of service represents a performance obligation that would be satisfied over time (over the length of the contract, not at a point in time) and has the same measure of progress (elapsed time). Management has therefore determined that property management services are a single performance obligation composed of a series of distinct services. In performing the daily management activities, the customer is simultaneously receiving and consuming the benefits provided by our performance of the contract. Revenue is earned evenly and daily over the life of the contract. For purposes of expedience, we record the fees when monthly invoices are processed. Each month contains 1/12 of the contract revenue. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers, as amended by ASU 2015‑14, Revenue from Contracts with Customers: Deferral of the Effective Date, ASU 2016‑08 , Revenue from Contracts with Customers: Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), ASU 2016‑10 , Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing, ASU 2016‑12 , Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, ASU 2016‑20 , Technical Corrections and Improvements to Topic 606, Revenue form Contracts with Customers, that provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to customers. The guidance also provides for a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property and equipment, including real estate. We adopted the pronouncement on January 1, 2018. Our accounting policies and revenue recognition principles did not change materially as the principles of ASC 606 are largely consistent with the previous revenue recognition practices. In January 2016, FASB issued ASU No. 2016‑01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which requires entities to measure equity investments at fair value and recognize changes on fair value in net income. The guidance also provides a new measurement alternative for equity investments that do not have readily determinable fair values and don’t qualify for the net asset value practical expedient. The standard requires entities to record changes in instrument–specific credit risk for financial liabilities measured under the fair value option in other comprehensive income, except for certain financial liabilities of consolidated collateralized financing entities. Entities also have to reassess the realizability of a deferred tax asset related to an available-for-sale (“AFS”) debt security in combination with their other deferred tax assets. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations, or cash flows. In August 2016, FASB issued ASU No. 2016‑15, Classification of Certain Cash Receipts and Cash Payments, which provides guidance regarding the presentation of certain cash receipts and cash payments in the statement of cash flows, addressing eight specific cash flow classification issues, in order to reduce existing diversity in practice. The adoption of ASC No. 2016‑15 did not have a material impact on our financial position, results of operations, or cash flows. Pronouncements Issued In February 2016, FASB issued ASU 2016‑02, Leases , which requires a lessee to recognize the assets and liabilities that arise from all leases with a term greater than 12 months. The core principle requires the lessee to recognize a liability to make lease payments and a “right-of-use” asset. The accounting applied by the lessor is relatively unchanged. The ASU also requires expanded qualitative and quantitative disclosures. For public business entities, the guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and mandates a modified retrospective transition for all entities. Early application is permitted. We have determined that the provisions of ASU No. 2016‑02 may result in an increase in assets to recognize the present value of the lease obligations, with a corresponding increase in liabilities, however, we do not expect this to have a material impact on our financial position, results of operations, or cash flows. In June 2016, FASB issued ASU No. 2016‑13, Financial Instruments – Credit Losses , which sets forth a current expected credit loss (“CECL”) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. While we are currently in the process of evaluating the impact of the amended guidance on our Consolidated Financial Statements, we currently expect the Allowance to increase upon adoption given that the Allowance will be required to cover the full remaining expected life of the portfolio upon adoption, rather than the incurred loss model under current U.S. GAAP. The extent of this increase is still being evaluated and will depend on economic conditions and the composition of our loan and lease portfolio at the time of adoption. In March 2017, FASB issued ASU No. 2017‑08, Receivables - Nonrefundable Fees and Other costs, which provides guidance that calls for the shortening of the amortization period for certain callable debt securities held at a premium. The standard is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of ASC No. 2017‑08 to have a material impact on our financial position, results of operations, or cash flows. In February 2018, FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income , which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU No. 2018-02 to have a material impact on its financial position, results of operations, or cash flows. |
Securities (Tables)
Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Securities [Abstract] | |
Amortized cost and fair value of investment securities AFS | The amortized cost and fair values of our AFS securities portfolio were as follows as of March 31, 2018: March 31, 2018 Amortized Unrealized Unrealized Cost Gains Losses Fair Value (dollars in thousands) U.S. Treasury securities $ 1,985 $ — $ 10 $ 1,975 U.S. government agency notes 10,149 — 113 10,036 $ 12,134 $ — $ 123 $ 12,011 December 31, 2017 Amortized Unrealized Unrealized Cost Gains Losses Fair Value (dollars in thousands) U.S. government agency notes $ 10,169 $ — $ 50 $ 10,119 $ 10,169 $ — $ 50 $ 10,119 |
Amortized cost and fair value of investment securities held to maturity | The amortized cost and fair values of our held-to-maturity (“HTM”) securities portfolio were as follows: March 31, 2018 Amortized Unrealized Unrealized Fair Cost Gains Losses Value (dollars in thousands) U.S. Treasury securities $ 4,993 $ 40 $ 8 $ 5,025 U.S. government agency notes 15,999 40 143 15,896 Mortgage-backed securities 28,919 11 825 28,105 $ 49,911 $ 91 $ 976 $ 49,026 December 31, 2017 Amortized Unrealized Unrealized Fair Cost Gains Losses Value (dollars in thousands) U.S. Treasury securities $ 4,994 $ 68 $ 6 $ 5,056 U.S. government agency notes 19,004 81 99 18,986 Mortgage-backed securities 30,305 27 370 29,962 $ 54,303 $ 176 $ 475 $ 54,004 |
Schedule of AFS securities in an unrealized loss position | Gross unrealized losses and fair value by length of time that the individual AFS securities have been in an unrealized loss position at the dates indicated are presented in the following tables: March 31, 2018 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. Treasury securities $ 1,975 $ 10 $ — $ — $ 1,975 $ 10 U.S. government agency notes 9,021 103 1,015 10 10,036 113 $ 10,996 $ 113 $ 1,015 $ 10 $ 12,011 $ 123 December 31, 2017 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. government agency notes $ 10,119 $ 50 $ — $ — $ 10,119 $ 50 $ 10,119 $ 50 $ — $ — $ 10,119 $ 50 |
Schedule of temporary impairment losses | Gross unrealized losses and fair value by length of time that the individual HTM securities have been in an unrealized loss position at the dates indicated are presented in the following tables: March 31, 2018 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. Treasury securities $ 1,992 $ 8 $ — $ — $ 1,992 $ 8 U.S. government agency notes 8,953 41 4,935 102 13,888 143 Mortgage-backed securities 21,284 568 6,557 257 27,841 825 $ 32,229 $ 617 $ 11,492 $ 359 $ 43,721 $ 976 December 31, 2017 Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (dollars in thousands) U.S. Treasury securities $ 1,993 $ 6 $ — $ — $ 1,993 $ 6 U.S. government agency notes 6,977 23 6,964 76 13,941 99 Mortgage-backed securities 20,993 217 7,046 153 28,039 370 $ 29,963 $ 246 $ 14,010 $ 229 $ 43,973 $ 475 |
Amortized cost and estimated fair value of debt securities | Contractual maturities of debt securities at March 31, 2018 are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. AFS Securities HTM Securities Amortized Fair Amortized Fair Cost Value Cost Value (dollars in thousands) Due in one year or less $ 1,025 $ 1,015 $ 9,006 $ 8,980 Due after one through five years 11,109 10,996 10,978 10,909 Due after five years through ten years — — 1,008 1,032 Mortgage-backed securities — — 28,919 28,105 $ 12,134 $ 12,011 $ 49,911 $ 49,026 |
Loans Receivable and Allowanc22
Loans Receivable and Allowance for Loan Losses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Loans Receivable and Allowance for Loan Losses [Abstract] | |
Summary of loans receivable | Loans receivable are summarized as follows: March 31, 2018 December 31, 2017 (dollars in thousands) Residential mortgage $ 288,061 $ 287,656 Commercial 39,015 37,356 Commercial real estate 230,336 236,302 Construction, land acquisition, and development 100,635 93,060 Home equity/2nds 13,853 15,703 Consumer 1,050 1,084 Total loans receivable 672,950 671,161 Unearned loan fees (3,038) (3,010) Loans receivable $ 669,912 $ 668,151 |
Changes in allowance for loan losses and recorded investment | The following tables present, by portfolio segment, the changes in the Allowance and the recorded investment in loans: Three Months Ended March 31, 2018 Residential Commercial Home Equity/ Mortgage Commercial Real Estate ADC 2nds Consumer Total (dollars in thousands) Beginning Balance $ 3,099 $ 527 $ 2,805 $ 1,236 $ 386 $ 2 $ 8,055 Charge-offs (323) — — (13) — — (336) Recoveries 221 — 211 — 18 — 450 Net (charge-offs) recoveries (102) — 211 (13) 18 — 114 Provision for (reversal of) loan losses 304 (13) (21) (163) (107) — — Ending Balance $ 3,301 $ 514 $ 2,995 $ 1,060 $ 297 $ 2 $ 8,169 Ending balance - individually evaluated for impairment $ 1,285 $ — $ 318 $ 47 $ 2 $ 1 $ 1,653 Ending balance - collectively evaluated for impairment 2,016 514 2,677 1,013 295 1 6,516 $ 3,301 $ 514 $ 2,995 $ 1,060 $ 297 $ 2 $ 8,169 Ending loan balance -individually evaluated for impairment $ 17,439 $ 296 $ 2,820 $ 981 $ 1,260 $ 82 $ 22,878 Ending loan balance -collectively evaluated for impairment 267,584 38,719 227,516 99,654 12,593 968 647,034 $ 285,023 $ 39,015 $ 230,336 $ 100,635 $ 13,853 $ 1,050 $ 669,912 December 31, 2017 Residential Commercial Home Equity/ Mortgage Commercial Real Estate ADC 2nds Consumer Total (dollars in thousands) Ending balance - individually evaluated for impairment $ 1,181 $ — $ 182 $ 48 $ — $ 2 $ 1,413 Ending balance - collectively evaluated for impairment 1,918 527 2,623 1,188 386 — 6,642 $ 3,099 $ 527 $ 2,805 $ 1,236 $ 386 $ 2 $ 8,055 Ending loan balance - individually evaluated for impairment $ 18,219 $ — $ 2,917 $ 991 $ — $ 84 $ 22,211 Ending loan balance - collectively evaluated for impairment 266,427 37,356 233,385 92,069 15,703 1,000 645,940 $ 284,646 $ 37,356 $ 236,302 $ 93,060 $ 15,703 $ 1,084 $ 668,151 Three Months Ended March 31, 2017 Residential Commercial Home Equity/ Mortgage Commercial Real Estate ADC 2nds Consumer Total (dollars in thousands) Beginning Balance $ 3,833 $ 478 $ 2,535 $ 1,390 $ 728 $ 5 $ 8,969 Charge-offs (499) — — — — — (499) Recoveries 107 27 — — 3 — 137 Net (charge-offs) recoveries (392) 27 — — 3 — (362) Provision for (reversal of) loan losses 348 (32) (20) (293) (278) — (275) Ending Balance $ 3,789 $ 473 $ 2,515 $ 1,097 $ 453 $ 5 $ 8,332 Ending balance - individually evaluated for impairment $ 1,757 $ — $ 191 $ 52 $ 81 $ 3 $ 2,084 Ending balance - collectively evaluated for impairment 2,032 473 2,324 1,045 372 2 6,248 $ 3,789 $ 473 $ 2,515 $ 1,097 $ 453 $ 5 $ 8,332 Ending loan balance - individually evaluated for impairment $ 19,008 $ — $ 3,130 $ 818 $ 2,438 $ 92 $ 25,486 Ending loan balance - collectively evaluated for impairment 231,891 48,554 187,831 98,897 15,584 1,498 584,255 $ 250,899 $ 48,554 $ 190,961 $ 99,715 $ 18,022 $ 1,590 $ 609,741 |
Credit quality breakdown of loan portfolio by class | The following tables present the credit quality breakdown of our loan portfolio by class: March 31, 2018 Special Pass Mention Substandard Total (dollars in thousands) Residential mortgage $ 278,721 $ 1,367 $ 4,935 $ 285,023 Commercial 38,981 34 — 39,015 Commercial real estate 224,274 4,185 1,877 230,336 ADC 99,455 — 1,180 100,635 Home equity/2nds 12,542 457 854 13,853 Consumer 1,050 — — 1,050 $ 655,023 $ 6,043 $ 8,846 $ 669,912 December 31, 2017 Special Pass Mention Substandard Total (dollars in thousands) Residential mortgage $ 277,867 $ 1,563 $ 5,216 $ 284,646 Commercial 37,312 44 — 37,356 Commercial real estate 228,746 4,615 2,941 236,302 ADC 91,868 — 1,192 93,060 Home equity/2nds 14,384 465 854 15,703 Consumer 1,084 — — 1,084 $ 651,261 $ 6,687 $ 10,203 $ 668,151 |
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans | The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans: March 31, 2018 30-59 60-89 90+ Days Days Days Total Non- Past Due Past Due Past Due Past Due Current Total Accrual (dollars in thousands) Residential mortgage $ 99 $ 95 $ 2,652 $ 2,846 $ 282,177 $ 285,023 $ 3,619 Commercial — 16 225 241 38,774 39,015 296 Commercial real estate — — 216 216 230,120 230,336 216 ADC — — 239 239 100,396 100,635 310 Home equity/2nds 76 — 1,136 1,212 12,641 13,853 1,260 Consumer 36 — — 36 1,014 1,050 — $ 211 $ 111 $ 4,468 $ 4,790 $ 665,122 $ 669,912 $ 5,701 December 31, 2017 30-59 60-89 90+ Days Days Days Total Non- Past Due Past Due Past Due Past Due Current Total Accrual (dollars in thousands) Residential mortgage $ 1,006 $ — $ — $ 1,006 $ 283,640 $ 284,646 $ 3,891 Commercial — — — — 37,356 37,356 78 Commercial real estate 948 — — 948 235,354 236,302 159 ADC — — — — 93,060 93,060 314 Home equity/2nds — — — — 15,703 15,703 1,268 Consumer — — — — 1,084 1,084 — $ 1,954 $ — $ — $ 1,954 $ 666,197 $ 668,151 $ 5,710 |
Summary of Impaired loans | The following tables summarize impaired loans: March 31, 2018 December 31, 2017 Unpaid Unpaid Principal Recorded Related Principal Recorded Related Balance Investment Allowance Balance Investment Allowance With no related Allowance: (dollars in thousands) Residential mortgage $ 11,610 $ 9,958 $ — $ 12,929 $ 11,572 $ — Commercial 349 296 — — — — Commercial real estate 1,262 1,148 — 1,562 1,507 — ADC 633 633 — 636 636 — Home equity/2nds 1,684 1,247 — — — — Consumer — — — — — — With a related Allowance: Residential mortgage 7,596 7,481 1,285 6,761 6,647 1,181 Commercial — — — — — — Commercial real estate 1,566 1,672 318 1,410 1,410 182 ADC 387 348 47 392 355 48 Home equity/2nds 14 13 2 — — — Consumer 82 82 1 84 84 2 Totals: Residential mortgage 19,206 17,439 1,285 19,690 18,219 1,181 Commercial 349 296 — — — — Commercial real estate 2,828 2,820 318 2,972 2,917 182 ADC 1,020 981 47 1,028 991 48 Home equity/2nds 1,698 1,260 2 — — — Consumer 82 82 1 84 84 2 Three Months Ended March 31, 2018 2017 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized With no related Allowance: (dollars in thousands) Residential mortgage $ 10,765 $ 110 $ 10,592 $ 117 Commercial 148 13 87 8 Commercial real estate 1,328 10 2,494 39 ADC 634 8 438 6 Home equity/2nds 623 4 1,615 15 Consumer — — — — With a related Allowance: Residential mortgage 7,064 58 8,839 97 Commercial — — — — Commercial real estate 1,541 19 1,925 24 ADC 351 4 383 5 Home equity/2nds 7 — 1,338 48 Consumer 83 1 93 1 Totals: Residential mortgage 17,829 168 19,431 214 Commercial 148 13 87 8 Commercial real estate 2,869 29 4,419 63 ADC 985 12 821 11 Home equity/2nds 630 4 2,953 63 Consumer 83 1 93 1 |
Schedule of Troubled Debt Restructure Loans | March 31, 2018 Total Total Number of Accrual Number of Nonaccrual Number of Balance of Modifications Status Modifications Status Modifications Modifications (dollars in thousands) Residential mortgage 40 $ 10,692 4 $ 811 44 $ 11,503 Commercial real estate 3 1,848 — — 3 1,848 ADC 1 136 — — 1 136 Consumer 3 82 — — 3 82 47 $ 12,758 4 $ 811 51 $ 13,569 December 31, 2017 Total Total Number of Accrual Number of Nonaccrual Number of Balance of Modifications Status Modifications Status Modifications Modifications (dollars in thousands) Residential mortgage 42 $ 11,631 2 $ 736 44 $ 12,367 Commercial real estate 3 1,862 1 78 4 1,940 ADC 1 137 1 6 2 143 Consumer 4 84 — — 4 84 50 $ 13,714 4 $ 820 54 $ 14,534 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Matters [Abstract] | |
Bank's actual capital amounts and ratios | The Bank’s regulatory capital amounts and ratios were as follows: Minimum Minimum To be Well Requirements Requirements Capitalized Under for Capital Adequacy with Capital Prompt Corrective Actual Purposes Conservation Buffer Action Provision Amount Ratio Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) March 31, 2018 Common Equity Tier 1 Capital (to risk-weighted assets) $ 107,618 16.8 % $ 28,750 4.5 % $ 40,729 6.4 % $ 41,527 6.5 % Total capital (to risk-weighted assets) 115,614 18.1 % 51,111 8.0 % 63,090 9.9 % 63,888 10.0 % Tier 1 capital (to risk-weighted assets) 107,618 16.8 % 38,333 6.0 % 50,312 7.9 % 51,111 8.0 % Tier 1 capital (to average quarterly assets) 107,618 13.5 % 31,835 4.0 % 46,757 5.9 % 39,793 5.0 % December 31, 2017 Common Equity Tier 1 Capital (to risk-weighted assets) $ 105,721 16.5 % $ 28,904 4.5 % $ 36,933 5.8 % $ 41,750 6.5 % Total capital (to risk-weighted assets) 113,758 17.7 % 51,385 8.0 % 59,414 9.3 % 64,231 10.0 % Tier 1 capital (to risk-weighted assets) 105,721 16.5 % 38,539 6.0 % 46,567 7.3 % 51,385 8.0 % Tier 1 capital (to average quarterly assets) 105,721 13.5 % 31,440 4.0 % 41,264 5.3 % 39,300 5.0 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share reconciliation | Information relating to the calculations of our income per common share is summarized as follows: Three Months Ended March 31, 2018 2017 (dollars in thousands, except for per share data) Weighted-average shares outstanding - basic 12,241,554 12,125,553 Dilution 93,083 85,027 Weighted-average share outstanding - diluted 12,334,637 12,210,580 Net income available to common stockholders $ 1,815 $ 855 Net income per share - basic $ 0.15 $ 0.07 Net income per share - diluted $ 0.15 $ 0.07 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Information regarding stock option plan | Information regarding our stock-based compensation plan is as follows as of and for the three months ended March 31: 2018 2017 Weighted- Weighted- Weighted- Average Aggregate Weighted- Average Aggregate Average Remaining Intrinsic Average Remaining Intrinsic Number Exercise Contractual Value Number Exercise Contractual Value of Shares Price Term (in years) (in thousands) of Shares Price Term (in years) (in thousands) Outstanding at beginning of period 434,275 $ 5.87 339,500 $ 5.31 Granted 6,500 7.41 — — Exercised (14,202) 3.95 (5,025) 3.37 Forfeited (250) 7.10 — — Outstanding at end of period 426,323 $ 5.96 6.2 $ 549 334,475 $ 5.34 7.7 $ 627 Exercisable at end of period 200,028 $ 5.03 6.1 $ 453 151,249 $ 4.61 6.8 $ 397 |
Stock options valuation assumptions | The followings weighted average assumptions were used to value options granted for the three months ended March 31, 2018: 2018 Expected life 5.5 years Risk-free interest rate 2.67 % Expected volatility 32.20 % Expected dividend yield — Weighted average per share fair value of options granted $ 2.57 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of commitments and guarantees | March 31, December 31, 2018 2017 (dollars in thousands) Standby letters of credit $ 3,434 $ 3,480 Home equity lines of credit 14,221 13,321 Unadvanced construction commitments 50,021 74,720 Mortgage loan commitments 3,148 595 Lines of credit 16,796 16,612 Loans sold and serviced with limited repurchase provisions 24,592 21,409 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value of Financial Instruments [Abstract] | |
Schedule of fair value measurements for assets on a recurring basis | The following tables present fair value measurements for assets that are measured at fair value on a recurring basis as of and for the three months ended March 31, 2018: Significant Other Significant Total Changes Quoted Observable Unobservable In Fair Values Carrying Prices Inputs Inputs Included In Value (Level 1) (Level 2) (Level 3) Period Income Assets: (dollars in thousands) AFS Securities - U.S. Treasury and government agency notes $ 12,011 $ 1,975 $ 10,036 $ — $ — Loans held for sale ("LHFS") 5,803 — 5,803 — 38 Mortgage servicing rights ("MSRs") 499 — — 499 22 Interest-rate lock commitments ("IRLCs") 184 — — 184 162 Mandatory forward contracts 41 — 41 — 28 Best efforts forward contracts 15 — 15 — 12 The following tables present fair value measurements for assets and liabilities that are measured at fair value on a recurring basis as of and for the year ended December 31, 2017: Significant Other Significant Total Changes Quoted Observable Unobservable In Fair Values Carrying Prices Inputs Inputs Included In Value (Level 1) (Level 2) (Level 3) Period Income Assets: (dollars in thousands) AFS Securities - U.S. Treasury and government agency notes $ 10,119 $ — $ 10,119 $ — $ — LHFS 4,530 — 4,530 — 131 MSRs 477 — — 477 (80) IRLCs 22 — — 22 (140) Mandatory forward contracts 13 — 13 — (140) Best efforts forward contracts 3 — 3 — 3 |
Schedule of additional quantitative information about assets measured at fair value on a recurring basis | The following table provides additional quantitative information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value: Fair Value Valuation Unobservable Range Estimate Technique Input (Weighted-Average) (dollars in thousands) March 31, 2018: MSRs $ 499 Market Approach Weighted average prepayment speed 3.97 % IRLCs 184 Market Approach Average pull through rate 90.00 % December 31, 2017: MSRs $ 477 Market Approach Weighted average prepayment speed 3.94 % IRLCs 22 Market Approach Average pull through rate 90.00 % |
Schedule of assets measured at fair value on a nonrecurring basis | For assets measured at fair value on a nonrecurring basis, the following tables provide the level of valuation assumptions used to determine each adjustment and the carrying value of assets: March 31, 2018 Significant Other Significant Quoted Observable Unobservable Carrying Prices Inputs Inputs Range of Weighted Value (Level 1) (Level 2) (Level 3) Discount (1) Average (dollars in thousands) Impaired loans $ 8,697 $ — $ — $ 8,697 0% - 19% 8.2 % Real estate acquired through foreclosure 23 — — 23 0% - 36% 36.0 % December 31, 2017 Significant Other Significant Quoted Observable Unobservable Carrying Prices Inputs Inputs Range of Weighted Value (Level 1) (Level 2) (Level 3) Discount (1) Average (dollars in thousands) Impaired loans $ 2,793 $ — $ — $ 2,793 0% - 33% 14.5 % Real estate acquired through foreclosure 178 — — 178 0% - 22% 11.5 % (1) Discount based on current market conditions and estimated selling costs |
Estimated fair values of financial instruments | The carrying value and fair value of all financial instruments are summarized in the following tables. The descriptions of the fair value calculations for AFS securities, LHFS, MSRs, IRLCs, best efforts forward contracts, mandatory forward contracts, and impaired loans are included in the discussions above. March 31, 2018 Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: (dollars in thousands) Cash and cash equivalents $ 18,307 $ 18,307 $ — $ — $ 18,307 Certificates of deposit held for investment 8,780 8,780 — — 8,780 AFS securities 12,011 1,975 10,036 — 12,011 HTM securities 49,911 5,025 44,001 — 49,026 LHFS 5,803 — 5,803 — 5,803 Loans receivable, net 661,743 — — 668,451 668,451 Restricted stock investments 4,844 — 4,844 — 4,844 Accrued interest receivable 2,454 — 2,454 — 2,454 MSRs 499 — — 499 499 IRLCs 184 — — 184 184 Mandatory forward contracts 41 — 41 — 41 Best effort forward contracts 15 — 15 — 15 Liabilities: Deposits 589,916 — 578,257 — 578,257 Accrued interest payable 416 — 416 — 416 Borrowings 96,500 — 89,198 — 89,198 Subordinated debentures 20,619 — — 20,619 20,619 December 31, 2017 Carrying Fair Value Value Level 1 Level 2 Level 3 Total Assets: (dollars in thousands) Cash and cash equivalents $ 21,853 $ 21,853 $ — $ — $ 21,853 Certificates of deposit held for investment 8,780 8,780 — — 8,780 AFS securities 10,119 — 10,119 — 10,119 HTM securities 54,303 5,056 48,948 — 54,004 LHFS 4,530 — 4,530 — 4,530 Loans receivable, net 660,096 — — 672,349 672,349 Restricted stock investments 4,489 — 4,489 — 4,489 Accrued interest receivable 2,640 — 2,640 — 2,640 MSRs 477 — — 477 477 IRLCs 22 — — 22 22 Mandatory forward contracts 13 — 13 — 13 Best effort forward contracts 3 — 3 — 3 Liabilities: Deposits 602,228 — 594,659 — 594,659 Accrued interest payable 395 — 395 — 395 Borrowings 88,500 — 81,303 — 81,303 Subordinated debentures 20,169 — — 20,619 20,619 |
Correction of an Immaterial P28
Correction of an Immaterial Prior Year Error (Details) - USD ($) | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |||||
Net income available to common stockholders | $ 855,000 | $ 1,815,000 | $ 855,000 | $ 855,000 | |
Prior Year Adjustment [Member] | |||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |||||
Net income available to common stockholders | 787,000 | ||||
Prior Year Adjustment [Member] | Series B Preferred Stock [Member] | |||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |||||
Discount on redemption of series B preferred stock | $ 68,000 | $ 511,000 |
Securities (Details)
Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized cost and fair value of investment securities Available-for-sale [Abstract] | ||
Amortized Cost | $ 12,134 | $ 10,169 |
Unrealized Losses | 123 | 50 |
Debt securities available for sale, at fair value | 12,011 | 10,119 |
AFS securities, Number of securities in continuous unrealized loss position less than twelve months | 10,996 | 10,119 |
U.S. Treasury Securities [Member] | ||
Amortized cost and fair value of investment securities Available-for-sale [Abstract] | ||
Amortized Cost | 1,985 | |
Unrealized Losses | 10 | |
Debt securities available for sale, at fair value | 1,975 | |
AFS securities, Number of securities in continuous unrealized loss position less than twelve months | 1,975 | |
U.S. Government Agency Notes [Member] | ||
Amortized cost and fair value of investment securities Available-for-sale [Abstract] | ||
Amortized Cost | 10,149 | 10,169 |
Unrealized Losses | 113 | 50 |
Debt securities available for sale, at fair value | 10,036 | 10,119 |
AFS securities, Number of securities in continuous unrealized loss position less than twelve months | $ 9,021 | $ 10,119 |
Securities, Available-for-sale
Securities, Available-for-sale Securities (Details) $ in Thousands | Mar. 31, 2018USD ($)security | Dec. 31, 2017USD ($) |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 Months, Fair Value | $ 10,996 | $ 10,119 |
12 Months or More, Fair Value | 1,015 | |
Total, Estimated Fair Value | 12,011 | 10,119 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, Unrealized Losses | 113 | 50 |
12 Months or More, Unrealized Losses | 10 | |
Total, Unrealized Losses | $ 123 | 50 |
AFS securities, Number of securities in continuous unrealized loss position | security | 10 | |
AFS securities, Amount of largest loss recorded in one security | $ 24 | |
U.S. Treasury Securities [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 Months, Fair Value | 1,975 | |
Total, Estimated Fair Value | 1,975 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, Unrealized Losses | 10 | |
Total, Unrealized Losses | 10 | |
U.S. Government Agency Notes [Member] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 Months, Fair Value | 9,021 | 10,119 |
12 Months or More, Fair Value | 1,015 | |
Total, Estimated Fair Value | 10,036 | 10,119 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 Months, Unrealized Losses | 103 | 50 |
12 Months or More, Unrealized Losses | 10 | |
Total, Unrealized Losses | $ 113 | $ 50 |
Securities, Held-to-maturity Se
Securities, Held-to-maturity Securities (Details) $ in Thousands | Mar. 31, 2018USD ($)security | Dec. 31, 2017USD ($) |
Amortized cost and fair value of investment securities held to maturity [Abstract] | ||
Amortized Cost | $ 49,911 | $ 54,303 |
Unrealized Gains | 91 | 176 |
Unrealized Losses | 976 | 475 |
Fair Value | 49,026 | 54,004 |
Fair Value [Abstract] | ||
Less than 12 Months, Fair Value | 32,229 | 29,963 |
12 Months or More, Fair Value | 11,492 | 14,010 |
Total, Estimated Fair Value | 43,721 | 43,973 |
Unrealized Losses [Abstract] | ||
Less than 12 Months, Unrealized Losses | 617 | 246 |
12 Months or More, Unrealized Losses | 359 | 229 |
Total, Unrealized Losses | $ 976 | 475 |
HTM securities, Number of securities in continuous unrealized loss position | security | 34 | |
HTM securities, Amount of largest loss recorded in one security | $ 114 | |
U.S. Treasury Securities [Member] | ||
Amortized cost and fair value of investment securities held to maturity [Abstract] | ||
Amortized Cost | 4,993 | 4,994 |
Unrealized Gains | 40 | 68 |
Unrealized Losses | 8 | 6 |
Fair Value | 5,025 | 5,056 |
Fair Value [Abstract] | ||
Less than 12 Months, Fair Value | 1,992 | 1,993 |
Total, Estimated Fair Value | 1,992 | 1,993 |
Unrealized Losses [Abstract] | ||
Less than 12 Months, Unrealized Losses | 8 | 6 |
Total, Unrealized Losses | 8 | 6 |
U.S. Government Agency Notes [Member] | ||
Amortized cost and fair value of investment securities held to maturity [Abstract] | ||
Amortized Cost | 15,999 | 19,004 |
Unrealized Gains | 40 | 81 |
Unrealized Losses | 143 | 99 |
Fair Value | 15,896 | 18,986 |
Fair Value [Abstract] | ||
Less than 12 Months, Fair Value | 8,953 | 6,977 |
12 Months or More, Fair Value | 4,935 | 6,964 |
Total, Estimated Fair Value | 13,888 | 13,941 |
Unrealized Losses [Abstract] | ||
Less than 12 Months, Unrealized Losses | 41 | 23 |
12 Months or More, Unrealized Losses | 102 | 76 |
Total, Unrealized Losses | 143 | 99 |
Mortgage-backed Securities [Member] | ||
Amortized cost and fair value of investment securities held to maturity [Abstract] | ||
Amortized Cost | 28,919 | 30,305 |
Unrealized Gains | 11 | 27 |
Unrealized Losses | 825 | 370 |
Fair Value | 28,105 | 29,962 |
Fair Value [Abstract] | ||
Less than 12 Months, Fair Value | 21,284 | 20,993 |
12 Months or More, Fair Value | 6,557 | 7,046 |
Total, Estimated Fair Value | 27,841 | 28,039 |
Unrealized Losses [Abstract] | ||
Less than 12 Months, Unrealized Losses | 568 | 217 |
12 Months or More, Unrealized Losses | 257 | 153 |
Total, Unrealized Losses | $ 825 | $ 370 |
Securities, Available For Sale
Securities, Available For Sale securities and Held-to-maturity Securities (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)security | Mar. 31, 2017security | Dec. 31, 2017USD ($) | |
Amortized Cost [Abstract] | |||
Due in one year or less | $ 1,025 | ||
Due after one through five years | 11,109 | ||
Amortized Cost | 12,134 | $ 10,169 | |
Estimated Fair Value [Abstract] | |||
Due in one year or less | 1,015 | ||
Due after one through five years | 10,996 | ||
Fair Value | 12,011 | 10,119 | |
Amortized Cost [Abstract] | |||
Due in one year or less | 9,006 | ||
Due after one through five years | 10,978 | ||
Due after five years through ten years | 1,008 | ||
Mortgage-backed securities | 28,919 | ||
Amortized Cost | 49,911 | 54,303 | |
Estimated Fair Value [Abstract] | |||
Due in one year or less | 8,980 | ||
Due after one through five years | 10,909 | ||
Due after five years through ten years | 1,032 | ||
Mortgage-backed securities | 28,105 | ||
Fair Value | $ 49,026 | 54,004 | |
Number of securities sold during the period | security | 0 | 0 | |
Collateral Pledged | |||
Estimated Fair Value [Abstract] | |||
HTM Securities pledged as collateral for borrowings | $ 0 | 0 | |
AFS Securities pledged as collateral for borrowings | $ 0 | $ 0 |
Loans Receivable and Allowanc33
Loans Receivable and Allowance for Loan Losses, Summary of Loans Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | |
Summary of loans receivable [Abstract] | |||
Total loans receivable | $ 672,950 | $ 671,161 | |
Unearned loan fees | (3,038) | (3,010) | |
Net loans receivable | 669,912 | 668,151 | |
Loans pledged as collateral | 190,800 | ||
Federal National Mortgage Association [Member] | |||
Summary of loans receivable [Abstract] | |||
Mortgage loans serviced | 32,700 | ||
Federal Home Loan Mortgage Corporation [Member] | |||
Summary of loans receivable [Abstract] | |||
Mortgage loans serviced | 15,600 | ||
Residential Mortgage [Member] | |||
Summary of loans receivable [Abstract] | |||
Total loans receivable | 288,061 | 287,656 | |
Net loans receivable | $ 285,023 | 284,646 | $ 250,899 |
Loan to value ratio | 80.00% | ||
Commercial [Member] | |||
Summary of loans receivable [Abstract] | |||
Total loans receivable | $ 39,015 | 37,356 | |
Net loans receivable | 39,015 | 37,356 | 48,554 |
Commercial Real Estate [Member] | |||
Summary of loans receivable [Abstract] | |||
Total loans receivable | 230,336 | 236,302 | |
Net loans receivable | 230,336 | 236,302 | 190,961 |
ADC [Member] | |||
Summary of loans receivable [Abstract] | |||
Total loans receivable | 100,635 | 93,060 | |
Net loans receivable | 100,635 | 93,060 | 99,715 |
Home Equity/2nds[Member] | |||
Summary of loans receivable [Abstract] | |||
Total loans receivable | 13,853 | 15,703 | |
Net loans receivable | 13,853 | 15,703 | $ 609,741 |
Consumer [Member] | |||
Summary of loans receivable [Abstract] | |||
Total loans receivable | 1,050 | 1,084 | |
Net loans receivable | $ 1,050 | $ 1,084 |
Loans Receivable and Allowanc34
Loans Receivable and Allowance for Loan Losses, Changes in Allowance for Loan Losses and Recorded Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | |
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | $ 8,055 | ||||
Charge-offs | (336) | ||||
Recoveries | 450 | ||||
Net (charge-offs) recoveries | 114 | ||||
Provision for (reversal of) loan losses | $ (275) | ||||
Ending Balance | 8,169 | ||||
Ending balance - individually evaluated for impairment | $ 1,653 | $ 1,413 | |||
Ending balance - collectively evaluated for impairment | 6,516 | 6,642 | |||
Ending balance | 8,055 | 8,169 | 8,055 | ||
Ending loan balance - individually evaluated for impairment | 22,878 | 22,211 | |||
Ending loan balance - collectively evaluated for impairment | 647,034 | 645,940 | |||
Ending loan balance | 669,912 | 668,151 | |||
Residential Mortgage [Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 3,099 | 3,833 | |||
Charge-offs | (323) | (499) | |||
Recoveries | 221 | 107 | |||
Net (charge-offs) recoveries | (102) | (392) | |||
Provision for (reversal of) loan losses | 304 | 348 | |||
Ending Balance | 3,301 | 3,789 | |||
Ending balance - individually evaluated for impairment | 1,285 | 1,181 | $ 1,757 | ||
Ending balance - collectively evaluated for impairment | 2,016 | 1,918 | 2,032 | ||
Ending balance | 3,099 | 3,833 | 3,301 | 3,099 | 3,789 |
Ending loan balance - individually evaluated for impairment | 17,439 | 18,219 | 19,008 | ||
Ending loan balance - collectively evaluated for impairment | 267,584 | 266,427 | 231,891 | ||
Ending loan balance | 285,023 | 284,646 | 250,899 | ||
Commercial [Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 527 | 478 | |||
Recoveries | 27 | ||||
Net (charge-offs) recoveries | 27 | ||||
Provision for (reversal of) loan losses | (13) | (32) | |||
Ending Balance | 514 | 473 | |||
Ending balance - collectively evaluated for impairment | 514 | 527 | 473 | ||
Ending balance | 527 | 478 | 514 | 527 | 473 |
Ending loan balance - individually evaluated for impairment | 296 | ||||
Ending loan balance - collectively evaluated for impairment | 38,719 | 37,356 | 48,554 | ||
Ending loan balance | 39,015 | 37,356 | 48,554 | ||
Commercial Real Estate [Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 2,805 | 2,535 | |||
Recoveries | 211 | ||||
Net (charge-offs) recoveries | 211 | ||||
Provision for (reversal of) loan losses | (21) | (20) | |||
Ending Balance | 2,995 | 2,515 | |||
Ending balance - individually evaluated for impairment | 318 | 182 | 191 | ||
Ending balance - collectively evaluated for impairment | 2,677 | 2,623 | 2,324 | ||
Ending balance | 2,805 | 2,535 | 2,995 | 2,805 | 2,515 |
Ending loan balance - individually evaluated for impairment | 2,820 | 2,917 | 3,130 | ||
Ending loan balance - collectively evaluated for impairment | 227,516 | 233,385 | 187,831 | ||
Ending loan balance | 230,336 | 236,302 | 190,961 | ||
ADC [Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 1,236 | 1,390 | |||
Charge-offs | (13) | ||||
Net (charge-offs) recoveries | (13) | ||||
Provision for (reversal of) loan losses | (163) | (293) | |||
Ending Balance | 1,060 | 1,097 | |||
Ending balance - individually evaluated for impairment | 47 | 48 | 52 | ||
Ending balance - collectively evaluated for impairment | 1,013 | 1,188 | 1,045 | ||
Ending balance | 1,236 | 1,390 | 1,060 | 1,236 | 1,097 |
Ending loan balance - individually evaluated for impairment | 981 | 991 | 818 | ||
Ending loan balance - collectively evaluated for impairment | 99,654 | 92,069 | 98,897 | ||
Ending loan balance | 100,635 | 93,060 | 99,715 | ||
Land [Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 728 | ||||
Recoveries | 3 | ||||
Net (charge-offs) recoveries | 3 | ||||
Provision for (reversal of) loan losses | (278) | ||||
Ending Balance | 453 | ||||
Ending balance - individually evaluated for impairment | 81 | ||||
Ending balance - collectively evaluated for impairment | 372 | ||||
Ending balance | 728 | 453 | |||
Ending loan balance - individually evaluated for impairment | 2,438 | ||||
Ending loan balance - collectively evaluated for impairment | 15,584 | ||||
Ending loan balance | 18,022 | ||||
Line of Credit [Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 5 | ||||
Ending Balance | 5 | ||||
Ending balance - individually evaluated for impairment | 3 | ||||
Ending balance - collectively evaluated for impairment | 2 | ||||
Ending balance | 5 | 5 | |||
Ending loan balance - individually evaluated for impairment | 92 | ||||
Ending loan balance - collectively evaluated for impairment | 1,498 | ||||
Ending loan balance | 1,590 | ||||
Home Equity/2nds[Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 386 | 8,969 | |||
Charge-offs | (499) | ||||
Recoveries | 18 | 137 | |||
Net (charge-offs) recoveries | 18 | (362) | |||
Provision for (reversal of) loan losses | (107) | (275) | |||
Ending Balance | 297 | 8,332 | |||
Ending balance - individually evaluated for impairment | 2 | 2,084 | |||
Ending balance - collectively evaluated for impairment | 295 | 386 | 6,248 | ||
Ending balance | 386 | $ 8,969 | 297 | 386 | 8,332 |
Ending loan balance - individually evaluated for impairment | 1,260 | 25,486 | |||
Ending loan balance - collectively evaluated for impairment | 12,593 | 15,703 | 584,255 | ||
Ending loan balance | 13,853 | 15,703 | $ 609,741 | ||
Consumer [Member] | |||||
Allowance for Loan losses [Roll Forward] | |||||
Beginning Balance | 2 | ||||
Ending Balance | 2 | ||||
Ending balance - individually evaluated for impairment | 1 | 2 | |||
Ending balance - collectively evaluated for impairment | 1 | ||||
Ending balance | $ 2 | 2 | 2 | ||
Ending loan balance - individually evaluated for impairment | 82 | 84 | |||
Ending loan balance - collectively evaluated for impairment | 968 | 1,000 | |||
Ending loan balance | $ 1,050 | $ 1,084 |
Loans Receivable and Allowanc35
Loans Receivable and Allowance for Loan Losses, Credit Quality Breakdown of Loan Portfolio by Class (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | $ 669,912 | $ 668,151 | |
Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 655,023 | 651,261 | |
Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 6,043 | 6,687 | |
Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 8,846 | 10,203 | |
Residential Mortgage [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 285,023 | 284,646 | $ 250,899 |
Residential Mortgage [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 278,721 | 277,867 | |
Residential Mortgage [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 1,367 | 1,563 | |
Residential Mortgage [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 4,935 | 5,216 | |
Commercial [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 39,015 | 37,356 | 48,554 |
Commercial [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 38,981 | 37,312 | |
Commercial [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 34 | 44 | |
Commercial Real Estate [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 230,336 | 236,302 | 190,961 |
Commercial Real Estate [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 224,274 | 228,746 | |
Commercial Real Estate [Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 4,185 | 4,615 | |
Commercial Real Estate [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 1,877 | 2,941 | |
ADC [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 100,635 | 93,060 | 99,715 |
ADC [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 99,455 | 91,868 | |
ADC [Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 1,180 | 1,192 | |
Home Equity/2nds[Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 13,853 | 15,703 | $ 609,741 |
Home Equity/2nds[Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 12,542 | 14,384 | |
Home Equity/2nds[Member] | Special Mention [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 457 | 465 | |
Home Equity/2nds[Member] | Substandard [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 854 | 854 | |
Consumer [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | 1,050 | 1,084 | |
Consumer [Member] | Pass [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Loans and Leases Receivable, Net Amount | $ 1,050 | $ 1,084 |
Loans Receivable and Allowanc36
Loans Receivable and Allowance for Loan Losses, Classes of Loan Portfolio by Aging Categories of Performing and Nonaccrual Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | $ 4,790 | $ 1,954 | |
Current | 665,122 | 666,197 | |
Loans and Leases Receivable, Net Amount | 669,912 | 668,151 | |
Non-accrual | 5,701 | 5,710 | |
Loans in nonaccrual status | 462 | $ 172 | |
Actual interest income recorded on nonaccrual loans | 34 | 71 | |
30 to 59 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 211 | 1,954 | |
60 to 89 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 111 | ||
90+ Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 4,468 | ||
Residential Mortgage [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 2,846 | 1,006 | |
Current | 282,177 | 283,640 | |
Loans and Leases Receivable, Net Amount | 285,023 | 250,899 | 284,646 |
Non-accrual | 3,619 | 3,891 | |
Residential Mortgage [Member] | 30 to 59 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 99 | 1,006 | |
Residential Mortgage [Member] | 60 to 89 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 95 | ||
Residential Mortgage [Member] | 90+ Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 2,652 | ||
Commercial [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 241 | ||
Current | 38,774 | 37,356 | |
Loans and Leases Receivable, Net Amount | 39,015 | 48,554 | 37,356 |
Non-accrual | 296 | 78 | |
Commercial [Member] | 60 to 89 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 16 | ||
Commercial [Member] | 90+ Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 225 | ||
Commercial Real Estate [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 216 | 948 | |
Current | 230,120 | 235,354 | |
Loans and Leases Receivable, Net Amount | 230,336 | 190,961 | 236,302 |
Non-accrual | 216 | 159 | |
Commercial Real Estate [Member] | 30 to 59 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 948 | ||
Commercial Real Estate [Member] | 90+ Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 216 | ||
ADC [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 239 | ||
Current | 100,396 | 93,060 | |
Loans and Leases Receivable, Net Amount | 100,635 | 99,715 | 93,060 |
Non-accrual | 310 | 314 | |
ADC [Member] | 90+ Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 239 | ||
Home Equity/2nds[Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 1,212 | ||
Current | 12,641 | 15,703 | |
Loans and Leases Receivable, Net Amount | 13,853 | $ 609,741 | 15,703 |
Non-accrual | 1,260 | 1,268 | |
Home Equity/2nds[Member] | 30 to 59 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 76 | ||
Home Equity/2nds[Member] | 90+ Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 1,136 | ||
Consumer [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | 36 | ||
Current | 1,014 | 1,084 | |
Loans and Leases Receivable, Net Amount | 1,050 | $ 1,084 | |
Consumer [Member] | 30 to 59 Days Past Due [Member] | |||
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans [Abstract] | |||
Total past due | $ 36 |
Loans Receivable and Allowanc37
Loans Receivable and Allowance for Loan Losses, Summary of Impaired loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Interest income recognized [Abstract] | |||
Real estate acquired through foreclosure | $ 237 | $ 403 | |
Residential Mortgage [Member] | |||
Unpaid principal balance [Abstract] | |||
With no related allowance | 11,610 | 12,929 | |
With a related allowance | 7,596 | 6,761 | |
Total | 19,206 | 19,690 | |
Recorded investment [Abstract] | |||
With no related allowance | 9,958 | 11,572 | |
With a related allowance | 7,481 | 6,647 | |
Total | 17,439 | 18,219 | |
Related allowance | 1,285 | 1,181 | |
Average recorded investment [Abstract] | |||
With no related allowance | 10,765 | $ 10,592 | |
With a related allowance | 7,064 | 8,839 | |
Total | 17,829 | 19,431 | |
Interest income recognized [Abstract] | |||
With no related allowance | 110 | 117 | |
With a related allowance | 58 | 97 | |
Total | 168 | 214 | |
Commercial [Member] | |||
Unpaid principal balance [Abstract] | |||
With no related allowance | 349 | ||
Total | 349 | ||
Recorded investment [Abstract] | |||
With no related allowance | 296 | ||
Total | 296 | ||
Average recorded investment [Abstract] | |||
With no related allowance | 148 | 87 | |
Total | 148 | 87 | |
Interest income recognized [Abstract] | |||
With no related allowance | 13 | 8 | |
Total | 13 | 8 | |
Commercial Real Estate [Member] | |||
Unpaid principal balance [Abstract] | |||
With no related allowance | 1,262 | 1,562 | |
With a related allowance | 1,566 | 1,410 | |
Total | 2,828 | 2,972 | |
Recorded investment [Abstract] | |||
With no related allowance | 1,148 | 1,507 | |
With a related allowance | 1,672 | 1,410 | |
Total | 2,820 | 2,917 | |
Related allowance | 318 | 182 | |
Average recorded investment [Abstract] | |||
With no related allowance | 1,328 | 2,494 | |
With a related allowance | 1,541 | 1,925 | |
Total | 2,869 | 4,419 | |
Interest income recognized [Abstract] | |||
With no related allowance | 10 | 39 | |
With a related allowance | 19 | 24 | |
Total | 29 | 63 | |
ADC [Member] | |||
Unpaid principal balance [Abstract] | |||
With no related allowance | 633 | 636 | |
With a related allowance | 387 | 392 | |
Total | 1,020 | 1,028 | |
Recorded investment [Abstract] | |||
With no related allowance | 633 | 636 | |
With a related allowance | 348 | 355 | |
Total | 981 | 991 | |
Related allowance | 47 | 48 | |
Average recorded investment [Abstract] | |||
With no related allowance | 634 | 438 | |
With a related allowance | 351 | 383 | |
Total | 985 | 821 | |
Interest income recognized [Abstract] | |||
With no related allowance | 8 | 6 | |
With a related allowance | 4 | 5 | |
Total | 12 | 11 | |
Home Equity/2nds[Member] | |||
Unpaid principal balance [Abstract] | |||
With no related allowance | 1,684 | ||
With a related allowance | 14 | ||
Total | 1,698 | ||
Recorded investment [Abstract] | |||
With no related allowance | 1,247 | ||
With a related allowance | 13 | ||
Total | 1,260 | ||
Related allowance | 2 | ||
Average recorded investment [Abstract] | |||
With no related allowance | 623 | 1,615 | |
With a related allowance | 7 | 1,338 | |
Total | 630 | 2,953 | |
Interest income recognized [Abstract] | |||
With no related allowance | 4 | 15 | |
With a related allowance | 48 | ||
Total | 4 | 63 | |
Consumer [Member] | |||
Unpaid principal balance [Abstract] | |||
With a related allowance | 82 | 84 | |
Total | 82 | 84 | |
Recorded investment [Abstract] | |||
With a related allowance | 82 | 84 | |
Total | 82 | 84 | |
Related allowance | 1 | $ 2 | |
Average recorded investment [Abstract] | |||
With a related allowance | 83 | 93 | |
Total | 83 | 93 | |
Interest income recognized [Abstract] | |||
With a related allowance | 1 | 1 | |
Total | 1 | $ 1 | |
Residential Properties [Member] | |||
Interest income recognized [Abstract] | |||
Residential mortgage loans secured by residential real estate properties in formal foreclosure proceedings | $ 4,000 |
Loans Receivable and Allowanc38
Loans Receivable and Allowance for Loan Losses, Loans modified as TDRs (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)loancontract | Mar. 31, 2017loancontract | Dec. 31, 2017USD ($)contract | |
Loans modified [Abstract] | |||
Number of modifications | loan | 0 | 0 | |
TDRs loans accounted under method [Abstract] | |||
Number of modifications | 47 | 50 | |
Accrual status | $ | $ 12,758 | $ 13,714 | |
Number of modifications | 4 | 4 | |
Nonaccrual status | $ | $ 811 | $ 820 | |
Total number of modifications | 51 | 54 | |
Total balance of modifications | $ | $ 13,569 | $ 14,534 | |
Number of contract, subsequent defaults | 0 | 0 | |
Residential Mortgage [Member] | |||
TDRs loans accounted under method [Abstract] | |||
Number of modifications | 40 | 42 | |
Accrual status | $ | $ 10,692 | $ 11,631 | |
Number of modifications | 4 | 2 | |
Nonaccrual status | $ | $ 811 | $ 736 | |
Total number of modifications | 44 | 44 | |
Total balance of modifications | $ | $ 11,503 | $ 12,367 | |
Commercial Real Estate [Member] | |||
TDRs loans accounted under method [Abstract] | |||
Number of modifications | 3 | 3 | |
Accrual status | $ | $ 1,848 | $ 1,862 | |
Number of modifications | 1 | ||
Nonaccrual status | $ | $ 78 | ||
Total number of modifications | 3 | 4 | |
Total balance of modifications | $ | $ 1,848 | $ 1,940 | |
ADC [Member] | |||
TDRs loans accounted under method [Abstract] | |||
Number of modifications | 1 | 1 | |
Accrual status | $ | $ 136 | $ 137 | |
Number of modifications | 1 | ||
Nonaccrual status | $ | $ 6 | ||
Total number of modifications | 1 | 2 | |
Total balance of modifications | $ | $ 136 | $ 143 | |
Consumer [Member] | |||
TDRs loans accounted under method [Abstract] | |||
Number of modifications | 3 | 4 | |
Accrual status | $ | $ 82 | $ 84 | |
Total number of modifications | 3 | 4 | |
Total balance of modifications | $ | $ 82 | $ 84 |
Regulatory Matters (Details)
Regulatory Matters (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2017 | |
Regulatory Matters [Abstract] | |||
Capital conservation buffer | 2.50% | ||
New capital conservation buffer percentage | 1.875% | 0.625% | |
Common Equity Tier 1 Capital (to risk-weighted assets) [Abstract] | |||
Common Equity Tier I Capital Actual, Amount | $ 107,618 | $ 105,721 | |
Common Equity Tier I Capital, Ratio | 16.80% | 16.50% | |
Common Equity Tier I Capital for Capital Adequacy Purposes, Amount | $ 28,750 | $ 28,904 | |
Common Equity Tier I Capital for Capital Adequacy Purposes, Ratio | 4.50% | 4.50% | |
Common Equity Tier 1 Capital Minimum Capital Adequacy with Capital Buffer, Amount | $ 40,729 | $ 36,933 | |
Common Equity Tier 1 Capital Minimum Capital Adequacy with Capital Buffer, Ratio | 6.40% | 5.80% | |
Common Equity Tier I Capital To Be Well Capitalized Under Prompt Corrective Provisions, Amount | $ 41,527 | $ 41,750 | |
Common Equity Tier I Capital To Be Well Capitalized Under Prompt Corrective Provisions, Ratio | 6.50% | 6.50% | |
Total capital (to risk-weighted assets) [Abstract] | |||
Total Capital, Actual Amount | $ 115,614 | $ 113,758 | |
Total Capital, Ratio | 18.10% | 17.70% | |
Total For Capital Adequacy Purposes, Amount | $ 51,111 | $ 51,385 | |
Total For Capital Adequacy Purposes, Ratio | 8.00% | 8.00% | |
Total For Capital Adequacy with Capital Buffer, Amount | $ 63,090 | $ 59,414 | |
Total For Capital Adequacy with Capital Buffer, Ratio | 9.90% | 9.30% | |
Total To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 63,888 | $ 64,231 | |
Total Capital To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 10.00% | 10.00% | |
Tier 1 capital (to risk-weighted assets) [Abstract] | |||
Tier I Capital, Actual Amount | $ 107,618 | $ 105,721 | |
Tier I Capital, Ratio | 16.80% | 16.50% | |
Tier I Capital for Capital Adequacy Purposes, Amount | $ 38,333 | $ 38,539 | |
Tier I Capital for Capital Adequacy Purposes, Ratio | 6.00% | 6.00% | |
Tier I Capital Minimum Capital Adequacy with Capital Buffer, Amount | $ 50,312 | $ 46,567 | |
Tier I Capital Minimum Capital Adequacy with Capital Buffer, Ratio | 7.90% | 7.30% | |
Tier I Capital To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 51,111 | $ 51,385 | |
Tier I Capital To Be Well Capitalized Under Prompt Corrective Provisions, Ratio | 8.00% | 8.00% | |
Tier 1 capital (to average quarterly assets) [Abstract] | |||
Tier I Capital average, Actual Amount | $ 107,618 | $ 105,721 | |
Tier I Capital average, Ratio | 13.50% | 13.50% | |
Tier I Capital average for Capital Adequacy Purposes, Amount | $ 31,835 | $ 31,440 | |
Tier I Capital average for Capital Adequacy Purposes, Ratio | 4.00% | 4.00% | |
Tier I Capital Average Minimum Capital Adequacy with Capital Buffer, Amount | $ 46,757 | $ 41,264 | |
Tier I Capital Average Minimum Capital Adequacy with Capital Buffer, Ratio | 5.90% | 5.30% | |
Tier I Capital Average To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 39,793 | $ 39,300 | |
Tier I Capital Average To Be Well Capitalized Under Prompt Corrective Provisions, Ratio | 5.00% | 5.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Weighted average number of shares outstanding reconciliation [Abstract] | ||||
Weighted-average shares outstanding - basic (in shares) | 12,241,554 | 12,125,553 | ||
Dilution (in shares) | 93,083 | 85,027 | ||
Weighted-average share outstanding - diluted (in shares) | 12,334,637 | 12,210,580 | ||
Net income available to common stockholders | $ 855,000 | $ 1,815,000 | $ 855,000 | $ 855,000 |
Net income per share - basic (in dollars per share) | $ 0.15 | $ 0.07 | $ 0.07 | |
Net income per share - diluted (in dollars per share) | $ 0.15 | $ 0.07 | $ 0.07 | |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 22,000 | 20,000 | ||
Series A Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 437,500 | 437,500 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized under the plan (in shares) | 500,000 | |
Stock-based compensation expense | $ 56 | $ 53 |
Shares [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 434,275 | 339,500 |
Granted (in shares) | 6,500 | 0 |
Exercised (in shares) | (14,202) | (5,025) |
Forfeited (in shares) | (250) | 0 |
Outstanding at end of period (in shares) | 426,323 | 334,475 |
Exercisable at end of period (in shares) | 200,028 | 151,249 |
Weighted Average Price [Roll Forward] | ||
Outstanding at beginning of period (in dollars per share) | $ 5.87 | $ 5.31 |
Granted (in dollars per share) | 7.41 | 0 |
Exercised (in dollars per share) | 3.95 | 3.37 |
Forfeited (in dollars per share) | 7.10 | 0 |
Outstanding at end of period (in dollars per share) | 5.96 | 5.34 |
Exercisable at end of period (in dollars per share) | $ 5.03 | $ 4.61 |
Weighted Average Remaining Life [Abstract] | ||
Weighted-average remaining contractual term, outstanding | 6 years 2 months 12 days | 7 years 8 months 12 days |
Weighted-average remaining contractual term, exercisable | 6 years 1 month 6 days | 6 years 9 months 18 days |
Aggregate Intrinsic Value [Abstract] | ||
Aggregate intrinsic value of the options outstanding | $ 549 | $ 627 |
Aggregate intrinsic value of the options exercisable | $ 453 | $ 397 |
Fair value assumptions for options granted [Abstract] | ||
Expected lives | 5 years 6 months | |
Risk-free interest rate | 2.67% | |
Expected volatility | 32.20% | |
Weighted average fair value of option issued (in dollars per share) | $ 2.57 | |
Unrecognized stock-based compensation expense | $ 662 | |
Unrecognized stock-based compensation expected to be recognized period | 60 months | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options vesting period | 5 years | |
Stock Options [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expiry period | 10 years |
Commitments and Contingencies42
Commitments and Contingencies (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)item | |
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Deposits | $ 589,916,000 | $ 602,228,000 | |
Loan balances | 661,743,000 | 660,096,000 | |
Interest income | 6,984,000 | $ 5,586,000 | |
Noninterest Income | 1,869,000 | 1,358,000 | |
Standby Letters of Credit [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Off-balance sheet credit risk | $ 3,434,000 | 3,480,000 | |
Letters of credit expiry period | 12 months | ||
Current liability for guarantees | $ 44,000 | 42,000 | |
Home Equity Lines of Credit [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Off-balance sheet credit risk | $ 14,221,000 | 13,321,000 | |
Loan expiry period | 10 years | ||
Unadvanced Construction Commitments [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Off-balance sheet credit risk | $ 50,021,000 | 74,720,000 | |
Mortgage Loan Commitments [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Off-balance sheet credit risk | $ 3,148,000 | $ 595,000 | |
Number of mortgage loan commitments at fixed interest rate | item | 3 | 2 | |
Fixed rate loan commitments | $ 3,100,000 | $ 595,000 | |
Lines of Credit [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Off-balance sheet credit risk | 16,796,000 | 16,612,000 | |
Loans Sold and Serviced with Limited Repurchase Provisions [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Off-balance sheet credit risk | 24,592,000 | 21,409,000 | |
Mortgage loan, held in reserve | 67,000 | 63,000 | |
Repurchases of loans previously sold | $ 0 | 0 | |
Loans Sold and Serviced with Limited Repurchase Provisions [Member] | Minimum [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Period of delinquency under repurchase agreement | 120 days | ||
Loans Sold and Serviced with Limited Repurchase Provisions [Member] | Maximum [Member] | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Period of delinquency under repurchase agreement | 180 days | ||
Business activities with medical-use cannabis customers [Member] | Cannabis Customers | |||
Financial instruments whose contract amount represents credit risk [Abstract] | |||
Deposits | $ 16,500,000 | 19,200,000 | |
Loan balances | $ 12,700,000 | $ 11,900,000 | |
Percentage of deposits in total deposits | 2.80% | 3.20% | |
Percentage of loans in total loans | 1.90% | 1.80% | |
Interest income | $ 176,000 | 0 | |
Noninterest Income | 230,000 | 0 | |
Volume of deposits accepted | $ 17,900,000 | $ 0 |
Fair Value of Financial Instr43
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | $ 12,011 | $ 10,119 |
U.S. Government Agency Notes [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | 10,036 | 10,119 |
Level 1 [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | 1,975 | |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | 10,036 | 10,119 |
Loans held for sale ("LHFS") | 5,803 | 4,530 |
Best efforts forward contracts | 15 | 3 |
Level 3 [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Mortgage servicing rights ("MSRs") | 499 | 477 |
Interest rate lock commitments ("IRLCs") | 184 | 22 |
Carrying Value [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | 12,011 | 10,119 |
Loans held for sale ("LHFS") | 5,803 | 4,530 |
Mortgage servicing rights ("MSRs") | 499 | 477 |
Interest rate lock commitments ("IRLCs") | 184 | 22 |
Best efforts forward contracts | 15 | 3 |
Recurring [Member] | Loans Held for Sale [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Loans held for sale ("LHFS") | 131 | |
Total changes in fair values included in period income - assets | 38 | |
Recurring [Member] | Mortgage Servicing Rights [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Mortgage servicing rights ("MSRs") | (80) | |
Total changes in fair values included in period income - assets | 22 | |
Recurring [Member] | Interest Rate Lock Commitments [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Interest rate lock commitments ("IRLCs") | (140) | |
Total changes in fair values included in period income - assets | 162 | |
Recurring [Member] | Mandatory Forward Contracts [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Total changes in fair values included in period income - assets | 28 | (140) |
Recurring [Member] | Best Effort Forward Contracts [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Total changes in fair values included in period income - assets | 12 | 3 |
Recurring [Member] | Level 1 [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | 1,975 | |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | 10,036 | 10,119 |
Loans held for sale ("LHFS") | 5,803 | 4,530 |
Mandatory forward contracts | 41 | 13 |
Best efforts forward contracts | 15 | 3 |
Recurring [Member] | Level 3 [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Mortgage servicing rights ("MSRs") | 499 | 477 |
Interest rate lock commitments ("IRLCs") | 184 | 22 |
Recurring [Member] | Carrying Value [Member] | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
AFS Securities - U.S. government agency notes | 12,011 | 10,119 |
Loans held for sale ("LHFS") | 5,803 | 4,530 |
Mortgage servicing rights ("MSRs") | 499 | 477 |
Interest rate lock commitments ("IRLCs") | 184 | 22 |
Mandatory forward contracts | 41 | 13 |
Best efforts forward contracts | $ 15 | $ 3 |
Fair Value of Financial Instr44
Fair Value of Financial Instruments, Fair Values of Financial Instruments, Assets, Quantitative Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Level 3 [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Fair value estimate | $ 477 | |
Weighted average prepayment speed | 3.94% | |
Impaired loans [Member] | Nonrecurring [Member] | Minimum [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Weighted average discount rate | 0.00% | 0.00% |
Impaired loans [Member] | Nonrecurring [Member] | Maximum [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Weighted average discount rate | 19.00% | 33.00% |
Impaired loans [Member] | Nonrecurring [Member] | Weighted Average [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Weighted average discount rate | 8.20% | 14.50% |
Impaired loans [Member] | Nonrecurring [Member] | Level 3 [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Fair value estimate | $ 8,697 | $ 2,793 |
Impaired loans [Member] | Nonrecurring [Member] | Carrying Value [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Fair value estimate | $ 8,697 | $ 2,793 |
Foreclosed real estate [Member] | Nonrecurring [Member] | Minimum [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Weighted average discount rate | 0.00% | |
Foreclosed real estate [Member] | Nonrecurring [Member] | Maximum [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Weighted average discount rate | 36.00% | 22.00% |
Foreclosed real estate [Member] | Nonrecurring [Member] | Weighted Average [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Weighted average discount rate | 36.00% | 11.50% |
Foreclosed real estate [Member] | Nonrecurring [Member] | Level 3 [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Fair value estimate | $ 23 | $ 178 |
Foreclosed real estate [Member] | Nonrecurring [Member] | Carrying Value [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Fair value estimate | 23 | 178 |
Market Approach [Member] | Mortgage Servicing Rights [Member] | Recurring [Member] | Level 3 [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Fair value estimate | $ 499 | |
Weighted average prepayment speed | 3.97% | |
Market Approach [Member] | Interest Rate Lock Commitments [Member] | Recurring [Member] | Level 3 [Member] | ||
Quantitative Information about Level 3 Fair Value Measurements [Abstract] | ||
Fair value estimate | $ 184 | $ 22 |
Average pull through rate | 90.00% | 90.00% |
Fair Value of Financial Instr45
Fair Value of Financial Instruments, Assets, Balance Sheet Grouping (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Assets [Abstract] | |||
AFS Securities - U.S. government agency notes | $ 12,011 | $ 10,119 | |
HTM securities | 49,026 | 54,004 | |
Liabilities [Abstract] | |||
Assets transfers level 1 to level 2 Transfers | 0 | $ 0 | 0 |
Liabilities transfers level 1 to level 2 Transfers | 0 | 0 | 0 |
Assets transfers level 2 to level 1 Transfers | 0 | 0 | 0 |
Liabilities transfers level 2 to level 1 Transfers | 0 | 0 | 0 |
Assets transfers into level 3 | 0 | 0 | 0 |
Liabilities transfers into level 3 | 0 | 0 | 0 |
Assets transfers out of level 3 | 0 | 0 | 0 |
Liabilities transfers out of level 3 | 0 | $ 0 | 0 |
Bank Commitments [Member] | |||
Liabilities [Abstract] | |||
Loan funding commitments | 84,200 | 105,200 | |
Standby Letters of Credit [Member] | |||
Liabilities [Abstract] | |||
Loan funding commitments | 3,400 | 3,500 | |
Carrying Value [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 18,307 | 21,853 | |
Certificates of deposit held as investment | 8,780 | 8,780 | |
AFS Securities - U.S. government agency notes | 12,011 | 10,119 | |
HTM securities | 49,911 | 54,303 | |
LHFS | 5,803 | 4,530 | |
Loans receivable, net | 661,743 | 660,096 | |
Restricted stock investments | 4,844 | 4,489 | |
Accrued interest receivable | 2,454 | 2,640 | |
MSRs | 499 | 477 | |
IRLCs | 184 | 22 | |
Mandatory forward contracts | 41 | 13 | |
Best effort forward contracts | 15 | 3 | |
Liabilities [Abstract] | |||
Deposits | 589,916 | 602,228 | |
Borrowings | 416 | 395 | |
Subordinated debentures | 96,500 | 88,500 | |
Accrued interest payable | 20,619 | 20,169 | |
Total [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 18,307 | 21,853 | |
Certificates of deposit held as investment | 8,780 | 8,780 | |
AFS Securities - U.S. government agency notes | 12,011 | 10,119 | |
HTM securities | 49,026 | 54,004 | |
LHFS | 5,803 | 4,530 | |
Loans receivable, net | 668,451 | 672,349 | |
Restricted stock investments | 4,844 | 4,489 | |
Accrued interest receivable | 2,454 | 2,640 | |
MSRs | 499 | 477 | |
IRLCs | 184 | 22 | |
Mandatory forward contracts | 41 | 13 | |
Best effort forward contracts | 15 | 3 | |
Liabilities [Abstract] | |||
Deposits | 578,257 | 594,659 | |
Borrowings | 416 | 395 | |
Subordinated debentures | 89,198 | 81,303 | |
Accrued interest payable | 20,619 | 20,619 | |
Level 1 [Member] | |||
Assets [Abstract] | |||
Cash and cash equivalents | 18,307 | 21,853 | |
Certificates of deposit held as investment | 8,780 | 8,780 | |
AFS Securities - U.S. government agency notes | 1,975 | ||
HTM securities | 5,025 | 5,056 | |
Significant Other Observable Inputs (Level 2) [Member] | |||
Assets [Abstract] | |||
AFS Securities - U.S. government agency notes | 10,036 | 10,119 | |
HTM securities | 44,001 | 48,948 | |
LHFS | 5,803 | 4,530 | |
Restricted stock investments | 4,844 | 4,489 | |
Accrued interest receivable | 2,454 | 2,640 | |
Mandatory forward contracts | 41 | 13 | |
Best effort forward contracts | 15 | 3 | |
Liabilities [Abstract] | |||
Deposits | 578,257 | 594,659 | |
Borrowings | 416 | 395 | |
Subordinated debentures | 89,198 | 81,303 | |
Level 3 [Member] | |||
Assets [Abstract] | |||
Loans receivable, net | 668,451 | 672,349 | |
MSRs | 499 | 477 | |
IRLCs | 184 | 22 | |
Liabilities [Abstract] | |||
Accrued interest payable | $ 20,619 | $ 20,619 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] | Apr. 02, 2018securityshares |
Subsequent Event [Line Items] | |
Preferred stock converted to shares of common stock | 437,500 |
Preferred stock conversion ratio | security | 1 |
Preferred stock, shares outstanding (in shares) | 0 |