Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 08, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | CAROLINA FINANCIAL CORP | |
Entity Central Index Key | 870,385 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,159,309 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and due from banks | $ 14,965 | $ 9,761 |
Interest-bearing cash | 30,064 | 14,591 |
Cash and cash equivalents | 45,029 | 24,352 |
Securities available-for-sale (cost of $495,807 at June 30, 2017 and $338,214 at December 31, 2016) | 500,310 | 335,352 |
Federal Home Loan Bank stock, at cost | 10,545 | 11,072 |
Other investments | 2,130 | 1,768 |
Derivative assets | 2,583 | 2,219 |
Loans held for sale | 36,232 | 31,569 |
Loans receivable, net of allowance for loan losses of $10,750 at June 30, 2017 and $10,688 at December 31, 2016 | 1,424,670 | 1,167,578 |
Premises and equipment, net | 46,872 | 37,054 |
Accrued interest receivable | 7,124 | 5,373 |
Real estate acquired through foreclosure, net | 1,417 | 1,179 |
Deferred tax assets, net | 8,057 | 8,341 |
Mortgage servicing rights | 16,692 | 15,032 |
Cash value life insurance | 38,057 | 28,984 |
Core deposit intangible | 7,836 | 3,658 |
Goodwill | 37,287 | 4,266 |
Other assets | 7,070 | 5,939 |
Total assets | 2,191,911 | 1,683,736 |
Liabilities: | ||
Noninterest-bearing deposits | 330,641 | 229,905 |
Interest-bearing deposits | 1,333,088 | 1,028,355 |
Total deposits | 1,663,729 | 1,258,260 |
Short-term borrowed funds | 149,000 | 203,000 |
Long-term debt | 75,327 | 38,465 |
Derivative liabilities | 249 | 342 |
Drafts outstanding | 3,869 | 6,223 |
Advances from borrowers for insurance and taxes | 2,684 | 1,058 |
Accrued interest payable | 755 | 327 |
Reserve for mortgage repurchase losses | 2,354 | 2,880 |
Dividends payable to shareholders | 646 | 502 |
Accrued expenses and other liabilities | 11,480 | 9,489 |
Total liabilities | 1,910,093 | 1,520,546 |
Stockholders' equity: | ||
Preferred stock, par value $.01; 1,000,000 shares authorized at June 30, 2017 and December 31, 2016; no shares issued or outstanding | ||
Common stock, par value $.01; 25,000,000 shares authorized at June 30, 2017 and December 31, 2016; 16,156,943 and 12,548,328 issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 162 | 125 |
Additional paid-in capital | 168,509 | 66,156 |
Retained earnings | 110,166 | 98,451 |
Accumulated other comprehensive income (loss), net of tax benefit | 2,981 | (1,542) |
Total stockholders' equity | 281,818 | 163,190 |
Total liabilities and stockholders' equity | $ 2,191,911 | $ 1,683,736 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Securities available for sale at cost | $ 495,807 | $ 338,214 |
Loans, allowance for loan losses | $ 10,750 | $ 10,688 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 16,156,943 | 12,548,328 |
Common stock, shares outstanding | 16,156,943 | 12,548,328 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Interest income | ||||
Loans | $ 18,280 | $ 11,880 | $ 33,247 | $ 22,965 |
Investment securities | 3,661 | 2,470 | 6,214 | 4,622 |
Dividends from Federal Home Loan Bank stock | 115 | 108 | 216 | 205 |
Federal Funds sold | 4 | 2 | 7 | 2 |
Other interest income | 63 | 33 | 108 | 59 |
Total interest income | 22,123 | 14,493 | 39,792 | 27,853 |
Interest expense | ||||
Deposits | 2,098 | 1,512 | 3,790 | 2,879 |
Short-term borrowed funds | 429 | 91 | 784 | 196 |
Long-term debt | 498 | 570 | 850 | 1,185 |
Total interest expense | 3,025 | 2,173 | 5,424 | 4,260 |
Net interest income | 19,098 | 12,320 | 34,368 | 23,593 |
Provision for loan losses | ||||
Net interest income after provision for loan losses | 19,098 | 12,320 | 34,368 | 23,593 |
Noninterest income | ||||
Mortgage banking income | 4,289 | 4,187 | 7,897 | 7,362 |
Deposit service charges | 998 | 897 | 1,856 | 1,759 |
Net loss on extinguishment of debt | (47) | (56) | ||
Net gain on sale of securities | 621 | 113 | 806 | 530 |
Fair value adjustments on interest rate swaps | (69) | (226) | (127) | (507) |
Net increase in cash value life insurance | 281 | 229 | 492 | 458 |
Mortgage loan servicing income | 1,604 | 1,413 | 3,170 | 2,801 |
Other | 1,081 | 623 | 1,941 | 1,118 |
Total noninterest income | 8,805 | 7,189 | 16,035 | 13,465 |
Noninterest expense | ||||
Salaries and employee benefits | 9,255 | 7,675 | 17,864 | 14,825 |
Occupancy and equipment | 2,439 | 1,927 | 4,621 | 3,769 |
Marketing and public relations | 416 | 385 | 797 | 770 |
FDIC insurance | 75 | 179 | 175 | 347 |
Recovery of mortgage loan repurchase losses | (225) | (250) | (450) | (500) |
Legal expense | 151 | 56 | 216 | 105 |
Other real estate expense, net | 26 | 39 | 45 | 59 |
Mortgage subservicing expense | 505 | 468 | 991 | 891 |
Amortization of mortgage servicing rights | 665 | 541 | 1,335 | 1,073 |
Merger related expenses | 279 | 2,799 | 1,599 | 2,985 |
Other | 2,304 | 1,990 | 4,283 | 3,753 |
Total noninterest expense | 15,890 | 15,809 | 31,476 | 28,077 |
Income before income taxes | 12,013 | 3,700 | 18,927 | 8,981 |
Income tax expense | 2,673 | 864 | 4,684 | 2,502 |
Net income | $ 9,340 | $ 2,836 | $ 14,243 | $ 6,479 |
Earnings per common share: | ||||
Basic (per share) | $ 0.58 | $ 0.24 | $ 0.95 | $ 0.55 |
Diluted (per share) | 0.58 | 0.23 | 0.94 | 0.54 |
Dividends per common share | $ 0.04 | $ 0.03 | $ 0.08 | $ 0.06 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 16,029,332 | 11,908,282 | 14,980,349 | 11,827,428 |
Diluted (in shares) | 16,180,171 | 12,076,878 | 15,144,796 | 12,001,862 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Consolidated Statements Of Comprehensive Income | ||||
Net income | $ 9,340 | $ 2,836 | $ 14,243 | $ 6,479 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gain on securities | 4,650 | 2,503 | 8,125 | 2,700 |
Tax effect | (1,674) | (901) | (2,925) | (972) |
Reclassification adjustment for gains included in earnings | (621) | (113) | (806) | (530) |
Tax effect | 224 | 41 | 290 | 191 |
Unrealized gain (loss) on interest rate swaps designated as cash flow hedges | (389) | (743) | (251) | (2,251) |
Tax effect | 140 | 267 | 90 | 810 |
Transfer from held-to-maturity to available-for-sale securities | 1,023 | 1,023 | ||
Tax effect | (368) | (368) | ||
Other comprehensive income (loss), net of tax | 2,330 | 1,709 | 4,523 | 603 |
Comprehensive income | $ 11,670 | $ 4,545 | $ 18,766 | $ 7,082 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning Balance at Dec. 31, 2015 | $ 120 | $ 56,418 | $ 82,859 | $ 462 | $ 139,859 |
Beginning Balance (in shares) at Dec. 31, 2015 | 12,023,557 | ||||
Issuance of common stock, net of offering expenses | |||||
Stock awards | $ 1 | 1 | |||
Stock awards (in shares) | 35,556 | ||||
Vested stock awards surrendered in cashless exercise | $ (1) | (106) | (342) | (449) | |
Vested stock awards surrendered in cashless exercise | (24,881) | ||||
Stock options exercised | 13 | 13 | |||
Stock options exercised (in shares) | 1,680 | ||||
Stock issued - Greer Bancshares Incorporated acquisition | $ 5 | 8,552 | 8,557 | ||
Stock issued - Greer Bancshares Incorporated acquisition (in shares) | 509,370 | ||||
Excess tax benefit in connection with equity awards | 15 | 15 | |||
Stock-based compensation expense, net | 675 | 675 | |||
Net income | 6,479 | 6,479 | |||
Dividends declared to stockholders | (736) | (736) | |||
Other comprehensive income, net of tax | 603 | 603 | |||
Ending Balance at Jun. 30, 2016 | $ 125 | 65,567 | 88,260 | 1,065 | 155,017 |
Ending Balance (in shares) at Jun. 30, 2016 | 12,545,282 | ||||
Beginning Balance at Dec. 31, 2016 | $ 125 | 66,156 | 98,451 | (1,542) | 163,190 |
Beginning Balance (in shares) at Dec. 31, 2016 | 12,548,328 | ||||
Issuance of common stock, net of offering expenses | $ 18 | 47,653 | 47,671 | ||
Issuance of common stock, net of offering expenses | 1,807,143 | ||||
Stock awards | $ 1 | 108 | 109 | ||
Stock awards (in shares) | 68,385 | ||||
Vested stock awards surrendered in cashless exercise | (365) | (1,306) | (1,671) | ||
Vested stock awards surrendered in cashless exercise | (56,436) | ||||
Stock issued - Greer Bancshares Incorporated acquisition | $ 18 | 54,205 | 54,223 | ||
Stock issued - Greer Bancshares Incorporated acquisition (in shares) | 1,789,523 | ||||
Stock-based compensation expense, net | 752 | 752 | |||
Net income | 14,243 | 14,243 | |||
Dividends declared to stockholders | (1,222) | (1,222) | |||
Other comprehensive income, net of tax | 4,523 | 4,523 | |||
Ending Balance at Jun. 30, 2017 | $ 162 | $ 168,509 | $ 110,166 | $ 2,981 | $ 281,818 |
Ending Balance (in shares) at Jun. 30, 2017 | 16,156,943 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 14,243 | $ 6,479 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Amortization of unearned discount/premiums on investments, net | 1,762 | 1,822 |
Amortization of deferred loan fees | (588) | (234) |
Accretion of acquired loans | (1,451) | (106) |
Amortization of core deposit intangibles | 302 | 181 |
Gain on sale of available-for-sale securities, net | (806) | (530) |
Mortgage banking income | (7,897) | (7,362) |
Originations of loans held for sale | (433,852) | (429,268) |
Proceeds from sale of loans held for sale | 437,191 | 442,120 |
Loss on extinquishment of debt | 56 | |
Amortization of fair value adjustments on subordinated debentures | 31 | |
Provision for mortgage loan repurchase losses | (450) | (500) |
Mortgage loan losses paid, net of recoveries | (76) | (21) |
Fair value adjustments on interest rate swaps | 127 | 507 |
Stock-based compensation | 752 | 675 |
Increase in cash surrender value of bank owned life insurance | (492) | (483) |
Depreciation | 1,219 | 953 |
(Gain) loss on disposals of premises and equipment | 3 | (1) |
Loss on sale of real estate acquired through foreclosure | (21) | 59 |
Originations of mortgage servicing assets | (2,995) | (2,040) |
Amortization of mortgage servicing assets | 1,335 | 1,073 |
Accrued interest receivable | (568) | (162) |
Other assets | (2,276) | (4,216) |
Increase (decrease) in: | ||
Accrued interest payable | 170 | |
Dividends payable to shareholders | 144 | 11 |
Accrued expenses and other liabilities | (9,511) | 1,418 |
Cash flows provided by operating activities | (3,704) | 10,431 |
Activity in available-for-sale securities: | ||
Purchases | (144,383) | (87,702) |
Maturities, payments and calls | 24,591 | 25,332 |
Proceeds from sales | 81,021 | 50,803 |
Increase in other investments | (14) | (405) |
Increase in Federal Home Loan Bank stock | 2,122 | 2,362 |
Increase in loans receivable, net | (61,160) | (70,228) |
Purchase of premises and equipment | (2,910) | (893) |
Proceeds from disposals of premises and equipment | 1 | |
Proceeds from sale of real estate acquired through foreclosure | 582 | 1,295 |
Net cash received for acquisitions | 37,764 | 3,667 |
Cash flows used in investing activities | (62,387) | (75,768) |
Cash flows from financing activities: | ||
Net increase in deposit accounts | 94,403 | 142,335 |
Net increase in Federal Home Loan Bank advances | (53,500) | (60,056) |
Net increase (decrease) in drafts outstanding | (2,354) | 2,104 |
Net increase in advances from borrowers for insurance and taxes | 1,626 | 951 |
Cash dividends paid on common stock | (1,078) | (722) |
Proceeds from issuance of common stock | 47,671 | |
Net increase in excess tax benefit in connection with equity awards | 414 | |
Proceeds from exercise of stock options | 13 | |
Cash flows provided by financing activities | 86,768 | 85,039 |
Net increase (decrease) in cash and cash equivalents | 20,677 | 19,702 |
Cash and cash equivalents, beginning of period | 24,352 | 26,627 |
Cash and cash equivalents, end of period | 45,029 | 46,329 |
Supplemental disclosure | ||
Cash paid for Interest on deposits and borrowed funds | 4,996 | 4,238 |
Cash paid for Income taxes paid, net of refunds | 4,025 | 3,201 |
Noncash investing and financing activities: | ||
Transfer of loans receivable to real estate acquired through foreclosure | 757 | 792 |
Transfer of held-to-maturity securities to available-for-sale securities | (1,023) | |
Acquisitions: | ||
Fair value of tangible assets acquired | 380,011 | 103,117 |
Other intangible assets acquired | 4,480 | 1,104 |
Liabilities assumed | 358,866 | 92,203 |
Net identifiable assets acquired over liabilities assumed | 25,625 | 12,018 |
Common stock issued in acquisition | 54,223 | 8,557 |
Goodwill | $ 33,020 | $ 4,266 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Carolina Financial Corporation (“Carolina Financial” or the “Company”), incorporated under the laws of the State of Delaware, is a financial holding company with one wholly-owned subsidiary, CresCom Bank (the “Bank”). In June 2017, the Company applied, and was approved by the Federal Reserve Bank of Richmond, to be a financial holding company from a bank holding company. CresCom Bank operates two wholly-owned subsidiaries, Crescent Mortgage Company and Carolina Services Corporation of Charleston (“Carolina Services”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. In consolidation, all material intercompany accounts and transactions have been eliminated. The results of operations of the businesses acquired in transactions accounted for as purchases are included only from the dates of acquisition. All majority-owned subsidiaries are consolidated unless control is temporary or does not rest with the Company. At June 30, 2017, statutory business trusts (“Trusts”) created or acquired by the Company had outstanding trust preferred securities with a balance of $23.3 million. The principal assets of the Trusts are the Company’s subordinated debentures with identical rates of interest and maturities as the trust preferred securities. The Trusts have issued $806,000 of common securities to the Company and are included in other investments in the accompanying consolidated balance sheets. The Trusts are not consolidated subsidiaries of the Company. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2017. There have been no significant changes to the accounting policies as disclosed in the Company’s Form 10-K. Management’s Estimates The financial statements are prepared in accordance with GAAP, which require 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 the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, including valuation for impaired loans, the valuation of real estate acquired in connection with foreclosure or in satisfaction of loans, the valuation of securities, the valuation of derivative instruments, the valuation of assets acquired and liabilities assumed in business combinations, the valuation of mortgage servicing rights, the determination of the reserve for mortgage loan repurchase losses, asserted and unasserted legal claims and deferred tax assets or liabilities. In connection with the determination of the allowance for loan losses and foreclosed real estate, management obtains independent appraisals for significant properties. Management must also make estimates in determining the estimated useful lives and methods for depreciating premises and equipment. Management uses available information to recognize losses on loans and foreclosed real estate. However, future additions to the allowance may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses and foreclosed real estate. Such agencies may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowance for loan losses and valuation of foreclosed real estate may change materially in the near term. Earnings Per Share Basic earnings per share (“EPS”) represents income available to common stockholders divided by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflects additional shares that would have been outstanding if dilutive potential shares had been issued. Potential shares that may be issued by the Company relate solely to outstanding stock options, restricted stock (non-vested shares), restricted stock units (“RSUs”) and warrants, and are determined using the treasury stock method. Under the treasury stock method, the number of incremental shares is determined by assuming the issuance of stock for the outstanding stock options, unvested restricted stock and RSUs, and warrants, reduced by the number of shares assumed to be repurchased from the issuance proceeds, using the average market price for the period of the Company’s stock. Subsequent Events Subsequent events are material events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the statement of financial condition but arose after that date. Management has reviewed events occurring through the date the financial statements were issued and no subsequent events occurred requiring accrual or disclosure except as follows: On July 19, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.04 per share payable on its common stock. The cash dividend will be payable on October 5, 2017 to stockholders of record as of September 14, 2017. Reclassification Certain reclassifications of accounts reported for previous periods have been made in these consolidated financial statements. Such reclassifications had no effect on stockholders’ equity or the net income as previously reported. Recently Issued Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation-Stock Compensation (Topic 718) In March 2017, the FASB issued ASU No. 2017-08, Receivables-Nonrefundable Fees and Other Cost (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities In January 2017, the FASB issued ASU No. 2017-04, Intangible-Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment In June 2016, the FASB ASU No. 2016-13 , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share – Based Payment Accounting In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU No. 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10); Recognition and Measurement of Financial Assets and Financial Liabilities Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 6 Months Ended |
Jun. 30, 2017 | |
Acquisitions: | |
BUSINESS COMBINATION | NOTE 2 – BUSINESS COMBINATIONS Acquisition of Greer Bancshares Incorporated On March 18, 2017, the Company completed its acquisition of Greer Bancshares Incorporated (“Greer”), the holding company for Greer State Bank, pursuant to the Agreement and Plan of Merger, dated as of November 7, 2016. Under the terms of the merger agreement, each share of Greer common stock was converted into the right to receive $18.00 in cash or 0.782 shares of the Company’s common stock, or a combination thereof, subject to certain limitations. The following table presents a summary of total consideration paid by the Company at the acquisition date (dollars in thousand). Common stock issued (1,789,523 shares at $30.30 per share) $ 54,223 Cash payments to common stockholders 4,422 Total consideration paid $ 58,645 The assets acquired and liabilities assumed from Greer were recorded at their fair value as of the closing date of the merger. Fair values were preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values became available. Goodwill of $33.0 million was initially recorded at the time of the acquisition. The following table summarizes the consideration paid by the Company in the merger with Greer and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date. March 18, 2017 As Reported Fair Value As Recorded by (In thousands) Assets Cash and cash equivalents $ 42,187 — 42,187 Securities available for sale 121,374 — 121,374 Loans held for sale 105 — 105 Loans receivable 205,209 (10,559 ) (a) 194,650 Allowance for loan losses (3,198 ) 3,198 (b) — Premises and equipment 3,928 4,202 (c) 8,130 Foreclosed assets 42 — 42 Core deposit intangible — 4,480 (d) 4,480 Deferred tax asset, net 3,831 (1,434 ) (e) 2,397 Other assets 11,367 (241 ) (f) 11,126 Total assets acquired $ 384,845 (354 ) 384,491 Liabilities Deposits $ 310,866 200 (g) 311,066 Borrowings 43,712 (3,510 ) (h) 40,202 Other liabilities 7,086 512 (i) 7,598 Total liabilities assumed $ 361,664 (2,798 ) 358,866 Net identifiable assets acquired over liabilities assumed 25,625 Total consideration paid 58,645 Goodwill $ 33,020 Explanation of fair value adjustments: (a) Adjustment represents the amount necessary to adjust loans to their fair value due to interest rate and credit factors. (b) Adjustment reflects the elimination of Greer’s historical allowance for loan losses. (c) Adjustment reflects fair value adjustments on acquired branch and administrative offices based on third party appraisals. (d) Adjustment reflects the fair value adjustment to record the estimated core deposit intangible based on the Company’s third party valuation report. (e) Adjustment reflects the tax impact of acquisition accounting fair value adjustments. (f) Adjustment reflects the fair value adjustment based on the Company’s evaluation of acquired other assets. (g) Adjustment represents the fair value adjustment due to interest rate factors. (h) Adjustment represents the fair value adjustment due to interest rate factors. (i) Adjustment reflects the fair value adjustment based on the Company’s evaluation of acquired other liabilities. The following table presents additional information related to the purchased credit impaired (“PCI”) acquired loan portfolio at March 18, 2017 (in thousands): Contractual principal and interest at acquisition $ 37,683 Nonaccretable difference 7,248 Expected cash flows at acquisition 30,435 Accretable yield 4,995 Basis in PCI loans at acquisition - estimated fair value $ 25,440 Acquisition of Congaree Bancshares, Inc. On June 11, 2016, the Company completed its acquisition of Congaree Bancshares, Inc. (“Congaree”), the holding company for Congaree State Bank, pursuant to the Agreement and Plan of Merger, dated as of January 5, 2016. Under the terms of the merger agreement, each share of Congaree common stock was converted into the right to receive $8.10 in cash or 0.4806 shares of the Company’s common stock, or a combination thereof, subject to certain limitations. The following table presents a summary of total consideration paid by the Company at the acquisition date (dollars in thousands). Common stock issued (509,370 shares at $16.80 per share) $ 8,557 Cash payments to common stockholders 5,724 Preferred shares assumed and redeemed at par 1,564 Fair value of Congaree stock options assumed - paid out in cash 439 Total consideration paid $ 16,284 The following table presents the Congaree assets acquired and liabilities assumed as of June 11, 2016 as well as the related fair value adjustments and determination of goodwill. There have been no adjustments to initial fair values recorded by the Company for the Congaree acquisition to date. As Reported Fair Value As Recorded by (In thousands) Assets Cash and cash equivalents $ 11,394 — 11,394 Securities 9,453 (59 ) (a) 9,394 Loans receivable 78,712 (4,111 ) (b) 74,601 Allowance for loan losses (1,112 ) 1,112 (c) — Premises and equipment 2,712 38 (d) 2,750 Foreclosed assets 1,710 (250 ) (e) 1,460 Core deposit intangible — 1,104 (f) 1,104 Deferred tax asset, net 1,813 915 (g) 2,728 Other assets 942 (152 ) (h) 790 Total assets acquired $ 105,624 (1,403 ) 104,221 Liabilities Deposits $ 89,227 98 (i) 89,325 Borrowings 2,500 — 2,500 Other liabilities 378 — 378 Total liabilities assumed $ 92,105 98 92,203 Net identifiable assets acquired over liabilities assumed 12,018 Total consideration paid 16,284 Goodwill $ 4,266 Explanation of fair value adjustments: (a) Adjustment reflects opening fair value of securities portfolio, which was established as the new book basis of the portfolio. (b) Adjustment represents the amount necessary to adjust loans to their fair value due to interest rate and credit factors. (c) Adjustment reflects the elimination of Congaree’s historical allowance for loan losses. (d) Adjustment reflects fair value adjustments on acquired branch and administrative offices based on third party appraisals. (e) Adjustment reflects the fair value adjustment based on the Company’s evaluation of the foreclosed assets. (f) Adjustment reflects the fair value adjustment to record the estimated core deposit intangible based on the Company’s third party valuation report. (g) Adjustment reflects the tax impact of acquisition accounting fair value adjustments. (h) Adjustment reflects the fair value adjustment based on the Company’s evaluation of acquired other assets. (i) Adjustment reflects the fair value adjustment based on the Company’s third party evaluation report on deposits assumed. Acquisition of First South Bancorp, Inc. On June 9, 2017, the Company announced the execution of an Agreement and Plan of Merger and Reorganization, by and between the Company and First South Bancorp, Inc. (“First South”), pursuant to which, subject to the terms and conditions set forth therein, First South will merge with and into the Company (the “Merger”), with the Company as the surviving corporation of the Merger. The Merger Agreement provides that immediately following the Merger, First South’s wholly-owned subsidiary, First South Bank, a North Carolina-chartered bank, will merge with and into the Bank, with the Bank as the surviving entity. The Company expects the Merger to occur in the fourth quarter of 2017. Pursuant to the Merger Agreement, each share of First South common stock issued and outstanding immediately prior to the completion of the Merger will be automatically converted into the right to receive 0.5200 shares of the Company’s common stock. Notwithstanding the foregoing, the exchange ratio may be adjusted in certain circumstances. If the average closing price of the Company’s common stock over a specified period prior to closing is greater than $35.14, and the Company’s common stock over performs better than the Nasdaq Bank Index by 15% or more between the date of the Merger Agreement and closing, the exchange ratio will be decreased automatically based upon the change in the Nasdaq Bank Index. Alternatively, if the average closing price of the Company’s common stock over a specified period prior to closing is less than $25.98, and the Company’s common stock underperforms the Nasdaq Bank Index by 15% or more between the date of the Merger Agreement and closing, First South may terminate the Merger Agreement unless the Company agrees to increase the exchange ratio or add cash consideration to make up the difference based upon the change in the Nasdaq Bank Index. The Company will not issue fractional shares and will instead pay cash, without interest, for the value of any fraction of a share of the Company’s common stock that a First South shareholder would otherwise be entitled to receive. |
SECURITIES
SECURITIES | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | NOTE 3 – SECURITIES The amortized cost, gross unrealized gains, gross unrealized losses and fair value of securities available-for-sale at June 30, 2017 and December 31, 2016 follows: June 30, 2017 December 31, 2016 Gross Gross Gross Gross Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value Securities available-for-sale: (In thousands) Municipal securities $ 157,809 5,131 (346 ) 162,594 92,792 1,475 (1,055 ) 93,212 US government agencies 2,815 51 — 2,866 3,438 — (52 ) 3,386 Collateralized loan obligations 104,470 649 (36 ) 105,083 76,202 138 (91 ) 76,249 Corporate securities 475 19 — 494 474 17 — 491 Mortgage-backed securities: Agency 157,049 1,605 (345 ) 158,309 90,477 995 (486 ) 90,986 Non-agency 61,975 560 (230 ) 62,305 63,628 424 (188 ) 63,864 Total mortgage-backed securities 219,024 2,165 (575 ) 220,614 154,105 1,419 (674 ) 154,850 Trust preferred securities 11,214 914 (3,469 ) 8,659 11,203 545 (4,584 ) 7,164 Total $ 495,807 8,929 (4,426 ) 500,310 338,214 3,594 (6,456 ) 335,352 The Company had no held-to-maturity securities as of June 30, 2017 or December 31, 2016. During the second quarter of 2016, the Company tainted its securities held-to-maturity portfolio as a result of a change in the intent to hold these securities until maturity to provide opportunities to maximize its asset utilization. As a result, the securities were moved to available-for-sale resulting in an increase to accumulated other comprehensive income of $655,000. The amortized cost and fair value of debt securities by contractual maturity at June 30, 2017 follows: At June 30, 2017 Amortized Fair Cost Value (In thousands) Securities available-for-sale: Less than one year $ 300 301 One to five years 2,023 2,037 Six to ten years 90,979 92,146 After ten years 402,505 405,826 Total $ 495,807 500,310 The contractual maturity dates of the securities were used for mortgage-backed securities and asset-backed securities. No estimates were made to anticipate principal repayments. The following table summarizes the gross realized gains and losses from sales of investment securities available-for-sale for the periods indicated. For the Three Months For the Six Months Ended June 30, Ended June 30, 2017 2016 2017 2016 (In thousands) Proceeds $ 43,324 16,325 81,021 50,803 Realized gains $ 647 113 1,020 647 Realized losses (26 ) — (214 ) (117 ) Total investment securities gains, net $ 621 113 806 530 At June 30, 2017, the Company had pledged securities with a market value of $7.0 million for Federal Home Loan Bank (“FHLB”) advances. At June 30, 2017, the Company has pledged $83.6 million of securities to secure public agency funds. The following tables summarize gross unrealized losses on investment securities and the fair market value of the related securities at June 30, 2017 and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position. At June 30, 2017 Less than 12 Months 12 Months or Greater Total Amortized Fair Unrealized Amortized Fair Unrealized Amortized Fair Unrealized Cost Value Losses Cost Value Losses Cost Value Losses (In thousands) Available-for-sale: Municipal securities $ 13,298 12,952 (346 ) — — — 13,298 12,952 (346 ) Collateralized loan obligations 28,248 28,213 (35 ) 5,000 4,999 (1 ) 33,248 33,212 (36 ) Mortgage-backed securities: Agency 30,112 29,877 (235 ) 10,664 10,554 (110 ) 40,776 40,431 (345 ) Non-agency 3,218 3,189 (29 ) 11,358 11,157 (201 ) 14,576 14,346 (230 ) Total mortgage-backed securities 33,330 33,066 (264 ) 22,022 21,711 (311 ) 55,352 54,777 (575 ) Trust preferred securities — — — 9,980 6,511 (3,469 ) 9,980 6,511 (3,469 ) Total $ 74,876 74,231 (645 ) 37,002 33,221 (3,781 ) 111,878 107,452 (4,426 ) At December 31, 2016 Less than 12 Months 12 Months or Greater Total Amortized Fair Unrealized Amortized Fair Unrealized Amortized Fair Unrealized Cost Value Losses Cost Value Losses Cost Value Losses (In thousands) Available-for-sale: Municipal securities $ 40,479 39,424 (1,055 ) — — — 40,479 39,424 (1,055 ) US government agencies 3,438 3,386 (52 ) — — — 3,438 3,386 (52 ) Collateralized loan obligations 16,792 16,748 (44 ) 8,500 8,453 (47 ) 25,292 25,201 (91 ) Mortgage-backed securities: Agency 33,323 32,960 (363 ) 10,125 10,002 (123 ) 43,448 42,962 (486 ) Non-agency 9,357 9,240 (117 ) 8,801 8,730 (71 ) 18,158 17,970 (188 ) Total mortgage-backed securities 42,680 42,200 (480 ) 18,926 18,732 (194 ) 61,606 60,932 (674 ) Trust preferred securities 1,362 1,112 (250 ) 8,667 4,333 (4,334 ) 10,029 5,445 (4,584 ) Total $ 104,751 102,870 (1,881 ) 36,093 31,518 (4,575 ) 140,844 134,388 (6,456 ) The Company reviews its investment securities portfolio at least quarterly and more frequently when economic conditions warrant, assessing whether there is any indication of other-than-temporary impairment (“OTTI”). Factors considered in the review include estimated future cash flows, length of time and extent to which market value has been less than cost, the financial condition and near term prospect of the issuer, and our intent and ability to retain the security to allow for an anticipated recovery in market value. If the review determines that there is OTTI, then an impairment loss is recognized in earnings equal to the difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made, or a portion may be recognized in other comprehensive income. The fair value of investments on which OTTI is recognized then becomes the new cost basis of the investment. As of June 30, 2017, trust preferred securities had an amortized cost of $11.2 million and a fair value of $8.7 million. For each trust preferred security, impairment testing is performed on a quarterly basis using a detailed cash flow analysis. The major assumptions used during the quarterly impairment testing are described in the subsequent paragraph. In 2009, the Company adopted a four year “burst” scenario for its modeled default rates (2010 - 2013) that replicated the default rates for the banking industry from the four peak years of the savings and loan crisis, which then reduced to 0.25% annually. The elevated default rate ended in 2013, and the constant default rate used by the Company is now 0.25% annually. All issuers that are currently in deferral were presumed to be in default. Additionally, all defaults are assumed to have a 15% recovery after two years and 1% of the pool is presumed to prepay annually. If this analysis results in a present value of expected cash flows that is less than the book value of a security (that is, a credit loss exists), OTTI is considered to have occurred. If there is no credit loss, any impairment is considered temporary. The cash flow analysis we performed used discount rates equal to the credit spread at the time of purchase for each security and then added the current three-month LIBOR forward interest rate curve. Based on the cash flow analysis performed at period end, management believes that there are no additional securities other-than-temporarily impaired at June 30, 2017. The underlying issuers in the pools were primarily financial institutions and to a lesser extent, insurance companies and real estate investment trusts. The Company owns both senior and mezzanine tranches in pooled trust preferred securities; however, the Company does not own any income notes. The senior and mezzanine tranches of trust preferred collateralized debt obligations generally have some protection from defaults in the form of over-collateralization and excess spread revenues, along with waterfall structures that redirect cash flows in the event certain coverage test requirements are failed. Generally, senior tranches have the greatest protection, with mezzanine tranches subordinated to the senior tranches, and income notes subordinated to the mezzanine tranches. At June 30, 2017 and December 31, 2016, the Company had 52 and 81, respectively, individual investments available-for-sale that were in an unrealized loss position. The unrealized losses on the Company’s investments in US government-sponsored agencies, municipal securities, mortgage-backed securities (agency and non-agency), and trust preferred securities summarized above were attributable primarily to changes in interest rates. Management has performed various analyses, including cash flows testing as needed, and determined that no OTTI expense was necessary during 2017 or 2016. Management believes that there are no additional securities other-than-temporarily impaired at June 30, 2017. The Company does not currently intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities before recovery of their amortized cost. Management continues to monitor these securities with a high degree of scrutiny. There can be no assurance that the Company will not conclude in future periods that conditions existing at that time indicate some or all of the securities may be sold or are other-than-temporarily impaired, which would require a charge to earnings in such periods. |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | NOTE 4 – DERIVATIVES In the ordinary course of business, the Company enters into various types of derivative transactions. The Company’s primary uses of derivative instruments are related to the mortgage banking activities. As such, the Company holds derivative instruments, which consist of rate lock agreements related to expected funding of fixed-rate mortgage loans to customers (interest rate lock commitments) and forward commitments to sell mortgage-backed securities and individual fixed-rate mortgage loans. The Company’s objective in obtaining the forward commitments is to mitigate the interest rate risk associated with the interest rate lock commitments and the mortgage loans that are held for sale. Derivative instruments not related to mortgage banking activities primarily relate to interest rate swap agreements. The derivative positions of the Company at June 30, 2017 and December 31, 2016 are as follows: At June 30, At December 31, 2017 2016 Fair Notional Fair Notional Value Value Value Value (In thousands) Derivative assets: Cash flow hedges: Interest rate swaps $ 199 30,000 421 30,000 Non-hedging derivatives: Interest rate swaps 505 30,000 532 20,000 Mortgage loan interest rate lock commitments 951 135,485 1,113 117,439 Mortgage loan forward sales commitments 399 22,081 153 94,001 Mortgage-backed securities forward sales commitments 529 111,350 — — Total derivative assets $ 2,583 328,916 2,219 261,440 Derivative liabilities: Cash flow hedges: Interest rate swaps $ 29 15,000 — — Non-hedging derivatives: Interest rate swaps 220 10,000 195 10,000 Mortgage-backed securities forward sales commitments — — 147 22,784 Total derivative liabilities $ 249 25,000 342 32,784 Non-Designated Hedges Derivative Loan Commitments and Forward Sales Commitments The Company enters into mortgage loan commitments that are also referred to as derivative loan commitments, if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential mortgage loans at specified rates and times in the future, with the intention that these loans will subsequently be sold in the secondary market. Outstanding derivative loan commitments expose the Company to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of the rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments typically decreases. Conversely, if interest rates decrease, the value of these loan commitments typically increases. To protect against the price risk inherent in derivative loan commitments, the Company utilizes both “mandatory delivery” and “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. With a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a “pair-off” fee, based on then-current market prices, to the investor to compensate the investor for the shortfall. With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g., on the same day the lender commits to lend funds to a potential borrower). The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. Derivatives related to these commitments are recorded as either a derivative asset or a derivative liability on the balance sheet and are measured at fair value. Both the interest rate lock commitments and the forward commitments are reported at fair value, with adjustments recorded in current period earnings in “mortgage banking income” within noninterest income in the consolidated statements of operations. Interest Rate Swaps The Company enters into interest rate swaps that do not meet the hedge accounting requirements and are recorded at fair value as a derivative asset or liability. Interest rate swaps that are not designated as hedges are primarily used to more closely match the interest rate characteristics of assets and liabilities and to mitigate the risks arising from timing mismatches between assets and liabilities including duration mismatches. Fair value changes are recognized in noninterest income as “fair value adjustments on interest rate swaps.” Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using certain interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company has entered into interest rate swaps to reduce the exposure to variability in interest-related cash outflows attributable to changes in forecasted LIBOR-based FHLB borrowings. These derivative instruments are designated as cash flow hedges. The hedged item is the LIBOR portion of the series of future adjustable rate borrowings over the term of the interest rate swap. Accordingly, changes to the amount of interest payment cash flows for the hedged transactions attributable to a change in credit risk are excluded from our assessment of hedge effectiveness. The Company tests for hedging effectiveness on a quarterly basis. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company has not recorded any hedge ineffectiveness since inception. Risk Management Objective of Using Derivatives When using derivatives to hedge fair value and cash flow risks, the Company exposes itself to potential credit risk from the counterparty to the hedging instrument. This credit risk is normally a small percentage of the notional amount and fluctuates as interest rates change. The Company analyzes and approves credit risk for all potential derivative counterparties prior to execution of any derivative transaction. The Company seeks to minimize credit risk by dealing with highly rated counterparties and by obtaining collateralization for exposures above certain predetermined limits. If significant counterparty risk is determined, the Company would adjust the fair value of the derivative recorded asset balance to consider such risk. |
LOANS RECEIVABLE, NET
LOANS RECEIVABLE, NET | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
LOANS RECEIVABLE, NET | NOTE 5 - LOANS RECEIVABLE, NET We emphasize a range of lending services, including commercial and residential real estate mortgage loans, real estate construction loans, commercial and industrial loans and consumer loans. Our customers are generally individuals and small to medium-sized businesses and professional firms that are located in or conduct a substantial portion of their business in our market areas. We have focused our lending activities primarily on the professional market, including doctors, dentists, small business to medium-sized owners and commercial real estate developers. Certain credit risks are inherent in making loans. These include prepayment risks, risks resulting from uncertainties in the future value of collateral, risks resulting from changes in economic and industry conditions, and risks inherent in dealing with individual borrowers. We attempt to mitigate repayment risks by adhering to internal credit policies and procedures. These policies and procedures include officer and customer lending limits, with approval processes for larger loans, documentation examination, and follow-up procedures for any exceptions to credit policies. Our loan approval policies provide for various levels of officer lending authority. When the amount of aggregate loans to a single borrower exceeds the maximum senior officer’s lending authority, the loan request will be considered by the management loan committee, or MLC, which is comprised of four members, all of whom are part of the senior management team of the Bank. The MLC meets weekly to approve loans with total loan commitment relationships generally exceeding $1.5 million. The loan authority of the MLC is equal to two-thirds of the legal lending limit of the Bank which is equivalent to the in-house loan limit. Total credit exposure above the in-house limit requires approval by the majority of the board of directors. We do not make any loans to any director, executive officer of the Bank, or the related interests of each, unless the loan is approved by the full Board of Directors of the Bank and is on terms not more favorable than would be available to a person not affiliated with the Bank. The following is a description of the risk characteristics of the material loan portfolio segments: Residential Mortgage Loans and Home Equity Loans Commercial Real Estate Real Estate Construction and Development Loans. Commercial Loans. The Company’s primary markets are generally concentrated in real estate lending. However, in order to diversify our lending portfolio, the Company purchases nationally syndicated commercial and industrial loans. These loans typically have terms of seven years and are generally tied to a floating rate index such as LIBOR or prime. To effectively manage this line of business, the Company has an experienced senior lending executive with relevant experience to manage this area of this segment of the loan portfolio. In addition, the Company engaged a consulting firm that specializes in syndicated loans to assist in monitoring performance analytics. As of June 30, 2017 and December 31, 2016, there were approximately $84.1 million and $91.5 million in syndicated loans outstanding. Syndicated loans are grouped within commercial business loans below. Consumer Loans. Loans receivable, net at June 30, 2017 and December 31, 2016 are summarized by category as follows: At June 30, At December 31, 2017 2016 % of Total % of Total All Loans: Amount Loans Amount Loans (Dollars in thousands) Loans secured by real estate: One-to-four family $ 482,718 33.62 % $ 411,399 34.91 % Home equity 49,202 3.43 % 36,026 3.06 % Commercial real estate 543,534 37.87 % 445,344 37.80 % Construction and development 153,083 10.66 % 115,682 9.82 % Consumer loans 8,996 0.63 % 5,714 0.48 % Commercial business loans 197,887 13.79 % 164,101 13.93 % Total gross loans receivable 1,435,420 100.00 % 1,178,266 100.00 % Less: Allowance for loan losses 10,750 10,688 Total loans receivable, net $ 1,424,670 $ 1,167,578 Loans receivable, net at June 30, 2017 and December 31, 2016 for acquired non-credit impaired loans and nonacquired loans are summarized by category as follows: At June 30, At December 31, 2017 2016 Acquired Non-Credit Impaired Loans % of Total % of Total (ASC 310-20) and Nonacquired Loans: Amount Loans Amount Loans (Dollars in thousands) Loans secured by real estate: One-to-four family $ 476,873 33.80 % $ 411,399 34.91 % Home equity 49,151 3.48 % 36,026 3.06 % Commercial real estate 530,620 37.59 % 445,344 37.80 % Construction and development 149,393 10.58 % 115,682 9.82 % Consumer loans 8,952 0.63 % 5,714 0.48 % Commercial business loans 196,438 13.92 % 164,101 13.93 % Total gross loans receivable 1,411,427 100.00 % 1,178,266 100.00 % Less: Allowance for loan losses 10,750 10,688 Total loans receivable, net $ 1,400,677 $ 1,167,578 Loans receivable, net at June 30, 2017 for acquired credit impaired loans are summarized by category below. There were no acquired credit impaired loans at December 31, 2016. At June 30, 2017 Acquired Credit Impaired % of Total Loans (ASC 310-30): Amount Loans (Dollars in thousands) Loans secured by real estate: One-to-four family $ 5,845 24.37 % Home equity 51 0.21 % Commercial real estate 12,914 53.82 % Construction and development 3,690 15.38 % Consumer loans 44 0.18 % Commercial business loans 1,449 6.04 % Total gross loans receivable 23,993 100.00 % Less: Allowance for loan losses — Total loans receivable, net $ 23,993 Included in the loan totals, net of purchase discount, were $273.3 million and $111.4 million in loans acquired through acquisitions at June 30, 2017 and December 31, 2016, respectively. At June 30, 2017 and December 31, 2016, the purchase discount on acquired non-credit impaired loans was $5.9 million and $3.2 million, respectively. No allowance for loan losses related to the acquired loans is recorded on the acquisition date because the fair value of the loans acquired incorporates assumptions regarding credit risk. There are two methods to account for acquired loans as part of a business combination. Acquired loans that contain evidence of credit deterioration on the date of purchase are carried at the net present value of expected future proceeds in accordance with ASC 310-30 and are considered purchased credit impaired (“PCI”) loans. All other acquired loans are recorded at their initial fair value, adjusted for subsequent advances, pay downs, amortization or accretion of any premium or discount on purchase, charge-offs and any other adjustment to carrying value in accordance with ASC 310-20. PCI loans are aggregated into pools of loans based on common risk characteristics such as the type of loan, payment status, or collateral type. The Company estimates the amount and timing of expected cash flows for each purchased loan pool and the expected cash flows in excess of the amount paid are recorded as interest income over the remaining life of the pool (accretable yield). The excess of the pool’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan pool, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. At June 30, 2017, the outstanding balance and recorded investment of PCI loans was $30.8 million and $24.0 million, respectively. The Company had no PCI loans prior to 2017. The following table presents changes in the value of the accretable yield for PCI loans for three and six months ended June 30, 2017 (in thousands): For the Three Months For the Six Months Ended June 30, 2017 Ended June 30, 2017 (In thousands) (In thousands) Accretable yield, beginning of period $ 4,893 $ — Additions — 4,995 Accretion (352 ) (454 ) Reclassification from nonaccretable balance, net — — Other changes, net — — Accretable yield, end of period $ 4,541 $ 4,541 The composition of gross loans outstanding, net of undisbursed amounts, by rate type is as follows: At June 30, At December 31, 2017 2016 (Dollars in thousands) Variable rate loans $ 544,084 37.90 % $ 455,589 38.67 % Fixed rate loans 891,336 62.10 % 722,677 61.33 % Total loans outstanding $ 1,435,420 100.00 % $ 1,178,266 100.00 % The following table presents activity in the allowance for loan losses for the period indicated. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Allowance for loan losses: For the Three Months Ended June 30, 2017 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,506 236 3,613 943 110 2,498 809 10,715 Provision for loan losses 237 (18 ) (283 ) 4 (16 ) 359 (283 ) — Charge-offs (19 ) — — — (1 ) — — (20 ) Recoveries 1 — 1 1 8 44 — 55 Balance, end of period $ 2,725 218 3,331 948 101 2,901 526 10,750 For the Three Months Ended June 30, 2016 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,863 152 3,365 1,231 29 2,193 400 10,233 Provision for loan losses (193 ) 15 28 (24 ) 19 187 (32 ) — Charge-offs (45 ) — — — (27 ) (119 ) — (191 ) Recoveries 81 — — 3 9 162 — 255 Balance, end of period $ 2,706 167 3,393 1,210 30 2,423 368 10,297 Allowance for loan losses: For the Six Months Ended June 30, 2017 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,636 197 3,344 1,132 80 2,805 494 10,688 Provision for loan losses 122 21 (39 ) (186 ) 20 30 32 — Charge-offs (35 ) — — — (10 ) — — (45 ) Recoveries 2 — 26 2 11 66 — 107 Balance, end of period $ 2,725 218 3,331 948 101 2,901 526 10,750 For the Six Months Ended June 30, 2016 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,903 151 3,402 1,138 27 2,100 420 10,141 Provision for loan losses (291 ) 16 (9 ) 66 17 253 (52 ) — Charge-offs (45 ) — — — (29 ) (119 ) — (193 ) Recoveries 139 — — 6 15 189 — 349 Balance, end of period $ 2,706 167 3,393 1,210 30 2,423 368 10,297 The following table disaggregates our allowance for loan losses and recorded investment in loans by impairment methodology. Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) At June 30, 2017: Allowance for loan losses ending balances: Individually evaluated for impairment $ 199 54 48 — — 23 — 324 Collectively evaluated for impairment 2,526 164 3,283 948 101 2,878 526 10,426 $ 2,725 218 3,331 948 101 2,901 526 10,750 Loans receivable ending balances: Individually evaluated for impairment $ 4,809 627 4,996 317 18 228 — 10,995 Collectively evaluated for impairment 472,064 48,524 525,624 149,076 8,934 196,210 — 1,400,432 Purchased Credit-Impaired Loans 5,845 51 12,914 3,690 44 1,449 — 23,993 Total loans receivable $ 482,718 49,202 543,534 153,083 8,996 197,887 — 1,435,420 At December 31, 2016: Allowance for loan losses ending balances: Individually evaluated for impairment $ 27 29 92 — — 9 — 157 Collectively evaluated for impairment 2,609 168 3,252 1,132 80 2,796 494 10,531 $ 2,636 197 3,344 1,132 80 2,805 494 10,688 Loans receivable ending balances: Individually evaluated for impairment $ 4,668 108 5,247 507 24 267 — 10,821 Collectively evaluated for impairment 406,731 35,918 440,097 115,175 5,690 163,834 — 1,167,445 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 — 1,178,266 The following table presents impaired loans individually evaluated for impairment in the segmented portfolio categories and the corresponding allowance for loan losses as of June 30, 2017 and December 31, 2016. The recorded investment is defined as the original amount of the loan, net of any deferred costs and fees, less any principal reductions and direct charge-offs. Unpaid principal balance includes amounts previously included in charge-offs. At June 30, 2017 At December 31, 2016 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (In thousands) With no related allowance recorded: Loans secured by real estate: One-to-four family $ 3,515 3,534 — 4,125 4,366 — Home equity 355 355 — — — — Commercial real estate 3,993 3,993 — 4,011 4,011 — Construction and development 317 317 — 507 507 — Consumer loans 18 18 — 24 24 — Commercial business loans 30 30 — 258 258 — 8,228 8,247 — 8,925 9,166 — With an allowance recorded: Loans secured by real estate: One-to-four family 1,294 1,294 199 543 543 27 Home equity 272 272 54 108 108 29 Commercial real estate 1,003 1,003 48 1,236 1,236 92 Construction and development — — — — — — Consumer loans — — — — — — Commercial business loans 198 198 23 9 9 9 2,767 2,767 324 1,896 1,896 157 Total: Loans secured by real estate: One-to-four family 4,809 4,828 199 4,668 4,909 27 Home equity 627 627 54 108 108 29 Commercial real estate 4,996 4,996 48 5,247 5,247 92 Construction and development 317 317 — 507 507 — Consumer loans 18 18 — 24 24 — Commercial business loans 228 228 23 267 267 9 $ 10,995 11,014 324 10,821 11,062 157 The following table presents the average recorded investment and interest income recognized on impaired loans individually evaluated for impairment in the segmented portfolio categories for the three and six months ended June 30, 2017 and 2016. For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Average Interest Average Interest Average Interest Average Interest Recorded Income Recorded Income Recorded Income Recorded Income Investment Recognized Investment Recognized Investment Recognized Investment Recognized (In thousands) With no related allowance recorded: Loans secured by real estate: One-to-four family $ 3,027 (15 ) 2,393 13 2,953 21 2,660 23 Home equity 347 9 154 — 258 12 — — Commercial real estate 4,016 (37 ) 6,843 92 4,043 98 8,798 228 Construction and development 158 8 24 — 87 8 25 — Consumer loans 19 — 32 3 19 — 48 (1 ) Commercial business loans 32 (16 ) 451 48 35 1 554 52 7,599 (51 ) 9,897 156 7,395 140 12,085 302 With an allowance recorded: Loans secured by real estate: One-to-four family 992 5 513 5 803 8 515 10 Home equity 274 (2 ) — — 233 (1 ) — — Commercial real estate 1,009 (67 ) 1,642 — 1,014 — 1,657 — Construction and development — — 475 — — — 475 — Consumer loans — — — — — — — — Commercial business loans 205 — 9 1 211 6 9 — 2,480 (64 ) 2,639 6 2,261 13 2,656 10 Total: Loans secured by real estate: One-to-four family 4,019 (10 ) 2,906 18 3,756 29 3,175 33 Home equity 621 7 154 — 491 11 — — Commercial real estate 5,025 (104 ) 8,485 92 5,057 98 10,455 228 Construction and development 158 8 499 — 87 8 500 — Consumer loans 19 — 32 3 19 — 48 (1 ) Commercial business loans 237 (16 ) 460 49 246 7 563 52 $ 10,079 (115 ) 12,536 162 9,656 153 14,741 312 A loan is considered past due if the required principal and interest payment has not been received as of the due date. The following schedule is an aging of past due loans receivable by portfolio segment as of June 30, 2017 and December 31, 2016. At June 30, 2017 Acquired Non-Credit Real Estate Loans Impaired Loans One-to- Commercial Construction (ASC 310-20) and four Home real and Commercial Nonacquired Loans: family equity estate development Consumer business Total (In thousands) 30-59 days past due $ 116 — — 118 139 4 377 60-89 days past due 778 — — 75 2 188 1,043 90 days or more past due 2,967 108 — 16 5 8 3,104 Total past due 3,861 108 — 209 146 200 4,524 Current 473,012 49,043 530,620 149,184 8,806 196,238 1,406,903 Total loans receivable $ 476,873 49,151 530,620 149,393 8,952 196,438 1,411,427 At June 30, 2017 Real Estate Loans One-to- Commercial Construction Acquired Credit Impaired four Home real and Commercial Loans (ASC 310-30): family equity estate development Consumer business Total (In thousands) 30-59 days past due $ 940 — — 1,746 — 42 2,728 60-89 days past due 138 — — — — — 138 90 days or more past due 10 — — — — 487 497 Total past due 1,088 — — 1,746 — 529 3,363 Current 4,757 51 12,914 1,944 44 920 20,630 Total loans receivable $ 5,845 51 12,914 3,690 44 1,449 23,993 At December 31, 2016 Real Estate Loans One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Total (In thousands) 30-59 days past due $ 3,864 379 206 62 55 136 4,702 60-89 days past due 635 497 — — 3 — 1,135 90 days or more past due 3,170 108 334 507 26 16 4,161 Total past due 7,669 984 540 569 84 152 9,998 Current 403,730 35,042 444,804 115,113 5,630 163,949 1,168,268 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 1,178,266 Loans are generally placed in nonaccrual status when the collection of principal and interest is 90 days or more past due, unless the obligation is both well-secured and in the process of collection. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest payments received while the loan is on nonaccrual are applied to the principal balance. No interest income was recognized on impaired loans subsequent to the nonaccrual status designation. A loan is returned to accrual status when the borrower makes consistent payments according to contractual terms and future payments are reasonably assured. The following is a schedule of loans receivable, by portfolio segment, on nonaccrual at June 30, 2017 and December 31, 2016. At June 30, At December 31, 2017 2016 Loans secured by real estate: (In thousands) One-to-four family $ 3,597 3,256 Home equity 272 108 Commercial real estate 1,519 1,703 Construction and development 51 507 Consumer loans 6 27 Commercial business loans 14 24 $ 5,459 5,625 The Company uses several metrics as credit quality indicators of current or potential risks as part of the ongoing monitoring of credit quality of its loan portfolio. The credit quality indicators are periodically reviewed and updated on a case-by-case basis. The Company uses the following definitions for the internal risk rating grades, listed from the least risk to the highest risk. Pass: Special mention: Substandard: Doubtful: The Company uses the following definitions in the tables below: Nonperforming: Performing: The following is a schedule of the credit quality of loans receivable, by portfolio segment, as of June 30, 2017 and December 31, 2016. At June 30, 2017 Real Estate Loans One-to- Commercial Construction four Home real and Commercial Total Loans: family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 475,833 48,507 538,876 150,272 8,968 195,160 1,417,616 Special Mention 2,052 — 2,281 156 21 2,227 6,737 Substandard 4,833 695 2,377 2,655 7 500 11,067 Total loans receivable $ 482,718 49,202 543,534 153,083 8,996 197,887 1,435,420 Performing $ 479,111 48,930 542,015 153,032 8,990 197,386 1,429,464 Nonperforming: 90 days past due still accruing 10 — — — — 487 497 Nonaccrual 3,597 272 1,519 51 6 14 5,459 Total nonperforming 3,607 272 1,519 51 6 501 5,956 Total loans receivable $ 482,718 49,202 543,534 153,083 8,996 197,887 1,435,420 At June 30, 2017 Acquired Non-Credit Real Estate Loans Impaired Loans One-to- Commercial Construction (ASC 310-20) and four Home real and Commercial Nonacquired Loans: family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 472,681 48,456 527,813 148,879 8,924 194,687 1,401,440 Special Mention 595 — 1,287 76 21 1,739 3,718 Substandard 3,597 695 1,520 438 7 12 6,269 Total loans receivable $ 476,873 49,151 530,620 149,393 8,952 196,438 1,411,427 Performing $ 473,276 48,879 529,101 149,342 8,946 196,424 1,405,968 Nonperforming: 90 days past due still accruing — — — — — — — Nonaccrual 3,597 272 1,519 51 6 14 5,459 Total nonperforming 3,597 272 1,519 51 6 14 5,459 Total loans receivable $ 476,873 49,151 530,620 149,393 8,952 196,438 1,411,427 At June 30, 2017 Real Estate Loans One-to- Commercial Construction Acquired Credit Impaired four Home real and Commercial Loans (ASC 310-30): family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 3,152 51 11,063 1,393 44 473 16,176 Special Mention 1,457 — 994 80 — 488 3,019 Substandard 1,236 — 857 2,217 — 488 4,798 Total loans receivable $ 5,845 51 12,914 3,690 44 1,449 23,993 Performing $ 5,835 51 12,914 3,690 44 962 23,496 Nonperforming: 90 days past due still accruing 10 — — — — 487 497 Nonaccrual — — — — — — — Total nonperforming 10 — — — — 487 497 Total loans receivable $ 5,845 51 12,914 3,690 44 1,449 23,993 At December 31, 2016 Real Estate Loans One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 407,612 35,903 442,323 114,751 5,683 162,235 1,168,507 Special Mention 438 15 1,318 424 19 1,849 4,063 Substandard 3,349 108 1,703 507 12 17 5,696 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 1,178,266 Performing $ 408,143 35,918 443,641 115,175 5,687 164,077 1,172,641 Nonperforming: Nonaccrual 3,256 108 1,703 507 27 24 5,625 Total nonperforming 3,256 108 1,703 507 27 24 5,625 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 1,178,266 There were no loans 90 days or more past due and still accruing at December 31, 2016. The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. Troubled Debt Restructurings At June 30, 2017, there were $6.7 million in loans designated as troubled debt restructurings of which $5.5 million were accruing. At December 31, 2016, there were $6.4 million in loans designated as troubled debt restructurings of which $5.2 million were accruing. There was one loan with a pre-modification and post-modification balance of $266,000 identified as a troubled debt restructuring during the three months ended June 30, 2017 due to a payment structure change. There were no loans designated as troubled debt restructuring during the three months ended June 30, 2016. No loans previously restructured in the twelve months prior to June 30, 2017 and 2016 went into default during the three and six months ended June 30, 2017 and 2016. |
REAL ESTATE ACQUIRED THROUGH FO
REAL ESTATE ACQUIRED THROUGH FORECLOSURE | 6 Months Ended |
Jun. 30, 2017 | |
Banking and Thrift [Abstract] | |
REAL ESTATE ACQUIRED THROUGH FORECLOSURE | NOTE 6 – REAL ESTATE ACQUIRED THROUGH FORECLOSURE The following presents summarized activity in real estate acquired through foreclosure for the periods ended June 30, 2017 and December 31, 2016: June 30, December 31, 2017 2016 (In thousands) Balance at beginning of period $ 1,179 2,374 Additions 799 2,630 Sales (561 ) (3,810 ) Write downs — (15 ) Balance at end of period $ 1,417 1,179 A summary of the composition of real estate acquired through foreclosure follows: At June 30, At December 31, 2017 2016 (In thousands) Real estate loans: Construction and development $ 1,417 1,179 $ 1,417 1,179 |
DEPOSITS
DEPOSITS | 6 Months Ended |
Jun. 30, 2017 | |
Banking and Thrift [Abstract] | |
DEPOSITS | NOTE 7 - DEPOSITS Deposits outstanding by type of account at June 30, 2017 and December 31, 2016 are summarized as follows: At June 30, At December 31, 2017 2016 (In thousands) Noninterest-bearing demand accounts $ 330,641 229,905 Interest-bearing demand accounts 298,123 191,851 Savings accounts 70,336 48,648 Money market accounts 380,108 292,639 Certificates of deposit: Less than $250,000 535,427 467,937 $250,000 or more 49,094 27,280 Total certificates of deposit 584,521 495,217 Total deposits $ 1,663,729 1,258,260 The aggregate amount of brokered certificates of deposit was $95.7 million and $98.3 million at June 30, 2017 and December 31, 2016, respectively. Brokered certificates of deposit are included in the table above under certificates of deposit less than $250,000. The aggregate amount of institutional certificates of deposit was $47.7 million and $44.3 million at June 30, 2017 and December 31, 2016, respectively. |
ESTIMATED FAIR VALUE OF FINANCI
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 8 – ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS Current accounting literature requires disclosures about the fair value of all financial instruments whether or not recognized in the balance sheet, for which it is practicable to estimate the value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized through immediate settlement of the instrument. Certain items are specifically excluded from disclosure requirements, including the Company’s stock, premises and equipment, accrued interest receivable and payable and other assets and liabilities. The fair value of a financial instrument is an amount at which the asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced sale. Fair values are estimated at a specific point in time based on relevant market information and information about the financial instruments. Because no market value exists for a significant portion of the 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. The Company has used management’s best estimate of fair value based on the above assumptions. Thus the fair values presented may not be the amounts that could be realized in an immediate sale or settlement of the instrument. In addition, any income taxes or other expenses that would be incurred in an actual sale or settlement are not taken into consideration in the fair values presented. The Company determines the fair value of its financial instruments based on the fair value hierarchy established under ASC 820-10, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the financial instrument’s fair value measurement in its entirety. There are three levels of inputs that may be used to measure fair value. The three levels of inputs of the valuation hierarchy are defined below: Level 1 Quoted prices (unadjusted) in active markets for identical assets and liabilities for the instrument or security to be valued. Level 1 assets include marketable equity securities as well as U.S. Treasury securities that are highly liquid and are actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or model-based valuation techniques for which all significant assumptions are derived principally from or corroborated by observable market data. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined by using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. U.S. Government sponsored agency securities, mortgage-backed securities issued by U.S. Government sponsored enterprises and agencies, obligations of states and municipalities, collateralized mortgage obligations issued by U.S. Government sponsored enterprises, and mortgage loans held-for-sale are generally included in this category. Certain private equity investments that invest in publicly traded companies are also considered Level 2 assets. Level 3 Unobservable inputs that are supported by little, if any, market activity for the asset or liability. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow models and similar techniques, and may also include the use of market prices of assets or liabilities that are not directly comparable to the subject asset or liability. These methods of valuation may result in a significant portion of the fair value being derived from unobservable assumptions that reflect The Company’s own estimates for assumptions that market participants would use in pricing the asset or liability. This category primarily includes collateral-dependent impaired loans, other real estate, certain equity investments, and certain private equity investments. Cash and due from banks - The carrying amounts of these financial instruments approximate fair value. All mature within 90 days and present no anticipated credit concerns. Interest-bearing cash - The carrying amount of these financial instruments approximates fair value. Securities available-for-sale and securities held to maturity – Fair values for investment securities available-for-sale and securities held to maturity are based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. FHLB stock and other non-marketable equity securities - The carrying amount of these financial instruments approximates fair value. Mortgage loans held for sale – Mortgage loans held for sale are recorded at either fair value, if elected, or the lower of cost or fair value on an individual loan basis. Origination fees and costs for loans held for sale recorded at lower of cost or market are capitalized in the basis of the loan and are included in the calculation of realized gains and losses upon sale. Origination fees and costs are recognized in earnings at the time of origination for loans held for sale that are recorded at fair value. Fair value is derived from observable current market prices, when available, and includes loan servicing value. When observable market prices are not available, the Company uses judgment and estimates fair value using internal models, in which the Company uses its best estimates of assumptions it believes would be used by market participants in estimating fair value. Mortgage loans held for sale are classified within Level 2 of the valuation hierarchy. Loans receivable - The fair value of other types of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Further adjustments are made to reflect current market conditions. There is no discount for liquidity included in the expected cash flow assumptions. Loans receivable are classified within Level 3 of the valuation hierarchy. Accrued interest receivable - The carrying value approximates the fair value. Mortgage servicing rights - The Company initially measures servicing assets and liabilities retained related to the sale of residential loans held for sale (“mortgage servicing rights”) at fair value, if practicable. For subsequent measurement purposes, the Company measures servicing assets and liabilities based on the lower of cost or market. Deposits - The estimated fair value of demand deposits, savings accounts, and money market accounts is the amount payable on demand at the reporting date. The estimated fair value of fixed maturity certificates of deposits is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturities. Short-term borrowed funds - The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings maturing within 90 days approximate their fair values. Estimated fair values of other short-term borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Long-term debt - The estimated fair values of the Company’s long-term debt are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Other Investments – The carrying value approximates the fair value. Derivative assets and liabilities – The primary use of derivative instruments are related to the mortgage banking activities of the Company. The Company’s wholesale mortgage banking subsidiary enters into interest rate lock commitments related to expected funding of residential mortgage loans at specified times in the future. Interest rate lock commitments that relate to the origination of mortgage loans that will be held-for-sale are considered derivative instruments under applicable accounting guidance. As such, The Company records its interest rate lock commitments and forward loan sales commitments at fair value, determined as the amount that would be required to settle each of these derivative financial instruments at the balance sheet date. In the normal course of business, the mortgage subsidiary enters into contractual interest rate lock commitments to extend credit, if approved, at a fixed interest rate and with fixed expiration dates. The commitments become effective when the borrowers “lock-in” a specified interest rate within the time frames established by the mortgage banking subsidiary. Market risk arises if interest rates move adversely between the time of the interest rate lock by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing interest rate lock commitments to borrowers, the mortgage banking subsidiary enters into best efforts forward sales contracts with third party investors. The forward sales contracts lock in a price for the sale of loans similar to the specific interest rate lock commitments. Both the interest rate lock commitments to the borrowers and the forward sales contracts to the investors that extend through to the date the loan may close are derivatives, and accordingly, are marked to fair value through earnings. In estimating the fair value of an interest rate lock commitment, the Company assigns a probability to the interest rate lock commitment based on an expectation that it will be exercised and the loan will be funded. The fair value of the interest rate lock commitment is derived from the fair value of related mortgage loans, which is based on observable market data and includes the expected net future cash flows related to servicing of the loans. The fair value of the interest rate lock commitment is also derived from inputs that include guarantee fees negotiated with the agencies and private investors, buy-up and buy-down values provided by the agencies and private investors, and interest rate spreads for the difference between retail and wholesale mortgage rates. Management also applies fall-out ratio assumptions for those interest rate lock commitments for which we do not close a mortgage loan. The fall-out ratio assumptions are based on the mortgage subsidiary’s historical experience, conversion ratios for similar loan commitments, and market conditions. While fall-out tendencies are not exact predictions of which loans will or will not close, historical performance review of loan-level data provides the basis for determining the appropriate hedge ratios. In addition, on a periodic basis, the mortgage banking subsidiary performs analysis of actual rate lock fall-out experience to determine the sensitivity of the mortgage pipeline to interest rate changes from the date of the commitment through loan origination, and then period end, using applicable published mortgage-backed investment security prices. The expected fall-out ratios (or conversely the “pull-through” percentages) are applied to the determined fair value of the unclosed mortgage pipeline in accordance with GAAP. Changes to the fair value of interest rate lock commitments are recognized based on interest rate changes, changes in the probability that the commitment will be exercised, and the passage of time. The fair value of the forward sales contracts to investors considers the market price movement of the same type of security between the trade date and the balance sheet date. These instruments are defined as Level 2 within the valuation hierarchy. Derivative instruments not related to mortgage banking activities interest rate swap agreements - Fair values for these instruments are based on quoted market prices, when available. As such, the fair value adjustments for derivatives with fair values based on quoted market prices are recurring Level 1. Commitments to extend credit – The carrying amounts of these commitments are considered to be a reasonable estimate of fair value because the commitments underlying interest rates are based upon current market rates. Accrued interest payable - The fair value approximates the carrying value. Off-balance sheet financial instruments – Contract values and fair values for off-balance sheet, credit-related financial instruments are based on estimated fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and counterparties’ credit standing. The carrying amount and estimated fair value of the Company’s financial instruments at June 30, 2017 and December 31, 2016 are as follows: At June 30, 2017 Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Financial assets: (In thousands) Cash and due from banks $ 14,965 14,965 14,965 — — Interest-bearing cash 30,064 30,064 30,064 — — Securities available-for-sale 500,310 500,310 — 491,651 8,659 Federal Home Loan Bank stock 10,545 10,545 — — 10,545 Other investments 2,130 2,130 — — 2,130 Derivative assets 2,583 2,583 704 1,879 — Loans held for sale 36,232 36,232 — 36,232 — Loans receivable, net 1,424,670 1,422,796 — — 1,422,796 Accrued interest receivable 7,124 7,124 — 7,124 — Mortgage servicing rights 16,692 22,188 — — 22,188 Cash value life insurance 38,057 38,057 — 38,057 — Financial liabilities: Deposits 1,663,729 1,661,265 — 1,661,265 — Short-term borrowed funds 149,000 148,820 — 148,820 — Long-term debt 75,327 75,171 — 75,171 — Derivative liabilities 249 249 249 — — Accrued interest payable 755 755 — 755 — At December 31, 2016 Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Financial assets: (In thousands) Cash and due from banks $ 9,761 9,761 9,761 — — Interest-bearing cash 14,591 14,591 14,591 — — Securities available-for-sale 335,352 335,352 — 328,188 7,164 Federal Home Loan Bank stock 11,072 11,072 — — 11,072 Other investments 1,768 1,768 — — 1,768 Derivative assets 2,219 2,219 953 1,266 — Loans held for sale 31,569 31,569 — 31,569 — Loans receivable, net 1,167,578 1,173,118 — — 1,173,118 Cash value life insurance 28,984 28,984 — 28,984 — Accrued interest receivable 5,373 5,373 — 5,373 — Mortgage servicing rights 15,032 20,961 — — 20,961 Financial liabilities: Deposits 1,258,260 1,256,119 — 1,256,119 — Short-term borrowed funds 203,000 202,455 — 202,455 — Long-term debt 38,465 38,442 — 38,442 — Derivative liabilities 342 342 195 147 — Accrued interest payable 327 327 — 327 — At June 30, 2017 At December 31, 2016 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Off-Balance Sheet Financial Instruments: (In thousands) Commitments to extend credit $ 186,604 — 111,446 — Standby letters of credit 2,730 — 2,248 — In determining appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to fair value disclosures. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. Following is a description of valuation methodologies used for assets recorded at fair value on a recurring and non-recurring basis. Securities Available-for-Sale Measurement is on a recurring basis upon quoted market prices, if available. If quoted market prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for prepayment assumptions, projected credit losses, and liquidity. At June 30, 2017 and December 31, 2016, the Company’s investment securities available-for-sale are recurring Level 2 except for trust preferred securities which are determined to be Level 3. Mortgage Loans Held for Sale Mortgage loans held for sale are recorded at either fair value, if elected, or the lower of cost or fair value on an individual loan basis. Origination fees and costs for loans held for sale recorded at lower of cost or market are capitalized in the basis of the loan and are included in the calculation of realized gains and losses upon sale. Origination fees and costs are recognized in earnings at the time of origination for loans held for sale that are recorded at fair value. Fair value is derived from observable current market prices, when available, and includes loan servicing value. When observable market prices are not available, the Company uses judgment and estimates fair value using internal models, in which the Company uses its best estimates of assumptions it believes would be used by market participants in estimating fair value. Mortgage loans held for sale are classified within Level 2 of the valuation hierarchy. Derivative Assets and Liabilities The primary use of derivative instruments is related to the mortgage banking activities of the Company. The Company’s wholesale mortgage banking subsidiary enters into interest rate lock commitments related to expected funding of residential mortgage loans at specified times in the future. Interest rate lock commitments that relate to the origination of mortgage loans that will be held-for-sale are considered derivative instruments under applicable accounting guidance. As such, The Company records its interest rate lock commitments and forward loan sales commitments at fair value, determined as the amount that would be required to settle each of these derivative financial instruments at the balance sheet date. In the normal course of business, the mortgage subsidiary enters into contractual interest rate lock commitments to extend credit, if approved, at a fixed interest rate and with fixed expiration dates. The commitments become effective when the borrowers “lock-in” a specified interest rate within the time frames established by the mortgage banking subsidiary. Market risk arises if interest rates move adversely between the time of the interest rate lock by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing interest rate lock commitments to borrowers, the mortgage banking subsidiary enters into best efforts forward sales contracts with third party investors. The forward sales contracts lock in a price for the sale of loans similar to the specific interest rate lock commitments. Both the interest rate lock commitments to the borrowers and the forward sales contracts to the investors that extend through to the date the loan may close are derivatives, and accordingly, are marked to fair value through earnings. In estimating the fair value of an interest rate lock commitment, the Company assigns a probability to the interest rate lock commitment based on an expectation that it will be exercised and the loan will be funded. The fair value of the interest rate lock commitment is derived from the fair value of related mortgage loans, which is based on observable market data and includes the expected net future cash flows related to servicing of the loans. The fair value of the interest rate lock commitment is also derived from inputs that include guarantee fees negotiated with the agencies and private investors, buy-up and buy-down values provided by the agencies and private investors, and interest rate spreads for the difference between retail and wholesale mortgage rates. The Company also applies fall-out ratio assumptions for those interest rate lock commitments for which we do not close a mortgage loan. The fall-out ratio assumptions are based on the mortgage subsidiary’s historical experience, conversion ratios for similar loan commitments, and market conditions. While fall-out tendencies are not exact predictions of which loans will or will not close, historical performance review of loan-level data provides the basis for determining the appropriate hedge ratios. In addition, on a periodic basis, the mortgage banking subsidiary performs analysis of actual rate lock fall-out experience to determine the sensitivity of the mortgage pipeline to interest rate changes from the date of the commitment through loan origination, and then period end, using applicable published mortgage-backed investment security prices. The expected fall-out ratios (or conversely the “pull-through” percentages) are applied to the determined fair value of the unclosed mortgage pipeline in accordance with GAAP. Changes to the fair value of interest rate lock commitments are recognized based on interest rate changes, changes in the probability that the commitment will be exercised, and the passage of time. The fair value of the forward sales contracts to investors considers the market price movement of the same type of security between the trade date and the balance sheet date. These instruments are defined as Level 2 within the valuation hierarchy. Derivative instruments not related to mortgage banking activities include interest rate swap agreements. Fair values for these instruments are based on quoted market prices, when available. As such, the fair value adjustments for derivatives with fair values based on quoted market prices in an active market are recurring Level 1. Impaired Loans Loans that are considered impaired are recorded at fair value on a nonrecurring basis. Once a loan is considered impaired, the fair value is measured using one of several methods, including collateral liquidation value, market value of similar debt and discounted cash flows. Those impaired loans not requiring a specific charge against the allowance represent loans for which the fair value of the expected repayments or collateral meet or exceed the recorded investment in the loan. Loans which are deemed to be impaired are primarily valued on a nonrecurring basis at the fair value of the underlying real estate collateral. Such fair values are obtained using independent appraisals, which the Company considers to be Level 3 inputs. Other Real Estate Owned (“OREO”) OREO is carried at the lower of carrying value or fair value on a nonrecurring basis. Fair value is based upon independent appraisals or management’s estimation of the collateral and is considered a Level 3 measurement. When the OREO value is based upon a current appraisal or when a current appraisal is not available or there is estimated further impairment, the measurement is considered a Level 3 measurement. Mortgage Servicing Rights A mortgage servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans are expected to more than adequately compensate the Company for performing the servicing. The Company initially measures servicing assets and liabilities retained related to the sale of residential loans held for sale (“mortgage servicing rights”) at fair value, if practicable. For subsequent measurement purposes, the Company measures servicing assets and liabilities based on the lower of cost or market on a quarterly basis. The quarterly determination of fair value of servicing rights is provided by a third party and is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy. Assets and liabilities measured at fair value on a recurring basis are as follows as of June 30, 2017 and December 31, 2016: Quoted market Significant other Significant other price in active observable unobservable markets inputs inputs (In thousands) June 30, 2017 Available-for-sale investment securities: Municipal securities $ — 162,594 — US government agencies — 2,866 — Collateralized loan obligations — 105,083 — Corporate securities — 494 — Mortgage-backed securities: Agency — 158,309 — Non-agency — 62,305 — Trust Preferred Securities — — 8,659 Loans held for sale — 36,232 — Derivative assets: Cash flow hedges: Interest rate swaps 199 — — Non-hedging derivatives: Interest rate swaps 505 — — Mortgage loan interest rate lock commitments — 951 — Mortgage loan forward sales commitments — 399 — Mortgage-backed securities forward sales commitments — 529 — Derivative liabilities: Cash flow hedges: Interest rate swaps 29 — — Non-hedging derivatives: Interest rate swaps 220 — — Total $ 953 529,762 8,659 December 31, 2016 Available-for-sale investment securities: Municipal securities $ — 93,212 — US government agencies — 3,386 — Collateralized loan obligations — 76,249 — Corporate securities — 491 — Mortgage-backed securities: Agency — 90,986 — Non-agency — 63,864 — Trust preferred securities — — 7,164 Loans held for sale — 31,569 — Derivative assets: Cash flow hedges: Interest rate swaps 421 — — Non-hedging derivatives: Interest rate swaps 532 — — Mortgage loan interest rate lock commitments — 1,113 — Mortgage loan forward sales commitments — 153 — Derivative liabilities: Non-hedging derivatives: Interest rate swaps 195 — — Mortgage-backed securities forward sales commitments — 147 — Total $ 1,148 361,170 7,164 Assets measured at fair value on a nonrecurring basis are as follows as of June 30, 2017 and December 31, 2016: Quoted market Significant other Significant other price in active observable unobservable markets inputs inputs (In thousands) June 30, 2017 Impaired loans: Loans secured by real estate: One-to-four family $ — — 4,610 Home equity — — 573 Commercial real estate — — 4,948 Construction and development — — 317 Consumer loans — — 18 Commercial business loans — — 205 Real estate owned: Construction and development — — 1,417 Mortgage servicing rights — — 22,188 Total $ — — 34,276 December 31, 2016 Impaired loans: Loans secured by real estate: One-to-four family $ — — 4,641 Home equity — — 79 Commercial real estate — — 5,155 Construction and development — — 507 Consumer loans — — 24 Commercial business loans — — 258 Real estate owned: Construction and development — — 1,179 Mortgage servicing rights — — 20,961 Total $ — — 32,804 For Level 3 assets and liabilities measured at fair value on a nonrecurring basis as of June 30, 2017 and December 31, 2016, the significant unobservable inputs used in the fair value measurements were as follows: June 30, 2017 and December 31, 2016 Significant Significant Unobservable Valuation Technique Observable Inputs Inputs Impaired Loans Appraisal Value Appraisals and or sales of Appraisals discounted 10% to 20% for comparable properties sales commissions and other holding costs Real estate owned Appraisal Value/ Appraisals and or sales of Appraisals discounted 10% to 20% for Comparison Sales comparable properties sales commissions and other holding costs Mortgage Servicing Rights Discounted cash flows Comparable sales Discount rates averaging 12% - 13% in each period presented Prepayment rates averaging 7% - 8% in each period presented |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2017 | |
Earnings per common share: | |
EARNINGS PER SHARE | NOTE 9 - EARNINGS PER SHARE Basic earnings per share (“EPS”) represents income available to common stockholders divided by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflects additional shares that would have been outstanding if dilutive potential shares had been issued. Potential shares that may be issued by the Company relate solely to outstanding stock options, restricted stock (non-vested shares), restricted stock units (“RSUs”) and warrants, and are determined using the treasury stock method. Under the treasury stock method, the number of incremental shares is determined by assuming the issuance of stock for the outstanding stock options, unvested restricted stock and RSUs, and warrants, reduced by the number of shares assumed to be repurchased from the issuance proceeds, using the average market price for the period of the Company’s stock. The following is a summary of the reconciliation of weighted average shares outstanding for the three and six months ended June 30, 2017 and 2016: For the Three Months Ended June 30, 2017 2016 Basic Diluted Basic Diluted Weighted average shares outstanding 16,029,332 16,029,332 11,908,282 11,908,282 Effect of dilutive securities — 150,839 — 168,596 Weighted average shares outstanding 16,029,332 16,180,171 11,908,282 12,076,878 For the Six Months Ended June 30, 2017 2016 Basic Diluted Basic Diluted Weighted average shares outstanding 14,980,349 14,980,349 11,827,428 11,827,428 Effect of dilutive securities — 164,447 — 174,434 Weighted average shares outstanding 14,980,349 15,144,796 11,827,428 12,001,862 The following is a summary of the reconciliation of shares issued and outstanding and unvested restricted stock awards as of June 30, 2017 and 2016 used to calculate book value per share: As of June 30, 2017 2016 Issued and outstanding shares 16,156,943 12,545,282 Less nonvested restricted stock awards (101,489 ) (219,228 ) Period end dilutive shares 16,055,454 12,326,054 |
SUPPLEMENTAL SEGMENT INFORMATIO
SUPPLEMENTAL SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
SUPPLEMENTAL SEGMENT INFORMATION | NOTE 10 – SUPPLEMENTAL SEGMENT INFORMATION The Company has three reportable segments: community banking, wholesale mortgage banking (“mortgage banking”) and other. The community banking segment includes traditional banking services offered through the Bank as well as the managerial and operational support provided by Carolina Services. The mortgage banking segment provides wholesale mortgage loan origination and servicing offered through Crescent Mortgage Company. The other segment includes parent company financial information and represents an overhead function rather than an operating segment. The parent company’s most significant assets are its net investments in its subsidiaries. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on net income. The Company accounts for intersegment revenues and expenses as if the revenue/expense transactions were generated to third parties, that is, at current market prices. The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each segment has different types and levels of credit and interest rate risk. The following tables present selected financial information for the Company’s reportable business segments for the three and six months ended June 30, 2017 and 2016: Community Mortgage For the Three Months Ended June 30, 2017 Banking Banking Other Eliminations Total (In thousands) Interest income $ 21,691 427 8 (3 ) 22,123 Interest expense 2,747 42 278 (42 ) 3,025 Net interest income (expense) 18,944 385 (270 ) 39 19,098 Provision for loan losses — — — — — Noninterest income from external customers 3,494 5,311 — — 8,805 Intersegment noninterest income 242 31 — (273 ) — Noninterest expense 11,448 4,164 278 — 15,890 Intersegment noninterest expense — 240 2 (242 ) — Income (loss) before income taxes 11,232 1,323 (550 ) 8 12,013 Income tax expense (benefit) 2,789 85 (204 ) 3 2,673 Net income (loss) $ 8,443 1,238 (346 ) 5 9,340 Community Mortgage For the Three Months Ended June 30, 2016 Banking Banking Other Eliminations Total (In thousands) Interest income $ 14,136 329 4 24 14,493 Interest expense 2,025 4 148 (4 ) 2,173 Net interest income (expense) 12,111 325 (144 ) 28 12,320 Provision for loan losses — — — — — Noninterest income from external customers 2,078 5,111 — — 7,189 Intersegment noninterest income 242 15 — (257 ) — Noninterest expense 11,646 3,891 272 — 15,809 Intersegment noninterest expense — 240 2 (242 ) — Income (loss) before income taxes 2,785 1,320 (418 ) 13 3,700 Income tax expense (benefit) 623 401 (165 ) 5 864 Net income (loss) $ 2,162 919 (253 ) 8 2,836 Community Mortgage For the Six Months Ended June 30, 2017 Banking Banking Other Eliminations Total (In thousands) Interest income $ 38,949 822 13 8 39,792 Interest expense 4,965 54 459 (54 ) 5,424 Net interest income (expense) 33,984 768 (446 ) 62 34,368 Provision for loan losses — — — — — Noninterest income from external customers 5,912 10,123 — — 16,035 Intersegment noninterest income 483 64 — (547 ) — Noninterest expense 22,772 8,216 488 — 31,476 Intersegment noninterest expense — 480 3 (483 ) — Income (loss) before income taxes 17,607 2,259 (937 ) (2 ) 18,927 Income tax expense (benefit) 4,656 375 (346 ) (1 ) 4,684 Net income (loss) $ 12,951 1,884 (591 ) (1 ) 14,243 Community Mortgage For the Six Months June 30, 2016 Banking Banking Other Eliminations Total (In thousands) Interest income $ 27,080 698 9 66 27,853 Interest expense 3,964 9 296 (9 ) 4,260 Net interest income (expense) 23,116 689 (287 ) 75 23,593 Provision for loan losses — — — — — Noninterest income from external customers 4,211 9,254 — — 13,465 Intersegment noninterest income 485 34 — (519 ) — Noninterest expense 20,075 7,571 431 — 28,077 Intersegment noninterest expense — 481 4 (485 ) — Income (loss) before income taxes 7,737 1,925 (722 ) 41 8,981 Income tax expense (benefit) 2,162 605 (281 ) 16 2,502 Net income (loss) $ 5,575 1,320 (441 ) 25 6,479 The following tables present selected financial information for the Company’s reportable business segments for June 30, 2017 and December 31, 2016: Community Mortgage At June 30, 2017 Banking Banking Other Eliminations Total (In thousands) Assets $ 2,189,371 79,092 302,533 (379,085 ) 2,191,911 Loans receivable, net 1,409,887 27,423 — (12,640 ) 1,424,670 Loans held for sale 8,252 27,980 — — 36,232 Deposits 1,671,008 — — (7,279 ) 1,663,729 Borrowed funds 201,000 12,069 23,327 (12,069 ) 224,327 Community Mortgage At December 31, 2016 Banking Banking Other Eliminations Total (In thousands) Assets $ 1,678,541 78,315 179,681 (252,801 ) 1,683,736 Loans receivable, net 1,151,704 27,433 — (11,559 ) 1,167,578 Loans held for sale 2,159 29,410 — — 31,569 Deposits 1,263,030 — — (4,770 ) 1,258,260 Borrowed funds 226,000 10,990 15,465 (10,990 ) 241,465 |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization | Organization Carolina Financial Corporation (“Carolina Financial” or the “Company”), incorporated under the laws of the State of Delaware, is a financial holding company with one wholly-owned subsidiary, CresCom Bank (the “Bank”). In June 2017, the Company applied, and was approved by the Federal Reserve Bank of Richmond, to be a financial holding company from a bank holding company. CresCom Bank operates two wholly-owned subsidiaries, Crescent Mortgage Company and Carolina Services Corporation of Charleston (“Carolina Services”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. In consolidation, all material intercompany accounts and transactions have been eliminated. The results of operations of the businesses acquired in transactions accounted for as purchases are included only from the dates of acquisition. All majority-owned subsidiaries are consolidated unless control is temporary or does not rest with the Company. At June 30, 2017, statutory business trusts (“Trusts”) created or acquired by the Company had outstanding trust preferred securities with a balance of $23.3 million. The principal assets of the Trusts are the Company’s subordinated debentures with identical rates of interest and maturities as the trust preferred securities. The Trusts have issued $806,000 of common securities to the Company and are included in other investments in the accompanying consolidated balance sheets. The Trusts are not consolidated subsidiaries of the Company. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2017. There have been no significant changes to the accounting policies as disclosed in the Company’s Form 10-K. |
Management's Estimates | Management’s Estimates The financial statements are prepared in accordance with GAAP, which require 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 the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, including valuation for impaired loans, the valuation of real estate acquired in connection with foreclosure or in satisfaction of loans, the valuation of securities, the valuation of derivative instruments, the valuation of assets acquired and liabilities assumed in business combinations, the valuation of mortgage servicing rights, the determination of the reserve for mortgage loan repurchase losses, asserted and unasserted legal claims and deferred tax assets or liabilities. In connection with the determination of the allowance for loan losses and foreclosed real estate, management obtains independent appraisals for significant properties. Management must also make estimates in determining the estimated useful lives and methods for depreciating premises and equipment. Management uses available information to recognize losses on loans and foreclosed real estate. However, future additions to the allowance may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses and foreclosed real estate. Such agencies may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowance for loan losses and valuation of foreclosed real estate may change materially in the near term. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) represents income available to common stockholders divided by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflects additional shares that would have been outstanding if dilutive potential shares had been issued. Potential shares that may be issued by the Company relate solely to outstanding stock options, restricted stock (non-vested shares), restricted stock units (“RSUs”) and warrants, and are determined using the treasury stock method. Under the treasury stock method, the number of incremental shares is determined by assuming the issuance of stock for the outstanding stock options, unvested restricted stock and RSUs, and warrants, reduced by the number of shares assumed to be repurchased from the issuance proceeds, using the average market price for the period of the Company’s stock. |
Subsequent Events | Subsequent Events Subsequent events are material events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the statement of financial condition but arose after that date. Management has reviewed events occurring through the date the financial statements were issued and no subsequent events occurred requiring accrual or disclosure except as follows: On July 19, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.04 per share payable on its common stock. The cash dividend will be payable on October 5, 2017 to stockholders of record as of September 14, 2017. |
Reclassification | Reclassification Certain reclassifications of accounts reported for previous periods have been made in these consolidated financial statements. Such reclassifications had no effect on stockholders’ equity or the net income as previously reported. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation-Stock Compensation (Topic 718) In March 2017, the FASB issued ASU No. 2017-08, Receivables-Nonrefundable Fees and Other Cost (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities In January 2017, the FASB issued ASU No. 2017-04, Intangible-Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment In June 2016, the FASB ASU No. 2016-13 , Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share – Based Payment Accounting In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU No. 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10); Recognition and Measurement of Financial Assets and Financial Liabilities Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Greer Bancshares [Member] | |
Schedule of Assets and Liabilities Acquired [Table Text Block] | The following table presents a summary of total consideration paid by the Company at the acquisition date (dollars in thousand). Common stock issued (1,789,523 shares at $30.30 per share) $ 54,223 Cash payments to common stockholders 4,422 Total consideration paid $ 58,645 |
Schedule of loans acquired at the Acquisition date | The following table summarizes the consideration paid by the Company in the merger with Greer and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date. March 18, 2017 As Reported Fair Value As Recorded by (In thousands) Assets Cash and cash equivalents $ 42,187 — 42,187 Securities available for sale 121,374 — 121,374 Loans held for sale 105 — 105 Loans receivable 205,209 (10,559 ) (a) 194,650 Allowance for loan losses (3,198 ) 3,198 (b) — Premises and equipment 3,928 4,202 (c) 8,130 Foreclosed assets 42 — 42 Core deposit intangible — 4,480 (d) 4,480 Deferred tax asset, net 3,831 (1,434 ) (e) 2,397 Other assets 11,367 (241 ) (f) 11,126 Total assets acquired $ 384,845 (354 ) 384,491 Liabilities Deposits $ 310,866 200 (g) 311,066 Borrowings 43,712 (3,510 ) (h) 40,202 Other liabilities 7,086 512 (i) 7,598 Total liabilities assumed $ 361,664 (2,798 ) 358,866 Net identifiable assets acquired over liabilities assumed 25,625 Total consideration paid 58,645 Goodwill $ 33,020 Explanation of fair value adjustments: (a) Adjustment represents the amount necessary to adjust loans to their fair value due to interest rate and credit factors. (b) Adjustment reflects the elimination of Greer’s historical allowance for loan losses. (c) Adjustment reflects fair value adjustments on acquired branch and administrative offices based on third party appraisals. (d) Adjustment reflects the fair value adjustment to record the estimated core deposit intangible based on the Company’s third party valuation report. (e) Adjustment reflects the tax impact of acquisition accounting fair value adjustments. (f) Adjustment reflects the fair value adjustment based on the Company’s evaluation of acquired other assets. (g) Adjustment represents the fair value adjustment due to interest rate factors. (h) Adjustment represents the fair value adjustment due to interest rate factors. (i) Adjustment reflects the fair value adjustment based on the Company’s evaluation of acquired other liabilities. |
Schedule of deposits acquired at the Acquisition date | The following table presents additional information related to the purchased credit impaired (“PCI”) acquired loan portfolio at March 18, 2017 (in thousands): Contractual principal and interest at acquisition $ 37,683 Nonaccretable difference 7,248 Expected cash flows at acquisition 30,435 Accretable yield 4,995 Basis in PCI loans at acquisition - estimated fair value $ 25,440 |
Congaree Bancshares, Inc. [Member] | |
Schedule of Assets and Liabilities Acquired [Table Text Block] | The following table presents a summary of total consideration paid by the Company at the acquisition date (dollars in thousands). Common stock issued (509,370 shares at $16.80 per share) $ 8,557 Cash payments to common stockholders 5,724 Preferred shares assumed and redeemed at par 1,564 Fair value of Congaree stock options assumed - paid out in cash 439 Total consideration paid $ 16,284 |
Schedule of loans acquired at the Acquisition date | The following table presents the Congaree assets acquired and liabilities assumed as of June 11, 2016 as well as the related fair value adjustments and determination of goodwill. There have been no adjustments to initial fair values recorded by the Company for the Congaree acquisition to date. As Reported Fair Value As Recorded by (In thousands) Assets Cash and cash equivalents $ 11,394 — 11,394 Securities 9,453 (59 ) (a) 9,394 Loans receivable 78,712 (4,111 ) (b) 74,601 Allowance for loan losses (1,112 ) 1,112 (c) — Premises and equipment 2,712 38 (d) 2,750 Foreclosed assets 1,710 (250 ) (e) 1,460 Core deposit intangible — 1,104 (f) 1,104 Deferred tax asset, net 1,813 915 (g) 2,728 Other assets 942 (152 ) (h) 790 Total assets acquired $ 105,624 (1,403 ) 104,221 Liabilities Deposits $ 89,227 98 (i) 89,325 Borrowings 2,500 — 2,500 Other liabilities 378 — 378 Total liabilities assumed $ 92,105 98 92,203 Net identifiable assets acquired over liabilities assumed 12,018 Total consideration paid 16,284 Goodwill $ 4,266 Explanation of fair value adjustments: (a) Adjustment reflects opening fair value of securities portfolio, which was established as the new book basis of the portfolio. (b) Adjustment represents the amount necessary to adjust loans to their fair value due to interest rate and credit factors. (c) Adjustment reflects the elimination of Congaree’s historical allowance for loan losses. (d) Adjustment reflects fair value adjustments on acquired branch and administrative offices based on third party appraisals. (e) Adjustment reflects the fair value adjustment based on the Company’s evaluation of the foreclosed assets. (f) Adjustment reflects the fair value adjustment to record the estimated core deposit intangible based on the Company’s third party valuation report. (g) Adjustment reflects the tax impact of acquisition accounting fair value adjustments. (h) Adjustment reflects the fair value adjustment based on the Company’s evaluation of acquired other assets. (i) Adjustment reflects the fair value adjustment based on the Company’s third party evaluation report on deposits assumed. |
SECURITIES (Tables)
SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investment securities available for sale | The amortized cost, gross unrealized gains, gross unrealized losses and fair value of securities available-for-sale at June 30, 2017 and December 31, 2016 follows: June 30, 2017 December 31, 2016 Gross Gross Gross Gross Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cost Gains Losses Value Securities available-for-sale: (In thousands) Municipal securities $ 157,809 5,131 (346 ) 162,594 92,792 1,475 (1,055 ) 93,212 US government agencies 2,815 51 — 2,866 3,438 — (52 ) 3,386 Collateralized loan obligations 104,470 649 (36 ) 105,083 76,202 138 (91 ) 76,249 Corporate securities 475 19 — 494 474 17 — 491 Mortgage-backed securities: Agency 157,049 1,605 (345 ) 158,309 90,477 995 (486 ) 90,986 Non-agency 61,975 560 (230 ) 62,305 63,628 424 (188 ) 63,864 Total mortgage-backed securities 219,024 2,165 (575 ) 220,614 154,105 1,419 (674 ) 154,850 Trust preferred securities 11,214 914 (3,469 ) 8,659 11,203 545 (4,584 ) 7,164 Total $ 495,807 8,929 (4,426 ) 500,310 338,214 3,594 (6,456 ) 335,352 |
Schedule of amortized costs and fair values of investment securities, by contractual maturity | The amortized cost and fair value of debt securities by contractual maturity at June 30, 2017 follows: At June 30, 2017 Amortized Fair Cost Value (In thousands) Securities available-for-sale: Less than one year $ 300 301 One to five years 2,023 2,037 Six to ten years 90,979 92,146 After ten years 402,505 405,826 Total $ 495,807 500,310 |
Schedule of gross realized gains and losses from sales of investment securities available-for-sale | The following table summarizes the gross realized gains and losses from sales of investment securities available-for-sale for the periods indicated. For the Three Months For the Six Months Ended June 30, Ended June 30, 2017 2016 2017 2016 (In thousands) Proceeds $ 43,324 16,325 81,021 50,803 Realized gains $ 647 113 1,020 647 Realized losses (26 ) — (214 ) (117 ) Total investment securities gains, net $ 621 113 806 530 |
Schedule of securities in a continuous unrealized loss position aggregated by investment category and length of time | The following tables summarize gross unrealized losses on investment securities and the fair market value of the related securities at June 30, 2017 and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position. At June 30, 2017 Less than 12 Months 12 Months or Greater Total Amortized Fair Unrealized Amortized Fair Unrealized Amortized Fair Unrealized Cost Value Losses Cost Value Losses Cost Value Losses (In thousands) Available-for-sale: Municipal securities $ 13,298 12,952 (346 ) — — — 13,298 12,952 (346 ) Collateralized loan obligations 28,248 28,213 (35 ) 5,000 4,999 (1 ) 33,248 33,212 (36 ) Mortgage-backed securities: Agency 30,112 29,877 (235 ) 10,664 10,554 (110 ) 40,776 40,431 (345 ) Non-agency 3,218 3,189 (29 ) 11,358 11,157 (201 ) 14,576 14,346 (230 ) Total mortgage-backed securities 33,330 33,066 (264 ) 22,022 21,711 (311 ) 55,352 54,777 (575 ) Trust preferred securities — — — 9,980 6,511 (3,469 ) 9,980 6,511 (3,469 ) Total $ 74,876 74,231 (645 ) 37,002 33,221 (3,781 ) 111,878 107,452 (4,426 ) At December 31, 2016 Less than 12 Months 12 Months or Greater Total Amortized Fair Unrealized Amortized Fair Unrealized Amortized Fair Unrealized Cost Value Losses Cost Value Losses Cost Value Losses (In thousands) Available-for-sale: Municipal securities $ 40,479 39,424 (1,055 ) — — — 40,479 39,424 (1,055 ) US government agencies 3,438 3,386 (52 ) — — — 3,438 3,386 (52 ) Collateralized loan obligations 16,792 16,748 (44 ) 8,500 8,453 (47 ) 25,292 25,201 (91 ) Mortgage-backed securities: Agency 33,323 32,960 (363 ) 10,125 10,002 (123 ) 43,448 42,962 (486 ) Non-agency 9,357 9,240 (117 ) 8,801 8,730 (71 ) 18,158 17,970 (188 ) Total mortgage-backed securities 42,680 42,200 (480 ) 18,926 18,732 (194 ) 61,606 60,932 (674 ) Trust preferred securities 1,362 1,112 (250 ) 8,667 4,333 (4,334 ) 10,029 5,445 (4,584 ) Total $ 104,751 102,870 (1,881 ) 36,093 31,518 (4,575 ) 140,844 134,388 (6,456 ) |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative positions of Company | The derivative positions of the Company at June 30, 2017 and December 31, 2016 are as follows: At June 30, At December 31, 2017 2016 Fair Notional Fair Notional Value Value Value Value (In thousands) Derivative assets: Cash flow hedges: Interest rate swaps $ 199 30,000 421 30,000 Non-hedging derivatives: Interest rate swaps 505 30,000 532 20,000 Mortgage loan interest rate lock commitments 951 135,485 1,113 117,439 Mortgage loan forward sales commitments 399 22,081 153 94,001 Mortgage-backed securities forward sales commitments 529 111,350 — — Total derivative assets $ 2,583 328,916 2,219 261,440 Derivative liabilities: Cash flow hedges: Interest rate swaps $ 29 15,000 — — Non-hedging derivatives: Interest rate swaps 220 10,000 195 10,000 Mortgage-backed securities forward sales commitments — — 147 22,784 Total derivative liabilities $ 249 25,000 342 32,784 |
LOANS RECEIVABLE, NET (Tables)
LOANS RECEIVABLE, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of categories of loans | Loans receivable, net at June 30, 2017 and December 31, 2016 are summarized by category as follows: At June 30, At December 31, 2017 2016 % of Total % of Total All Loans: Amount Loans Amount Loans (Dollars in thousands) Loans secured by real estate: One-to-four family $ 482,718 33.62 % $ 411,399 34.91 % Home equity 49,202 3.43 % 36,026 3.06 % Commercial real estate 543,534 37.87 % 445,344 37.80 % Construction and development 153,083 10.66 % 115,682 9.82 % Consumer loans 8,996 0.63 % 5,714 0.48 % Commercial business loans 197,887 13.79 % 164,101 13.93 % Total gross loans receivable 1,435,420 100.00 % 1,178,266 100.00 % Less: Allowance for loan losses 10,750 10,688 Total loans receivable, net $ 1,424,670 $ 1,167,578 The composition of gross loans outstanding, net of undisbursed amounts, by rate type is as follows: At June 30, At December 31, 2017 2016 (Dollars in thousands) Variable rate loans $ 544,084 37.90 % $ 455,589 38.67 % Fixed rate loans 891,336 62.10 % 722,677 61.33 % Total loans outstanding $ 1,435,420 100.00 % $ 1,178,266 100.00 % |
Schedule of loan acquired non-credit impaired loans and nonacquired loans | Loans receivable, net at June 30, 2017 and December 31, 2016 for acquired non-credit impaired loans and nonacquired loans are summarized by category as follows: At June 30, At December 31, 2017 2016 Acquired Non-Credit Impaired Loans % of Total % of Total (ASC 310-20) and Nonacquired Loans: Amount Loans Amount Loans (Dollars in thousands) Loans secured by real estate: One-to-four family $ 476,873 33.80 % $ 411,399 34.91 % Home equity 49,151 3.48 % 36,026 3.06 % Commercial real estate 530,620 37.59 % 445,344 37.80 % Construction and development 149,393 10.58 % 115,682 9.82 % Consumer loans 8,952 0.63 % 5,714 0.48 % Commercial business loans 196,438 13.92 % 164,101 13.93 % Total gross loans receivable 1,411,427 100.00 % 1,178,266 100.00 % Less: Allowance for loan losses 10,750 10,688 Total loans receivable, net $ 1,400,677 $ 1,167,578 Loans receivable, net at June 30, 2017 for acquired credit impaired loans are summarized by category below. There were no acquired credit impaired loans at December 31, 2016. At June 30, 2017 Acquired Credit Impaired % of Total Loans (ASC 310-30): Amount Loans (Dollars in thousands) Loans secured by real estate: One-to-four family $ 5,845 24.37 % Home equity 51 0.21 % Commercial real estate 12,914 53.82 % Construction and development 3,690 15.38 % Consumer loans 44 0.18 % Commercial business loans 1,449 6.04 % Total gross loans receivable 23,993 100.00 % Less: Allowance for loan losses — Total loans receivable, net $ 23,993 |
Schedule of changes in the value of the accretable yield for PCI loans | The following table presents changes in the value of the accretable yield for PCI loans for three and six months ended June 30, 2017 (in thousands): For the Three Months For the Six Months Ended June 30, 2017 Ended June 30, 2017 (In thousands) (In thousands) Accretable yield, beginning of period $ 4,893 $ — Additions — 4,995 Accretion (352 ) (454 ) Reclassification from nonaccretable balance, net — — Other changes, net — — Accretable yield, end of period $ 4,541 $ 4,541 |
Schedule of activity in the allowance for loan losses | The following table presents activity in the allowance for loan losses for the period indicated. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. Allowance for loan losses: For the Three Months Ended June 30, 2017 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,506 236 3,613 943 110 2,498 809 10,715 Provision for loan losses 237 (18 ) (283 ) 4 (16 ) 359 (283 ) — Charge-offs (19 ) — — — (1 ) — — (20 ) Recoveries 1 — 1 1 8 44 — 55 Balance, end of period $ 2,725 218 3,331 948 101 2,901 526 10,750 For the Three Months Ended June 30, 2016 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,863 152 3,365 1,231 29 2,193 400 10,233 Provision for loan losses (193 ) 15 28 (24 ) 19 187 (32 ) — Charge-offs (45 ) — — — (27 ) (119 ) — (191 ) Recoveries 81 — — 3 9 162 — 255 Balance, end of period $ 2,706 167 3,393 1,210 30 2,423 368 10,297 Allowance for loan losses: For the Six Months Ended June 30, 2017 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,636 197 3,344 1,132 80 2,805 494 10,688 Provision for loan losses 122 21 (39 ) (186 ) 20 30 32 — Charge-offs (35 ) — — — (10 ) — — (45 ) Recoveries 2 — 26 2 11 66 — 107 Balance, end of period $ 2,725 218 3,331 948 101 2,901 526 10,750 For the Six Months Ended June 30, 2016 Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) Balance, beginning of period $ 2,903 151 3,402 1,138 27 2,100 420 10,141 Provision for loan losses (291 ) 16 (9 ) 66 17 253 (52 ) — Charge-offs (45 ) — — — (29 ) (119 ) — (193 ) Recoveries 139 — — 6 15 189 — 349 Balance, end of period $ 2,706 167 3,393 1,210 30 2,423 368 10,297 |
Schedule of allowance for loan losses and recorded investment in loans by impairment methodology | The following table disaggregates our allowance for loan losses and recorded investment in loans by impairment methodology. Loans Secured by Real Estate One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Unallocated Total (In thousands) At June 30, 2017: Allowance for loan losses ending balances: Individually evaluated for impairment $ 199 54 48 — — 23 — 324 Collectively evaluated for impairment 2,526 164 3,283 948 101 2,878 526 10,426 $ 2,725 218 3,331 948 101 2,901 526 10,750 Loans receivable ending balances: Individually evaluated for impairment $ 4,809 627 4,996 317 18 228 — 10,995 Collectively evaluated for impairment 472,064 48,524 525,624 149,076 8,934 196,210 — 1,400,432 Purchased Credit-Impaired Loans 5,845 51 12,914 3,690 44 1,449 — 23,993 Total loans receivable $ 482,718 49,202 543,534 153,083 8,996 197,887 — 1,435,420 At December 31, 2016: Allowance for loan losses ending balances: Individually evaluated for impairment $ 27 29 92 — — 9 — 157 Collectively evaluated for impairment 2,609 168 3,252 1,132 80 2,796 494 10,531 $ 2,636 197 3,344 1,132 80 2,805 494 10,688 Loans receivable ending balances: Individually evaluated for impairment $ 4,668 108 5,247 507 24 267 — 10,821 Collectively evaluated for impairment 406,731 35,918 440,097 115,175 5,690 163,834 — 1,167,445 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 — 1,178,266 |
Schedule of impaired loans by class of loans | The following table presents impaired loans individually evaluated for impairment in the segmented portfolio categories and the corresponding allowance for loan losses as of June 30, 2017 and December 31, 2016. The recorded investment is defined as the original amount of the loan, net of any deferred costs and fees, less any principal reductions and direct charge-offs. Unpaid principal balance includes amounts previously included in charge-offs. At June 30, 2017 At December 31, 2016 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (In thousands) With no related allowance recorded: Loans secured by real estate: One-to-four family $ 3,515 3,534 — 4,125 4,366 — Home equity 355 355 — — — — Commercial real estate 3,993 3,993 — 4,011 4,011 — Construction and development 317 317 — 507 507 — Consumer loans 18 18 — 24 24 — Commercial business loans 30 30 — 258 258 — 8,228 8,247 — 8,925 9,166 — With an allowance recorded: Loans secured by real estate: One-to-four family 1,294 1,294 199 543 543 27 Home equity 272 272 54 108 108 29 Commercial real estate 1,003 1,003 48 1,236 1,236 92 Construction and development — — — — — — Consumer loans — — — — — — Commercial business loans 198 198 23 9 9 9 2,767 2,767 324 1,896 1,896 157 Total: Loans secured by real estate: One-to-four family 4,809 4,828 199 4,668 4,909 27 Home equity 627 627 54 108 108 29 Commercial real estate 4,996 4,996 48 5,247 5,247 92 Construction and development 317 317 — 507 507 — Consumer loans 18 18 — 24 24 — Commercial business loans 228 228 23 267 267 9 $ 10,995 11,014 324 10,821 11,062 157 The following table presents the average recorded investment and interest income recognized on impaired loans individually evaluated for impairment in the segmented portfolio categories for the three and six months ended June 30, 2017 and 2016. For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Average Interest Average Interest Average Interest Average Interest Recorded Income Recorded Income Recorded Income Recorded Income Investment Recognized Investment Recognized Investment Recognized Investment Recognized (In thousands) With no related allowance recorded: Loans secured by real estate: One-to-four family $ 3,027 (15 ) 2,393 13 2,953 21 2,660 23 Home equity 347 9 154 — 258 12 — — Commercial real estate 4,016 (37 ) 6,843 92 4,043 98 8,798 228 Construction and development 158 8 24 — 87 8 25 — Consumer loans 19 — 32 3 19 — 48 (1 ) Commercial business loans 32 (16 ) 451 48 35 1 554 52 7,599 (51 ) 9,897 156 7,395 140 12,085 302 With an allowance recorded: Loans secured by real estate: One-to-four family 992 5 513 5 803 8 515 10 Home equity 274 (2 ) — — 233 (1 ) — — Commercial real estate 1,009 (67 ) 1,642 — 1,014 — 1,657 — Construction and development — — 475 — — — 475 — Consumer loans — — — — — — — — Commercial business loans 205 — 9 1 211 6 9 — 2,480 (64 ) 2,639 6 2,261 13 2,656 10 Total: Loans secured by real estate: One-to-four family 4,019 (10 ) 2,906 18 3,756 29 3,175 33 Home equity 621 7 154 — 491 11 — — Commercial real estate 5,025 (104 ) 8,485 92 5,057 98 10,455 228 Construction and development 158 8 499 — 87 8 500 — Consumer loans 19 — 32 3 19 — 48 (1 ) Commercial business loans 237 (16 ) 460 49 246 7 563 52 $ 10,079 (115 ) 12,536 162 9,656 153 14,741 312 |
Schedule of aging of the recorded investment in past due loans by class of loans | A loan is considered past due if the required principal and interest payment has not been received as of the due date. The following schedule is an aging of past due loans receivable by portfolio segment as of June 30, 2017 and December 31, 2016. At June 30, 2017 Acquired Non-Credit Real Estate Loans Impaired Loans One-to- Commercial Construction (ASC 310-20) and four Home real and Commercial Nonacquired Loans: family equity estate development Consumer business Total (In thousands) 30-59 days past due $ 116 — — 118 139 4 377 60-89 days past due 778 — — 75 2 188 1,043 90 days or more past due 2,967 108 — 16 5 8 3,104 Total past due 3,861 108 — 209 146 200 4,524 Current 473,012 49,043 530,620 149,184 8,806 196,238 1,406,903 Total loans receivable $ 476,873 49,151 530,620 149,393 8,952 196,438 1,411,427 At June 30, 2017 Real Estate Loans One-to- Commercial Construction Acquired Credit Impaired four Home real and Commercial Loans (ASC 310-30): family equity estate development Consumer business Total (In thousands) 30-59 days past due $ 940 — — 1,746 — 42 2,728 60-89 days past due 138 — — — — — 138 90 days or more past due 10 — — — — 487 497 Total past due 1,088 — — 1,746 — 529 3,363 Current 4,757 51 12,914 1,944 44 920 20,630 Total loans receivable $ 5,845 51 12,914 3,690 44 1,449 23,993 At December 31, 2016 Real Estate Loans One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Total (In thousands) 30-59 days past due $ 3,864 379 206 62 55 136 4,702 60-89 days past due 635 497 — — 3 — 1,135 90 days or more past due 3,170 108 334 507 26 16 4,161 Total past due 7,669 984 540 569 84 152 9,998 Current 403,730 35,042 444,804 115,113 5,630 163,949 1,168,268 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 1,178,266 |
Schedule of analysis of loans receivables on nonaccrual status | The following is a schedule of loans receivable, by portfolio segment, on nonaccrual at June 30, 2017 and December 31, 2016. At June 30, At December 31, 2017 2016 Loans secured by real estate: (In thousands) One-to-four family $ 3,597 3,256 Home equity 272 108 Commercial real estate 1,519 1,703 Construction and development 51 507 Consumer loans 6 27 Commercial business loans 14 24 $ 5,459 5,625 |
Schedule of analysis of loan portfolio by credit quality indicators | The following is a schedule of the credit quality of loans receivable, by portfolio segment, as of June 30, 2017 and December 31, 2016. At June 30, 2017 Real Estate Loans One-to- Commercial Construction four Home real and Commercial Total Loans: family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 475,833 48,507 538,876 150,272 8,968 195,160 1,417,616 Special Mention 2,052 — 2,281 156 21 2,227 6,737 Substandard 4,833 695 2,377 2,655 7 500 11,067 Total loans receivable $ 482,718 49,202 543,534 153,083 8,996 197,887 1,435,420 Performing $ 479,111 48,930 542,015 153,032 8,990 197,386 1,429,464 Nonperforming: 90 days past due still accruing 10 — — — — 487 497 Nonaccrual 3,597 272 1,519 51 6 14 5,459 Total nonperforming 3,607 272 1,519 51 6 501 5,956 Total loans receivable $ 482,718 49,202 543,534 153,083 8,996 197,887 1,435,420 At June 30, 2017 Acquired Non-Credit Real Estate Loans Impaired Loans One-to- Commercial Construction (ASC 310-20) and four Home real and Commercial Nonacquired Loans: family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 472,681 48,456 527,813 148,879 8,924 194,687 1,401,440 Special Mention 595 — 1,287 76 21 1,739 3,718 Substandard 3,597 695 1,520 438 7 12 6,269 Total loans receivable $ 476,873 49,151 530,620 149,393 8,952 196,438 1,411,427 Performing $ 473,276 48,879 529,101 149,342 8,946 196,424 1,405,968 Nonperforming: 90 days past due still accruing — — — — — — — Nonaccrual 3,597 272 1,519 51 6 14 5,459 Total nonperforming 3,597 272 1,519 51 6 14 5,459 Total loans receivable $ 476,873 49,151 530,620 149,393 8,952 196,438 1,411,427 At June 30, 2017 Real Estate Loans One-to- Commercial Construction Acquired Credit Impaired four Home real and Commercial Loans (ASC 310-30): family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 3,152 51 11,063 1,393 44 473 16,176 Special Mention 1,457 — 994 80 — 488 3,019 Substandard 1,236 — 857 2,217 — 488 4,798 Total loans receivable $ 5,845 51 12,914 3,690 44 1,449 23,993 Performing $ 5,835 51 12,914 3,690 44 962 23,496 Nonperforming: 90 days past due still accruing 10 — — — — 487 497 Nonaccrual — — — — — — — Total nonperforming 10 — — — — 487 497 Total loans receivable $ 5,845 51 12,914 3,690 44 1,449 23,993 At December 31, 2016 Real Estate Loans One-to- Commercial Construction four Home real and Commercial family equity estate development Consumer business Total (In thousands) Internal Risk Rating Grades: Pass $ 407,612 35,903 442,323 114,751 5,683 162,235 1,168,507 Special Mention 438 15 1,318 424 19 1,849 4,063 Substandard 3,349 108 1,703 507 12 17 5,696 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 1,178,266 Performing $ 408,143 35,918 443,641 115,175 5,687 164,077 1,172,641 Nonperforming: Nonaccrual 3,256 108 1,703 507 27 24 5,625 Total nonperforming 3,256 108 1,703 507 27 24 5,625 Total loans receivable $ 411,399 36,026 445,344 115,682 5,714 164,101 1,178,266 |
REAL ESTATE ACQUIRED THROUGH 23
REAL ESTATE ACQUIRED THROUGH FORECLOSURE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Banking and Thrift [Abstract] | |
Summary of Changes in Other Real Estate Owned | The following presents summarized activity in real estate acquired through foreclosure for the periods ended June 30, 2017 and December 31, 2016: June 30, December 31, 2017 2016 (In thousands) Balance at beginning of period $ 1,179 2,374 Additions 799 2,630 Sales (561 ) (3,810 ) Write downs — (15 ) Balance at end of period $ 1,417 1,179 |
Schedule of composition of other real estate owned | A summary of the composition of real estate acquired through foreclosure follows: At June 30, At December 31, 2017 2016 (In thousands) Real estate loans: Construction and development $ 1,417 1,179 $ 1,417 1,179 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Banking and Thrift [Abstract] | |
Summary of Deposits outstanding | Deposits outstanding by type of account at June 30, 2017 and December 31, 2016 are summarized as follows: At June 30, At December 31, 2017 2016 (In thousands) Noninterest-bearing demand accounts $ 330,641 229,905 Interest-bearing demand accounts 298,123 191,851 Savings accounts 70,336 48,648 Money market accounts 380,108 292,639 Certificates of deposit: Less than $250,000 535,427 467,937 $250,000 or more 49,094 27,280 Total certificates of deposit 584,521 495,217 Total deposits $ 1,663,729 1,258,260 |
ESTIMATED FAIR VALUE OF FINAN25
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying amount and estimated fair value of the Company's financial instruments | The carrying amount and estimated fair value of the Company’s financial instruments at June 30, 2017 and December 31, 2016 are as follows: At June 30, 2017 Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Financial assets: (In thousands) Cash and due from banks $ 14,965 14,965 14,965 — — Interest-bearing cash 30,064 30,064 30,064 — — Securities available-for-sale 500,310 500,310 — 491,651 8,659 Federal Home Loan Bank stock 10,545 10,545 — — 10,545 Other investments 2,130 2,130 — — 2,130 Derivative assets 2,583 2,583 704 1,879 — Loans held for sale 36,232 36,232 — 36,232 — Loans receivable, net 1,424,670 1,422,796 — — 1,422,796 Accrued interest receivable 7,124 7,124 — 7,124 — Mortgage servicing rights 16,692 22,188 — — 22,188 Cash value life insurance 38,057 38,057 — 38,057 — Financial liabilities: Deposits 1,663,729 1,661,265 — 1,661,265 — Short-term borrowed funds 149,000 148,820 — 148,820 — Long-term debt 75,327 75,171 — 75,171 — Derivative liabilities 249 249 249 — — Accrued interest payable 755 755 — 755 — At December 31, 2016 Carrying Fair Value Amount Total Level 1 Level 2 Level 3 Financial assets: (In thousands) Cash and due from banks $ 9,761 9,761 9,761 — — Interest-bearing cash 14,591 14,591 14,591 — — Securities available-for-sale 335,352 335,352 — 328,188 7,164 Federal Home Loan Bank stock 11,072 11,072 — — 11,072 Other investments 1,768 1,768 — — 1,768 Derivative assets 2,219 2,219 953 1,266 — Loans held for sale 31,569 31,569 — 31,569 — Loans receivable, net 1,167,578 1,173,118 — — 1,173,118 Cash value life insurance 28,984 28,984 — 28,984 — Accrued interest receivable 5,373 5,373 — 5,373 — Mortgage servicing rights 15,032 20,961 — — 20,961 Financial liabilities: Deposits 1,258,260 1,256,119 — 1,256,119 — Short-term borrowed funds 203,000 202,455 — 202,455 — Long-term debt 38,465 38,442 — 38,442 — Derivative liabilities 342 342 195 147 — Accrued interest payable 327 327 — 327 — |
Schedule of notional amount and estimated fair values of off-balance sheet financial instruments | At June 30, 2017 At December 31, 2016 Notional Estimated Notional Estimated Amount Fair Value Amount Fair Value Off-Balance Sheet Financial Instruments: (In thousands) Commitments to extend credit $ 186,604 — 111,446 — Standby letters of credit 2,730 — 2,248 — |
Summary of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are as follows as of June 30, 2017 and December 31, 2016: Quoted market Significant other Significant other price in active observable unobservable markets inputs inputs (In thousands) June 30, 2017 Available-for-sale investment securities: Municipal securities $ — 162,594 — US government agencies — 2,866 — Collateralized loan obligations — 105,083 — Corporate securities — 494 — Mortgage-backed securities: Agency — 158,309 — Non-agency — 62,305 — Trust Preferred Securities — — 8,659 Loans held for sale — 36,232 — Derivative assets: Cash flow hedges: Interest rate swaps 199 — — Non-hedging derivatives: Interest rate swaps 505 — — Mortgage loan interest rate lock commitments — 951 — Mortgage loan forward sales commitments — 399 — Mortgage-backed securities forward sales commitments — 529 — Derivative liabilities: Cash flow hedges: Interest rate swaps 29 — — Non-hedging derivatives: Interest rate swaps 220 — — Total $ 953 529,762 8,659 December 31, 2016 Available-for-sale investment securities: Municipal securities $ — 93,212 — US government agencies — 3,386 — Collateralized loan obligations — 76,249 — Corporate securities — 491 — Mortgage-backed securities: Agency — 90,986 — Non-agency — 63,864 — Trust preferred securities — — 7,164 Loans held for sale — 31,569 — Derivative assets: Cash flow hedges: Interest rate swaps 421 — — Non-hedging derivatives: Interest rate swaps 532 — — Mortgage loan interest rate lock commitments — 1,113 — Mortgage loan forward sales commitments — 153 — Derivative liabilities: Non-hedging derivatives: Interest rate swaps 195 — — Mortgage-backed securities forward sales commitments — 147 — Total $ 1,148 361,170 7,164 |
Summary of assets and liabilities measured at a fair value on a nonrecurring basis | Assets measured at fair value on a nonrecurring basis are as follows as of June 30, 2017 and December 31, 2016: Quoted market Significant other Significant other price in active observable unobservable markets inputs inputs (In thousands) June 30, 2017 Impaired loans: Loans secured by real estate: One-to-four family $ — — 4,610 Home equity — — 573 Commercial real estate — — 4,948 Construction and development — — 317 Consumer loans — — 18 Commercial business loans — — 205 Real estate owned: Construction and development — — 1,417 Mortgage servicing rights — — 22,188 Total $ — — 34,276 December 31, 2016 Impaired loans: Loans secured by real estate: One-to-four family $ — — 4,641 Home equity — — 79 Commercial real estate — — 5,155 Construction and development — — 507 Consumer loans — — 24 Commercial business loans — — 258 Real estate owned: Construction and development — — 1,179 Mortgage servicing rights — — 20,961 Total $ — — 32,804 |
Schedule of significant unobservable inputs used in the fair value measurements | For Level 3 assets and liabilities measured at fair value on a nonrecurring basis as of June 30, 2017 and December 31, 2016, the significant unobservable inputs used in the fair value measurements were as follows: June 30, 2017 and December 31, 2016 Significant Significant Unobservable Valuation Technique Observable Inputs Inputs Impaired Loans Appraisal Value Appraisals and or sales of Appraisals discounted 10% to 20% for comparable properties sales commissions and other holding costs Real estate owned Appraisal Value/ Appraisals and or sales of Appraisals discounted 10% to 20% for Comparison Sales comparable properties sales commissions and other holding costs Mortgage Servicing Rights Discounted cash flows Comparable sales Discount rates averaging 12% - 13% in each period presented Prepayment rates averaging 7% - 8% in each period presented |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings per common share: | |
Schedule of reconciliation of average shares outstanding | The following is a summary of the reconciliation of weighted average shares outstanding for the three and six months ended June 30, 2017 and 2016: For the Three Months Ended June 30, 2017 2016 Basic Diluted Basic Diluted Weighted average shares outstanding 16,029,332 16,029,332 11,908,282 11,908,282 Effect of dilutive securities — 150,839 — 168,596 Weighted average shares outstanding 16,029,332 16,180,171 11,908,282 12,076,878 For the Six Months Ended June 30, 2017 2016 Basic Diluted Basic Diluted Weighted average shares outstanding 14,980,349 14,980,349 11,827,428 11,827,428 Effect of dilutive securities — 164,447 — 174,434 Weighted average shares outstanding 14,980,349 15,144,796 11,827,428 12,001,862 The following is a summary of the reconciliation of shares issued and outstanding and unvested restricted stock awards as of June 30, 2017 and 2016 used to calculate book value per share: As of June 30, 2017 2016 Issued and outstanding shares 16,156,943 12,545,282 Less nonvested restricted stock awards (101,489 ) (219,228 ) Period end dilutive shares 16,055,454 12,326,054 |
SUPPLEMENTAL SEGMENT INFORMAT27
SUPPLEMENTAL SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information of Company's reportable business segments | The following tables present selected financial information for the Company’s reportable business segments for the three and six months ended June 30, 2017 and 2016: Community Mortgage For the Three Months Ended June 30, 2017 Banking Banking Other Eliminations Total (In thousands) Interest income $ 21,691 427 8 (3 ) 22,123 Interest expense 2,747 42 278 (42 ) 3,025 Net interest income (expense) 18,944 385 (270 ) 39 19,098 Provision for loan losses — — — — — Noninterest income from external customers 3,494 5,311 — — 8,805 Intersegment noninterest income 242 31 — (273 ) — Noninterest expense 11,448 4,164 278 — 15,890 Intersegment noninterest expense — 240 2 (242 ) — Income (loss) before income taxes 11,232 1,323 (550 ) 8 12,013 Income tax expense (benefit) 2,789 85 (204 ) 3 2,673 Net income (loss) $ 8,443 1,238 (346 ) 5 9,340 Community Mortgage For the Three Months Ended June 30, 2016 Banking Banking Other Eliminations Total (In thousands) Interest income $ 14,136 329 4 24 14,493 Interest expense 2,025 4 148 (4 ) 2,173 Net interest income (expense) 12,111 325 (144 ) 28 12,320 Provision for loan losses — — — — — Noninterest income from external customers 2,078 5,111 — — 7,189 Intersegment noninterest income 242 15 — (257 ) — Noninterest expense 11,646 3,891 272 — 15,809 Intersegment noninterest expense — 240 2 (242 ) — Income (loss) before income taxes 2,785 1,320 (418 ) 13 3,700 Income tax expense (benefit) 623 401 (165 ) 5 864 Net income (loss) $ 2,162 919 (253 ) 8 2,836 Community Mortgage For the Six Months Ended June 30, 2017 Banking Banking Other Eliminations Total (In thousands) Interest income $ 38,949 822 13 8 39,792 Interest expense 4,965 54 459 (54 ) 5,424 Net interest income (expense) 33,984 768 (446 ) 62 34,368 Provision for loan losses — — — — — Noninterest income from external customers 5,912 10,123 — — 16,035 Intersegment noninterest income 483 64 — (547 ) — Noninterest expense 22,772 8,216 488 — 31,476 Intersegment noninterest expense — 480 3 (483 ) — Income (loss) before income taxes 17,607 2,259 (937 ) (2 ) 18,927 Income tax expense (benefit) 4,656 375 (346 ) (1 ) 4,684 Net income (loss) $ 12,951 1,884 (591 ) (1 ) 14,243 Community Mortgage For the Six Months June 30, 2016 Banking Banking Other Eliminations Total (In thousands) Interest income $ 27,080 698 9 66 27,853 Interest expense 3,964 9 296 (9 ) 4,260 Net interest income (expense) 23,116 689 (287 ) 75 23,593 Provision for loan losses — — — — — Noninterest income from external customers 4,211 9,254 — — 13,465 Intersegment noninterest income 485 34 — (519 ) — Noninterest expense 20,075 7,571 431 — 28,077 Intersegment noninterest expense — 481 4 (485 ) — Income (loss) before income taxes 7,737 1,925 (722 ) 41 8,981 Income tax expense (benefit) 2,162 605 (281 ) 16 2,502 Net income (loss) $ 5,575 1,320 (441 ) 25 6,479 The following tables present selected financial information for the Company’s reportable business segments for June 30, 2017 and December 31, 2016: Community Mortgage At June 30, 2017 Banking Banking Other Eliminations Total (In thousands) Assets $ 2,189,371 79,092 302,533 (379,085 ) 2,191,911 Loans receivable, net 1,409,887 27,423 — (12,640 ) 1,424,670 Loans held for sale 8,252 27,980 — — 36,232 Deposits 1,671,008 — — (7,279 ) 1,663,729 Borrowed funds 201,000 12,069 23,327 (12,069 ) 224,327 Community Mortgage At December 31, 2016 Banking Banking Other Eliminations Total (In thousands) Assets $ 1,678,541 78,315 179,681 (252,801 ) 1,683,736 Loans receivable, net 1,151,704 27,433 — (11,559 ) 1,167,578 Loans held for sale 2,159 29,410 — — 31,569 Deposits 1,263,030 — — (4,770 ) 1,258,260 Borrowed funds 226,000 10,990 15,465 (10,990 ) 241,465 |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jul. 19, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Value of common stock issued to company | $ 162 | $ 125 | ||
Public offering of common shares | 16,156,943 | 12,548,328 | 12,545,282 | |
Subsequent Event [Member] | ||||
Dividend Declared to Stockholders [Per Share] | $ 0.04 | |||
Dividend Declared, Record Date | Sep. 14, 2017 | |||
Dividend Declared, Payable Date | Oct. 5, 2017 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands | Jun. 11, 2016 | Jun. 30, 2017 | Mar. 18, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Common stock issued | $ 162 | $ 125 | |||
Common stock issued | 16,156,943 | 12,548,328 | 12,545,282 | ||
Greer Bancshares [Member] | |||||
Common stock issued | $ 54,223 | ||||
Cash payments to common stockholders | 4,422 | ||||
Preferred shares assumed and redeemed at par | $ 58,645 | ||||
Common stock issued | 1,789,523 | ||||
Congaree Bancshares, Inc. [Member] | |||||
Common stock issued | $ 8,557 | ||||
Cash payments to common stockholders | 5,724 | ||||
Preferred shares assumed and redeemed at par | 1,564 | ||||
Fair value of stock options assumed - paid out in cash | 439 | ||||
Total consideration paid | $ 16,284 | ||||
Common stock issued | 509,370 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details 2) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 18, 2017 | Dec. 31, 2016 | Jun. 11, 2016 | |||
Liabilities | |||||||
Goodwill | $ 37,287 | $ 4,266 | |||||
Greer Bancshares [Member] | |||||||
Assets | |||||||
Cash and cash equivalents | $ 42,187 | ||||||
Securities | 121,374 | ||||||
Loans held for sale | 105 | ||||||
Loans receivable | 205,209 | ||||||
Allowance for loan losses | (3,198) | ||||||
Premises and equipment | 3,928 | ||||||
Foreclosed assets | 42 | ||||||
Core deposit intangible | |||||||
Deferred tax asset | 3,831 | ||||||
Other assets | 11,367 | ||||||
Total assets acquired | 384,845 | ||||||
Liabilities | |||||||
Deposits | 310,866 | ||||||
Long-term debt | 43,712 | ||||||
Accrued expenses and other liabilities | 7,086 | ||||||
Total liabilities assumed | 361,664 | ||||||
Fair Value Adjustments [Member] | |||||||
Assets | |||||||
Cash and cash equivalents | |||||||
Securities | (59) | [1] | |||||
Loans held for sale | |||||||
Loans receivable | (10,559) | [2] | (4,111) | [3] | |||
Allowance for loan losses | 3,198 | [4] | 1,112 | [5] | |||
Premises and equipment | 4,202 | [6] | 38 | [7] | |||
Foreclosed assets | (250) | [8] | |||||
Core deposit intangible | 4,480 | [9] | 1,104 | [10] | |||
Deferred tax asset | [11] | (1,434) | 915 | ||||
Other assets | (241) | [12] | (152) | [13] | |||
Total assets acquired | (354) | (1,403) | |||||
Liabilities | |||||||
Deposits | 200 | [14] | 98 | [15] | |||
Long-term debt | [14] | (3,510) | |||||
Accrued expenses and other liabilities | [16] | 512 | |||||
Borrowings | |||||||
Other liabilities | |||||||
Total liabilities assumed | (2,798) | 98 | |||||
As Recorded by the Company [Member] | |||||||
Assets | |||||||
Cash and cash equivalents | 42,187 | 11,394 | |||||
Securities | 121,374 | 9,394 | |||||
Loans held for sale | 105 | ||||||
Loans receivable | 194,650 | 74,601 | |||||
Allowance for loan losses | |||||||
Premises and equipment | 8,130 | 2,750 | |||||
Foreclosed assets | 42 | 1,460 | |||||
Core deposit intangible | 4,480 | 1,104 | |||||
Deferred tax asset | 2,397 | 2,728 | |||||
Other assets | 11,126 | 790 | |||||
Total assets acquired | 384,491 | 104,221 | |||||
Liabilities | |||||||
Deposits | 311,066 | 89,325 | |||||
Long-term debt | 40,202 | ||||||
Accrued expenses and other liabilities | 7,598 | ||||||
Borrowings | 2,500 | ||||||
Other liabilities | 378 | ||||||
Total liabilities assumed | 358,866 | 92,203 | |||||
Net assets acquired | 25,625 | 12,018 | |||||
Total consideration paid | 58,645 | 16,284 | |||||
Goodwill | $ 33,020 | 4,266 | |||||
Congaree Bancshares, Inc. [Member] | |||||||
Assets | |||||||
Cash and cash equivalents | 11,394 | ||||||
Securities | 9,453 | ||||||
Loans receivable | 78,712 | ||||||
Allowance for loan losses | (1,112) | ||||||
Premises and equipment | 2,712 | ||||||
Foreclosed assets | 1,710 | ||||||
Core deposit intangible | |||||||
Deferred tax asset | 1,813 | ||||||
Other assets | 942 | ||||||
Total assets acquired | 105,624 | ||||||
Liabilities | |||||||
Deposits | 89,227 | ||||||
Borrowings | 2,500 | ||||||
Other liabilities | 378 | ||||||
Total liabilities assumed | $ 92,105 | ||||||
[1] | Adjustment reflects opening fair value of securities portfolio, which was established as the new book basis of the portfolio. | ||||||
[2] | Adjustment reflects the fair value adjustment based on the Company's third party valuation report. | ||||||
[3] | Adjustment reflects the fair value adjustment based on the Company's third party valuation report. | ||||||
[4] | Adjustment reflects the elimination of Greer's historical allowance for loan losses. | ||||||
[5] | Adjustment reflects the elimination of Congaree's historical allowance for loan losses. | ||||||
[6] | Adjustment reflects fair value adjustments on acquired branch and administrative offices based on third party appraisals. | ||||||
[7] | Adjustment reflects fair value adjustments on acquired branch and administrative offices. | ||||||
[8] | Adjustment reflects the fair value adjustment based on the Company's evaluation of the foreclosed assets | ||||||
[9] | Adjustment reflects the fair value adjustment to record the estimated core deposit intangible based on the Company's third party valuation report. | ||||||
[10] | Adjustment reflects the fair value adjustment to record the estimated core deposit intangible based on the Company's third party valuation report. | ||||||
[11] | Adjustment reflects the tax impact of acquisition accounting fair value adjustments. | ||||||
[12] | Adjustment reflects the fair value adjustment based on the Company's evaluation of acquired other assets. | ||||||
[13] | Adjustment reflects the fair value adjustment based on the Company's evaluation of acquired other assets. | ||||||
[14] | Adjustments reflects the fair value adjustment based on Company's third party valuation report. | ||||||
[15] | Adjustment reflects the fair value adjustment based on the Company's third party evaluation report on deposits assumed. | ||||||
[16] | Adjustment reflects the fair value adjustment based on the Company's evaluation of acquired other liabilities. |
BUSINESS COMBINATIONS (Detail31
BUSINESS COMBINATIONS (Details 3) - Greer Bancshares [Member] $ in Thousands | Mar. 18, 2017USD ($) |
Contractual principal and interest at acquisition | $ 37,683 |
Nonaccretable difference | 7,248 |
Expected cash flows at acquisition | 30,434 |
Accretable yield | 4,995 |
Basis in PCI loans at acquisition - estimated fair value | $ 25,439 |
SECURITIES (Details)
SECURITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Available For Sale | ||
Amortized Cost | $ 495,807 | $ 338,214 |
Unrealized Gains | 8,929 | 3,594 |
Unrealized Losses | (4,426) | (6,456) |
Securities available for sale | 500,310 | 335,352 |
Municipal securities [Member] | ||
Available For Sale | ||
Amortized Cost | 157,809 | 92,792 |
Unrealized Gains | 5,131 | 1,475 |
Unrealized Losses | (346) | (1,055) |
Securities available for sale | 162,594 | 93,212 |
US government agencies [Member] | ||
Available For Sale | ||
Amortized Cost | 2,815 | 3,438 |
Unrealized Gains | 51 | |
Unrealized Losses | (52) | |
Securities available for sale | 2,866 | 3,386 |
Collateralized loan obligations [Member] | ||
Available For Sale | ||
Amortized Cost | 104,470 | 76,202 |
Unrealized Gains | 649 | 138 |
Unrealized Losses | (36) | (91) |
Securities available for sale | 105,083 | 76,249 |
Corporate securities [Member] | ||
Available For Sale | ||
Amortized Cost | 475 | 474 |
Unrealized Gains | 19 | 17 |
Unrealized Losses | ||
Securities available for sale | 494 | 491 |
Mortgage-backed securities Agency [Member] | ||
Available For Sale | ||
Amortized Cost | 157,049 | 90,477 |
Unrealized Gains | 1,605 | 995 |
Unrealized Losses | (345) | (486) |
Securities available for sale | 158,309 | 90,986 |
Mortgage-backed securities Non-agency [Member] | ||
Available For Sale | ||
Amortized Cost | 61,975 | 63,628 |
Unrealized Gains | 560 | 424 |
Unrealized Losses | (230) | (188) |
Securities available for sale | 62,305 | 63,864 |
Total mortgage-backed securities [Member] | ||
Available For Sale | ||
Amortized Cost | 219,024 | 154,105 |
Unrealized Gains | 2,165 | 1,419 |
Unrealized Losses | (575) | (674) |
Securities available for sale | 220,614 | 154,850 |
Asset-backed securities [Member] | ||
Available For Sale | ||
Amortized Cost | 11,214 | 11,203 |
Unrealized Gains | 914 | 545 |
Unrealized Losses | (3,469) | (4,584) |
Securities available for sale | $ 8,659 | $ 7,164 |
SECURITIES (Details 2)
SECURITIES (Details 2) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Investment securities, Amortized Cost | ||
Less than one year | $ 300 | |
One to five years | 2,023 | |
Six to ten years | 90,979 | |
After ten years | 402,505 | |
Total | 495,807 | $ 338,214 |
Investment securities, Fair Value | ||
Less than one year | 301 | |
One to five years | 2,037 | |
Six to ten years | 92,146 | |
After ten years | 405,826 | |
Securities available for sale | $ 500,310 | $ 335,352 |
SECURITIES (Details 3)
SECURITIES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Gross realized gains and losses, Available-for-sale | ||||
Proceeds | $ 81,021 | $ 50,803 | $ 43,324 | $ 16,325 |
Realized gains | 1,020 | 647 | 647 | 113 |
Realized losses | (214) | (117) | (26) | |
Total investment securities gains, net | $ 806 | $ 530 | $ 621 | $ 113 |
SECURITIES (Details 4)
SECURITIES (Details 4) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | $ 74,876 | $ 104,751 |
Less than 12 Months, Fair Value | 74,231 | 102,870 |
Less than 12 Months, Unrealized Losses | (645) | (1,881) |
Greater than 12 Months, Amortized Cost | 37,002 | 36,093 |
Greater than 12 Months, Fair Value | 33,221 | 31,518 |
Greater than 12 Months, Unrealized Losses | (3,781) | (4,575) |
Total, Amortized Cost | 111,878 | 140,844 |
Total, Fair Value | 107,452 | 134,388 |
Total, Unrealized Losses | (4,426) | (6,456) |
Municipal securities [Member] | ||
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | 13,298 | 40,479 |
Less than 12 Months, Fair Value | 12,952 | 39,424 |
Less than 12 Months, Unrealized Losses | (346) | (1,055) |
Greater than 12 Months, Amortized Cost | ||
Greater than 12 Months, Fair Value | ||
Greater than 12 Months, Unrealized Losses | ||
Total, Amortized Cost | 13,298 | 40,479 |
Total, Fair Value | 12,952 | 39,424 |
Total, Unrealized Losses | (346) | (1,055) |
Collateralized loan obligations [Member] | ||
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | 28,248 | 16,792 |
Less than 12 Months, Fair Value | 28,213 | 16,748 |
Less than 12 Months, Unrealized Losses | (35) | (44) |
Greater than 12 Months, Amortized Cost | 5,000 | 8,500 |
Greater than 12 Months, Fair Value | 4,999 | 8,453 |
Greater than 12 Months, Unrealized Losses | (1) | (47) |
Total, Amortized Cost | 33,248 | 25,292 |
Total, Fair Value | 33,212 | 25,201 |
Total, Unrealized Losses | (36) | (91) |
Mortgage-backed securities Agency [Member] | ||
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | 30,112 | 33,323 |
Less than 12 Months, Fair Value | 29,877 | 32,960 |
Less than 12 Months, Unrealized Losses | (235) | (363) |
Greater than 12 Months, Amortized Cost | 10,664 | 10,125 |
Greater than 12 Months, Fair Value | 10,554 | 10,002 |
Greater than 12 Months, Unrealized Losses | (110) | (123) |
Total, Amortized Cost | 40,776 | 43,448 |
Total, Fair Value | 40,431 | 42,962 |
Total, Unrealized Losses | (345) | (486) |
Mortgage-backed securities Non-agency [Member] | ||
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | 3,218 | 9,357 |
Less than 12 Months, Fair Value | 3,189 | 9,240 |
Less than 12 Months, Unrealized Losses | (29) | (117) |
Greater than 12 Months, Amortized Cost | 11,358 | 8,801 |
Greater than 12 Months, Fair Value | 11,157 | 8,730 |
Greater than 12 Months, Unrealized Losses | (201) | (71) |
Total, Amortized Cost | 14,576 | 18,158 |
Total, Fair Value | 14,346 | 17,970 |
Total, Unrealized Losses | (230) | (188) |
Total mortgage-backed securities [Member] | ||
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | 33,330 | 42,680 |
Less than 12 Months, Fair Value | 33,066 | 42,200 |
Less than 12 Months, Unrealized Losses | (264) | (480) |
Greater than 12 Months, Amortized Cost | 22,022 | 18,926 |
Greater than 12 Months, Fair Value | 21,711 | 18,732 |
Greater than 12 Months, Unrealized Losses | (311) | (194) |
Total, Amortized Cost | 55,352 | 61,606 |
Total, Fair Value | 54,777 | 60,932 |
Total, Unrealized Losses | (575) | (674) |
Asset-backed securities [Member] | ||
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | 1,362 | |
Less than 12 Months, Fair Value | 1,112 | |
Less than 12 Months, Unrealized Losses | (250) | |
Greater than 12 Months, Amortized Cost | 9,980 | 8,667 |
Greater than 12 Months, Fair Value | 6,511 | 4,333 |
Greater than 12 Months, Unrealized Losses | (3,469) | (4,334) |
Total, Amortized Cost | 9,980 | 10,029 |
Total, Fair Value | 6,511 | 5,445 |
Total, Unrealized Losses | $ (3,469) | (4,584) |
US government agencies [Member] | ||
Available For Sale Securities | ||
Less than 12 Months, Amortized Cost | 3,438 | |
Less than 12 Months, Fair Value | 3,386 | |
Less than 12 Months, Unrealized Losses | (52) | |
Greater than 12 Months, Amortized Cost | ||
Greater than 12 Months, Fair Value | ||
Greater than 12 Months, Unrealized Losses | ||
Total, Amortized Cost | 3,438 | |
Total, Fair Value | 3,386 | |
Total, Unrealized Losses | $ (52) |
SECURITIES (Details Narrative)
SECURITIES (Details Narrative) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)Item | Dec. 31, 2016Item | |
Securities Details 2 | |||
Available for Sale Securities pledged for FHLB advances | $ 7,000 | ||
Available for Sale Securities pledged to secure public agency funds | $ 83,600 | ||
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions | Item | 52 | 81 | |
Securities were moved to Available-For-Sale resulting change in Accumulated Other Comprehensive Income | $ 655 |
DERIVATIVES (Details)
DERIVATIVES (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Asset derivatives, Fair value | $ 2,583 | $ 2,219 |
Notional Value, Assets | 328,916 | 261,440 |
Liability derivatives, Fair value | 249 | 342 |
Notional Value, Liability | 25,000 | 32,784 |
Interest rate swaps [Member] | ||
Asset derivatives, Fair value | 505 | 532 |
Notional Value, Assets | 30,000 | 20,000 |
Liability derivatives, Fair value | 220 | 195 |
Notional Value, Liability | 10,000 | 10,000 |
Interest rate swaps [Member] | Cash Flow Hedging [Member] | ||
Asset derivatives, Fair value | 199 | 421 |
Notional Value, Assets | 30,000 | 30,000 |
Mortgage loan interest rate lock commitments [Member] | ||
Asset derivatives, Fair value | 951 | 1,113 |
Notional Value, Assets | 135,485 | 117,439 |
Mortgage loan forward sales commitments [Member] | ||
Asset derivatives, Fair value | 399 | 153 |
Notional Value, Assets | 22,081 | 94,001 |
Liability derivatives, Fair value | ||
Notional Value, Liability | ||
Mortgage-backed securities forward sales commitments [Member] | ||
Asset derivatives, Fair value | 529 | |
Notional Value, Assets | 111,350 | |
Liability derivatives, Fair value | 147 | |
Notional Value, Liability | $ 22,784 |
LOANS RECEIVABLE, NET (Details)
LOANS RECEIVABLE, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Total gross loans receivable | $ 1,435,420 | $ 1,178,266 | ||||
Percentage of Total Loan | 100.00% | 100.00% | ||||
Allowance for loan losses | $ 10,750 | $ 10,715 | $ 10,688 | $ 10,297 | $ 10,233 | $ 10,141 |
Total loans receivable, net | 1,424,670 | 1,167,578 | ||||
Acquired Non-Credit Impaired Loans and Nonacquired Loans, gross | 1,411,427 | 1,178,266 | ||||
Allowance for loan losses | 10,750 | 10,688 | ||||
Acquired Non-Credit Impaired Loans and Nonacquired Loans, net | $ 1,400,677 | $ 1,167,578 | ||||
Percentage of Total Acquired Non-Credit Impaired Loans and Nonacquired Loans | 100.00% | 1.00% | ||||
Acquired Credit Impaired Loans | $ 23,993 | |||||
Percentage of Acquired Credit Impaired Loans | 100.00% | |||||
Consumer loans [Member] | ||||||
Total gross loans receivable | $ 8,996 | $ 5,714 | ||||
Percentage of Total Loan | 0.63% | 0.48% | ||||
Allowance for loan losses | $ 101 | 110 | $ 80 | 30 | 29 | 27 |
Acquired Non-Credit Impaired Loans and Nonacquired Loans, gross | $ 8,952 | $ 5,714 | ||||
Percentage of Total Acquired Non-Credit Impaired Loans and Nonacquired Loans | 0.63% | 0.48% | ||||
Acquired Credit Impaired Loans | $ 44 | |||||
Percentage of Acquired Credit Impaired Loans | 0.18% | |||||
Commercial business loans [Member] | ||||||
Total gross loans receivable | $ 197,887 | $ 164,101 | ||||
Percentage of Total Loan | 13.44% | 13.93% | ||||
Allowance for loan losses | $ 2,901 | 2,498 | $ 2,805 | 2,423 | 2,193 | 2,100 |
Acquired Non-Credit Impaired Loans and Nonacquired Loans, gross | $ 196,438 | $ 164,101 | ||||
Percentage of Total Acquired Non-Credit Impaired Loans and Nonacquired Loans | 13.92% | 13.93% | ||||
Acquired Credit Impaired Loans | $ 1,449 | |||||
Percentage of Acquired Credit Impaired Loans | 6.04% | |||||
Mortgage Receivables [Member] | One-to-four family [Member] | ||||||
Total gross loans receivable | $ 482,718 | $ 411,399 | ||||
Percentage of Total Loan | 33.36% | 34.91% | ||||
Allowance for loan losses | $ 2,725 | 2,506 | $ 2,636 | 2,706 | 2,863 | 2,903 |
Acquired Non-Credit Impaired Loans and Nonacquired Loans, gross | $ 476,873 | $ 411,399 | ||||
Percentage of Total Acquired Non-Credit Impaired Loans and Nonacquired Loans | 33.80% | 34.91% | ||||
Acquired Credit Impaired Loans | $ 5,845 | |||||
Percentage of Acquired Credit Impaired Loans | 24.37% | |||||
Mortgage Receivables [Member] | Home equity [Member] | ||||||
Total gross loans receivable | $ 49,202 | $ 36,026 | ||||
Percentage of Total Loan | 3.43% | 3.06% | ||||
Allowance for loan losses | $ 218 | 236 | $ 197 | 167 | 152 | 151 |
Acquired Non-Credit Impaired Loans and Nonacquired Loans, gross | $ 49,151 | $ 36,026 | ||||
Percentage of Total Acquired Non-Credit Impaired Loans and Nonacquired Loans | 3.48% | 3.06% | ||||
Acquired Credit Impaired Loans | $ 51 | |||||
Percentage of Acquired Credit Impaired Loans | 0.21% | |||||
Mortgage Receivables [Member] | Commercial real estate [Member] | ||||||
Total gross loans receivable | $ 543,534 | $ 445,344 | ||||
Percentage of Total Loan | 37.87% | 37.80% | ||||
Allowance for loan losses | $ 3,331 | 3,613 | $ 3,344 | 3,393 | 3,365 | 3,402 |
Acquired Non-Credit Impaired Loans and Nonacquired Loans, gross | $ 530,620 | $ 445,344 | ||||
Percentage of Total Acquired Non-Credit Impaired Loans and Nonacquired Loans | 7.59% | 37.80% | ||||
Acquired Credit Impaired Loans | $ 12,914 | |||||
Percentage of Acquired Credit Impaired Loans | 53.82% | |||||
Mortgage Receivables [Member] | Construction and development [Member] | ||||||
Total gross loans receivable | $ 153,083 | $ 115,682 | ||||
Percentage of Total Loan | 10.66% | 9.82% | ||||
Allowance for loan losses | $ 948 | $ 943 | $ 1,132 | $ 1,210 | $ 1,231 | $ 1,138 |
Acquired Non-Credit Impaired Loans and Nonacquired Loans, gross | $ 149,393 | $ 115,682 | ||||
Percentage of Total Acquired Non-Credit Impaired Loans and Nonacquired Loans | 10.58% | 9.82% | ||||
Acquired Credit Impaired Loans | $ 3,690 | |||||
Percentage of Acquired Credit Impaired Loans | 15.38% |
LOANS RECEIVABLE, NET (Details
LOANS RECEIVABLE, NET (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Loans Receivable Net Details 2 | ||||
Accretable yield, beginning of period | $ 4,893 | |||
Additions | 4,995 | |||
Accretion | (352) | (1,451) | $ (106) | |
Reclassification from nonaccretable balance, net | ||||
Other changes, net | ||||
Accretable yield, end of period | 4,541 | 4,541 | ||
Variable rate loans | $ 544,084 | $ 544,084 | $ 455,589 | |
Variable rate loans (as a percentage) | 37.90% | 37.90% | 38.67% | |
Fixed rate loans | $ 891,336 | $ 891,336 | $ 722,677 | |
Fixed rate loans (as a percentage) | 62.10% | 62.10% | 61.33% | |
Total loans outstanding | $ 1,435,420 | $ 1,435,420 | $ 1,178,266 | $ 1,178,266 |
Total loans outstanding (as a percentage) | 100.00% | 100.00% | 100.00% |
LOANS RECEIVABLE, NET (Detail40
LOANS RECEIVABLE, NET (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | $ 10,715 | $ 10,233 | $ 10,688 | $ 10,141 |
Provision for Loan Losses | ||||
Charge-Offs | (20) | (191) | (45) | (193) |
Recoveries | 55 | 255 | 107 | 349 |
Ending Balance | 10,750 | 10,297 | 10,750 | 10,297 |
Consumer loans [Member] | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 110 | 29 | 80 | 27 |
Provision for Loan Losses | (16) | 19 | 20 | 17 |
Charge-Offs | (1) | (27) | (10) | (29) |
Recoveries | 8 | 9 | 11 | 15 |
Ending Balance | 101 | 30 | 101 | 30 |
Commercial business loans [Member] | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 2,498 | 2,193 | 2,805 | 2,100 |
Provision for Loan Losses | 359 | 187 | 30 | 253 |
Charge-Offs | (119) | (119) | ||
Recoveries | 44 | 162 | 66 | 189 |
Ending Balance | 2,901 | 2,423 | 2,901 | 2,423 |
Unallocated [Member] | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 809 | 400 | 494 | 420 |
Provision for Loan Losses | (283) | (32) | 32 | (52) |
Charge-Offs | ||||
Recoveries | ||||
Ending Balance | 526 | 368 | 526 | 368 |
Mortgage Receivables [Member] | One-to-four family [Member] | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 2,506 | 2,863 | 2,636 | 2,903 |
Provision for Loan Losses | 237 | (193) | 122 | (291) |
Charge-Offs | (19) | (45) | (35) | (45) |
Recoveries | 1 | 81 | 2 | 139 |
Ending Balance | 2,725 | 2,706 | 2,725 | 2,706 |
Mortgage Receivables [Member] | Home equity [Member] | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 236 | 152 | 197 | 151 |
Provision for Loan Losses | (18) | 15 | 21 | 16 |
Charge-Offs | ||||
Recoveries | ||||
Ending Balance | 218 | 167 | 218 | 167 |
Mortgage Receivables [Member] | Commercial real estate [Member] | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 3,613 | 3,365 | 3,344 | 3,402 |
Provision for Loan Losses | (283) | 28 | (39) | (9) |
Charge-Offs | ||||
Recoveries | 1 | 26 | ||
Ending Balance | 3,331 | 3,393 | 3,331 | 3,393 |
Mortgage Receivables [Member] | Construction and development [Member] | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 943 | 1,231 | 1,132 | 1,138 |
Provision for Loan Losses | 4 | (24) | (186) | 66 |
Charge-Offs | ||||
Recoveries | 1 | 3 | 2 | 6 |
Ending Balance | $ 948 | $ 1,210 | $ 948 | $ 1,210 |
LOANS RECEIVABLE, NET (Detail41
LOANS RECEIVABLE, NET (Details 4) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | $ 324 | $ 157 | |
Loans Collectively Evaluated for Impairment | 10,426 | 10,531 | |
Ending Balance | 10,750 | 10,688 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | 10,995 | 10,821 | |
Collectively Evaluated for Impairment | 1,400,432 | 1,167,445 | |
Purchased Credit-Impaired Loans | 23,993 | ||
Total | 1,435,420 | $ 1,178,266 | 1,178,266 |
Consumer loans [Member] | |||
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | |||
Loans Collectively Evaluated for Impairment | 101 | 80 | |
Ending Balance | 101 | 80 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | 18 | 24 | |
Collectively Evaluated for Impairment | 8,934 | 5,690 | |
Purchased Credit-Impaired Loans | 44 | ||
Total | 8,996 | 5,714 | 5,714 |
Commercial business loans [Member] | |||
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | 23 | 9 | |
Loans Collectively Evaluated for Impairment | 2,878 | 2,796 | |
Ending Balance | 2,901 | 2,805 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | 228 | 267 | |
Collectively Evaluated for Impairment | 196,210 | 163,834 | |
Purchased Credit-Impaired Loans | 1,449 | ||
Total | 197,887 | 164,101 | 164,101 |
Unallocated [Member] | |||
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | |||
Loans Collectively Evaluated for Impairment | 526 | 494 | |
Ending Balance | 526 | 494 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | |||
Collectively Evaluated for Impairment | |||
Purchased Credit-Impaired Loans | |||
Total | |||
Mortgage Receivables [Member] | One-to-four family [Member] | |||
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | 199 | 27 | |
Loans Collectively Evaluated for Impairment | 2,526 | 2,609 | |
Ending Balance | 2,725 | 2,636 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | 4,809 | 4,668 | |
Collectively Evaluated for Impairment | 472,064 | 406,731 | |
Purchased Credit-Impaired Loans | 5,845 | ||
Total | 482,718 | 411,399 | 411,399 |
Mortgage Receivables [Member] | Home equity [Member] | |||
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | 54 | 29 | |
Loans Collectively Evaluated for Impairment | 164 | 168 | |
Ending Balance | 218 | 197 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | 627 | 108 | |
Collectively Evaluated for Impairment | 48,524 | 35,918 | |
Purchased Credit-Impaired Loans | 51 | ||
Total | 49,202 | 36,026 | 36,026 |
Mortgage Receivables [Member] | Commercial real estate [Member] | |||
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | 48 | 92 | |
Loans Collectively Evaluated for Impairment | 3,283 | 3,252 | |
Ending Balance | 3,331 | 3,344 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | 4,996 | 5,247 | |
Collectively Evaluated for Impairment | 525,624 | 440,097 | |
Purchased Credit-Impaired Loans | 12,914 | ||
Total | 543,534 | 445,344 | 445,344 |
Mortgage Receivables [Member] | Construction and development [Member] | |||
Allowance for loan losses ending balances: | |||
Loans Individually Evaluated for Impairment | |||
Loans Collectively Evaluated for Impairment | 948 | 1,132 | |
Ending Balance | 948 | 1,132 | |
Loans receivable ending balances: | |||
Individually Evaluated for Impairment | 317 | 507 | |
Collectively Evaluated for Impairment | 149,076 | 115,175 | |
Purchased Credit-Impaired Loans | 3,690 | ||
Total | $ 153,083 | $ 115,682 | $ 115,682 |
LOANS RECEIVABLE, NET (Detail42
LOANS RECEIVABLE, NET (Details 5) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | $ 8,228 | $ 8,228 | $ 8,925 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 2,767 | 2,767 | 1,896 | ||
Impaired Financing Receivable, Recorded Investment | 10,995 | 10,995 | 10,821 | ||
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 8,247 | 8,247 | 9,166 | ||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 2,767 | 2,767 | 1,896 | ||
Impaired Financing Receivable, Unpaid Principal Balance | 11,014 | 11,014 | 11,062 | ||
Impaired Financing Receivable, Related Allowance | 324 | 324 | 157 | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 7,599 | $ 9,897 | 7,395 | $ 12,085 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 2,480 | 2,639 | 2,261 | 2,656 | |
Impaired Financing Receivable, Average Recorded Investment | 10,079 | 12,536 | 9,656 | 14,741 | |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method | (51) | 156 | 140 | 302 | |
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method | (64) | 6 | 13 | 10 | |
Impaired Financing Receivable, Interest Income, Accrual Method | (115) | 162 | 153 | 312 | |
Consumer loans [Member] | |||||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 18 | 18 | 24 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | |||||
Impaired Financing Receivable, Recorded Investment | 18 | 18 | 24 | ||
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 18 | 18 | 24 | ||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | |||||
Impaired Financing Receivable, Unpaid Principal Balance | 18 | 18 | 24 | ||
Impaired Financing Receivable, Related Allowance | |||||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 19 | 32 | 19 | 48 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | |||||
Impaired Financing Receivable, Average Recorded Investment | 19 | 32 | 19 | 48 | |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method | 3 | (1) | |||
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method | |||||
Impaired Financing Receivable, Interest Income, Accrual Method | 3 | (1) | |||
Commercial business loans [Member] | |||||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 30 | 30 | 258 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 198 | 198 | 9 | ||
Impaired Financing Receivable, Recorded Investment | 228 | 228 | 267 | ||
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 30 | 30 | 258 | ||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 198 | 198 | 9 | ||
Impaired Financing Receivable, Unpaid Principal Balance | 228 | 228 | 267 | ||
Impaired Financing Receivable, Related Allowance | 23 | 23 | 9 | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 32 | 451 | 35 | 554 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 205 | 9 | 211 | 9 | |
Impaired Financing Receivable, Average Recorded Investment | 237 | 460 | 246 | 563 | |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method | (16) | 48 | 1 | 52 | |
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method | 1 | 6 | |||
Impaired Financing Receivable, Interest Income, Accrual Method | (16) | 49 | 7 | 52 | |
Mortgage Receivables [Member] | One-to-four family [Member] | |||||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 3,515 | 3,515 | 4,125 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 1,294 | 1,294 | 543 | ||
Impaired Financing Receivable, Recorded Investment | 4,809 | 4,809 | 4,668 | ||
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 3,534 | 3,534 | 4,366 | ||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 1,294 | 1,294 | 543 | ||
Impaired Financing Receivable, Unpaid Principal Balance | 4,828 | 4,828 | 4,909 | ||
Impaired Financing Receivable, Related Allowance | 199 | 199 | 27 | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 3,027 | 2,393 | 2,953 | 2,660 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 992 | 513 | 803 | 515 | |
Impaired Financing Receivable, Average Recorded Investment | 4,019 | 2,906 | 3,756 | 3,175 | |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method | (15) | 13 | 21 | 23 | |
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method | 5 | 5 | 8 | 10 | |
Impaired Financing Receivable, Interest Income, Accrual Method | (10) | 18 | 29 | 33 | |
Mortgage Receivables [Member] | Home equity [Member] | |||||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 355 | 355 | |||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 272 | 272 | 108 | ||
Impaired Financing Receivable, Recorded Investment | 627 | 627 | 108 | ||
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 355 | 355 | |||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 272 | 272 | 108 | ||
Impaired Financing Receivable, Unpaid Principal Balance | 627 | 627 | 108 | ||
Impaired Financing Receivable, Related Allowance | 54 | 54 | 29 | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 347 | 154 | 258 | ||
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 274 | 233 | |||
Impaired Financing Receivable, Average Recorded Investment | 621 | 154 | 491 | ||
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method | 9 | 12 | |||
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method | (2) | (1) | |||
Impaired Financing Receivable, Interest Income, Accrual Method | 7 | 11 | |||
Mortgage Receivables [Member] | Commercial real estate [Member] | |||||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 3,993 | 3,993 | 4,011 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 1,003 | 1,003 | 1,236 | ||
Impaired Financing Receivable, Recorded Investment | 4,996 | 4,996 | 5,247 | ||
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 3,993 | 3,993 | 4,011 | ||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 1,003 | 1,003 | 1,236 | ||
Impaired Financing Receivable, Unpaid Principal Balance | 4,996 | 4,996 | 5,247 | ||
Impaired Financing Receivable, Related Allowance | 48 | 48 | 92 | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 158 | 24 | 4,043 | 8,798 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 475 | 1,014 | 1,657 | ||
Impaired Financing Receivable, Average Recorded Investment | 158 | 499 | 5,057 | 10,455 | |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method | 8 | 98 | 228 | ||
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method | |||||
Impaired Financing Receivable, Interest Income, Accrual Method | 8 | 98 | 228 | ||
Mortgage Receivables [Member] | Construction and development [Member] | |||||
Impaired Financing Receivable, Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 317 | 317 | 507 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | |||||
Impaired Financing Receivable, Recorded Investment | 317 | 317 | 507 | ||
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance | 317 | 317 | 507 | ||
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | |||||
Impaired Financing Receivable, Unpaid Principal Balance | 317 | 317 | 507 | ||
Impaired Financing Receivable, Related Allowance | |||||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Average Recorded Investment | 4,016 | 6,843 | 87 | 25 | |
Impaired Financing Receivable, with Related Allowance, Average Recorded Investment | 1,009 | 1,642 | 475 | ||
Impaired Financing Receivable, Average Recorded Investment | 5,025 | 8,485 | 87 | 500 | |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | |||||
Impaired Financing Receivable, with No Related Allowance, Interest Income, Accrual Method | (37) | 92 | 8 | ||
Impaired Financing Receivable, with Related Allowance, Interest Income, Accrual Method | (67) | ||||
Impaired Financing Receivable, Interest Income, Accrual Method | $ (104) | $ 92 | $ 8 |
LOANS RECEIVABLE, NET (Detail43
LOANS RECEIVABLE, NET (Details 6) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | $ 3,363 | $ 9,998 | |
Current | 20,630 | 1,168,268 | |
Total loans receivable | 1,435,420 | 1,178,266 | $ 1,178,266 |
Nonaccrual | 5,459 | 5,625 | |
Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 4,524 | ||
Current | 1,406,903 | ||
Total loans receivable | 1,411,427 | ||
30-59 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 2,728 | 4,702 | |
30-59 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 377 | ||
60-89 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 138 | 1,135 | |
60-89 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,043 | ||
90 days or more past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 497 | 4,161 | |
90 days or more past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 3,104 | ||
Consumer loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 84 | ||
Current | 44 | 5,630 | |
Total loans receivable | 8,996 | 5,714 | 5,714 |
Nonaccrual | 6 | 27 | |
Consumer loans [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 146 | ||
Current | 8,806 | ||
Total loans receivable | 8,952 | ||
Consumer loans [Member] | 30-59 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 55 | ||
Consumer loans [Member] | 30-59 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 139 | ||
Consumer loans [Member] | 60-89 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 3 | ||
Consumer loans [Member] | 60-89 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 2 | ||
Consumer loans [Member] | 90 days or more past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 26 | ||
Consumer loans [Member] | 90 days or more past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 5 | ||
Commercial business loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 529 | 152 | |
Current | 920 | 163,949 | |
Total loans receivable | 197,887 | 164,101 | 164,101 |
Nonaccrual | 14 | 24 | |
Commercial business loans [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 200 | ||
Current | 196,238 | ||
Total loans receivable | 196,438 | ||
Commercial business loans [Member] | 30-59 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 42 | 136 | |
Commercial business loans [Member] | 30-59 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 4 | ||
Commercial business loans [Member] | 60-89 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Commercial business loans [Member] | 60-89 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 188 | ||
Commercial business loans [Member] | 90 days or more past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 487 | 16 | |
Commercial business loans [Member] | 90 days or more past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 8 | ||
Mortgage Receivables [Member] | One-to-four family [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,088 | 7,669 | |
Current | 4,757 | 403,730 | |
Total loans receivable | 482,718 | 411,399 | 411,399 |
Nonaccrual | 3,597 | 3,256 | |
Mortgage Receivables [Member] | One-to-four family [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 3,861 | ||
Current | 473,012 | ||
Total loans receivable | 476,873 | ||
Mortgage Receivables [Member] | One-to-four family [Member] | 30-59 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 940 | 3,864 | |
Mortgage Receivables [Member] | One-to-four family [Member] | 30-59 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 116 | ||
Mortgage Receivables [Member] | One-to-four family [Member] | 60-89 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 138 | 635 | |
Mortgage Receivables [Member] | One-to-four family [Member] | 60-89 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 778 | ||
Mortgage Receivables [Member] | One-to-four family [Member] | 90 days or more past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 10 | 3,170 | |
Mortgage Receivables [Member] | One-to-four family [Member] | 90 days or more past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 2,967 | ||
Mortgage Receivables [Member] | Home equity [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 984 | ||
Current | 51 | 35,042 | |
Total loans receivable | 49,202 | 36,026 | 36,026 |
Nonaccrual | 272 | 108 | |
Mortgage Receivables [Member] | Home equity [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 108 | ||
Current | 49,043 | ||
Total loans receivable | 49,151 | ||
Mortgage Receivables [Member] | Home equity [Member] | 30-59 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 379 | ||
Mortgage Receivables [Member] | Home equity [Member] | 30-59 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Mortgage Receivables [Member] | Home equity [Member] | 60-89 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 497 | ||
Mortgage Receivables [Member] | Home equity [Member] | 60-89 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Mortgage Receivables [Member] | Home equity [Member] | 90 days or more past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 108 | ||
Mortgage Receivables [Member] | Home equity [Member] | 90 days or more past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 108 | ||
Mortgage Receivables [Member] | Commercial real estate [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 540 | ||
Current | 12,914 | 444,804 | |
Total loans receivable | 543,534 | 445,344 | 445,344 |
Nonaccrual | 1,519 | 1,703 | |
Mortgage Receivables [Member] | Commercial real estate [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Current | 530,620 | ||
Total loans receivable | 530,620 | ||
Mortgage Receivables [Member] | Commercial real estate [Member] | 30-59 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 206 | ||
Mortgage Receivables [Member] | Commercial real estate [Member] | 30-59 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Mortgage Receivables [Member] | Commercial real estate [Member] | 60-89 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Mortgage Receivables [Member] | Commercial real estate [Member] | 60-89 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Mortgage Receivables [Member] | Commercial real estate [Member] | 90 days or more past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 334 | ||
Mortgage Receivables [Member] | Commercial real estate [Member] | 90 days or more past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Mortgage Receivables [Member] | Construction and development [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,746 | 569 | |
Current | 1,944 | 115,113 | |
Total loans receivable | 153,083 | 115,682 | $ 115,682 |
Nonaccrual | 51 | 507 | |
Mortgage Receivables [Member] | Construction and development [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 209 | ||
Current | 149,184 | ||
Total loans receivable | 149,393 | ||
Mortgage Receivables [Member] | Construction and development [Member] | 30-59 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 1,746 | 62 | |
Mortgage Receivables [Member] | Construction and development [Member] | 30-59 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 118 | ||
Mortgage Receivables [Member] | Construction and development [Member] | 60-89 days past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | |||
Mortgage Receivables [Member] | Construction and development [Member] | 60-89 days past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | 75 | ||
Mortgage Receivables [Member] | Construction and development [Member] | 90 days or more past due [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | $ 507 | ||
Mortgage Receivables [Member] | Construction and development [Member] | 90 days or more past due [Member] | Financing Receivable Impaired Non Credit Loans [Member] | |||
Aging of the recorded investment in past due loans by class of loans | |||
Total Past Due | $ 16 |
LOANS RECEIVABLE, NET (Detail44
LOANS RECEIVABLE, NET (Details 7) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Total loans receivable | $ 1,435,420 | $ 1,178,266 | $ 1,178,266 |
Pass [Member] | |||
Total loans receivable | 16,176 | 1,168,507 | |
Special Mention [Member] | |||
Total loans receivable | 3,019 | 4,063 | |
Substandard [Member] | |||
Total loans receivable | 4,798 | 5,696 | |
Consumer loans [Member] | |||
Total loans receivable | 8,996 | 5,714 | 5,714 |
Consumer loans [Member] | Pass [Member] | |||
Total loans receivable | 44 | 5,683 | |
Consumer loans [Member] | Special Mention [Member] | |||
Total loans receivable | 19 | ||
Consumer loans [Member] | Substandard [Member] | |||
Total loans receivable | 12 | ||
Commercial business loans [Member] | |||
Total loans receivable | 197,887 | 164,101 | 164,101 |
Commercial business loans [Member] | Pass [Member] | |||
Total loans receivable | 473 | 162,235 | |
Commercial business loans [Member] | Special Mention [Member] | |||
Total loans receivable | 488 | 1,849 | |
Commercial business loans [Member] | Substandard [Member] | |||
Total loans receivable | 488 | 17 | |
Mortgage Receivables [Member] | One-to-four family [Member] | |||
Total loans receivable | 482,718 | 411,399 | 411,399 |
Mortgage Receivables [Member] | One-to-four family [Member] | Pass [Member] | |||
Total loans receivable | 3,152 | 407,612 | |
Mortgage Receivables [Member] | One-to-four family [Member] | Special Mention [Member] | |||
Total loans receivable | 1,457 | 438 | |
Mortgage Receivables [Member] | One-to-four family [Member] | Substandard [Member] | |||
Total loans receivable | 1,236 | 3,349 | |
Mortgage Receivables [Member] | Home equity [Member] | |||
Total loans receivable | 49,202 | 36,026 | 36,026 |
Mortgage Receivables [Member] | Home equity [Member] | Pass [Member] | |||
Total loans receivable | 51 | 35,903 | |
Mortgage Receivables [Member] | Home equity [Member] | Special Mention [Member] | |||
Total loans receivable | 15 | ||
Mortgage Receivables [Member] | Home equity [Member] | Substandard [Member] | |||
Total loans receivable | 108 | ||
Mortgage Receivables [Member] | Commercial real estate [Member] | |||
Total loans receivable | 543,534 | 445,344 | 445,344 |
Mortgage Receivables [Member] | Commercial real estate [Member] | Pass [Member] | |||
Total loans receivable | 11,063 | 442,323 | |
Mortgage Receivables [Member] | Commercial real estate [Member] | Special Mention [Member] | |||
Total loans receivable | 994 | 1,318 | |
Mortgage Receivables [Member] | Commercial real estate [Member] | Substandard [Member] | |||
Total loans receivable | 857 | 1,703 | |
Mortgage Receivables [Member] | Construction and development [Member] | |||
Total loans receivable | 153,083 | 115,682 | $ 115,682 |
Mortgage Receivables [Member] | Construction and development [Member] | Pass [Member] | |||
Total loans receivable | 1,393 | 114,751 | |
Mortgage Receivables [Member] | Construction and development [Member] | Special Mention [Member] | |||
Total loans receivable | 80 | 424 | |
Mortgage Receivables [Member] | Construction and development [Member] | Substandard [Member] | |||
Total loans receivable | $ 2,217 | $ 507 |
LOANS RECEIVABLE, NET (Detail45
LOANS RECEIVABLE, NET (Details 8) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Total loans receivable | $ 1,435,420 | $ 1,178,266 | $ 1,178,266 |
Nonaccrual | 5,459 | 5,625 | |
Performing Financing Receivable [Member] | |||
Total loans receivable | 23,993 | 1,172,641 | |
Nonperforming Financing Receivable [Member] | |||
Total loans receivable | 23,496 | 5,625 | |
90 days or more past due | |||
Nonaccrual | 23,496 | 5,625 | |
Consumer loans [Member] | |||
Total loans receivable | 8,996 | 5,714 | 5,714 |
Nonaccrual | 6 | 27 | |
Consumer loans [Member] | Performing Financing Receivable [Member] | |||
Total loans receivable | 44 | 5,687 | |
Consumer loans [Member] | Nonperforming Financing Receivable [Member] | |||
Total loans receivable | 44 | 27 | |
90 days or more past due | |||
Nonaccrual | 44 | 27 | |
Commercial business loans [Member] | |||
Total loans receivable | 197,887 | 164,101 | 164,101 |
Nonaccrual | 14 | 24 | |
Commercial business loans [Member] | Performing Financing Receivable [Member] | |||
Total loans receivable | 1,449 | 164,077 | |
Commercial business loans [Member] | Nonperforming Financing Receivable [Member] | |||
Total loans receivable | 962 | 24 | |
90 days or more past due | |||
Nonaccrual | 962 | 24 | |
Mortgage Receivables [Member] | One-to-four family [Member] | |||
Total loans receivable | 482,718 | 411,399 | 411,399 |
Nonaccrual | 3,597 | 3,256 | |
Mortgage Receivables [Member] | One-to-four family [Member] | Performing Financing Receivable [Member] | |||
Total loans receivable | 5,845 | 408,143 | |
Mortgage Receivables [Member] | One-to-four family [Member] | Nonperforming Financing Receivable [Member] | |||
Total loans receivable | 5,835 | 3,256 | |
90 days or more past due | |||
Nonaccrual | 5,835 | 3,256 | |
Mortgage Receivables [Member] | Home equity [Member] | |||
Total loans receivable | 49,202 | 36,026 | 36,026 |
Nonaccrual | 272 | 108 | |
Mortgage Receivables [Member] | Home equity [Member] | Performing Financing Receivable [Member] | |||
Total loans receivable | 51 | 35,918 | |
Mortgage Receivables [Member] | Home equity [Member] | Nonperforming Financing Receivable [Member] | |||
Total loans receivable | 51 | 108 | |
90 days or more past due | |||
Nonaccrual | 51 | 108 | |
Mortgage Receivables [Member] | Commercial real estate [Member] | |||
Total loans receivable | 543,534 | 445,344 | 445,344 |
Nonaccrual | 1,519 | 1,703 | |
Mortgage Receivables [Member] | Commercial real estate [Member] | Performing Financing Receivable [Member] | |||
Total loans receivable | 12,914 | 443,641 | |
Mortgage Receivables [Member] | Commercial real estate [Member] | Nonperforming Financing Receivable [Member] | |||
Total loans receivable | 12,914 | 1,703 | |
90 days or more past due | |||
Nonaccrual | 12,914 | 1,703 | |
Mortgage Receivables [Member] | Construction and development [Member] | |||
Total loans receivable | 153,083 | 115,682 | $ 115,682 |
Nonaccrual | 51 | 507 | |
Mortgage Receivables [Member] | Construction and development [Member] | Performing Financing Receivable [Member] | |||
Total loans receivable | 3,690 | 115,175 | |
Mortgage Receivables [Member] | Construction and development [Member] | Nonperforming Financing Receivable [Member] | |||
Total loans receivable | 3,690 | 507 | |
90 days or more past due | |||
Nonaccrual | $ 3,690 | $ 507 |
LOANS RECEIVABLE, NET (Detail46
LOANS RECEIVABLE, NET (Details Narrative) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017USD ($)Item | Dec. 31, 2016USD ($) | |
Loans Receivable Net Details 2 | ||
Loans designated as troubled debt restructurings | $ 6,700 | $ 6,400 |
Troubled debt restructurings, still accruing | $ 5,500 | $ 5,200 |
Number of Contracts due to modification identified as a TDR | Item | 1 | |
Pre-Modification Recorded Investment | $ 266 | |
Post-Modification Recorded Investment | $ 266 |
REAL ESTATE ACQUIRED THROUGH 47
REAL ESTATE ACQUIRED THROUGH FORECLOSURE (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Real Estate Acquired Through Foreclosure Details | ||
Balance at beginning of period | $ 1,179 | $ 2,374 |
Additions | 799 | 2,630 |
Sales | (561) | (3,810) |
Write downs | (15) | |
Balance at end of period | $ 1,417 | $ 1,179 |
REAL ESTATE ACQUIRED THROUGH 48
REAL ESTATE ACQUIRED THROUGH FORECLOSURE (Details 2) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Real Estate Acquired Through Foreclosure | $ 1,417 | $ 1,179 | $ 2,374 |
Mortgage Receivables [Member] | Construction and development [Member] | |||
Real Estate Acquired Through Foreclosure | $ 1,417 | $ 1,179 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Deposits Details | ||
Noninterest-bearing demand accounts | $ 330,641 | $ 229,905 |
Interest-bearing demand accounts | 298,123 | 191,851 |
Savings accounts | 70,336 | 48,648 |
Money market accounts | 380,108 | 292,639 |
Certificates of deposit: | ||
Less than $250,000 | 535,427 | 467,937 |
$250,000 or more | 49,094 | 27,280 |
Total certificates of deposit | 584,521 | 495,217 |
Total deposits | 1,663,729 | 1,258,260 |
Brokered certificates of deposit | 95,700 | 98,300 |
Institutional certificates of deposit | $ 47,700 | $ 44,300 |
ESTIMATED FAIR VALUE OF FINAN50
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Cash and due from banks | $ 14,965 | $ 9,761 |
Interest-bearing cash | 30,064 | 14,591 |
Securities available for sale | 500,310 | 335,352 |
Federal funds sold | 45,029 | 24,352 |
Federal Home Loan Bank stock | 10,545 | 11,072 |
Other investments | 2,130 | 1,768 |
Derivative assets | 2,583 | 2,219 |
Loans held for sale | 36,232 | 31,569 |
Loans receivable, net | 1,424,670 | 1,167,578 |
Accrued interest receivable | 7,124 | 5,373 |
Mortgage servicing rights | 16,692 | 15,032 |
Financial liabilities: | ||
Deposits | 1,663,729 | 1,258,260 |
Short-term borrowed funds | 149,000 | 203,000 |
Long-term debt | 75,327 | 38,465 |
Derivative liabilities | 249 | 342 |
Accrued interest payable | 755 | 327 |
Fair Value, Inputs, Level 1 [Member] | ||
Financial assets: | ||
Cash and due from banks | 14,965 | 9,761 |
Interest-bearing cash | 30,064 | 14,591 |
Securities available for sale | ||
Federal funds sold | ||
Federal Home Loan Bank stock | ||
Other investments | 704 | |
Derivative assets | 953 | |
Loans held for sale | ||
Loans receivable, net | ||
Cash value life insurance | ||
Accrued interest receivable | ||
Mortgage servicing rights | ||
Financial liabilities: | ||
Deposits | ||
Short-term borrowed funds | ||
Long-term debt | ||
Derivative liabilities | 249 | 195 |
Accrued interest payable | ||
Fair Value, Inputs, Level 2 [Member] | ||
Financial assets: | ||
Cash and due from banks | ||
Interest-bearing cash | ||
Securities available for sale | 491,651 | 328,188 |
Federal funds sold | ||
Federal Home Loan Bank stock | ||
Other investments | 1,879 | |
Derivative assets | 36,232 | 1,266 |
Loans held for sale | 31,569 | |
Loans receivable, net | 7,124 | |
Cash value life insurance | 28,984 | |
Accrued interest receivable | 5,373 | |
Mortgage servicing rights | 38,057 | |
Financial liabilities: | ||
Deposits | 1,661,265 | 1,256,119 |
Short-term borrowed funds | 148,820 | 202,455 |
Long-term debt | 75,171 | 38,442 |
Derivative liabilities | 147 | |
Accrued interest payable | 755 | 327 |
Fair Value, Inputs, Level 3 [Member] | ||
Financial assets: | ||
Cash and due from banks | ||
Interest-bearing cash | ||
Securities available for sale | 8,659 | 7,164 |
Federal funds sold | 10,545 | |
Federal Home Loan Bank stock | 2,130 | 11,072 |
Other investments | 1,768 | |
Derivative assets | ||
Loans held for sale | 1,422,796 | |
Loans receivable, net | 1,173,118 | |
Cash value life insurance | ||
Accrued interest receivable | 22,188 | |
Mortgage servicing rights | 20,961 | |
Financial liabilities: | ||
Deposits | ||
Short-term borrowed funds | ||
Long-term debt | ||
Derivative liabilities | ||
Accrued interest payable | ||
Carrying Amount [Member] | ||
Financial assets: | ||
Cash and due from banks | 14,965 | 9,761 |
Interest-bearing cash | 30,064 | 14,591 |
Securities available for sale | 500,310 | 335,352 |
Federal funds sold | 10,545 | |
Federal Home Loan Bank stock | 2,130 | 11,072 |
Other investments | 2,583 | 1,768 |
Derivative assets | 36,232 | 2,219 |
Loans held for sale | 1,424,670 | 31,569 |
Loans receivable, net | 7,124 | 1,167,578 |
Cash value life insurance | 28,984 | |
Accrued interest receivable | 16,692 | 5,373 |
Mortgage servicing rights | 38,057 | 15,032 |
Financial liabilities: | ||
Deposits | 1,663,729 | 1,258,260 |
Short-term borrowed funds | 149,000 | 203,000 |
Long-term debt | 75,327 | 38,465 |
Derivative liabilities | 249 | 342 |
Accrued interest payable | 755 | 327 |
Fair Value [Member] | ||
Financial assets: | ||
Cash and due from banks | 14,965 | 9,761 |
Interest-bearing cash | 30,064 | 14,591 |
Securities available for sale | 500,310 | 335,352 |
Federal funds sold | 10,545 | |
Federal Home Loan Bank stock | 2,130 | 11,072 |
Other investments | 2,583 | 1,768 |
Derivative assets | 36,232 | 2,219 |
Loans held for sale | 1,422,796 | 31,569 |
Loans receivable, net | 7,124 | 1,173,118 |
Cash value life insurance | 28,984 | |
Accrued interest receivable | 22,188 | 5,373 |
Mortgage servicing rights | 38,057 | 20,961 |
Financial liabilities: | ||
Deposits | 1,661,265 | 1,256,119 |
Short-term borrowed funds | 148,820 | 202,455 |
Long-term debt | 75,171 | 38,442 |
Derivative liabilities | 249 | 342 |
Accrued interest payable | $ 755 | $ 327 |
ESTIMATED FAIR VALUE OF FINAN51
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Commitments to Extend Credit [Member] | ||
Off-Balance Sheet Financial Instruments: | ||
Notional Amount | $ 186,604 | $ 111,446 |
Estimated Fair Value | ||
Standby Letters of Credit [Member] | ||
Off-Balance Sheet Financial Instruments: | ||
Notional Amount | 2,730 | 2,248 |
Estimated Fair Value |
ESTIMATED FAIR VALUE OF FINAN52
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Securities available for sale | $ 500,310 | $ 335,352 |
Loans held for sale | 36,232 | 31,569 |
Derivative Asset | 2,583 | 2,219 |
Brokered deposits | 95,700 | 98,300 |
Derivative Liability | 249 | 342 |
Municipal securities [Member] | ||
Securities available for sale | 162,594 | 93,212 |
US government agencies [Member] | ||
Securities available for sale | 2,866 | 3,386 |
Mortgage-backed securities Agency [Member] | ||
Securities available for sale | 158,309 | 90,986 |
Mortgage-backed securities Non-agency [Member] | ||
Securities available for sale | 62,305 | 63,864 |
Collateralized loan obligations [Member] | ||
Securities available for sale | 105,083 | 76,249 |
Corporate securities [Member] | ||
Securities available for sale | 494 | 491 |
Asset-backed securities [Member] | ||
Securities available for sale | 8,659 | 7,164 |
Fair Value, Inputs, Level 1 [Member] | ||
Securities available for sale | ||
Loans held for sale | ||
Derivative Asset | 953 | |
Derivative Liability | 249 | 195 |
Fair Value, Inputs, Level 2 [Member] | ||
Securities available for sale | 491,651 | 328,188 |
Loans held for sale | 31,569 | |
Derivative Asset | 36,232 | 1,266 |
Derivative Liability | 147 | |
Fair Value, Inputs, Level 3 [Member] | ||
Securities available for sale | 8,659 | 7,164 |
Loans held for sale | 1,422,796 | |
Derivative Asset | ||
Derivative Liability | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Loans held for sale | ||
Brokered deposits | ||
Assets and liabilities measured at fair value | 953 | 1,148 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mortgage loan interest rate lock commitments [Member] | ||
Securities available for sale | ||
Derivative Asset | ||
Derivative Liability | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mortgage loan forward sales commitments [Member] | ||
Derivative Asset | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mortgage-backed securities forward sales commitments [Member] | ||
Derivative Asset | ||
Derivative Liability | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest rate swaps [Member] | ||
Loans held for sale | 505 | 532 |
Derivative Asset | 199 | 421 |
Derivative Liability | 29 | |
Assets and liabilities measured at fair value | 220 | 195 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Municipal securities [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | US government agencies [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mortgage-backed securities Agency [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mortgage-backed securities Non-agency [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Collateralized loan obligations [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets and liabilities measured at fair value | 529,762 | 361,170 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage loan interest rate lock commitments [Member] | ||
Derivative Asset | 951 | 1,113 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage loan forward sales commitments [Member] | ||
Derivative Asset | 399 | 153 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage-backed securities forward sales commitments [Member] | ||
Derivative Asset | 529 | |
Derivative Liability | 147 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest rate swaps [Member] | ||
Derivative Asset | ||
Derivative Liability | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Municipal securities [Member] | ||
Securities available for sale | 162,594 | 93,212 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | US government agencies [Member] | ||
Securities available for sale | 2,866 | 3,386 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage-backed securities Agency [Member] | ||
Securities available for sale | 158,309 | 90,986 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage-backed securities Non-agency [Member] | ||
Securities available for sale | 62,305 | 63,864 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Collateralized loan obligations [Member] | ||
Securities available for sale | 105,083 | 76,249 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate securities [Member] | ||
Securities available for sale | 494 | 491 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Asset-backed securities [Member] | ||
Securities available for sale | 8,659 | 7,164 |
Loans held for sale | 36,232 | 31,569 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Loans held for sale | ||
Brokered deposits | ||
Assets and liabilities measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage loan interest rate lock commitments [Member] | ||
Derivative Asset | ||
Derivative Liability | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage loan forward sales commitments [Member] | ||
Derivative Asset | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage-backed securities forward sales commitments [Member] | ||
Derivative Asset | ||
Derivative Liability | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest rate swaps [Member] | ||
Derivative Asset | ||
Derivative Liability | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Municipal securities [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | US government agencies [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage-backed securities Agency [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage-backed securities Non-agency [Member] | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Collateralized loan obligations [Member] | ||
Securities available for sale |
ESTIMATED FAIR VALUE OF FINAN53
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) - Nonrecurring basis [Member] - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Commercial real estate [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Construction and development [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Consumer loans [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Commercial business loans [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Mortgage Receivables [Member] | One-to-four family [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Mortgage Receivables [Member] | Home equity [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Mortgage Receivables [Member] | Commercial real estate [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 1 [Member] | Mortgage Receivables [Member] | Construction and development [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Commercial real estate [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Construction and development [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Consumer loans [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Commercial business loans [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Mortgage Receivables [Member] | One-to-four family [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Mortgage Receivables [Member] | Home equity [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Mortgage Receivables [Member] | Commercial real estate [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 2 [Member] | Mortgage Receivables [Member] | Construction and development [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 3 [Member] | ||
Assets measured at fair value on a nonrecurring basis | 34,276 | 32,804 |
Fair Value, Inputs, Level 3 [Member] | Commercial real estate [Member] | ||
Assets measured at fair value on a nonrecurring basis | ||
Fair Value, Inputs, Level 3 [Member] | Construction and development [Member] | ||
Assets measured at fair value on a nonrecurring basis | 1,417 | 1,179 |
Fair Value, Inputs, Level 3 [Member] | Consumer loans [Member] | ||
Assets measured at fair value on a nonrecurring basis | 18 | 24 |
Fair Value, Inputs, Level 3 [Member] | Commercial business loans [Member] | ||
Assets measured at fair value on a nonrecurring basis | 205 | 258 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Servicing Rights [Member] | ||
Assets measured at fair value on a nonrecurring basis | 22,188 | 20,961 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Receivables [Member] | One-to-four family [Member] | ||
Assets measured at fair value on a nonrecurring basis | 4,610 | 4,641 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Receivables [Member] | Home equity [Member] | ||
Assets measured at fair value on a nonrecurring basis | 573 | 79 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Receivables [Member] | Commercial real estate [Member] | ||
Assets measured at fair value on a nonrecurring basis | 4,948 | 5,155 |
Fair Value, Inputs, Level 3 [Member] | Mortgage Receivables [Member] | Construction and development [Member] | ||
Assets measured at fair value on a nonrecurring basis | $ 317 | $ 507 |
ESTIMATED FAIR VALUE OF FINAN54
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 5) - Fair Value, Inputs, Level 3 [Member] | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Mortgage Servicing Rights [Member] | ||
Valuation Techniques | Discounted cash flows | Discounted cash flows |
Significant Unobservable Inputs | Comparable sales | Comparable sales |
Minimum [Member] | Mortgage Servicing Rights [Member] | ||
Significant Unobservable Input Range | 12.00% | 12.00% |
Assumptions Used to Estimate Fair Value, Prepayment Speed (As a percent) | 7.00% | 7.00% |
Maximum [Member] | Mortgage Servicing Rights [Member] | ||
Significant Unobservable Input Range | 13.00% | 13.00% |
Assumptions Used to Estimate Fair Value, Prepayment Speed (As a percent) | 8.00% | 8.00% |
Impaired Loans [Member] | ||
Valuation Techniques | Appraisal Value | Appraisal Value |
Significant Unobservable Inputs | Appraisals and or sales of comparable properties | Appraisals and or sales of comparable properties |
Impaired Loans [Member] | Minimum [Member] | ||
Significant Unobservable Input Range | 10.00% | 10.00% |
Impaired Loans [Member] | Maximum [Member] | ||
Significant Unobservable Input Range | 20.00% | 20.00% |
Real estate owned [Member] | ||
Valuation Techniques | Appraisal Value/ Comparison Sales/ Other estimates | Appraisal Value/ Comparison Sales/ Other estimates |
Significant Unobservable Inputs | Appraisals and or sales of comparable properties | Appraisals and or sales of comparable properties |
Real estate owned [Member] | Minimum [Member] | ||
Significant Unobservable Input Range | 10.00% | 10.00% |
Real estate owned [Member] | Maximum [Member] | ||
Significant Unobservable Input Range | 20.00% | 20.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share Details | ||||
Weighted average shares outstanding | 16,029,332 | 11,908,282 | 14,980,349 | 11,827,428 |
Effect of dilutive securities | 150,839 | 168,596 | 164,447 | 174,434 |
Average shares outstanding | 16,180,171 | 12,076,878 | 15,144,796 | 12,001,862 |
EARNINGS PER SHARE (Details 2)
EARNINGS PER SHARE (Details 2) - shares | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Earnings Per Share Details 2 | |||
Common stock, shares issued | 16,156,943 | 12,548,328 | 12,545,282 |
Common stock, shares outstanding | 16,156,943 | 12,548,328 | 12,545,282 |
Less nonvested restricted stock awards | (101,489) | (219,228) | |
Period end dilutive shares | 16,055,454 | 12,326,054 |
SUPPLEMENTAL SEGMENT INFORMAT57
SUPPLEMENTAL SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Interest income | $ 22,123 | $ 14,493 | $ 39,792 | $ 27,853 |
Interest expense | 3,025 | 2,173 | 5,424 | 4,260 |
Net interest income (expense) | 19,098 | 12,320 | 34,368 | 23,593 |
(Recovery of) provision for loan losses | ||||
Noninterest income (expense) from external customers | 8,805 | 7,189 | 16,035 | 13,465 |
Intersegment noninterest income | ||||
Noninterest expense | 15,890 | 15,809 | 31,476 | 28,077 |
Intersegment noninterest expense | ||||
Income (loss) before income taxes | 12,013 | 3,700 | 18,927 | 8,981 |
Income tax expense (benefit) | 2,673 | 864 | 4,684 | 2,502 |
Net income (loss) | 9,340 | 2,836 | 14,243 | 6,479 |
Community Banking [Member] | ||||
Interest income | 21,691 | 14,136 | 38,949 | 27,080 |
Interest expense | 2,747 | 2,025 | 4,965 | 3,964 |
Net interest income (expense) | 18,944 | 12,111 | 33,984 | 23,116 |
(Recovery of) provision for loan losses | ||||
Noninterest income (expense) from external customers | 3,494 | 2,078 | 5,912 | 4,211 |
Intersegment noninterest income | 242 | 242 | 483 | 485 |
Noninterest expense | 11,448 | 11,646 | 22,772 | 20,075 |
Intersegment noninterest expense | ||||
Income (loss) before income taxes | 11,232 | 2,785 | 17,607 | 7,737 |
Income tax expense (benefit) | 2,789 | 623 | 4,656 | 2,162 |
Net income (loss) | 8,443 | 2,162 | 12,951 | 5,575 |
Mortgage Banking [Member] | ||||
Interest income | 427 | 329 | 822 | 698 |
Interest expense | 42 | 4 | 54 | 9 |
Net interest income (expense) | 385 | 325 | 768 | 689 |
(Recovery of) provision for loan losses | ||||
Noninterest income (expense) from external customers | 5,311 | 5,111 | 10,123 | 9,254 |
Intersegment noninterest income | 31 | 15 | 64 | 34 |
Noninterest expense | 4,164 | 3,891 | 8,216 | 7,571 |
Intersegment noninterest expense | 240 | 240 | 480 | 481 |
Income (loss) before income taxes | 1,323 | 1,320 | 2,259 | 1,925 |
Income tax expense (benefit) | 85 | 401 | 375 | 605 |
Net income (loss) | 1,238 | 919 | 1,884 | 1,320 |
Other [Member] | ||||
Interest income | 8 | 4 | 13 | 9 |
Interest expense | 278 | 148 | 459 | 296 |
Net interest income (expense) | (270) | (144) | (446) | (287) |
(Recovery of) provision for loan losses | ||||
Noninterest income (expense) from external customers | ||||
Intersegment noninterest income | ||||
Noninterest expense | 278 | 272 | 488 | 431 |
Intersegment noninterest expense | 2 | 2 | 3 | 4 |
Income (loss) before income taxes | (550) | (418) | (937) | (722) |
Income tax expense (benefit) | (204) | (165) | (346) | (281) |
Net income (loss) | (346) | (253) | (591) | (441) |
Eliminations [Member] | ||||
Interest income | (3) | 24 | 8 | 66 |
Interest expense | (42) | (4) | (54) | (9) |
Net interest income (expense) | 39 | 28 | 62 | 75 |
(Recovery of) provision for loan losses | ||||
Noninterest income (expense) from external customers | ||||
Intersegment noninterest income | (273) | (257) | (547) | (519) |
Noninterest expense | ||||
Intersegment noninterest expense | (242) | (242) | (483) | (485) |
Income (loss) before income taxes | 8 | 13 | (2) | 41 |
Income tax expense (benefit) | 3 | 5 | (1) | 16 |
Net income (loss) | $ 5 | $ 8 | $ (1) | $ 25 |
SUPPLEMENTAL SEGMENT INFORMAT58
SUPPLEMENTAL SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | $ 2,191,911 | $ 1,683,736 |
Loans receivable, net | 1,424,670 | 1,167,578 |
Loans held for sale | 36,232 | 31,569 |
Deposits | 1,663,729 | 1,258,260 |
Borrowed funds | 224,327 | 241,465 |
Community Banking [Member] | ||
Assets | 2,189,371 | 1,678,541 |
Loans receivable, net | 1,409,887 | 1,151,704 |
Loans held for sale | 8,252 | 2,159 |
Deposits | 1,671,008 | 1,263,030 |
Borrowed funds | 201,000 | 226,000 |
Mortgage Banking [Member] | ||
Assets | 79,092 | 78,315 |
Loans receivable, net | 27,423 | 27,433 |
Loans held for sale | 27,980 | 29,410 |
Deposits | ||
Borrowed funds | 12,069 | 10,990 |
Other [Member] | ||
Assets | 302,533 | 179,681 |
Loans receivable, net | ||
Loans held for sale | ||
Deposits | ||
Borrowed funds | 23,327 | 15,465 |
Eliminations [Member] | ||
Assets | (379,085) | (252,801) |
Loans receivable, net | (12,640) | (11,559) |
Loans held for sale | ||
Deposits | (7,279) | (4,770) |
Borrowed funds | $ (12,069) | $ (10,990) |