Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 31, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | UNITY BANCORP INC /NJ/ | |
Entity Central Index Key | 920,427 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 10,566,877 | |
Trading Symbol | unty |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and due from banks | $ 21,745 | $ 22,105 |
Federal funds sold, interest-bearing deposits and repos | 83,070 | 83,790 |
Cash and cash equivalents | 104,815 | 105,895 |
Securities: | ||
Securities available for sale | 54,825 | 40,568 |
Securities held to maturity (fair value of $20,449 and $20,968, respectively) | 20,241 | 20,979 |
Total securities | 75,066 | 61,547 |
Loans: | ||
SBA loans held for sale | 13,950 | 14,773 |
SBA loans held for investment | 43,329 | 42,492 |
SBA 504 loans | 23,153 | 26,344 |
Commercial loans | 545,308 | 509,171 |
Residential mortgage loans | 315,396 | 289,093 |
Consumer loans | 105,668 | 91,541 |
Total loans | 1,046,804 | 973,414 |
Allowance for loan losses | (12,800) | (12,579) |
Net loans | 1,034,004 | 960,835 |
Premises and equipment, net | 23,134 | 23,398 |
Bank owned life insurance (BOLI) | 13,936 | 13,758 |
Deferred tax assets | 5,617 | 5,512 |
Federal Home Loan Bank (FHLB) stock | 7,101 | 6,037 |
Accrued interest receivable | 4,669 | 4,462 |
Other real estate owned (OREO) | 581 | 1,050 |
Goodwill and other intangibles | 1,516 | 1,516 |
Other assets | 5,078 | 5,896 |
Total assets | 1,275,517 | 1,189,906 |
Liabilities: | ||
Noninterest-bearing demand | 232,545 | 215,963 |
Interest-bearing demand | 149,703 | 145,654 |
Savings | 403,722 | 363,462 |
Time, under $100,000 | 123,225 | 123,724 |
Time, $100,000 to $250,000 | 72,926 | 75,567 |
Time, $250,000 and over | 21,846 | 21,353 |
Total deposits | 1,003,967 | 945,723 |
Borrowed funds | 142,000 | 121,000 |
Subordinated debentures | 10,310 | 10,310 |
Accrued interest payable | 410 | 430 |
Accrued expenses and other liabilities | 6,383 | 6,152 |
Total liabilities | 1,163,070 | 1,083,615 |
Shareholders' equity: | ||
Common stock | 86,112 | 85,383 |
Retained earnings | 26,137 | 20,748 |
Accumulated other comprehensive income | 198 | 160 |
Total shareholders' equity | 112,447 | 106,291 |
Total liabilities and shareholders' equity | $ 1,275,517 | $ 1,189,906 |
Outstanding common shares (in shares) | 10,567 | 10,477 |
Issued common shares (in shares) | 10,567 | 10,477 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Estimated fair value of securities held to maturity | $ 20,449 | $ 20,968 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
INTEREST INCOME | |||||
Federal funds sold, interest-bearing deposits and repos | $ 203 | $ 41 | $ 332 | $ 85 | |
FHLB stock | 73 | 55 | 166 | 107 | |
Securities: | |||||
Taxable | 538 | 427 | 1,030 | 791 | |
Tax-exempt | 44 | 55 | 88 | 117 | |
Total securities | 582 | 482 | 1,118 | 908 | |
Loans: | |||||
SBA loans | 886 | 788 | 1,739 | 1,509 | |
SBA 504 loans | 309 | 344 | 610 | 729 | |
Commercial loans | 6,573 | 5,860 | 12,740 | 11,538 | |
Residential mortgage loans | 3,584 | 2,937 | 6,967 | 5,878 | |
Consumer loans | 1,267 | 980 | 2,400 | 1,911 | |
Total loans | 12,619 | 10,909 | 24,456 | 21,565 | |
Total interest income | 13,477 | 11,487 | 26,072 | 22,665 | |
INTEREST EXPENSE | |||||
Interest-bearing demand deposits | 161 | 124 | 314 | 261 | |
Savings deposits | 678 | 381 | 1,261 | 748 | |
Time deposits | 814 | 954 | 1,618 | 1,904 | |
Borrowed funds and subordinated debentures | 674 | 686 | 1,338 | 1,421 | |
Total interest expense | 2,327 | 2,145 | 4,531 | 4,334 | |
Net interest income | 11,150 | 9,342 | 21,541 | 18,331 | |
Provision for loan losses | 400 | 400 | 650 | 600 | |
Net interest income after provision for loan losses | 10,750 | 8,942 | 20,891 | 17,731 | |
NONINTEREST INCOME | |||||
Branch fee income | 344 | 286 | 675 | 619 | |
Service and loan fee income | 512 | 267 | 1,024 | 522 | |
Gain on sale of SBA loans held for sale, net | 479 | 637 | 963 | 945 | |
Gain on sale of mortgage loans, net | 264 | 593 | 796 | 1,308 | |
BOLI income | 89 | 93 | 178 | 187 | |
Net security gains | 16 | 81 | 16 | 175 | |
Gain on repurchase of subordinated debt | 0 | 0 | 0 | 2,264 | |
Other income | 317 | 277 | 573 | 494 | |
Total noninterest income | 2,021 | 2,234 | 4,225 | 6,514 | |
NONINTEREST EXPENSE | |||||
Compensation and benefits | 4,299 | 3,709 | 8,394 | 7,258 | |
Occupancy | 590 | 513 | 1,190 | 1,131 | |
Processing and communications | 632 | 643 | 1,236 | 1,287 | |
Furniture and equipment | 513 | 395 | 1,024 | 815 | |
Professional services | 251 | 239 | 477 | 494 | |
Loan collection and OREO expenses | 38 | 100 | 379 | 172 | |
Other loan expenses | 18 | (2) | 102 | 101 | |
Deposit insurance | 144 | 165 | 220 | 326 | |
Advertising | 323 | 303 | 560 | 544 | |
Director fees | 149 | 139 | 346 | 274 | |
Other expenses | 464 | 524 | 934 | 936 | |
Total noninterest expense | 7,421 | 6,728 | 14,862 | 13,338 | |
Income before provision for income taxes | 5,350 | 4,448 | 10,254 | 10,907 | |
Provision for income taxes | 1,906 | 1,624 | 3,618 | 3,878 | |
Net income | $ 3,444 | $ 2,824 | $ 6,636 | $ 7,029 | |
Net income per common share - Basic (in dollars per share) | [1] | $ 0.33 | $ 0.30 | $ 0.63 | $ 0.75 |
Net income per common share - Diluted (in dollars per share) | [1] | $ 0.32 | $ 0.30 | $ 0.62 | $ 0.74 |
Weighted average common shares outstanding - Basic (in shares) | [1] | 10,546 | 9,318 | 10,528 | 9,311 |
Weighted average common shares outstanding - Diluted (in shares) | [1] | 10,735 | 9,468 | 10,720 | 9,456 |
[1] | All share information has been adjusted for the 10% stock dividend paid September 30, 2016. |
Consolidated Statements of Inc5
Consolidated Statements of Income (Unaudited) (Parenthetical) | Jun. 30, 2017 | Sep. 30, 2016 | Aug. 26, 2016 |
Income Statement [Abstract] | |||
Stock dividend, percentage | 10.00% | 10.00% | 10.00% |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income, before tax amount | $ 5,350 | $ 4,448 | $ 10,254 | $ 10,907 |
Income tax expense | 1,906 | 1,624 | 3,618 | 3,878 |
Net income | 3,444 | 2,824 | 6,636 | 7,029 |
Investment securities available for sale: | ||||
Unrealized holding gains on securities arising during the period, before tax | 409 | 284 | 265 | 436 |
Unrealized holding gains on securities arising during the period, tax | 163 | 109 | 105 | 164 |
Unrealized holding gains on securities arising during the period, net | 246 | 175 | 160 | 272 |
Less: reclassification adjustment for gains on securities included in net income, before tax | 16 | 81 | 16 | 175 |
Less: reclassification adjustment for gains on securities included in net income, tax | 5 | 28 | 5 | 61 |
Less: reclassification adjustment for gains on securities included in net income, net | 11 | 53 | 11 | 114 |
Total unrealized gains on securities available for sale, before tax | 393 | 203 | 249 | 261 |
Total unrealized gains on securities available for sale, tax | 158 | 81 | 100 | 103 |
Total unrealized gains on securities available for sale, net of tax | 235 | 122 | 149 | 158 |
Adjustments related to defined benefit plan: | ||||
Amortization of prior service cost, before tax | 21 | 21 | 42 | 41 |
Amortization of prior service cost, tax | 8 | 7 | 17 | 7 |
Amortization of prior service cost, net of tax | 13 | 14 | 25 | 34 |
Total adjustments related to defined benefit plan, before tax | 21 | 21 | 42 | 41 |
Total adjustments related to defined benefit plan, tax | 8 | 7 | 17 | 7 |
Total adjustments related to defined benefit plan, net | 13 | 14 | 25 | 34 |
Net unrealized (losses) from cash flow hedges: | ||||
Unrealized holding losses on cash flow hedges arising during the period, before tax | (312) | (366) | (231) | (858) |
Unrealized holding losses on cash flow hedges arising during the period, tax | (128) | (138) | (95) | (340) |
Unrealized holding losses on cash flow hedges arising during the period, net of tax | (184) | (228) | (136) | (518) |
Total unrealized losses on cash flow hedges, before tax | (312) | (366) | (231) | (858) |
Total unrealized losses on cash flow hedges, tax | (128) | (138) | (95) | (340) |
Total unrealized losses on cash flow hedges, net of tax | (184) | (228) | (136) | (518) |
Total other comprehensive income (loss), before tax | 102 | (142) | 60 | (556) |
Total other comprehensive income (loss), tax | 38 | (50) | 22 | (230) |
Total other comprehensive income (loss), net | 64 | (92) | 38 | (326) |
Total comprehensive income, before tax | 5,452 | 4,306 | 10,314 | 10,351 |
Total comprehensive income, tax | 1,944 | 1,574 | 3,640 | 3,648 |
Total comprehensive income | $ 3,508 | $ 2,732 | $ 6,674 | $ 6,703 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Retained earnings | Accumulated other comprehensive (loss) | |
Beginning Balance at Dec. 31, 2015 | $ 78,470 | $ 59,371 | $ 19,566 | $ (467) | |
Beginning Balance (in shares) at Dec. 31, 2015 | 9,279 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 7,029 | 7,029 | |||
Other comprehensive income, net of tax | (326) | (326) | |||
Dividends on common stock | (631) | $ 48 | (679) | ||
Common stock issued and related tax effects | [1] | 425 | $ 425 | ||
Common stock issued and related tax effects (in shares) | [1] | 57 | |||
Ending Balance at Jun. 30, 2016 | 84,967 | $ 59,844 | 25,916 | (793) | |
Ending Balance (in shares) at Jun. 30, 2016 | 9,336 | ||||
Beginning Balance at Mar. 31, 2016 | (701) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 2,824 | ||||
Other comprehensive income, net of tax | (92) | ||||
Ending Balance at Jun. 30, 2016 | 84,967 | $ 59,844 | 25,916 | (793) | |
Ending Balance (in shares) at Jun. 30, 2016 | 9,336 | ||||
Beginning Balance at Dec. 31, 2016 | $ 106,291 | $ 85,383 | 20,748 | 160 | |
Beginning Balance (in shares) at Dec. 31, 2016 | 10,477 | 10,477 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 6,636 | 6,636 | |||
Other comprehensive income, net of tax | 38 | 38 | |||
Dividends on common stock | (1,173) | $ 74 | (1,247) | ||
Common stock issued and related tax effects | [1] | 655 | $ 655 | ||
Common stock issued and related tax effects (in shares) | [1] | 90 | |||
Ending Balance at Jun. 30, 2017 | $ 112,447 | $ 86,112 | 26,137 | 198 | |
Ending Balance (in shares) at Jun. 30, 2017 | 10,567 | 10,567 | |||
Beginning Balance at Mar. 31, 2017 | 134 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 3,444 | ||||
Other comprehensive income, net of tax | 64 | ||||
Ending Balance at Jun. 30, 2017 | $ 112,447 | $ 86,112 | $ 26,137 | $ 198 | |
Ending Balance (in shares) at Jun. 30, 2017 | 10,567 | 10,567 | |||
[1] | Includes the issuance of common stock under employee benefit plans, which includes nonqualified stock options and restricted stock expense related entries, employee option exercises and the tax benefit of options exercised |
Consolidated Statements of Cha8
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends per share, cash paid (in dollars per share) | $ 0.11 | $ 0.08 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
OPERATING ACTIVITIES: | ||
Net income | $ 6,636 | $ 7,029 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Provision for loan losses | 650 | 600 |
Net amortization of purchase premiums and discounts on securities | 137 | 172 |
Depreciation and amortization | 797 | 504 |
Deferred income tax (benefit) expense | (82) | 10 |
Net security gains | (16) | (175) |
Gain on repurchase of subordinated debentures | 0 | (2,264) |
Stock compensation expense | 390 | 271 |
Loss (gain) on sale of OREO | 253 | (44) |
Valuation writedowns on OREO | 50 | 0 |
Gain on sale of mortgage loans held for sale, net | (841) | (783) |
Gain on sale of SBA loans held for sale, net | (963) | (945) |
Origination of mortgage loans held for sale | (42,348) | (51,052) |
Origination of SBA loans held for sale | (9,867) | (11,174) |
Proceeds from sale of mortgage loans held for sale, net | 43,189 | 51,835 |
Proceeds from sale of SBA loans held for sale, net | 12,304 | 11,563 |
BOLI income | (178) | (187) |
Net change in other assets and liabilities | 604 | 1,226 |
Net cash provided by operating activities | 10,715 | 6,586 |
INVESTING ACTIVITIES | ||
Purchases of securities held to maturity | 0 | (11,109) |
Purchases of securities available for sale | (25,720) | (4,249) |
Purchases of FHLB stock, at cost | (2,009) | (3,012) |
Maturities and principal payments on securities held to maturity | 711 | 823 |
Maturities and principal payments on securities available for sale | 8,840 | 5,547 |
Proceeds from sales of securities available for sale | 2,777 | 6,594 |
Proceeds from redemption of FHLB stock | 945 | 2,520 |
Proceeds from sale of OREO | 546 | 1,518 |
Net increase in loans | (75,776) | (27,585) |
Purchases of premises and equipment | (451) | (6,001) |
Net cash used in investing activities | (90,137) | (34,954) |
FINANCING ACTIVITIES | ||
Net increase in deposits | 58,244 | 17,705 |
Proceeds from new borrowings | 77,000 | 59,000 |
Repayments of borrowings | (56,000) | (37,000) |
Repurchase of subordinated debentures | 0 | (2,891) |
Proceeds from exercise of stock options | 271 | 105 |
Dividends on common stock | (1,173) | (631) |
Net cash provided by financing activities | 78,342 | 36,288 |
(Decrease) increase in cash and cash equivalents | (1,080) | 7,920 |
Cash and cash equivalents, beginning of period | 105,895 | 88,157 |
Cash and cash equivalents, end of period | 104,815 | 96,077 |
SUPPLEMENTAL DISCLOSURES | ||
Interest paid | 4,551 | 4,427 |
Income taxes paid | 3,277 | 3,112 |
Noncash investing activities: | ||
Transfer of SBA loans held for sale to held to maturity | 13 | 0 |
Capitalization of servicing rights | 146 | 835 |
Transfer of loans to OREO | $ 396 | $ 1,473 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The accompanying Consolidated Financial Statements include the accounts of Unity Bancorp, Inc. (the "Parent Company") and its wholly-owned subsidiary, Unity Bank (the "Bank" or when consolidated with the Parent Company, the "Company"), and reflect all adjustments and disclosures which are generally routine and recurring in nature, and in the opinion of management, necessary for a fair presentation of interim results. The Bank has multiple subsidiaries used to hold part of its investment and loan portfolios and OREO properties. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation, with no impact on current earnings or shareholders’ equity. The financial information has been prepared in accordance with U.S. generally accepted accounting principles and has not been audited. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the reporting periods. Actual results could differ from those estimates. Amounts requiring the use of significant estimates include the allowance for loan losses, valuation of deferred tax and servicing assets, the carrying value of loans held for sale and other real estate owned, the valuation of securities and the determination of other-than-temporary impairment for securities and fair value disclosures. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q were available to be issued. The interim unaudited Consolidated Financial Statements included herein have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission (“SEC”) and consist of normal recurring adjustments necessary for the fair presentation of interim results. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results which may be expected for the entire year. As used in this Form 10-Q, “we” and “us” and “our” refer to Unity Bancorp, Inc., and its consolidated subsidiary, Unity Bank, depending on the context. Certain information and financial disclosures required by U.S. generally accepted accounting principles have been condensed or omitted from interim reporting pursuant to SEC rules. Interim financial statements should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Stock Transactions On August 26, 2016, the Company declared a 10% stock dividend to shareholders' of record as of September 15, 2016. The 10% stock dividend was paid on September 30, 2016. All share amounts in the following tables have been restated to include the effect of the 10% stock dividend distribution. Stock Option Plans The Company has incentive and nonqualified option plans, which allow for the grant of options to officers, employees and members of the Board of Directors. Transactions under the Company’s stock option plans for the six months ended June 30, 2017 are summarized in the following table: Shares Weighted average exercise price Weighted average remaining contractual life in years Aggregate intrinsic value Outstanding at December 31, 2016 552,759 $ 7.26 5.7 $ 4,663,432 Options granted 47,100 16.37 Options exercised (46,682 ) 5.80 Options forfeited — — Options expired (607 ) 11.48 Outstanding at June 30, 2017 552,570 $ 8.16 5.9 $ 4,857,968 Exercisable at June 30, 2017 381,744 $ 6.26 4.5 $ 4,079,655 Grants under the Company’s incentive and nonqualified option plans generally vest over 3 years and must be exercised within 10 years of the date of grant. The exercise price of each option is the market price on the date of grant. As of June 30, 2017 , 2,462,585 shares have been reserved for issuance upon the exercise of options, 552,570 option grants are outstanding, and 1,527,643 option grants have been exercised, forfeited or expired, leaving 382,372 shares available for grant. The fair values of the options granted during the three and six months ended June 30, 2017 and 2016 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Number of options granted — — 47,100 97,900 Weighted average exercise price $ — $ — $ 16.37 $ 10.06 Weighted average fair value of options $ — $ — $ 4.64 $ 3.19 Expected life in years (1) 0.00 0.00 6.57 6.85 Expected volatility (2) — % — % 28.12 % 31.91 % Risk-free interest rate (3) — % — % 2.18 % 1.79 % Dividend yield (4) — % — % 1.15 % 1.44 % (1) The expected life of the options was estimated based on historical employee behavior and represents the period of time that options granted are expected to be outstanding. (2) The expected volatility of the Company’s stock price was based on the historical volatility over the period commensurate with the expected life of the options. (3) The risk-free interest rate is the U.S. Treasury rate commensurate with the expected life of the options on the date of grant. (4) The expected dividend yield is the projected annual yield based on the grant date stock price. Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during 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 Number of options exercised 29,618 20,378 46,682 20,378 Total intrinsic value of options exercised $ 337,230 $ 116,992 $ 484,920 $ 116,992 Cash received from options exercised 135,837 — 270,792 — Tax deduction realized from options 137,758 — 198,089 — The following table summarizes information about stock options outstanding and exercisable at June 30, 2017 : Options outstanding Options exercisable Range of exercise prices Options outstanding Weighted average remaining contractual life (in years) Weighted average exercise price Options exercisable Weighted average exercise price $ 0.00 - 4.00 77,000 1.6 $ 3.51 77,000 $ 3.51 4.01 - 8.00 232,870 4.3 6.25 232,870 6.25 8.01 - 12.00 166,100 8.3 9.52 71,874 9.27 12.01 - 16.00 46,600 9.5 15.00 — — 16.01 - 20.00 30,000 9.7 16.75 — — Total 552,570 5.9 $ 8.16 381,744 $ 6.26 Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") Topic 718, “Compensation - Stock Compensation,” requires an entity to recognize the fair value of equity awards as compensation expense over the period during which an employee is required to provide service in exchange for such an award (vesting period). Compensation expense related to stock options and the related income tax benefit for the three and six months ended June 30, 2017 and 2016 are detailed in the following table: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Compensation expense $ 71,023 $ 57,765 $ 140,839 $ 113,748 Income tax benefit 29,013 23,684 57,533 46,466 As of June 30, 2017 , unrecognized compensation costs related to nonvested share-based compensation arrangements granted under the Company’s stock option plans totaled approximately $500 thousand . That cost is expected to be recognized over a weighted average period of 2.1 years. Restricted Stock Awards Restricted stock is issued under the stock bonus program to reward employees and directors and to retain them by distributing stock over a period of time. The following table summarizes nonvested restricted stock activity for the six months ended June 30, 2017 : Shares Average grant date fair value Nonvested restricted stock at December 31, 2016 97,203 $ 9.47 Granted 38,400 16.36 Cancelled — — Vested (29,290 ) 8.80 Nonvested restricted stock at June 30, 2017 106,313 $ 12.14 Restricted stock awards granted to date vest over a period of 4 years and are recognized as compensation to the recipient over the vesting period. The awards are recorded at fair market value at the time of grant and amortized into salary expense on a straight line basis over the vesting period. As of June 30, 2017 , 518,157 shares of restricted stock were reserved for issuance, of which 111,404 shares are available for grant. Restricted stock awards granted during the three and six months ended June 30, 2017 and 2016 were as follows: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Number of shares granted — — 38,400 33,385 Average grant date fair value $ — $ — $ 16.36 $ 10.19 Compensation expense related to restricted stock for the three and six months ended June 30, 2017 and 2016 is detailed in the following table: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Compensation expense $ 107,773 $ 81,110 $ 249,577 $ 157,229 Income tax benefit 44,025 32,545 101,952 64,230 As of June 30, 2017 , there was approximately $1.1 million of unrecognized compensation cost related to nonvested restricted stock awards granted under the Company’s stock incentive plans. That cost is expected to be recognized over a weighted average period of 3.0 years. 401(k) Savings Plan The Bank has a 401(k) savings plan covering substantially all employees. Under the Plan, an employee can contribute up to 80 percent of their salary on a tax deferred basis. The Bank may also make discretionary contributions to the Plan. The Bank contributed $138 thousand and $90 thousand during the three months ended June 30, 2017 and 2016 , respectively, and $257 thousand and $179 thousand during the six months ended June 30, 2017 and 2016 , respectively. Deferred Fee Plan The Company has a deferred fee plan for Directors and executive management. Directors of the Company have the option to elect to defer up to 100 percent of their respective retainer and Board of Director fees, and each member of executive management has the option to elect to defer 100 percent of their year end cash bonuses. Director and executive deferred fees totaled $6 thousand and $5 thousand during the three months ended June 30, 2017 and 2016 , and $126 thousand and $107 thousand during the six months ended June 30, 2017 , and 2016 respectively. The interest paid on the deferred balances totaled $12 thousand and $9 thousand during the three months ended June 30, 2017 and 2016 , and $21 thousand and $16 thousand during the six months ended June 30, 2017 , and 2016 respectively. No fees were distributed in 2017 and 2016 , respectively. Benefit Plans In addition to the 401(k) savings plan which covers substantially all employees, the Company established in 2015 an unfunded supplemental defined benefit plan to provide additional retirement benefits for the President and Chief Executive Officer (“CEO”) and certain key executives. On June 4, 2015, the Company approved the Supplemental Executive Retirement Plan (“SERP”) pursuant to which the President and CEO is entitled to receive certain supplemental nonqualified retirement benefits. On November 21, 2016 the Company approved a change in calculation of the Retirement Benefit payable under the Plan so that the Retirement Benefit shall be an amount equal to forty ( 40% ) percent of the average of Executive's base salary for the thirty-six ( 36 ) months immediately preceding executive's separation from service after age 66, adjusted annually thereafter by 2 percent . The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $3.4 million . A discount rate of 4.00 percent was used to calculate the present value of the benefit obligation. The President and CEO commenced vesting to this retirement benefit on January 1, 2014, and vests an additional 3 percent each year until fully vested on January 1, 2024. In the event that the President and CEO’s separation from service from the company were to occur prior to full vesting, the President and CEO would be entitled to and shall be paid the vested portion of the retirement benefit calculated as of the date of separation from service. Notwithstanding the foregoing, upon a Change in Control, and provided that within 6 months following the Change in Control the President and CEO is involuntarily terminated for reasons other than “cause” or the President and CEO resigns for “good reason”, as such is defined in the SERP, or the President and CEO voluntarily terminates his employment after being offered continued employment in a position that is not a “Comparable Position”, as such is also defined in the SERP, the President and CEO shall become 100 percent vested in the full retirement benefit. No contributions or payments have been made during the three and six months ended June 30, 2017 . The following table summarizes the components of the net periodic pension cost of the defined benefit plan recognized during the three and six months ended June 30, 2017 and 2016 : For the three months ended For the six months ended (In thousands) 2017 2016 2017 2016 Service cost $ 35 $ 16 $ 51 $ 31 Interest cost 11 9 21 19 Amortization of prior service cost 21 21 42 41 Net periodic benefit cost $ 67 $ 46 $ 114 $ 91 The following table summarizes the changes in benefit obligations of the defined benefit plan during the six months ended June 30, 2017 and 2016 : For the six months ended June 30, (In thousands) 2017 2016 Benefit obligation, beginning of year $ 1,023 $ 923 Service cost 51 31 Interest cost 21 19 Actuarial gain (loss) — — Benefit obligation, end of period $ 1,095 $ 973 On October 22, 2015, the Company entered into an Executive Incentive Retirement Plan (the “Plan”) with certain key executive officers. The Plan has an effective date of January 1, 2015. The Plan is an unfunded, nonqualified deferred compensation plan. For any Plan Year, a guaranteed annual Deferral Award percentage of seven and one half percent ( 7.5% ) of the participant’s annual base salary will be credited to each Participant’s Deferred Benefit Account. A discretionary annual Deferral Award equal to seven and one half percent ( 7.5% ) of the participant’s annual base salary may be credited to the Participant’s account in addition to the guaranteed Deferral Award, if the Bank exceeds the benchmarks set forth in the Annual Executive Bonus Matrix. The total Deferral Award shall never exceed fifteen percent ( 15% ) of the participant's base salary for any given Plan Year. Each Participant shall be one hundred percent 100% vested in all Deferral Awards as of the date they are awarded. As of June 30, 2017 , the Company had total year to date expenses of $45 thousand related to the Plan. The Plan is reflected on the Company’s balance sheet as accrued expenses. Certain members of management are also enrolled in a split-dollar life insurance plan with a post retirement death benefit of $250 thousand . Total expenses related to this plan were $1 thousand for the three months ended June 30, 2017 and 2016 , and $3 thousand and $2 thousand for the six months ended June 30, 2017 and 2016 , respectively. Other-Than-Temporary Impairment The Company has a process in place to identify securities that could potentially incur credit impairment that is other-than-temporary. This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concern warrants such evaluation. This evaluation considers relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other-than-temporary. Relevant facts and circumstances considered include: (1)the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events and (4) for fixed maturity securities, our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity and for equity securities, our ability and intent to hold the security for a forecasted period of time that allows for the recovery in value. Management assesses its intent to sell or whether it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis less any current-period credit losses. For debt securities that are considered other-than-temporarily impaired with no intent to sell and no requirement to sell prior to recovery of its amortized cost basis, the amount of the impairment is separated into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the security’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of future expected cash flows is due to factors that are not credit related and is recognized in other comprehensive income. For debt securities where management has the intent to sell, the amount of the impairment is reflected in earnings as realized losses. The present value of expected future cash flows is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The asset-backed securities cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate bond cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances including timing, security interests and loss severity. Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Loans Loans Held for Sale Loans held for sale represent the guaranteed portion of Small Business Administration (“SBA”) loans and are reflected at the lower of aggregate cost or market value. The Company originates loans to customers under an SBA program that historically has provided for SBA guarantees of up to 90 percent of each loan. The Company generally sells the guaranteed portion of its SBA loans to a third party and retains the servicing, holding the nonguaranteed portion in its portfolio. The net amount of loan origination fees on loans sold is included in the carrying value and in the gain or loss on the sale. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income. All criteria for sale accounting must be met in order for the loan sales to occur; see details under the “Transfers of Financial Assets” heading above. Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment, if temporary, would be reported as a valuation allowance. Serviced loans sold to others are not included in the accompanying Consolidated Balance Sheets. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. Loans Held to Maturity Loans held to maturity are stated at the unpaid principal balance, net of unearned discounts and deferred loan origination fees and costs. In accordance with the level yield method, loan origination fees, net of direct loan origination costs, are deferred and recognized over the estimated life of the related loans as an adjustment to the loan yield. Interest is credited to operations primarily based upon the principal balance outstanding. Loans are reported as past due when either interest or principal is unpaid in the following circumstances: fixed payment loans when the borrower is in arrears for two or more monthly payments; open end credit for two or more billing cycles; and single payment notes if interest or principal remains unpaid for 30 days or more. Nonperforming loans consist of loans that are not accruing interest as a result of principal or interest being in default for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt (nonaccrual loans). When a loan is classified as nonaccrual, interest accruals are discontinued and all past due interest previously recognized as income is reversed and charged against current period earnings. Generally, until the loan becomes current, any payments received from the borrower are applied to outstanding principal until such time as management determines that the financial condition of the borrower and other factors merit recognition of a portion of such payments as interest income. Loans may be returned to an accrual status when the ability to collect is reasonably assured and when the loan is brought current as to principal and interest. Loans are charged off when collection is sufficiently questionable and when the Company can no longer justify maintaining the loan as an asset on the balance sheet. Loans qualify for charge-off when, after thorough analysis, all possible sources of repayment are insufficient. These include: 1) potential future cash flows, 2) value of collateral, and/or 3) strength of co-makers and guarantors. All unsecured loans are charged off upon the establishment of the loan’s nonaccrual status. Additionally, all loans classified as a loss or that portion of the loan classified as a loss is charged off. All loan charge-offs are approved by the Board of Directors. Troubled debt restructurings ("TDRs") occur when a creditor, for economic or legal reasons related to a debtor’s financial condition, grants a concession to the debtor that it would not otherwise consider. These concessions typically include reductions in interest rate, extending the maturity of a loan, or a combination of both. Interest income on accruing TDRs is credited to operations primarily based upon the principal amount outstanding, as stated in the paragraphs above. The Company evaluates its loans for impairment. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company has defined impaired loans to be all TDRs and nonperforming loans individually evaluated for impairment. Impairment is evaluated in total for smaller-balance loans of a similar nature (consumer and residential mortgage loans), and on an individual basis for all other loans. Impairment of a loan is measured based on the present value of expected future cash flows, discounted at the loan's effective interest rate, or as a practical expedient, based on a loan’s observable market price or the fair value of collateral, net of estimated costs to sell, if the loan is collateral-dependent. If the value of the impaired loan is less than the recorded investment in the loan, the Company establishes a valuation allowance, or adjusts existing valuation allowances, with a corresponding charge to the provision for loan losses. For additional information on loans, see Note 8 to the Consolidated Financial Statements and the section titled "Loan Portfolio" under Item 2. Management's Discussion and Analysis. Allowance for Loan Losses and Reserve for Unfunded Loan Commitments The allowance for loan losses is maintained at a level management considers adequate to provide for probable loan losses as of the balance sheet date. The allowance is increased by provisions charged to expense and is reduced by net charge-offs. The level of the allowance is based on management’s evaluation of probable losses in the loan portfolio, after consideration of prevailing economic conditions in the Company’s market area, the volume and composition of the loan portfolio, and historical loan loss experience. The allowance for loan losses consists of specific reserves for individually impaired credits and TDRs, reserves for nonimpaired loans based on historical loss factors and reserves based on general economic factors and other qualitative risk factors such as changes in delinquency trends, industry concentrations or local/national economic trends. This risk assessment process is performed at least quarterly, and, as adjustments become necessary, they are realized in the periods in which they become known. Although management attempts to maintain the allowance at a level deemed adequate to provide for probable losses, future additions to the allowance may be necessary based upon certain factors including changes in market conditions and underlying collateral values. In addition, various regulatory agencies periodically review the adequacy of the Company’s allowance for loan losses. These agencies may require the Company to make additional provisions based on their judgments about information available to them at the time of their examination. The Company maintains an allowance for unfunded loan commitments that is maintained at a level that management believes is adequate to absorb estimated probable losses. Adjustments to the allowance are made through other expenses and applied to the allowance which is maintained in other liabilities. For additional information on the allowance for loan losses and unfunded loan commitments, see Note 9 to the Consolidated Financial Statements and the sections titled "Asset Quality" and "Allowance for Loan Losses and Reserve for Unfunded Loan Commitments" under Item 2. Management's Discussion and Analysis. Income Taxes The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be recognized in income tax expense on the income statement. |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company may, in the ordinary course of business, become a party to litigation involving collection matters, contract claims and other legal proceedings relating to the conduct of its business. In the best judgment of management, based upon consultation with counsel, the consolidated financial position and results of operations of the Company will not be affected materially by the final outcome of any pending legal proceedings or other contingent liabilities and commitments. |
Net Income per Share
Net Income per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share Basic net income per common share is calculated as net income divided by the weighted average common shares outstanding during the reporting period. Diluted net income per common share is computed similarly to that of basic net income per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, principally stock options, were issued during the reporting period utilizing the Treasury stock method. The following is a reconciliation of the calculation of basic and diluted income per share: For the three months ended June 30, For the six months ended June 30, (In thousands, except per share amounts) 2017 2016 2017 2016 Net income $ 3,444 $ 2,824 $ 6,636 $ 7,029 Weighted average common shares outstanding - Basic 10,546 9,318 10,528 9,311 Plus: Potential dilutive common stock equivalents 189 150 192 145 Weighted average common shares outstanding - Diluted 10,735 9,468 10,720 9,456 Net income per common share - Basic $ 0.33 $ 0.30 $ 0.63 $ 0.75 Net income per common share - Diluted 0.32 0.30 0.62 0.74 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive 77 168 66 187 Prior year weighted average share and per share figures shown above have been adjusted for the 10% stock dividend paid September 30, 2016. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company follows FASB ASC Topic 740, “Income Taxes,” which prescribes a threshold for the financial statement recognition of income taxes and provides criteria for the measurement of tax positions taken or expected to be taken in a tax return. ASC 740 also includes guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition of income taxes. For the quarter ended June 30, 2017 , the Company reported income tax expense of $1.9 million for an effective tax rate of 35.6 percent , compared to an income tax expense of $1.6 million and an effective tax rate of 36.5 percent for the prior year’s quarter. For the six months ended June 30, 2017 , the Company reported income tax expense of $3.6 million for an effective tax rate of 35.3 percent , compared to an income tax expense of $3.9 million and an effective tax rate of 35.6 percent for the six months ended June 30, 2016 . The Company did not recognize or accrue any interest or penalties related to income taxes during the three or six months ended June 30, 2017 or 2016 . The Company did not have an accrual for uncertain tax positions as of June 30, 2017 or December 31, 2016 , as deductions taken and benefits accrued are based on widely understood administrative practices and procedures and are based on clear and unambiguous tax law. Tax returns for all years 2012 and thereafter are subject to future examination by tax authorities. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following tables show the changes in other comprehensive income (loss) for the three and six months ended June 30, 2017 and 2016 , net of tax: For the three months ended June 30, 2017 (In thousands) Net unrealized gains (losses) on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ (247 ) $ (379 ) $ 760 $ 134 Other comprehensive income (loss) before reclassification 246 — (184 ) 62 Less amounts reclassified from accumulated other comprehensive income (loss) 11 (13 ) — (2 ) Period change 235 13 (184 ) 64 Balance, end of period $ (12 ) $ (366 ) $ 576 $ 198 For the three months ended June 30, 2016 (In thousands) Net unrealized gains on securities Adjustments related to defined benefit plan Net unrealized losses from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ 34 $ (428 ) $ (307 ) $ (701 ) Other comprehensive income (loss) before reclassification 175 — (228 ) (53 ) Less amounts reclassified from accumulated other comprehensive income (loss) 53 (14 ) — 39 Period change 122 14 (228 ) (92 ) Balance, end of period $ 156 $ (414 ) $ (535 ) $ (793 ) For the six months ended June 30, 2017 (In thousands) Net unrealized gains (losses) on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ (161 ) $ (391 ) $ 712 $ 160 Other comprehensive income (loss) before reclassification 160 — (136 ) 24 Less amounts reclassified from accumulated other comprehensive loss 11 (25 ) — (14 ) Period change 149 25 (136 ) 38 Balance, end of period $ (12 ) $ (366 ) $ 576 $ 198 For the six months ended June 30, 2016 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized losses from cash flow hedges Accumulated other comprehensive (loss) income Balance, beginning of period $ (2 ) $ (448 ) $ (17 ) $ (467 ) Other comprehensive income (loss) before reclassification 272 — (518 ) (246 ) Less amounts reclassified from accumulated other comprehensive loss 114 (34 ) — 80 Period change 158 34 (518 ) (326 ) Balance, end of period $ 156 $ (414 ) $ (535 ) $ (793 ) |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurement The Company follows FASB ASC Topic 820, “Fair Value Measurement and Disclosures,” which requires additional disclosures about the Company’s assets and liabilities that are measured at fair value. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed as follows: Level 1 Inputs • Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. • Generally, this includes debt and equity securities and derivative contracts that are traded in an active exchange market (i.e. New York Stock Exchange), as well as certain U.S. Treasury, U.S. Government and sponsored entity agency mortgage-backed securities that are highly liquid and are actively traded in over-the-counter markets. Level 2 Inputs • Quoted prices for similar assets or liabilities in active markets. • Quoted prices for identical or similar assets or liabilities in inactive markets. • Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (i.e., interest rates, yield curves, credit risks, prepayment speeds or volatilities) or “market corroborated inputs.” • Generally, this includes U.S. Government and sponsored entity mortgage-backed securities, corporate debt securities and derivative contracts. Level 3 Inputs • Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to the fair value of the assets or liabilities. • These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Fair Value on a Recurring Basis The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis: Securities Available for Sale The fair value of available for sale ("AFS") securities is the market value based on quoted market prices, when available, or market prices provided by recognized broker dealers (Level 1). If listed prices or quotes are not available, fair value is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). As of June 30, 2017 , the fair value of the Company's AFS securities portfolio was $54.8 million . Approximately 64 percent of the portfolio was made up of residential mortgage-backed securities, which had a fair value of $35.1 million at June 30, 2017 . Approximately $34.5 million of the residential mortgage-backed securities are guaranteed by the Government National Mortgage Association ("GNMA"), the Federal National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC"). The underlying loans for these securities are residential mortgages that are geographically dispersed throughout the United States. All of the Company’s AFS securities were classified as Level 2 assets at June 30, 2017 . The valuation of AFS securities using Level 2 inputs was primarily determined using the market approach, which uses quoted prices for similar assets or liabilities in active markets and all other relevant information. It includes model pricing, defined as valuing securities based upon their relationship with other benchmark securities. There were no changes in the inputs or methodologies used to determine fair value during the period ended June 30, 2017 , as compared to the periods ended December 31, 2016 and June 30, 2016 . The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 : June 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Securities available for sale: U.S. Government sponsored entities $ — $ 5,763 $ — $ 5,763 State and political subdivisions — 5,877 — 5,877 Residential mortgage-backed securities — 35,105 — 35,105 Corporate and other securities — 8,080 — 8,080 Total securities available for sale $ — $ 54,825 $ — $ 54,825 Interest rate swap agreements — 973 — 973 Total $ — 973 $ — $ 973 December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Securities available for sale: U.S. Government sponsored entities $ — $ 3,716 $ — $ 3,716 State and political subdivisions — 5,502 — 5,502 Residential mortgage-backed securities — 21,631 — 21,631 Corporate and other securities — 9,719 — 9,719 Total securities available for sale $ — $ 40,568 $ — $ 40,568 Interest rate swap agreements — 1,204 — 1,204 Total $ — $ 1,204 $ — $ 1,204 Fair Value on a Nonrecurring Basis Certain assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following is a description of the valuation methodologies used for instruments measured at fair value on a nonrecurring basis: Appraisal Policy All appraisals must be performed in accordance with the Uniform Standards of Professional Appraisal Practice ("USPAP"). Appraisals are certified to the Company and performed by appraisers on the Company’s approved list of appraisers. Evaluations are completed by a person independent of Company management. The content of the appraisal depends on the complexity of the property. Appraisals are completed on a “retail value” and an “as is value”. The Company requires current real estate appraisals on all loans that become OREO or in-substance foreclosure, loans that are classified substandard, doubtful or loss, or loans that are over $100 thousand and nonperforming. Prior to each balance sheet date, the Company values impaired collateral-dependent loans and OREO based upon a third party appraisal, broker's price opinion, drive by appraisal, automated valuation model, updated market evaluation, or a combination of these methods. The amount is discounted for the decline in market real estate values (for original appraisals), for any known damage or repair costs, and for selling and closing costs. The amount of the discount ranges from 10 to 25 percent and is dependent upon the method used to determine the original value. The original appraisal is generally used when a loan is first determined to be impaired. When applying the discount, the Company takes into consideration when the appraisal was performed, the collateral’s location, the type of collateral, any known damage to the property and the type of business. Subsequent to entering impaired status and the Company determining that there is a collateral shortfall, the Company will generally, depending on the type of collateral, order a third party appraisal, broker's price opinion, automated valuation model or updated market evaluation. After receiving the third party results, the Company will discount the value 8 to 10 percent for selling and closing costs. OREO The fair value of OREO is determined using appraisals, which may be discounted based on management’s review and changes in market conditions (Level 3 Inputs). Impaired Collateral-Dependent Loans The fair value of impaired collateral-dependent loans is derived in accordance with FASB ASC Topic 310, “Receivables.” Fair value is determined based on the loan’s observable market price or the fair value of the collateral. Partially charged-off loans are measured for impairment based upon an appraisal for collateral-dependent loans. When an updated appraisal is received for a nonperforming loan, the value on the appraisal is discounted in the manner discussed above. If there is a deficiency in the value after the Company applies these discounts, management applies a specific reserve and the loan remains in nonaccrual status. The receipt of an updated appraisal would not qualify as a reason to put a loan back into accruing status. The Company removes loans from nonaccrual status generally when the borrower makes nine months of contractual payments and demonstrates the ability to service the debt going forward. Charge-offs are determined based upon the loss that management believes the Company will incur after evaluating collateral for impairment based upon the valuation methods described above and the ability of the borrower to pay any deficiency. The valuation allowance for impaired loans is included in the allowance for loan losses in the consolidated balance sheets. At June 30, 2017 , the valuation allowance for impaired loans was $168 thousand , a decrease of $112 thousand from $280 thousand at December 31, 2016 . The following tables present the assets and liabilities subject to fair value adjustments (impairment) on a non-recurring basis carried on the balance sheet by caption and by level within the hierarchy (as described above): Fair value at June 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Financial assets: OREO $ — $ — $ 581 $ 581 Impaired collateral-dependent loans — — 1,091 1,091 Fair value at December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Financial assets: OREO $ — $ — $ 1,050 $ 1,050 Impaired collateral-dependent loans — — 1,767 1,767 Fair Value of Financial Instruments FASB ASC Topic 825, “Financial Instruments,” requires the disclosure of the estimated fair value of certain financial instruments, including those financial instruments for which the Company did not elect the fair value option. These estimated fair values as of June 30, 2017 and December 31, 2016 have been determined using available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop estimates of fair value. The estimates presented are not necessarily indicative of amounts the Company could realize in a current market exchange. The use of alternative market assumptions and estimation methodologies could have had a material effect on these estimates of fair value. The methodology for estimating the fair value of financial assets and liabilities that are measured on a recurring or nonrecurring basis are discussed above. The following methods and assumptions were used to estimate the fair value of other financial instruments for which it is practicable to estimate that value: Cash and Cash Equivalents For these short-term instruments, the carrying value is a reasonable estimate of fair value. Securities The fair value of securities is based upon quoted market prices for similar or identical assets or other observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). SBA Loans Held for Sale The fair value of SBA loans held for sale is estimated by using a market approach that includes significant other observable inputs. Loans The fair value of loans is estimated by discounting the future cash flows using current market rates that reflect the interest rate risk inherent in the loan, except for previously discussed impaired loans. FHLB Stock Federal Home Loan Bank stock is carried at cost. Carrying value approximates fair value based on the redemption provisions of the issues. Servicing Assets Servicing assets do not trade in an active, open market with readily observable prices. The Company estimates the fair value of servicing assets using discounted cash flow models incorporating numerous assumptions from the perspective of a market participant including market discount rates and prepayment speeds. Accrued Interest The carrying amounts of accrued interest approximate fair value. OREO The fair value of OREO is determined using appraisals, which may be discounted based on management’s review and changes in market conditions (Level 3 Inputs). Deposit Liabilities The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date (i.e. carrying value). The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using current market rates. Borrowed Funds and Subordinated Debentures The fair value of borrowings is estimated by discounting the projected future cash flows using current market rates. Standby Letters of Credit At June 30, 2017 , the Bank had standby letters of credit outstanding of $4.3 million , as compared to $4.1 million at December 31, 2016 . The fair value of these commitments is nominal. The table below presents the carrying amount and estimated fair values of the Company’s financial instruments presented as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In thousands) Fair value level Carrying amount Estimated fair value Carrying amount Estimated fair value Financial assets: Cash and cash equivalents Level 1 $ 104,815 $ 104,815 $ 105,895 $ 105,895 Securities (1) Level 2 75,066 75,274 61,547 61,536 SBA loans held for sale Level 2 13,950 15,708 14,773 16,440 Loans, net of allowance for loan losses (2) Level 2 1,020,054 1,018,549 946,062 944,772 FHLB stock Level 2 7,101 7,101 6,037 6,037 Servicing assets Level 3 2,003 2,003 2,086 2,086 Accrued interest receivable Level 2 4,669 4,669 4,462 4,462 OREO Level 3 581 581 1,050 1,050 Financial liabilities: Deposits Level 2 1,003,967 1,003,168 945,723 944,886 Borrowed funds and subordinated debentures Level 2 152,310 151,862 131,310 130,319 Accrued interest payable Level 2 410 410 430 430 (1) Includes held to maturity (“HTM”) corporate securities that are considered Level 3. These securities had book values of $3.7 million and $3.8 million at June 30, 2017 and December 31, 2016 , respectively, and market values of $3.7 million and $3.6 million at June 30, 2017 and December 31, 2016 , respectively. (2) Includes collateral-dependent impaired loans that are considered Level 3 and reported separately in the tables under the “Fair Value on a Nonrecurring Basis” heading. Collateral-dependent impaired loans, net of specific reserves totaled $1.1 million and $1.8 million at June 30, 2017 and December 31, 2016 , respectively. |
Securities
Securities | 6 Months Ended |
Jun. 30, 2017 | |
Marketable Securities [Abstract] | |
Securities | Securities This table provides the major components of AFS and HTM securities at amortized cost and estimated fair value at June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Available for sale: U.S. Government sponsored entities $ 5,768 $ 8 $ (13 ) $ 5,763 $ 3,744 $ 2 $ (30 ) $ 3,716 State and political subdivisions 5,862 53 (38 ) 5,877 5,545 19 (62 ) 5,502 Residential mortgage-backed securities 34,934 350 (179 ) 35,105 21,547 339 (255 ) 21,631 Corporate and other securities 8,283 22 (225 ) 8,080 10,003 — (284 ) 9,719 Total securities available for sale $ 54,847 $ 433 $ (455 ) $ 54,825 $ 40,839 $ 360 $ (631 ) $ 40,568 Held to maturity: U.S. Government sponsored entities $ 3,270 $ — $ (64 ) $ 3,206 $ 3,530 $ — $ (128 ) $ 3,402 State and political subdivisions 2,302 203 — 2,505 2,306 181 (1 ) 2,486 Residential mortgage-backed securities 4,386 98 (16 ) 4,468 4,799 98 (25 ) 4,872 Commercial mortgage-backed securities 3,741 — (76 ) 3,665 3,796 — (148 ) 3,648 Corporate and other securities 6,542 69 (6 ) 6,605 6,548 12 — 6,560 Total securities held to maturity $ 20,241 $ 370 $ (162 ) $ 20,449 $ 20,979 $ 291 $ (302 ) $ 20,968 This table provides the remaining contractual maturities and yields of securities within the investment portfolios. The carrying value of securities at June 30, 2017 is distributed by contractual maturity. Mortgage-backed securities and other securities, which may have principal prepayment provisions, are distributed based on contractual maturity. Expected maturities will differ materially from contractual maturities as a result of early prepayments and calls. Within one year After one through five years After five through ten years After ten years Total carrying value (In thousands, except percentages) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Available for sale at fair value: U.S. Government sponsored entities $ — — % $ 3,739 1.61 % $ 2,024 2.16 % $ — — % $ 5,763 1.80 % State and political subdivisions — — 768 3.13 2,418 2.78 2,691 2.80 5,877 2.83 Residential mortgage-backed securities 15 4.04 328 2.46 4,044 2.29 30,718 2.80 35,105 2.74 Corporate and other securities — — 14 2.00 5,183 3.30 2,883 4.44 8,080 3.70 Total securities available for sale $ 15 4.04 % $ 4,849 1.91 % $ 13,669 2.74 % $ 36,292 2.93 % $ 54,825 2.79 % Held to maturity at cost: U.S. Government sponsored entities $ — — % $ — — % $ — — % $ 3,270 1.98 % $ 3,270 1.98 % State and political subdivisions 213 0.99 — — 493 5.07 1,596 4.64 2,302 4.40 Residential mortgage-backed securities 13 4.06 32 5.58 627 2.77 3,714 3.27 4,386 3.22 Commercial mortgage-backed securities — — — — — — 3,741 2.76 3,741 2.76 Corporate and other securities — — — — 4,530 5.72 2,012 8.80 6,542 6.67 Total securities held to maturity $ 226 1.17 % $ 32 5.58 % $ 5,650 5.34 % $ 14,333 3.77 % $ 20,241 4.18 % The fair value of securities with unrealized losses by length of time that the individual securities have been in a continuous unrealized loss position at June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 Less than 12 months 12 months and greater Total (In thousands, except number in a loss position) Total number in a loss position Estimated fair value Unrealized loss Estimated fair value Unrealized loss Estimated fair value Unrealized loss Available for sale: U.S. Government sponsored entities 1 $ 1,978 $ (13 ) $ — $ — $ 1,978 $ (13 ) State and political subdivisions 1 $ 1,949 $ (38 ) $ — $ — $ 1,949 $ (38 ) Residential mortgage-backed securities 10 $ 9,388 $ (133 ) $ 1,016 $ (46 ) $ 10,404 $ (179 ) Corporate and other securities 6 1,032 (67 ) 1,842 (158 ) 2,874 (225 ) Total temporarily impaired securities 18 $ 14,347 $ (251 ) $ 2,858 $ (204 ) $ 17,205 $ (455 ) Held to maturity: U.S. Government sponsored entities 2 $ 3,206 $ (64 ) $ — $ — $ 3,206 $ (64 ) Residential mortgage-backed securities 3 $ 705 $ (10 ) $ 398 $ (6 ) $ 1,103 $ (16 ) Commercial mortgage-backed securities 2 $ 3,664 (76 ) — — 3,664 (76 ) Corporate and other securities 1 1,524 (6 ) — — 1,524 (6 ) Total temporarily impaired securities 8 $ 9,099 $ (156 ) $ 398 $ (6 ) $ 9,497 $ (162 ) December 31, 2016 Less than 12 months 12 months and greater Total (In thousands, except number in a loss position) Total number in a loss position Estimated fair value Unrealized loss Estimated fair value Unrealized loss Estimated fair value Unrealized loss Available for sale: U.S. Government sponsored entities 1 $ 1,962 $ (30 ) $ — $ — $ 1,962 $ (30 ) State and political subdivisions 4 3,833 (62 ) — — 3,833 (62 ) Residential mortgage-backed securities 13 7,813 (139 ) 2,983 (116 ) 10,796 (255 ) Corporate and other securities 6 822 (67 ) 5,376 (217 ) 6,198 (284 ) Total temporarily impaired securities 24 $ 14,430 $ (298 ) $ 8,359 $ (333 ) $ 22,789 $ (631 ) Held to maturity: U.S. Government sponsored entities 2 $ 3,402 $ (128 ) $ — $ — $ 3,402 $ (128 ) State and political subdivisions 1 212 (1 ) — — 212 (1 ) Residential mortgage-backed securities 2 776 (15 ) 441 (10 ) 1,217 (25 ) Commercial mortgage-backed securities 2 3,648 (148 ) — — 3,648 (148 ) Total temporarily impaired securities 7 $ 8,038 $ (292 ) $ 441 $ (10 ) $ 8,479 $ (302 ) Unrealized Losses The unrealized losses in each of the categories presented in the tables above are discussed in the paragraphs that follow: U.S. government sponsored entities and state and political subdivision securities: The unrealized losses on investments in these types of securities were caused by the increase in interest rate spreads or the increase in interest rates at the long end of the Treasury curve. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the par value of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider these investments to be other-than temporarily impaired as of June 30, 2017 . There was no impairment on these securities at December 31, 2016 . Residential and commercial mortgage-backed securities: The unrealized losses on investments in mortgage-backed securities were caused by increases in interest rate spreads or the increase in interest rates at the long end of the Treasury curve. The majority of contractual cash flows of these securities are guaranteed by the FNMA, GNMA, and the FHLMC. It is expected that the securities would not be settled at a price significantly less than the par value of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity, the Company did not consider these investments to be other-than-temporarily impaired as of June 30, 2017 or December 31, 2016 . Corporate and other securities: Included in this category are corporate debt securities, Community Reinvestment Act (“CRA”) investments, asset-backed securities, and trust preferred securities. The unrealized losses on corporate debt securities were due to widening credit spreads or the increase in interest rates at the long end of the Treasury curve and the unrealized losses on CRA investments were caused by decreases in the market value of underlying bonds and rate changes. The Company evaluated the prospects of the issuers and forecasted a recovery period; and as a result determined it did not consider these investments to be other-than-temporarily impaired as of June 30, 2017 or December 31, 2016 . The contractual terms do not allow the security to be settled at a price less than the par value. Because the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity, the Company did not consider this security to be other-than-temporarily impaired as of June 30, 2017 or December 31, 2016 . Realized Gains and Losses Gross realized gains on securities for the three and six months ended June 30, 2017 and 2016 are detailed in the table below: For the three months ended For the six months ended (In thousands) 2017 2016 2017 2016 Available for sale: Realized gains $ 74 $ 81 $ 74 $ 175 Realized losses (58 ) — (58 ) — Total securities available for sale 16 81 16 175 Held to maturity: Realized gains — — — — Realized losses — — — — Total securities held to maturity — — — — Net gains on sales of securities $ 16 $ 81 $ 16 $ 175 The net realized gains are included in noninterest income in the Consolidated Statements of Income as net security gains. There was a gross realized gain of $74 thousand for the three and six months ended June 30, 2017 . • For the six months ended June 30, 2017 , the net gains are attributed to the sale of three residential mortgage-backed securities with a total book value of $1.2 million and resulting gains of $71 thousand and the call of two asset-backed securities with a total book value of $3.5 million and resulting gains of $3 thousand , partially offset by the sale of two residential mortgage-backed securities with a book value of $1.6 million which resulted in a loss of $58 thousand . There was a gross realized gain of $81 thousand for the three months ended June 30, 2016 , and there was a gross realized gain of $175 thousand for the six months ended June 30, 2016 . The net realized gains during 2016 were a result of the following: • For the six months ended June 30, 2016 , the net gains are attributed to the sale of fifteen municipal securities with a total book value of $6.4 million and resulting gains of $112 thousand and the sale of one equity totaling $40 thousand in book value, resulting in pre-tax gains of approximately $63 thousand . Pledged Securities Securities with a carrying value of $20.4 million and $17.7 million for June 30, 2017 and December 31, 2016 , respectively, were pledged to secure Government deposits, secure other borrowings and for other purposes required or permitted by law. |
Loans
Loans | 6 Months Ended |
Jun. 30, 2017 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans | Loans The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of June 30, 2017 and December 31, 2016 : (In thousands) June 30, 2017 December 31, 2016 SBA loans held for investment $ 43,329 $ 42,492 SBA 504 loans 23,153 26,344 Commercial loans Commercial other 65,551 58,447 Commercial real estate 443,564 422,418 Commercial real estate construction 36,193 28,306 Residential mortgage loans 315,396 289,093 Consumer loans Home equity 54,524 47,411 Consumer other 51,144 44,130 Total loans held for investment $ 1,032,854 $ 958,641 SBA loans held for sale 13,950 14,773 Total loans $ 1,046,804 $ 973,414 Loans are made to individuals as well as commercial entities. Specific loan terms vary as to interest rate, repayment, and collateral requirements based on the type of loan requested and the credit worthiness of the prospective borrower. Credit risk tends to be geographically concentrated in that a majority of the loan customers are located in the markets serviced by the Bank. Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and/or property type. A description of the Company's different loan segments follows: SBA Loans: SBA 7 (a) loans, on which the SBA has historically provided guarantees of up to 90 percent of the principal balance, are considered a higher risk loan product for the Company than its other loan products. The guaranteed portion of the Company’s SBA loans is generally sold in the secondary market with the nonguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. Loans are guaranteed by the businesses' major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. SBA 504 Loans: The SBA 504 program consists of real estate backed commercial mortgages where the Company has the first mortgage and the SBA has the second mortgage on the property. Loans will generally be guaranteed in full or for a meaningful amount by the businesses' major owners. SBA 504 loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. Generally, the Company has a 50 percent loan to value ratio on SBA 504 program loans at origination. Commercial Loans: Commercial credit is extended primarily to middle market and small business customers. Commercial loans are generally made in the Company’s market place for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. Loans will generally be guaranteed in full or for a meaningful amount by the businesses' major owners. Commercial loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided. Residential Mortgage and Consumer Loans: The Company originates mortgage and consumer loans including principally residential real estate and home equity lines and loans and consumer construction lines. The Company originates qualified mortgages which are generally sold in the secondary market and nonqualified mortgages which are generally held for investment. Each loan type is evaluated on debt to income, type of collateral and loan to collateral value, credit history and Company’s relationship with the borrower. Inherent in the lending function is credit risk, which is the possibility a borrower may not perform in accordance with the contractual terms of their loan. A borrower’s inability to pay their obligations according to the contractual terms can create the risk of past due loans and, ultimately, credit losses, especially on collateral deficient loans. The Company minimizes its credit risk by loan diversification and adhering to credit administration policies and procedures. Due diligence on loans begins when we initiate contact regarding a loan with a borrower. Documentation, including a borrower’s credit history, materials establishing the value and liquidity of potential collateral, the purpose of the loan, the source of funds for repayment of the loan, and other factors, are analyzed before a loan is submitted for approval. The loan portfolio is then subject to on-going internal reviews for credit quality which in part is derived from ongoing collection and review of borrowers’ financial information, as well as independent credit reviews by an outside firm. The Company's extension of credit is governed by the Credit Risk Policy which was established to control the quality of the Company's loans. These policies and procedures are reviewed and approved by the Board of Directors on a regular basis. Credit Ratings For SBA 7(a), SBA 504 and commercial loans, management uses internally assigned risk ratings as the best indicator of credit quality. A loan’s internal risk rating is updated at least annually and more frequently if circumstances warrant a change in risk rating. The Company uses a 1 through 10 loan grading system that follows regulatorily accepted definitions. Pass: Risk ratings of 1 through 6 are used for loans that are performing, as they meet, and are expected to continue to meet, all of the terms and conditions set forth in the original loan documentation, and are generally current on principal and interest payments. These performing loans are termed “Pass”. Special Mention: Criticized loans are assigned a risk rating of 7 and termed “Special Mention”, as the borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Bank’s collateral and position. While potentially weak, these borrowers are currently marginally acceptable and no loss of interest or principal is anticipated. As a result, special mention assets do not expose an institution to sufficient risk to warrant adverse classification. Included in “Special Mention” could be turnaround situations, such as borrowers with deteriorating trends beyond one year, borrowers in startup or deteriorating industries, or borrowers with a poor market share in an average industry. "Special Mention" loans may include an element of asset quality, financial flexibility, or below average management. Management and ownership may have limited depth or experience. Regulatory agencies have agreed on a consistent definition of “Special Mention” as an asset with potential weaknesses which, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. This definition is intended to ensure that the “Special Mention” category is not used to identify assets that have as their sole weakness credit data exceptions or collateral documentation exceptions that are not material to the repayment of the asset. Substandard: Classified loans are assigned a risk rating of an 8 or 9, depending upon the prospect for collection, and deemed “Substandard”. A risk rating of 8 is used for borrowers with well-defined weaknesses that jeopardize the orderly liquidation of debt. The loan is inadequately protected by the current paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. There is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified “Substandard”. A risk rating of 9 is used for borrowers that have all the weaknesses inherent in a loan with a risk rating of 8, with the added characteristic that the weaknesses make collection of debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely. The possibility of loss is extremely high, but because of certain important, reasonably specific pending factors that may work to strengthen the assets, the loans’ classification as estimated losses is deferred until a more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures; capital injection; perfecting liens on additional collateral; and refinancing plans. Partial charge-offs are likely. Loss: Once a borrower is deemed incapable of repayment of unsecured debt, the risk rating becomes a 10, the loan is termed a “Loss”, and charged-off immediately. Loans to such borrowers are considered uncollectible and of such little value that continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off these basically worthless assets even though partial recovery may be affected in the future. For residential mortgage and consumer loans, management uses performing versus nonperforming as the best indicator of credit quality. Nonperforming loans consist of loans that are not accruing interest (nonaccrual loans) as a result of principal or interest being in default for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. These credit quality indicators are updated on an ongoing basis, as a loan is placed on nonaccrual status as soon as management believes there is sufficient doubt as to the ultimate ability to collect interest on a loan. At June 30, 2017 and December 31, 2016 , the Company owned no residential consumer properties that were included in OREO in the Consolidated Balance Sheets. Additionally, there were $4.7 million of residential consumer loans in the process of foreclosure at June 30, 2017 , compared to $5.3 million at December 31, 2016 . The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of June 30, 2017 : June 30, 2017 SBA, SBA 504 & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 40,568 $ 1,394 $ 1,367 $ 43,329 SBA 504 loans 21,999 1,049 105 23,153 Commercial loans Commercial other 64,357 350 844 65,551 Commercial real estate 438,888 4,157 519 443,564 Commercial real estate construction 35,443 750 — 36,193 Total commercial loans 538,688 5,257 1,363 545,308 Total SBA, SBA 504 and commercial loans $ 601,255 $ 7,700 $ 2,835 $ 611,790 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 313,714 $ 1,682 $ 315,396 Consumer loans Home equity 53,806 718 54,524 Consumer other 49,163 1,981 51,144 Total consumer loans 102,969 2,699 105,668 Total residential mortgage and consumer loans $ 416,683 $ 4,381 $ 421,064 The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of December 31, 2016 : December 31, 2016 SBA, SBA 504 & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 38,990 $ 2,023 $ 1,479 $ 42,492 SBA 504 loans 24,635 1,073 636 26,344 Commercial loans Commercial other 57,000 1,422 25 58,447 Commercial real estate 408,288 13,729 401 422,418 Commercial real estate construction 27,556 750 — 28,306 Total commercial loans 492,844 15,901 426 509,171 Total SBA, SBA 504 and commercial loans $ 556,469 $ 18,997 $ 2,541 $ 578,007 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 286,421 $ 2,672 $ 289,093 Consumer loans Home equity 46,929 482 47,411 Consumer other 42,154 1,976 44,130 Total consumer loans 89,083 2,458 91,541 Total residential mortgage and consumer loans $ 375,504 $ 5,130 $ 380,634 Nonperforming and Past Due Loans Nonperforming loans consist of loans that are not accruing interest (nonaccrual loans) as a result of principal or interest being in default for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt. Loans past due 90 days or more and still accruing interest are not included in nonperforming loans and generally represent loans that are well collateralized and in a continuing process expected to result in repayment or restoration to current status. The risk of loss is difficult to quantify and is subject to fluctuations in collateral values, general economic conditions and other factors. The improved state of the economy has resulted in a substantial reduction in nonperforming loans and loan delinquencies. The Company values its collateral through the use of appraisals, broker price opinions, and knowledge of its local market. The following tables set forth an aging analysis of past due and nonaccrual loans as of June 30, 2017 and December 31, 2016 : June 30, 2017 (In thousands) 30-59 days past due 60-89 days past due 90+ days and still accruing Nonaccrual (1) Total past due Current Total loans SBA loans held for investment $ 1,078 $ — $ 230 $ 889 $ 2,197 $ 41,132 $ 43,329 SBA 504 loans — — — — — 23,153 23,153 Commercial loans Commercial other — — — 25 25 65,526 65,551 Commercial real estate 3,540 808 — 386 4,734 438,830 443,564 Commercial real estate construction — — — — — 36,193 36,193 Residential mortgage loans 2,330 — — 1,682 4,012 311,384 315,396 Consumer loans Home equity 24 240 — 718 982 53,542 54,524 Consumer other — — — 1,981 1,981 49,163 51,144 Total loans held for investment $ 6,972 $ 1,048 $ 230 $ 5,681 $ 13,931 $ 1,018,923 $ 1,032,854 SBA loans held for sale — — — — — 13,950 13,950 Total loans $ 6,972 $ 1,048 $ 230 $ 5,681 $ 13,931 $ 1,032,873 $ 1,046,804 (1) At June 30, 2017 , nonaccrual loans included $41 thousand of loans guaranteed by the SBA. December 31, 2016 (In thousands) 30-59 days past due 60-89 days past due 90+ days and still accruing Nonaccrual (1) Total past due Current Total loans SBA loans held for investment $ 491 $ 397 $ — $ 1,168 $ 2,056 $ 40,436 $ 42,492 SBA 504 loans — — — 513 513 25,831 26,344 Commercial loans Commercial other 50 — — 25 75 58,372 58,447 Commercial real estate 1,108 574 — 401 2,083 420,335 422,418 Commercial real estate construction — — — — — 28,306 28,306 Residential mortgage loans 2,932 263 — 2,672 5,867 283,226 289,093 Consumer loans Home equity 227 — — 482 709 46,702 47,411 Consumer other — — — 1,976 1,976 42,154 44,130 Total loans held for investment $ 4,808 $ 1,234 $ — $ 7,237 $ 13,279 $ 945,362 $ 958,641 SBA loans held for sale — — — — — 14,773 14,773 Total loans $ 4,808 $ 1,234 $ — $ 7,237 $ 13,279 $ 960,135 $ 973,414 (1) At December 31, 2016 , nonaccrual loans included $153 thousand of TDRs and $60 thousand of loans guaranteed by the SBA. Impaired Loans The Company has defined impaired loans to be all nonperforming loans individually evaluated for impairment and TDRs. Management considers a loan impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract. Impairment is evaluated on an individual basis for SBA, SBA 504, and commercial loans. The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of June 30, 2017 : June 30, 2017 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 846 $ 455 $ — Commercial loans Commercial other 25 25 — Commercial real estate 43 43 — Total commercial loans 68 68 — Total impaired loans with no related allowance 914 523 — With an allowance: SBA loans held for investment (1) 943 393 149 Commercial loans Commercial real estate 343 343 19 Total commercial loans 343 343 19 Total impaired loans with a related allowance 1,286 736 168 Total individually evaluated impaired loans: SBA loans held for investment (1) 1,789 848 149 Commercial loans Commercial other 25 25 — Commercial real estate 386 386 19 Total commercial loans 411 411 19 Total individually evaluated impaired loans $ 2,200 $ 1,259 $ 168 (1) Balances are reduced by amount guaranteed by the SBA of $41 thousand at June 30, 2017 . The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of December 31, 2016 : December 31, 2016 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 1,235 $ 653 $ — SBA 504 loans 513 513 — Commercial loans Commercial other 25 25 — Commercial real estate 42 43 — Total commercial loans 67 68 — Total impaired loans with no related allowance 1,815 1,234 — With an allowance: SBA loans held for investment (1) 975 455 246 Commercial loans Commercial other 13 1 1 Commercial real estate 358 357 33 Total commercial loans 371 358 34 Total impaired loans with a related allowance 1,346 813 280 Total individually evaluated impaired loans: SBA loans held for investment (1) 2,210 1,108 246 SBA 504 loans 513 513 — Commercial loans Commercial other 38 26 1 Commercial real estate 400 400 33 Total commercial loans 438 426 34 Total individually evaluated impaired loans $ 3,161 $ 2,047 $ 280 (1) Balances are reduced by amount guaranteed by the SBA of $60 thousand at December 31, 2016 . The following tables present the average recorded investments in impaired loans and the related amount of interest recognized during the time period in which the loans were impaired for the three and six months ended June 30, 2017 and 2016 . The average balances are calculated based on the month-end balances of impaired loans. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method, and therefore no interest income is recognized. The interest income recognized on impaired loans noted below represents primarily nominal amounts of income recognized on a cash basis for well-collateralized impaired loans. For the three months ended June 30, 2017 2016 (In thousands) Average recorded investment Interest income recognized on impaired loans Average recorded investment Interest income recognized on impaired loans SBA loans held for investment (1) $ 989 $ 22 $ 1,640 $ 1 SBA 504 loans — — 513 — Commercial loans Commercial other 25 — 929 14 Commercial real estate 921 — 1,273 19 Commercial real estate construction — — 339 — Total $ 1,935 $ 22 $ 4,694 $ 34 (1) Balances are reduced by the average amount guaranteed by the SBA of $54 thousand and $218 thousand for the three months ended June 30, 2017 and 2016 , respectively. For the six months ended June 30, 2017 2016 (In thousands) Average recorded investment Interest income recognized on impaired loans Average recorded investment Interest income recognized on impaired loans SBA loans held for investment (1) $ 993 $ 19 $ 1,822 $ 3 SBA 504 loans 165 — 1,082 — Commercial loans Commercial other 25 — 496 38 Commercial real estate 1,027 22 1,662 31 Commercial real estate construction — — 288 — Total $ 2,210 $ 41 $ 5,350 $ 72 (1) Balances are reduced by the average amount guaranteed by the SBA of $151 thousand and $241 thousand for the six months ended June 30, 2017 and 2016 , respectively. TDRs The Company's loan portfolio also includes certain loans that have been modified as TDRs. TDRs occur when a creditor, for economic or legal reasons related to a debtor’s financial condition, grants a concession to the debtor that it would not otherwise consider, unless it results in a delay in payment that is insignificant. These concessions typically include reductions in interest rate, extending the maturity of a loan, or a combination of both. When the Company modifies a loan, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs if the loan is collateral-dependent. If management determines that the value of the modified loan is less than the recorded investment in the loan, impairment is recognized by segment or class of loan, as applicable, through an allowance estimate or charge-off to the allowance. This process is used, regardless of loan type, and for loans modified as TDRs that subsequently default on their modified terms. As of June 30, 2017 , the Company had no TDRs. TDRs of $153 thousand are included in the impaired loan numbers as of December 31, 2016 . The decrease was due to the removal of one loan. At December 31, 2016 , there were specific reserves of $34 thousand on the nonperforming TDR. At December 31, 2016 , the $153 thousand TDR was in nonaccrual status and none were in accrual status. To date, the Company’s TDRs consisted of interest rate reductions and maturity extensions. There has been no principal forgiveness. There were no loans modified during the three or six months ended June 30, 2017 and 2016 that were deemed to be TDRs. There were no loans modified as a TDR within the previous 12 months that subsequently defaulted at some point during the three or six months ended June 30, 2017 . In this case, the subsequent default is defined as 90 days past due or transferred to nonaccrual status. |
Allowance for Loan Losses and R
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments | 6 Months Ended |
Jun. 30, 2017 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments | Allowance for Loan Losses and Reserve for Unfunded Loan Commitments Allowance for Loan Losses The Company has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. At a minimum, the adequacy of the allowance for loan losses is reviewed by management on a quarterly basis. For purposes of determining the allowance for loan losses, the Company has segmented the loans in its portfolio by loan type. Loans are segmented into the following pools: SBA 7(a), SBA 504, commercial, residential mortgages, and consumer loans. Certain portfolio segments are further broken down into classes based on the associated risks within those segments and the type of collateral underlying each loan. Commercial loans are divided into the following four classes: commercial real estate, commercial real estate construction, unsecured business line of credit and commercial other. Consumer loans are divided into two classes as follows: Home equity and other. The standardized methodology used to assess the adequacy of the allowance includes the allocation of specific and general reserves. The same standard methodology is used, regardless of loan type. Specific reserves are made to individual impaired loans and TDRs (see Note 1 for additional information on this term). The general reserve is set based upon a representative average historical net charge-off rate adjusted for the following environmental factors: delinquency and impairment trends, charge-off and recovery trends, changes in the volume of restructured loans, volume and loan term trends, changes in risk and underwriting policy trends, staffing and experience changes, national and local economic trends, industry conditions and credit concentration changes. Within the five-year historical net charge-off rate, the Company weights the past three years more heavily as it believes it is more indicative of future charge-offs. All of the environmental factors are ranked and assigned a basis points value based on the following scale: low, low moderate, moderate, high moderate and high risk. Each environmental factor is evaluated separately for each class of loans and risk weighted based on its individual characteristics. • For SBA 7(a), SBA 504 and commercial loans, the estimate of loss based on pools of loans with similar characteristics is made through the use of a standardized loan grading system that is applied on an individual loan level and updated on a continuous basis. The loan grading system incorporates reviews of the financial performance of the borrower, including cash flow, debt-service coverage ratio, earnings power, debt level and equity position, in conjunction with an assessment of the borrower's industry and future prospects. It also incorporates analysis of the type of collateral and the relative loan to value ratio. • For residential mortgage and consumer loans, the estimate of loss is based on pools of loans with similar characteristics. Factors such as credit score, delinquency status and type of collateral are evaluated. Factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as needed. According to the Company’s policy, a loss (“charge-off”) is to be recognized and charged to the allowance for loan losses as soon as a loan is recognized as uncollectable. All credits which are 90 days past due must be analyzed for the Company’s ability to collect on the credit. Once a loss is known to exist, the charge-off approval process is immediately expedited. This charge-off policy is followed for all loan types. The allocated allowance is the total of identified specific and general reserves by loan category. The allocation is not necessarily indicative of the categories in which future losses may occur. The total allowance is available to absorb losses from any segment of the portfolio. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in methodologies for estimating allocated and general reserves in the portfolio. There was no unallocated portion of the allowance during the six months ended June 30, 2017 , compared to $183 thousand at December 31, 2016 . The following tables detail the activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2017 and 2016 : For the three months ended June 30, 2017 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,653 $ 600 $ 6,533 $ 2,869 $ 1,026 $ — $ 12,681 Charge-offs (150 ) — (120 ) — (17 ) — (287 ) Recoveries 3 — 3 — — — 6 Net (charge-offs) recoveries (147 ) — (117 ) — (17 ) — (281 ) Provision for loan losses charged to expense 8 (106 ) 477 (53 ) 74 — 400 Balance, end of period $ 1,514 $ 494 $ 6,893 $ 2,816 $ 1,083 $ — $ 12,800 For the three months ended June 30, 2016 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,713 $ 598 $ 6,312 $ 2,892 $ 836 $ 283 $ 12,634 Charge-offs (142 ) — (152 ) — — — (294 ) Recoveries 4 — 13 — 1 — 18 Net (charge-offs) recoveries (138 ) — (139 ) — 1 — (276 ) Provision for loan losses charged to expense 55 (10 ) 393 72 24 (134 ) 400 Balance, end of period $ 1,630 $ 588 $ 6,566 $ 2,964 $ 861 $ 149 $ 12,758 The following tables detail the activity in the allowance for loan losses portfolio segment for the six months ended June 30, 2017 and 2016 : For the six months ended June 30, 2017 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,576 $ 573 $ 6,729 $ 2,593 $ 925 $ 183 $ 12,579 Charge-offs (258 ) — (196 ) — (83 ) — (537 ) Recoveries 39 — 56 12 1 — 108 Net (charge-offs) recoveries (219 ) — (140 ) 12 (82 ) — (429 ) Provision for loan losses charged to expense 157 (79 ) 304 211 240 (183 ) 650 Balance, end of period $ 1,514 $ 494 $ 6,893 $ 2,816 $ 1,083 $ — $ 12,800 For the six months ended June 30, 2016 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,961 $ 741 $ 6,309 $ 2,769 $ 817 $ 162 $ 12,759 Charge-offs (228 ) — (380 ) — (28 ) — (636 ) Recoveries 15 — 19 — 1 — 35 Net (charge-offs) recoveries (213 ) — (361 ) — (27 ) — (601 ) Provision for loan losses charged to expense (118 ) (153 ) 618 195 71 (13 ) 600 Balance, end of period $ 1,630 $ 588 $ 6,566 $ 2,964 $ 861 $ 149 $ 12,758 The following tables present loans and their related allowance for loan losses, by portfolio segment, as of June 30, 2017 and December 31, 2016 : June 30, 2017 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 149 $ — $ 19 $ — $ — $ — $ 168 Collectively evaluated for impairment 1,365 494 6,874 2,816 1,083 — 12,632 Total $ 1,514 $ 494 $ 6,893 $ 2,816 $ 1,083 $ — $ 12,800 Loan ending balances: Individually evaluated for impairment $ 848 $ — $ 411 $ — $ — $ — $ 1,259 Collectively evaluated for impairment 42,481 23,153 544,897 315,396 105,668 — 1,031,595 Total $ 43,329 $ 23,153 $ 545,308 $ 315,396 $ 105,668 $ — $ 1,032,854 December 31, 2016 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 246 $ — $ 34 $ — $ — $ — $ 280 Collectively evaluated for impairment 1,330 573 6,695 2,593 925 183 12,299 Total $ 1,576 $ 573 $ 6,729 $ 2,593 $ 925 $ 183 $ 12,579 Loan ending balances: Individually evaluated for impairment $ 1,108 $ 513 $ 426 $ — $ — $ — $ 2,047 Collectively evaluated for impairment 41,384 25,831 508,745 289,093 91,541 — 956,594 Total $ 42,492 $ 26,344 $ 509,171 $ 289,093 $ 91,541 $ — $ 958,641 Changes in Methodology: The Company did not make any changes to its allowance for loan losses methodology in the current period. Reserve for Unfunded Loan Commitments In addition to the allowance for loan losses, the Company maintains a reserve for unfunded loan commitments at a level that management believes is adequate to absorb estimated probable losses. Adjustments to the reserve are made through other expense and applied to the reserve which is classified as other liabilities. At June 30, 2017 , a $219 thousand commitment reserve was reported on the balance sheet as an “other liability”, compared to a $181 thousand commitment reserve at December 31, 2016 , due to a larger loan portfolio requiring a larger general reserve. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 replaced almost all existing revenue recognition guidance in current U.S. GAAP. However, the effects of the new revenue recognition guidance on the financial statements of reporting entities in the financial institution industry will be somewhat limited because, for the most part, financial instruments and related contractual rights and obligations are excluded from its scope. As such, it is anticipated that interest income recognition and measurement, the largest source of revenue for the Company, will not be impacted by ASC 606. However, the recognition and measurement of certain non-interest income items such as gain on sale of other real estate owned and deposit-related fees, could be affected by ASC 606. Under current U.S. GAAP, when full consideration is not expected and financing is required by the buyer to purchase the property, there are very prescriptive requirements in determining when foreclosed real estate property sold by an institution should be derecognized and a gain or loss be recognized. The new guidance that will be applied to these sales is more principles based. For example, as it pertains to the criteria for determining how a contract should be accounted for under the new guidance, judgment will need to be exercised in evaluating if: (a) a commitment on the buyer’s part exists, (b) collection is probable in circumstances where the initial investment is minimal and (c) the buyer has obtained control of the asset, including the significant risks and rewards of the ownership. If there is no commitment on the buyer’s part, collection is not probable or the buyer has not obtained control of the asset, then a gain cannot be recognized under the new guidance. The initial investment requirement for the buyer along with the various methods for profit recognition are no longer applicable when the new guidance goes into effect. The Company will revise its current policy on the recognition and measurement of gain on sale of other real estate owned to be consistent with the new guidance, but does not expect the new guidance to have a significant impact on the consolidated financial statements of the Company when adopted. For deposit-related fees, considering the straightforward nature of the arrangements with the Company’s deposits customers, the Company does not expect the recognition and measurement outcomes of deposit-related fees to be significant differently under the new guidance compared to current U.S. GAAP. ASU 2014-09 was to be effective for interim and annual periods beginning after December 15, 2016 and was to be applied on either a modified retrospective or full retrospective basis. In August 2015, the FASB issued ASU 2015-14 which defers the original effective date for all entities by one year. Public business entities should apply the guidance in ASU 2015-14 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company does not expect this ASU to have a material impact on the Company’s consolidated financial statements when adopted on January 1, 2018. ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This eliminates the available for sale classification of accounting for equity securities and adjusts the fair value disclosures for financial instruments carried at amortized cost such that the disclosed fair values represent an exit price as opposed to an entry price. This update requires that equity securities be carried at fair value on the balance sheet and any periodic changes in value will be adjusted through the income statement. A practical expedient is provided for equity securities without a readily determinable fair value, such that these securities can be carried at cost less any impairment. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of the standard. ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 was issued in three parts: (a) Section A , “Leases: Amendments to the FASB Accounting Standards Codification®,” (b) Section B , “Conforming Amendments Related to Leases: Amendments to the FASB Accounting Standards Codification®,” and (c) Section C , “Background Information and Basis for Conclusions.” While both lessees and lessors are affected by the new guidance, the effects on lessees are much more significant. The update states that a lessee should recognize the assets and liabilities that arise from all leases with a term greater than 12 months. The core principle requires the lessee to recognize a liability to make lease payments and a "right-of-use" asset. The accounting applied by the lessor is relatively unchanged as the majority of operating leases should remain classified as operating leases and the income from them recognized, generally, on a straight-line basis over the lease term. The standards update also requires expanded qualitative and quantitative disclosures. For public business entities, ASC 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. ASC 2016-02 mandates a modified retrospective transition for all entities. The Company is currently evaluating the impact of the adoption of ASC 2016-02 on its consolidated financial statements. ASU 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 was issued as part of FASB's simplification initiative as a result of its post-implementation review of FASB Statement No. 123(R), Share-Based Payment. Areas addressed include the accounting for income taxes, classification of awards as either equity or liabilities and classification on the statement of cash flows. The ASU is aimed at reducing the cost and complexity of accounting for share-based payments but will likely result in fluctuations in net income and earnings per share. Under this guidance all excess tax benefits and deficiencies related to employee stock compensation will be recognized within income tax expense via a lower effective tax rate, versus previously being recognized in additional paid in capital. For public business entities, ASU 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company has applied this change and the impact of the adoption of ASU 2016-09 on its consolidated financial statements was immaterial. ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 was issued to replace the incurred loss impairment methodology in current GAAP with an expected credit loss methodology and requires consideration of a broader range of information to determine credit loss estimates. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. Purchased credit impaired loans will receive an allowance account at the acquisition date that represents a component of the purchase price allocation. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses, with such allowance limited to the amount by which fair value is below amortized cost. For public business entities, ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements. ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 was issued to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this update provide guidance on the following eight specific cash flow issues: • Debt Prepayment or Debt Extinguishment Costs • Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing • Contingent Consideration Payments Made after a Business Combination • Proceeds from the Settlement of Insurance Claims • Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, include Bank-Owned Life Insurance Policies • Distributions Received from Equity Method Investees • Beneficial Interest in Securitization Transactions • Separately Identifiable Cash Flows and Application of the Predominance Principle The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoptions of ASU 2016-15 on its consolidated financial statements. ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash." ASU 2016-18 was issued to address divergence in the way restricted cash is classified and presented. The amendments in the update require that a statement of cash flows explain the change during a reporting period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. The amendments in this update apply to entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. The amendment says that transfers between cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents are not part of the entity's operating, investing, and financing activities. For public business entities, ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoptions of ASU 2016-18 on its consolidated financial statements. ASU 2017-04, "Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 was issued in an effort to simplify accounting in a new standard. The amendments in this update require that an entity perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment states that an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. For public business entities, ASU 2017-04 is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performing on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoptions of ASU 2017-04 on its consolidated financial statements. ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" ASU 2017-07 was issued to provide guidance on the presentation of defined benefit costs in the income statement. The amendments in this update requires that an entity report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The amendment states that other components of net benefit cost be separate from the service cost component in the income statement. For public business entities, ASU 2017-07 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoptions of ASU 2017-07 on its consolidated financial statements. ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities." ASU 2017-08 was issued to enhance the accounting for the amortization of premiums for purchased callable debt securities. This amendment requires that the amortization premium be shortened to the earliest call date. For public business entities, ASU 2017-08 is effective for fiscal years after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoptions of ASU 2017-08 on its consolidated financial statements. ASU 2017-09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-09 was issued to provide guidance on modification accounting for share-based payment awards. The amendments in this update requires that an entity account for the effects of a modification unless the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. ASU 2017-09 is effective for all entities for annual period, and interim period within those annual periods, beginning after December 15, 2017. The Company is currently evaluating the impact of the adoptions of ASU 2017-09 on its consolidated financial statements. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments The Company has derivative financial instruments in the form of interest rate swap agreements, which derive their value from underlying interest rates. These transactions involve both credit and market risk. The notional amounts are amounts on which calculations, payments, and the value of the derivatives are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Such difference, which represents the fair value of the derivative instrument, is reflected on the Company’s balance sheet as other assets or other liabilities. The Company is exposed to credit-related losses in the event of nonperformance by the counterparties to any derivative agreement. The Company controls the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect any counterparties to fail their obligations. The Company deals only with primary dealers. Derivative instruments are generally either negotiated OTC contracts or standardized contracts executed on a recognized exchange. Negotiated OTC derivative contracts are generally entered into between two counterparties that negotiate specific agreement terms, including the underlying instrument, amount, exercise prices and maturity. Risk Management Policies – Hedging Instruments The primary focus of the Company’s asset/liability management program is to monitor the sensitivity of the Company’s net portfolio value and net income under varying interest rate scenarios to take steps to control its risks. On a quarterly basis, the Company evaluates the effectiveness of entering into any derivative agreement by measuring the cost of such an agreement in relation to the reduction in net portfolio value and net income volatility within an assumed range of interest rates. Interest Rate Risk Management – Cash Flow Hedging Instruments The Company has variable rate debt as a source of funds for use in the Company’s lending and investment activities and for other general business purposes. These debt obligations expose the Company to variability in interest payments due to changes in interest rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense decreases. Management believes it is prudent to limit the variability of a portion of its interest payments and, therefore hedges its variable-rate interest payments. To meet this objective, management enters into interest rate swap agreements whereby the Company receives variable interest rate payments and makes fixed interest rate payments during the contract period. During the three and six months ended June 30, 2017 , the Company received variable rate London Interbank Offered Rate ("LIBOR") payments from and paid fixed rates in accordance with its interest rate swap agreements. A summary of the Company’s outstanding interest rate swap agreements used to hedge variable rate debt at June 30, 2017 and 2016 , respectively is as follows: For the three months ended June 30, For the six months ended June 30, (In thousands, except percentages and years) 2017 2016 2017 2016 Notional amount $ 60,000 $ 40,000 $ 60,000 $ 40,000 Weighted average pay rate 1.26 % 1.36 % 1.26 % 1.54 % Weighted average receive rate 1.07 % 0.65 % 0.98 % 0.56 % Weighted average maturity in years 3.36 4.04 3.61 4.40 Unrealized gain (loss) relating to interest rate swaps $ 312 $ (366 ) $ (231 ) $ (858 ) At June 30, 2017 , the unrealized gain relating to interest rate swaps was recorded as a derivative asset. The unrealized loss relating to interest rate swaps was recorded as a derivative liability. Changes in the fair value of the interest rate swaps designated as hedging instruments of the variability of cash flows associated with long-term debt are reported in other comprehensive income. |
Repurchase of Subordinated Debe
Repurchase of Subordinated Debentures | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Repurchase of Subordinated Debentures | Repurchase of Subordinated Debentures On February 26, 2016, the Company repurchased $5.2 million of its outstanding subordinated debentures, reducing its outstanding subordinated debt to $10.3 million . The subordinated debentures were repurchased at a price of $0.5475 per dollar, resulting in a pre-tax gain of $2.3 million . This gain is included in noninterest income on the income statement. The subordinated debentures were previously issued by Unity (NJ) Statutory Trust III, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., on December 19, 2006 and were due on December 19, 2036 . The floating interest rate was 3 month LIBOR plus 165 basis points and repriced quarterly. Upon completion of the transaction, Unity (NJ) Statutory Trust III was dissolved effective March 4, 2016. These securities qualified as Tier 1 capital under the terms of the Dodd-Frank Wall Street Reform and Consumer Protection Act and thus repurchasing them reduced Tier 1 capital. |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Overview | The accompanying Consolidated Financial Statements include the accounts of Unity Bancorp, Inc. (the "Parent Company") and its wholly-owned subsidiary, Unity Bank (the "Bank" or when consolidated with the Parent Company, the "Company"), and reflect all adjustments and disclosures which are generally routine and recurring in nature, and in the opinion of management, necessary for a fair presentation of interim results. The Bank has multiple subsidiaries used to hold part of its investment and loan portfolios and OREO properties. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation, with no impact on current earnings or shareholders’ equity. The financial information has been prepared in accordance with U.S. generally accepted accounting principles and has not been audited. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the reporting periods. Actual results could differ from those estimates. Amounts requiring the use of significant estimates include the allowance for loan losses, valuation of deferred tax and servicing assets, the carrying value of loans held for sale and other real estate owned, the valuation of securities and the determination of other-than-temporary impairment for securities and fair value disclosures. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q were available to be issued. The interim unaudited Consolidated Financial Statements included herein have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission (“SEC”) and consist of normal recurring adjustments necessary for the fair presentation of interim results. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results which may be expected for the entire year. As used in this Form 10-Q, “we” and “us” and “our” refer to Unity Bancorp, Inc., and its consolidated subsidiary, Unity Bank, depending on the context. Certain information and financial disclosures required by U.S. generally accepted accounting principles have been condensed or omitted from interim reporting pursuant to SEC rules. Interim financial statements should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Stock Transactions | Stock Transactions On August 26, 2016, the Company declared a 10% stock dividend to shareholders' of record as of September 15, 2016. The 10% stock dividend was paid on September 30, 2016. All share amounts in the following tables have been restated to include the effect of the 10% stock dividend distribution. Stock Option Plans The Company has incentive and nonqualified option plans, which allow for the grant of options to officers, employees and members of the Board of Directors. Transactions under the Company’s stock option plans for the six months ended June 30, 2017 are summarized in the following table: Shares Weighted average exercise price Weighted average remaining contractual life in years Aggregate intrinsic value Outstanding at December 31, 2016 552,759 $ 7.26 5.7 $ 4,663,432 Options granted 47,100 16.37 Options exercised (46,682 ) 5.80 Options forfeited — — Options expired (607 ) 11.48 Outstanding at June 30, 2017 552,570 $ 8.16 5.9 $ 4,857,968 Exercisable at June 30, 2017 381,744 $ 6.26 4.5 $ 4,079,655 Grants under the Company’s incentive and nonqualified option plans generally vest over 3 years and must be exercised within 10 years of the date of grant. The exercise price of each option is the market price on the date of grant. As of June 30, 2017 , 2,462,585 shares have been reserved for issuance upon the exercise of options, 552,570 option grants are outstanding, and 1,527,643 option grants have been exercised, forfeited or expired, leaving 382,372 shares available for grant. The fair values of the options granted during the three and six months ended June 30, 2017 and 2016 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Number of options granted — — 47,100 97,900 Weighted average exercise price $ — $ — $ 16.37 $ 10.06 Weighted average fair value of options $ — $ — $ 4.64 $ 3.19 Expected life in years (1) 0.00 0.00 6.57 6.85 Expected volatility (2) — % — % 28.12 % 31.91 % Risk-free interest rate (3) — % — % 2.18 % 1.79 % Dividend yield (4) — % — % 1.15 % 1.44 % (1) The expected life of the options was estimated based on historical employee behavior and represents the period of time that options granted are expected to be outstanding. (2) The expected volatility of the Company’s stock price was based on the historical volatility over the period commensurate with the expected life of the options. (3) The risk-free interest rate is the U.S. Treasury rate commensurate with the expected life of the options on the date of grant. (4) The expected dividend yield is the projected annual yield based on the grant date stock price. Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during 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 Number of options exercised 29,618 20,378 46,682 20,378 Total intrinsic value of options exercised $ 337,230 $ 116,992 $ 484,920 $ 116,992 Cash received from options exercised 135,837 — 270,792 — Tax deduction realized from options 137,758 — 198,089 — The following table summarizes information about stock options outstanding and exercisable at June 30, 2017 : Options outstanding Options exercisable Range of exercise prices Options outstanding Weighted average remaining contractual life (in years) Weighted average exercise price Options exercisable Weighted average exercise price $ 0.00 - 4.00 77,000 1.6 $ 3.51 77,000 $ 3.51 4.01 - 8.00 232,870 4.3 6.25 232,870 6.25 8.01 - 12.00 166,100 8.3 9.52 71,874 9.27 12.01 - 16.00 46,600 9.5 15.00 — — 16.01 - 20.00 30,000 9.7 16.75 — — Total 552,570 5.9 $ 8.16 381,744 $ 6.26 Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") Topic 718, “Compensation - Stock Compensation,” requires an entity to recognize the fair value of equity awards as compensation expense over the period during which an employee is required to provide service in exchange for such an award (vesting period). Compensation expense related to stock options and the related income tax benefit for the three and six months ended June 30, 2017 and 2016 are detailed in the following table: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Compensation expense $ 71,023 $ 57,765 $ 140,839 $ 113,748 Income tax benefit 29,013 23,684 57,533 46,466 As of June 30, 2017 , unrecognized compensation costs related to nonvested share-based compensation arrangements granted under the Company’s stock option plans totaled approximately $500 thousand . That cost is expected to be recognized over a weighted average period of 2.1 years. Restricted Stock Awards Restricted stock is issued under the stock bonus program to reward employees and directors and to retain them by distributing stock over a period of time. The following table summarizes nonvested restricted stock activity for the six months ended June 30, 2017 : Shares Average grant date fair value Nonvested restricted stock at December 31, 2016 97,203 $ 9.47 Granted 38,400 16.36 Cancelled — — Vested (29,290 ) 8.80 Nonvested restricted stock at June 30, 2017 106,313 $ 12.14 Restricted stock awards granted to date vest over a period of 4 years and are recognized as compensation to the recipient over the vesting period. The awards are recorded at fair market value at the time of grant and amortized into salary expense on a straight line basis over the vesting period. As of June 30, 2017 , 518,157 shares of restricted stock were reserved for issuance, of which 111,404 shares are available for grant. Restricted stock awards granted during the three and six months ended June 30, 2017 and 2016 were as follows: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Number of shares granted — — 38,400 33,385 Average grant date fair value $ — $ — $ 16.36 $ 10.19 Compensation expense related to restricted stock for the three and six months ended June 30, 2017 and 2016 is detailed in the following table: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Compensation expense $ 107,773 $ 81,110 $ 249,577 $ 157,229 Income tax benefit 44,025 32,545 101,952 64,230 As of June 30, 2017 , there was approximately $1.1 million of unrecognized compensation cost related to nonvested restricted stock awards granted under the Company’s stock incentive plans. That cost is expected to be recognized over a weighted average period of 3.0 years. 401(k) Savings Plan The Bank has a 401(k) savings plan covering substantially all employees. Under the Plan, an employee can contribute up to 80 percent of their salary on a tax deferred basis. The Bank may also make discretionary contributions to the Plan. The Bank contributed $138 thousand and $90 thousand during the three months ended June 30, 2017 and 2016 , respectively, and $257 thousand and $179 thousand during the six months ended June 30, 2017 and 2016 , respectively. Deferred Fee Plan The Company has a deferred fee plan for Directors and executive management. Directors of the Company have the option to elect to defer up to 100 percent of their respective retainer and Board of Director fees, and each member of executive management has the option to elect to defer 100 percent of their year end cash bonuses. Director and executive deferred fees totaled $6 thousand and $5 thousand during the three months ended June 30, 2017 and 2016 , and $126 thousand and $107 thousand during the six months ended June 30, 2017 , and 2016 respectively. The interest paid on the deferred balances totaled $12 thousand and $9 thousand during the three months ended June 30, 2017 and 2016 , and $21 thousand and $16 thousand during the six months ended June 30, 2017 , and 2016 respectively. No fees were distributed in 2017 and 2016 , respectively. |
Benefit Plans | Benefit Plans In addition to the 401(k) savings plan which covers substantially all employees, the Company established in 2015 an unfunded supplemental defined benefit plan to provide additional retirement benefits for the President and Chief Executive Officer (“CEO”) and certain key executives. On June 4, 2015, the Company approved the Supplemental Executive Retirement Plan (“SERP”) pursuant to which the President and CEO is entitled to receive certain supplemental nonqualified retirement benefits. On November 21, 2016 the Company approved a change in calculation of the Retirement Benefit payable under the Plan so that the Retirement Benefit shall be an amount equal to forty ( 40% ) percent of the average of Executive's base salary for the thirty-six ( 36 ) months immediately preceding executive's separation from service after age 66, adjusted annually thereafter by 2 percent . The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $3.4 million . A discount rate of 4.00 percent was used to calculate the present value of the benefit obligation. The President and CEO commenced vesting to this retirement benefit on January 1, 2014, and vests an additional 3 percent each year until fully vested on January 1, 2024. In the event that the President and CEO’s separation from service from the company were to occur prior to full vesting, the President and CEO would be entitled to and shall be paid the vested portion of the retirement benefit calculated as of the date of separation from service. Notwithstanding the foregoing, upon a Change in Control, and provided that within 6 months following the Change in Control the President and CEO is involuntarily terminated for reasons other than “cause” or the President and CEO resigns for “good reason”, as such is defined in the SERP, or the President and CEO voluntarily terminates his employment after being offered continued employment in a position that is not a “Comparable Position”, as such is also defined in the SERP, the President and CEO shall become 100 percent vested in the full retirement benefit. No contributions or payments have been made during the three and six months ended June 30, 2017 . The following table summarizes the components of the net periodic pension cost of the defined benefit plan recognized during the three and six months ended June 30, 2017 and 2016 : For the three months ended For the six months ended (In thousands) 2017 2016 2017 2016 Service cost $ 35 $ 16 $ 51 $ 31 Interest cost 11 9 21 19 Amortization of prior service cost 21 21 42 41 Net periodic benefit cost $ 67 $ 46 $ 114 $ 91 The following table summarizes the changes in benefit obligations of the defined benefit plan during the six months ended June 30, 2017 and 2016 : For the six months ended June 30, (In thousands) 2017 2016 Benefit obligation, beginning of year $ 1,023 $ 923 Service cost 51 31 Interest cost 21 19 Actuarial gain (loss) — — Benefit obligation, end of period $ 1,095 $ 973 On October 22, 2015, the Company entered into an Executive Incentive Retirement Plan (the “Plan”) with certain key executive officers. The Plan has an effective date of January 1, 2015. The Plan is an unfunded, nonqualified deferred compensation plan. For any Plan Year, a guaranteed annual Deferral Award percentage of seven and one half percent ( 7.5% ) of the participant’s annual base salary will be credited to each Participant’s Deferred Benefit Account. A discretionary annual Deferral Award equal to seven and one half percent ( 7.5% ) of the participant’s annual base salary may be credited to the Participant’s account in addition to the guaranteed Deferral Award, if the Bank exceeds the benchmarks set forth in the Annual Executive Bonus Matrix. The total Deferral Award shall never exceed fifteen percent ( 15% ) of the participant's base salary for any given Plan Year. Each Participant shall be one hundred percent 100% vested in all Deferral Awards as of the date they are awarded. As of June 30, 2017 , the Company had total year to date expenses of $45 thousand related to the Plan. The Plan is reflected on the Company’s balance sheet as accrued expenses. Certain members of management are also enrolled in a split-dollar life insurance plan with a post retirement death benefit of $250 thousand . Total expenses related to this plan were $1 thousand for the three months ended June 30, 2017 and 2016 , and $3 thousand and $2 thousand for the six months ended June 30, 2017 and 2016 , respectively. |
Other-Than-Temporary Impairment | Other-Than-Temporary Impairment The Company has a process in place to identify securities that could potentially incur credit impairment that is other-than-temporary. This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concern warrants such evaluation. This evaluation considers relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other-than-temporary. Relevant facts and circumstances considered include: (1)the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events and (4) for fixed maturity securities, our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity and for equity securities, our ability and intent to hold the security for a forecasted period of time that allows for the recovery in value. Management assesses its intent to sell or whether it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis less any current-period credit losses. For debt securities that are considered other-than-temporarily impaired with no intent to sell and no requirement to sell prior to recovery of its amortized cost basis, the amount of the impairment is separated into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the security’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of future expected cash flows is due to factors that are not credit related and is recognized in other comprehensive income. For debt securities where management has the intent to sell, the amount of the impairment is reflected in earnings as realized losses. The present value of expected future cash flows is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The asset-backed securities cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate bond cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances including timing, security interests and loss severity. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Loans | Loans Loans Held for Sale Loans held for sale represent the guaranteed portion of Small Business Administration (“SBA”) loans and are reflected at the lower of aggregate cost or market value. The Company originates loans to customers under an SBA program that historically has provided for SBA guarantees of up to 90 percent of each loan. The Company generally sells the guaranteed portion of its SBA loans to a third party and retains the servicing, holding the nonguaranteed portion in its portfolio. The net amount of loan origination fees on loans sold is included in the carrying value and in the gain or loss on the sale. When sales of SBA loans do occur, the premium received on the sale and the present value of future cash flows of the servicing assets are recognized in income. All criteria for sale accounting must be met in order for the loan sales to occur; see details under the “Transfers of Financial Assets” heading above. Servicing assets represent the estimated fair value of retained servicing rights, net of servicing costs, at the time loans are sold. Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on stratifying the underlying financial assets by date of origination and term. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment, if temporary, would be reported as a valuation allowance. Serviced loans sold to others are not included in the accompanying Consolidated Balance Sheets. Income and fees collected for loan servicing are credited to noninterest income when earned, net of amortization on the related servicing assets. Loans Held to Maturity Loans held to maturity are stated at the unpaid principal balance, net of unearned discounts and deferred loan origination fees and costs. In accordance with the level yield method, loan origination fees, net of direct loan origination costs, are deferred and recognized over the estimated life of the related loans as an adjustment to the loan yield. Interest is credited to operations primarily based upon the principal balance outstanding. Loans are reported as past due when either interest or principal is unpaid in the following circumstances: fixed payment loans when the borrower is in arrears for two or more monthly payments; open end credit for two or more billing cycles; and single payment notes if interest or principal remains unpaid for 30 days or more. Nonperforming loans consist of loans that are not accruing interest as a result of principal or interest being in default for a period of 90 days or more or when the ability to collect principal and interest according to the contractual terms is in doubt (nonaccrual loans). When a loan is classified as nonaccrual, interest accruals are discontinued and all past due interest previously recognized as income is reversed and charged against current period earnings. Generally, until the loan becomes current, any payments received from the borrower are applied to outstanding principal until such time as management determines that the financial condition of the borrower and other factors merit recognition of a portion of such payments as interest income. Loans may be returned to an accrual status when the ability to collect is reasonably assured and when the loan is brought current as to principal and interest. Loans are charged off when collection is sufficiently questionable and when the Company can no longer justify maintaining the loan as an asset on the balance sheet. Loans qualify for charge-off when, after thorough analysis, all possible sources of repayment are insufficient. These include: 1) potential future cash flows, 2) value of collateral, and/or 3) strength of co-makers and guarantors. All unsecured loans are charged off upon the establishment of the loan’s nonaccrual status. Additionally, all loans classified as a loss or that portion of the loan classified as a loss is charged off. All loan charge-offs are approved by the Board of Directors. Troubled debt restructurings ("TDRs") occur when a creditor, for economic or legal reasons related to a debtor’s financial condition, grants a concession to the debtor that it would not otherwise consider. These concessions typically include reductions in interest rate, extending the maturity of a loan, or a combination of both. Interest income on accruing TDRs is credited to operations primarily based upon the principal amount outstanding, as stated in the paragraphs above. The Company evaluates its loans for impairment. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company has defined impaired loans to be all TDRs and nonperforming loans individually evaluated for impairment. Impairment is evaluated in total for smaller-balance loans of a similar nature (consumer and residential mortgage loans), and on an individual basis for all other loans. Impairment of a loan is measured based on the present value of expected future cash flows, discounted at the loan's effective interest rate, or as a practical expedient, based on a loan’s observable market price or the fair value of collateral, net of estimated costs to sell, if the loan is collateral-dependent. If the value of the impaired loan is less than the recorded investment in the loan, the Company establishes a valuation allowance, or adjusts existing valuation allowances, with a corresponding charge to the provision for loan losses. For additional information on loans, see Note 8 to the Consolidated Financial Statements and the section titled "Loan Portfolio" under Item 2. Management's Discussion and Analysis. |
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments | Allowance for Loan Losses and Reserve for Unfunded Loan Commitments The allowance for loan losses is maintained at a level management considers adequate to provide for probable loan losses as of the balance sheet date. The allowance is increased by provisions charged to expense and is reduced by net charge-offs. The level of the allowance is based on management’s evaluation of probable losses in the loan portfolio, after consideration of prevailing economic conditions in the Company’s market area, the volume and composition of the loan portfolio, and historical loan loss experience. The allowance for loan losses consists of specific reserves for individually impaired credits and TDRs, reserves for nonimpaired loans based on historical loss factors and reserves based on general economic factors and other qualitative risk factors such as changes in delinquency trends, industry concentrations or local/national economic trends. This risk assessment process is performed at least quarterly, and, as adjustments become necessary, they are realized in the periods in which they become known. Although management attempts to maintain the allowance at a level deemed adequate to provide for probable losses, future additions to the allowance may be necessary based upon certain factors including changes in market conditions and underlying collateral values. In addition, various regulatory agencies periodically review the adequacy of the Company’s allowance for loan losses. These agencies may require the Company to make additional provisions based on their judgments about information available to them at the time of their examination. The Company maintains an allowance for unfunded loan commitments that is maintained at a level that management believes is adequate to absorb estimated probable losses. Adjustments to the allowance are made through other expenses and applied to the allowance which is maintained in other liabilities. For additional information on the allowance for loan losses and unfunded loan commitments, see Note 9 to the Consolidated Financial Statements and the sections titled "Asset Quality" and "Allowance for Loan Losses and Reserve for Unfunded Loan Commitments" under Item 2. Management's Discussion and Analysis. |
Income Taxes | Income Taxes The Company accounts for income taxes according to the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applicable to taxable income for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation reserves are established against certain deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. Increases or decreases in the valuation reserve are charged or credited to the income tax provision. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that ultimately would be sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. The evaluation of a tax position taken is considered by itself and not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits would be recognized in income tax expense on the income statement. |
Significant Accounting Polici23
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Cash Proceeds Received from Share-based Payment Awards | Upon exercise, the Company issues shares from its authorized but unissued common stock to satisfy the options. The following table presents information about options exercised during 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 Number of options exercised 29,618 20,378 46,682 20,378 Total intrinsic value of options exercised $ 337,230 $ 116,992 $ 484,920 $ 116,992 Cash received from options exercised 135,837 — 270,792 — Tax deduction realized from options 137,758 — 198,089 — |
Summary of Nonvested Restricted Stock Activity | The following table summarizes nonvested restricted stock activity for the six months ended June 30, 2017 : Shares Average grant date fair value Nonvested restricted stock at December 31, 2016 97,203 $ 9.47 Granted 38,400 16.36 Cancelled — — Vested (29,290 ) 8.80 Nonvested restricted stock at June 30, 2017 106,313 $ 12.14 |
Summary of Components of Net Periodic Pension Cost of Defined Benefit Plan Recognized | The following table summarizes the components of the net periodic pension cost of the defined benefit plan recognized during the three and six months ended June 30, 2017 and 2016 : For the three months ended For the six months ended (In thousands) 2017 2016 2017 2016 Service cost $ 35 $ 16 $ 51 $ 31 Interest cost 11 9 21 19 Amortization of prior service cost 21 21 42 41 Net periodic benefit cost $ 67 $ 46 $ 114 $ 91 |
Summary of Changes In Benefit Obligations Of Defined Benefit Plan | The following table summarizes the changes in benefit obligations of the defined benefit plan during the six months ended June 30, 2017 and 2016 : For the six months ended June 30, (In thousands) 2017 2016 Benefit obligation, beginning of year $ 1,023 $ 923 Service cost 51 31 Interest cost 21 19 Actuarial gain (loss) — — Benefit obligation, end of period $ 1,095 $ 973 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Transactions Under the Company’s Stock Option Plans | Transactions under the Company’s stock option plans for the six months ended June 30, 2017 are summarized in the following table: Shares Weighted average exercise price Weighted average remaining contractual life in years Aggregate intrinsic value Outstanding at December 31, 2016 552,759 $ 7.26 5.7 $ 4,663,432 Options granted 47,100 16.37 Options exercised (46,682 ) 5.80 Options forfeited — — Options expired (607 ) 11.48 Outstanding at June 30, 2017 552,570 $ 8.16 5.9 $ 4,857,968 Exercisable at June 30, 2017 381,744 $ 6.26 4.5 $ 4,079,655 |
Stock Options, Valuation Assumptions | The fair values of the options granted during the three and six months ended June 30, 2017 and 2016 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Number of options granted — — 47,100 97,900 Weighted average exercise price $ — $ — $ 16.37 $ 10.06 Weighted average fair value of options $ — $ — $ 4.64 $ 3.19 Expected life in years (1) 0.00 0.00 6.57 6.85 Expected volatility (2) — % — % 28.12 % 31.91 % Risk-free interest rate (3) — % — % 2.18 % 1.79 % Dividend yield (4) — % — % 1.15 % 1.44 % (1) The expected life of the options was estimated based on historical employee behavior and represents the period of time that options granted are expected to be outstanding. (2) The expected volatility of the Company’s stock price was based on the historical volatility over the period commensurate with the expected life of the options. (3) The risk-free interest rate is the U.S. Treasury rate commensurate with the expected life of the options on the date of grant. (4) The expected dividend yield is the projected annual yield based on the grant date stock price. |
Schedule of Stock Options, by Exercise Price Range | The following table summarizes information about stock options outstanding and exercisable at June 30, 2017 : Options outstanding Options exercisable Range of exercise prices Options outstanding Weighted average remaining contractual life (in years) Weighted average exercise price Options exercisable Weighted average exercise price $ 0.00 - 4.00 77,000 1.6 $ 3.51 77,000 $ 3.51 4.01 - 8.00 232,870 4.3 6.25 232,870 6.25 8.01 - 12.00 166,100 8.3 9.52 71,874 9.27 12.01 - 16.00 46,600 9.5 15.00 — — 16.01 - 20.00 30,000 9.7 16.75 — — Total 552,570 5.9 $ 8.16 381,744 $ 6.26 |
Allocation of Share-based Compensation Costs | Compensation expense related to stock options and the related income tax benefit for the three and six months ended June 30, 2017 and 2016 are detailed in the following table: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Compensation expense $ 71,023 $ 57,765 $ 140,839 $ 113,748 Income tax benefit 29,013 23,684 57,533 46,466 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Allocation of Share-based Compensation Costs | Compensation expense related to restricted stock for the three and six months ended June 30, 2017 and 2016 is detailed in the following table: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Compensation expense $ 107,773 $ 81,110 $ 249,577 $ 157,229 Income tax benefit 44,025 32,545 101,952 64,230 |
Restricted Stock Grants | Restricted stock awards granted during the three and six months ended June 30, 2017 and 2016 were as follows: For the three months ended June 30, For the six months ended June 30, 2017 2016 2017 2016 Number of shares granted — — 38,400 33,385 Average grant date fair value $ — $ — $ 16.36 $ 10.19 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Calculation of Basic and Diluted Income Per Share | The following is a reconciliation of the calculation of basic and diluted income per share: For the three months ended June 30, For the six months ended June 30, (In thousands, except per share amounts) 2017 2016 2017 2016 Net income $ 3,444 $ 2,824 $ 6,636 $ 7,029 Weighted average common shares outstanding - Basic 10,546 9,318 10,528 9,311 Plus: Potential dilutive common stock equivalents 189 150 192 145 Weighted average common shares outstanding - Diluted 10,735 9,468 10,720 9,456 Net income per common share - Basic $ 0.33 $ 0.30 $ 0.63 $ 0.75 Net income per common share - Diluted 0.32 0.30 0.62 0.74 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive 77 168 66 187 |
Other Comprehensive (Loss) Inco
Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Changes In Other Comprehensive (Loss) Income | The following tables show the changes in other comprehensive income (loss) for the three and six months ended June 30, 2017 and 2016 , net of tax: For the three months ended June 30, 2017 (In thousands) Net unrealized gains (losses) on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ (247 ) $ (379 ) $ 760 $ 134 Other comprehensive income (loss) before reclassification 246 — (184 ) 62 Less amounts reclassified from accumulated other comprehensive income (loss) 11 (13 ) — (2 ) Period change 235 13 (184 ) 64 Balance, end of period $ (12 ) $ (366 ) $ 576 $ 198 For the three months ended June 30, 2016 (In thousands) Net unrealized gains on securities Adjustments related to defined benefit plan Net unrealized losses from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ 34 $ (428 ) $ (307 ) $ (701 ) Other comprehensive income (loss) before reclassification 175 — (228 ) (53 ) Less amounts reclassified from accumulated other comprehensive income (loss) 53 (14 ) — 39 Period change 122 14 (228 ) (92 ) Balance, end of period $ 156 $ (414 ) $ (535 ) $ (793 ) For the six months ended June 30, 2017 (In thousands) Net unrealized gains (losses) on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ (161 ) $ (391 ) $ 712 $ 160 Other comprehensive income (loss) before reclassification 160 — (136 ) 24 Less amounts reclassified from accumulated other comprehensive loss 11 (25 ) — (14 ) Period change 149 25 (136 ) 38 Balance, end of period $ (12 ) $ (366 ) $ 576 $ 198 For the six months ended June 30, 2016 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized losses from cash flow hedges Accumulated other comprehensive (loss) income Balance, beginning of period $ (2 ) $ (448 ) $ (17 ) $ (467 ) Other comprehensive income (loss) before reclassification 272 — (518 ) (246 ) Less amounts reclassified from accumulated other comprehensive loss 114 (34 ) — 80 Period change 158 34 (518 ) (326 ) Balance, end of period $ 156 $ (414 ) $ (535 ) $ (793 ) |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Balances of Assets And Liabilities Measured at Fair Value on Recurring Basis | The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 : June 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Securities available for sale: U.S. Government sponsored entities $ — $ 5,763 $ — $ 5,763 State and political subdivisions — 5,877 — 5,877 Residential mortgage-backed securities — 35,105 — 35,105 Corporate and other securities — 8,080 — 8,080 Total securities available for sale $ — $ 54,825 $ — $ 54,825 Interest rate swap agreements — 973 — 973 Total $ — 973 $ — $ 973 December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Securities available for sale: U.S. Government sponsored entities $ — $ 3,716 $ — $ 3,716 State and political subdivisions — 5,502 — 5,502 Residential mortgage-backed securities — 21,631 — 21,631 Corporate and other securities — 9,719 — 9,719 Total securities available for sale $ — $ 40,568 $ — $ 40,568 Interest rate swap agreements — 1,204 — 1,204 Total $ — $ 1,204 $ — $ 1,204 |
Assets and Liabilities Subject to Fair Value Adjustments (Impairment) on Non-Recurring Basis Carried on Balance Sheet by Caption and by Level within Hierarchy | The following tables present the assets and liabilities subject to fair value adjustments (impairment) on a non-recurring basis carried on the balance sheet by caption and by level within the hierarchy (as described above): Fair value at June 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Financial assets: OREO $ — $ — $ 581 $ 581 Impaired collateral-dependent loans — — 1,091 1,091 Fair value at December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Financial assets: OREO $ — $ — $ 1,050 $ 1,050 Impaired collateral-dependent loans — — 1,767 1,767 |
Carrying Amount and Estimated Fair Values of Financial Instruments | The table below presents the carrying amount and estimated fair values of the Company’s financial instruments presented as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In thousands) Fair value level Carrying amount Estimated fair value Carrying amount Estimated fair value Financial assets: Cash and cash equivalents Level 1 $ 104,815 $ 104,815 $ 105,895 $ 105,895 Securities (1) Level 2 75,066 75,274 61,547 61,536 SBA loans held for sale Level 2 13,950 15,708 14,773 16,440 Loans, net of allowance for loan losses (2) Level 2 1,020,054 1,018,549 946,062 944,772 FHLB stock Level 2 7,101 7,101 6,037 6,037 Servicing assets Level 3 2,003 2,003 2,086 2,086 Accrued interest receivable Level 2 4,669 4,669 4,462 4,462 OREO Level 3 581 581 1,050 1,050 Financial liabilities: Deposits Level 2 1,003,967 1,003,168 945,723 944,886 Borrowed funds and subordinated debentures Level 2 152,310 151,862 131,310 130,319 Accrued interest payable Level 2 410 410 430 430 (1) Includes held to maturity (“HTM”) corporate securities that are considered Level 3. These securities had book values of $3.7 million and $3.8 million at June 30, 2017 and December 31, 2016 , respectively, and market values of $3.7 million and $3.6 million at June 30, 2017 and December 31, 2016 , respectively. (2) Includes collateral-dependent impaired loans that are considered Level 3 and reported separately in the tables under the “Fair Value on a Nonrecurring Basis” heading. Collateral-dependent impaired loans, net of specific reserves totaled $1.1 million and $1.8 million at June 30, 2017 and December 31, 2016 , respectively. |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Marketable Securities [Abstract] | |
Reconciliation from Amortized Cost to Estimated Fair Value of Marketable Securities | This table provides the major components of AFS and HTM securities at amortized cost and estimated fair value at June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 (In thousands) Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Available for sale: U.S. Government sponsored entities $ 5,768 $ 8 $ (13 ) $ 5,763 $ 3,744 $ 2 $ (30 ) $ 3,716 State and political subdivisions 5,862 53 (38 ) 5,877 5,545 19 (62 ) 5,502 Residential mortgage-backed securities 34,934 350 (179 ) 35,105 21,547 339 (255 ) 21,631 Corporate and other securities 8,283 22 (225 ) 8,080 10,003 — (284 ) 9,719 Total securities available for sale $ 54,847 $ 433 $ (455 ) $ 54,825 $ 40,839 $ 360 $ (631 ) $ 40,568 Held to maturity: U.S. Government sponsored entities $ 3,270 $ — $ (64 ) $ 3,206 $ 3,530 $ — $ (128 ) $ 3,402 State and political subdivisions 2,302 203 — 2,505 2,306 181 (1 ) 2,486 Residential mortgage-backed securities 4,386 98 (16 ) 4,468 4,799 98 (25 ) 4,872 Commercial mortgage-backed securities 3,741 — (76 ) 3,665 3,796 — (148 ) 3,648 Corporate and other securities 6,542 69 (6 ) 6,605 6,548 12 — 6,560 Total securities held to maturity $ 20,241 $ 370 $ (162 ) $ 20,449 $ 20,979 $ 291 $ (302 ) $ 20,968 |
Schedule of Marketable Securities by Contractual Maturity | This table provides the remaining contractual maturities and yields of securities within the investment portfolios. The carrying value of securities at June 30, 2017 is distributed by contractual maturity. Mortgage-backed securities and other securities, which may have principal prepayment provisions, are distributed based on contractual maturity. Expected maturities will differ materially from contractual maturities as a result of early prepayments and calls. Within one year After one through five years After five through ten years After ten years Total carrying value (In thousands, except percentages) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Available for sale at fair value: U.S. Government sponsored entities $ — — % $ 3,739 1.61 % $ 2,024 2.16 % $ — — % $ 5,763 1.80 % State and political subdivisions — — 768 3.13 2,418 2.78 2,691 2.80 5,877 2.83 Residential mortgage-backed securities 15 4.04 328 2.46 4,044 2.29 30,718 2.80 35,105 2.74 Corporate and other securities — — 14 2.00 5,183 3.30 2,883 4.44 8,080 3.70 Total securities available for sale $ 15 4.04 % $ 4,849 1.91 % $ 13,669 2.74 % $ 36,292 2.93 % $ 54,825 2.79 % Held to maturity at cost: U.S. Government sponsored entities $ — — % $ — — % $ — — % $ 3,270 1.98 % $ 3,270 1.98 % State and political subdivisions 213 0.99 — — 493 5.07 1,596 4.64 2,302 4.40 Residential mortgage-backed securities 13 4.06 32 5.58 627 2.77 3,714 3.27 4,386 3.22 Commercial mortgage-backed securities — — — — — — 3,741 2.76 3,741 2.76 Corporate and other securities — — — — 4,530 5.72 2,012 8.80 6,542 6.67 Total securities held to maturity $ 226 1.17 % $ 32 5.58 % $ 5,650 5.34 % $ 14,333 3.77 % $ 20,241 4.18 % |
Schedule of Marketable Securities in Unrealized Loss Position | The fair value of securities with unrealized losses by length of time that the individual securities have been in a continuous unrealized loss position at June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 Less than 12 months 12 months and greater Total (In thousands, except number in a loss position) Total number in a loss position Estimated fair value Unrealized loss Estimated fair value Unrealized loss Estimated fair value Unrealized loss Available for sale: U.S. Government sponsored entities 1 $ 1,978 $ (13 ) $ — $ — $ 1,978 $ (13 ) State and political subdivisions 1 $ 1,949 $ (38 ) $ — $ — $ 1,949 $ (38 ) Residential mortgage-backed securities 10 $ 9,388 $ (133 ) $ 1,016 $ (46 ) $ 10,404 $ (179 ) Corporate and other securities 6 1,032 (67 ) 1,842 (158 ) 2,874 (225 ) Total temporarily impaired securities 18 $ 14,347 $ (251 ) $ 2,858 $ (204 ) $ 17,205 $ (455 ) Held to maturity: U.S. Government sponsored entities 2 $ 3,206 $ (64 ) $ — $ — $ 3,206 $ (64 ) Residential mortgage-backed securities 3 $ 705 $ (10 ) $ 398 $ (6 ) $ 1,103 $ (16 ) Commercial mortgage-backed securities 2 $ 3,664 (76 ) — — 3,664 (76 ) Corporate and other securities 1 1,524 (6 ) — — 1,524 (6 ) Total temporarily impaired securities 8 $ 9,099 $ (156 ) $ 398 $ (6 ) $ 9,497 $ (162 ) December 31, 2016 Less than 12 months 12 months and greater Total (In thousands, except number in a loss position) Total number in a loss position Estimated fair value Unrealized loss Estimated fair value Unrealized loss Estimated fair value Unrealized loss Available for sale: U.S. Government sponsored entities 1 $ 1,962 $ (30 ) $ — $ — $ 1,962 $ (30 ) State and political subdivisions 4 3,833 (62 ) — — 3,833 (62 ) Residential mortgage-backed securities 13 7,813 (139 ) 2,983 (116 ) 10,796 (255 ) Corporate and other securities 6 822 (67 ) 5,376 (217 ) 6,198 (284 ) Total temporarily impaired securities 24 $ 14,430 $ (298 ) $ 8,359 $ (333 ) $ 22,789 $ (631 ) Held to maturity: U.S. Government sponsored entities 2 $ 3,402 $ (128 ) $ — $ — $ 3,402 $ (128 ) State and political subdivisions 1 212 (1 ) — — 212 (1 ) Residential mortgage-backed securities 2 776 (15 ) 441 (10 ) 1,217 (25 ) Commercial mortgage-backed securities 2 3,648 (148 ) — — 3,648 (148 ) Total temporarily impaired securities 7 $ 8,038 $ (292 ) $ 441 $ (10 ) $ 8,479 $ (302 ) |
Schedule of Realized Gains (Losses) for Marketable Securities | Gross realized gains on securities for the three and six months ended June 30, 2017 and 2016 are detailed in the table below: For the three months ended For the six months ended (In thousands) 2017 2016 2017 2016 Available for sale: Realized gains $ 74 $ 81 $ 74 $ 175 Realized losses (58 ) — (58 ) — Total securities available for sale 16 81 16 175 Held to maturity: Realized gains — — — — Realized losses — — — — Total securities held to maturity — — — — Net gains on sales of securities $ 16 $ 81 $ 16 $ 175 |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Classification of Loans By Class | The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of June 30, 2017 and December 31, 2016 : (In thousands) June 30, 2017 December 31, 2016 SBA loans held for investment $ 43,329 $ 42,492 SBA 504 loans 23,153 26,344 Commercial loans Commercial other 65,551 58,447 Commercial real estate 443,564 422,418 Commercial real estate construction 36,193 28,306 Residential mortgage loans 315,396 289,093 Consumer loans Home equity 54,524 47,411 Consumer other 51,144 44,130 Total loans held for investment $ 1,032,854 $ 958,641 SBA loans held for sale 13,950 14,773 Total loans $ 1,046,804 $ 973,414 |
Loan Portfolio by Class According to Credit Quality Indicators | The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of June 30, 2017 : June 30, 2017 SBA, SBA 504 & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 40,568 $ 1,394 $ 1,367 $ 43,329 SBA 504 loans 21,999 1,049 105 23,153 Commercial loans Commercial other 64,357 350 844 65,551 Commercial real estate 438,888 4,157 519 443,564 Commercial real estate construction 35,443 750 — 36,193 Total commercial loans 538,688 5,257 1,363 545,308 Total SBA, SBA 504 and commercial loans $ 601,255 $ 7,700 $ 2,835 $ 611,790 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 313,714 $ 1,682 $ 315,396 Consumer loans Home equity 53,806 718 54,524 Consumer other 49,163 1,981 51,144 Total consumer loans 102,969 2,699 105,668 Total residential mortgage and consumer loans $ 416,683 $ 4,381 $ 421,064 The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of December 31, 2016 : December 31, 2016 SBA, SBA 504 & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 38,990 $ 2,023 $ 1,479 $ 42,492 SBA 504 loans 24,635 1,073 636 26,344 Commercial loans Commercial other 57,000 1,422 25 58,447 Commercial real estate 408,288 13,729 401 422,418 Commercial real estate construction 27,556 750 — 28,306 Total commercial loans 492,844 15,901 426 509,171 Total SBA, SBA 504 and commercial loans $ 556,469 $ 18,997 $ 2,541 $ 578,007 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 286,421 $ 2,672 $ 289,093 Consumer loans Home equity 46,929 482 47,411 Consumer other 42,154 1,976 44,130 Total consumer loans 89,083 2,458 91,541 Total residential mortgage and consumer loans $ 375,504 $ 5,130 $ 380,634 |
Aging Analysis of Past Due and Nonaccrual Loans by Loan Class | The following tables set forth an aging analysis of past due and nonaccrual loans as of June 30, 2017 and December 31, 2016 : June 30, 2017 (In thousands) 30-59 days past due 60-89 days past due 90+ days and still accruing Nonaccrual (1) Total past due Current Total loans SBA loans held for investment $ 1,078 $ — $ 230 $ 889 $ 2,197 $ 41,132 $ 43,329 SBA 504 loans — — — — — 23,153 23,153 Commercial loans Commercial other — — — 25 25 65,526 65,551 Commercial real estate 3,540 808 — 386 4,734 438,830 443,564 Commercial real estate construction — — — — — 36,193 36,193 Residential mortgage loans 2,330 — — 1,682 4,012 311,384 315,396 Consumer loans Home equity 24 240 — 718 982 53,542 54,524 Consumer other — — — 1,981 1,981 49,163 51,144 Total loans held for investment $ 6,972 $ 1,048 $ 230 $ 5,681 $ 13,931 $ 1,018,923 $ 1,032,854 SBA loans held for sale — — — — — 13,950 13,950 Total loans $ 6,972 $ 1,048 $ 230 $ 5,681 $ 13,931 $ 1,032,873 $ 1,046,804 (1) At June 30, 2017 , nonaccrual loans included $41 thousand of loans guaranteed by the SBA. December 31, 2016 (In thousands) 30-59 days past due 60-89 days past due 90+ days and still accruing Nonaccrual (1) Total past due Current Total loans SBA loans held for investment $ 491 $ 397 $ — $ 1,168 $ 2,056 $ 40,436 $ 42,492 SBA 504 loans — — — 513 513 25,831 26,344 Commercial loans Commercial other 50 — — 25 75 58,372 58,447 Commercial real estate 1,108 574 — 401 2,083 420,335 422,418 Commercial real estate construction — — — — — 28,306 28,306 Residential mortgage loans 2,932 263 — 2,672 5,867 283,226 289,093 Consumer loans Home equity 227 — — 482 709 46,702 47,411 Consumer other — — — 1,976 1,976 42,154 44,130 Total loans held for investment $ 4,808 $ 1,234 $ — $ 7,237 $ 13,279 $ 945,362 $ 958,641 SBA loans held for sale — — — — — 14,773 14,773 Total loans $ 4,808 $ 1,234 $ — $ 7,237 $ 13,279 $ 960,135 $ 973,414 (1) At December 31, 2016 , nonaccrual loans included $153 thousand of TDRs and $60 thousand of loans guaranteed by the SBA. |
Impaired Loans with Associated Allowance Amount | The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of June 30, 2017 : June 30, 2017 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 846 $ 455 $ — Commercial loans Commercial other 25 25 — Commercial real estate 43 43 — Total commercial loans 68 68 — Total impaired loans with no related allowance 914 523 — With an allowance: SBA loans held for investment (1) 943 393 149 Commercial loans Commercial real estate 343 343 19 Total commercial loans 343 343 19 Total impaired loans with a related allowance 1,286 736 168 Total individually evaluated impaired loans: SBA loans held for investment (1) 1,789 848 149 Commercial loans Commercial other 25 25 — Commercial real estate 386 386 19 Total commercial loans 411 411 19 Total individually evaluated impaired loans $ 2,200 $ 1,259 $ 168 (1) Balances are reduced by amount guaranteed by the SBA of $41 thousand at June 30, 2017 . The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of December 31, 2016 : December 31, 2016 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 1,235 $ 653 $ — SBA 504 loans 513 513 — Commercial loans Commercial other 25 25 — Commercial real estate 42 43 — Total commercial loans 67 68 — Total impaired loans with no related allowance 1,815 1,234 — With an allowance: SBA loans held for investment (1) 975 455 246 Commercial loans Commercial other 13 1 1 Commercial real estate 358 357 33 Total commercial loans 371 358 34 Total impaired loans with a related allowance 1,346 813 280 Total individually evaluated impaired loans: SBA loans held for investment (1) 2,210 1,108 246 SBA 504 loans 513 513 — Commercial loans Commercial other 38 26 1 Commercial real estate 400 400 33 Total commercial loans 438 426 34 Total individually evaluated impaired loans $ 3,161 $ 2,047 $ 280 (1) Balances are reduced by amount guaranteed by the SBA of $60 thousand at December 31, 2016 . |
Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized [Table Text Block] | The following tables present the average recorded investments in impaired loans and the related amount of interest recognized during the time period in which the loans were impaired for the three and six months ended June 30, 2017 and 2016 . The average balances are calculated based on the month-end balances of impaired loans. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method, and therefore no interest income is recognized. The interest income recognized on impaired loans noted below represents primarily nominal amounts of income recognized on a cash basis for well-collateralized impaired loans. For the three months ended June 30, 2017 2016 (In thousands) Average recorded investment Interest income recognized on impaired loans Average recorded investment Interest income recognized on impaired loans SBA loans held for investment (1) $ 989 $ 22 $ 1,640 $ 1 SBA 504 loans — — 513 — Commercial loans Commercial other 25 — 929 14 Commercial real estate 921 — 1,273 19 Commercial real estate construction — — 339 — Total $ 1,935 $ 22 $ 4,694 $ 34 (1) Balances are reduced by the average amount guaranteed by the SBA of $54 thousand and $218 thousand for the three months ended June 30, 2017 and 2016 , respectively. For the six months ended June 30, 2017 2016 (In thousands) Average recorded investment Interest income recognized on impaired loans Average recorded investment Interest income recognized on impaired loans SBA loans held for investment (1) $ 993 $ 19 $ 1,822 $ 3 SBA 504 loans 165 — 1,082 — Commercial loans Commercial other 25 — 496 38 Commercial real estate 1,027 22 1,662 31 Commercial real estate construction — — 288 — Total $ 2,210 $ 41 $ 5,350 $ 72 (1) Balances are reduced by the average amount guaranteed by the SBA of $151 thousand and $241 thousand for the six months ended June 30, 2017 and 2016 , respectively. |
Allowance for Loan Losses and29
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | |
Activity in Allowance for Loan Losses by Portfolio Segment | The following tables detail the activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2017 and 2016 : For the three months ended June 30, 2017 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,653 $ 600 $ 6,533 $ 2,869 $ 1,026 $ — $ 12,681 Charge-offs (150 ) — (120 ) — (17 ) — (287 ) Recoveries 3 — 3 — — — 6 Net (charge-offs) recoveries (147 ) — (117 ) — (17 ) — (281 ) Provision for loan losses charged to expense 8 (106 ) 477 (53 ) 74 — 400 Balance, end of period $ 1,514 $ 494 $ 6,893 $ 2,816 $ 1,083 $ — $ 12,800 For the three months ended June 30, 2016 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,713 $ 598 $ 6,312 $ 2,892 $ 836 $ 283 $ 12,634 Charge-offs (142 ) — (152 ) — — — (294 ) Recoveries 4 — 13 — 1 — 18 Net (charge-offs) recoveries (138 ) — (139 ) — 1 — (276 ) Provision for loan losses charged to expense 55 (10 ) 393 72 24 (134 ) 400 Balance, end of period $ 1,630 $ 588 $ 6,566 $ 2,964 $ 861 $ 149 $ 12,758 The following tables detail the activity in the allowance for loan losses portfolio segment for the six months ended June 30, 2017 and 2016 : For the six months ended June 30, 2017 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,576 $ 573 $ 6,729 $ 2,593 $ 925 $ 183 $ 12,579 Charge-offs (258 ) — (196 ) — (83 ) — (537 ) Recoveries 39 — 56 12 1 — 108 Net (charge-offs) recoveries (219 ) — (140 ) 12 (82 ) — (429 ) Provision for loan losses charged to expense 157 (79 ) 304 211 240 (183 ) 650 Balance, end of period $ 1,514 $ 494 $ 6,893 $ 2,816 $ 1,083 $ — $ 12,800 For the six months ended June 30, 2016 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Balance, beginning of period $ 1,961 $ 741 $ 6,309 $ 2,769 $ 817 $ 162 $ 12,759 Charge-offs (228 ) — (380 ) — (28 ) — (636 ) Recoveries 15 — 19 — 1 — 35 Net (charge-offs) recoveries (213 ) — (361 ) — (27 ) — (601 ) Provision for loan losses charged to expense (118 ) (153 ) 618 195 71 (13 ) 600 Balance, end of period $ 1,630 $ 588 $ 6,566 $ 2,964 $ 861 $ 149 $ 12,758 |
Allowance for Credit Losses on Financing Receivables on Basis of Impairment Method | The following tables present loans and their related allowance for loan losses, by portfolio segment, as of June 30, 2017 and December 31, 2016 : June 30, 2017 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 149 $ — $ 19 $ — $ — $ — $ 168 Collectively evaluated for impairment 1,365 494 6,874 2,816 1,083 — 12,632 Total $ 1,514 $ 494 $ 6,893 $ 2,816 $ 1,083 $ — $ 12,800 Loan ending balances: Individually evaluated for impairment $ 848 $ — $ 411 $ — $ — $ — $ 1,259 Collectively evaluated for impairment 42,481 23,153 544,897 315,396 105,668 — 1,031,595 Total $ 43,329 $ 23,153 $ 545,308 $ 315,396 $ 105,668 $ — $ 1,032,854 December 31, 2016 (In thousands) SBA held for investment SBA 504 Commercial Residential Consumer Unallocated Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 246 $ — $ 34 $ — $ — $ — $ 280 Collectively evaluated for impairment 1,330 573 6,695 2,593 925 183 12,299 Total $ 1,576 $ 573 $ 6,729 $ 2,593 $ 925 $ 183 $ 12,579 Loan ending balances: Individually evaluated for impairment $ 1,108 $ 513 $ 426 $ — $ — $ — $ 2,047 Collectively evaluated for impairment 41,384 25,831 508,745 289,093 91,541 — 956,594 Total $ 42,492 $ 26,344 $ 509,171 $ 289,093 $ 91,541 $ — $ 958,641 |
Derivative Financial Instrume30
Derivative Financial Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | A summary of the Company’s outstanding interest rate swap agreements used to hedge variable rate debt at June 30, 2017 and 2016 , respectively is as follows: For the three months ended June 30, For the six months ended June 30, (In thousands, except percentages and years) 2017 2016 2017 2016 Notional amount $ 60,000 $ 40,000 $ 60,000 $ 40,000 Weighted average pay rate 1.26 % 1.36 % 1.26 % 1.54 % Weighted average receive rate 1.07 % 0.65 % 0.98 % 0.56 % Weighted average maturity in years 3.36 4.04 3.61 4.40 Unrealized gain (loss) relating to interest rate swaps $ 312 $ (366 ) $ (231 ) $ (858 ) |
Significant Accounting Polici31
Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2017USD ($)shares | Jun. 30, 2016USD ($)shares | Jun. 30, 2017USD ($)paymentshares | Jun. 30, 2016USD ($)shares | Dec. 31, 2016USD ($)shares | Sep. 30, 2016 | Aug. 26, 2016 | Dec. 31, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock dividend, percentage | 10.00% | 10.00% | 10.00% | 10.00% | ||||
Options, outstanding (in shares) | shares | 552,570 | 552,570 | 552,759 | |||||
Number of options exercised | shares | 29,618 | 20,378 | 46,682 | 20,378 | ||||
Defined contribution plan, maximum annual contributions per employee, percent | 80.00% | |||||||
Defined contribution plan employer discretionary contribution amount | $ 138,000 | $ 90,000 | $ 257,000 | $ 179,000 | ||||
Deferred fees | 6,000 | 5,000 | 126,000 | 107,000 | ||||
Interest paid on deferred fees | 12,000 | 9,000 | 21,000 | 16,000 | ||||
Distributions paid | 0 | 0 | 0 | 0 | ||||
Defined benefit plans future payments | $ 1,095,000 | 973,000 | $ 1,095,000 | 973,000 | $ 1,023,000 | $ 923,000 | ||
Director | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Deferred compensation arrangement guaranteed award percentage | 100.00% | |||||||
Executive Management | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Deferred compensation arrangement guaranteed award percentage | 100.00% | |||||||
Supplemental Employee Retirement Plan | President And Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percent of average executive base salary | 40.00% | 40.00% | ||||||
Payment term after separation | 36 months | |||||||
Percent of average executive base salary, adjustment thereafter | 2.00% | 2.00% | ||||||
Number of annual payments after separation | payment | 15 | |||||||
Defined benefit plans future payments | $ 3,400,000 | $ 3,400,000 | ||||||
Discount rate used to calculate the present value of the benefit obligation | 4.00% | 4.00% | ||||||
Vesting percentage | 3.00% | |||||||
Award vesting rights, percentage | 100.00% | |||||||
Other Postretirement Benefit Plan | Executive Management | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Deferred compensation arrangement guaranteed award percentage | 7.50% | |||||||
Award vesting rights, percentage | 100.00% | |||||||
Accrued expense under the plan | $ 45,000 | $ 45,000 | ||||||
Life insurance plan with a post retirement death benefit | 250,000 | 250,000 | ||||||
Life insurance plan aggregate expenses | $ 1,000 | $ 1,000 | $ 3,000 | $ 2,000 | ||||
Other Postretirement Benefit Plan | Executive Management | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Deferred compensation arrangement guaranteed award percentage | 15.00% | |||||||
Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Options, award expiration period | 10 years | |||||||
Number of shares authorized | shares | 2,462,585 | 2,462,585 | ||||||
Options, outstanding (in shares) | shares | 552,570 | 552,570 | ||||||
Options, exercised forfeited or expired (shares) | shares | 1,527,643 | |||||||
Number of shares available for grant | shares | 382,372 | 382,372 | ||||||
Compensation cost not yet recognized | $ 500,000 | $ 500,000 | ||||||
Compensation cost recognition weighted average period | 2 years 1 month 6 days | |||||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 4 years | |||||||
Number of shares authorized | shares | 518,157 | 518,157 | ||||||
Number of shares available for grant | shares | 111,404 | 111,404 | ||||||
Compensation cost recognition weighted average period | 3 years | |||||||
Nonvested awards, compensation not yet recognized, awards other than options | $ 1,100,000 | $ 1,100,000 |
Significant Accounting Polici32
Significant Accounting Policies - Stock Transactions - Stock Option Plans (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Shares | |||||
Options Outstanding, beginning shares | 552,759 | ||||
Options granted, shares | 0 | 0 | 47,100 | 97,900 | |
Options exercised, shares | (29,618) | (20,378) | (46,682) | (20,378) | |
Options forfeited, shares | 0 | ||||
Options expired, shares | (607) | ||||
Options Outstanding, ending shares | 552,570 | 552,570 | 552,759 | ||
Shares Exercisable | 381,744 | 381,744 | |||
Weighted average exercise price | |||||
Weighted average exercise price, Options Outstanding, beginning (in dollars per share) | $ 7.26 | ||||
Weighted average exercise price, Options granted (in dollars per share) | $ 0 | $ 0 | 16.37 | $ 10.06 | |
Weighted average exercise price, Options exercised (in dollars per share) | 5.80 | ||||
Weighted average exercise price, Options forfeited (in dollars per share) | 0 | ||||
Weighted average exercise price, Options expired (in dollars per share) | 11.48 | ||||
Weighted average exercise price, Options Outstanding, ending (in dollars per share) | 8.16 | 8.16 | $ 7.26 | ||
Weighted average exercise price, Options Exercisable (in dollars per share) | $ 6.26 | $ 6.26 | |||
Weighted average remaining contractual life , Options Outstanding | 5 years 10 months 24 days | 5 years 8 months 12 days | |||
Weighted average remaining contractual life, Options exercisable | 4 years 6 months | ||||
Aggregate intrinsic value: Options Outstanding | $ 4,857,968 | $ 4,857,968 | $ 4,663,432 | ||
Aggregate intrinsic value, Options exercisable | $ 4,079,655 | $ 4,079,655 |
Significant Accounting Polici33
Significant Accounting Policies - Stock Option Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Number of options granted | 0 | 0 | 47,100 | 97,900 |
Weighted average exercise price (in dollars per share) | $ 0 | $ 0 | $ 16.37 | $ 10.06 |
Weighted average fair value of options (in dollars per share) | $ 0 | $ 0 | $ 4.64 | $ 3.19 |
Expected life | 0 years | 0 years | 6 years 6 months 26 days | 6 years 10 months 6 days |
Expected volatility | 0.00% | 0.00% | 28.12% | 31.91% |
Risk-free interest rate | 0.00% | 0.00% | 2.18% | 1.79% |
Dividend yield | 0.00% | 0.00% | 1.15% | 1.44% |
Significant Accounting Polici34
Significant Accounting Policies - Schedule of Information About Options Exercised (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Number of options exercised | 29,618 | 20,378 | 46,682 | 20,378 |
Total intrinsic value of options exercised | $ 337,230 | $ 116,992 | $ 484,920 | $ 116,992 |
Cash received from options exercised | 135,837 | 0 | 270,792 | 0 |
Tax deduction realized from options | $ 137,758 | $ 0 | $ 198,089 | $ 0 |
Significant Accounting Polici35
Significant Accounting Policies - Stock Transactions - Stock Options Outstanding And Exercisable (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding: Shares Outstanding | shares | 552,570 |
Options Outstanding: Weighted Average Remaining Contractual Life | 5 years 10 months 24 days |
Options Outstanding: Weighted Average Exercise Price (in dollars per share) | $ 8.16 |
Options Exercisable: Shares Exercisable | shares | 381,744 |
Options Exercisable: Weighted Average Exercise Price (in dollars per share) | $ 6.26 |
0.00 - 4.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower (in dollars per share) | 0 |
Range of exercise prices, upper (in dollars per share) | $ 4 |
Options Outstanding: Shares Outstanding | shares | 77,000 |
Options Outstanding: Weighted Average Remaining Contractual Life | 1 year 7 months 6 days |
Options Outstanding: Weighted Average Exercise Price (in dollars per share) | $ 3.51 |
Options Exercisable: Shares Exercisable | shares | 77,000 |
Options Exercisable: Weighted Average Exercise Price (in dollars per share) | $ 3.51 |
4.01 - 8.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower (in dollars per share) | 4.01 |
Range of exercise prices, upper (in dollars per share) | $ 8 |
Options Outstanding: Shares Outstanding | shares | 232,870 |
Options Outstanding: Weighted Average Remaining Contractual Life | 4 years 3 months 18 days |
Options Outstanding: Weighted Average Exercise Price (in dollars per share) | $ 6.25 |
Options Exercisable: Shares Exercisable | shares | 232,870 |
Options Exercisable: Weighted Average Exercise Price (in dollars per share) | $ 6.25 |
8.01 - 12.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower (in dollars per share) | 8.01 |
Range of exercise prices, upper (in dollars per share) | $ 12 |
Options Outstanding: Shares Outstanding | shares | 166,100 |
Options Outstanding: Weighted Average Remaining Contractual Life | 8 years 3 months 18 days |
Options Outstanding: Weighted Average Exercise Price (in dollars per share) | $ 9.52 |
Options Exercisable: Shares Exercisable | shares | 71,874 |
Options Exercisable: Weighted Average Exercise Price (in dollars per share) | $ 9.27 |
12.01 - 16.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower (in dollars per share) | 12.01 |
Range of exercise prices, upper (in dollars per share) | $ 16 |
Options Outstanding: Shares Outstanding | shares | 46,600 |
Options Outstanding: Weighted Average Remaining Contractual Life | 9 years 6 months |
Options Outstanding: Weighted Average Exercise Price (in dollars per share) | $ 15 |
Options Exercisable: Shares Exercisable | shares | 0 |
Options Exercisable: Weighted Average Exercise Price (in dollars per share) | $ 0 |
16.01 - 20.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower (in dollars per share) | 16.01 |
Range of exercise prices, upper (in dollars per share) | $ 20 |
Options Outstanding: Shares Outstanding | shares | 30,000 |
Options Outstanding: Weighted Average Remaining Contractual Life | 9 years 8 months 12 days |
Options Outstanding: Weighted Average Exercise Price (in dollars per share) | $ 16.75 |
Options Exercisable: Shares Exercisable | shares | 0 |
Options Exercisable: Weighted Average Exercise Price (in dollars per share) | $ 0 |
Significant Accounting Polici36
Significant Accounting Policies - Compensation Expense Related To Stock Options (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 71,023 | $ 57,765 | $ 140,839 | $ 113,748 |
Income tax benefit | 29,013 | 23,684 | 57,533 | 46,466 |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 107,773 | 81,110 | 249,577 | 157,229 |
Income tax benefit | $ 44,025 | $ 32,545 | $ 101,952 | $ 64,230 |
Significant Accounting Polici37
Significant Accounting Policies - Stock Transactions - Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Shares | ||||
Nonvested restricted stock: shares | 97,203 | |||
Granted: shares | 0 | 0 | 38,400 | 33,385 |
Cancelled: shares | 0 | |||
Vested: shares | (29,290) | |||
Nonvested restricted stock: shares | 106,313 | 106,313 | ||
Average grant date fair value | ||||
Nonvested restricted stock: Average grant date fair value (in dollars per share) | $ 9.47 | |||
Granted: Average grant date fair value (in dollars per share) | $ 0 | $ 0 | 16.36 | $ 10.19 |
Cancelled: Average grant date fair value (in dollars per share) | 0 | |||
Vested: Average grant date fair value (in dollars per share) | 8.80 | |||
Nonvested restricted stock: Average grant date fair value (in dollars per share) | $ 12.14 | $ 12.14 |
Significant Accounting Polici38
Significant Accounting Policies - Stock Transactions - Restricted Stock Awards (Details) - Restricted Stock - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 0 | 0 | 38,400 | 33,385 |
Average grant date fair value (in dollars per share) | $ 0 | $ 0 | $ 16.36 | $ 10.19 |
Significant Accounting Polici39
Significant Accounting Policies - Components of Net Periodic Pension Cost of Defined Benefit Plan Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Service cost | $ 35 | $ 16 | $ 51 | $ 31 |
Interest cost | 11 | 9 | 21 | 19 |
Amortization of prior service cost | 21 | 21 | 42 | 41 |
Net periodic benefit cost | $ 67 | $ 46 | $ 114 | $ 91 |
Significant Accounting Polici40
Significant Accounting Policies - Summary of Changes in Benefit Obligations of Defined Benefit Plan Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation, beginning of year | $ 1,023 | $ 923 | ||
Service cost | $ 35 | $ 16 | 51 | 31 |
Interest cost | 11 | 9 | 21 | 19 |
Actuarial gain (loss) | 0 | 0 | ||
Benefit obligation, end of year | $ 1,095 | $ 973 | $ 1,095 | $ 973 |
Net Income per Share - Reconcil
Net Income per Share - Reconciliation of Calculation of Basic and Diluted Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Aug. 26, 2016 | ||
Earnings Per Share [Abstract] | |||||||
Net income | $ 3,444 | $ 2,824 | $ 6,636 | $ 7,029 | |||
Weighted average common shares outstanding - Basic (in shares) | [1] | 10,546 | 9,318 | 10,528 | 9,311 | ||
Plus: Potential dilutive common stock equivalents (in shares) | 189 | 150 | 192 | 145 | |||
Weighted average common shares outstanding - Diluted (in shares) | [1] | 10,735 | 9,468 | 10,720 | 9,456 | ||
Net income per common share - Basic (in dollars per share) | [1] | $ 0.33 | $ 0.30 | $ 0.63 | $ 0.75 | ||
Net income per common share - Diluted (in dollars per share) | [1] | $ 0.32 | $ 0.30 | $ 0.62 | $ 0.74 | ||
Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive (in shares) | 77 | 168 | 66 | 187 | |||
Stock dividend, percentage | 10.00% | 10.00% | 10.00% | 10.00% | |||
[1] | All share information has been adjusted for the 10% stock dividend paid September 30, 2016. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 1,906,000 | $ 1,624,000 | $ 3,618,000 | $ 3,878,000 | |
Effective income tax rate, continuing operations | 35.60% | 36.50% | 35.30% | 35.60% | |
Unrecognized tax benefits, income tax penalties and interest expense | $ 0 | $ 0 | $ 0 | $ 0 | |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 0 | $ 0 | $ 0 | ||
Income tax returns open tax years (2012 and thereafter) | 2,012 |
Other Comprehensive Income (L43
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 106,291 | $ 78,470 | ||
Other comprehensive income (loss) before reclassification | $ 62 | $ (53) | 24 | (246) |
Less amounts reclassified from accumulated other comprehensive income (loss) | (2) | 39 | (14) | 80 |
Total other comprehensive income (loss), net | 64 | (92) | 38 | (326) |
Ending Balance | 112,447 | 84,967 | 112,447 | 84,967 |
Net unrealized gains (losses) on securities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning Balance | (247) | 34 | (161) | (2) |
Other comprehensive income (loss) before reclassification | 246 | 175 | 160 | 272 |
Less amounts reclassified from accumulated other comprehensive income (loss) | 11 | 53 | 11 | 114 |
Total other comprehensive income (loss), net | 235 | 122 | 149 | 158 |
Ending Balance | (12) | 156 | (12) | 156 |
Adjustments related to defined benefit plan | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning Balance | (379) | (428) | (391) | (448) |
Other comprehensive income (loss) before reclassification | 0 | 0 | 0 | 0 |
Less amounts reclassified from accumulated other comprehensive income (loss) | (13) | (14) | (25) | (34) |
Total other comprehensive income (loss), net | 13 | 14 | 25 | 34 |
Ending Balance | (366) | (414) | (366) | (414) |
Net unrealized gains (losses) from cash flow hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning Balance | 760 | (307) | 712 | (17) |
Other comprehensive income (loss) before reclassification | (184) | (228) | (136) | (518) |
Less amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), net | (184) | (228) | (136) | (518) |
Ending Balance | 576 | (535) | 576 | (535) |
Accumulated other comprehensive income (loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning Balance | 134 | (701) | 160 | (467) |
Total other comprehensive income (loss), net | 38 | (326) | ||
Ending Balance | $ 198 | $ (793) | $ 198 | $ (793) |
Fair Value - Fair Value on Recu
Fair Value - Fair Value on Recurring Basis - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 54,825 | $ 40,568 |
Percentage of portfolio in residential mortgage backed securities | 64.00% | |
Residential mortgage backed securities guaranteed by Government National Mortgage Association or Federal National Mortgage Association or Federal Home Loan Mortgage Corporation | $ 34,500 | |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 35,105 | $ 21,631 |
Fair Value - Fair Value on Nonr
Fair Value - Fair Value on Nonrecurring Basis - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired financing receivable, related allowance | $ 168 | $ 280 |
Decrease in valuation allowance for impaired loans | 112 | |
Standby Letters of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Standby letter of credit | $ 4,300 | $ 4,100 |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Post modification recorded investment discount for selling and closing costs | 8.00% | |
Minimum | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value inputs, discount rate | 10.00% | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Post modification recorded investment discount for selling and closing costs | 10.00% | |
Maximum | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value inputs, discount rate | 25.00% |
Fair Value - Balances of Assets
Fair Value - Balances of Assets And Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | $ 54,825 | $ 40,568 |
Liabilities fair value disclosure | 973 | 1,204 |
Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | 973 | 1,204 |
U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 5,763 | 3,716 |
State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 5,877 | 5,502 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 35,105 | 21,631 |
Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 8,080 | 9,719 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Liabilities fair value disclosure | 0 | 0 |
Level 1 | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | 0 | 0 |
Level 1 | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Level 1 | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Level 1 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Level 1 | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 54,825 | 40,568 |
Liabilities fair value disclosure | 973 | 1,204 |
Level 2 | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | 973 | 1,204 |
Level 2 | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 5,763 | 3,716 |
Level 2 | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 5,877 | 5,502 |
Level 2 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 35,105 | 21,631 |
Level 2 | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 8,080 | 9,719 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Liabilities fair value disclosure | 0 | 0 |
Level 3 | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | 0 | 0 |
Level 3 | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Level 3 | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Level 3 | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 0 | 0 |
Level 3 | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | $ 0 | $ 0 |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities Subject to Fair Value Adjustments (Impairment) on Non-Recurring Basis Carried on Balance Sheet by Caption and by Level within Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO | $ 581 | $ 1,050 |
Impaired collateral-dependent loans | 1,091 | 1,767 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO | 581 | 1,050 |
Impaired collateral-dependent loans | $ 1,091 | $ 1,767 |
Fair Value - Carrying Amount an
Fair Value - Carrying Amount and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Accrued interest receivable | $ 4,669 | $ 4,462 |
Financial liabilities: | ||
Accrued interest payable | 410 | 430 |
Estimated fair value | 20,449 | 20,968 |
Impaired collateral-dependent loans | 1,091 | 1,767 |
Corporate and other securities | ||
Financial liabilities: | ||
Estimated fair value | 6,605 | 6,560 |
Fair Value, Inputs, Level 3 | ||
Financial liabilities: | ||
Impaired collateral-dependent loans | 1,091 | 1,767 |
Carrying amount | Fair Value, Inputs, Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 104,815 | 105,895 |
Carrying amount | Fair Value, Inputs, Level 2 | ||
Financial assets: | ||
Securities | 75,066 | 61,547 |
SBA loans held for sale | 13,950 | 14,773 |
Loans, net of allowance for loan losses | 1,020,054 | 946,062 |
FHLB stock | 7,101 | 6,037 |
Accrued interest receivable | 4,669 | 4,462 |
Financial liabilities: | ||
Deposits | 1,003,967 | 945,723 |
Borrowed funds and subordinated debentures | 152,310 | 131,310 |
Accrued interest payable | 410 | 430 |
Carrying amount | Fair Value, Inputs, Level 3 | ||
Financial assets: | ||
Servicing assets | 2,003 | 2,086 |
OREO | 581 | 1,050 |
Carrying amount | Fair Value, Inputs, Level 3 | Corporate and other securities | ||
Financial liabilities: | ||
Estimated fair value | 3,700 | 3,800 |
Estimated fair value | Fair Value, Inputs, Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 104,815 | 105,895 |
Estimated fair value | Fair Value, Inputs, Level 2 | ||
Financial assets: | ||
Securities | 75,274 | 61,536 |
SBA loans held for sale | 15,708 | 16,440 |
Loans, net of allowance for loan losses | 1,018,549 | 944,772 |
FHLB stock | 7,101 | 6,037 |
Accrued interest receivable | 4,669 | 4,462 |
Financial liabilities: | ||
Deposits | 1,003,168 | 944,886 |
Borrowed funds and subordinated debentures | 151,862 | 130,319 |
Accrued interest payable | 410 | 430 |
Estimated fair value | Fair Value, Inputs, Level 3 | ||
Financial assets: | ||
Servicing assets | 2,003 | 2,086 |
OREO | 581 | 1,050 |
Financial liabilities: | ||
Impaired collateral-dependent loans | 1,100 | 1,800 |
Estimated fair value | Fair Value, Inputs, Level 3 | Corporate and other securities | ||
Financial liabilities: | ||
Estimated fair value | $ 3,700 | $ 3,600 |
Securities - Realized Gains and
Securities - Realized Gains and Losses (Narrative) (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)security | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Schedule of Investments [Line Items] | |||||
Available-for-sale Securities, impairment on securities | $ 0 | ||||
Available-for-sale securities, realized gains | $ 74,000 | $ 81,000 | $ 74,000 | $ 175,000 | |
Available-for-sale Securities, gross realized gain (loss) | 16,000 | $ 81,000 | 16,000 | $ 175,000 | |
Available-for-sale Securities pledged as collateral | 20,400,000 | $ 20,400,000 | $ 17,700,000 | ||
Residential mortgage-backed securities | 3 Securities Sold | |||||
Schedule of Investments [Line Items] | |||||
Number of securities sold | security | 3 | ||||
Available-for-sale Securities, book value | 1,200,000 | $ 1,200,000 | |||
Available-for-sale Securities, gross realized gain (loss) | $ 71,000 | ||||
Residential mortgage-backed securities | 2 Securities Sold | |||||
Schedule of Investments [Line Items] | |||||
Number of securities sold | security | 2 | ||||
Available-for-sale Securities, book value | 1,600,000 | $ 1,600,000 | |||
Available-for-sale Securities, gross realized gain (loss) | $ (58,000) | ||||
Asset-backed securities | |||||
Schedule of Investments [Line Items] | |||||
Number of securities sold | security | 2 | ||||
Available-for-sale Securities, book value | 3,500,000 | $ 3,500,000 | |||
Available-for-sale Securities, gross realized gain (loss) | $ 3,000 | ||||
Municipal Securities | |||||
Schedule of Investments [Line Items] | |||||
Number of securities sold | security | 15 | ||||
Available-for-sale Securities, book value | 6,400,000 | $ 6,400,000 | |||
Available-for-sale Securities, gross realized gain (loss) | $ 112,000 | ||||
Equity Securities | |||||
Schedule of Investments [Line Items] | |||||
Number of securities sold | security | 1 | ||||
Available-for-sale Securities, book value | $ 40,000 | $ 40,000 | |||
Available-for-sale Securities, gross realized gain (loss) | $ 63,000 |
Securities - Reconciliation fro
Securities - Reconciliation from Amortized Cost to Estimated Fair Value of Marketable Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Available for sale at fair value: | ||
Amortized cost | $ 54,847 | $ 40,839 |
Gross unrealized gains | 433 | 360 |
Gross unrealized losses | (455) | (631) |
Securities available for sale | 54,825 | 40,568 |
Held to maturity at cost: | ||
Amortized cost | 20,241 | 20,979 |
Gross unrealized gains | 370 | 291 |
Gross unrealized losses | (162) | (302) |
Estimated fair value | 20,449 | 20,968 |
U.S. Government sponsored entities | ||
Available for sale at fair value: | ||
Amortized cost | 5,768 | 3,744 |
Gross unrealized gains | 8 | 2 |
Gross unrealized losses | (13) | (30) |
Securities available for sale | 5,763 | 3,716 |
Held to maturity at cost: | ||
Amortized cost | 3,270 | 3,530 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (64) | (128) |
Estimated fair value | 3,206 | 3,402 |
State and political subdivisions | ||
Available for sale at fair value: | ||
Amortized cost | 5,862 | 5,545 |
Gross unrealized gains | 53 | 19 |
Gross unrealized losses | (38) | (62) |
Securities available for sale | 5,877 | 5,502 |
Held to maturity at cost: | ||
Amortized cost | 2,302 | 2,306 |
Gross unrealized gains | 203 | 181 |
Gross unrealized losses | 0 | (1) |
Estimated fair value | 2,505 | 2,486 |
Residential mortgage-backed securities | ||
Available for sale at fair value: | ||
Amortized cost | 34,934 | 21,547 |
Gross unrealized gains | 350 | 339 |
Gross unrealized losses | (179) | (255) |
Securities available for sale | 35,105 | 21,631 |
Held to maturity at cost: | ||
Amortized cost | 4,386 | 4,799 |
Gross unrealized gains | 98 | 98 |
Gross unrealized losses | (16) | (25) |
Estimated fair value | 4,468 | 4,872 |
Commercial mortgage-backed securities | ||
Held to maturity at cost: | ||
Amortized cost | 3,741 | 3,796 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (76) | (148) |
Estimated fair value | 3,665 | 3,648 |
Corporate and other securities | ||
Available for sale at fair value: | ||
Amortized cost | 8,283 | 10,003 |
Gross unrealized gains | 22 | 0 |
Gross unrealized losses | (225) | (284) |
Securities available for sale | 8,080 | 9,719 |
Held to maturity at cost: | ||
Amortized cost | 6,542 | 6,548 |
Gross unrealized gains | 69 | 12 |
Gross unrealized losses | (6) | 0 |
Estimated fair value | $ 6,605 | $ 6,560 |
Securities - Schedule of Market
Securities - Schedule of Marketable Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Available for sale at fair value: | ||
Available for sale at fair value, Within one year | $ 15 | |
Available for sale at fair value yield, Within one year | 4.04% | |
Available for sale at fair value, After one through five years | $ 4,849 | |
Available for sale at fair value yield, After one through five years | 1.91% | |
Available for sale at fair value, After five through ten years | $ 13,669 | |
Available for sale at fair value yield, After five through ten years | 2.74% | |
Available for sale at fair value, After ten years | $ 36,292 | |
Available for sale at fair value yield, After ten years | 2.93% | |
Available-for-sale Securities | $ 54,825 | $ 40,568 |
Available for sale at fair value yield | 2.79% | |
Held to maturity at cost: | ||
Held to maturity at cost, Within one year | $ 226 | |
Held to maturity at cost yield, Within one year | 1.17% | |
Held to maturity at cost, After one through five years | $ 32 | |
Held to maturity at cost yield, After one through five years | 5.58% | |
Held to maturity at cost, After five through ten years | $ 5,650 | |
Held to maturity at cost yield, After five through ten years | 5.34% | |
Held to maturity at cost, After ten years | $ 14,333 | |
Held to maturity at cost yield, After ten years | 3.77% | |
Amortized cost | $ 20,241 | 20,979 |
Held to maturity at cost yield, | 4.18% | |
U.S. Government sponsored entities | ||
Available for sale at fair value: | ||
Available for sale at fair value, Within one year | $ 0 | |
Available for sale at fair value yield, Within one year | 0.00% | |
Available for sale at fair value, After one through five years | $ 3,739 | |
Available for sale at fair value yield, After one through five years | 1.61% | |
Available for sale at fair value, After five through ten years | $ 2,024 | |
Available for sale at fair value yield, After five through ten years | 2.16% | |
Available for sale at fair value, After ten years | $ 0 | |
Available for sale at fair value yield, After ten years | 0.00% | |
Available-for-sale Securities | $ 5,763 | 3,716 |
Available for sale at fair value yield | 1.80% | |
Held to maturity at cost: | ||
Held to maturity at cost, Within one year | $ 0 | |
Held to maturity at cost yield, Within one year | 0.00% | |
Held to maturity at cost, After one through five years | $ 0 | |
Held to maturity at cost yield, After one through five years | 0.00% | |
Held to maturity at cost, After five through ten years | $ 0 | |
Held to maturity at cost yield, After five through ten years | 0.00% | |
Held to maturity at cost, After ten years | $ 3,270 | |
Held to maturity at cost yield, After ten years | 1.98% | |
Amortized cost | $ 3,270 | 3,530 |
Held to maturity at cost yield, | 1.98% | |
State and political subdivisions | ||
Available for sale at fair value: | ||
Available for sale at fair value, Within one year | $ 0 | |
Available for sale at fair value yield, Within one year | 0.00% | |
Available for sale at fair value, After one through five years | $ 768 | |
Available for sale at fair value yield, After one through five years | 3.13% | |
Available for sale at fair value, After five through ten years | $ 2,418 | |
Available for sale at fair value yield, After five through ten years | 2.78% | |
Available for sale at fair value, After ten years | $ 2,691 | |
Available for sale at fair value yield, After ten years | 2.80% | |
Available-for-sale Securities | $ 5,877 | 5,502 |
Available for sale at fair value yield | 2.83% | |
Held to maturity at cost: | ||
Held to maturity at cost, Within one year | $ 213 | |
Held to maturity at cost yield, Within one year | 0.99% | |
Held to maturity at cost, After one through five years | $ 0 | |
Held to maturity at cost yield, After one through five years | 0.00% | |
Held to maturity at cost, After five through ten years | $ 493 | |
Held to maturity at cost yield, After five through ten years | 5.07% | |
Held to maturity at cost, After ten years | $ 1,596 | |
Held to maturity at cost yield, After ten years | 4.64% | |
Amortized cost | $ 2,302 | 2,306 |
Held to maturity at cost yield, | 4.40% | |
Residential mortgage-backed securities | ||
Available for sale at fair value: | ||
Available for sale at fair value, Within one year | $ 15 | |
Available for sale at fair value yield, Within one year | 4.04% | |
Available for sale at fair value, After one through five years | $ 328 | |
Available for sale at fair value yield, After one through five years | 2.46% | |
Available for sale at fair value, After five through ten years | $ 4,044 | |
Available for sale at fair value yield, After five through ten years | 2.29% | |
Available for sale at fair value, After ten years | $ 30,718 | |
Available for sale at fair value yield, After ten years | 2.80% | |
Available-for-sale Securities | $ 35,105 | 21,631 |
Available for sale at fair value yield | 2.74% | |
Held to maturity at cost: | ||
Held to maturity at cost, Within one year | $ 13 | |
Held to maturity at cost yield, Within one year | 4.06% | |
Held to maturity at cost, After one through five years | $ 32 | |
Held to maturity at cost yield, After one through five years | 5.58% | |
Held to maturity at cost, After five through ten years | $ 627 | |
Held to maturity at cost yield, After five through ten years | 2.77% | |
Held to maturity at cost, After ten years | $ 3,714 | |
Held to maturity at cost yield, After ten years | 3.27% | |
Amortized cost | $ 4,386 | 4,799 |
Held to maturity at cost yield, | 3.22% | |
Commercial mortgage-backed securities | ||
Held to maturity at cost: | ||
Held to maturity at cost, Within one year | $ 0 | |
Held to maturity at cost yield, Within one year | 0.00% | |
Held to maturity at cost, After one through five years | $ 0 | |
Held to maturity at cost yield, After one through five years | 0.00% | |
Held to maturity at cost, After five through ten years | $ 0 | |
Held to maturity at cost yield, After five through ten years | 0.00% | |
Held to maturity at cost, After ten years | $ 3,741 | |
Held to maturity at cost yield, After ten years | 2.76% | |
Amortized cost | $ 3,741 | 3,796 |
Held to maturity at cost yield, | 2.76% | |
Corporate and other securities | ||
Available for sale at fair value: | ||
Available for sale at fair value, Within one year | $ 0 | |
Available for sale at fair value yield, Within one year | 0.00% | |
Available for sale at fair value, After one through five years | $ 14 | |
Available for sale at fair value yield, After one through five years | 2.00% | |
Available for sale at fair value, After five through ten years | $ 5,183 | |
Available for sale at fair value yield, After five through ten years | 3.30% | |
Available for sale at fair value, After ten years | $ 2,883 | |
Available for sale at fair value yield, After ten years | 4.44% | |
Available-for-sale Securities | $ 8,080 | 9,719 |
Available for sale at fair value yield | 3.70% | |
Held to maturity at cost: | ||
Held to maturity at cost, Within one year | $ 0 | |
Held to maturity at cost yield, Within one year | 0.00% | |
Held to maturity at cost, After one through five years | $ 0 | |
Held to maturity at cost yield, After one through five years | 0.00% | |
Held to maturity at cost, After five through ten years | $ 4,530 | |
Held to maturity at cost yield, After five through ten years | 5.72% | |
Held to maturity at cost, After ten years | $ 2,012 | |
Held to maturity at cost yield, After ten years | 8.80% | |
Amortized cost | $ 6,542 | $ 6,548 |
Held to maturity at cost yield, | 6.67% |
Securities - Schedule of Mark52
Securities - Schedule of Marketable Securities in Unrealized Loss Position (Details) $ in Thousands | Jun. 30, 2017USD ($)security | Dec. 31, 2016USD ($)security |
Available for sale at fair value: | ||
Available for sale, Total number in a loss position | security | 18 | 24 |
Available for sale, Less than 12 months Estimated fair value | $ 14,347 | $ 14,430 |
Available for sale, Less than 12 months Unrealized loss | (251) | (298) |
Available for sale, 12 months and greater, Estimated fair value | 2,858 | 8,359 |
Available for sale, 12 months and greater, Unrealized loss | (204) | (333) |
Available for sale, Total Estimated fair value | 17,205 | 22,789 |
Available for sale, Total Unrealized loss | $ (455) | $ (631) |
Held to maturity at cost: | ||
Held to maturity, Total number in a loss position | security | 8 | 7 |
Held to maturity, Less than 12 months Estimated fair value | $ 9,099 | $ 8,038 |
Held to maturity, Less than 12 months Unrealized loss | (156) | (292) |
Held to maturity, 12 months and greater, Estimated fair value | 398 | 441 |
Held to maturity, 12 months and greater, Unrealized loss | (6) | (10) |
Held to maturity, Total Estimated fair value | 9,497 | 8,479 |
Held to maturity, Total Unrealized loss | $ (162) | $ (302) |
U.S. Government sponsored entities | ||
Available for sale at fair value: | ||
Available for sale, Total number in a loss position | security | 1 | 1 |
Available for sale, Less than 12 months Estimated fair value | $ 1,978 | $ 1,962 |
Available for sale, Less than 12 months Unrealized loss | (13) | (30) |
Available for sale, 12 months and greater, Estimated fair value | 0 | 0 |
Available for sale, 12 months and greater, Unrealized loss | 0 | 0 |
Available for sale, Total Estimated fair value | 1,978 | 1,962 |
Available for sale, Total Unrealized loss | $ (13) | $ (30) |
Held to maturity at cost: | ||
Held to maturity, Total number in a loss position | security | 2 | 2 |
Held to maturity, Less than 12 months Estimated fair value | $ 3,206 | $ 3,402 |
Held to maturity, Less than 12 months Unrealized loss | (64) | (128) |
Held to maturity, 12 months and greater, Estimated fair value | 0 | 0 |
Held to maturity, 12 months and greater, Unrealized loss | 0 | 0 |
Held to maturity, Total Estimated fair value | 3,206 | 3,402 |
Held to maturity, Total Unrealized loss | $ (64) | $ (128) |
State and political subdivisions | ||
Available for sale at fair value: | ||
Available for sale, Total number in a loss position | security | 1 | 4 |
Available for sale, Less than 12 months Estimated fair value | $ 1,949 | $ 3,833 |
Available for sale, Less than 12 months Unrealized loss | (38) | (62) |
Available for sale, 12 months and greater, Estimated fair value | 0 | 0 |
Available for sale, 12 months and greater, Unrealized loss | 0 | 0 |
Available for sale, Total Estimated fair value | 1,949 | 3,833 |
Available for sale, Total Unrealized loss | $ (38) | $ (62) |
Held to maturity at cost: | ||
Held to maturity, Total number in a loss position | security | 1 | |
Held to maturity, Less than 12 months Estimated fair value | $ 212 | |
Held to maturity, Less than 12 months Unrealized loss | (1) | |
Held to maturity, 12 months and greater, Estimated fair value | 0 | |
Held to maturity, 12 months and greater, Unrealized loss | 0 | |
Held to maturity, Total Estimated fair value | 212 | |
Held to maturity, Total Unrealized loss | $ (1) | |
Residential mortgage-backed securities | ||
Available for sale at fair value: | ||
Available for sale, Total number in a loss position | security | 10 | 13 |
Available for sale, Less than 12 months Estimated fair value | $ 9,388 | $ 7,813 |
Available for sale, Less than 12 months Unrealized loss | (133) | (139) |
Available for sale, 12 months and greater, Estimated fair value | 1,016 | 2,983 |
Available for sale, 12 months and greater, Unrealized loss | (46) | (116) |
Available for sale, Total Estimated fair value | 10,404 | 10,796 |
Available for sale, Total Unrealized loss | $ (179) | $ (255) |
Held to maturity at cost: | ||
Held to maturity, Total number in a loss position | security | 3 | 2 |
Held to maturity, Less than 12 months Estimated fair value | $ 705 | $ 776 |
Held to maturity, Less than 12 months Unrealized loss | (10) | (15) |
Held to maturity, 12 months and greater, Estimated fair value | 398 | 441 |
Held to maturity, 12 months and greater, Unrealized loss | (6) | (10) |
Held to maturity, Total Estimated fair value | 1,103 | 1,217 |
Held to maturity, Total Unrealized loss | $ (16) | $ (25) |
Commercial mortgage-backed securities | ||
Held to maturity at cost: | ||
Held to maturity, Total number in a loss position | security | 2 | 2 |
Held to maturity, Less than 12 months Estimated fair value | $ 3,664 | $ 3,648 |
Held to maturity, Less than 12 months Unrealized loss | (76) | (148) |
Held to maturity, 12 months and greater, Estimated fair value | 0 | 0 |
Held to maturity, 12 months and greater, Unrealized loss | 0 | 0 |
Held to maturity, Total Estimated fair value | 3,664 | 3,648 |
Held to maturity, Total Unrealized loss | $ (76) | $ (148) |
Corporate and other securities | ||
Available for sale at fair value: | ||
Available for sale, Total number in a loss position | security | 6 | 6 |
Available for sale, Less than 12 months Estimated fair value | $ 1,032 | $ 822 |
Available for sale, Less than 12 months Unrealized loss | (67) | (67) |
Available for sale, 12 months and greater, Estimated fair value | 1,842 | 5,376 |
Available for sale, 12 months and greater, Unrealized loss | (158) | (217) |
Available for sale, Total Estimated fair value | 2,874 | 6,198 |
Available for sale, Total Unrealized loss | $ (225) | $ (284) |
Held to maturity at cost: | ||
Held to maturity, Total number in a loss position | security | 1 | |
Held to maturity, Less than 12 months Estimated fair value | $ 1,524 | |
Held to maturity, Less than 12 months Unrealized loss | (6) | |
Held to maturity, 12 months and greater, Estimated fair value | 0 | |
Held to maturity, 12 months and greater, Unrealized loss | 0 | |
Held to maturity, Total Estimated fair value | 1,524 | |
Held to maturity, Total Unrealized loss | $ (6) |
Securities - Schedule of Realiz
Securities - Schedule of Realized Gains (Losses) for Marketable Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Available for sale at fair value: | ||||
Realized gains | $ 74 | $ 81 | $ 74 | $ 175 |
Realized losses | (58) | 0 | (58) | 0 |
Total securities available for sale | 16 | 81 | 16 | 175 |
Held to maturity at cost: | ||||
Realized gains | 0 | 0 | 0 | 0 |
Realized losses | 0 | 0 | 0 | 0 |
Total securities held to maturity | 0 | 0 | 0 | 0 |
Net gains on sales of securities | $ 16 | $ 81 | $ 16 | $ 175 |
Loans - Narrative (Details)
Loans - Narrative (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Residential Consumer Properties | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Residential loans in process of foreclosure | $ 4,700,000 | $ 5,300,000 |
Consumer Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Other real estate properties owned | $ 0 | $ 0 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructuring (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)loan | Jun. 30, 2016USD ($)loan | Jun. 30, 2017USD ($)loan | Jun. 30, 2016USD ($)loan | Dec. 31, 2016USD ($) | |
Financing Receivable, Impaired [Line Items] | |||||
Average recorded investment | $ 1,935 | $ 4,694 | $ 2,210 | $ 5,350 | |
Impaired financing receivable, related allowance | 168 | 168 | $ 280 | ||
Loans receivable, nonaccrual status | $ 5,681 | $ 5,681 | 7,237 | ||
Number of loans modified as a TDR | loan | 0 | 0 | 0 | 0 | |
Number of loans with subsequent default | loan | 0 | 0 | |||
Troubled Debt Restructuring (TDR) | |||||
Financing Receivable, Impaired [Line Items] | |||||
Average recorded investment | $ 153 | ||||
Impaired financing receivable, related allowance | 34 | ||||
Non Accrual | Troubled Debt Restructuring (TDR) | |||||
Financing Receivable, Impaired [Line Items] | |||||
Loans receivable, nonaccrual status | $ 153 |
Loans - Classification of Loans
Loans - Classification of Loans By Class (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | $ 1,032,854 | $ 958,641 |
SBA loans held for sale | 13,950 | 14,773 |
Total loans | 1,046,804 | 973,414 |
SBA loans held for investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 43,329 | 42,492 |
SBA 504 loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 23,153 | 26,344 |
Residential mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 315,396 | 289,093 |
SBA loans held for investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 43,329 | 42,492 |
SBA 504 loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 23,153 | 26,344 |
Commercial loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 545,308 | 509,171 |
Commercial loans | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 65,551 | 58,447 |
Commercial loans | Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 443,564 | 422,418 |
Commercial loans | Commercial real estate construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 36,193 | 28,306 |
Residential mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 315,396 | 289,093 |
Consumer loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 105,668 | 91,541 |
Consumer loans | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 51,144 | 44,130 |
Consumer loans | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | $ 54,524 | $ 47,411 |
Loans - Loan Portfolio by Class
Loans - Loan Portfolio by Class According to Credit Quality Indicators (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | $ 1,032,854 | $ 958,641 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 43,329 | 42,492 |
SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 23,153 | 26,344 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 43,329 | 42,492 |
SBA loans held for investment | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 40,568 | 38,990 |
SBA loans held for investment | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,394 | 2,023 |
SBA loans held for investment | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,367 | 1,479 |
SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 23,153 | 26,344 |
SBA 504 loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 21,999 | 24,635 |
SBA 504 loans | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,049 | 1,073 |
SBA 504 loans | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 105 | 636 |
Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 545,308 | 509,171 |
Commercial loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 538,688 | 492,844 |
Commercial loans | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 5,257 | 15,901 |
Commercial loans | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,363 | 426 |
Commercial loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 65,551 | 58,447 |
Commercial loans | Other | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 64,357 | 57,000 |
Commercial loans | Other | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 350 | 1,422 |
Commercial loans | Other | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 844 | 25 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 443,564 | 422,418 |
Commercial loans | Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 438,888 | 408,288 |
Commercial loans | Commercial real estate | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 4,157 | 13,729 |
Commercial loans | Commercial real estate | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 519 | 401 |
Commercial loans | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 36,193 | 28,306 |
Commercial loans | Commercial real estate construction | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 35,443 | 27,556 |
Commercial loans | Commercial real estate construction | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 750 | 750 |
Commercial loans | Commercial real estate construction | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 0 | 0 |
Total SBA, SBA 504 and commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 611,790 | 578,007 |
Total SBA, SBA 504 and commercial loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 601,255 | 556,469 |
Total SBA, SBA 504 and commercial loans | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 7,700 | 18,997 |
Total SBA, SBA 504 and commercial loans | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 2,835 | 2,541 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 315,396 | 289,093 |
Residential mortgage loans | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 313,714 | 286,421 |
Residential mortgage loans | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,682 | 2,672 |
Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 105,668 | 91,541 |
Consumer loans | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 102,969 | 89,083 |
Consumer loans | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 2,699 | 2,458 |
Consumer loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 51,144 | 44,130 |
Consumer loans | Other | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 49,163 | 42,154 |
Consumer loans | Other | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,981 | 1,976 |
Consumer loans | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 54,524 | 47,411 |
Consumer loans | Home equity | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 53,806 | 46,929 |
Consumer loans | Home equity | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 718 | 482 |
Total residential mortgage and consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 421,064 | 380,634 |
Total residential mortgage and consumer loans | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 416,683 | 375,504 |
Total residential mortgage and consumer loans | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | $ 4,381 | $ 5,130 |
Loans - Aging Analysis of Past
Loans - Aging Analysis of Past Due and Nonaccrual Loans by Class (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | $ 5,681 | $ 7,237 |
Loans receivable, past due | 13,931 | 13,279 |
Loans receivable, current | 1,018,923 | 945,362 |
Loan receivable, current | 1,032,873 | 960,135 |
Total loans | 1,032,854 | 958,641 |
SBA loans held for sale | 13,950 | 14,773 |
Total loans | 1,046,804 | 973,414 |
Troubled Debt Restructuring (TDR) | Non Accrual | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 153 | |
30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 6,972 | 4,808 |
60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 1,048 | 1,234 |
90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 230 | 0 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 889 | 1,168 |
Loans receivable, past due | 2,197 | 2,056 |
Loan receivable, current | 41,132 | 40,436 |
Total loans | 43,329 | 42,492 |
SBA loans held for investment | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 1,078 | 491 |
SBA loans held for investment | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 397 |
SBA loans held for investment | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 230 | 0 |
SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 0 | 513 |
Loans receivable, past due | 0 | 513 |
Loan receivable, current | 23,153 | 25,831 |
Total loans | 23,153 | 26,344 |
SBA 504 loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
SBA 504 loans | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
SBA 504 loans | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 545,308 | 509,171 |
Commercial loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 25 | 25 |
Loans receivable, past due | 25 | 75 |
Loan receivable, current | 65,526 | 58,372 |
Total loans | 65,551 | 58,447 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 386 | 401 |
Loans receivable, past due | 4,734 | 2,083 |
Loan receivable, current | 438,830 | 420,335 |
Total loans | 443,564 | 422,418 |
Commercial loans | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 0 | 0 |
Loans receivable, past due | 0 | 0 |
Loan receivable, current | 36,193 | 28,306 |
Total loans | 36,193 | 28,306 |
Commercial loans | 30-59 days past due | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 50 |
Commercial loans | 30-59 days past due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 3,540 | 1,108 |
Commercial loans | 30-59 days past due | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Commercial loans | 60-89 days past due | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Commercial loans | 60-89 days past due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 808 | 574 |
Commercial loans | 60-89 days past due | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Commercial loans | 90 days and still accruing | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Commercial loans | 90 days and still accruing | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Commercial loans | 90 days and still accruing | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 1,682 | 2,672 |
Loans receivable, past due | 4,012 | 5,867 |
Loan receivable, current | 311,384 | 283,226 |
Total loans | 315,396 | 289,093 |
Residential mortgage loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 2,330 | 2,932 |
Residential mortgage loans | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 263 |
Residential mortgage loans | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 105,668 | 91,541 |
Consumer loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 1,981 | 1,976 |
Loans receivable, past due | 1,981 | 1,976 |
Loan receivable, current | 49,163 | 42,154 |
Total loans | 51,144 | 44,130 |
Consumer loans | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | 718 | 482 |
Loans receivable, past due | 982 | 709 |
Loan receivable, current | 53,542 | 46,702 |
Total loans | 54,524 | 47,411 |
Consumer loans | 30-59 days past due | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Consumer loans | 30-59 days past due | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 24 | 227 |
Consumer loans | 60-89 days past due | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Consumer loans | 60-89 days past due | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 240 | 0 |
Consumer loans | 90 days and still accruing | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Consumer loans | 90 days and still accruing | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Small Business Administration | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | $ 41 | $ 60 |
Loans - Impaired Loans with Ass
Loans - Impaired Loans with Associated Allowance Amount (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | $ 914 | $ 1,815 |
Unpaid principal balance, with related allowance | 1,286 | 1,346 |
Unpaid principal balance, total | 2,200 | 3,161 |
Recorded investment, with no related allowance | 523 | 1,234 |
Recorded investment, with related allowance | 736 | 813 |
Recorded investment | 1,259 | 2,047 |
Impaired financing receivable, related allowance | 168 | 280 |
Loans receivable, nonaccrual status | 5,681 | 7,237 |
SBA loans held for investment | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 846 | 1,235 |
Unpaid principal balance, with related allowance | 943 | 975 |
Unpaid principal balance, total | 1,789 | 2,210 |
Recorded investment, with no related allowance | 455 | 653 |
Recorded investment, with related allowance | 393 | 455 |
Recorded investment | 848 | 1,108 |
Impaired financing receivable, related allowance | 149 | 246 |
Loans receivable, nonaccrual status | 889 | 1,168 |
SBA 504 loans | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 513 | |
Unpaid principal balance, total | 513 | |
Recorded investment, with no related allowance | 513 | |
Recorded investment | 513 | |
Impaired financing receivable, related allowance | 0 | |
Loans receivable, nonaccrual status | 0 | 513 |
Commercial loans | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 68 | 67 |
Unpaid principal balance, with related allowance | 343 | 371 |
Unpaid principal balance, total | 411 | 438 |
Recorded investment, with no related allowance | 68 | 68 |
Recorded investment, with related allowance | 343 | 358 |
Recorded investment | 411 | 426 |
Impaired financing receivable, related allowance | 19 | 34 |
Commercial loans | Other | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 25 | 25 |
Unpaid principal balance, with related allowance | 13 | |
Unpaid principal balance, total | 25 | 38 |
Recorded investment, with no related allowance | 25 | 25 |
Recorded investment, with related allowance | 1 | |
Recorded investment | 25 | 26 |
Impaired financing receivable, related allowance | 0 | 1 |
Loans receivable, nonaccrual status | 25 | 25 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 43 | 42 |
Unpaid principal balance, with related allowance | 343 | 358 |
Unpaid principal balance, total | 386 | 400 |
Recorded investment, with no related allowance | 43 | 43 |
Recorded investment, with related allowance | 343 | 357 |
Recorded investment | 386 | 400 |
Impaired financing receivable, related allowance | 19 | 33 |
Loans receivable, nonaccrual status | 386 | 401 |
Commercial loans | Commercial real estate construction | ||
Financing Receivable, Impaired [Line Items] | ||
Loans receivable, nonaccrual status | $ 0 | $ 0 |
Loans - Average Recorded Invest
Loans - Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | $ 1,935 | $ 4,694 | $ 2,210 | $ 5,350 |
Loans, Interest income recognized on impaired loans | 22 | 34 | 41 | 72 |
SBA loans held for investment | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 989 | 1,640 | 993 | 1,822 |
Loans, Interest income recognized on impaired loans | 22 | 1 | 19 | 3 |
SBA 504 loans | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 0 | 513 | 165 | 1,082 |
Loans, Interest income recognized on impaired loans | 0 | 0 | 0 | 0 |
Commercial loans | Other | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 25 | 929 | 25 | 496 |
Loans, Interest income recognized on impaired loans | 0 | 14 | 0 | 38 |
Commercial loans | Commercial real estate | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 921 | 1,273 | 1,027 | 1,662 |
Loans, Interest income recognized on impaired loans | 0 | 19 | 22 | 31 |
Commercial loans | Commercial real estate construction | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 0 | 339 | 0 | 288 |
Loans, Interest income recognized on impaired loans | 0 | 0 | 0 | 0 |
Small Business Administration | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired financing receivable average recorded investment, guaranteed by Small Business Administration | $ 54 | $ 218 | $ 151 | $ 241 |
Allowance for Loan Losses and61
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments - Narrative (Details) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Allowance for loan losses | $ 12,800,000 | $ 12,681,000 | $ 12,579,000 | $ 12,758,000 | $ 12,634,000 | $ 12,759,000 |
Other commitment | 219,000 | 181,000 | ||||
Unallocated | ||||||
Allowance for loan losses | $ 0 | $ 0 | $ 183,000 | $ 149,000 | $ 283,000 | $ 162,000 |
Allowance for Loan Losses and62
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments - Activity in Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning Balance | $ 12,681,000 | $ 12,634,000 | $ 12,579,000 | $ 12,759,000 |
Charge-offs | (287,000) | (294,000) | (537,000) | (636,000) |
Recoveries | 6,000 | 18,000 | 108,000 | 35,000 |
Net (charge-offs) recoveries | (281,000) | (276,000) | (429,000) | (601,000) |
Provision for loan losses charged to expense | 400,000 | 400,000 | 650,000 | 600,000 |
Ending Balance | 12,800,000 | 12,758,000 | 12,800,000 | 12,758,000 |
SBA loans held for investment | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning Balance | 1,653,000 | 1,713,000 | 1,576,000 | 1,961,000 |
Charge-offs | (150,000) | (142,000) | (258,000) | (228,000) |
Recoveries | 3,000 | 4,000 | 39,000 | 15,000 |
Net (charge-offs) recoveries | (147,000) | (138,000) | (219,000) | (213,000) |
Provision for loan losses charged to expense | 8,000 | 55,000 | 157,000 | (118,000) |
Ending Balance | 1,514,000 | 1,630,000 | 1,514,000 | 1,630,000 |
SBA 504 loans | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning Balance | 600,000 | 598,000 | 573,000 | 741,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Net (charge-offs) recoveries | 0 | 0 | 0 | 0 |
Provision for loan losses charged to expense | (106,000) | (10,000) | (79,000) | (153,000) |
Ending Balance | 494,000 | 588,000 | 494,000 | 588,000 |
Commercial loans | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning Balance | 6,533,000 | 6,312,000 | 6,729,000 | 6,309,000 |
Charge-offs | (120,000) | (152,000) | (196,000) | (380,000) |
Recoveries | 3,000 | 13,000 | 56,000 | 19,000 |
Net (charge-offs) recoveries | (117,000) | (139,000) | (140,000) | (361,000) |
Provision for loan losses charged to expense | 477,000 | 393,000 | 304,000 | 618,000 |
Ending Balance | 6,893,000 | 6,566,000 | 6,893,000 | 6,566,000 |
Residential mortgage loans | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning Balance | 2,869,000 | 2,892,000 | 2,593,000 | 2,769,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 12,000 | 0 |
Net (charge-offs) recoveries | 0 | 0 | 12,000 | 0 |
Provision for loan losses charged to expense | (53,000) | 72,000 | 211,000 | 195,000 |
Ending Balance | 2,816,000 | 2,964,000 | 2,816,000 | 2,964,000 |
Consumer loans | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning Balance | 1,026,000 | 836,000 | 925,000 | 817,000 |
Charge-offs | (17,000) | 0 | (83,000) | (28,000) |
Recoveries | 0 | 1,000 | 1,000 | 1,000 |
Net (charge-offs) recoveries | (17,000) | 1,000 | (82,000) | (27,000) |
Provision for loan losses charged to expense | 74,000 | 24,000 | 240,000 | 71,000 |
Ending Balance | 1,083,000 | 861,000 | 1,083,000 | 861,000 |
Unallocated | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Beginning Balance | 0 | 283,000 | 183,000 | 162,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Net (charge-offs) recoveries | 0 | 0 | 0 | 0 |
Provision for loan losses charged to expense | 0 | (134,000) | (183,000) | (13,000) |
Ending Balance | $ 0 | $ 149,000 | $ 0 | $ 149,000 |
Allowance for Loan Losses and63
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments - Allowance for Credit Losses on Financing Receivables on Basis of Impairment Method (Details) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Total | $ 12,800,000 | $ 12,681,000 | $ 12,579,000 | $ 12,758,000 | $ 12,634,000 | $ 12,759,000 |
Total loans | 1,032,854,000 | 958,641,000 | ||||
SBA loans held for investment | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 149,000 | 246,000 | ||||
Collectively evaluated for impairment | 1,365,000 | 1,330,000 | ||||
Total | 1,514,000 | 1,653,000 | 1,576,000 | 1,630,000 | 1,713,000 | 1,961,000 |
Individually evaluated for impairment | 848,000 | 1,108,000 | ||||
Collectively evaluated for impairment | 42,481,000 | 41,384,000 | ||||
Total loans | 43,329,000 | 42,492,000 | ||||
SBA 504 loans | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 494,000 | 573,000 | ||||
Total | 494,000 | 600,000 | 573,000 | 588,000 | 598,000 | 741,000 |
Individually evaluated for impairment | 0 | 513,000 | ||||
Collectively evaluated for impairment | 23,153,000 | 25,831,000 | ||||
Total loans | 23,153,000 | 26,344,000 | ||||
Commercial loans | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 19,000 | 34,000 | ||||
Collectively evaluated for impairment | 6,874,000 | 6,695,000 | ||||
Total | 6,893,000 | 6,533,000 | 6,729,000 | 6,566,000 | 6,312,000 | 6,309,000 |
Individually evaluated for impairment | 411,000 | 426,000 | ||||
Collectively evaluated for impairment | 544,897,000 | 508,745,000 | ||||
Total loans | 545,308,000 | 509,171,000 | ||||
Residential mortgage loans | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 2,816,000 | 2,593,000 | ||||
Total | 2,816,000 | 2,869,000 | 2,593,000 | 2,964,000 | 2,892,000 | 2,769,000 |
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 315,396,000 | 289,093,000 | ||||
Total loans | 315,396,000 | 289,093,000 | ||||
Consumer loans | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 1,083,000 | 925,000 | ||||
Total | 1,083,000 | 1,026,000 | 925,000 | 861,000 | 836,000 | 817,000 |
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 105,668,000 | 91,541,000 | ||||
Total loans | 105,668,000 | 91,541,000 | ||||
Unallocated | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 0 | 183,000 | ||||
Total | 0 | $ 0 | 183,000 | $ 149,000 | $ 283,000 | $ 162,000 |
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 0 | 0 | ||||
Total loans | 0 | 0 | ||||
Total | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 168,000 | 280,000 | ||||
Collectively evaluated for impairment | 12,632,000 | 12,299,000 | ||||
Total | 12,800,000 | 12,579,000 | ||||
Individually evaluated for impairment | 1,259,000 | 2,047,000 | ||||
Collectively evaluated for impairment | 1,031,595,000 | 956,594,000 | ||||
Total loans | $ 1,032,854,000 | $ 958,641,000 |
Derivative Financial Instrume64
Derivative Financial Instruments and Hedging Activities (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Notional amount | $ 60,000,000 | $ 40,000,000 | $ 60,000,000 | $ 40,000,000 |
Weighted average pay rate | 1.26% | 1.36% | 1.26% | 1.54% |
Weighted average receive rate | 1.07% | 0.65% | 0.98% | 0.56% |
Weighted average maturity | 3 years 4 months 10 days | 4 years 15 days | 3 years 7 months 10 days | 4 years 4 months 23 days |
Unrealized gain (loss) relating to interest rate swaps | $ 312,000 | $ (366,000) | $ (231,000) | $ (858,000) |
Repurchase of Subordinated De65
Repurchase of Subordinated Debentures (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Feb. 26, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||
Subordinated debentures | $ 10,310 | $ 10,310 | $ 10,310 | |||
Gain on repurchase of subordinated debt | 0 | $ 0 | 0 | $ 2,264 | ||
Subordinated Debentures | ||||||
Debt Instrument [Line Items] | ||||||
Repurchase of subordinated debentures | $ 5,200 | |||||
Subordinated debentures | $ 10,300 | $ 10,300 | ||||
Repurchase of subordinated debentures, price per dollar | 0.5475 | |||||
Gain on repurchase of subordinated debt | $ 2,300 | |||||
Debt maturity date | Dec. 19, 2036 | |||||
LIBOR | Subordinated Debentures | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument basis spread on variable rate | 1.65% |