Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | UNITY BANCORP INC /NJ/ | |
Entity Central Index Key | 0000920427 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,869,425 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 29,426 | $ 20,028 |
Federal funds sold, interest-bearing deposits and repos | 137,334 | 125,487 |
Cash and cash equivalents | 166,760 | 145,515 |
Securities: | ||
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | 47,295 | 46,713 |
Securities held to maturity (fair value of $14,639 in 2019 and $14,802 in 2018) | 14,332 | 14,875 |
Equity securities with readily determinable fair values (amortized cost of $2,398 in 2019 and $2,394 in 2018) | 2,364 | 2,144 |
Total securities | 63,991 | 63,732 |
Loans: | ||
SBA loans held for sale | 13,053 | 11,171 |
SBA loans held for investment | 36,380 | 39,333 |
Commercial loans | 723,249 | 694,102 |
Residential mortgage loans | 456,963 | 436,056 |
Consumer loans | 138,829 | 123,904 |
Total loans | 1,368,474 | 1,304,566 |
Allowance for loan losses | (16,002) | (15,488) |
Net loans | 1,352,472 | 1,289,078 |
Premises and equipment, net | 21,700 | 23,371 |
Bank owned life insurance (BOLI) | 25,302 | 24,710 |
Deferred tax assets | 5,768 | 5,350 |
Federal Home Loan Bank (FHLB) stock | 10,899 | 10,795 |
Accrued interest receivable | 6,858 | 6,399 |
Other real estate owned (OREO) | 1,723 | 56 |
Goodwill | 1,516 | 1,516 |
Prepaid expenses and other assets | 7,319 | 8,635 |
Total assets | 1,664,308 | 1,579,157 |
Deposits: | ||
Noninterest-bearing demand | 279,238 | 270,152 |
Interest-bearing demand | 179,661 | 185,792 |
Savings | 394,333 | 394,727 |
Time, under $100,000 | 208,755 | 184,022 |
Time, $100,000 to $250,000 | 133,401 | 116,147 |
Time, $250,000 and over | 77,974 | 56,847 |
Total deposits | 1,273,362 | 1,207,687 |
Borrowed funds | 210,000 | 210,000 |
Subordinated debentures | 10,310 | 10,310 |
Accrued interest payable | 420 | 406 |
Accrued expenses and other liabilities | 15,332 | 12,266 |
Total liabilities | 1,509,424 | 1,440,669 |
Shareholders' equity: | ||
Common stock | 89,753 | 88,484 |
Retained earnings | 65,199 | 50,161 |
Accumulated other comprehensive loss | (68) | (157) |
Total shareholders' equity | 154,884 | 138,488 |
Total liabilities and shareholders' equity | $ 1,664,308 | $ 1,579,157 |
Outstanding common shares (in shares) | 10,869 | 10,780 |
Issued common shares (in shares) | 10,869 | 10,780 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Amortized cost of debt securities available for sale | $ 47,220 | $ 47,762 |
Estimated fair value of securities held to maturity | 14,639 | 14,802 |
Amortized cost of equity securities with readily determinable fair values | $ 2,398 | $ 2,394 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
INTEREST INCOME | ||||
Federal funds sold, interest-bearing deposits and repos | $ 271 | $ 187 | $ 724 | $ 563 |
FHLB stock | 82 | 101 | 275 | 359 |
Securities: | ||||
Taxable | 463 | 465 | 1,400 | 1,442 |
Tax-exempt | 26 | 28 | 81 | 88 |
Total securities | 489 | 493 | 1,481 | 1,530 |
Loans: | ||||
SBA loans | 943 | 1,050 | 2,880 | 3,365 |
Commercial loans | 9,467 | 8,784 | 27,892 | 24,718 |
Residential mortgage loans | 5,606 | 4,803 | 16,702 | 13,666 |
Consumer loans | 2,197 | 1,776 | 6,382 | 5,003 |
Total loans | 18,213 | 16,413 | 53,856 | 46,752 |
Total interest income | 19,055 | 17,194 | 56,336 | 49,204 |
INTEREST EXPENSE | ||||
Interest-bearing demand deposits | 438 | 330 | 1,289 | 813 |
Savings deposits | 1,194 | 1,049 | 3,500 | 2,768 |
Time deposits | 2,577 | 1,739 | 7,023 | 4,042 |
Borrowed funds and subordinated debentures | 442 | 509 | 1,695 | 1,997 |
Total interest expense | 4,651 | 3,627 | 13,507 | 9,620 |
Net interest income | 14,404 | 13,567 | 42,829 | 39,584 |
Provision for loan losses | 750 | 500 | 1,600 | 1,550 |
Net interest income after provision for loan losses | 13,654 | 13,067 | 41,229 | 38,034 |
NONINTEREST INCOME | ||||
Branch fee income | 373 | 357 | 1,120 | 1,107 |
Service and loan fee income | 522 | 465 | 1,533 | 1,441 |
Gain on sale of SBA loans held for sale, net | 0 | 253 | 554 | 1,383 |
Gain on sale of mortgage loans, net | 545 | 597 | 1,525 | 1,442 |
BOLI income | 138 | 464 | 435 | 810 |
Net security gains (losses) | 18 | 2 | 216 | (6) |
Other income | 1,114 | 341 | 1,758 | 900 |
Total noninterest income | 2,710 | 2,479 | 7,141 | 7,077 |
NONINTEREST EXPENSE | ||||
Compensation and benefits | 5,353 | 5,704 | 15,384 | 15,274 |
Occupancy | 651 | 675 | 1,997 | 2,057 |
Processing and communications | 749 | 709 | 2,213 | 2,072 |
Furniture and equipment | 711 | 586 | 2,086 | 1,732 |
Professional services | 274 | 270 | 839 | 682 |
Loan collection and OREO (recoveries) expenses | (48) | (331) | 9 | (320) |
Other loan expenses | 89 | 51 | 202 | 137 |
Deposit insurance | 0 | 191 | 301 | 593 |
Advertising | 334 | 370 | 1,056 | 1,051 |
Director fees | 171 | 175 | 499 | 502 |
Other expenses | 445 | 401 | 1,409 | 1,373 |
Total noninterest expense | 8,729 | 8,801 | 25,995 | 25,153 |
Income before provision for income taxes | 7,635 | 6,745 | 22,375 | 19,958 |
Provision for income taxes | 1,676 | 1,255 | 4,842 | 3,841 |
Net income | $ 5,959 | $ 5,490 | $ 17,533 | $ 16,117 |
Net income per common share - Basic (in dollars per share) | $ 0.55 | $ 0.51 | $ 1.62 | $ 1.50 |
Net income per common share - Diluted (in dollars per share) | $ 0.54 | $ 0.50 | $ 1.59 | $ 1.48 |
Weighted average common shares outstanding - Basic (in shares) | 10,863 | 10,743 | 10,836 | 10,713 |
Weighted average common shares outstanding - Diluted (in shares) | 11,036 | 10,936 | 11,019 | 10,910 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income, before tax | $ 7,635 | $ 6,745 | $ 22,375 | $ 19,958 |
Income tax expense (benefit) | 1,676 | 1,255 | 4,842 | 3,841 |
Net income | 5,959 | 5,490 | 17,533 | 16,117 |
Debt securities available for sale: | ||||
Unrealized holding gains (losses) on securities arising during the period, before tax | 153 | (293) | 1,340 | (1,236) |
Unrealized holding gains (losses) on securities arising during the period, income tax expense (benefit) | 42 | (82) | 358 | (371) |
Unrealized holding gains (losses) on securities arising during the period, net of tax | 111 | (211) | 982 | (865) |
Less: reclassification adjustment for gains on securities included in net income, before tax | 18 | 2 | 216 | 9 |
Less: reclassification adjustment for gains on securities included in net income, income tax expense (benefit) | 3 | 0 | 45 | 1 |
Less: reclassification adjustment for gains on securities included in net income, net of tax | 15 | 2 | 171 | 8 |
Total unrealized gains (losses) on debt securities available for sale, before tax | 135 | (295) | 1,124 | (1,245) |
Total unrealized gains (losses) on debt securities available for sale, income tax expense (benefit) | 39 | (82) | 313 | (372) |
Total unrealized gains (losses) on debt securities available for sale, net of tax | 96 | (213) | 811 | (873) |
Adjustments related to defined benefit plan: | ||||
Amortization of prior service cost, before tax | 20 | 21 | 62 | 63 |
Amortization of prior service cost, income tax expense (benefit) | 5 | 6 | (59) | 167 |
Amortization of prior service cost, net of tax | 15 | 15 | 121 | (104) |
Total adjustments related to defined benefit plan, before tax | 20 | 21 | 62 | 63 |
Total adjustments related to defined benefit plan, income tax expense (benefit) | 5 | 6 | (59) | 167 |
Total adjustments related to defined benefit plan, net of tax | 15 | 15 | 121 | (104) |
Net unrealized (losses) gains from cash flow hedges: | ||||
Unrealized holding (losses) gains on cash flow hedges arising during the period, before tax | (177) | (7) | (1,169) | 658 |
Unrealized holding (losses) gains on cash flow hedges arising during the period, income tax expense (benefit) | (51) | (2) | (326) | 55 |
Unrealized holding (losses) gains on cash flow hedges arising during the period, net of tax | (126) | (5) | (843) | 603 |
Total unrealized (losses) gains on cash flow hedges, before tax | (177) | (7) | (1,169) | 658 |
Total unrealized (losses) gains on cash flow hedges, income tax expense (benefit) | (51) | (2) | (326) | 55 |
Total unrealized (losses) gains on cash flow hedges, net of tax | (126) | (5) | (843) | 603 |
Total other comprehensive income (loss), before tax | (22) | (281) | 17 | (524) |
Total other comprehensive income (loss), income tax expense (benefit) | (7) | (78) | (72) | (150) |
Total other comprehensive income (loss), net of tax | (15) | (203) | 89 | (374) |
Total comprehensive income, before tax | 7,613 | 6,464 | 22,392 | 19,434 |
Total comprehensive income, income tax expense (benefit) | 1,669 | 1,177 | 4,770 | 3,691 |
Total comprehensive income, net of tax | $ 5,944 | $ 5,287 | $ 17,622 | $ 15,743 |
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) income | |
Beginning Balance at Dec. 31, 2017 | $ 118,105 | $ 86,782 | $ 31,117 | $ 206 | |
Beginning Balance (in shares) at Dec. 31, 2017 | 10,615 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,229 | 5,229 | |||
Other comprehensive loss, net of tax | (166) | (166) | |||
Dividends on common stock | (618) | $ 25 | (643) | ||
Common stock issued and related tax effects | [1] | 554 | $ 554 | ||
Common stock issued and related tax effects (in shares) | [1] | 94 | |||
Ending Balance at Mar. 31, 2018 | 123,104 | $ 87,361 | 35,713 | 30 | |
Ending Balance (in shares) at Mar. 31, 2018 | 10,709 | ||||
Beginning Balance at Dec. 31, 2017 | 118,105 | $ 86,782 | 31,117 | 206 | |
Beginning Balance (in shares) at Dec. 31, 2017 | 10,615 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 16,117 | ||||
Other comprehensive loss, net of tax | (374) | ||||
Ending Balance at Sep. 30, 2018 | 133,067 | $ 88,149 | 45,121 | (203) | |
Ending Balance (in shares) at Sep. 30, 2018 | 10,756 | ||||
Beginning Balance at Mar. 31, 2018 | 123,104 | $ 87,361 | 35,713 | 30 | |
Beginning Balance (in shares) at Mar. 31, 2018 | 10,709 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,398 | 5,398 | |||
Other comprehensive loss, net of tax | (5) | (5) | |||
Dividends on common stock | (722) | $ 28 | (750) | ||
Common stock issued and related tax effects | [1] | 366 | $ 366 | ||
Common stock issued and related tax effects (in shares) | [1] | 22 | |||
Ending Balance at Jun. 30, 2018 | 128,141 | $ 87,755 | 40,386 | ||
Ending Balance (in shares) at Jun. 30, 2018 | 10,731 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,490 | 5,490 | |||
Other comprehensive loss, net of tax | (203) | (203) | |||
Dividends on common stock | (727) | $ 28 | (755) | ||
Common stock issued and related tax effects | [1] | 366 | $ 366 | ||
Common stock issued and related tax effects (in shares) | [1] | 25 | |||
Ending Balance at Sep. 30, 2018 | 133,067 | $ 88,149 | 45,121 | (203) | |
Ending Balance (in shares) at Sep. 30, 2018 | 10,756 | ||||
Beginning Balance at Dec. 31, 2018 | $ 138,488 | $ 88,484 | 50,161 | (157) | |
Beginning Balance (in shares) at Dec. 31, 2018 | 10,780 | 10,780 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 5,740 | 5,740 | |||
Other comprehensive loss, net of tax | (50) | (50) | |||
Dividends on common stock | (730) | $ 26 | (756) | ||
Common stock issued and related tax effects | [1] | 269 | $ 269 | ||
Common stock issued and related tax effects (in shares) | [1] | 42 | |||
Ending Balance at Mar. 31, 2019 | 143,717 | $ 88,779 | 55,145 | (207) | |
Ending Balance (in shares) at Mar. 31, 2019 | 10,822 | ||||
Beginning Balance at Dec. 31, 2018 | $ 138,488 | $ 88,484 | 50,161 | (157) | |
Beginning Balance (in shares) at Dec. 31, 2018 | 10,780 | 10,780 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 17,533 | ||||
Other comprehensive loss, net of tax | 89 | ||||
Ending Balance at Sep. 30, 2019 | $ 154,884 | $ 89,753 | 65,199 | (68) | |
Ending Balance (in shares) at Sep. 30, 2019 | 10,869 | 10,869 | |||
Beginning Balance at Mar. 31, 2019 | $ 143,717 | $ 88,779 | 55,145 | (207) | |
Beginning Balance (in shares) at Mar. 31, 2019 | 10,822 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,834 | 5,834 | |||
Other comprehensive loss, net of tax | 154 | 154 | |||
Dividends on common stock | (839) | $ 31 | (870) | ||
Common stock issued and related tax effects | [1] | 517 | $ 517 | ||
Common stock issued and related tax effects (in shares) | [1] | 34 | |||
Ending Balance at Jun. 30, 2019 | 149,383 | $ 89,327 | 60,109 | (53) | |
Ending Balance (in shares) at Jun. 30, 2019 | 10,856 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,959 | 5,959 | |||
Other comprehensive loss, net of tax | (15) | (15) | |||
Dividends on common stock | (838) | $ 31 | (869) | ||
Common stock issued and related tax effects | [1] | 395 | $ 395 | ||
Common stock issued and related tax effects (in shares) | [1] | 13 | |||
Ending Balance at Sep. 30, 2019 | $ 154,884 | $ 89,753 | $ 65,199 | $ (68) | |
Ending Balance (in shares) at Sep. 30, 2019 | 10,869 | 10,869 | |||
[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 Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends per share, cash paid (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.06 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
OPERATING ACTIVITIES: | ||
Net income | $ 17,533,000 | $ 16,117,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 1,600,000 | 1,550,000 |
Net amortization of purchase premiums and discounts on securities | 126,000 | 170,000 |
Depreciation and amortization | 1,144,000 | 1,359,000 |
Deferred income tax benefit | (418,000) | (1,337,000) |
Stock compensation expense | 932,000 | 786,000 |
Gain on sale of OREO | (16,000) | (169,000) |
Gain on sale of mortgage loans held for sale, net | (1,337,000) | (1,155,000) |
Gain on sale of SBA loans held for sale, net | (554,000) | (1,383,000) |
Origination of mortgage loans held for sale | (78,209,000) | (65,304,000) |
Origination of SBA loans held for sale | (8,306,000) | (7,718,000) |
Proceeds from sale of mortgage loans held for sale, net | 79,546,000 | 66,459,000 |
Proceeds from sale of SBA loans held for sale, net | 9,629,000 | 18,597,000 |
BOLI income | (435,000) | (810,000) |
Net change in other assets and liabilities | 3,793,000 | 1,715,000 |
Net cash provided by operating activities | 25,028,000 | 28,877,000 |
INVESTING ACTIVITIES | ||
Purchases of debt securities available for sale | (3,225,000) | 0 |
Purchases of FHLB stock, at cost | (63,261,000) | (51,797,000) |
Maturities and principal payments on securities held to maturity | 525,000 | 954,000 |
Maturities and principal payments on debt securities available for sale | 3,658,000 | 4,026,000 |
Proceeds from redemption of FHLB stock | 63,158,000 | 55,215,000 |
Proceeds from sale of OREO | 269,000 | 439,000 |
Net increase in loans | (67,788,000) | (122,540,000) |
Proceeds from BOLI | (157,000) | 493,000 |
Purchases of premises and equipment | (654,000) | (1,134,000) |
Net cash used in investing activities | (67,475,000) | (114,344,000) |
FINANCING ACTIVITIES | ||
Net increase in deposits | 65,675,000 | 176,336,000 |
Proceeds from new borrowings | 210,000,000 | 180,000,000 |
Repayments of borrowings | (210,000,000) | (275,000,000) |
Proceeds from exercise of stock options | 424,198 | 500,114 |
Dividends on common stock | (2,407,000) | (2,067,000) |
Net cash provided by financing activities | 63,692,000 | 79,769,000 |
Decrease in cash and cash equivalents | 21,245,000 | (5,698,000) |
Cash and cash equivalents, beginning of period | 145,515,000 | 150,254,000 |
Cash and cash equivalents, end of period | 166,760,000 | 144,556,000 |
SUPPLEMENTAL DISCLOSURES | ||
Interest paid | 13,493,000 | 9,550,000 |
Income taxes paid | 5,957,000 | 4,241,000 |
Noncash investing activities: | ||
Establishment of lease liability and right-of-use asset | 3,234,000 | 0 |
Capitalization of servicing rights | 215,000 | 708,000 |
Transfer of loans to OREO | $ 2,151,000 | $ 127,000 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months ended September 30, 2019 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, 2018 . 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 | 9 Months Ended |
Sep. 30, 2019 | |
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 | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, For the nine months ended September 30, (In thousands, except per share amounts) 2019 2018 2019 2018 Net income $ 5,959 $ 5,490 $ 17,533 $ 16,117 Weighted average common shares outstanding - Basic 10,863 10,743 10,836 10,713 Plus: Potential dilutive common stock equivalents 173 193 183 197 Weighted average common shares outstanding - Diluted 11,036 10,936 11,019 10,910 Net income per common share - Basic $ 0.55 $ 0.51 $ 1.62 $ 1.50 Net income per common share - Diluted 0.54 0.50 1.59 1.48 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive 251 40 237 103 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
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. On July 1, 2018, New Jersey's Assembly Bill 4202 was signed into law. Assembly Bill 4202, effective January 1, 2018, imposed a temporary surtax on corporations earning New Jersey allocated income in excess of $1 million at a rate of 2.5 percent for tax years beginning on or after January 1, 2018, through December 31, 2019, and at 1.5 percent for tax years beginning on or after January 1, 2020, through December 31, 2021. In addition, effective for periods on or after January 1, 2019, New Jersey is adopting mandatory unitary combined reporting for its Corporation Business Tax. For the quarter ended September 30, 2019 , the Company reported income tax expense of $1.7 million for an effective tax rate of 22.0 percent , compared to an income tax expense of $1.3 million and an effective tax rate of 18.6 percent for the prior year’s quarter. For the nine months ended September 30, 2019 , the Company reported income tax expense of $4.8 million for an effective tax rate of 21.6 percent , compared to an income tax expense of $3.8 million and an effective tax rate of 19.2 percent for the nine months ended September 30, 2018 . The Company did not recognize or accrue any interest or penalties related to income taxes during the three or nine months ended September 30, 2019 or 2018 . The Company did not have an accrual for uncertain tax positions as of September 30, 2019 or December 31, 2018 , 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 2014 and thereafter are subject to future examination by tax authorities. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following tables show the changes in other comprehensive (loss) income for the three and nine months ended September 30, 2019 and 2018 , net of tax: For the three months ended September 30, 2019 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive loss income Balance, beginning of period $ (6 ) $ (325 ) $ 313 $ (18 ) Other comprehensive income (loss) before reclassification 111 — (126 ) (15 ) Less amounts reclassified from accumulated other comprehensive income (loss) 15 (15 ) — — Period change 96 15 (126 ) (15 ) Balance, end of period $ 90 $ (310 ) $ 187 $ (33 ) For the three months ended September 30, 2018 (In thousands) Net unrealized (losses) gains 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 $ (995 ) $ (460 ) $ 1,490 $ 35 Other comprehensive loss before reclassification (211 ) — (5 ) (216 ) Less amounts reclassified from accumulated other comprehensive income (loss) 2 (15 ) — (13 ) Period change (213 ) 15 (5 ) (203 ) Balance, end of period (1) $ (1,208 ) $ (445 ) $ 1,485 $ (168 ) (1) AOCI does not reflect the net reclassification of $35 thousand to Retained Earnings as a result of ASU 2016-01, "Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" & ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". For the nine months ended September 30, 2019 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive (loss) income Balance, beginning of period $ (721 ) $ (431 ) $ 1,030 $ (122 ) Other comprehensive income (loss) before reclassification 982 — (843 ) 139 Less amounts reclassified from accumulated other comprehensive income (loss) 171 (121 ) — 50 Period change 811 121 (843 ) 89 Balance, end of period $ 90 $ (310 ) $ 187 $ (33 ) For the nine months ended September 30, 2018 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized gains from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ (335 ) $ (341 ) $ 882 $ 206 Other comprehensive (loss) income before reclassification (865 ) — 603 (262 ) Less amounts reclassified from accumulated other comprehensive income 8 104 — 112 Period change (873 ) (104 ) 603 (374 ) Balance, end of period (1) $ (1,208 ) $ (445 ) $ 1,485 $ (168 ) (1) AOCI does not reflect the net reclassification of $35 thousand to Retained Earnings as a result of ASU 2016-01, "Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" & ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2019 | |
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: Debt Securities Available for Sale The fair value of available for sale ("AFS") debt 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 September 30, 2019 , the fair value of the Company's AFS debt securities portfolio was $47.3 million . Approximately 50 percent of the portfolio was made up of residential mortgage-backed securities, which had a fair value of $23.8 million at September 30, 2019 . Approximately $23.4 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 debt securities were classified as Level 2 assets at September 30, 2019 . The valuation of AFS debt 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. Equity Securities with Readily Determinable Fair Values The fair value of equity 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 September 30, 2019 , the fair value of the Company's equity securities portfolio was $2.4 million . All of the Company’s equity securities were classified as Level 2 assets at September 30, 2019 . The valuation of 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. There were no changes in the inputs or methodologies used to determine fair value during the period ended September 30, 2019 , as compared to the periods ended December 31, 2018 and September 30, 2018 . Loans Held for Sale Fair value for loans held for sale is derived from quoted market prices for similar loans, in which case they are characterized as Level 2 assets in the fair value hierarchy. The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 : Fair Value Measurements at September 30, 2019 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured on a recurring basis: Assets: Debt Securities available for sale: U.S. Government sponsored entities $ 5,742 $ — $ 5,742 $ — State and political subdivisions 4,379 — 4,379 — Residential mortgage-backed securities 23,842 — 23,842 — Corporate and other securities 13,332 — 13,332 — Total debt securities available for sale $ 47,295 $ — $ 47,295 $ — Equity securities with readily determinable fair values 2,364 — 2,364 — Total equity securities $ 2,364 $ — $ 2,364 $ — Loans held for sale 14,437 — 14,437 — Total loans held for sale $ 14,437 $ — $ 14,437 $ — Interest rate swap agreements 264 — 264 — Total swap agreements $ 264 $ — $ 264 $ — Fair Value Measurements at December 31, 2018 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured on a recurring basis: Assets: Debt Securities available for sale: U.S. Government sponsored entities $ 5,642 $ — $ 5,642 $ — State and political subdivisions 4,498 — 4,498 — Residential mortgage-backed securities 26,613 — 26,613 — Corporate and other securities 9,960 — 9,960 — Total debt securities available for sale $ 46,713 $ — $ 46,713 $ — Equity securities with readily determinable fair values 2,144 — 2,144 — Total equity securities $ 2,144 $ — $ 2,144 $ — Loans held for sale 12,177 — 12,177 — Total loans held for sale $ 12,177 $ — $ 12,177 $ — Interest rate swap agreements 1,433 — 1,433 — Total swap agreements $ 1,433 $ — $ 1,433 $ — Fair Value on a Nonrecurring Basis 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 Measurements at September 30, 2019 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Credit During Period Measured on a non-recurring basis: Financial assets: OREO $ 1,723 $ — $ — $ 1,723 $ (231 ) Impaired collateral-dependent loans 1,229 — — 1,229 (109 ) Fair Value Measurements at December 31, 2018 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Credit During Period Measured on a non-recurring basis: Financial assets: OREO $ 56 $ — $ — $ 56 $ (196 ) Impaired collateral-dependent loans 2,625 — — 2,625 (335 ) 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”. 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 September 30, 2019 , the valuation allowance for impaired loans was $558 thousand , a decrease of $109 thousand from $667 thousand at December 31, 2018 . 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 September 30, 2019 and December 31, 2018 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. 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 September 30, 2019 , the Bank had standby letters of credit outstanding of $4.8 million , compared to $5.7 million at December 31, 2018 . 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 September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (In thousands) Fair value level Carrying amount Estimated fair value Carrying amount Estimated fair value Financial assets: Cash and cash equivalents Level 1 $ 166,760 $ 166,760 $ 145,515 $ 145,515 Securities (1) Level 2 63,991 64,297 63,732 63,600 SBA loans held for sale Level 2 13,053 14,437 11,171 12,177 Loans, net of allowance for loan losses (2) Level 2 1,339,419 1,341,272 1,277,907 1,268,909 FHLB stock Level 2 10,899 10,899 10,795 10,795 Servicing assets Level 3 2,138 2,138 2,375 2,375 Accrued interest receivable Level 2 6,858 6,858 6,399 6,399 OREO Level 3 1,723 1,723 56 56 Financial liabilities: Deposits Level 2 1,273,362 1,275,256 1,207,687 1,204,731 Borrowed funds and subordinated debentures Level 2 220,310 219,838 220,310 218,879 Accrued interest payable Level 2 420 420 406 406 (1) Includes held to maturity (“HTM”) corporate securities that are considered Level 3. These securities had book values of $3.5 million and $3.6 million at September 30, 2019 and December 31, 2018 , respectively, with market values of $3.6 million and $3.4 million . Includes one corporate bond with a book value and market value of $1.0 million at September 30, 2019 and December 31, 2018 . (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 $1.2 million and $2.6 million at September 30, 2019 and December 31, 2018 , respectively. Limitations Fair value estimates are made at a point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-statement of condition financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the effect of fair value estimates have not been considered in the above estimates. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2019 | |
Marketable Securities [Abstract] | |
Securities | Securities This table provides the major components of debt securities available for sale ("AFS"), held to maturity ("HTM") and equity securities with readily determinable fair values ("equity securities") at amortized cost and estimated fair value at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (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 $ 5,753 $ — $ (11 ) $ 5,742 $ 5,758 $ — $ (116 ) $ 5,642 State and political subdivisions 4,356 39 (16 ) 4,379 4,614 4 (120 ) 4,498 Residential mortgage-backed securities 23,659 294 (111 ) 23,842 27,159 74 (620 ) 26,613 Corporate and other securities 13,452 171 (291 ) 13,332 10,231 123 (394 ) 9,960 Total debt securities available for sale $ 47,220 $ 504 $ (429 ) $ 47,295 $ 47,762 $ 201 $ (1,250 ) $ 46,713 Held to maturity: U.S. Government sponsored entities $ 2,298 $ — $ (20 ) $ 2,278 $ 2,527 $ — $ (94 ) $ 2,433 State and political subdivisions 951 156 — 1,107 951 110 — 1,061 Residential mortgage-backed securities 3,094 68 (8 ) 3,154 3,312 17 (52 ) 3,277 Commercial mortgage-backed securities 3,481 100 (24 ) 3,557 3,570 — (138 ) 3,432 Corporate and other securities 4,508 35 — 4,543 4,515 84 — 4,599 Total securities held to maturity $ 14,332 $ 359 $ (52 ) $ 14,639 $ 14,875 $ 211 $ (284 ) $ 14,802 Equity securities: Total equity securities $ 2,398 $ 65 $ (99 ) $ 2,364 $ 2,394 $ — $ (250 ) $ 2,144 This table provides the remaining contractual maturities and yields of securities within the investment portfolios. The carrying value of securities at September 30, 2019 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 $ 999 1.71 % $ 4,743 1.83 % $ — — % $ — — % $ 5,742 1.81 % State and political subdivisions 376 3.14 601 3.92 2,259 2.44 1,143 2.74 4,379 2.78 Residential mortgage-backed securities — — 393 2.05 2,276 2.36 21,173 2.87 23,842 2.81 Corporate and other securities — — 3,787 3.43 7,640 4.45 1,905 5.06 13,332 4.25 Total debt securities available for sale $ 1,375 2.10 % $ 9,524 2.61 % $ 12,175 3.68 % $ 24,221 3.04 % $ 47,295 3.09 % Held to maturity at cost: U.S. Government sponsored entities $ — — % $ — — % $ — — % $ 2,298 1.98 % $ 2,298 1.98 % State and political subdivisions — — — — 495 5.06 456 5.85 951 5.44 Residential mortgage-backed securities — — 37 5.22 356 2.99 2,701 3.53 3,094 3.49 Commercial mortgage-backed securities — — — — — — 3,481 2.76 3,481 2.76 Corporate and other securities — — — — 4,508 5.73 — — 4,508 5.73 Total securities held to maturity $ — — % $ 37 5.22 % $ 5,359 5.49 % $ 8,936 2.95 % $ 14,332 3.90 % Equity securities at fair value: Total equity securities $ — — % $ — — % $ — — % $ 2,364 2.14 % $ 2,364 2.13 % 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 September 30, 2019 and December 31, 2018 are as follows: September 30, 2019 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 5 $ 2,755 $ — $ 2,987 $ (11 ) $ 5,742 $ (11 ) State and political subdivisions 1 — — 1,143 (16 ) 1,143 (16 ) Residential mortgage-backed securities 11 3,532 (15 ) 4,431 (96 ) 7,963 (111 ) Corporate and other securities 5 3,215 (8 ) 3,705 (283 ) 6,920 (291 ) Total temporarily impaired securities 22 $ 9,502 $ (23 ) $ 12,266 $ (406 ) $ 21,768 $ (429 ) Held to maturity: U.S. Government sponsored entities 2 $ 2,278 $ (20 ) $ — $ — $ 2,278 $ (20 ) Residential mortgage-backed securities 2 — — 772 (8 ) 772 (8 ) Commercial mortgage-backed securities 1 1,504 (24 ) — — 1,504 (24 ) Total temporarily impaired securities 5 $ 3,782 $ (44 ) $ 772 $ (8 ) $ 4,554 $ (52 ) December 31, 2018 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 5 $ — $ — $ 5,642 $ (116 ) $ 5,642 $ (116 ) State and political subdivisions 4 — — 3,129 (120 ) 3,129 (120 ) Residential mortgage-backed securities 31 4,445 (23 ) 20,480 (597 ) 24,925 (620 ) Corporate and other securities 5 971 (30 ) 5,787 (364 ) 6,758 (394 ) Total temporarily impaired securities 45 $ 5,416 $ (53 ) $ 35,038 $ (1,197 ) $ 40,454 $ (1,250 ) Held to maturity: U.S. Government sponsored entities 2 $ — $ — $ 2,434 $ (94 ) $ 2,434 $ (94 ) Residential mortgage-backed securities 5 1,277 (15 ) 821 (37 ) 2,098 (52 ) Commercial mortgage-backed securities 2 — — 3,432 (138 ) 3,432 (138 ) Total temporarily impaired securities 9 $ 1,277 $ (15 ) $ 6,687 $ (269 ) $ 7,964 $ (284 ) 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 September 30, 2019 or December 31, 2018 . 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 September 30, 2019 or December 31, 2018 . Corporate and other securities: Included in this category are corporate and other debt securities. The unrealized losses on corporate and other debt securities were due to widening credit spreads. 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 September 30, 2019 or December 31, 2018 . The unrealized loss on the trust preferred security was caused by an inactive trading market and charges in market credit spreads. 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 likely than not that the Company will hold the security, the Company did not consider this security to be other-than-temporarily impaired as of September 30, 2019 or December 31, 2018 . Realized Gains and Losses There were no realized gains or losses for the three and nine months ended September 30, 2019 , or 2018 . Equity Securities Included in this category are Community Reinvestment Act ("CRA") investments and the equity holdings of financial institutions. Equity securities are defined to include (a) preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interest in entities at fixed or determinable prices. The Company follows ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities," which aims to simplify accounting for financial instruments and to converge the guidance between U.S. GAAP and IFRS. ASU 2016-01 also includes guidance on how entities account for equity investments, present and disclose financial instruments, and measure the valuation allowance on deferred tax assets related to available-for-sale debt securities. The guidance in ASU 2016-01 requires an entity to disaggregate the net gains and losses on the equity investments recognized in the income statement during a reporting period into realized and unrealized gains and losses. As a result, equity securities are no longer carried at fair value through other comprehensive income (OCI) or by applying the cost method to those equity securities that do not have readily determinable values. Equity securities are generally required to be measured at fair value with unrealized holding gains and losses reflected in net income. The Company adopted this standard as of January 1, 2018. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and nine months ended September 30, 2019 and 2018 : For the three months ended September 30, For the nine months ended September 30, (In thousands) 2019 2018 2019 2018 Net gains (losses) recognized during the period on equity securities $ 18 $ 2 $ 216 $ (6 ) Less: Net gains (losses) recognized during the period on equity securities sold during the period — — — — Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date $ 18 $ 2 $ 216 $ (6 ) Pledged Securities Securities with a carrying value of $5.5 million and $4.3 million for September 30, 2019 and December 31, 2018 , respectively, were pledged to secure Government deposits, secure other borrowings and for other purposes required or permitted by law. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 SBA loans held for investment $ 36,380 $ 39,333 Commercial loans SBA 504 loans 26,208 29,155 Commercial other 105,449 104,587 Commercial real estate 541,510 510,370 Commercial real estate construction 50,082 49,990 Residential mortgage loans 456,963 436,056 Consumer loans Home equity 67,087 59,887 Consumer construction and other 71,742 64,017 Total loans held for investment $ 1,355,421 $ 1,293,395 SBA loans held for sale 13,053 11,171 Total loans $ 1,368,474 $ 1,304,566 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. 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. 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. Commercial 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. 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. This policy and the underlying procedures are reviewed and approved by the Board of Directors on a regular basis. Credit Ratings For SBA 7(a) 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 regulatory 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 September 30, 2019 , the Company owned $1.7 million in residential consumer properties that were included in OREO in the Consolidated Balance Sheets, compared to one residential consumer property, which was fully charged off at December 31, 2018 . Additionally, there were $4.0 million of residential consumer loans in the process of foreclosure at September 30, 2019 , compared to $5.3 million at December 31, 2018 . The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of September 30, 2019 : September 30, 2019 SBA & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 34,575 $ 1,417 $ 388 $ 36,380 Commercial loans SBA 504 loans 26,160 — 48 26,208 Commercial other 103,466 1,983 — 105,449 Commercial real estate 535,360 5,227 923 541,510 Commercial real estate construction 50,082 — — 50,082 Total commercial loans 715,068 7,210 971 723,249 Total SBA and commercial loans $ 749,643 $ 8,627 $ 1,359 $ 759,629 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 452,536 $ 4,427 $ 456,963 Consumer loans Home equity 67,064 23 67,087 Consumer construction and other 71,742 — 71,742 Total consumer loans 138,806 23 138,829 Total residential mortgage and consumer loans $ 591,342 $ 4,450 $ 595,792 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, 2018 : December 31, 2018 SBA & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 37,198 $ 601 $ 1,534 $ 39,333 Commercial loans SBA 504 loans 28,105 — 1,050 29,155 Commercial other 103,806 322 459 104,587 Commercial real estate 504,022 2,879 3,469 510,370 Commercial real estate construction 49,990 — — 49,990 Total commercial loans 685,923 3,201 4,978 694,102 Total SBA and commercial loans $ 723,121 $ 3,802 $ 6,512 $ 733,435 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 431,845 $ 4,211 $ 436,056 Consumer loans Home equity 59,861 26 59,887 Consumer construction and other 64,017 — 64,017 Total consumer loans 123,878 26 123,904 Total residential mortgage and consumer loans $ 555,723 $ 4,237 $ 559,960 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 the process of collection. The risk of loss is difficult to quantify and is subject to fluctuations in collateral values, general economic conditions and other factors. 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 September 30, 2019 and December 31, 2018 : September 30, 2019 (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 $ 663 $ — $ — $ 503 $ 1,166 $ 35,214 $ 36,380 Commercial loans SBA 504 loans 1,822 — — — 1,822 24,386 26,208 Commercial other 156 — — 416 572 104,877 105,449 Commercial real estate 1,673 — — 213 1,886 539,624 541,510 Commercial real estate construction — — — — — 50,082 50,082 Residential mortgage loans 6,020 2,261 — 4,427 12,708 444,255 456,963 Consumer loans Home equity 252 201 140 23 616 66,471 67,087 Consumer construction and other — — — — — 71,742 71,742 Total loans held for investment $ 10,586 $ 2,462 $ 140 $ 5,582 $ 18,770 $ 1,336,651 $ 1,355,421 SBA loans held for sale — — — — — 13,053 13,053 Total loans $ 10,586 $ 2,462 $ 140 $ 5,582 $ 18,770 $ 1,349,704 $ 1,368,474 (1) At September 30, 2019 , nonaccrual loans included $63 thousand of loans guaranteed by the SBA. December 31, 2018 (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 $ — $ — $ — $ 1,560 $ 1,560 $ 37,773 $ 39,333 Commercial loans SBA 504 loans — — — — — 29,155 29,155 Commercial other — — — 30 30 104,557 104,587 Commercial real estate 301 — — 1,046 1,347 509,023 510,370 Commercial real estate construction — — — — — 49,990 49,990 Residential mortgage loans 3,801 1,204 98 4,211 9,314 426,742 436,056 Consumer loans Home equity 396 — — 26 422 59,465 59,887 Consumer construction and other 300 — — — 300 63,717 64,017 Total loans held for investment $ 4,798 $ 1,204 $ 98 $ 6,873 $ 12,973 $ 1,280,422 $ 1,293,395 SBA loans held for sale — — — — — 11,171 11,171 Total loans $ 4,798 $ 1,204 $ 98 $ 6,873 $ 12,973 $ 1,291,593 $ 1,304,566 (1) At December 31, 2018 , nonaccrual loans included $89 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 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 September 30, 2019 : September 30, 2019 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 531 $ 367 $ — Commercial loans Commercial real estate 213 213 — Total commercial loans 213 213 — Total impaired loans with no related allowance 744 580 — With an allowance: SBA loans held for investment (1) 238 73 72 Commercial loans Commercial other 916 416 416 Commercial real estate 718 718 70 Total commercial loans 1,634 1,134 486 Total impaired loans with a related allowance 1,872 1,207 558 Total individually evaluated impaired loans: SBA loans held for investment (1) 769 440 72 Commercial loans Commercial other 916 416 416 Commercial real estate 931 931 70 Total commercial loans 1,847 1,347 486 Total individually evaluated impaired loans $ 2,616 $ 1,787 $ 558 (1) Balances are reduced by amount guaranteed by the SBA of $63 thousand at September 30, 2019 . 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, 2018 : December 31, 2018 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 359 $ 353 $ — Commercial loans Commercial real estate 1,046 1,046 — Total commercial loans 1,046 1,046 — Total impaired loans with no related allowance 1,405 1,399 — With an allowance: SBA loans held for investment (1) 1,257 1,118 540 Commercial loans Commercial other 30 30 30 Commercial real estate 745 745 97 Total commercial loans 775 775 127 Total impaired loans with a related allowance 2,032 1,893 667 Total individually evaluated impaired loans: SBA loans held for investment (1) 1,616 1,471 540 Commercial loans Commercial other 30 30 30 Commercial real estate 1,791 1,791 97 Total commercial loans 1,821 1,821 127 Total individually evaluated impaired loans $ 3,437 $ 3,292 $ 667 (1) Balances are reduced by amount guaranteed by the SBA of $89 thousand at December 31, 2018 . Impaired loans decreased $1.5 million at September 30, 2019 compared to December 31, 2018 . The decrease in impaired loans was primarily due to one commercial loan note sale totaling $1.0 million , one SBA loan taken into OREO totaling $328 thousand , one SBA loan note sale totaling $293 thousand , and the removal of one SBA loan totaling $276 thousand , partially offset by the addition of two SBA loans totaling $629 thousand . Additionally, one SBA loan was reduced in 2019 through a short sale of $184 thousand , and two SBA loans were reduced through charge-offs totaling $154 thousand . 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 nine months ended September 30, 2019 and 2018 . 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 September 30, 2019 2018 (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) $ 255 $ 4 $ 1,275 $ — Commercial loans Commercial other 700 3 11 — Commercial real estate 831 9 2,524 55 Total $ 1,786 $ 16 $ 3,810 $ 55 (1) Balances are reduced by the average amount guaranteed by the SBA of $270 thousand and $120 thousand for the three months ended September 30, 2019 and 2018 , respectively. For the nine months ended September 30, 2019 2018 (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) $ 685 $ 13 $ 1,003 $ (2 ) Commercial loans Commercial other 236 3 10 — Commercial real estate 1,369 26 2,190 80 Total $ 2,290 $ 42 $ 3,203 $ 78 (1) Balances are reduced by the average amount guaranteed by the SBA of $146 thousand and $82 thousand for the nine months ended September 30, 2019 and 2018 , 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, a combination of both, or a reduction in principal amount. 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. The Company had one performing TDR with a balance of $718 thousand and $745 thousand as of September 30, 2019 , and December 31, 2018 , respectively, which was included in the impaired loan numbers as of such dates. At September 30, 2019 , and December 31, 2018 , there were specific reserves on the performing TDR of $70 thousand and $97 thousand , respectively. The loan remains in accrual status since it continues to perform in accordance with the restructured terms. To date, the Company’s TDRs consisted of interest rate reductions, interest only periods, principal balance reductions, and maturity extensions. There were no loans modified during the three or nine months ended September 30, 2019 and 2018 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 nine months ended September 30, 2019 . 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 | 9 Months Ended |
Sep. 30, 2019 | |
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), 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 five classes: commercial real estate, commercial real estate construction, unsecured business line of credit, commercial other, and SBA 504. 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) 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. The following tables detail the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2019 and 2018 : For the three months ended September 30, 2019 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,321 $ 9,144 $ 4,198 $ 1,302 $ 15,965 Charge-offs (99 ) (500 ) (130 ) — (729 ) Recoveries 13 3 — — 16 Net (charge-offs) recoveries (86 ) (497 ) (130 ) — (713 ) (Credit) provision for loan losses charged to expense (68 ) 778 52 (12 ) 750 Balance, end of period $ 1,167 $ 9,425 $ 4,120 $ 1,290 $ 16,002 For the three months ended September 30, 2018 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,637 $ 8,355 $ 3,493 $ 1,149 $ 14,634 Charge-offs (169 ) — — — (169 ) Recoveries 1 5 — 17 23 Net (charge-offs) recoveries (168 ) 5 — 17 (146 ) Provision for loan losses charged to expense 66 317 119 (2 ) 500 Balance, end of period $ 1,535 $ 8,677 $ 3,612 $ 1,164 $ 14,988 The following tables detail the activity in the allowance for loan losses portfolio segment for the nine months ended September 30, 2019 and 2018 : For the nine months ended September 30, 2019 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,655 $ 8,705 $ 3,900 $ 1,228 $ 15,488 Charge-offs (492 ) (501 ) (130 ) (1 ) (1,124 ) Recoveries 16 12 — 10 38 Net (charge-offs) recoveries (476 ) (489 ) (130 ) 9 (1,086 ) Provision for loan losses charged to expense (12 ) 1,209 350 53 1,600 Balance, end of period $ 1,167 $ 9,425 $ 4,120 $ 1,290 $ 16,002 For the nine months ended September 30, 2018 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,471 $ 7,825 $ 3,130 $ 1,130 $ 13,556 Charge-offs (354 ) — — (22 ) (376 ) Recoveries 68 25 13 152 258 Net (charge-offs) recoveries (286 ) 25 13 130 (118 ) Provision (credit) for loan losses charged to expense 350 827 469 (96 ) 1,550 Balance, end of period $ 1,535 $ 8,677 $ 3,612 $ 1,164 $ 14,988 The following tables present loans and their related allowance for loan losses, by portfolio segment, as of September 30, 2019 and December 31, 2018 : September 30, 2019 (In thousands) SBA held for investment Commercial Residential Consumer Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 72 $ 486 $ — $ — $ 558 Collectively evaluated for impairment 1,095 8,939 4,120 1,290 15,444 Total $ 1,167 $ 9,425 $ 4,120 $ 1,290 $ 16,002 Loan ending balances: Individually evaluated for impairment $ 440 $ 1,347 $ — $ — $ 1,787 Collectively evaluated for impairment 35,940 721,902 456,963 138,829 1,353,634 Total $ 36,380 $ 723,249 $ 456,963 $ 138,829 $ 1,355,421 December 31, 2018 (In thousands) SBA held for investment Commercial Residential Consumer Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 540 $ 127 $ — $ — $ 667 Collectively evaluated for impairment 1,115 8,578 3,900 1,228 14,821 Total $ 1,655 $ 8,705 $ 3,900 $ 1,228 $ 15,488 Loan ending balances: Individually evaluated for impairment $ 1,471 $ 1,821 $ — $ — $ 3,292 Collectively evaluated for impairment 37,862 692,281 436,056 123,904 1,290,103 Total $ 39,333 $ 694,102 $ 436,056 $ 123,904 $ 1,293,395 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 September 30, 2019 , a $278 thousand commitment reserve was reported on the balance sheet as an “other liability”, compared to a $290 thousand commitment reserve at December 31, 2018 . |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements 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. In May 2019, FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." ASU 2019-05 was issued to address concerns with the adoption of ASU 2016-13. ASU 2019-05 gives entities the ability to irrevocable elect the fair value option in Subtopic 825-10 for certain existing financial assets upon transition to ASU 2016-03. Financial assets that are eligible for this fair value election are those that qualify under Subtopic 825-10 and are within the scope of Subtopic 326-10, "Financial Instruments - Credit Losses - Measured at Amortized Costs." An exception to this is held-to-maturity debt securities, which do not qualify for this transition election. The effective date for the amendment is the same as the effective date in ASU 2016-03. The Company is currently evaluating the impact of the adoption of ASU 2016-13 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 does not expect this ASU to have a material impact on the Company's consolidated financial statements since the fair values of our reporting units were not lower than their respective carrying amounts at the time of our goodwill impairment analysis for 2018. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2019 | |
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. The Company had interest rate swaps designated as cash flow hedging instruments with a notional amount of $60.0 million at September 30, 2019 and September 30, 2018 , respectively. On February 16, 2019, a $10.0 million swap instrument matured, resulting in a reduction in fair value of $27 thousand . On July 5, 2019, the Company entered into a new swap agreement with a notional value of $10.0 million . A summary of the Company’s outstanding interest rate swap agreements used to hedge variable rate debt at September 30, 2019 and 2018 , respectively is as follows: For the three months ended September 30, For the nine months ended September 30, (In thousands, except percentages, years and contracts) 2019 2018 2019 2018 Notional amount $ 60,000 $ 60,000 $ 60,000 $ 60,000 Fair value 264 2,066 264 2,066 Weighted average pay rate 1.42 % 1.26 % 1.36 % 1.26 % Weighted average receive rate 2.49 % 2.33 % 2.59 % 1.76 % Weighted average maturity in years 1.50 2.12 1.72 2.49 Number of contracts 4 4 4 4 During the three and nine months ended September 30, 2019 , the Company received variable rate London Interbank Offered Rate ("LIBOR") payments from and paid fixed rates in accordance with its interest rate swap agreements. At September 30, 2019 and 2018 , the unrealized gain relating to interest rate swaps was recorded as a derivative asset and is included in Prepaid expenses and other assets in the Company's Balance Sheet, and the unrealized loss as a derivative liability and is included in Accrued expenses and other liabilities. 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. The following table presents the net (losses) gains recorded in other comprehensive income and the consolidated financial statements relating to the cash flow derivative instruments at September 30, 2019 and 2018 , respectively: For the three months ended September 30, For the three months ended September 30, (In thousands) 2019 2018 2019 2018 (Decrease) Increase in the fair value of interest rate swaps $ (177 ) $ (7 ) $ (1,077 ) $ 659 |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2019 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans 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. 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. Transactions under the Company’s stock option plans for the nine months ended September 30, 2019 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, 2018 584,178 $ 13.00 7.1 $ 4,574,680 Options granted 55,000 20.61 Options exercised (57,234 ) 7.41 Options forfeited (5,333 ) 19.38 Options expired — — Outstanding at September 30, 2019 576,611 $ 14.22 6.9 $ 4,573,458 Exercisable at September 30, 2019 338,089 $ 10.28 5.5 $ 4,011,761 On April 25, 2019, The Company adopted the 2019 Equity Compensation Plan providing for grants of up to 500,000 shares to be allocated between incentive and non-qualified stock options, restricted stock awards, performance units and deferred stock. The Plan replaced all previously approved and established equity plans then currently in effect. As of September 30, 2019, 7,500 shares of restricted stock have been awarded from the plan leaving 492,500 shares available for future grants. The fair values of the options granted during the nine months ended September 30, 2019 and 2018 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions. No options were granted during the three months ended September 30, 2019 and 2018 : For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Number of options granted — — 55,000 114,500 Weighted average exercise price $ — $ — $ 20.61 $ 20.24 Weighted average fair value of options $ — $ — $ 6.21 $ 5.97 Expected life in years (1) 0.00 0.00 8.23 6.35 Expected volatility (2) — % — % 27.08 % 26.40 % Risk-free interest rate (3) — % — % 2.55 % 2.48 % Dividend yield (4) — % — % 1.36 % 1.14 % (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 nine months ended September 30, 2019 and 2018 : For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Number of options exercised 4,800 23,366 57,234 100,973 Total intrinsic value of options exercised $ 38,127 $ 462,533 $ 742,737 $ 1,699,924 Cash received from options exercised $ 61,134 $ 108,156 $ 424,198 $ 500,114 Tax deduction realized from options $ 11,491 $ 130,018 $ 223,453 $ 477,849 The following table summarizes information about stock options outstanding and exercisable at September 30, 2019 : 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 - $6.00 61,761 2.9 $ 5.60 61,761 $ 5.60 $6.01 - $12.00 196,817 5.5 8.70 196,817 8.70 $12.01 - $18.00 67,533 7.3 15.78 43,335 15.80 $18.01 - $24.00 250,500 8.9 20.26 36,176 20.27 Total 576,611 6.9 $ 14.22 338,089 $ 10.28 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 nine months ended September 30, 2019 and 2018 are detailed in the following table: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Compensation expense $ 155,942 $ 115,345 $ 446,544 $ 357,007 Income tax benefit 45,067 32,424 129,051 100,355 As of September 30, 2019 , unrecognized compensation costs related to nonvested share-based compensation arrangements granted under the Company’s stock option plans totaled approximately $993 thousand . That cost is expected to be recognized over a weighted average period of 2.0 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. 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. The following table summarizes nonvested restricted stock activity for the nine months ended September 30, 2019 : Shares Average grant date fair value Nonvested restricted stock at December 31, 2018 105,312 $ 16.55 Granted 37,650 20.52 Cancelled (1,350 ) 17.92 Vested (35,438 ) 14.11 Nonvested restricted stock at September 30, 2019 106,174 $ 18.76 On April 25, 2019, The Company adopted the 2019 Equity Compensation Plan providing for grants of up to 500,000 shares to be allocated between incentive and non-qualified stock options, restricted stock awards, performance units and deferred stock. The Plan replaced all previously approved and established equity plans then currently in effect. As of September 30, 2019, 7,500 shares of restricted stock have been awarded from the plan leaving 492,500 shares available for future grants. Restricted stock awards granted during the three and nine months ended September 30, 2019 and 2018 were as follows: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Number of shares granted 7,500 — 37,650 38,300 Average grant date fair value $ 20.00 $ — $ 20.52 $ 20.64 Compensation expense related to restricted stock for the three and nine months ended September 30, 2019 and 2018 is detailed in the following table: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Compensation expense $ 172,558 $ 143,854 $ 485,466 $ 429,990 Income tax benefit 49,869 40,437 140,299 120,870 As of September 30, 2019 , there was approximately $1.5 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 2.7 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 $150 thousand and $146 thousand during the three months ended September 30, 2019 and 2018 , respectively, and $490 thousand and $458 thousand during the nine months ended September 30, 2019 and 2018 , 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 up to 100 percent of their year end cash bonuses. Director and executive deferred fees totaled $22 thousand during the three months ended September 30, 2019 and 2018 , and $354 thousand and $282 thousand during the nine months ended September 30, 2019 , and 2018 respectively. The interest paid on the deferred balances totaled $28 thousand and $18 thousand during the three months ended September 30, 2019 and 2018 , and $78 thousand and $49 thousand during the nine months ended September 30, 2019 , and 2018 respectively. The fees distributed on the deferred balances totaled $2 thousand during the three months ended September 30, 2019 and 2018 , and $9 thousand during the nine months ended September 30, 2019 , and 2018 . Benefit Plans In addition to the 401(k) savings plan which covers substantially all employees, in 2015 the Company established 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. The Retirement Benefit shall be an amount equal to sixty percent ( 60% ) 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 two percent ( 2% ). The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $6.6 million . A discount rate of four percent ( 4% ) was used to calculate the present value of the benefit obligation. The President and CEO commenced vesting in this retirement benefit on January 1, 2014, and vests an additional three percent ( 3% ) 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 one hundred percent ( 100% ) vested in the full retirement benefit. No contributions or payments have been made during the three and nine months ended September 30, 2019 . The following table summarizes the components of the net periodic pension cost of the defined benefit plan recognized during the three and nine months ended September 30, 2019 and 2018 : For the three months ended For the nine months ended (In thousands) 2019 2018 2019 2018 Service cost (1) $ 235 $ 953 $ 454 $ 1,159 Interest cost 36 16 99 47 Amortization of prior service cost 20 20 62 62 Net periodic benefit cost $ 291 $ 989 $ 615 $ 1,268 (1) On September 27, 2018 the Company approved a change in calculation of the Retirement Benefit resulting in an additional $850 thousand in expense. The following table summarizes the changes in benefit obligations of the defined benefit plan during the nine months ended September 30, 2019 and 2018 : For the nine months ended September 30, (In thousands) 2019 2018 Benefit obligation, beginning of year $ 2,747 $ 1,187 Service cost (1) 454 1,159 Interest cost 99 47 Benefit obligation, end of period $ 3,300 $ 2,393 (1) On September 27, 2018 the Company approved a change in calculation of the Retirement Benefit resulting in an additional $850 thousand in expense. 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 September 30, 2019 , the Company had total year to date expenses of $85 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 and $8 thousand for the three months ended September 30, 2019 and 2018 , and $4 thousand and $10 thousands for the nine months ended September 30, 2019 and 2018 , respectively. |
Regulatory Capital
Regulatory Capital | 9 Months Ended |
Sep. 30, 2019 | |
Regulatory Capital Requirements [Abstract] | |
Regulatory Capital | Regulatory Capital A significant measure of the strength of a financial institution is its capital base. Federal regulators have classified and defined capital into the following components: (1) tier 1 capital, which includes tangible shareholders’ equity for common stock, qualifying preferred stock and certain qualifying hybrid instruments, and (2) tier 2 capital, which includes a portion of the allowance for loan losses, subject to limitations, certain qualifying long-term debt, preferred stock and hybrid instruments, which do not qualify as tier 1 capital. The Bank is currently subject to various regulatory capital requirements administered by the FDIC. Quantitative measures of capital adequacy include the leverage ratio (tier 1 capital as a percentage of tangible assets), tier 1 risk-based capital ratio (tier 1 capital as a percent of risk-weighted assets), total risk-based capital ratio (total risk-based capital as a percent of total risk-weighted assets), and common equity tier 1 capital ratio. Minimum capital levels are regulated by risk-based capital adequacy guidelines, which require the Bank to maintain certain capital as a percentage of assets and certain off-balance sheet items adjusted for predefined credit risk factors (risk-weighted assets). Failure to meet minimum capital requirements can initiate certain mandatory and possibly discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action applicable to banks, the Bank must meet specific capital guidelines. Prompt corrective action provisions are not applicable to bank holding companies. Under the Federal Reserve's small bank holding company policy, holding companies with less than $3.0 billion in consolidated assets, like the Parent Company, are exempt from the FRB's consolidated capital requirements. In September 2010, the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, adopted Basel III, which constitutes a set of capital reform measures designed to strengthen the regulation, supervision and risk management of banking organizations worldwide. In order to implement Basel III and certain additional capital changes required by the Dodd-Frank Act, the FDIC approved, as an interim final rule in July 2013, the regulatory capital requirements substantially similar to final rules issued by the Board of Governors of the Federal Reserve System (“Federal Reserve”) for U.S. state nonmember banks and the Office of the Comptroller of the Currency for national banks. The interim final rule included new risk-based capital and leverage ratios that were phased-in from 2015 to 2019 for most state nonmember banks. The rule includes a new common equity Tier 1 capital (“CET1”) to risk-weighted assets ratio of 4.5% and a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets, which is in addition to the Tier 1 and Total risk-based capital requirements. The interim final rule also raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% and requires a minimum leverage ratio of 4.0%. The required minimum ratio of total capital to risk-weighted assets remained 8.0%. The new risk-based capital requirements (except for the capital conservation buffer) became effective for the Bank on January 1, 2015. The new rules also included a one-time opportunity to opt-out of the changes to treatment of accumulated other comprehensive income (“AOCI”) components. By making the election to opt-out, the institution may continue treating AOCI items in a manner consistent with risk-based capital rules in place prior to January 2015. The Bank and the Company have made the election to opt out of the treatment of AOCI on the appropriate March 31, 2015 filings. The following table summarizes the Company’s and the Bank’s regulatory capital ratios at September 30, 2019 and December 31, 2018 , as well as the minimum regulatory capital ratios required for the Bank to be deemed “well-capitalized.” At September 30, 2019 Required for capital To be well-capitalized under prompt corrective action regulations Company Bank January 1, 2019 Bank Leverage ratio 10.54 % 10.11 % 4.00 % 5.00 % CET1 12.24 % 12.53 % 7.00 % (1 ) 6.50 % Tier I risk-based capital ratio 13.04 % 12.53 % 8.50 % (1 ) 8.00 % Total risk-based capital ratio 14.28 % 13.78 % 10.50 % (1 ) 10.00 % At December 31, 2018 Required for capital To be well-capitalized under prompt corrective action regulations Company Bank January 1, 2018 January 1, 2019 Bank Leverage ratio 9.90 % 9.52 % 4.000 % 4.00 % 5.00 % CET1 11.40 % 11.80 % 6.375 % (2 ) 7.00 % (1 ) 6.50 % Tier I risk-based capital ratio 12.24 % 11.80 % 7.875 % (2 ) 8.50 % (1 ) 8.00 % Total risk-based capital ratio 13.49 % 13.05 % 9.875 % (2 ) 10.50 % (1 ) 10.00 % (1) Includes 2.5% capital conservation buffer. (2) Includes 1.875% capital conservation buffer. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company follows ASU 2016-02, "Leases (Topic 842)," which revised certain aspects of recognition, measurement, presentation, and disclosure of leasing transactions. ASU 2016-02 requires that a lessee recognize the assets and liabilities on its balance sheet 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 Company adopted this standard as of January 1, 2019. In accordance with ASU 2018-01, we have elected to apply ASU 2016-02 as of the beginning of the period of adoption and will not restate comparative periods. Financial results for reporting periods beginning on or after January 1, 2019 are presented under the new guidance (Topic 842), while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance (Topic 840). Operating leases in which we are the lessee are recorded as right-of-use ("ROU") assets and lease liabilities and are included in Prepaid expenses and other assets and Accrued expenses and other liabilities, respectively, on our Consolidated Balance Sheets. We do not currently have any finance leases in which we are the lessee. Operating lease ROU assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate. The incremental borrowing rate was calculated for each lease by taking a variable rate FHLB ARC product (based on Libor plus a spread) and then swapping it to a fixed rate borrowing by adding a fixed mid swap rate for the desired term. The borrowing rate for each lease is unique based on the lease term. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in Occupancy expense in the Consolidated Statements of Income. Our leases relate primarily to bank branches, office space and equipment with remaining lease terms of generally 1 to 10 years. Certain lease arrangements contain extension options which typically range from 1 to 5 years at the then fair market rental rates. As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term. Certain real estate leases have lease payments that adjust based on annual changes in the Consumer Price Index ("CPI"). The leases that are dependent upon CPI are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. As of September 30, 2019 , operating lease ROU assets and operating lease liabilities were $2.9 million , respectively. The table below summarizes our net lease cost: (In thousands) For the three months ended September 30, 2019 For the nine months ended September 30, 2019 Operating lease cost $ 156 $ 441 Net lease cost $ 156 $ 441 The table below summarizes the cash and non-cash activities associated with our leases: (In thousands) For the three months ended September 30, 2019 For the nine months ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 148 $ 416 ROU assets obtained in exchange for new finance lease liabilities $ 43 $ 3,295 The table below summarizes other information related to our operating leases: (In thousands, except percentages and years) September 30, 2019 Weighted average remaining lease term in years 6.95 Weighted average discount rate 5.47 % Operating lease right-of-use assets $ 2,901 The table below summarizes the maturity of remaining lease liabilities: (In thousands) September 30, 2019 2019 (excluding the nine months ended September 30, 2019) $ 141 2020 558 2021 529 2022 478 2023 413 2024 and thereafter 1,411 Total lease payments $ 3,530 Less: Interest (605 ) Present value of lease liabilities $ 2,925 As of September 30, 2019 , the Corporation had not entered into any material leases that have not yet commenced. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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 nine months ended September 30, 2019 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, 2018 . |
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. |
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. |
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. |
New Accounting Pronouncements | New Accounting Pronouncements 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. In May 2019, FASB issued ASU 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief." ASU 2019-05 was issued to address concerns with the adoption of ASU 2016-13. ASU 2019-05 gives entities the ability to irrevocable elect the fair value option in Subtopic 825-10 for certain existing financial assets upon transition to ASU 2016-03. Financial assets that are eligible for this fair value election are those that qualify under Subtopic 825-10 and are within the scope of Subtopic 326-10, "Financial Instruments - Credit Losses - Measured at Amortized Costs." An exception to this is held-to-maturity debt securities, which do not qualify for this transition election. The effective date for the amendment is the same as the effective date in ASU 2016-03. The Company is currently evaluating the impact of the adoption of ASU 2016-13 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 does not expect this ASU to have a material impact on the Company's consolidated financial statements since the fair values of our reporting units were not lower than their respective carrying amounts at the time of our goodwill impairment analysis for 2018. |
Benefit Plans | Benefit Plans In addition to the 401(k) savings plan which covers substantially all employees, in 2015 the Company established 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. The Retirement Benefit shall be an amount equal to sixty percent ( 60% ) 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 two percent ( 2% ). The total benefit is to be made payable in fifteen annual installments. The future payments are estimated to total $6.6 million . A discount rate of four percent ( 4% ) was used to calculate the present value of the benefit obligation. The President and CEO commenced vesting in this retirement benefit on January 1, 2014, and vests an additional three percent ( 3% ) 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 one hundred percent ( 100% ) vested in the full retirement benefit. |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, For the nine months ended September 30, (In thousands, except per share amounts) 2019 2018 2019 2018 Net income $ 5,959 $ 5,490 $ 17,533 $ 16,117 Weighted average common shares outstanding - Basic 10,863 10,743 10,836 10,713 Plus: Potential dilutive common stock equivalents 173 193 183 197 Weighted average common shares outstanding - Diluted 11,036 10,936 11,019 10,910 Net income per common share - Basic $ 0.55 $ 0.51 $ 1.62 $ 1.50 Net income per common share - Diluted 0.54 0.50 1.59 1.48 Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive 251 40 237 103 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Changes in Other Comprehensive (Loss) Income | The following tables show the changes in other comprehensive (loss) income for the three and nine months ended September 30, 2019 and 2018 , net of tax: For the three months ended September 30, 2019 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive loss income Balance, beginning of period $ (6 ) $ (325 ) $ 313 $ (18 ) Other comprehensive income (loss) before reclassification 111 — (126 ) (15 ) Less amounts reclassified from accumulated other comprehensive income (loss) 15 (15 ) — — Period change 96 15 (126 ) (15 ) Balance, end of period $ 90 $ (310 ) $ 187 $ (33 ) For the three months ended September 30, 2018 (In thousands) Net unrealized (losses) gains 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 $ (995 ) $ (460 ) $ 1,490 $ 35 Other comprehensive loss before reclassification (211 ) — (5 ) (216 ) Less amounts reclassified from accumulated other comprehensive income (loss) 2 (15 ) — (13 ) Period change (213 ) 15 (5 ) (203 ) Balance, end of period (1) $ (1,208 ) $ (445 ) $ 1,485 $ (168 ) (1) AOCI does not reflect the net reclassification of $35 thousand to Retained Earnings as a result of ASU 2016-01, "Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" & ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". For the nine months ended September 30, 2019 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized gains (losses) from cash flow hedges Accumulated other comprehensive (loss) income Balance, beginning of period $ (721 ) $ (431 ) $ 1,030 $ (122 ) Other comprehensive income (loss) before reclassification 982 — (843 ) 139 Less amounts reclassified from accumulated other comprehensive income (loss) 171 (121 ) — 50 Period change 811 121 (843 ) 89 Balance, end of period $ 90 $ (310 ) $ 187 $ (33 ) For the nine months ended September 30, 2018 (In thousands) Net unrealized (losses) gains on securities Adjustments related to defined benefit plan Net unrealized gains from cash flow hedges Accumulated other comprehensive income (loss) Balance, beginning of period $ (335 ) $ (341 ) $ 882 $ 206 Other comprehensive (loss) income before reclassification (865 ) — 603 (262 ) Less amounts reclassified from accumulated other comprehensive income 8 104 — 112 Period change (873 ) (104 ) 603 (374 ) Balance, end of period (1) $ (1,208 ) $ (445 ) $ 1,485 $ (168 ) (1) AOCI does not reflect the net reclassification of $35 thousand to Retained Earnings as a result of ASU 2016-01, "Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" & ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 and December 31, 2018 : Fair Value Measurements at September 30, 2019 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured on a recurring basis: Assets: Debt Securities available for sale: U.S. Government sponsored entities $ 5,742 $ — $ 5,742 $ — State and political subdivisions 4,379 — 4,379 — Residential mortgage-backed securities 23,842 — 23,842 — Corporate and other securities 13,332 — 13,332 — Total debt securities available for sale $ 47,295 $ — $ 47,295 $ — Equity securities with readily determinable fair values 2,364 — 2,364 — Total equity securities $ 2,364 $ — $ 2,364 $ — Loans held for sale 14,437 — 14,437 — Total loans held for sale $ 14,437 $ — $ 14,437 $ — Interest rate swap agreements 264 — 264 — Total swap agreements $ 264 $ — $ 264 $ — Fair Value Measurements at December 31, 2018 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measured on a recurring basis: Assets: Debt Securities available for sale: U.S. Government sponsored entities $ 5,642 $ — $ 5,642 $ — State and political subdivisions 4,498 — 4,498 — Residential mortgage-backed securities 26,613 — 26,613 — Corporate and other securities 9,960 — 9,960 — Total debt securities available for sale $ 46,713 $ — $ 46,713 $ — Equity securities with readily determinable fair values 2,144 — 2,144 — Total equity securities $ 2,144 $ — $ 2,144 $ — Loans held for sale 12,177 — 12,177 — Total loans held for sale $ 12,177 $ — $ 12,177 $ — Interest rate swap agreements 1,433 — 1,433 — Total swap agreements $ 1,433 $ — $ 1,433 $ — |
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 Measurements at September 30, 2019 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Credit During Period Measured on a non-recurring basis: Financial assets: OREO $ 1,723 $ — $ — $ 1,723 $ (231 ) Impaired collateral-dependent loans 1,229 — — 1,229 (109 ) Fair Value Measurements at December 31, 2018 Using (In thousands) Assets/Liabilities Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Credit During Period Measured on a non-recurring basis: Financial assets: OREO $ 56 $ — $ — $ 56 $ (196 ) Impaired collateral-dependent loans 2,625 — — 2,625 (335 ) |
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 September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (In thousands) Fair value level Carrying amount Estimated fair value Carrying amount Estimated fair value Financial assets: Cash and cash equivalents Level 1 $ 166,760 $ 166,760 $ 145,515 $ 145,515 Securities (1) Level 2 63,991 64,297 63,732 63,600 SBA loans held for sale Level 2 13,053 14,437 11,171 12,177 Loans, net of allowance for loan losses (2) Level 2 1,339,419 1,341,272 1,277,907 1,268,909 FHLB stock Level 2 10,899 10,899 10,795 10,795 Servicing assets Level 3 2,138 2,138 2,375 2,375 Accrued interest receivable Level 2 6,858 6,858 6,399 6,399 OREO Level 3 1,723 1,723 56 56 Financial liabilities: Deposits Level 2 1,273,362 1,275,256 1,207,687 1,204,731 Borrowed funds and subordinated debentures Level 2 220,310 219,838 220,310 218,879 Accrued interest payable Level 2 420 420 406 406 (1) Includes held to maturity (“HTM”) corporate securities that are considered Level 3. These securities had book values of $3.5 million and $3.6 million at September 30, 2019 and December 31, 2018 , respectively, with market values of $3.6 million and $3.4 million . Includes one corporate bond with a book value and market value of $1.0 million at September 30, 2019 and December 31, 2018 . (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 $1.2 million and $2.6 million at September 30, 2019 and December 31, 2018 , respectively. |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Marketable Securities [Abstract] | |
Reconciliation from Amortized Cost to Estimated Fair Value of Marketable Securities | This table provides the major components of debt securities available for sale ("AFS"), held to maturity ("HTM") and equity securities with readily determinable fair values ("equity securities") at amortized cost and estimated fair value at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (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 $ 5,753 $ — $ (11 ) $ 5,742 $ 5,758 $ — $ (116 ) $ 5,642 State and political subdivisions 4,356 39 (16 ) 4,379 4,614 4 (120 ) 4,498 Residential mortgage-backed securities 23,659 294 (111 ) 23,842 27,159 74 (620 ) 26,613 Corporate and other securities 13,452 171 (291 ) 13,332 10,231 123 (394 ) 9,960 Total debt securities available for sale $ 47,220 $ 504 $ (429 ) $ 47,295 $ 47,762 $ 201 $ (1,250 ) $ 46,713 Held to maturity: U.S. Government sponsored entities $ 2,298 $ — $ (20 ) $ 2,278 $ 2,527 $ — $ (94 ) $ 2,433 State and political subdivisions 951 156 — 1,107 951 110 — 1,061 Residential mortgage-backed securities 3,094 68 (8 ) 3,154 3,312 17 (52 ) 3,277 Commercial mortgage-backed securities 3,481 100 (24 ) 3,557 3,570 — (138 ) 3,432 Corporate and other securities 4,508 35 — 4,543 4,515 84 — 4,599 Total securities held to maturity $ 14,332 $ 359 $ (52 ) $ 14,639 $ 14,875 $ 211 $ (284 ) $ 14,802 Equity securities: Total equity securities $ 2,398 $ 65 $ (99 ) $ 2,364 $ 2,394 $ — $ (250 ) $ 2,144 |
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 September 30, 2019 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 $ 999 1.71 % $ 4,743 1.83 % $ — — % $ — — % $ 5,742 1.81 % State and political subdivisions 376 3.14 601 3.92 2,259 2.44 1,143 2.74 4,379 2.78 Residential mortgage-backed securities — — 393 2.05 2,276 2.36 21,173 2.87 23,842 2.81 Corporate and other securities — — 3,787 3.43 7,640 4.45 1,905 5.06 13,332 4.25 Total debt securities available for sale $ 1,375 2.10 % $ 9,524 2.61 % $ 12,175 3.68 % $ 24,221 3.04 % $ 47,295 3.09 % Held to maturity at cost: U.S. Government sponsored entities $ — — % $ — — % $ — — % $ 2,298 1.98 % $ 2,298 1.98 % State and political subdivisions — — — — 495 5.06 456 5.85 951 5.44 Residential mortgage-backed securities — — 37 5.22 356 2.99 2,701 3.53 3,094 3.49 Commercial mortgage-backed securities — — — — — — 3,481 2.76 3,481 2.76 Corporate and other securities — — — — 4,508 5.73 — — 4,508 5.73 Total securities held to maturity $ — — % $ 37 5.22 % $ 5,359 5.49 % $ 8,936 2.95 % $ 14,332 3.90 % Equity securities at fair value: Total equity securities $ — — % $ — — % $ — — % $ 2,364 2.14 % $ 2,364 2.13 % |
Schedule of Marketable Securities in Continuous 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 September 30, 2019 and December 31, 2018 are as follows: September 30, 2019 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 5 $ 2,755 $ — $ 2,987 $ (11 ) $ 5,742 $ (11 ) State and political subdivisions 1 — — 1,143 (16 ) 1,143 (16 ) Residential mortgage-backed securities 11 3,532 (15 ) 4,431 (96 ) 7,963 (111 ) Corporate and other securities 5 3,215 (8 ) 3,705 (283 ) 6,920 (291 ) Total temporarily impaired securities 22 $ 9,502 $ (23 ) $ 12,266 $ (406 ) $ 21,768 $ (429 ) Held to maturity: U.S. Government sponsored entities 2 $ 2,278 $ (20 ) $ — $ — $ 2,278 $ (20 ) Residential mortgage-backed securities 2 — — 772 (8 ) 772 (8 ) Commercial mortgage-backed securities 1 1,504 (24 ) — — 1,504 (24 ) Total temporarily impaired securities 5 $ 3,782 $ (44 ) $ 772 $ (8 ) $ 4,554 $ (52 ) December 31, 2018 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 5 $ — $ — $ 5,642 $ (116 ) $ 5,642 $ (116 ) State and political subdivisions 4 — — 3,129 (120 ) 3,129 (120 ) Residential mortgage-backed securities 31 4,445 (23 ) 20,480 (597 ) 24,925 (620 ) Corporate and other securities 5 971 (30 ) 5,787 (364 ) 6,758 (394 ) Total temporarily impaired securities 45 $ 5,416 $ (53 ) $ 35,038 $ (1,197 ) $ 40,454 $ (1,250 ) Held to maturity: U.S. Government sponsored entities 2 $ — $ — $ 2,434 $ (94 ) $ 2,434 $ (94 ) Residential mortgage-backed securities 5 1,277 (15 ) 821 (37 ) 2,098 (52 ) Commercial mortgage-backed securities 2 — — 3,432 (138 ) 3,432 (138 ) Total temporarily impaired securities 9 $ 1,277 $ (15 ) $ 6,687 $ (269 ) $ 7,964 $ (284 ) |
Summary of Unrealized and Realized Gains and Losses Recognized in Net Income on Equity Securities | The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and nine months ended September 30, 2019 and 2018 : For the three months ended September 30, For the nine months ended September 30, (In thousands) 2019 2018 2019 2018 Net gains (losses) recognized during the period on equity securities $ 18 $ 2 $ 216 $ (6 ) Less: Net gains (losses) recognized during the period on equity securities sold during the period — — — — Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date $ 18 $ 2 $ 216 $ (6 ) |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Classification of Loans by Class, Including Unearned Fees, Deferred Costs and Excluding Allowance for Loan Losses | 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 September 30, 2019 and December 31, 2018 : (In thousands) September 30, 2019 December 31, 2018 SBA loans held for investment $ 36,380 $ 39,333 Commercial loans SBA 504 loans 26,208 29,155 Commercial other 105,449 104,587 Commercial real estate 541,510 510,370 Commercial real estate construction 50,082 49,990 Residential mortgage loans 456,963 436,056 Consumer loans Home equity 67,087 59,887 Consumer construction and other 71,742 64,017 Total loans held for investment $ 1,355,421 $ 1,293,395 SBA loans held for sale 13,053 11,171 Total loans $ 1,368,474 $ 1,304,566 |
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 September 30, 2019 : September 30, 2019 SBA & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 34,575 $ 1,417 $ 388 $ 36,380 Commercial loans SBA 504 loans 26,160 — 48 26,208 Commercial other 103,466 1,983 — 105,449 Commercial real estate 535,360 5,227 923 541,510 Commercial real estate construction 50,082 — — 50,082 Total commercial loans 715,068 7,210 971 723,249 Total SBA and commercial loans $ 749,643 $ 8,627 $ 1,359 $ 759,629 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 452,536 $ 4,427 $ 456,963 Consumer loans Home equity 67,064 23 67,087 Consumer construction and other 71,742 — 71,742 Total consumer loans 138,806 23 138,829 Total residential mortgage and consumer loans $ 591,342 $ 4,450 $ 595,792 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, 2018 : December 31, 2018 SBA & Commercial loans - Internal risk ratings (In thousands) Pass Special mention Substandard Total SBA loans held for investment $ 37,198 $ 601 $ 1,534 $ 39,333 Commercial loans SBA 504 loans 28,105 — 1,050 29,155 Commercial other 103,806 322 459 104,587 Commercial real estate 504,022 2,879 3,469 510,370 Commercial real estate construction 49,990 — — 49,990 Total commercial loans 685,923 3,201 4,978 694,102 Total SBA and commercial loans $ 723,121 $ 3,802 $ 6,512 $ 733,435 Residential mortgage & Consumer loans - Performing/Nonperforming (In thousands) Performing Nonperforming Total Residential mortgage loans $ 431,845 $ 4,211 $ 436,056 Consumer loans Home equity 59,861 26 59,887 Consumer construction and other 64,017 — 64,017 Total consumer loans 123,878 26 123,904 Total residential mortgage and consumer loans $ 555,723 $ 4,237 $ 559,960 |
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 September 30, 2019 and December 31, 2018 : September 30, 2019 (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 $ 663 $ — $ — $ 503 $ 1,166 $ 35,214 $ 36,380 Commercial loans SBA 504 loans 1,822 — — — 1,822 24,386 26,208 Commercial other 156 — — 416 572 104,877 105,449 Commercial real estate 1,673 — — 213 1,886 539,624 541,510 Commercial real estate construction — — — — — 50,082 50,082 Residential mortgage loans 6,020 2,261 — 4,427 12,708 444,255 456,963 Consumer loans Home equity 252 201 140 23 616 66,471 67,087 Consumer construction and other — — — — — 71,742 71,742 Total loans held for investment $ 10,586 $ 2,462 $ 140 $ 5,582 $ 18,770 $ 1,336,651 $ 1,355,421 SBA loans held for sale — — — — — 13,053 13,053 Total loans $ 10,586 $ 2,462 $ 140 $ 5,582 $ 18,770 $ 1,349,704 $ 1,368,474 (1) At September 30, 2019 , nonaccrual loans included $63 thousand of loans guaranteed by the SBA. December 31, 2018 (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 $ — $ — $ — $ 1,560 $ 1,560 $ 37,773 $ 39,333 Commercial loans SBA 504 loans — — — — — 29,155 29,155 Commercial other — — — 30 30 104,557 104,587 Commercial real estate 301 — — 1,046 1,347 509,023 510,370 Commercial real estate construction — — — — — 49,990 49,990 Residential mortgage loans 3,801 1,204 98 4,211 9,314 426,742 436,056 Consumer loans Home equity 396 — — 26 422 59,465 59,887 Consumer construction and other 300 — — — 300 63,717 64,017 Total loans held for investment $ 4,798 $ 1,204 $ 98 $ 6,873 $ 12,973 $ 1,280,422 $ 1,293,395 SBA loans held for sale — — — — — 11,171 11,171 Total loans $ 4,798 $ 1,204 $ 98 $ 6,873 $ 12,973 $ 1,291,593 $ 1,304,566 (1) At December 31, 2018 , nonaccrual loans included $89 thousand of loans guaranteed by the SBA. |
Impaired Loans Individually Evaluated for Impairment 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 September 30, 2019 : September 30, 2019 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 531 $ 367 $ — Commercial loans Commercial real estate 213 213 — Total commercial loans 213 213 — Total impaired loans with no related allowance 744 580 — With an allowance: SBA loans held for investment (1) 238 73 72 Commercial loans Commercial other 916 416 416 Commercial real estate 718 718 70 Total commercial loans 1,634 1,134 486 Total impaired loans with a related allowance 1,872 1,207 558 Total individually evaluated impaired loans: SBA loans held for investment (1) 769 440 72 Commercial loans Commercial other 916 416 416 Commercial real estate 931 931 70 Total commercial loans 1,847 1,347 486 Total individually evaluated impaired loans $ 2,616 $ 1,787 $ 558 (1) Balances are reduced by amount guaranteed by the SBA of $63 thousand at September 30, 2019 . 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, 2018 : December 31, 2018 (In thousands) Unpaid principal balance Recorded investment Specific reserves With no related allowance: SBA loans held for investment (1) $ 359 $ 353 $ — Commercial loans Commercial real estate 1,046 1,046 — Total commercial loans 1,046 1,046 — Total impaired loans with no related allowance 1,405 1,399 — With an allowance: SBA loans held for investment (1) 1,257 1,118 540 Commercial loans Commercial other 30 30 30 Commercial real estate 745 745 97 Total commercial loans 775 775 127 Total impaired loans with a related allowance 2,032 1,893 667 Total individually evaluated impaired loans: SBA loans held for investment (1) 1,616 1,471 540 Commercial loans Commercial other 30 30 30 Commercial real estate 1,791 1,791 97 Total commercial loans 1,821 1,821 127 Total individually evaluated impaired loans $ 3,437 $ 3,292 $ 667 (1) Balances are reduced by amount guaranteed by the SBA of $89 thousand at December 31, 2018 . |
Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized | 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 nine months ended September 30, 2019 and 2018 . 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 September 30, 2019 2018 (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) $ 255 $ 4 $ 1,275 $ — Commercial loans Commercial other 700 3 11 — Commercial real estate 831 9 2,524 55 Total $ 1,786 $ 16 $ 3,810 $ 55 (1) Balances are reduced by the average amount guaranteed by the SBA of $270 thousand and $120 thousand for the three months ended September 30, 2019 and 2018 , respectively. For the nine months ended September 30, 2019 2018 (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) $ 685 $ 13 $ 1,003 $ (2 ) Commercial loans Commercial other 236 3 10 — Commercial real estate 1,369 26 2,190 80 Total $ 2,290 $ 42 $ 3,203 $ 78 (1) Balances are reduced by the average amount guaranteed by the SBA of $146 thousand and $82 thousand for the nine months ended September 30, 2019 and 2018 , respectively. |
Allowance for Loan Losses and_2
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 and 2018 : For the three months ended September 30, 2019 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,321 $ 9,144 $ 4,198 $ 1,302 $ 15,965 Charge-offs (99 ) (500 ) (130 ) — (729 ) Recoveries 13 3 — — 16 Net (charge-offs) recoveries (86 ) (497 ) (130 ) — (713 ) (Credit) provision for loan losses charged to expense (68 ) 778 52 (12 ) 750 Balance, end of period $ 1,167 $ 9,425 $ 4,120 $ 1,290 $ 16,002 For the three months ended September 30, 2018 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,637 $ 8,355 $ 3,493 $ 1,149 $ 14,634 Charge-offs (169 ) — — — (169 ) Recoveries 1 5 — 17 23 Net (charge-offs) recoveries (168 ) 5 — 17 (146 ) Provision for loan losses charged to expense 66 317 119 (2 ) 500 Balance, end of period $ 1,535 $ 8,677 $ 3,612 $ 1,164 $ 14,988 The following tables detail the activity in the allowance for loan losses portfolio segment for the nine months ended September 30, 2019 and 2018 : For the nine months ended September 30, 2019 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,655 $ 8,705 $ 3,900 $ 1,228 $ 15,488 Charge-offs (492 ) (501 ) (130 ) (1 ) (1,124 ) Recoveries 16 12 — 10 38 Net (charge-offs) recoveries (476 ) (489 ) (130 ) 9 (1,086 ) Provision for loan losses charged to expense (12 ) 1,209 350 53 1,600 Balance, end of period $ 1,167 $ 9,425 $ 4,120 $ 1,290 $ 16,002 For the nine months ended September 30, 2018 (In thousands) SBA held for investment Commercial Residential Consumer Total Balance, beginning of period $ 1,471 $ 7,825 $ 3,130 $ 1,130 $ 13,556 Charge-offs (354 ) — — (22 ) (376 ) Recoveries 68 25 13 152 258 Net (charge-offs) recoveries (286 ) 25 13 130 (118 ) Provision (credit) for loan losses charged to expense 350 827 469 (96 ) 1,550 Balance, end of period $ 1,535 $ 8,677 $ 3,612 $ 1,164 $ 14,988 |
Loans and Related Allowance for Loan Losses, by Portfolio Segment | The following tables present loans and their related allowance for loan losses, by portfolio segment, as of September 30, 2019 and December 31, 2018 : September 30, 2019 (In thousands) SBA held for investment Commercial Residential Consumer Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 72 $ 486 $ — $ — $ 558 Collectively evaluated for impairment 1,095 8,939 4,120 1,290 15,444 Total $ 1,167 $ 9,425 $ 4,120 $ 1,290 $ 16,002 Loan ending balances: Individually evaluated for impairment $ 440 $ 1,347 $ — $ — $ 1,787 Collectively evaluated for impairment 35,940 721,902 456,963 138,829 1,353,634 Total $ 36,380 $ 723,249 $ 456,963 $ 138,829 $ 1,355,421 December 31, 2018 (In thousands) SBA held for investment Commercial Residential Consumer Total Allowance for loan losses ending balance: Individually evaluated for impairment $ 540 $ 127 $ — $ — $ 667 Collectively evaluated for impairment 1,115 8,578 3,900 1,228 14,821 Total $ 1,655 $ 8,705 $ 3,900 $ 1,228 $ 15,488 Loan ending balances: Individually evaluated for impairment $ 1,471 $ 1,821 $ — $ — $ 3,292 Collectively evaluated for impairment 37,862 692,281 436,056 123,904 1,290,103 Total $ 39,333 $ 694,102 $ 436,056 $ 123,904 $ 1,293,395 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Interest Rate Swap Agreements Used to Hedge Variable Rate Debt | A summary of the Company’s outstanding interest rate swap agreements used to hedge variable rate debt at September 30, 2019 and 2018 , respectively is as follows: For the three months ended September 30, For the nine months ended September 30, (In thousands, except percentages, years and contracts) 2019 2018 2019 2018 Notional amount $ 60,000 $ 60,000 $ 60,000 $ 60,000 Fair value 264 2,066 264 2,066 Weighted average pay rate 1.42 % 1.26 % 1.36 % 1.26 % Weighted average receive rate 2.49 % 2.33 % 2.59 % 1.76 % Weighted average maturity in years 1.50 2.12 1.72 2.49 Number of contracts 4 4 4 4 |
Net (Losses) Gains Recorded in Other Comprehensive Income and Consolidated Financial Statements Relating to Cash Flow Derivative Instruments | The following table presents the net (losses) gains recorded in other comprehensive income and the consolidated financial statements relating to the cash flow derivative instruments at September 30, 2019 and 2018 , respectively: For the three months ended September 30, For the three months ended September 30, (In thousands) 2019 2018 2019 2018 (Decrease) Increase in the fair value of interest rate swaps $ (177 ) $ (7 ) $ (1,077 ) $ 659 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | |
Transactions Under Stock Option Plans | Transactions under the Company’s stock option plans for the nine months ended September 30, 2019 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, 2018 584,178 $ 13.00 7.1 $ 4,574,680 Options granted 55,000 20.61 Options exercised (57,234 ) 7.41 Options forfeited (5,333 ) 19.38 Options expired — — Outstanding at September 30, 2019 576,611 $ 14.22 6.9 $ 4,573,458 Exercisable at September 30, 2019 338,089 $ 10.28 5.5 $ 4,011,761 |
Fair Values of Options Granted Using Black-Scholes Option-Pricing Model | The fair values of the options granted during the nine months ended September 30, 2019 and 2018 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions. No options were granted during the three months ended September 30, 2019 and 2018 : For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Number of options granted — — 55,000 114,500 Weighted average exercise price $ — $ — $ 20.61 $ 20.24 Weighted average fair value of options $ — $ — $ 6.21 $ 5.97 Expected life in years (1) 0.00 0.00 8.23 6.35 Expected volatility (2) — % — % 27.08 % 26.40 % Risk-free interest rate (3) — % — % 2.55 % 2.48 % Dividend yield (4) — % — % 1.36 % 1.14 % (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 Cash Proceeds Received from Options Exercised | The following table presents information about options exercised during the three and nine months ended September 30, 2019 and 2018 : For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Number of options exercised 4,800 23,366 57,234 100,973 Total intrinsic value of options exercised $ 38,127 $ 462,533 $ 742,737 $ 1,699,924 Cash received from options exercised $ 61,134 $ 108,156 $ 424,198 $ 500,114 Tax deduction realized from options $ 11,491 $ 130,018 $ 223,453 $ 477,849 |
Summary of Information about Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at September 30, 2019 : 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 - $6.00 61,761 2.9 $ 5.60 61,761 $ 5.60 $6.01 - $12.00 196,817 5.5 8.70 196,817 8.70 $12.01 - $18.00 67,533 7.3 15.78 43,335 15.80 $18.01 - $24.00 250,500 8.9 20.26 36,176 20.27 Total 576,611 6.9 $ 14.22 338,089 $ 10.28 |
Compensation Expense Related to Stock Options, Restricted Stock and Related Income Tax Benefit | Compensation expense related to restricted stock for the three and nine months ended September 30, 2019 and 2018 is detailed in the following table: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Compensation expense $ 172,558 $ 143,854 $ 485,466 $ 429,990 Income tax benefit 49,869 40,437 140,299 120,870 Compensation expense related to stock options and the related income tax benefit for the three and nine months ended September 30, 2019 and 2018 are detailed in the following table: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Compensation expense $ 155,942 $ 115,345 $ 446,544 $ 357,007 Income tax benefit 45,067 32,424 129,051 100,355 |
Summary of Nonvested Restricted Stock Activity | The following table summarizes nonvested restricted stock activity for the nine months ended September 30, 2019 : Shares Average grant date fair value Nonvested restricted stock at December 31, 2018 105,312 $ 16.55 Granted 37,650 20.52 Cancelled (1,350 ) 17.92 Vested (35,438 ) 14.11 Nonvested restricted stock at September 30, 2019 106,174 $ 18.76 |
Restricted Stock Awards Granted | Restricted stock awards granted during the three and nine months ended September 30, 2019 and 2018 were as follows: For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Number of shares granted 7,500 — 37,650 38,300 Average grant date fair value $ 20.00 $ — $ 20.52 $ 20.64 |
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 nine months ended September 30, 2019 and 2018 : For the three months ended For the nine months ended (In thousands) 2019 2018 2019 2018 Service cost (1) $ 235 $ 953 $ 454 $ 1,159 Interest cost 36 16 99 47 Amortization of prior service cost 20 20 62 62 Net periodic benefit cost $ 291 $ 989 $ 615 $ 1,268 (1) On September 27, 2018 the Company approved a change in calculation of the Retirement Benefit resulting in an additional $850 thousand in expense. |
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 nine months ended September 30, 2019 and 2018 : For the nine months ended September 30, (In thousands) 2019 2018 Benefit obligation, beginning of year $ 2,747 $ 1,187 Service cost (1) 454 1,159 Interest cost 99 47 Benefit obligation, end of period $ 3,300 $ 2,393 (1) On September 27, 2018 the Company approved a change in calculation of the Retirement Benefit resulting in an additional $850 thousand in expense. |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following table summarizes the Company’s and the Bank’s regulatory capital ratios at September 30, 2019 and December 31, 2018 , as well as the minimum regulatory capital ratios required for the Bank to be deemed “well-capitalized.” At September 30, 2019 Required for capital To be well-capitalized under prompt corrective action regulations Company Bank January 1, 2019 Bank Leverage ratio 10.54 % 10.11 % 4.00 % 5.00 % CET1 12.24 % 12.53 % 7.00 % (1 ) 6.50 % Tier I risk-based capital ratio 13.04 % 12.53 % 8.50 % (1 ) 8.00 % Total risk-based capital ratio 14.28 % 13.78 % 10.50 % (1 ) 10.00 % At December 31, 2018 Required for capital To be well-capitalized under prompt corrective action regulations Company Bank January 1, 2018 January 1, 2019 Bank Leverage ratio 9.90 % 9.52 % 4.000 % 4.00 % 5.00 % CET1 11.40 % 11.80 % 6.375 % (2 ) 7.00 % (1 ) 6.50 % Tier I risk-based capital ratio 12.24 % 11.80 % 7.875 % (2 ) 8.50 % (1 ) 8.00 % Total risk-based capital ratio 13.49 % 13.05 % 9.875 % (2 ) 10.50 % (1 ) 10.00 % (1) Includes 2.5% capital conservation buffer. (2) Includes 1.875% capital conservation buffer. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Net Lease Cost | The table below summarizes our net lease cost: (In thousands) For the three months ended September 30, 2019 For the nine months ended September 30, 2019 Operating lease cost $ 156 $ 441 Net lease cost $ 156 $ 441 The table below summarizes the cash and non-cash activities associated with our leases: (In thousands) For the three months ended September 30, 2019 For the nine months ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 148 $ 416 ROU assets obtained in exchange for new finance lease liabilities $ 43 $ 3,295 The table below summarizes other information related to our operating leases: (In thousands, except percentages and years) September 30, 2019 Weighted average remaining lease term in years 6.95 Weighted average discount rate 5.47 % Operating lease right-of-use assets $ 2,901 |
Summary of Other Information Relating to Operating Leases | The table below summarizes other information related to our operating leases: (In thousands, except percentages and years) September 30, 2019 Weighted average remaining lease term in years 6.95 Weighted average discount rate 5.47 % Operating lease right-of-use assets $ 2,901 |
Summary of Maturity of Remaining Lease Liabilities | The table below summarizes the maturity of remaining lease liabilities: (In thousands) September 30, 2019 2019 (excluding the nine months ended September 30, 2019) $ 141 2020 558 2021 529 2022 478 2023 413 2024 and thereafter 1,411 Total lease payments $ 3,530 Less: Interest (605 ) Present value of lease liabilities $ 2,925 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 5,959 | $ 5,834 | $ 5,740 | $ 5,490 | $ 5,398 | $ 5,229 | $ 17,533 | $ 16,117 |
Weighted average common shares outstanding - Basic (in shares) | 10,863 | 10,743 | 10,836 | 10,713 | ||||
Plus: Potential dilutive common stock equivalents (in shares) | 173 | 193 | 183 | 197 | ||||
Weighted average common shares outstanding - Diluted (in shares) | 11,036 | 10,936 | 11,019 | 10,910 | ||||
Net income per common share - Basic (in dollars per share) | $ 0.55 | $ 0.51 | $ 1.62 | $ 1.50 | ||||
Net income per common share - Diluted (in dollars per share) | $ 0.54 | $ 0.50 | $ 1.59 | $ 1.48 | ||||
Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive (in shares) | 251 | 40 | 237 | 103 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 1,676,000 | $ 1,255,000 | $ 4,842,000 | $ 3,841,000 | |
Effective income tax rate, continuing operations | 22.00% | 18.60% | 21.60% | 19.20% | |
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 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning Balance | $ 149,383 | $ 143,717 | $ 138,488 | $ 128,141 | $ 123,104 | $ 118,105 | $ 138,488 | $ 118,105 |
Other comprehensive (loss) income before reclassification | (15) | (216) | 139 | (262) | ||||
Less amounts reclassified from accumulated other comprehensive income (loss) | 0 | (13) | 50 | 112 | ||||
Total other comprehensive income (loss), net of tax | (15) | 154 | (50) | (203) | (5) | (166) | 89 | (374) |
Ending Balance | 154,884 | 149,383 | 143,717 | 133,067 | 128,141 | 123,104 | 154,884 | 133,067 |
Net unrealized (losses) gains on securities | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning Balance | (6) | (721) | (995) | (335) | (721) | (335) | ||
Other comprehensive (loss) income before reclassification | 111 | (211) | 982 | (865) | ||||
Less amounts reclassified from accumulated other comprehensive income (loss) | 15 | 2 | 171 | 8 | ||||
Total other comprehensive income (loss), net of tax | 96 | (213) | 811 | (873) | ||||
Ending Balance | 90 | (6) | (1,208) | (995) | 90 | (1,208) | ||
Adjustments related to defined benefit plan | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning Balance | (325) | (431) | (460) | (341) | (431) | (341) | ||
Other comprehensive (loss) income before reclassification | 0 | 0 | 0 | 0 | ||||
Less amounts reclassified from accumulated other comprehensive income (loss) | (15) | (15) | (121) | 104 | ||||
Total other comprehensive income (loss), net of tax | 15 | 15 | 121 | (104) | ||||
Ending Balance | (310) | (325) | (445) | (460) | (310) | (445) | ||
Net unrealized gains (losses) from cash flow hedges | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning Balance | 313 | 1,030 | 1,490 | 882 | 1,030 | 882 | ||
Other comprehensive (loss) income before reclassification | (126) | (5) | (843) | 603 | ||||
Less amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Total other comprehensive income (loss), net of tax | (126) | (5) | (843) | 603 | ||||
Ending Balance | 187 | 313 | 1,485 | 1,490 | 187 | 1,485 | ||
Accumulated other comprehensive income (loss) | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning Balance | (53) | (207) | (157) | 30 | 206 | (157) | 206 | |
Total other comprehensive income (loss), net of tax | (15) | 154 | (50) | (203) | (5) | (166) | ||
Ending Balance | (68) | (53) | (207) | (203) | 30 | (68) | (203) | |
Accounting Standards Update 2016-01 and 2018-02 | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Reclassification to retained earnings | 35 | 35 | ||||||
Accounting Standards Update 2016-01 and 2018-02 | Accumulated other comprehensive income (loss) | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning Balance | (18) | $ (122) | 35 | $ 206 | (122) | 206 | ||
Ending Balance | $ (33) | $ (18) | $ (168) | $ 35 | $ (33) | $ (168) |
Fair Value - Fair Value on Recu
Fair Value - Fair Value on Recurring Basis - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | $ 47,295 | $ 46,713 |
Percentage of portfolio in residential mortgage backed securities | 50.00% | |
Residential mortgage backed securities guaranteed by Government National Mortgage Association or Federal National Mortgage Association or Federal Home Loan Mortgage Corporation | $ 23,400 | |
Equity securities | 2,364 | 2,144 |
Residential Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | $ 23,842 | $ 26,613 |
Fair Value - Balances of Assets
Fair Value - Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | $ 47,295 | $ 46,713 |
Equity securities | 2,364 | 2,144 |
Loans held for sale | 14,437 | 12,177 |
Interest rate swap agreements | 264 | 1,433 |
U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 5,742 | 5,642 |
State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 4,379 | 4,498 |
Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 23,842 | 26,613 |
Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 13,332 | 9,960 |
Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | 264 | 1,433 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Equity securities | 0 | 0 |
Loans held for sale | 0 | 0 |
Interest rate swap agreements | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (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 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 47,295 | 46,713 |
Equity securities | 2,364 | 2,144 |
Loans held for sale | 14,437 | 12,177 |
Interest rate swap agreements | 264 | 1,433 |
Significant Other Observable Inputs (Level 2) | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 5,742 | 5,642 |
Significant Other Observable Inputs (Level 2) | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 4,379 | 4,498 |
Significant Other Observable Inputs (Level 2) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 23,842 | 26,613 |
Significant Other Observable Inputs (Level 2) | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 13,332 | 9,960 |
Significant Other Observable Inputs (Level 2) | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | 264 | 1,433 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Equity securities | 0 | 0 |
Loans held for sale | 0 | 0 |
Interest rate swap agreements | 0 | 0 |
Significant Unobservable Inputs (Level 3) | U.S. Government sponsored entities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Significant Unobservable Inputs (Level 3) | State and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Residential mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Corporate and other securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities available for sale | 0 | 0 |
Significant Unobservable Inputs (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 |
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 | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO | $ 1,723 | $ 56 |
Impaired collateral-dependent loans | 1,229 | 2,625 |
OREO, Net Credit | (231) | (196) |
Impaired collateral-dependent loans, Net Credit | (109) | (335) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO | 0 | 0 |
Impaired collateral-dependent loans | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO | 0 | 0 |
Impaired collateral-dependent loans | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO | 1,723 | 56 |
Impaired collateral-dependent loans | $ 1,229 | $ 2,625 |
Fair Value - Fair Value on Nonr
Fair Value - Fair Value on Nonrecurring Basis - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired financing receivable, related allowance | $ 558 | $ 667 |
Decrease in valuation allowance for impaired loans | 109 | |
Standby Letters of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Standby letter of credit | $ 4,800 | $ 5,700 |
Fair Value - Carrying Amount an
Fair Value - Carrying Amount and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial assets: | ||
SBA loans held for sale | $ 14,437 | $ 12,177 |
Accrued interest receivable | 6,858 | 6,399 |
Financial liabilities: | ||
Accrued interest payable | 420 | 406 |
Estimated fair value | 14,639 | 14,802 |
Impaired collateral-dependent loans | 1,229 | 2,625 |
Corporate and other securities | ||
Financial liabilities: | ||
Estimated fair value | 4,543 | 4,599 |
Level 1 | ||
Financial assets: | ||
SBA loans held for sale | 0 | 0 |
Financial liabilities: | ||
Impaired collateral-dependent loans | 0 | 0 |
Level 2 | ||
Financial assets: | ||
SBA loans held for sale | 14,437 | 12,177 |
Financial liabilities: | ||
Impaired collateral-dependent loans | 0 | 0 |
Level 3 | ||
Financial assets: | ||
SBA loans held for sale | 0 | 0 |
Financial liabilities: | ||
Impaired collateral-dependent loans | 1,229 | 2,625 |
Carrying amount | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 166,760 | 145,515 |
Carrying amount | Level 2 | ||
Financial assets: | ||
Securities | 63,991 | 63,732 |
SBA loans held for sale | 13,053 | 11,171 |
Loans, net of allowance for loan losses | 1,339,419 | 1,277,907 |
FHLB stock | 10,899 | 10,795 |
Accrued interest receivable | 6,858 | 6,399 |
Financial liabilities: | ||
Deposits | 1,273,362 | 1,207,687 |
Borrowed funds and subordinated debentures | 220,310 | 220,310 |
Accrued interest payable | 420 | 406 |
Carrying amount | Level 3 | ||
Financial assets: | ||
Servicing assets | 2,138 | 2,375 |
OREO | 1,723 | 56 |
Carrying amount | Level 3 | Corporate and other securities | ||
Financial liabilities: | ||
Estimated fair value | 3,500 | 3,600 |
Estimated fair value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 166,760 | 145,515 |
Estimated fair value | Level 2 | ||
Financial assets: | ||
Securities | 64,297 | 63,600 |
SBA loans held for sale | 14,437 | 12,177 |
Loans, net of allowance for loan losses | 1,341,272 | 1,268,909 |
FHLB stock | 10,899 | 10,795 |
Accrued interest receivable | 6,858 | 6,399 |
Financial liabilities: | ||
Deposits | 1,275,256 | 1,204,731 |
Borrowed funds and subordinated debentures | 219,838 | 218,879 |
Accrued interest payable | 420 | 406 |
Estimated fair value | Level 3 | ||
Financial assets: | ||
Servicing assets | 2,138 | 2,375 |
OREO | 1,723 | 56 |
Financial liabilities: | ||
Impaired collateral-dependent loans | 1,200 | 2,600 |
Estimated fair value | Level 3 | Corporate and other securities | ||
Financial liabilities: | ||
Estimated fair value | 3,600 | 3,400 |
Estimated fair value | Level 3 | Corporate bond securities | ||
Financial liabilities: | ||
Estimated fair value | $ 1,000 | $ 100 |
Securities - Reconciliation fro
Securities - Reconciliation from Amortized Cost to Estimated Fair Value of Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Available for sale: | ||
Amortized cost | $ 47,220 | $ 47,762 |
Gross unrealized gains | 504 | 201 |
Gross unrealized losses | (429) | (1,250) |
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | 47,295 | 46,713 |
Held to maturity: | ||
Amortized cost | 14,332 | 14,875 |
Gross unrealized gains | 359 | 211 |
Gross unrealized losses | (52) | (284) |
Estimated fair value | 14,639 | 14,802 |
Equity securities: | ||
Amortized cost | 2,398 | 2,394 |
Gross unrealized gains | 65 | 0 |
Gross unrealized losses | (99) | (250) |
Estimated fair value | 2,364 | 2,144 |
U.S. Government sponsored entities | ||
Available for sale: | ||
Amortized cost | 5,753 | 5,758 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (11) | (116) |
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | 5,742 | 5,642 |
Held to maturity: | ||
Amortized cost | 2,298 | 2,527 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (20) | (94) |
Estimated fair value | 2,278 | 2,433 |
State and political subdivisions | ||
Available for sale: | ||
Amortized cost | 4,356 | 4,614 |
Gross unrealized gains | 39 | 4 |
Gross unrealized losses | (16) | (120) |
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | 4,379 | 4,498 |
Held to maturity: | ||
Amortized cost | 951 | 951 |
Gross unrealized gains | 156 | 110 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 1,107 | 1,061 |
Residential mortgage-backed securities | ||
Available for sale: | ||
Amortized cost | 23,659 | 27,159 |
Gross unrealized gains | 294 | 74 |
Gross unrealized losses | (111) | (620) |
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | 23,842 | 26,613 |
Held to maturity: | ||
Amortized cost | 3,094 | 3,312 |
Gross unrealized gains | 68 | 17 |
Gross unrealized losses | (8) | (52) |
Estimated fair value | 3,154 | 3,277 |
Commercial mortgage-backed securities | ||
Held to maturity: | ||
Amortized cost | 3,481 | 3,570 |
Gross unrealized gains | 100 | 0 |
Gross unrealized losses | (24) | (138) |
Estimated fair value | 3,557 | 3,432 |
Corporate and other securities | ||
Available for sale: | ||
Amortized cost | 13,452 | 10,231 |
Gross unrealized gains | 171 | 123 |
Gross unrealized losses | (291) | (394) |
Debt securities available for sale (amortized cost of $47,220 in 2019 and $47,762 in 2018) | 13,332 | 9,960 |
Held to maturity: | ||
Amortized cost | 4,508 | 4,515 |
Gross unrealized gains | 35 | 84 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | $ 4,543 | $ 4,599 |
Securities - Schedule of Market
Securities - Schedule of Marketable Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Available for sale at fair value: | ||
Debt securities available for sale, Within one year | $ 1,375 | |
Debt securities available for sale, Yield, Within one year | 2.10% | |
Debt securities available for sale, After one through five years | $ 9,524 | |
Debt securities available for sale, Yield, After one through five years | 2.61% | |
Debt securities available for sale, After five through ten years | $ 12,175 | |
Debt securities available for sale, Yield, After five through ten years | 3.68% | |
Debt securities available for sale, After ten years | $ 24,221 | |
Debt securities available for sale, Yield, After ten years | 3.04% | |
Debt securities available for sale | $ 47,295 | $ 46,713 |
Debt securities available for sale, Yield | 3.09% | |
Held to maturity at cost: | ||
Securities held to maturity, Within one year | $ 0 | |
Securities held to maturity, Yield, Within one year | 0.00% | |
Securities held to maturity, After one through five years | $ 37 | |
Securities held to maturity, Yield, After one through five years | 5.22% | |
Securities held to maturity, After five through ten years | $ 5,359 | |
Securities held to maturity, Yield, After five through ten years | 5.49% | |
Securities held to maturity, After ten years | $ 8,936 | |
Securities held to maturity, Yield, After ten years | 2.95% | |
Amortized cost | $ 14,332 | 14,875 |
Securities held to maturity, Yield | 3.90% | |
Equity securities at fair value: | ||
Equity securities, Within one year | $ 0 | |
Equity securities, Yield, Within one year | 0.00% | |
Equity securities, After one through five years | $ 0 | |
Equity securities, Yield, After one through five years | 0.00% | |
Equity securities, After five through ten years | $ 0 | |
Equity securities, Yield, After five through ten years | 0.00% | |
Equity securities, After ten years | $ 2,364 | |
Equity securities, Yield, After ten years | 2.14% | |
Equity securities | $ 2,364 | 2,144 |
Equity securities, Yield | 2.13% | |
U.S. Government sponsored entities | ||
Available for sale at fair value: | ||
Debt securities available for sale, Within one year | $ 999 | |
Debt securities available for sale, Yield, Within one year | 1.71% | |
Debt securities available for sale, After one through five years | $ 4,743 | |
Debt securities available for sale, Yield, After one through five years | 1.83% | |
Debt securities available for sale, After five through ten years | $ 0 | |
Debt securities available for sale, Yield, After five through ten years | 0.00% | |
Debt securities available for sale, After ten years | $ 0 | |
Debt securities available for sale, Yield, After ten years | 0.00% | |
Debt securities available for sale | $ 5,742 | 5,642 |
Debt securities available for sale, Yield | 1.81% | |
Held to maturity at cost: | ||
Securities held to maturity, Within one year | $ 0 | |
Securities held to maturity, Yield, Within one year | 0.00% | |
Securities held to maturity, After one through five years | $ 0 | |
Securities held to maturity, Yield, After one through five years | 0.00% | |
Securities held to maturity, After five through ten years | $ 0 | |
Securities held to maturity, Yield, After five through ten years | 0.00% | |
Securities held to maturity, After ten years | $ 2,298 | |
Securities held to maturity, Yield, After ten years | 1.98% | |
Amortized cost | $ 2,298 | 2,527 |
Securities held to maturity, Yield | 1.98% | |
State and political subdivisions | ||
Available for sale at fair value: | ||
Debt securities available for sale, Within one year | $ 376 | |
Debt securities available for sale, Yield, Within one year | 3.14% | |
Debt securities available for sale, After one through five years | $ 601 | |
Debt securities available for sale, Yield, After one through five years | 3.92% | |
Debt securities available for sale, After five through ten years | $ 2,259 | |
Debt securities available for sale, Yield, After five through ten years | 2.44% | |
Debt securities available for sale, After ten years | $ 1,143 | |
Debt securities available for sale, Yield, After ten years | 2.74% | |
Debt securities available for sale | $ 4,379 | 4,498 |
Debt securities available for sale, Yield | 2.78% | |
Held to maturity at cost: | ||
Securities held to maturity, Within one year | $ 0 | |
Securities held to maturity, Yield, Within one year | 0.00% | |
Securities held to maturity, After one through five years | $ 0 | |
Securities held to maturity, Yield, After one through five years | 0.00% | |
Securities held to maturity, After five through ten years | $ 495 | |
Securities held to maturity, Yield, After five through ten years | 5.06% | |
Securities held to maturity, After ten years | $ 456 | |
Securities held to maturity, Yield, After ten years | 5.85% | |
Amortized cost | $ 951 | 951 |
Securities held to maturity, Yield | 5.44% | |
Residential mortgage-backed securities | ||
Available for sale at fair value: | ||
Debt securities available for sale, Within one year | $ 0 | |
Debt securities available for sale, Yield, Within one year | 0.00% | |
Debt securities available for sale, After one through five years | $ 393 | |
Debt securities available for sale, Yield, After one through five years | 2.05% | |
Debt securities available for sale, After five through ten years | $ 2,276 | |
Debt securities available for sale, Yield, After five through ten years | 2.36% | |
Debt securities available for sale, After ten years | $ 21,173 | |
Debt securities available for sale, Yield, After ten years | 2.87% | |
Debt securities available for sale | $ 23,842 | 26,613 |
Debt securities available for sale, Yield | 2.81% | |
Held to maturity at cost: | ||
Securities held to maturity, Within one year | $ 0 | |
Securities held to maturity, Yield, Within one year | 0.00% | |
Securities held to maturity, After one through five years | $ 37 | |
Securities held to maturity, Yield, After one through five years | 5.22% | |
Securities held to maturity, After five through ten years | $ 356 | |
Securities held to maturity, Yield, After five through ten years | 2.99% | |
Securities held to maturity, After ten years | $ 2,701 | |
Securities held to maturity, Yield, After ten years | 3.53% | |
Amortized cost | $ 3,094 | 3,312 |
Securities held to maturity, Yield | 3.49% | |
Commercial mortgage-backed securities | ||
Held to maturity at cost: | ||
Securities held to maturity, Within one year | $ 0 | |
Securities held to maturity, Yield, Within one year | 0.00% | |
Securities held to maturity, After one through five years | $ 0 | |
Securities held to maturity, Yield, After one through five years | 0.00% | |
Securities held to maturity, After five through ten years | $ 0 | |
Securities held to maturity, Yield, After five through ten years | 0.00% | |
Securities held to maturity, After ten years | $ 3,481 | |
Securities held to maturity, Yield, After ten years | 2.76% | |
Amortized cost | $ 3,481 | 3,570 |
Securities held to maturity, Yield | 2.76% | |
Corporate and other securities | ||
Available for sale at fair value: | ||
Debt securities available for sale, Within one year | $ 0 | |
Debt securities available for sale, Yield, Within one year | 0.00% | |
Debt securities available for sale, After one through five years | $ 3,787 | |
Debt securities available for sale, Yield, After one through five years | 3.43% | |
Debt securities available for sale, After five through ten years | $ 7,640 | |
Debt securities available for sale, Yield, After five through ten years | 4.45% | |
Debt securities available for sale, After ten years | $ 1,905 | |
Debt securities available for sale, Yield, After ten years | 5.06% | |
Debt securities available for sale | $ 13,332 | 9,960 |
Debt securities available for sale, Yield | 4.25% | |
Held to maturity at cost: | ||
Securities held to maturity, Within one year | $ 0 | |
Securities held to maturity, Yield, Within one year | 0.00% | |
Securities held to maturity, After one through five years | $ 0 | |
Securities held to maturity, Yield, After one through five years | 0.00% | |
Securities held to maturity, After five through ten years | $ 4,508 | |
Securities held to maturity, Yield, After five through ten years | 5.73% | |
Securities held to maturity, After ten years | $ 0 | |
Securities held to maturity, Yield, After ten years | 0.00% | |
Amortized cost | $ 4,508 | $ 4,515 |
Securities held to maturity, Yield | 5.73% |
Securities - Schedule of Mark_2
Securities - Schedule of Marketable Securities in Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2019USD ($)loan | Dec. 31, 2018USD ($)loan |
Available for sale: | ||
Temporarily impaired securities, Total number in a loss position | loan | 22 | 45 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 9,502 | $ 5,416 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | (23) | (53) |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 12,266 | 35,038 |
Temporarily impaired securities,12 months and greater, Unrealized loss | (406) | (1,197) |
Temporarily impaired securities, Total estimated fair value | 21,768 | 40,454 |
Temporarily impaired securities, Total unrealized loss | $ (429) | $ (1,250) |
Held to maturity: | ||
Temporarily impaired securities, Total number in a loss position | loan | 5 | 9 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 3,782 | $ 1,277 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | (44) | (15) |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 772 | 6,687 |
Temporarily impaired securities, 12 months and greater, Unrealized loss | (8) | (269) |
Temporarily impaired securities, Total estimated fair value | 4,554 | 7,964 |
Temporarily impaired securities, Total unrealized loss | $ (52) | $ (284) |
U.S. Government sponsored entities | ||
Available for sale: | ||
Temporarily impaired securities, Total number in a loss position | loan | 5 | 5 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 2,755 | $ 0 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | 0 | 0 |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 2,987 | 5,642 |
Temporarily impaired securities,12 months and greater, Unrealized loss | (11) | (116) |
Temporarily impaired securities, Total estimated fair value | 5,742 | 5,642 |
Temporarily impaired securities, Total unrealized loss | $ (11) | $ (116) |
Held to maturity: | ||
Temporarily impaired securities, Total number in a loss position | loan | 2 | 2 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 2,278 | $ 0 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | (20) | 0 |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 0 | 2,434 |
Temporarily impaired securities, 12 months and greater, Unrealized loss | 0 | (94) |
Temporarily impaired securities, Total estimated fair value | 2,278 | 2,434 |
Temporarily impaired securities, Total unrealized loss | $ (20) | $ (94) |
State and political subdivisions | ||
Available for sale: | ||
Temporarily impaired securities, Total number in a loss position | loan | 1 | 4 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 0 | $ 0 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | 0 | 0 |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 1,143 | 3,129 |
Temporarily impaired securities,12 months and greater, Unrealized loss | (16) | (120) |
Temporarily impaired securities, Total estimated fair value | 1,143 | 3,129 |
Temporarily impaired securities, Total unrealized loss | $ (16) | $ (120) |
Residential mortgage-backed securities | ||
Available for sale: | ||
Temporarily impaired securities, Total number in a loss position | loan | 11 | 31 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 3,532 | $ 4,445 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | (15) | (23) |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 4,431 | 20,480 |
Temporarily impaired securities,12 months and greater, Unrealized loss | (96) | (597) |
Temporarily impaired securities, Total estimated fair value | 7,963 | 24,925 |
Temporarily impaired securities, Total unrealized loss | $ (111) | $ (620) |
Held to maturity: | ||
Temporarily impaired securities, Total number in a loss position | loan | 2 | 5 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 0 | $ 1,277 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | 0 | (15) |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 772 | 821 |
Temporarily impaired securities, 12 months and greater, Unrealized loss | (8) | (37) |
Temporarily impaired securities, Total estimated fair value | 772 | 2,098 |
Temporarily impaired securities, Total unrealized loss | $ (8) | $ (52) |
Commercial mortgage-backed securities | ||
Held to maturity: | ||
Temporarily impaired securities, Total number in a loss position | loan | 1 | 2 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 1,504 | $ 0 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | (24) | 0 |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 0 | 3,432 |
Temporarily impaired securities, 12 months and greater, Unrealized loss | 0 | (138) |
Temporarily impaired securities, Total estimated fair value | 1,504 | 3,432 |
Temporarily impaired securities, Total unrealized loss | $ (24) | $ (138) |
Corporate and other securities | ||
Available for sale: | ||
Temporarily impaired securities, Total number in a loss position | loan | 5 | 5 |
Temporarily impaired securities, Less than 12 months, Estimated fair value | $ 3,215 | $ 971 |
Temporarily impaired securities, Less than 12 months, Unrealized loss | (8) | (30) |
Temporarily impaired securities, 12 months and greater, Estimated fair value | 3,705 | 5,787 |
Temporarily impaired securities,12 months and greater, Unrealized loss | (283) | (364) |
Temporarily impaired securities, Total estimated fair value | 6,920 | 6,758 |
Temporarily impaired securities, Total unrealized loss | $ (291) | $ (394) |
Securities - Summary of Unreali
Securities - Summary of Unrealized and Realized Gains and Losses Recognized in Net Income on Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Marketable Securities [Abstract] | ||||
Net gains (losses) recognized during the period on equity securities | $ 18 | $ 2 | $ 216 | $ (6) |
Less: Net gains (losses) recognized during the period on equity securities sold during the period | 0 | 0 | 0 | 0 |
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date | $ 18 | $ 2 | $ 216 | $ (6) |
Securities - Narrative (Details
Securities - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Marketable Securities [Abstract] | ||
Available-for-sale securities pledged as collateral | $ 5.5 | $ 4.3 |
Loans - Classification of Loans
Loans - Classification of Loans by Class, Including Unearned Fees, Deferred Costs and Excluding Allowance for Loan Losses (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | $ 1,355,421 | $ 1,293,395 |
SBA loans held for sale | 13,053 | 11,171 |
Total loans | 1,368,474 | 1,304,566 |
SBA loans held for investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 36,380 | 39,333 |
Residential mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 456,963 | 436,056 |
SBA loans held for investment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 36,380 | 39,333 |
SBA 504 loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 26,208 | 29,155 |
Commercial loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 723,249 | 694,102 |
Commercial loans | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 105,449 | 104,587 |
Commercial loans | Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 541,510 | 510,370 |
Commercial loans | Commercial real estate construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 50,082 | 49,990 |
Residential mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 456,963 | 436,056 |
Consumer loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 138,829 | 123,904 |
Consumer loans | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | 71,742 | 64,017 |
Consumer loans | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans held for investment | $ 67,087 | $ 59,887 |
Loans - Narrative (Details)
Loans - Narrative (Details) - Residential Consumer Properties - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Other real estate properties owned | $ 1.7 | |
Residential loans in process of foreclosure | $ 4 | $ 5.3 |
Loans - Loan Portfolio by Class
Loans - Loan Portfolio by Class According to Credit Quality Indicators (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | $ 1,355,421 | $ 1,293,395 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 36,380 | 39,333 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 36,380 | 39,333 |
SBA loans held for investment | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 34,575 | 37,198 |
SBA loans held for investment | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,417 | 601 |
SBA loans held for investment | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 388 | 1,534 |
SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 26,208 | 29,155 |
SBA 504 loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 26,160 | 28,105 |
SBA 504 loans | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 0 | 0 |
SBA 504 loans | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 48 | 1,050 |
Commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 723,249 | 694,102 |
Commercial loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 715,068 | 685,923 |
Commercial loans | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 7,210 | 3,201 |
Commercial loans | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 971 | 4,978 |
Commercial loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 105,449 | 104,587 |
Commercial loans | Other | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 103,466 | 103,806 |
Commercial loans | Other | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,983 | 322 |
Commercial loans | Other | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 0 | 459 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 541,510 | 510,370 |
Commercial loans | Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 535,360 | 504,022 |
Commercial loans | Commercial real estate | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 5,227 | 2,879 |
Commercial loans | Commercial real estate | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 923 | 3,469 |
Commercial loans | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 50,082 | 49,990 |
Commercial loans | Commercial real estate construction | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 50,082 | 49,990 |
Commercial loans | Commercial real estate construction | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 0 | 0 |
Commercial loans | Commercial real estate construction | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 0 | 0 |
Total SBA and commercial loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 759,629 | 733,435 |
Total SBA and commercial loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 749,643 | 723,121 |
Total SBA and commercial loans | Special mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 8,627 | 3,802 |
Total SBA and commercial loans | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 1,359 | 6,512 |
Residential mortgage loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 456,963 | 436,056 |
Residential mortgage loans | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 452,536 | 431,845 |
Residential mortgage loans | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 4,427 | 4,211 |
Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 138,829 | 123,904 |
Consumer loans | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 138,806 | 123,878 |
Consumer loans | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 23 | 26 |
Consumer loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 71,742 | 64,017 |
Consumer loans | Other | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 71,742 | 64,017 |
Consumer loans | Other | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 0 | 0 |
Consumer loans | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 67,087 | 59,887 |
Consumer loans | Home equity | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 67,064 | 59,861 |
Consumer loans | Home equity | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 23 | 26 |
Total residential mortgage and consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 595,792 | 559,960 |
Total residential mortgage and consumer loans | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | 591,342 | 555,723 |
Total residential mortgage and consumer loans | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans held for investment | $ 4,450 | $ 4,237 |
Loans - Aging Analysis of Past
Loans - Aging Analysis of Past Due and Nonaccrual Loans by Class (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | $ 18,770 | $ 12,973 |
Loans receivable, nonaccrual status | 5,582 | 6,873 |
Loan receivable, current | 1,349,704 | 1,291,593 |
Loans receivable, current | 1,336,651 | 1,280,422 |
Total loans | 1,355,421 | 1,293,395 |
SBA loans held for sale | 13,053 | 11,171 |
Total loans | 1,368,474 | 1,304,566 |
30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 10,586 | 4,798 |
60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 2,462 | 1,204 |
90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 140 | 98 |
SBA loans held for investment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 1,166 | 1,560 |
Loans receivable, nonaccrual status | 503 | 1,560 |
Loan receivable, current | 35,214 | 37,773 |
Total loans | 36,380 | 39,333 |
SBA loans held for investment | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 663 | 0 |
SBA loans held for investment | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
SBA loans held for investment | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
SBA 504 loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 1,822 | 0 |
Loans receivable, nonaccrual status | 0 | 0 |
Loan receivable, current | 24,386 | 29,155 |
Total loans | 26,208 | 29,155 |
SBA 504 loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 1,822 | 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 | 723,249 | 694,102 |
Commercial loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 572 | 30 |
Loans receivable, nonaccrual status | 416 | 30 |
Loan receivable, current | 104,877 | 104,557 |
Total loans | 105,449 | 104,587 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 1,886 | 1,347 |
Loans receivable, nonaccrual status | 213 | 1,046 |
Loan receivable, current | 539,624 | 509,023 |
Total loans | 541,510 | 510,370 |
Commercial loans | Commercial real estate construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 0 |
Loans receivable, nonaccrual status | 0 | 0 |
Loan receivable, current | 50,082 | 49,990 |
Total loans | 50,082 | 49,990 |
Commercial loans | 30-59 days past due | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 156 | 0 |
Commercial loans | 30-59 days past due | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 1,673 | 301 |
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 | 0 | 0 |
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, past due | 12,708 | 9,314 |
Loans receivable, nonaccrual status | 4,427 | 4,211 |
Loan receivable, current | 444,255 | 426,742 |
Total loans | 456,963 | 436,056 |
Residential mortgage loans | 30-59 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 6,020 | 3,801 |
Residential mortgage loans | 60-89 days past due | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 2,261 | 1,204 |
Residential mortgage loans | 90 days and still accruing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 98 |
Consumer loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 138,829 | 123,904 |
Consumer loans | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 300 |
Loans receivable, nonaccrual status | 0 | 0 |
Loan receivable, current | 71,742 | 63,717 |
Total loans | 71,742 | 64,017 |
Consumer loans | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 616 | 422 |
Loans receivable, nonaccrual status | 23 | 26 |
Loan receivable, current | 66,471 | 59,465 |
Total loans | 67,087 | 59,887 |
Consumer loans | 30-59 days past due | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 0 | 300 |
Consumer loans | 30-59 days past due | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, past due | 252 | 396 |
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 | 201 | 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 | 140 | 0 |
Collateral Pledged | Small Business Administration | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable, nonaccrual status | $ 63 | $ 89 |
Loans - Impaired Loans Individu
Loans - Impaired Loans Individually Evaluated for Impairment with Associated Allowance Amount (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)loan | Dec. 31, 2018USD ($) | |
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | $ 744 | $ 1,405 |
Unpaid principal balance, with related allowance | 1,872 | 2,032 |
Unpaid principal balance | 2,616 | 3,437 |
Recorded investment, with no related allowance | 580 | 1,399 |
Recorded investment, with related allowance | 1,207 | 1,893 |
Recorded investment | 1,787 | 3,292 |
Specific reserves, with related allowance | 558 | 667 |
Loans receivable, nonaccrual status | 5,582 | 6,873 |
Increase (decrease) in impaired loans | (1,500) | |
SBA loans held for investment | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 531 | 359 |
Unpaid principal balance, with related allowance | 238 | 1,257 |
Unpaid principal balance | 769 | 1,616 |
Recorded investment, with no related allowance | 367 | 353 |
Recorded investment, with related allowance | 73 | 1,118 |
Recorded investment | 440 | 1,471 |
Specific reserves, with related allowance | 72 | 540 |
Loans receivable, nonaccrual status | 503 | 1,560 |
Commercial loans | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 213 | 1,046 |
Unpaid principal balance, with related allowance | 1,634 | 775 |
Unpaid principal balance | 1,847 | 1,821 |
Recorded investment, with no related allowance | 213 | 1,046 |
Recorded investment, with related allowance | 1,134 | 775 |
Recorded investment | 1,347 | 1,821 |
Specific reserves, with related allowance | 486 | 127 |
Increase (decrease) in impaired loans | $ (1,000) | |
Number of loans | loan | 1 | |
Commercial loans | Commercial other | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with related allowance | $ 916 | 30 |
Unpaid principal balance | 916 | 30 |
Recorded investment, with related allowance | 416 | 30 |
Recorded investment | 416 | 30 |
Specific reserves, with related allowance | 416 | 30 |
Loans receivable, nonaccrual status | 416 | 30 |
Commercial loans | Commercial real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Unpaid principal balance, with no related allowance | 213 | 1,046 |
Unpaid principal balance, with related allowance | 718 | 745 |
Unpaid principal balance | 931 | 1,791 |
Recorded investment, with no related allowance | 213 | 1,046 |
Recorded investment, with related allowance | 718 | 745 |
Recorded investment | 931 | 1,791 |
Specific reserves, with related allowance | 70 | 97 |
Loans receivable, nonaccrual status | 213 | $ 1,046 |
SBA Loan in OREO | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans | $ (328) | |
Number of loans | loan | 1 | |
SBA Loan Sold | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans | $ (293) | |
Number of loans | loan | 1 | |
SBA Loan Removed | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans | $ (276) | |
Number of loans | loan | 1 | |
SBA Loans Added | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans | $ 629 | |
Number of loans | loan | 2 | |
SBA Loan Short Sale | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans | $ (184) | |
Number of loans | loan | 1 | |
SBA Loans Charged Off | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans | $ (154) | |
Number of loans | loan | 2 |
Loans - Average Recorded Invest
Loans - Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | $ 1,786 | $ 3,810 | $ 2,290 | $ 3,203 |
Loans, Interest income recognized on impaired loans | 16 | 55 | 42 | 78 |
SBA loans held for investment | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 255 | 1,275 | 685 | 1,003 |
Loans, Interest income recognized on impaired loans | 4 | 0 | 13 | (2) |
Commercial loans | Commercial other | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 700 | 11 | 236 | 10 |
Loans, Interest income recognized on impaired loans | 3 | 0 | 3 | 0 |
Commercial loans | Commercial real estate | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans, Average recorded investment | 831 | 2,524 | 1,369 | 2,190 |
Loans, Interest income recognized on impaired loans | 9 | 55 | 26 | 80 |
Small Business Administration | ||||
Financing Receivable, Impaired [Line Items] | ||||
Impaired financing receivable average recorded investment, guaranteed by Small Business Administration | $ 270 | $ 120 | $ 146 | $ 82 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructuring (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)loan | Sep. 30, 2018USD ($)loan | Sep. 30, 2019USD ($)loan | Sep. 30, 2018USD ($)loan | Dec. 31, 2018USD ($)loan | |
Financing Receivable, Impaired [Line Items] | |||||
Number of loans modified as a TDR | loan | 0 | 0 | 0 | 0 | |
Average recorded investment | $ 1,786 | $ 3,810 | $ 2,290 | $ 3,203 | |
Impaired financing receivable, related allowance | $ 558 | $ 558 | $ 667 | ||
Number of loans with subsequent default | loan | 0 | 0 | |||
Troubled Debt Restructuring (TDR) | |||||
Financing Receivable, Impaired [Line Items] | |||||
Number of loans modified as a TDR | loan | 1 | 1 | |||
Average recorded investment | $ 718 | $ 745 | |||
Impaired financing receivable, related allowance | $ 70 | $ 70 | $ 97 |
Allowance for Loan Losses and_3
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments - Activity in Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance, beginning of period | $ 15,965 | $ 14,634 | $ 15,488 | $ 13,556 |
Charge-offs | (729) | (169) | (1,124) | (376) |
Recoveries | 16 | 23 | 38 | 258 |
Net (charge-offs) recoveries | (713) | (146) | (1,086) | (118) |
(Credit) provision for loan losses charged to expense | 750 | 500 | 1,600 | 1,550 |
Balance, end of period | 16,002 | 14,988 | 16,002 | 14,988 |
SBA held for investment | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance, beginning of period | 1,321 | 1,637 | 1,655 | 1,471 |
Charge-offs | (99) | (169) | (492) | (354) |
Recoveries | 13 | 1 | 16 | 68 |
Net (charge-offs) recoveries | (86) | (168) | (476) | (286) |
(Credit) provision for loan losses charged to expense | (68) | 66 | (12) | 350 |
Balance, end of period | 1,167 | 1,535 | 1,167 | 1,535 |
Commercial | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance, beginning of period | 9,144 | 8,355 | 8,705 | 7,825 |
Charge-offs | (500) | 0 | (501) | 0 |
Recoveries | 3 | 5 | 12 | 25 |
Net (charge-offs) recoveries | (497) | 5 | (489) | 25 |
(Credit) provision for loan losses charged to expense | 778 | 317 | 1,209 | 827 |
Balance, end of period | 9,425 | 8,677 | 9,425 | 8,677 |
Residential | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance, beginning of period | 4,198 | 3,493 | 3,900 | 3,130 |
Charge-offs | (130) | 0 | (130) | 0 |
Recoveries | 0 | 0 | 0 | 13 |
Net (charge-offs) recoveries | (130) | 0 | (130) | 13 |
(Credit) provision for loan losses charged to expense | 52 | 119 | 350 | 469 |
Balance, end of period | 4,120 | 3,612 | 4,120 | 3,612 |
Consumer | ||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||||
Balance, beginning of period | 1,302 | 1,149 | 1,228 | 1,130 |
Charge-offs | 0 | 0 | (1) | (22) |
Recoveries | 0 | 17 | 10 | 152 |
Net (charge-offs) recoveries | 0 | 17 | 9 | 130 |
(Credit) provision for loan losses charged to expense | (12) | (2) | 53 | (96) |
Balance, end of period | $ 1,290 | $ 1,164 | $ 1,290 | $ 1,164 |
Allowance for Loan Losses and_4
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments - Loans and Related Allowance for Loan Losses, by Portfolio Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Total | $ 16,002 | $ 15,965 | $ 15,488 | $ 14,988 | $ 14,634 | $ 13,556 |
Total loans | 1,355,421 | 1,293,395 | ||||
SBA held for investment | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 72 | 540 | ||||
Collectively evaluated for impairment | 1,095 | 1,115 | ||||
Total | 1,167 | 1,321 | 1,655 | 1,535 | 1,637 | 1,471 |
Individually evaluated for impairment | 440 | 1,471 | ||||
Collectively evaluated for impairment | 35,940 | 37,862 | ||||
Total loans | 36,380 | 39,333 | ||||
Commercial | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 486 | 127 | ||||
Collectively evaluated for impairment | 8,939 | 8,578 | ||||
Total | 9,425 | 9,144 | 8,705 | 8,677 | 8,355 | 7,825 |
Individually evaluated for impairment | 1,347 | 1,821 | ||||
Collectively evaluated for impairment | 721,902 | 692,281 | ||||
Total loans | 723,249 | 694,102 | ||||
Residential | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 4,120 | 3,900 | ||||
Total | 4,120 | 4,198 | 3,900 | 3,612 | 3,493 | 3,130 |
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 456,963 | 436,056 | ||||
Total loans | 456,963 | 436,056 | ||||
Consumer | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 1,290 | 1,228 | ||||
Total | 1,290 | $ 1,302 | 1,228 | $ 1,164 | $ 1,149 | $ 1,130 |
Individually evaluated for impairment | 0 | 0 | ||||
Collectively evaluated for impairment | 138,829 | 123,904 | ||||
Total loans | 138,829 | 123,904 | ||||
Total | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Individually evaluated for impairment | 558 | 667 | ||||
Collectively evaluated for impairment | 15,444 | 14,821 | ||||
Total | 16,002 | 15,488 | ||||
Individually evaluated for impairment | 1,787 | 3,292 | ||||
Collectively evaluated for impairment | 1,353,634 | 1,290,103 | ||||
Total loans | $ 1,355,421 | $ 1,293,395 |
Allowance for Loan Losses and_5
Allowance for Loan Losses and Reserve for Unfunded Loan Commitments - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract] | ||
Other commitment | $ 278 | $ 290 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities (Details) - Interest Rate Swap Agreements | Feb. 16, 2019USD ($) | Sep. 30, 2019USD ($)contract | Sep. 30, 2018USD ($)contract | Sep. 30, 2019USD ($)contract | Sep. 30, 2018USD ($)contract | Jul. 05, 2019USD ($) |
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Notional amount | $ 60,000,000 | $ 60,000,000 | $ 60,000,000 | $ 60,000,000 | $ 10,000,000 | |
Derivative instrument, maturity | $ 10,000,000 | |||||
(Decrease) Increase in the fair value of interest rate swaps | $ (27,000) | (177,000) | (7,000) | (1,077,000) | 659,000 | |
Fair value | $ 264,000,000 | $ 2,066,000,000 | $ 264,000,000 | $ 2,066,000,000 | ||
Weighted average pay rate | 1.42% | 1.26% | 1.36% | 1.26% | ||
Weighted average receive rate | 2.49% | 2.33% | 2.59% | 1.76% | ||
Weighted average maturity in years | 1 year 6 months | 2 years 1 month 13 days | 1 year 8 months 19 days | 2 years 5 months 27 days | ||
Number of contracts | contract | 4,000 | 4,000 | 4,000 | 4,000 |
Employee Benefit Plans - Transa
Employee Benefit Plans - Transactions Under Stock Option Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Shares | |||||
Options outstanding, beginning balance (in shares) | 584,178 | ||||
Options granted (in shares) | 0 | 0 | 55,000 | 114,500 | |
Options exercised (in shares) | (4,800) | (23,366) | (57,234) | (100,973) | |
Options forfeited (in shares) | (5,333) | ||||
Options expired (in shares) | 0 | ||||
Options outstanding, ending balance (in shares) | 576,611 | 576,611 | 584,178 | ||
Options, Exercisable (in shares) | 338,089 | 338,089 | |||
Weighted average exercise price | |||||
Options outstanding, beginning balance (in dollars per share) | $ 13 | ||||
Options granted (in dollars per share) | $ 0 | $ 0 | 20.61 | $ 20.24 | |
Options exercised (in dollars per share) | 7.41 | ||||
Options forfeited (in dollars per share) | 19.38 | ||||
Options expired (in dollars per share) | 0 | ||||
Options outstanding, ending balance (in dollars per share) | 14.22 | 14.22 | $ 13 | ||
Weighted average exercise price, Options exercisable (in dollars per share) | $ 10.28 | $ 10.28 | |||
Weighted average remaining contractual life , Options outstanding | 6 years 10 months 24 days | 7 years 1 month 6 days | |||
Weighted average remaining contractual life, Options exercisable | 5 years 6 months | ||||
Aggregate intrinsic value, Options outstanding | $ 4,573,458 | $ 4,573,458 | $ 4,574,680 | ||
Aggregate intrinsic value, Options exercisable | $ 4,011,761 | $ 4,011,761 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) $ in Thousands | Sep. 27, 2018USD ($)installment | Jan. 01, 2014 | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Apr. 25, 2019shares | Dec. 31, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Options, outstanding (in shares) | shares | 576,611 | 576,611 | 584,178 | |||||
Defined contribution plan employer discretionary contribution amount | $ 150 | $ 146 | $ 490 | $ 458 | ||||
Deferred fees | 22 | 22 | 354 | 282 | ||||
Interest paid on deferred fees | 28 | 18 | 78 | 49 | ||||
Distributions paid | 2 | 2 | $ 9 | 9 | ||||
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] | ||||||||
Retirement benefit payable as percent of average Executive's base salary for 36 months preceding separation from service | 60.00% | |||||||
Payment term after separation | 36 months | |||||||
Retirement benefit payable as percent of average Executive's base salary for 36 months preceding separation from service, adjustment thereafter | 2.00% | |||||||
Number of annual payments after separation | installment | 15 | |||||||
Expected future benefit payment | $ 6,600 | |||||||
Discount rate used to calculate the present value of the benefit obligation | 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 | 85 | $ 85 | ||||||
Life insurance plan with a post retirement death benefit | 250 | 250 | ||||||
Life insurance plan aggregate expenses | 1 | $ 8 | $ 4 | $ 10 | ||||
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 | |||||||
Compensation cost not yet recognized | $ 993 | $ 993 | ||||||
Compensation cost recognition weighted average period | 2 years | |||||||
Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 4 years | |||||||
Granted (in shares) | shares | 7,500 | 0 | 37,650 | 38,300 | ||||
Compensation cost recognition weighted average period | 2 years 8 months 12 days | |||||||
Nonvested awards, compensation not yet recognized, awards other than options | $ 1,500 | $ 1,500 | ||||||
2019 Equity Compensation Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for grant (in shares) | shares | 500,000 | |||||||
2019 Equity Compensation Plan | Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for grant (in shares) | shares | 492,500 | 492,500 | ||||||
Granted (in shares) | shares | 7,500 |
Employee Benefit Plans - Fair V
Employee Benefit Plans - Fair Values of Options Granted Using Black-Scholes Option-Pricing Model (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | ||||
Number of options granted (in shares) | 0 | 0 | 55,000 | 114,500 |
Weighted average exercise price (in dollars per share) | $ 0 | $ 0 | $ 20.61 | $ 20.24 |
Weighted average fair value of options (in dollars per share) | $ 0 | $ 0 | $ 6.21 | $ 5.97 |
Expected life | 0 years | 0 years | 8 years 2 months 23 days | 6 years 4 months 6 days |
Expected volatility | 0.00% | 0.00% | 27.08% | 26.40% |
Risk-free interest rate | 0.00% | 0.00% | 2.55% | 2.48% |
Dividend yield | 0.00% | 0.00% | 1.36% | 1.14% |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Cash Proceeds Received from Options Exercised (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | ||||
Number of options exercised (in shares) | 4,800 | 23,366 | 57,234 | 100,973 |
Total intrinsic value of options exercised | $ 38,127 | $ 462,533 | $ 742,737 | $ 1,699,924 |
Cash received from options exercised | 61,134 | 108,156 | 424,198 | 500,114 |
Tax deduction realized from options | $ 11,491 | $ 130,018 | $ 223,453 | $ 477,849 |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Information about Stock Options Outstanding and Exercisable (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | shares | 576,611 |
Options outstanding, Weighted average remaining contractual life | 6 years 10 months 24 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 14.22 |
Options exercisable (in shares) | shares | 338,089 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 10.28 |
$0.00 - $6.00 | |
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) | $ 6 |
Options outstanding (in shares) | shares | 61,761 |
Options outstanding, Weighted average remaining contractual life | 2 years 10 months 24 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 5.60 |
Options exercisable (in shares) | shares | 61,761 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 5.60 |
$6.01 - $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) | 6.01 |
Range of exercise prices, upper (in dollars per share) | $ 12 |
Options outstanding (in shares) | shares | 196,817 |
Options outstanding, Weighted average remaining contractual life | 5 years 6 months |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 8.70 |
Options exercisable (in shares) | shares | 196,817 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 8.70 |
$12.01 - $18.00 | |
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) | $ 18 |
Options outstanding (in shares) | shares | 67,533 |
Options outstanding, Weighted average remaining contractual life | 7 years 3 months 18 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 15.78 |
Options exercisable (in shares) | shares | 43,335 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 15.80 |
$18.01 - $24.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of exercise prices, lower (in dollars per share) | 18.01 |
Range of exercise prices, upper (in dollars per share) | $ 24 |
Options outstanding (in shares) | shares | 250,500 |
Options outstanding, Weighted average remaining contractual life | 8 years 10 months 24 days |
Options outstanding, Weighted average exercise price (in dollars per share) | $ 20.26 |
Options exercisable (in shares) | shares | 36,176 |
Options exercisable, Weighted average exercise price (in dollars per share) | $ 20.27 |
Employee Benefit Plans - Compen
Employee Benefit Plans - Compensation Expense Related to Stock Options, Restricted Stock and Related Income Tax Benefit (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 155,942 | $ 115,345 | $ 446,544 | $ 357,007 |
Income tax benefit | 45,067 | 32,424 | 129,051 | 100,355 |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 172,558 | 143,854 | 485,466 | 429,990 |
Income tax benefit | $ 49,869 | $ 40,437 | $ 140,299 | $ 120,870 |
Employee Benefit Plans - Summ_2
Employee Benefit Plans - Summary of Nonvested Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Shares | ||||
Nonvested restricted stock, beginning balance (in shares) | 105,312 | |||
Granted (in shares) | 7,500 | 0 | 37,650 | 38,300 |
Cancelled (in shares) | (1,350) | |||
Vested (in shares) | (35,438) | |||
Nonvested restricted stock, ending balance (in shares) | 106,174 | 106,174 | ||
Average grant date fair value | ||||
Nonvested restricted stock, beginning balance (in dollars per share) | $ 16.55 | |||
Granted (in dollars per share) | $ 20 | $ 0 | 20.52 | $ 20.64 |
Cancelled (in dollars per share) | 17.92 | |||
Vested (in dollars per share) | 14.11 | |||
Nonvested restricted stock, ending balance (in dollars per share) | $ 18.76 | $ 18.76 |
Employee Benefit Plans - Restri
Employee Benefit Plans - Restricted Stock Awards Granted (Details) - Restricted Stock - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted (in shares) | 7,500 | 0 | 37,650 | 38,300 |
Average grant date fair value (in dollars per share) | $ 20 | $ 0 | $ 20.52 | $ 20.64 |
Employee Benefit Plans - Summ_3
Employee Benefit Plans - Summary of Components of Net Periodic Pension Cost of Defined Benefit Plan Recognized (Details) - USD ($) $ in Thousands | Sep. 27, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | |||||
Service cost | $ 235 | $ 953 | $ 454 | $ 1,159 | |
Interest cost | 36 | 16 | 99 | 47 | |
Amortization of prior service cost | 20 | 20 | 62 | 62 | |
Net periodic benefit cost | $ 291 | $ 989 | $ 615 | $ 1,268 | |
Prior period expense | $ 850 |
Employee Benefit Plans - Summ_4
Employee Benefit Plans - Summary of Changes in Benefit Obligations of Defined Benefit Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Benefit obligation, beginning of year | $ 2,747 | $ 1,187 | ||
Service cost | $ 235 | $ 953 | 454 | 1,159 |
Interest cost | 36 | 16 | 99 | 47 |
Benefit obligation, end of period | $ 3,300 | $ 2,393 | $ 3,300 | $ 2,393 |
Regulatory Capital (Details)
Regulatory Capital (Details) | Jan. 01, 2019 | Jan. 01, 2018 | Sep. 30, 2019 | Dec. 31, 2018 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||
Leverage ratio | 10.54% | 9.90% | ||
CET1 | 12.24% | 11.40% | ||
Tier I risk-based capital ratio | 13.04% | 12.24% | ||
Total risk-based capital ratio | 14.28% | 13.49% | ||
Leverage ratio: Required for capital adequacy purposes | 4.00% | 4.00% | 4.00% | |
CET1: Required for capital adequacy purposes | 7.00% | 7.00% | 6.375% | |
Tier I risk-based capital ratio: Required for capital adequacy purposes | 8.50% | 8.50% | 7.875% | |
Total risk-based capital ratio: Required for capital adequacy purposes | 10.50% | 10.50% | 9.875% | |
Capital conservation buffer | 2.50% | 1.875% | ||
Bank | ||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||
Leverage ratio | 10.11% | 9.52% | ||
CET1 | 12.53% | 11.80% | ||
Tier I risk-based capital ratio | 12.53% | 11.80% | ||
Total risk-based capital ratio | 13.78% | 13.05% | ||
Leverage ratio: To be well-capitalized under prompt corrective action regulations | 5.00% | 5.00% | ||
CET1: To be well-capitalized under prompt corrective action regulations | 6.50% | 6.50% | ||
Tier I risk-based capital ratio: To be well-capitalized under prompt corrective action regulations | 8.00% | 8.00% | ||
Total risk-based capital ratio: To be well-capitalized under prompt corrective action regulations | 10.00% | 10.00% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |
Operating lease liabilities | $ 2,925 |
Operating lease right-of-use assets | $ 2,901 |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Remaining term of contract | 1 year |
Operating lease, renewal term | 1 year |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Remaining term of contract | 10 years |
Operating lease, renewal term | 5 years |
Leases - Summary of Net Lease C
Leases - Summary of Net Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 156 | $ 441 |
Net lease cost | 156 | 441 |
Operating cash flows from operating leases | 148 | 416 |
ROU assets obtained in exchange for new finance lease liabilities | $ 43 | $ 3,295 |
Leases - Summary of Other Infor
Leases - Summary of Other Information Relating to Operating Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Weighted average remaining lease term in years | 6 years 11 months 12 days |
Weighted average discount rate | 5.47% |
Operating lease right-of-use assets | $ 2,901 |
Leases - Summary of Maturity of
Leases - Summary of Maturity of Remaining Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (excluding the nine months ended September 30, 2019) | $ 141 |
2020 | 558 |
2021 | 529 |
2022 | 478 |
2023 | 413 |
2024 and thereafter | 1,411 |
Total lease payments | 3,530 |
Less: Interest | (605) |
Present value of lease liabilities | $ 2,925 |
Uncategorized Items - unty-2019
Label | Element | Value | |
Accounting Standards Update 2016-01 [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 40,000 | |
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 56,000 | [1] |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (16,000) | [1] |
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (56,000) | [1] |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 16,000 | [1] |
Accounting Standards Update 2018-02 [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 75,000 | |
Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (66,000) | [2] |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (9,000) | [2] |
Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 66,000 | [2] |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 9,000 | [2] |
[1] | As a result of ASU 2016-01, "Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities", the Company reclassed $40 thousand of gains (losses) on available for sale equity securities sitting in accumulated other comprehensive income to retained earnings. | ||
[2] | As a result of ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income", the Company reclassed $75 thousand from accumulated other comprehensive income to retained earnings. |