Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MVB FINANCIAL CORP | |
Entity Central Index Key | 0001277902 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 11,640,843 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Cash and cash equivalents: | ||
Cash and due from banks | $ 15,185 | $ 14,747 |
Interest bearing balances with banks | 2,773 | 7,474 |
Total cash and cash equivalents | 17,958 | 22,221 |
Certificates of deposit with other banks | 14,778 | 14,778 |
Investment Securities: | ||
Securities available-for-sale, at fair value | 224,741 | 221,614 |
Equity securities | 9,841 | 9,599 |
Loans held for sale | 65,955 | 75,807 |
Loans: | 1,341,218 | 1,304,366 |
Less: Allowance for loan losses | (11,242) | (10,939) |
Net Loans | 1,329,976 | 1,293,427 |
Premises and equipment | 25,922 | 26,545 |
Bank owned life insurance | 34,128 | 34,291 |
Accrued interest receivable and other assets | 48,129 | 34,207 |
Goodwill | 18,480 | 18,480 |
TOTAL ASSETS | 1,789,908 | 1,750,969 |
Deposits: | ||
Noninterest bearing | 236,086 | 213,597 |
Interest bearing | 1,194,573 | 1,095,557 |
Total deposits | 1,430,659 | 1,309,154 |
Accrued interest payable and other liabilities | 33,416 | 17,706 |
Repurchase agreements | 12,553 | 14,925 |
FHLB and other borrowings | 114,884 | 214,887 |
Subordinated debt | 17,524 | 17,524 |
Total liabilities | 1,609,036 | 1,574,196 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, par value $1,000; 20,000 authorized; 783 issued in 2019 and 2018, respectively (See Footnote 7) | 7,834 | 7,834 |
Common stock, par value $1; 20,000,000 shares authorized; 11,665,870 shares issued and 11,614,793 shares outstanding in 2019 and 11,658,370 shares issued and 11,607,293 shares outstanding in 2018 | 11,666 | 11,658 |
Additional paid-in capital | 117,408 | 116,897 |
Retained earnings | 50,937 | 48,274 |
Accumulated other comprehensive loss | (5,889) | (6,806) |
Treasury stock, 51,077 shares, at cost | (1,084) | (1,084) |
Total stockholders’ equity | 180,872 | 176,773 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,789,908 | $ 1,750,969 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized (shares) | 20,000 | 20,000 |
Preferred stock, shares issued (shares) | 783 | 783 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (shares) | 11,665,870 | 11,658,370 |
Common stock, shares outstanding (shares) | 11,614,793 | 11,607,293 |
Treasury stock, shares (shares) | 51,077 | 51,077 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
INTEREST INCOME | ||
Interest and fees on loans | $ 17,662 | $ 13,291 |
Interest on deposits with other banks | 122 | 90 |
Interest on investment securities - taxable | 879 | 895 |
Interest on tax exempt loans and securities | 960 | 778 |
Total interest income | 19,623 | 15,054 |
INTEREST EXPENSE | ||
Interest on deposits | 4,123 | 2,298 |
Interest on repurchase agreements | 14 | 19 |
Interest on FHLB and other borrowings | 1,229 | 714 |
Interest on subordinated debt | 285 | 558 |
Total interest expense | 5,651 | 3,589 |
NET INTEREST INCOME | 13,972 | 11,465 |
Provision for loan losses | 300 | 474 |
Net interest income after provision for loan losses | 13,672 | 10,991 |
NONINTEREST INCOME | ||
Service charges on deposit accounts | 315 | 185 |
Income on bank owned life insurance | 525 | 218 |
Interchange and debit card transaction fees | 141 | 150 |
Mortgage fee income | 6,670 | 6,563 |
Gain on sale of portfolio loans | 55 | 212 |
Insurance and investment services income | 156 | 164 |
(Loss) gain on sale of available-for-sale securities, net | (118) | 326 |
Gain on derivatives, net | 450 | 584 |
Commercial swap fee income | 80 | 413 |
Holding gain (loss) on equity securities | 180 | (30) |
Other operating income | 311 | 254 |
Total noninterest income | 8,765 | 9,039 |
NONINTEREST EXPENSES | ||
Salaries and employee benefits | 11,734 | 10,473 |
Occupancy expense | 1,185 | 1,049 |
Equipment depreciation and maintenance | 854 | 784 |
Data processing and communications | 988 | 835 |
Mortgage processing | 809 | 892 |
Marketing, contributions, and sponsorships | 214 | 347 |
Professional fees | 828 | 745 |
Printing, postage, and supplies | 135 | 165 |
Insurance, tax, and assessment expense | 505 | 390 |
Travel, entertainment, dues, and subscriptions | 690 | 648 |
Other operating expenses | 506 | 411 |
Total noninterest expenses | 18,448 | 16,739 |
Income before income taxes | 3,989 | 3,291 |
Income tax expense | 797 | 697 |
Net income | 3,192 | 2,594 |
Preferred dividends | 121 | 121 |
Net income available to common shareholders - basic | $ 3,071 | $ 2,473 |
Earnings per share - basic (in dollars per share) | $ 0.26 | $ 0.24 |
Earnings per share - diluted (in dollars per share) | 0.26 | 0.23 |
Cash dividends declared (in dollars per share) | $ 0.035 | $ 0.025 |
Weighted average shares outstanding - basic (in shares) | 11,607,543 | 10,474,138 |
Weighted average shares outstanding - diluted (in shares) | 13,177,281 | 12,714,353 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 3,192 | $ 2,594 |
Other comprehensive income (loss): | ||
Unrealized holding gains (losses) on securities available-for-sale | 1,859 | (4,448) |
Income tax effect | (502) | 1,201 |
Reclassification adjustment for loss (gain) recognized in income | 118 | (326) |
Income tax effect | (32) | 88 |
Change in defined benefit pension plan | (263) | 0 |
Income tax effect | 71 | 0 |
Carrying Value Adjustment - Investment hedge | (458) | 0 |
Income tax effect | 124 | 0 |
Total other comprehensive income (loss) | 917 | (3,485) |
Comprehensive income (loss) | $ 4,109 | $ (891) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) | Treasury Stock |
Increase (Decrease) in Stockholders' Equity | |||||||
Mark to market on equity positions | $ 98 | $ (98) | |||||
Beginning balance at Dec. 31, 2017 | $ 150,192 | $ 7,834 | $ 10,496 | $ 98,698 | 37,236 | (2,988) | $ (1,084) |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 2,594 | 2,594 | |||||
Other comprehensive loss | (3,485) | (3,485) | |||||
Cash dividends paid | (263) | (263) | |||||
Dividends on preferred stock | (121) | (121) | |||||
Stock based compensation | 244 | 244 | |||||
Common stock options exercised | 1,260 | 94 | 1,166 | ||||
Stranded AOCI | 646 | (646) | |||||
Ending balance at Mar. 31, 2018 | 150,421 | 7,834 | 10,590 | 100,108 | 40,190 | (7,217) | (1,084) |
Beginning balance at Dec. 31, 2018 | 176,773 | 7,834 | 11,658 | 116,897 | 48,274 | (6,806) | (1,084) |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 3,192 | 3,192 | |||||
Other comprehensive loss | 917 | 917 | |||||
Cash dividends paid | (408) | (408) | |||||
Dividends on preferred stock | (121) | (121) | |||||
Stock based compensation | 425 | 425 | |||||
Common stock options exercised | 94 | 8 | 86 | ||||
Ending balance at Mar. 31, 2019 | $ 180,872 | $ 7,834 | $ 11,666 | $ 117,408 | $ 50,937 | $ (5,889) | $ (1,084) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends paid (in dollars per share) | $ 0.035 | $ 0.025 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
OPERATING ACTIVITIES | ||
Net Income | $ 3,192 | $ 2,594 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net amortization and accretion of investments | 280 | 361 |
Net amortization of deferred loan costs | 72 | 16 |
Provision for loan losses | 300 | 474 |
Depreciation and amortization | 759 | 741 |
Stock based compensation | 425 | 244 |
Loans originated for sale | (239,160) | (238,935) |
Proceeds of loans sold | 255,682 | 261,012 |
Mortgage fee income | (6,670) | (6,563) |
Gain on sale of securities | (33) | (326) |
Loss on sale of securities | 151 | 0 |
Gain on sale of portfolio loans | (55) | (212) |
Income on bank owned life insurance | (525) | (218) |
Deferred taxes | 21 | (51) |
Amortization of operating lease right-of-use asset | 20 | |
Other, net | (1,534) | (3,924) |
Net cash provided by operating activities | 12,925 | 15,213 |
INVESTING ACTIVITIES | ||
Purchases of investment securities available-for-sale | (20,400) | (14,859) |
Maturities/paydowns of investment securities available-for-sale | 5,236 | 7,364 |
Sales of investment securities available-for-sale | 13,694 | 680 |
Purchases of premises and equipment | (115) | (506) |
Net increase in loans | (36,866) | (51,321) |
Purchases of restricted bank stock | (6,119) | (5,901) |
Redemptions of restricted bank stock | 8,352 | 3,797 |
Proceeds from sale of other real estate owned | 97 | 181 |
Proceeds from death benefit of bank owned life insurance policies | 688 | 0 |
Purchase of equity securities | (450) | 0 |
Net cash used in investing activities | (35,883) | (60,565) |
FINANCING ACTIVITIES | ||
Net increase in deposits | 121,505 | (5,673) |
Net decrease in repurchase agreements | (2,372) | (1,727) |
Net change in short-term FHLB & other borrowings | (99,982) | 67,421 |
Principal payments on FHLB & other borrowings | (21) | (12,220) |
Common stock options exercised | 94 | 1,260 |
Cash dividends paid on common stock | (408) | (263) |
Cash dividends paid on preferred stock | (121) | (121) |
Net cash provided by financing activities | 18,695 | 48,677 |
(Decrease) increase in cash and cash equivalents | (4,263) | 3,325 |
Cash and cash equivalents at beginning of period | 22,221 | 20,305 |
Cash and cash equivalents at end of period | 17,958 | 23,630 |
Supplemental disclosure of cash flow information: | ||
Loans transferred to other real estate owned | 63 | 720 |
Initial recognition of operating lease right-of-use assets | 12,935 | |
Initial recognition of operating lease liabilities | 15,659 | |
Cash payments for: | ||
Interest on deposits, repurchase agreements and borrowings | 6,136 | 3,635 |
Income taxes | $ 0 | $ 87 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Nature of Operations MVB Financial Corp. (“the Company”) is a financial holding company and was organized in 2003. MVB operates principally through its wholly-owned subsidiary, MVB Bank, Inc. (“MVB Bank”). MVB Bank’s operating subsidiaries include Potomac Mortgage Group (“PMG” which began doing business under the registered trade name “MVB Mortgage”) , MVB Insurance, LLC (“MVB Insurance”), and MVB Community Development Corporation (“CDC”). Principles of Consolidation and Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with instructions to Form 10 - Q. Accordingly, they do not include all the information and footnotes required by GAAP for annual year-end financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. The consolidated balance sheet as of December 31, 2018 has been derived from audited financial statements included in the Company’s 2018 filing on Form 10-K. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States and practices in the banking industry. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates, such as the allowance for loan losses, are based upon known facts and circumstances. Estimates are revised by management in the period such facts and circumstances change. Actual results could differ from those estimates. All significant inter-company accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the company’s December 31, 2018, Form 10-K filed with the Securities and Exchange Commission (the “SEC”). In certain instances, amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation. Information is presented in these notes with dollars expressed in thousands, unless otherwise noted or specified. Accounting Changes On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) . This pronouncement requires that lessees and lessors recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. ASU 2016-02 provides for a modified retrospective transition approach requiring lessees to recognize and measure leases on the balance sheet at the beginning of either the earliest period presented or as of the beginning of the period of adoption with the option to elect certain practical expedients. The Company has elected to apply ASU 2016-02 as of the beginning of the period (January 1, 2019) and has not restated comparative periods. Of the optional practical expedients available under ASU 2016-02, all have been adopted. Upon adoption, the Company recognized right-of-use assets and related lease liabilities totaling $12.9 million and $15.7 million, respectively. Certain of the Company's leases contain options to renew the lease; however, some of these renewal options are not included in the calculation of the lease liabilities as they are not reasonably expected to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments, and the Company does not have any material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations. The Company has made an accounting policy election to not apply the recognition requirements in Topic 842 to short-term leases. The Company has also elected to use the practical expedient to make an accounting policy election for property leases to include both lease and non-lease components as a single component and account for as a lease. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Note 2 – Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This update requires a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Reform Act, which was enacted on December 22, 2017. The Tax Reform Act included a reduction to the corporate income tax rate from 34 percent to 21 percent effective January 1, 2018. The amendments in the ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company elected to early adopt ASU 2018-02 during the first quarter of 2018 and elected to reclassify the income tax effects of the Tax Reform Act from AOCI to retained earnings. The amount of the reclassification is the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate, which amounted to $646 thousand . In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities , which amends the existing hedge accounting model and expands an entity’s ability to hedge nonfinancial and financial risk components and reduce complexity in fair value hedges of interest-rate risk. The ASU eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The ASU also changes certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company adopted this ASU in accordance with paragraph ASC 815-20-65-3 subpart C. The adoption of this ASU did not have a significant impact on the Company’s financial condition, results of operations and consolidated financial statements . The Company can now employ additional hedging strategies as described above, including the ability to apply fair value hedge accounting to a specified pool of assets by excluding the portion of the hedged items related to prepayments, defaults and other events. This allows the Company to better align its accounting and the financial reporting of its hedging activities with their economic objectives thereby reducing the earnings volatility resulting from these hedging activities. In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . This ASU amends guidance on the amortization period of premiums on certain purchased callable debt securities. Specifically, the amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date (that is, at a premium). For public companies, this update is effective for fiscal years beginning after December 15, 2018, including all interim periods within those fiscal years. The adoption of this guidance wa s not material to the consolidated financial statements, as it is our current policy to amortize premiums of investment securities to the earliest call date. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . Topic 350, Intangibles – Goodwill and Other (Topic 350), currently requires an entity that has not elected the private company alternative for goodwill to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit to address concerns over the cost and complexity of the two-step goodwill impairment test. The amendments in this Update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. For public companies, this update will be effective for fiscal years beginning after December 15, 2019, including all interim periods within those fiscal years. The adoption of this guidance will not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The new guidance replaces 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. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company has formed an implementation team led by the CFO, that also includes other lines of business and functions within the Company. The Company has also engaged a third party to assist with a data gap analysis and will utilize the data to determine the impact of the pronouncement. Additionally, the Company has researched and acquired software to assist in the development of models that can meet the requirements of the new guidance. While this standard may potentially have a material impact on the Company’s consolidated financial statements, we are still in the process of completing our evaluation. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:(1) A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) - Targeted Improvements , which, among other things, provides an additional transition method that would allow entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, Leases (Topic 842) - Narrow Scope Improvements , for Lessors which provides certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon the adoption of ASU 2016-02, ASU 2018-11, and ASU 2018-20 on January 1, 2019, the Company recognized right-of-use asset s and related lease liabilitie s totaling $12.9 million an d $15.7 million, respectively. The initial balance sheet gross up upon adoption was primarily related to operating leases of certain real estate properties and financing leases of certain office equipment. The Company has no material subleases or leasing arrangements for which it is the lessor of property or equipment. The Company applied certain practical expedients provided under ASU 2016-02 whereby the Company did reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for any existing leases. The Company did not apply the recognition requirements of ASU 2016-02 to any short-term leases (as defined by related accounting guidance). The Company accounted for lease and non-lease components separately because such amounts are readily determinable under our lease contracts and because this election resulted in a lower impact on our balance sheet. The Company utilized the modified-retrospective transition approach prescribed by ASU 2018-11. See Note 5, “Premises and Equipment” of the Notes to the Consolidated Financial Statements, included in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.` In January 2016, the FASB issued ASU 2016-01, Accounting for Financial Instruments - Overall: Classification and Measurement (Subtopic 825-10) . Amendments within ASU 2016-01 that relate to non-public entities have been excluded from this presentation. The amendments in this ASU 2016-01 address the following: 1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; 2) simplify the impairment assessment of equity investments without readily-determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value; 3) eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; 4) require entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; 5) require separate presentation in other comprehensive income for the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; 6) require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and 7) clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this guidance in the first quarter of 2018. The adoption of ASU 2016-01 on January 1, 2018 did not have a material impact on the Company’s Consolidated Financial Statements. In accordance with 4 ) above, the Company disclose s the fair value of its loan portfolio on a quarterly basis using an exit price notion. See Note 7, “Fair Value of Financial Instruments” of the Notes to the Consolidated Financial Statements, included in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Note 3 – Investment Securities There were no held-to-maturity securities at March 31, 2019 or December 31, 2018. Amortized cost and fair values of investment securities available-for-sale at March 31, 2019 are summarized as follows: (Dollars in thousands) Amortized Cost Unrealized Gain Unrealized Loss Fair Value U. S. Agency securities $ 67,631 $ — $ (1,043) $ 66,588 U.S. Sponsored Mortgage-backed securities 49,223 1 (1,453) 47,771 Municipal securities 100,253 241 (487) 100,007 Total debt securities 217,107 242 (2,983) 214,366 Other securities 10,294 98 (17) 10,375 Total investment securities available-for-sale $ 227,401 $ 340 $ (3,000) $ 224,741 Amortized cost and fair values of investment securities available-for-sale at December 31, 2018 are summarized as follows: (Dollars in thousands) Amortized Cost Unrealized Gain Unrealized Loss Fair Value U. S. Agency securities $ 79,041 $ 14 $ (1,625) $ 77,430 U.S. Sponsored Mortgage-backed securities 52,154 — (2,039) 50,115 Municipal securities 84,747 206 (1,192) 83,761 Total debt securities 215,942 220 (4,856) 211,306 Other securities 10,308 68 (68) 10,308 Total investment securities available-for-sale $ 226,250 $ 288 $ (4,924) $ 221,614 The following table summarizes amortized cost and fair values of debt securities by maturity: March 31, 2019 Available for sale (Dollars in thousands) Amortized Cost Fair Value Within one year $ 11,085 $ 11,280 After one year, but within five 31,156 30,716 After five years, but within ten 23,163 22,725 After ten years 151,703 149,645 Total $ 217,107 $ 214,366 Investment securities with a carrying value of $58.3 million at March 31, 2019, were pledged to secure public funds, repurchase agreements, and potential borrowings at the Federal Reserve discount window. The Company’s investment portfolio includes securities that are in an unrealized loss position as of March 31, 2019, the details of which are included in the following table. Although these securities, if sold at March 31, 2019 would result in a pretax loss of $3.0 million, the Company has no intent to sell the applicable securities at such fair values, and maintains the Company has the ability to hold these securities until all principal has been recovered. Management does not intend to sell these securities and it is unlikely that the Company will be required to sell these securities before recovery of their amortized cost basis. Declines in the fair values of these securities can be traced to general market conditions which reflect the prospect for the economy as a whole. When determining other-than-temporary impairment on securities, the Company considers such factors as adverse conditions specifically related to a certain security or to specific conditions in an industry or geographic area, the time frame securities have been in an unrealized loss position, the Company’s ability to hold the security for a period of time sufficient to allow for anticipated recovery in value, whether or not the security has been downgraded by a rating agency, and whether or not the financial condition of the security issuer has severely deteriorated. As of March 31, 2019, the Company considers all securities with unrealized loss positions to be temporarily impaired, and consequently, does not believe the Company will sustain any material realized losses as a result of the current temporary decline in fair value. The following table discloses investments in an unrealized loss position at March 31, 2019: (Dollars in thousands) Less than 12 months 12 months or more Description and number of positions Fair Value Unrealized Loss Fair Value Unrealized Loss U.S. Agency securities (51) $ 6,898 $ (70) $ 59,690 $ (973) U.S. Sponsored Mortgage-backed securities (39) — — 45,326 (1,453) Municipal securities (55) 523 (7) 29,130 (480) Other securities (2) — — 1,018 (17) $ 7,421 $ (77) $ 135,164 $ (2,923) The following table discloses investments in an unrealized loss position at December 31, 2018: (Dollars in thousands) Less than 12 months 12 months or more Description and number of positions Fair Value Unrealized Loss Fair Value Unrealized Loss U.S. Agency securities (54) $ 9,762 $ (123) $ 63,740 $ (1,502) U.S. Sponsored Mortgage-backed securities (42) 2,360 (32) 47,755 (2,007) Municipal securities (78) 5,936 (46) 35,955 (1,146) Other securities (2) 2,452 (48) 1,018 (20) $ 20,510 $ (249) $ 148,468 $ (4,675) For the three-month periods ended March 31, 2019 and 2018, the Company sold investments available-for-sale of $13.7 million and $680 thousand, respectively. These sales resulted in gross gains of $33 thousand and $326 thousand and gross losses of $151 thousand and $0 thousand, respectively. For the three months ended March 31, 2019, the Company recognized an unrealized holding gain of $180 thousand on equity securities held as of March 31, 2019, which was recorded in noninterest income in the consolidated statements of income. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Loans and Allowance for Loan Losses | Note 4 – Loans and Allowance for Loan Losses The components of loans in the Consolidated Balance Sheet s at March 31, 2019 and December 31, 2018, were as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Commercial and Non-Residential Real Estate $ 962,064 $ 941,033 Residential Real Estate 310,713 294,929 Home Equity 58,675 59,015 Consumer 9,469 9,605 Total Loans $ 1,340,921 $ 1,304,582 Deferred loan origination fees and costs, net 297 (216) Loans receivable $ 1,341,218 $ 1,304,366 All loan origination fees and direct loan origination costs are deferred and recognized over the life of the loan. An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans. The Bank’s methodology for determining the ALL is based on the requirements of ASC Section 310-10-35 for loans individually evaluated for impairment (discussed above) and ASC Subtopic 450-20 for loans collectively evaluated for impairment, as well as the Interagency Policy Statements on the Allowance for Loan and Lease Losses and other bank regulatory guidance. The total of the two components represents the Bank’s ALL. The Bank’s methodology allows for the analysis of certain impaired loans in homogeneous pools, rather than on an individual basis, when those loans are below specific thresholds based on outstanding principal balance. More specifically, residential mortgage loans, home equity lines of credit, and consumer loans, when considered impaired, are evaluated collectively for impairment by applying allocation rates derived from the Bank’s historical losses specific to impaired loans. Total collectively evaluated impaired loans were $1.8 million and $1.7 million, while the related reserves were $187 thousand and $218 thousand as of March 31, 2019 and December 31, 2018. Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are modified by qualified factors. The segments described below in the impaired loans by class table, which are based on the federal call code assigned to each loan, provide the starting point for the ALL analysis. Company and bank management tracks the historical net charge-off activity at the call code level. A historical charge-off factor is calculated utilizing a defined number of consecutive historical quarters. All pools currently utilize a rolling 12 quarters. “Pass” rated credits are segregated from “Criticized” credits for the application of qualitative factors. Loans in the criticized pools, which possess certain qualities or characteristics that may lead to collection and loss issues, are closely monitored by management and subject to additional qualitative factors. Company and Bank management have identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience. The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources are: lending policies and procedures, nature and volume of the portfolio, experience and ability of lending management and staff, volume and severity of problem credits, conclusion of loan reviews, audits, and exams, changes in the value of underlying collateral, effect of concentrations of credit from a loan type, industry and/or geographic standpoint, changes in economic and business conditions consumer sentiment, and other external factors. The combination of historical charge-off and qualitative factors are then weighted for each risk grade. These weightings are determined internally based upon the likelihood of loss as a loan risk grading deteriorates. To estimate the liability for off-balance sheet credit exposures, Bank management analyzed the portfolios of letters of credit, non-revolving lines of credit, and revolving lines of credit, and based its calculation on the expectation of future advances of each loan category. Letters of credit were determined to be highly unlikely to advance since they are generally in place only to ensure various forms of performance of the borrowers. In the Bank’s history, there have been no letters of credit drawn upon. In addition, many of the letters of credit are cash secured and do not warrant an allocation. Non-revolving lines of credit were determined to be highly likely to advance as these are typically construction lines. Meanwhile, the likelihood of revolving lines of credit advancing varies with each individual borrower. Therefore, the future usage of each line was estimated based on the average line utilization of the revolving line of credit portfolio as a whole. Once the estimated future advances were calculated, an allocation rate, which was derived from the Bank’s historical losses and qualitative environmental factors, was applied in the similar manner as those used for the allowance for loan loss calculation. The resulting estimated loss allocations were totaled to determine the liability for unfunded commitments related to these loans, which Management considers necessary to anticipate potential losses on those commitments that have a reasonable probability of funding. As of March 31, 2019 and December 31, 2018, the liability for unfunded commitments related to loans held for investment was $284 thousand. Bank management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL. The ALL is based on estimates, and actual losses will vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any given date. The following tables summarize the primary segments of the ALL, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2019: (Dollars in thousands) Commercial Residential Home Equity Consumer Total January 1, 2019 $ 8,605 $ 1,405 $ 684 $ 245 $ 10,939 Charge-offs — — — — — Recoveries — 1 1 1 3 Provision (recovery) 259 11 19 11 300 ALL balance at March 31, 2019 $ 8,864 $ 1,417 $ 704 $ 257 $ 11,242 Individually evaluated for impairment $ 1,123 $ — $ — $ — $ 1,123 Collectively evaluated for impairment $ 7,741 $ 1,417 $ 704 $ 257 $ 10,119 The following table summarizes the primary segments of the Company loan portfolio as of March 31, 2019: (Dollars in thousands) Commercial Residential Home Equity Consumer Total Individually evaluated for impairment $ 9,914 $ 2,890 $ 121 $ 36 $ 12,961 Collectively evaluated for impairment 952,150 307,823 58,554 9,433 1,327,960 Total Loans 962,064 310,713 58,675 9,469 1,340,921 The following tables summarize the primary segments of the ALL, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2018: (Dollars in thousands) Commercial Residential Home Equity Consumer Total January 1, 2018 $ 7,804 $ 1,119 $ 705 $ 250 $ 9,878 Charge-offs (324) (11) — (21) (356) Recoveries 2 9 56 4 71 Provision 516 60 (68) (34) 474 ALL balance at March 31, 2018 $ 7,998 $ 1,177 $ 693 $ 199 $ 10,067 Individually evaluated for impairment $ 915 $ — $ — $ — $ 915 Collectively evaluated for impairment $ 7,083 $ 1,177 $ 693 $ 199 $ 9,152 The following table summarizes the primary segments of the Company loan portfolio as of March 31, 2018: (Dollars in thousands) Commercial Residential Home Equity Consumer Total Individually evaluated for impairment $ 12,957 $ 1,707 $ 44 $ 43 $ 14,751 Collectively evaluated for impairment 811,668 258,806 59,482 11,866 1,141,822 Total Loans $ 824,625 $ 260,513 $ 59,526 $ 11,909 $ 1,156,573 Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Company evaluates residential mortgage loans, home equity lines of credit, and consumer loans in homogeneous pools, rather than on an individual basis, when each of those loans are below specific thresholds based on outstanding principal balance. Such loans that individually exceed these thresholds are evaluated individually for impairment. The Chief Credit Officer identifies these loans individually by monitoring the delinquency status of the Bank’s portfolio. Once identified, the Bank’s ongoing communications with the borrower allow Management to evaluate the significance of the payment delays and the circumstances surrounding the loan and the borrower. Once the determination has been made that a loan is impaired, the amount of the impairment is measured using one of 3 valuation methods: (a) the present value of expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs. The method is selected on a loan-by-loan basis, with management primarily utilizing the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made on a quarterly basis. The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of March 31, 2019 and December 31, 2018: Impaired Loans with Specific Allowance Impaired Loans with No Specific Allowance Total Impaired Loans (Dollars in thousands) Recorded Investment Related Allowance Recorded Investment Recorded Investment Unpaid Principal Balance March 31, 2019 Commercial Commercial Business $ 4,925 $ 744 $ 616 $ 5,541 $ 5,566 Commercial Real Estate 1,826 374 343 2,169 2,227 Acquisition & Development 1,787 5 417 2,204 3,583 Total Commercial 8,538 1,123 1,376 9,914 11,376 Residential — — 2,890 2,890 2,915 Home Equity — — 121 121 126 Consumer — — 36 36 36 Total Impaired Loans $ 8,538 $ 1,123 $ 4,423 $ 12,961 $ 14,453 December 31, 2018 Commercial Commercial Business $ 4,885 $ 668 $ 387 $ 5,272 $ 5,292 Commercial Real Estate 1,842 375 396 2,238 2,300 Acquisition & Development — — 2,224 2,224 3,601 Total Commercial 6,727 1,043 3,007 9,734 11,193 Residential — — 2,831 2,831 2,882 Home Equity — — 123 123 123 Consumer — — 90 90 316 Total Impaired Loans $ 6,727 $ 1,043 $ 6,051 $ 12,778 $ 14,514 Impaired loans have increased by $183 thousand, or 1.4%, during the three months ended March 31, 2019. This change is the net effect of multiple factors, including the identification of $328 thousand of impaired loans, the foreclosure of a commercial development loan which required th e reclassification of $63 thousand to other real estate owned, the classification of $50 thousand to performing loans based on improved repayment performance, and normal loan amortization. The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated: Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 (Dollars in thousands) Average Investment in Impaired Loans Interest Income Recognized on Accrual Basis Interest Income Recognized on Cash Basis Average Investment in Impaired Loans Interest Income Recognized on Accrual Basis Interest Income Recognized on Cash Basis Commercial Commercial Business $ 3,608 $ — $ — $ 4,525 $ 38 $ 53 Commercial Real Estate 4,038 40 39 7,431 21 23 Acquisition & Development 2,215 31 29 1,837 — — Total Commercial 9,861 71 68 13,793 59 76 Residential 2,858 3 3 1,747 5 48 Home Equity 122 1 1 65 — — Consumer 79 — — 132 — — Total $ 12,920 $ 75 $ 72 $ 15,737 $ 64 $ 124 As of March 31, 2019, the Bank’s other real estate owned balance totaled $2.1 million. The Bank held twelve foreclosed residential real estate properties representing $877 thousand, or 42%, of the total balance of other real estate owned. These properties are held as a result of the foreclosures of primarily two commercial loan relationships, one of which included two properties for a total of $294 thousand, while the other included seven properties for a total of $174 thousand. The three remaining residential real estate properties, totaling $409 thousand, were result of the foreclosure of three unrelated borrowers. The remaining $1.2 million, or 58%, of other real estate owned is the result of the foreclosure of three unrelated commercial development loans. There are three additional consumer mortgage loans collateralized by residential real estate properties in the process of foreclosure. The total recorded investment in these loans was $270 thousand as of March 31, 2019. These loans are included in the table above and have no specific allowance allocated to them. Bank management uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Any portion of a loan that has been or is expected to be charged off is placed in the Loss category. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as past due status, bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. The Bank’s Chief Credit Officer is responsible for the timely and accurate risk rating of the loans in the portfolio at origination and on an ongoing basis. The Credit Department ensures that a review of all commercial relationships of one million dollars or greater is performed annually. Review of the appropriate risk grade is included in both the internal and external loan review process, and on an ongoing basis. The Bank has an experienced Credit Department that continually reviews and assesses loans within the portfolio. The Bank engages an external consultant to conduct independent loan reviews on at least an annual basis. Generally, the external consultant reviews larger commercial relationships or criticized relationships. The Bank’s Credit Department compiles detailed reviews, including plans for resolution, on loans classified as Substandard on a quarterly basis. Loans in the Special Mention and Substandard categories that are collectively evaluated for impairment are given separate consideration in the determination of the allowance. The following table represents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of March 31, 2019 and December 31, 2018: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total March 31, 2019 Commercial Commercial Business $ 463,995 $ 6,238 $ 6,318 $ — $ 476,551 Commercial Real Estate 382,037 4,985 2,513 — 389,535 Acquisition & Development 92,822 177 2,854 125 95,978 Total Commercial 938,854 11,400 11,685 125 962,064 Residential 306,347 2,573 1,675 118 310,713 Home Equity 57,767 870 38 — 58,675 Consumer 9,287 164 18 — 9,469 Total Loans $ 1,312,255 $ 15,007 $ 13,416 $ 243 $ 1,340,921 December 31, 2018 Commercial Commercial Business $ 432,589 $ 5,290 $ 5,652 $ — $ 443,531 Commercial Real Estate 371,309 2,071 2,181 — 375,561 Acquisition & Development 118,754 179 2,879 129 121,941 Total Commercial 922,652 7,540 10,712 129 941,033 Residential 290,602 2,608 1,600 119 294,929 Home Equity 58,100 876 39 — 59,015 Consumer 9,359 164 19 63 9,605 Total Loans $ 1,280,713 $ 11,188 $ 12,370 $ 311 $ 1,304,582 Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. A loan that has deteriorated and requires additional collection efforts by the Bank could warrant non-accrual status. A thorough review is presented to the Chief Credit Officer and/or the MLC, as required with respect to any loan which is in a collection process and to make a determination as to whether the loan should be placed on non-accrual status. The placement of loans on non-accrual status is subject to applicable regulatory restrictions and guidelines. Generally, loans should be placed in non-accrual status when the loan reaches 90 days past due, when it becomes likely the borrower cannot or will not make scheduled principal or interest payments, when full repayment of principal and interest is not expected, or when the loan displays potential loss characteristics. Normally, all accrued interest is charged off when a loan is placed in non-accrual status, unless Management believes it is likely the accrued interest will be collected. Any payments subsequently received are applied to principal. To remove a loan from non-accrual status, all principal and interest due must be paid up to date and the Bank is reasonably sure of future satisfactory payment performance. Usually, this requires a six-month recent history of payments due. Removal of a loan from non-accrual status will require the approval of the Chief Credit Officer and/or MLC. The following table presents the classes of the loan portfolio summarized by aging categories of performing loans and non - accrual loans as of March 31, 2019 and December 31, 2018: (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total Past Due Total Loans Non-Accrual 90+ Days Still Accruing March 31, 2019 Commercial Commercial Business $ 472,847 $ 165 $ 130 $ 3,409 $ 3,704 $ 476,551 $ 3,707 $ — Commercial Real Estate 389,336 199 — — 199 389,535 333 — Acquisition & Development 95,686 — — 292 292 95,978 417 — Total Commercial 957,869 364 130 3,701 4,195 962,064 4,457 — Residential 307,936 2,384 50 343 2,777 310,713 2,506 — Home Equity 58,457 193 25 — 218 58,675 83 — Consumer 9,435 5 — 29 34 9,469 29 — Total Loans $ 1,333,697 $ 2,946 $ 205 $ 4,073 $ 7,224 $ 1,340,921 $ 7,075 $ — December 31, 2018 Commercial Commercial Business $ 432,097 $ 6,380 $ 1,746 $ 3,308 $ 11,434 $ 443,531 $ 3,684 $ — Commercial Real Estate 374,880 681 — — 681 375,561 385 — Acquisition & Development 121,644 — — 297 297 121,941 426 — Total Commercial 928,621 7,061 1,746 3,605 12,412 941,033 4,495 — Residential 291,665 1,000 760 1,504 3,264 294,929 2,442 — Home Equity 58,575 400 40 — 440 59,015 84 — Consumer 9,485 28 10 82 120 9,605 82 — Total Loans $ 1,288,346 $ 8,489 $ 2,556 $ 5,191 $ 16,236 $ 1,304,582 $ 7,103 $ — Troubled Debt Restructurings The restructuring of a loan is considered a troubled debt restructuring (“TDR”) if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. At March 31, 2019 and December 31, 2018, the Bank had specific reserve allocations for TDR’s of $484 thousand and $439 thousand, respectively. Loans considered to be troubled debt restructured loans totaled $8.2 million and $8.0 million as of March 31, 2019 and December 31, 2018, respectively. Of these totals, $4.5 million and $4.2 million, respectively, represent accruing troubled debt restructured loans and represent 35% and 27%, respectively of total impaired loans. Meanwhile, as of March 31, 2019, $3.7 million represents three loans to two borrowers that have defaulted under the restructured terms. Two of the three loans, totaling $417 thousand, are commercial acquisition and development loans that were considered TDR’s due to extended interest only periods and/or unsatisfactory repayment structures once transitioned to principal and interest payments. The third loan, to an unrelated borrower, is a $3.3 million commercial term loan which was previously considered a TDR due to multiple interest only periods being provided. This loan defaulted during the three months ended September 30, 2018. The default is due to delayed payments stemming from ongoing negotiations with respect to a third-party operator that is expected to provide a new source of reliable cash flow to service the required payments of this loan. These negotiations are expected to conclude in the second quarter of 201 9 . These borrowers have experienced continued financial difficulty and are considered non-performing loans as of March 31, 2019 and December 31, 2018. A commercial loan in the amount of $128 thousand was classified as impaired and as a TDR in the first quarter of 2018. Upon the identification of financial difficulties on the part of the borrower, this loan was modified to interest-only payments for a twelve-month period with the balance due at maturity. A commercial loan in the amount of $268 thousand was classified as a TDR during the three months ended March 31, 2019. Upon the identification of financial difficulties on the part of the borrower, this loan was modified to a lower loan payment by lengthening the amortization period beyond what is typical for a commercial loan of this type. These loans have paid as agreed since they were renewed under modified terms. Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial Commercial Business 1 $ 268 $ 267 1 $ 128 $ 128 Commercial Real Estate — — — — — — Acquisition & Development — — — — — — Total Commercial 1 268 267 1 128 128 Residential — — — — — — Home Equity — — — — — — Consumer — — — — — — Total 1 $ 268 $ 267 1 $ 128 $ 128 1 The pre-modification and post-modification balances represent the balances outstanding immediately before and after modification of the loan. |
Premises and Equipment
Premises and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Premises and Equipment | Note 5 – Premises and Equipment The Company leases certain premises and equipment under operating and finance leases. At March 31, 2019, the Company had lease liabilities totaling $15.7 million and right-of-use assets totaling $12.9 million related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. For the three months ended March 31, 2019, the weighted average remaining lease term for finance leases was 3.4 years and the weighted average discount rate used in the measurement of finance lease liabilities was 2.86%. For the three months ended March 31, 2019, the weighted average remaining lease term for operating leases was 12.3 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.52%. Lease costs were as follows: (Dollars in thousands) Three Months Ended March 31, 2019 Amortization of right-of-use assets, finance leases $ 20 Interest on lease liabilities, finance leases 2 Operating lease cost 530 Short-term lease cost 25 Variable lease cost 10 Total lease cost $ 587 Rent expense for the three months ended March 31, 2018, prior to the adoption of ASU 2016-02, was $512 thousand. There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the three months ended March 31, 2019. At March 31, 2019, the Company had leases that had not commenced, but will create approximately $2.4 million and $4.1 million of additional lease liabilities and right-of-use assets, respectively, for the Company. Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more are as follows: March 31, 2019 (Dollars in thousands) Finance Leases Operating Leases 2019 $ 69 $ 1,851 2020 66 1,753 2021 66 1,783 2022 27 1,655 2023 — 1,425 2024 and thereafter — 11,050 Total future minimum lease payments $ 228 $ 19,517 Less: Amounts representing interest (10) (4,048) Present value of net future minimum lease payments $ 218 $ 15,469 |
Premises and Equipment | Note 5 – Premises and Equipment The Company leases certain premises and equipment under operating and finance leases. At March 31, 2019, the Company had lease liabilities totaling $15.7 million and right-of-use assets totaling $12.9 million related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. For the three months ended March 31, 2019, the weighted average remaining lease term for finance leases was 3.4 years and the weighted average discount rate used in the measurement of finance lease liabilities was 2.86%. For the three months ended March 31, 2019, the weighted average remaining lease term for operating leases was 12.3 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.52%. Lease costs were as follows: (Dollars in thousands) Three Months Ended March 31, 2019 Amortization of right-of-use assets, finance leases $ 20 Interest on lease liabilities, finance leases 2 Operating lease cost 530 Short-term lease cost 25 Variable lease cost 10 Total lease cost $ 587 Rent expense for the three months ended March 31, 2018, prior to the adoption of ASU 2016-02, was $512 thousand. There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the three months ended March 31, 2019. At March 31, 2019, the Company had leases that had not commenced, but will create approximately $2.4 million and $4.1 million of additional lease liabilities and right-of-use assets, respectively, for the Company. Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more are as follows: March 31, 2019 (Dollars in thousands) Finance Leases Operating Leases 2019 $ 69 $ 1,851 2020 66 1,753 2021 66 1,783 2022 27 1,655 2023 — 1,425 2024 and thereafter — 11,050 Total future minimum lease payments $ 228 $ 19,517 Less: Amounts representing interest (10) (4,048) Present value of net future minimum lease payments $ 218 $ 15,469 |
Borrowed Funds
Borrowed Funds | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Borrowed Funds | Note 6 – Borrowed Funds Short-term borrowings Along with traditional deposits, the Bank has access to short-term borrowings from the FHLB , Federal Reserve discount window borrowings, and Fed Funds purchased from correspondent banks to fund its operations and investments. Short-term borrowings totaled $112.4 million at March 31, 2019, compared to $212.4 million at December 31, 2018. Information related to short-term borrowings is summarized as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Balance at end of period $ 112,412 $ 212,395 Average balance during the period 176,428 171,117 Maximum month-end balance 177,164 264,297 Weighted-average rate during the year 2.63 % 2.27 % Weighted-average rate at end of period 2.70 % 2.62 % Repurchase agreements Along with traditional deposits, the Bank has access to securities sold under agreements to repurchase “repurchase agreements” with customers representing funds deposited by customers, on an overnight basis, that are collateralized by investment securities owned by the Company. Repurchase agreements with customers are included in borrowings section on the consolidated balance sheets. All repurchase agreements are subject to terms and conditions of repurchase/security agreements between the Company and the client and are accounted for as secured borrowings. The Company’s repurchase agreements reflected in liabilities consist of customer accounts and securities which are pledged on an individual security basis. The Company monitors the fair value of the underlying securities on a monthly basis. Repurchase agreements are reflected at the amount of cash received in connection with the transaction and included in Securities sold under agreements to repurchase on the consolidated balance sheets. The primary risk with the Company’s repurchase agreements is market risk associated with the investments securing the transactions, as we may be required to provide additional collateral based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. All of the Company’s repurchase agreements were overnight agreements at March 31, 2019 and December 31, 2018. These borrowings were collateralized with investment securities with a carrying value of $13.0 million and $15.4 million at March 31, 2019 and December 31, 2018, respectively, and were comprised of U.S. Government Agencies and Mortgage backed securities. Declines in the value of the collateral would require the Company to increase the amounts of securities pledged. Repurchase agreements totaled $12.6 million at March 31, 2019, compared to $14.9 million at December 31, 2018. Information related to repurchase agreements is summarized as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Balance at end of period $ 12,553 $ 14,925 Average balance during the period 14,206 18,536 Maximum month-end balance 14,655 20,903 Weighted-average rate during the year 0.38 % 0.30 % Weighted-average rate at end of period 0.52 % 0.16 % Long-term notes from the FHLB were as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Fixed interest rate notes, originating between October 2006 and April 2007, due between October 2021 and April 2022, interest of between 5.18% and 5.20% payable monthly $ 1,727 $ 1,741 Amortizing fixed interest rate note, originating February 2007, due February 2022, payable in monthly installments of $5 thousand, including interest of 5.22% 745 751 $ 2,472 $ 2,492 Subordinated Debt Information related to subordinated debt is summarized as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Balance at end of period $ 17,524 $ 17,524 Average balance during the period 17,524 25,774 Maximum month-end balance 17,524 33,524 Weighted-average rate during the year 6.51 % 6.81 % Weighted-average rate at end of period 6.53 % 6.57 % In March 2007, the Company completed the private placement of $4 million Floating Rate, Trust Preferred Securities through its MVB Financial Statutory Trust I subsidiary (the “Trust”). The Company established the Trust for the sole purpose of issuing the Trust Preferred Securities pursuant to an Amended and Restated Declaration of Trust. The proceeds from the sale of the Trust Preferred Securities will be loaned to the Company under subordinated Debentures (the “Debentures”) issued to the Trust pursuant to an Indenture. The Debentures are the only asset of the Trust. The Trust Preferred Securities have been issued to a pooling vehicle that will use the distributions on the Trust Preferred Securities to securitize note obligations. The securities issued by the Trust are includable for regulatory purposes as a component of the Company’s Tier 1 capital. The Trust Preferred Securities and the Debentures mature in 2037 and have been redeemable by the Company since 2012. Interest payments are due in March, June, September, and December and are adjusted at the interest due dates at a rate of 1.62% over the three-month LIBOR Rate. The obligations of the Company with respect to the issuance of the trust preferred securities constitute a full and unconditional guarantee by the Company of the Trust’s obligations with respect to the trust preferred securities to the extent set forth in the related guarantees. On June 30, 2014, the Company issued its Convertible Subordinated Promissory Notes Due 2024 (the “Notes”) to various investors in the aggregate principal amount of $29,400,000. The Notes were issued in $100,000 increments per Note subject to a minimum investment of $1,000,000 . The Notes expire 10 years after the initial issuance date of the Notes (the “Maturity Date”). Interest on the Notes accrues on the unpaid principal amount of each Note (paid quarterly in arrears on January 1, April 1, July 1, and October 1 of each year) which rate shall be dependent upon the principal invested in the Notes and the holder’s ownership of common stock in the Company. For investments of less than $3,000,000 in Notes, an ownership of Company common stock representing at least 30% of the principal of the Notes acquired, the interest rate on the Notes is 7% per annum. For investments of $3,000,000 or greater in Notes and ownership of the Company’s common stock representing at least 30% of the principal of the Notes acquired, the interest rate on the Notes is 7.5% per annum. For investments of $10,000,000 or greater, the interest rate on the Notes is 7% per annum, regardless of whether the holder owns or acquires MVB common stock. The principal on the Notes shall be paid in full at the Maturity Date. On the fifth anniversary of the issuance of the Notes, a holder may elect to continue to receive the stated fixed rate on the Notes or a floating rate determined by LIBOR plus 5% up to a maximum rate of 9%, adjusted quarterly. The Notes are unsecured and subject to the terms and conditions of any senior debt and after consultation with the Board of Governors of the Federal Reserve System, the Company may, after the Notes have been outstanding for 5 years, and without premium or penalty, prepay all or a portion of the unpaid principal amount of any Note together with the unpaid interest accrued on such portion of the principal amount of such Note. All such prepayments shall be made pro rata among the holders of all outstanding Notes. At the election of a holder, any or all of the Notes may be converted into shares of common stock during the 5-day period after the first, second, third, fourth, and fifth anniversaries of the issuance of the Notes or upon a notice to prepay by the Company. On December 28, 2017, the Company distributed notices to the holders of the Notes that provide that the Company has elected to waive the timing requirements associated with when a conversion may occur and, instead, the Company will accept notices of conversion at any time prior to July 1, 2019, which is the final conversion date for the Notes. The Notes will convert into common stock based on $16 per share of the Company’s common stock. The conversion price will be subject to anti-dilution adjustments for certain events such as stock splits, reclassifications, non-cash distributions, extraordinary cash dividends, pro rata repurchases of common stock, and business combination transactions. The Company must give 20 days’ notice to the holders of the Company’s intent to prepay the Notes, so that holders may execute the conversion right set forth above if a holder so desires. Repayment of the Notes is subordinated to the Company’s outstanding senior debt including (if any) without limitation, senior secured loans. No payment will be made by the Company, directly or indirectly, on the Notes, unless and until all of the senior debt then due has been paid in full. Notwithstanding the foregoing, so long as there exists no event of default under any senior debt, the Company would make, and a holder would receive and retain for the holder’s account, regularly scheduled payments of accrued interest and principal pursuant to the terms of the Notes. The Company must obtain a consent of the holders of the Notes prior to issuing any new senior debt in excess of $15,000,000 after the date of issuance of the Notes and prior to the Maturity Date. An event of default will occur upon the Company’s bankruptcy or any failure to pay interest, principal, or other amounts owing on the Notes when due. Upon the occurrence and during the continuance of an event of default (but subject to the subordination provisions of the Notes) the holders of a majority of the outstanding principal amount of the Notes may declare all or any portion of the outstanding principal amount of the Notes due and payable and demand immediate payment of such amount. The Notes are redeemable, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed on any interest payment date after a date five years from the original issue date. The Company reflects subordinated debt in the amount of $17.5 million as of March 31, 2019 and December 31, 2018 and interest expense of $285 thousand and $558 thousand for the three months ended March 31, 2019 and 2018. In 2018, $16.0 million of subordinated debt was converted into common stock, which resulted in the issuance of 1,000,000 new shares and provided an annual interest expense savings of $1.1 million. A summary of maturities of borrowings and subordinated debt over the next five years is as follows (dollars in thousands): Year Amount 2019 $ 112,477 2020 90 2021 886 2022 1,431 2023 — Thereafter 17,524 $ 132,408 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 7 – Fair Value of Financial Instruments Accounting standards require that the Company adopt fair value measurement for financial assets and financial liabilities. This enhanced guidance for using fair value to measure assets and liabilities applies whenever other standards require or permit assets or liabilities to be measured at fair value. This guidance does not expand the use of fair value in any new circumstances. Accounting standards establish a hierarchical disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. The three broad levels defined by these standards are as follows: Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. Level III: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The methods of determining the fair value of assets and liabilities presented in this footnote are consistent with our methodologies disclosed in Note 17, “Fair Value of Financial Instruments” and Note 18, “Fair Value Measurement” of the Notes to the Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, of the Company’s 2018 Annual Report on Form 10-K, except for the valuation of loans held for investment which was impacted by the adoption of ASU 2016-01. In accordance with ASU 2016-01, the fair value of loans held for investment is estimated using a discounted cash flow analysis. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit, and nonperformance risk of the loans. Loans are considered a Level III classification. Assets Measured on a Recurring Basis As required by accounting standards, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company classified investments in government securities as Level II instruments and valued them using the market approach. The following measurements are made on a recurring basis. • Available-for-sale investment and equity securities – Available-for-sale investment securities are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level I securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level II securities include mortgage-backed securities issued by government sponsored entities and private label entities, municipal bonds, and corporate debt securities. There have been no changes in valuation techniques for the three months ended March 31, 2019. Valuation techniques are consistent with techniques used in prior periods. Certain local municipal securities related to tax increment financing (“TIF”) are independently valued and classified as Level III instruments. • Loans held for sale – The fair value of mortgage loans held for sale is determined, when possible, using quoted secondary-market prices or investor commitments. If no such quoted price exists, the fair value of a loan is determined using quoted prices for a similar asset or assets, adjusted for the specific attributes of that loan, which would be used by other market participants. • Interest rate lock commitment – The Company estimates the fair value of interest rate lock commitments based on the value of the underlying mortgage loan, quoted mortgage-backed security prices, and estimates of the fair value of the mortgage servicing rights and the probability that the mortgage loan will fund within the terms of the interest rate lock commitments. • Mortgage-backed security hedges – MBS hedges are considered derivatives and are recorded at fair value based on observable market data of the individual mortgage-backed security. • Interest rate cap – The fair value of the interest rate cap is determined at the end of each quarter by using Bloomberg Finance which values the interest rate cap using observable inputs from forward and futures yield curves as well as standard market volatility. • Interest rate swap – Interest rate swaps are recorded at fair value based on third party vendors who compile prices from various sources and may determine fair value of identical or similar instruments by using pricing models that consider observable market data. • Fair value hedge – Treated like an interest rate swap, fair value hedges are recorded at fair value based on third party vendors who compile prices from various sources and may determine fair value of identical or similar instruments by using pricing models that consider observable market data. The following tables present the assets reported on the consolidated statements of financial condition at their fair value on a recurring basis as of March 31, 2019 and December 31, 2018 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. March 31, 2019 (Dollars in thousands) Level I Level II Level III Total Assets: U.S. Government Agency securities $ — $ 66,588 $ — $ 66,588 U.S. Sponsored Mortgage backed securities — 47,771 — 47,771 Municipal securities — 63,206 36,801 100,007 Other securities — 10,375 — 10,375 Equity securities 5,819 3,272 750 9,841 Loans held for sale — 65,955 — 65,955 Interest rate lock commitment — — 2,256 2,256 Interest rate swap — 2,666 — 2,666 Interest rate cap — — — — Fair value hedge — 630 — 630 Liabilities: Interest rate swap — 2,666 — 2,666 Fair value hedge — 630 — 630 Mortgage-backed security hedges — 687 — 687 December 31, 2018 (Dollars in thousands) Level I Level II Level III Total Assets: U.S. Government Agency securities $ — $ 77,430 $ — $ 77,430 U.S. Sponsored Mortgage backed securities — 50,115 — 50,115 Municipal securities — 50,639 33,122 83,761 Other securities — 10,308 — 10,308 Equity securities 6,027 3,272 300 9,599 Loans held for sale — 75,807 — 75,807 Interest rate lock commitment — — 1,750 1,750 Interest rate swap — 1,375 — 1,375 Interest rate cap — 8 — 8 Fair value hedge — 343 — 343 Liabilities: Interest rate swap — 1,375 — 1,375 Fair value hedge — 343 — 343 Mortgage-backed security hedges — 853 — 853 The following table represents recurring level III assets: (Dollars in thousands) Interest Rate Lock Commitments Municipal Securities Equity Securities Total Balance at January 1, 2019 $ 1,750 $ 33,122 $ 300 $ 35,172 Realized and unrealized gains included in earnings 506 — — 506 Purchase of securities — — 450 450 Unrealized gain included in other comprehensive income (loss) — 5,012 — 5,012 Unrealized loss included in other comprehensive income (loss) — (1,333) — (1,333) Balance at Balance at March 31, 2019 $ 2,256 $ 36,801 $ 750 $ 39,807 Balance at January 1, 2018 $ 1,426 $ 22,909 $ 900 $ 25,235 Realized and unrealized gains included in earnings 886 — — 886 Unrealized loss included in other comprehensive income (loss) — (338) — (338) Balance at Balance at March 31, 2018 $ 2,312 $ 22,571 $ 900 $ 25,783 Assets Measured on a Nonrecurring Basis The Company may be required, from time to time, to measure certain financial assets, financial liabilities, non-financial assets, and non-financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period. Certain non-financial assets measured at fair value on a nonrecurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment. Non-financial assets measured at fair value on a nonrecurring basis during 2019 and 2018 include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge-off to the allowance for possible loan losses and certain foreclosed assets which, subsequent to their initial recognition, were remeasured at fair value through a write-down included in other noninterest expense. • Impaired loans – Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment using one of several methods, including collateral value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. Collateral values are estimated using Level II inputs based on observable market data or Level III inputs based on customized discounting criteria. For a majority of impaired real estate related loans, the Company obtains a current external appraisal. Other valuation techniques are used as well, including internal valuations, comparable property analysis and contractual sales information. • Other real estate owned – Other real estate owned, which is obtained through the Bank’s foreclosure process is valued utilizing the appraised collateral value. Collateral values are estimated using Level II inputs based on observable market data or Level III inputs based on customized discounting criteria. At the time, the foreclosure is completed, the Company obtains a current external appraisal. Assets measured at fair value on a nonrecurring basis as of March 31, 2019 and December 31, 2018 are included in the table below: March 31, 2019 (Dollars in thousands) Level I Level II Level III Total Impaired loans $ — $ — $ 11,838 $ 11,838 Other real estate owned — — 2,108 2,108 December 31, 2018 (Dollars in thousands) Level I Level II Level III Total Impaired loans $ — $ — $ 11,735 $ 11,735 Other real estate owned — — 2,145 2,145 The following tables presents quantitative information about the Level III significant unobservable inputs for assets and liabilities measured at fair value at March 31, 2019 and December 31, 2018. Quantitative Information about Level III Fair Value Measurements (Dollars in thousands) Fair Value Valuation Technique Unobservable Input Range March 31, 2019 Nonrecurring measurements: Impaired loans $ 11,838 Appraisal of collateral 1 Appraisal adjustments 2 20% - 62% Liquidation expense 2 5% - 10% Other real estate owned $ 2,108 Appraisal of collateral 1 Appraisal adjustments 2 20% - 30% Liquidation expense 2 5% - 10% Recurring measurements: Municipal securities $ 36,801 Appraisal of bond 3 Bond appraisal adjustment 4 5% - 15% Equity securities $ 750 Net asset value Cost minus impairment 0% Interest rate lock commitments $ 2,256 Pricing model Pull through rates 77% - 82% Quantitative Information about Level III Fair Value Measurements (Dollars in thousands) Fair Value Valuation Technique Unobservable Input Range December 31, 2018 Nonrecurring measurements: Impaired loans $ 11,735 Appraisal of collateral 1 Appraisal adjustments 2 20% - 62% Liquidation expense 2 5% - 10% Other real estate owned $ 2,145 Appraisal of collateral 1 Appraisal adjustments 2 20% - 30% Liquidation expense 2 5% - 10% Recurring measurements: Municipal securities $ 33,122 Appraisal of bond 3 Bond appraisal adjustment 4 5% - 15% Equity securities $ 300 Net asset value Cost minus impairment 0% Interest rate lock commitments $ 1,750 Pricing model Pull through rates 80% - 88% 1 Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level III inputs which are not identifiable. 2 Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. 3 Fair value determined through independent analysis of liquidity, rating, yield and duration. 4 Appraisals may be adjusted for qualitative factors such as local economic conditions. Estimated fair value of financial instruments have been determined by the Company using historical data, as generally provided in the Company’s regulatory reports, and an estimation methodology suitable for each category of financial instruments. The carrying values and estimated fair values of the Company’s financial instruments are summarized as follows: Fair Value Measurements at: (Dollars in thousands) Carrying Value Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) March 31, 2019 Financial assets: Cash and cash equivalents $ 17,958 $ 17,958 $ 17,958 $ — $ — Certificates of deposits with other banks 14,778 14,498 — 14,498 — Securities available-for-sale 224,741 224,741 — 187,940 36,801 Equity securities 9,841 9,841 5,819 3,272 750 Loans held for sale 65,955 65,955 — 65,955 — Loans, net 1,329,976 1,322,042 — — 1,322,042 Mortgage servicing rights 171 171 — — 171 Interest rate lock commitment 2,256 2,256 — — 2,256 Interest rate swap 2,666 2,666 — 2,666 — Fair value hedge 630 630 — 630 — Accrued interest receivable 7,205 7,205 — 1,789 5,416 Financial liabilities: Deposits $ 1,430,659 $ 1,376,015 $ — $ 1,376,015 $ — Repurchase agreements 12,553 12,553 — 12,553 — FHLB and other borrowings 114,884 114,886 — 114,886 — Mortgage-backed security hedges 687 687 — 687 — Interest rate swap 2,666 2,666 — 2,666 — Fair value hedge 630 630 — 630 — Accrued interest payable 959 959 — 959 — Subordinated debt 17,524 18,250 — 18,250 — December 31, 2018 Financial assets: Cash and cash equivalents $ 22,221 $ 22,221 $ 22,221 $ — $ — Certificates of deposits with other banks 14,778 14,300 — 14,300 — Securities available-for-sale 221,614 221,614 — 188,492 33,122 Equity securities 9,599 9,599 6,027 3,272 300 Loans held for sale 75,807 75,807 — 75,807 — Loans, net 1,293,427 1,276,065 — — 1,276,065 Mortgage servicing rights 173 173 — — 173 Interest rate lock commitment 1,750 1,750 — — 1,750 Interest rate swap 1,375 1,375 — 1,375 — Interest rate cap 8 8 — 8 — Fair value hedge 343 343 — 343 — Accrued interest receivable 7,710 7,710 — 1,368 6,342 Financial liabilities: Deposits $ 1,309,154 $ 1,249,164 $ — $ 1,249,164 $ — Repurchase agreements 14,925 14,925 — 14,925 — FHLB and other borrowings 214,887 214,969 — 214,969 — Mortgage-backed security hedges 853 853 — 853 — Interest rate swap 1,375 1,375 — 1,375 — Fair value hedge 343 343 — 343 — Accrued interest payable 1,064 1,064 — 1,064 — Subordinated debt 17,524 18,250 — 18,250 — |
Stock Offerings
Stock Offerings | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stock Offerings | Note 8 – Stock Offerings On March 13, 2017, the Company entered into an Investment Agreement (the “Investment Agreement”) with its Chief Executive Officer, Larry F. Mazza (“Mazza”). Pursuant to the Investment Agreement, Mazza committed to subscribe for and purchase, at the Subscription Price, upon expiration of the Rights Offering, the number of shares of the Company’s common stock, if any, equal to the amount by which 100,000 exceeds the number of shares purchased by Mazza in the Rights Offering. Pursuant to the Investment Agreement, Mazza agreed not to sell or otherwise transfer any shares acquired in connection with the Investment Agreement for a period of six months following the closing of the Rights Offering. Larry F. Mazza purchased 100,000 shares of the Company’s common stock: 90,999 under the rights offering and 9,001 shares under the Investment Agreement. On March 13, 2017, the Company filed with the SEC a prospectus supplement and accompanying base prospectus (collectively, the “Prospectus”) relating to the commencement of the Company’s rights offering (the “Rights Offering”), pursuant to which the Company distributed, at no charge, non-transferable subscription rights to the holders of its common stock as of 5:00 p.m., Eastern time, on March 10, 2017. The subscription rights were exercisable for up to a total of 434,783 shares of the Company’s common stock, subject to such terms and conditions as further described in the Prospectus. On April 20, 2017, the Company announced the completion of the rights offering, which expired at 5:00 p.m. Eastern time on April 14, 2017. All 434,783 shares offered in the rights offering were subscribed for, resulting in new capital of approximately $5.0 million. Computershare, who served as subscription agent, completed its review and tabulation of subscriptions on April 19, 2017. Computershare issued the shares acquired in the rights offering by book entry in the Company’s stock ownership records, which are maintained by Computershare, as transfer agent, on or about April 20, 2017. On June 30, 2014, the Company filed Certificates of Designations for its Convertible Noncumulative Perpetual Preferred Stock, Series B (“Class B Preferred”) and its Convertible Noncumulative Perpetual Preferred Stock, Series C (“Class C Preferred”). The Class B Preferred Certificate designated 400 shares of preferred stock as Class B Preferred shares. The Class B Preferred shares carry an annual dividend rate of 6% and are convertible into shares of Company common stock within 30 days after the first, second, third, fourth and fifth anniversaries of the original issue date, based on a common stock price of $16 per share, as adjusted for future corporate activities. On December 28, 2017, the Company distributed a notice to each of the holders of the Class B Preferred Stock regarding the Company’s agreement to waive the timing requirements associated with when a conversion may occur and, instead, the Company will accept notices of conversion at any time prior to July 30, 2019, which is the final conversion date for the Preferred Stock. The Class B Preferred shares are redeemable by the Company on or after the fifth anniversary of the original issue date for Liquidation Amount, as defined therein, plus declared and unpaid dividends. Redemption is subject to any necessary regulatory approvals. In the event of liquidation of the Company, shares of Class B Preferred stock shall be junior to creditors of the Company and to the shares of Senior Noncumulative Perpetual Preferred Stock, Series A. Holders of Class B Preferred shares shall have no voting rights, except for authorization of senior shares of stock, amendment to the Class B Preferred shares, share exchanges, reclassifications or changes of control, or as required by law. The Class C Preferred Certificate designated 383.4 shares of preferred stock as Class C Preferred shares. The Class C Preferred shares carry an annual dividend rate of 6.5% and are convertible into shares of Company common stock within 30 days after the first, second, third, fourth and fifth anniversaries of the original issue date, based on a common stock price of $16 per share, as adjusted for future corporate activities. On December 28, 2017, the Company distributed a notice to each of the holders of the Class C Preferred Stock regarding the Company’s agreement to waive the timing requirements associated with when a conversion may occur and, instead, the Company will accept notices of conversion at any time prior to July 30, 2019, which is the final conversion date for the Preferred Stock. The Class C Preferred shares are redeemable by the Company on or after the fifth anniversary of the original issue date for Liquidation Amount, as defined therein, plus declared and unpaid dividends. Redemption is subject to any necessary regulatory approvals. In the event of liquidation of the Company, shares of Class C Preferred stock |
Net Income Per Common Share
Net Income Per Common Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Note 9 – Net Income Per Common Share The Company determines basic earnings per share by dividing net income less preferred stock dividends by the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined by dividing net income less dividends on convertible preferred stock plus interest on convertible subordinated debt by the weighted average number of shares outstanding increased by both the number of shares that would be issued assuming the exercise of stock options or restricted stock unit awards under the Company’s 2003 and 2013 Stock Incentive Plans and the conversion of preferred stock and subordinated debt if dilutive. Three Months Ended March 31 (Dollars in thousands except shares and per share data) 2019 2018 Numerator for basic earnings per share: Net income $ 3,192 $ 2,594 Less: Dividends on preferred stock 121 121 Net income available to common shareholders - basic $ 3,071 $ 2,473 Numerator for diluted earnings per share: Net income available to common shareholders - basic $ 3,071 $ 2,473 Add: Dividends on convertible preferred stock 121 — Add: Interest on subordinated debt (tax effected) 184 404 Net income available to common shareholders - diluted $ 3,376 $ 2,877 Denominator: Total average shares outstanding 11,607,543 10,474,138 Effect of dilutive convertible preferred stock 489,625 — Effect of dilutive convertible subordinated debt 837,500 1,837,500 Effect of dilutive stock options and restricted stock units 242,613 402,715 Total diluted average shares outstanding 13,177,281 12,714,353 Earnings per share - basic $ 0.26 $ 0.24 Earnings per share - diluted $ 0.26 $ 0.23 For the three months ended March 31, 2019 and 2018, approximately 0 and 490 thousand, respectively, of options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive. For the three months ended March 31, 2019 and 2018, approximately 0 and 3 thousand |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 10 – Segment Reporting The Company has identified three reportable segments: commercial and retail banking; mortgage banking; and financial holding company. Revenue from commercial and retail banking activities consists primarily of interest earned on loans and investment securities and service charges on deposit accounts. Revenue from financial holding company activities is mainly comprised of intercompany service income and dividends. Revenue from the mortgage banking activities is comprised of interest earned on loans and fees received as a result of the mortgage origination process. The mortgage banking services are conducted by MVB Mortgage. Information about the reportable segments and reconciliation to the consolidated financial statements for the three month periods ended March 31, 2019 and March 31, 2018 are as follows: Three Months Ended March 31, 2019 Commercial & Retail Banking Mortgage Banking Financial Holding Company Intercompany Eliminations Consolidated (Dollars in thousands) Interest income $ 18,327 $ 1,538 $ 1 $ (243) $ 19,623 Interest expense 4,754 993 285 (381) 5,651 Net interest income 13,573 545 (284) 138 13,972 Provision for loan losses 247 53 — — 300 Net interest income after provision for loan losses 13,326 492 (284) 138 13,672 Noninterest Income: Mortgage fee income 109 6,697 — (136) 6,670 Other income 1,566 476 1,779 (1,726) 2,095 Total noninterest income 1,675 7,173 1,779 (1,862) 8,765 Noninterest Expenses: Salaries and employee benefits 4,395 5,159 2,180 — 11,734 Other expense 5,352 2,025 1,061 (1,724) 6,714 Total noninterest expenses 9,747 7,184 3,241 (1,724) 18,448 Income (loss) before income taxes 5,254 481 (1,746) — 3,989 Income tax expense (benefit) 1,054 146 (403) — 797 Net income (loss) $ 4,200 $ 335 $ (1,343) $ — $ 3,192 Preferred stock dividends — — 121 — 121 Net income (loss) available to common shareholders $ 4,200 $ 335 $ (1,464) $ — $ 3,071 Capital Expenditures for the three month period ended March 31, 2019 $ 89 $ 4 $ 22 $ — $ 115 Total Assets as of March 31, 2019 1,790,725 175,218 197,191 (373,226) 1,789,908 Total Assets as of December 31, 2018 1,753,932 165,430 196,537 (364,930) 1,750,969 Goodwill as of March 31, 2019 1,598 16,882 — — 18,480 Goodwill as of December 31, 2018 1,598 16,882 — — 18,480 Three Months Ended March 31, 2018 Commercial & Retail Banking Mortgage Banking Financial Holding Company Intercompany Eliminations Consolidated (Dollars in thousands) Interest income $ 13,838 $ 1,335 $ 1 $ (120) $ 15,054 Interest expense 2,674 727 558 (370) 3,589 Net interest income 11,164 608 (557) 250 11,465 Provision for loan losses 417 57 — — 474 Net interest income after provision for loan losses 10,747 551 (557) 250 10,991 Noninterest income: Mortgage fee income 140 6,673 — (250) 6,563 Other income 1,780 517 1,553 (1,374) 2,476 Total noninterest income 1,920 7,190 1,553 (1,624) 9,039 Noninterest Expense: Salaries and employee benefits 3,569 5,416 1,488 — 10,473 Other expense 4,559 2,122 959 (1,374) 6,266 Total noninterest expenses 8,128 7,538 2,447 (1,374) 16,739 Income (loss) before income taxes 4,539 203 (1,451) — 3,291 Income tax expense (benefit) 978 53 (334) — 697 Net income (loss) $ 3,561 $ 150 $ (1,117) $ — $ 2,594 Preferred stock dividends — — 121 — 121 Net income (loss) available to common shareholders $ 3,561 $ 150 $ (1,238) $ — $ 2,473 Capital Expenditures for the three month period ended March 31, 2018 $ 403 $ 78 $ 25 $ — $ 506 Total Assets as of March 31, 2018 1,581,673 148,789 185,012 (333,956) 1,581,518 Total Assets as of December 31, 2017 1,533,497 149,323 184,600 (333,118) 1,534,302 Goodwill as of March 31, 2018 1,598 16,882 — — 18,480 Goodwill as of December 31, 2017 1,598 16,882 — — 18,480 Commercial & Retail Banking For the three months ended March 31, 2019, the Commercial & Retail Banking segment earned $4.2 million compared to $3.6 million in 2018. Net interest income increased by $2.4 million, primarily the result of an increase of $4.3 million in interest and fees on loans , which was partially offset by an increase of $1.8 million in interest on deposits. Noninterest income decreased by $245 thousand which was the result of a decrease of $260 thousand in gain on sale of securities. Noninterest expense increased by $1.6 million, primarily the result of an increase of $826 thousand in salaries and employee benefits expense, an increase of $347 thousand in other operating expenses, an increase of $210 thousand in occupancy and equipment expense, and an increase of $150 thousand in data processing and communications . In addition, provision expense decreased by $170 thousand due to decreased loan volume in the first quarter of 201 9 versus the same quarter in 20 18 , fluctuating historical loan loss rates, increased specific loan loss allocations, and a lower level of charge-offs in the first quarter of 201 9 versus 201 8 . Mortgage Banki ng For the three months ended March 31, 2019, the Mortgage Banking segment earned $335 thousand compared to $150 thousand in 2018. Net interest income decreased $63 thousand, which was the result of an increase of $266 thousand in interest on FHLB and other borrowings , which was partially offset by an increase of $203 thousand in interest and fees on loans. The increase in interest on FHLB and other borrowings was due to an increase of $5.6 million in average borrowings and an increase in short-term borrowing rates . Noninterest income decreased by $17 thousand, primarily the result of a decrease $56 thousand in the gain on derivative , which was partially offset by an increase of $24 thousand in mortgage fee income . The decrease in the gain on derivatives was largely the result of a $26.9 million decrease in the derivative asset, as the locked pipeline related to the derivative asset increased 42.7% in the first quarter of 2019 compared to a n increase of 67.6% in the first quarter of 2018. Noninterest expense decreased by $354 thousand, which was the result of a decrease of $257 thousand in salaries and employee benefits e xpense and a decrease of $83 thousand in mortgage processing expense. The decrease in salaries and employee benefits expense was primarily the result of a decrease in the overall contractual commissions to loan officers and management . Financial Holding Company For the three months ended March 31, 2019, the Financial Holding Company segment lost $1.3 million compared to a loss of $1.1 million in 2018. Interest expense decreased $273 thousand, noninterest income increased $226 thousand, and noninterest expense increased $794 thousand. In addition, the income tax benefit increased $69 thousand. The decrease in interest expense was due to a $273 thousand decrease in interest on subordinated debt. The increase in noninterest income was primarily the result of an increase of $350 thousand in intercompany services income related to Regulation W , which was partially offset by a decrease of $184 thousand in the gain on sale of securities. T he increase in noninterest expense was primarily the result of an increase of $692 thousand in salaries and employee benefits expense and an increase of $60 thousand in professional fees. |
Pension and Supplemental Execut
Pension and Supplemental Executive Retirement Plans | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Pension and Supplemental Executive Retirement Plans | Note 11 – Pension and Supplemental Executive Retirement Plans The Company participates in a trusteed pension plan known as the Allegheny Group Retirement Plan covering virtually all full-time employees. Benefits are based on years of service and the employee’s compensation. Accruals under the Plan were frozen as of May 31, 2014. Freezing the plan resulted in a re-measurement of the pension obligations and plan assets as of the freeze date. The pension obligation was re-measured using the discount rate based on the Citigroup Above Median Pension Discount Curve in effect on May 31, 2014 of 4.46% . Information pertaining to the activity in the Company’s defined benefit plan, using the latest available actuarial valuations with a measurement date of March 31, 2019 and 2018 is as follows: (Dollars in thousands) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Service cost $ — $ — Interest cost 98 88 Expected Return on Plan Assets (102) (93) Amortization of Net Actuarial Loss 68 77 Amortization of Prior Service Cost — — Net Periodic Benefit Cost $ 64 $ 72 Contributions Paid $ 90 $ 79 On June 19, 2017, the Company and MVB Mortgage approved a Supplemental Executive Retirement Plan (“SERP”), pursuant to which the Chief Executive Officer of MVB Mortgage is entitled to receive certain supplemental nonqualified retirement benefits. The SERP took effect on December 31, 2017. If executive completes three years of continuous employment with MVB Mortgage prior to retirement date (which shall be no earlier than the date he attains age 55) he will, upon retirement, be entitled to receive $1.8 million p ayable in 180 equal consecutive monthly |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Comprehensive Income | Note 12 – Comprehensive Income The following tables present the components of accumulated other comprehensive income (“AOCI”) three months ended March 31, 2019 and 2018: (Dollars in thousands) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Details about AOCI Components Amount Reclassified from AOCI Amount Reclassified from AOCI Affected line item in the Statement where Net Income is presented Available-for-sale securities Unrealized holding gains (losses) $ (118) $ 326 Gain (loss) on sale of securities (118) 326 Total before tax 32 (88) Income tax expense (86) 238 Net of tax Defined benefit pension plan items Amortization of net actuarial loss (68) (77) Salaries and benefits (68) (77) Total before tax 18 31 Income tax expense (50) (46) Net of tax Investment hedge Carrying value adjustment 458 — Interest on investment securities - taxable 458 — Total before tax (124) — Income tax expense 334 — Net of tax Total reclassifications $ 198 $ 192 (Dollars in thousands) Unrealized gains (losses) on available for-sale securities Defined benefit pension plan items Investment Hedge Total Balance at January 1, 2019 $ (3,384) $ (3,422) $ — $ (6,806) Other comprehensive loss before reclassification 1,357 (242) — 1,115 Amounts reclassified from AOCI 86 50 (334) (198) Net current period OCI 1,443 (192) (334) 917 Balance at March 31, 2019 $ (1,941) $ (3,614) $ (334) $ (5,889) Balance at January 1, 2018 $ (5) $ (2,983) $ (2,988) Other comprehensive loss before reclassification (3,247) (46) (3,293) Amounts reclassified from AOCI (238) 46 (192) Net current period OCI (3,485) — (3,485) Stranded AOCI — (646) (646) Mark to Market on equity positions held at December 31, 2017 (98) — (98) Balance at March 31, 2018 $ (3,588) $ (3,629) $ (7,217) |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 13 – Revenue Recognition The Company records revenue from contracts with customers in accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). Under Topic 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods. The Company’s primary sources of revenue are derived from interest and fees earned on loans, investment securities, and other financial instruments that are not within the scope of Topic 606. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The Company also completed its evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contract-revenue (i.e. gross versus net). Based on the evaluation, the Company determined that the classification of certain debit and credit card processing related costs should change (i.e. costs previously recorded as expense in now recorded as contract-revenue). These classification changes resulted in immaterial changes to both revenue and expense. Since there was no net income impact upon adoption of the new guidance, a cumulative effect adjustment to beginning retained earnings was not deemed necessary. Consistent with the modified retrospective approach, the Company did not adjust prior period amounts related to the debit and credit card related cost reclassifications discussed above. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees, monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Visa Debit Card and Interchange Income Visa debit card and interchange income is primarily comprised of interchange fees earned whenever the Bank’s debit and credit cards are processed through card payment networks, such as Visa. The Bank’s performance obligation for debit card and interchange income is generally satisfied, and the related revenue recognized, on a transactional basis. Payment is typically received immediately or in the following month. Other Operating Income Other operating income is primarily comprised of ATM fees, wire transfer fees, travelers check fees, revenue streams such as safe deposit box rental fees, and other miscellaneous service charges. ATM fees, wire transfer fees and travelers check fees are primarily generated when a Bank’s cardholder uses a non-Bank ATM or a non-Bank cardholder uses a Bank ATM. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Bank determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Bank’s performance obligations for fees and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. The Bank’s performance obligation for the gains and losses on sales of other real estate owned is satisfied, and the related revenue recognized, after each sale of other real estate owned is closed. The following presents noninterest income, segregated by revenue streams in scope and out of scope of Topic 606, for the periods indicated: (Dollars in thousands) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Service charges on deposit accounts $ 315 $ 185 Visa debit card and interchange income 141 150 Other 113 46 Noninterest income in scope of Topic 606 569 381 Noninterest income out of scope of Topic 606 8,196 8,658 Total noninterest income $ 8,765 $ 9,039 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 14 – Subsequent Event MVB continues to carve a niche in the fintech industry by making strategic investments in fintech companies. As of the date of this filing, MVB has invested a total of $3.1 million in various fintech companies. After a recent valuation of MVB’s fintech investment portfolio, MVB intends to recognize a pre-tax gain on its equity investment of $13.5 million that will be recognized in the second quarter of 2019. MVB’s fintech investment portfolio is now valued at approximately $17.3 million. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with instructions to Form 10 - Q. Accordingly, they do not include all the information and footnotes required by GAAP for annual year-end financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. The consolidated balance sheet as of December 31, 2018 has been derived from audited financial statements included in the Company’s 2018 filing on Form 10-K. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. |
Use of Estimates | The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates, such as the allowance for loan losses, are based upon known facts and circumstances. Estimates are revised by management in the period such facts and circumstances change. Actual results could differ from those estimates. |
Consolidation | All significant inter-company accounts and transactions have been eliminated in consolidation. |
Leases | On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) . This pronouncement requires that lessees and lessors recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. ASU 2016-02 provides for a modified retrospective transition approach requiring lessees to recognize and measure leases on the balance sheet at the beginning of either the earliest period presented or as of the beginning of the period of adoption with the option to elect certain practical expedients. The Company has elected to apply ASU 2016-02 as of the beginning of the period (January 1, 2019) and has not restated comparative periods. Of the optional practical expedients available under ASU 2016-02, all have been adopted. Upon adoption, the Company recognized right-of-use assets and related lease liabilities totaling $12.9 million and $15.7 million, respectively. Certain of the Company's leases contain options to renew the lease; however, some of these renewal options are not included in the calculation of the lease liabilities as they are not reasonably expected to be exercised. The Company's leases do not contain residual value guarantees or material variable lease payments, and the Company does not have any material restrictions or covenants imposed by leases that would impact the Company's ability to pay dividends or cause the Company to incur additional financial obligations. The Company has made an accounting policy election to not apply the recognition requirements in Topic 842 to short-term leases. The Company has also elected to use the practical expedient to make an accounting policy election for property leases to include both lease and non-lease components as a single component and account for as a lease. |
Recent Accounting Pronouncements | In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This update requires a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Reform Act, which was enacted on December 22, 2017. The Tax Reform Act included a reduction to the corporate income tax rate from 34 percent to 21 percent effective January 1, 2018. The amendments in the ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company elected to early adopt ASU 2018-02 during the first quarter of 2018 and elected to reclassify the income tax effects of the Tax Reform Act from AOCI to retained earnings. The amount of the reclassification is the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate, which amounted to $646 thousand . In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities , which amends the existing hedge accounting model and expands an entity’s ability to hedge nonfinancial and financial risk components and reduce complexity in fair value hedges of interest-rate risk. The ASU eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The ASU also changes certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company adopted this ASU in accordance with paragraph ASC 815-20-65-3 subpart C. The adoption of this ASU did not have a significant impact on the Company’s financial condition, results of operations and consolidated financial statements . The Company can now employ additional hedging strategies as described above, including the ability to apply fair value hedge accounting to a specified pool of assets by excluding the portion of the hedged items related to prepayments, defaults and other events. This allows the Company to better align its accounting and the financial reporting of its hedging activities with their economic objectives thereby reducing the earnings volatility resulting from these hedging activities. In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . This ASU amends guidance on the amortization period of premiums on certain purchased callable debt securities. Specifically, the amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. The amendments affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date (that is, at a premium). For public companies, this update is effective for fiscal years beginning after December 15, 2018, including all interim periods within those fiscal years. The adoption of this guidance wa s not material to the consolidated financial statements, as it is our current policy to amortize premiums of investment securities to the earliest call date. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . Topic 350, Intangibles – Goodwill and Other (Topic 350), currently requires an entity that has not elected the private company alternative for goodwill to perform a two-step test to determine the amount, if any, of goodwill impairment. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the entity performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit to address concerns over the cost and complexity of the two-step goodwill impairment test. The amendments in this Update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. For public companies, this update will be effective for fiscal years beginning after December 15, 2019, including all interim periods within those fiscal years. The adoption of this guidance will not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The new guidance replaces 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. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company has formed an implementation team led by the CFO, that also includes other lines of business and functions within the Company. The Company has also engaged a third party to assist with a data gap analysis and will utilize the data to determine the impact of the pronouncement. Additionally, the Company has researched and acquired software to assist in the development of models that can meet the requirements of the new guidance. While this standard may potentially have a material impact on the Company’s consolidated financial statements, we are still in the process of completing our evaluation. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:(1) A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 initially required transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) - Targeted Improvements , which, among other things, provides an additional transition method that would allow entities to not apply the guidance in ASU 2016-02 in the comparative periods presented in the financial statements and instead recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB also issued ASU 2018-20, Leases (Topic 842) - Narrow Scope Improvements , for Lessors which provides certain policy elections and changes lessor accounting for sales and similar taxes and certain lessor costs. Upon the adoption of ASU 2016-02, ASU 2018-11, and ASU 2018-20 on January 1, 2019, the Company recognized right-of-use asset s and related lease liabilitie s totaling $12.9 million an d $15.7 million, respectively. The initial balance sheet gross up upon adoption was primarily related to operating leases of certain real estate properties and financing leases of certain office equipment. The Company has no material subleases or leasing arrangements for which it is the lessor of property or equipment. The Company applied certain practical expedients provided under ASU 2016-02 whereby the Company did reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for any existing leases. The Company did not apply the recognition requirements of ASU 2016-02 to any short-term leases (as defined by related accounting guidance). The Company accounted for lease and non-lease components separately because such amounts are readily determinable under our lease contracts and because this election resulted in a lower impact on our balance sheet. The Company utilized the modified-retrospective transition approach prescribed by ASU 2018-11. See Note 5, “Premises and Equipment” of the Notes to the Consolidated Financial Statements, included in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.` In January 2016, the FASB issued ASU 2016-01, Accounting for Financial Instruments - Overall: Classification and Measurement (Subtopic 825-10) . Amendments within ASU 2016-01 that relate to non-public entities have been excluded from this presentation. The amendments in this ASU 2016-01 address the following: 1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; 2) simplify the impairment assessment of equity investments without readily-determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value; 3) eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; 4) require entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; 5) require separate presentation in other comprehensive income for the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; 6) require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and 7) clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this guidance in the first quarter of 2018. The adoption of ASU 2016-01 on January 1, 2018 did not have a material impact on the Company’s Consolidated Financial Statements. In accordance with 4 ) above, the Company disclose s the fair value of its loan portfolio on a quarterly basis using an exit price notion. See Note 7, “Fair Value of Financial Instruments” of the Notes to the Consolidated Financial Statements, included in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost and Fair Values of Investment Securities Available-for-sale | Amortized cost and fair values of investment securities available-for-sale at March 31, 2019 are summarized as follows: (Dollars in thousands) Amortized Cost Unrealized Gain Unrealized Loss Fair Value U. S. Agency securities $ 67,631 $ — $ (1,043) $ 66,588 U.S. Sponsored Mortgage-backed securities 49,223 1 (1,453) 47,771 Municipal securities 100,253 241 (487) 100,007 Total debt securities 217,107 242 (2,983) 214,366 Other securities 10,294 98 (17) 10,375 Total investment securities available-for-sale $ 227,401 $ 340 $ (3,000) $ 224,741 Amortized cost and fair values of investment securities available-for-sale at December 31, 2018 are summarized as follows: (Dollars in thousands) Amortized Cost Unrealized Gain Unrealized Loss Fair Value U. S. Agency securities $ 79,041 $ 14 $ (1,625) $ 77,430 U.S. Sponsored Mortgage-backed securities 52,154 — (2,039) 50,115 Municipal securities 84,747 206 (1,192) 83,761 Total debt securities 215,942 220 (4,856) 211,306 Other securities 10,308 68 (68) 10,308 Total investment securities available-for-sale $ 226,250 $ 288 $ (4,924) $ 221,614 The following table summarizes amortized cost and fair values of debt securities by maturity: March 31, 2019 Available for sale (Dollars in thousands) Amortized Cost Fair Value Within one year $ 11,085 $ 11,280 After one year, but within five 31,156 30,716 After five years, but within ten 23,163 22,725 After ten years 151,703 149,645 Total $ 217,107 $ 214,366 |
Investments in an Unrealized Loss Position | The following table discloses investments in an unrealized loss position at March 31, 2019: (Dollars in thousands) Less than 12 months 12 months or more Description and number of positions Fair Value Unrealized Loss Fair Value Unrealized Loss U.S. Agency securities (51) $ 6,898 $ (70) $ 59,690 $ (973) U.S. Sponsored Mortgage-backed securities (39) — — 45,326 (1,453) Municipal securities (55) 523 (7) 29,130 (480) Other securities (2) — — 1,018 (17) $ 7,421 $ (77) $ 135,164 $ (2,923) The following table discloses investments in an unrealized loss position at December 31, 2018: (Dollars in thousands) Less than 12 months 12 months or more Description and number of positions Fair Value Unrealized Loss Fair Value Unrealized Loss U.S. Agency securities (54) $ 9,762 $ (123) $ 63,740 $ (1,502) U.S. Sponsored Mortgage-backed securities (42) 2,360 (32) 47,755 (2,007) Municipal securities (78) 5,936 (46) 35,955 (1,146) Other securities (2) 2,452 (48) 1,018 (20) $ 20,510 $ (249) $ 148,468 $ (4,675) |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Components of Loans in the Consolidated Balance Sheet | The components of loans in the Consolidated Balance Sheet s at March 31, 2019 and December 31, 2018, were as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Commercial and Non-Residential Real Estate $ 962,064 $ 941,033 Residential Real Estate 310,713 294,929 Home Equity 58,675 59,015 Consumer 9,469 9,605 Total Loans $ 1,340,921 $ 1,304,582 Deferred loan origination fees and costs, net 297 (216) Loans receivable $ 1,341,218 $ 1,304,366 |
Allowance for Credit Losses on Financing Receivables and Schedule of Loans Evaluated for Impairment | The following tables summarize the primary segments of the ALL, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2019: (Dollars in thousands) Commercial Residential Home Equity Consumer Total January 1, 2019 $ 8,605 $ 1,405 $ 684 $ 245 $ 10,939 Charge-offs — — — — — Recoveries — 1 1 1 3 Provision (recovery) 259 11 19 11 300 ALL balance at March 31, 2019 $ 8,864 $ 1,417 $ 704 $ 257 $ 11,242 Individually evaluated for impairment $ 1,123 $ — $ — $ — $ 1,123 Collectively evaluated for impairment $ 7,741 $ 1,417 $ 704 $ 257 $ 10,119 The following table summarizes the primary segments of the Company loan portfolio as of March 31, 2019: (Dollars in thousands) Commercial Residential Home Equity Consumer Total Individually evaluated for impairment $ 9,914 $ 2,890 $ 121 $ 36 $ 12,961 Collectively evaluated for impairment 952,150 307,823 58,554 9,433 1,327,960 Total Loans 962,064 310,713 58,675 9,469 1,340,921 The following tables summarize the primary segments of the ALL, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2018: (Dollars in thousands) Commercial Residential Home Equity Consumer Total January 1, 2018 $ 7,804 $ 1,119 $ 705 $ 250 $ 9,878 Charge-offs (324) (11) — (21) (356) Recoveries 2 9 56 4 71 Provision 516 60 (68) (34) 474 ALL balance at March 31, 2018 $ 7,998 $ 1,177 $ 693 $ 199 $ 10,067 Individually evaluated for impairment $ 915 $ — $ — $ — $ 915 Collectively evaluated for impairment $ 7,083 $ 1,177 $ 693 $ 199 $ 9,152 The following table summarizes the primary segments of the Company loan portfolio as of March 31, 2018: (Dollars in thousands) Commercial Residential Home Equity Consumer Total Individually evaluated for impairment $ 12,957 $ 1,707 $ 44 $ 43 $ 14,751 Collectively evaluated for impairment 811,668 258,806 59,482 11,866 1,141,822 Total Loans $ 824,625 $ 260,513 $ 59,526 $ 11,909 $ 1,156,573 |
Impaired Loans by Class | The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of March 31, 2019 and December 31, 2018: Impaired Loans with Specific Allowance Impaired Loans with No Specific Allowance Total Impaired Loans (Dollars in thousands) Recorded Investment Related Allowance Recorded Investment Recorded Investment Unpaid Principal Balance March 31, 2019 Commercial Commercial Business $ 4,925 $ 744 $ 616 $ 5,541 $ 5,566 Commercial Real Estate 1,826 374 343 2,169 2,227 Acquisition & Development 1,787 5 417 2,204 3,583 Total Commercial 8,538 1,123 1,376 9,914 11,376 Residential — — 2,890 2,890 2,915 Home Equity — — 121 121 126 Consumer — — 36 36 36 Total Impaired Loans $ 8,538 $ 1,123 $ 4,423 $ 12,961 $ 14,453 December 31, 2018 Commercial Commercial Business $ 4,885 $ 668 $ 387 $ 5,272 $ 5,292 Commercial Real Estate 1,842 375 396 2,238 2,300 Acquisition & Development — — 2,224 2,224 3,601 Total Commercial 6,727 1,043 3,007 9,734 11,193 Residential — — 2,831 2,831 2,882 Home Equity — — 123 123 123 Consumer — — 90 90 316 Total Impaired Loans $ 6,727 $ 1,043 $ 6,051 $ 12,778 $ 14,514 |
Average Recorded Investment in Impaired Loans and Related Interest Income Recognized | Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 (Dollars in thousands) Average Investment in Impaired Loans Interest Income Recognized on Accrual Basis Interest Income Recognized on Cash Basis Average Investment in Impaired Loans Interest Income Recognized on Accrual Basis Interest Income Recognized on Cash Basis Commercial Commercial Business $ 3,608 $ — $ — $ 4,525 $ 38 $ 53 Commercial Real Estate 4,038 40 39 7,431 21 23 Acquisition & Development 2,215 31 29 1,837 — — Total Commercial 9,861 71 68 13,793 59 76 Residential 2,858 3 3 1,747 5 48 Home Equity 122 1 1 65 — — Consumer 79 — — 132 — — Total $ 12,920 $ 75 $ 72 $ 15,737 $ 64 $ 124 |
Classes of the Loan Portfolio Summarized by the Aggregate Pass and the Criticized Categories | The following table represents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of March 31, 2019 and December 31, 2018: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total March 31, 2019 Commercial Commercial Business $ 463,995 $ 6,238 $ 6,318 $ — $ 476,551 Commercial Real Estate 382,037 4,985 2,513 — 389,535 Acquisition & Development 92,822 177 2,854 125 95,978 Total Commercial 938,854 11,400 11,685 125 962,064 Residential 306,347 2,573 1,675 118 310,713 Home Equity 57,767 870 38 — 58,675 Consumer 9,287 164 18 — 9,469 Total Loans $ 1,312,255 $ 15,007 $ 13,416 $ 243 $ 1,340,921 December 31, 2018 Commercial Commercial Business $ 432,589 $ 5,290 $ 5,652 $ — $ 443,531 Commercial Real Estate 371,309 2,071 2,181 — 375,561 Acquisition & Development 118,754 179 2,879 129 121,941 Total Commercial 922,652 7,540 10,712 129 941,033 Residential 290,602 2,608 1,600 119 294,929 Home Equity 58,100 876 39 — 59,015 Consumer 9,359 164 19 63 9,605 Total Loans $ 1,280,713 $ 11,188 $ 12,370 $ 311 $ 1,304,582 |
Classes of the Loan Portfolio Summarized by Aging Categories | The following table presents the classes of the loan portfolio summarized by aging categories of performing loans and non - accrual loans as of March 31, 2019 and December 31, 2018: (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total Past Due Total Loans Non-Accrual 90+ Days Still Accruing March 31, 2019 Commercial Commercial Business $ 472,847 $ 165 $ 130 $ 3,409 $ 3,704 $ 476,551 $ 3,707 $ — Commercial Real Estate 389,336 199 — — 199 389,535 333 — Acquisition & Development 95,686 — — 292 292 95,978 417 — Total Commercial 957,869 364 130 3,701 4,195 962,064 4,457 — Residential 307,936 2,384 50 343 2,777 310,713 2,506 — Home Equity 58,457 193 25 — 218 58,675 83 — Consumer 9,435 5 — 29 34 9,469 29 — Total Loans $ 1,333,697 $ 2,946 $ 205 $ 4,073 $ 7,224 $ 1,340,921 $ 7,075 $ — December 31, 2018 Commercial Commercial Business $ 432,097 $ 6,380 $ 1,746 $ 3,308 $ 11,434 $ 443,531 $ 3,684 $ — Commercial Real Estate 374,880 681 — — 681 375,561 385 — Acquisition & Development 121,644 — — 297 297 121,941 426 — Total Commercial 928,621 7,061 1,746 3,605 12,412 941,033 4,495 — Residential 291,665 1,000 760 1,504 3,264 294,929 2,442 — Home Equity 58,575 400 40 — 440 59,015 84 — Consumer 9,485 28 10 82 120 9,605 82 — Total Loans $ 1,288,346 $ 8,489 $ 2,556 $ 5,191 $ 16,236 $ 1,304,582 $ 7,103 $ — |
Troubled Debt Restructurings on Financing Receivables | Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial Commercial Business 1 $ 268 $ 267 1 $ 128 $ 128 Commercial Real Estate — — — — — — Acquisition & Development — — — — — — Total Commercial 1 268 267 1 128 128 Residential — — — — — — Home Equity — — — — — — Consumer — — — — — — Total 1 $ 268 $ 267 1 $ 128 $ 128 1 The pre-modification and post-modification balances represent the balances outstanding immediately before and after modification of the loan. |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Summary of Lease Cost | Lease costs were as follows: (Dollars in thousands) Three Months Ended March 31, 2019 Amortization of right-of-use assets, finance leases $ 20 Interest on lease liabilities, finance leases 2 Operating lease cost 530 Short-term lease cost 25 Variable lease cost 10 Total lease cost $ 587 |
Summary of Operating Lease Liability | Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more are as follows: March 31, 2019 (Dollars in thousands) Finance Leases Operating Leases 2019 $ 69 $ 1,851 2020 66 1,753 2021 66 1,783 2022 27 1,655 2023 — 1,425 2024 and thereafter — 11,050 Total future minimum lease payments $ 228 $ 19,517 Less: Amounts representing interest (10) (4,048) Present value of net future minimum lease payments $ 218 $ 15,469 |
Summary of Finance Lease Liability | Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more are as follows: March 31, 2019 (Dollars in thousands) Finance Leases Operating Leases 2019 $ 69 $ 1,851 2020 66 1,753 2021 66 1,783 2022 27 1,655 2023 — 1,425 2024 and thereafter — 11,050 Total future minimum lease payments $ 228 $ 19,517 Less: Amounts representing interest (10) (4,048) Present value of net future minimum lease payments $ 218 $ 15,469 |
Borrowed Funds (Tables)
Borrowed Funds (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Information Related to Short-term Borrowings | Information related to short-term borrowings is summarized as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Balance at end of period $ 112,412 $ 212,395 Average balance during the period 176,428 171,117 Maximum month-end balance 177,164 264,297 Weighted-average rate during the year 2.63 % 2.27 % Weighted-average rate at end of period 2.70 % 2.62 % |
Information Related To Repurchase Agreements | Information related to repurchase agreements is summarized as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Balance at end of period $ 12,553 $ 14,925 Average balance during the period 14,206 18,536 Maximum month-end balance 14,655 20,903 Weighted-average rate during the year 0.38 % 0.30 % Weighted-average rate at end of period 0.52 % 0.16 % |
Long-term Notes from the FHLB | Long-term notes from the FHLB were as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Fixed interest rate notes, originating between October 2006 and April 2007, due between October 2021 and April 2022, interest of between 5.18% and 5.20% payable monthly $ 1,727 $ 1,741 Amortizing fixed interest rate note, originating February 2007, due February 2022, payable in monthly installments of $5 thousand, including interest of 5.22% 745 751 $ 2,472 $ 2,492 |
Information Related to Subordinated Debt | Information related to subordinated debt is summarized as follows: (Dollars in thousands) March 31, 2019 December 31, 2018 Balance at end of period $ 17,524 $ 17,524 Average balance during the period 17,524 25,774 Maximum month-end balance 17,524 33,524 Weighted-average rate during the year 6.51 % 6.81 % Weighted-average rate at end of period 6.53 % 6.57 % |
Maturities of Borrowings and Subordinated Debt | A summary of maturities of borrowings and subordinated debt over the next five years is as follows (dollars in thousands): Year Amount 2019 $ 112,477 2020 90 2021 886 2022 1,431 2023 — Thereafter 17,524 $ 132,408 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair value of assets and liabilities | |
Schedule of Recurring Level III Assets | The following table represents recurring level III assets: (Dollars in thousands) Interest Rate Lock Commitments Municipal Securities Equity Securities Total Balance at January 1, 2019 $ 1,750 $ 33,122 $ 300 $ 35,172 Realized and unrealized gains included in earnings 506 — — 506 Purchase of securities — — 450 450 Unrealized gain included in other comprehensive income (loss) — 5,012 — 5,012 Unrealized loss included in other comprehensive income (loss) — (1,333) — (1,333) Balance at Balance at March 31, 2019 $ 2,256 $ 36,801 $ 750 $ 39,807 Balance at January 1, 2018 $ 1,426 $ 22,909 $ 900 $ 25,235 Realized and unrealized gains included in earnings 886 — — 886 Unrealized loss included in other comprehensive income (loss) — (338) — (338) Balance at Balance at March 31, 2018 $ 2,312 $ 22,571 $ 900 $ 25,783 |
Quantitative Information About the Level III Significant Unobservable Inputs for Assets and Liabilities Measured at Fair Value on Nonrecurring Basis | The following tables presents quantitative information about the Level III significant unobservable inputs for assets and liabilities measured at fair value at March 31, 2019 and December 31, 2018. Quantitative Information about Level III Fair Value Measurements (Dollars in thousands) Fair Value Valuation Technique Unobservable Input Range March 31, 2019 Nonrecurring measurements: Impaired loans $ 11,838 Appraisal of collateral 1 Appraisal adjustments 2 20% - 62% Liquidation expense 2 5% - 10% Other real estate owned $ 2,108 Appraisal of collateral 1 Appraisal adjustments 2 20% - 30% Liquidation expense 2 5% - 10% Recurring measurements: Municipal securities $ 36,801 Appraisal of bond 3 Bond appraisal adjustment 4 5% - 15% Equity securities $ 750 Net asset value Cost minus impairment 0% Interest rate lock commitments $ 2,256 Pricing model Pull through rates 77% - 82% Quantitative Information about Level III Fair Value Measurements (Dollars in thousands) Fair Value Valuation Technique Unobservable Input Range December 31, 2018 Nonrecurring measurements: Impaired loans $ 11,735 Appraisal of collateral 1 Appraisal adjustments 2 20% - 62% Liquidation expense 2 5% - 10% Other real estate owned $ 2,145 Appraisal of collateral 1 Appraisal adjustments 2 20% - 30% Liquidation expense 2 5% - 10% Recurring measurements: Municipal securities $ 33,122 Appraisal of bond 3 Bond appraisal adjustment 4 5% - 15% Equity securities $ 300 Net asset value Cost minus impairment 0% Interest rate lock commitments $ 1,750 Pricing model Pull through rates 80% - 88% 1 Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level III inputs which are not identifiable. 2 Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. 3 Fair value determined through independent analysis of liquidity, rating, yield and duration. 4 Appraisals may be adjusted for qualitative factors such as local economic conditions. |
Carrying Values and Estimated Fair Values of Financial Instruments | The carrying values and estimated fair values of the Company’s financial instruments are summarized as follows: Fair Value Measurements at: (Dollars in thousands) Carrying Value Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) March 31, 2019 Financial assets: Cash and cash equivalents $ 17,958 $ 17,958 $ 17,958 $ — $ — Certificates of deposits with other banks 14,778 14,498 — 14,498 — Securities available-for-sale 224,741 224,741 — 187,940 36,801 Equity securities 9,841 9,841 5,819 3,272 750 Loans held for sale 65,955 65,955 — 65,955 — Loans, net 1,329,976 1,322,042 — — 1,322,042 Mortgage servicing rights 171 171 — — 171 Interest rate lock commitment 2,256 2,256 — — 2,256 Interest rate swap 2,666 2,666 — 2,666 — Fair value hedge 630 630 — 630 — Accrued interest receivable 7,205 7,205 — 1,789 5,416 Financial liabilities: Deposits $ 1,430,659 $ 1,376,015 $ — $ 1,376,015 $ — Repurchase agreements 12,553 12,553 — 12,553 — FHLB and other borrowings 114,884 114,886 — 114,886 — Mortgage-backed security hedges 687 687 — 687 — Interest rate swap 2,666 2,666 — 2,666 — Fair value hedge 630 630 — 630 — Accrued interest payable 959 959 — 959 — Subordinated debt 17,524 18,250 — 18,250 — December 31, 2018 Financial assets: Cash and cash equivalents $ 22,221 $ 22,221 $ 22,221 $ — $ — Certificates of deposits with other banks 14,778 14,300 — 14,300 — Securities available-for-sale 221,614 221,614 — 188,492 33,122 Equity securities 9,599 9,599 6,027 3,272 300 Loans held for sale 75,807 75,807 — 75,807 — Loans, net 1,293,427 1,276,065 — — 1,276,065 Mortgage servicing rights 173 173 — — 173 Interest rate lock commitment 1,750 1,750 — — 1,750 Interest rate swap 1,375 1,375 — 1,375 — Interest rate cap 8 8 — 8 — Fair value hedge 343 343 — 343 — Accrued interest receivable 7,710 7,710 — 1,368 6,342 Financial liabilities: Deposits $ 1,309,154 $ 1,249,164 $ — $ 1,249,164 $ — Repurchase agreements 14,925 14,925 — 14,925 — FHLB and other borrowings 214,887 214,969 — 214,969 — Mortgage-backed security hedges 853 853 — 853 — Interest rate swap 1,375 1,375 — 1,375 — Fair value hedge 343 343 — 343 — Accrued interest payable 1,064 1,064 — 1,064 — Subordinated debt 17,524 18,250 — 18,250 — |
Recurring | |
Fair value of assets and liabilities | |
Financial Assets and Liabilities Measured at Fair Value | The following tables present the assets reported on the consolidated statements of financial condition at their fair value on a recurring basis as of March 31, 2019 and December 31, 2018 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. March 31, 2019 (Dollars in thousands) Level I Level II Level III Total Assets: U.S. Government Agency securities $ — $ 66,588 $ — $ 66,588 U.S. Sponsored Mortgage backed securities — 47,771 — 47,771 Municipal securities — 63,206 36,801 100,007 Other securities — 10,375 — 10,375 Equity securities 5,819 3,272 750 9,841 Loans held for sale — 65,955 — 65,955 Interest rate lock commitment — — 2,256 2,256 Interest rate swap — 2,666 — 2,666 Interest rate cap — — — — Fair value hedge — 630 — 630 Liabilities: Interest rate swap — 2,666 — 2,666 Fair value hedge — 630 — 630 Mortgage-backed security hedges — 687 — 687 December 31, 2018 (Dollars in thousands) Level I Level II Level III Total Assets: U.S. Government Agency securities $ — $ 77,430 $ — $ 77,430 U.S. Sponsored Mortgage backed securities — 50,115 — 50,115 Municipal securities — 50,639 33,122 83,761 Other securities — 10,308 — 10,308 Equity securities 6,027 3,272 300 9,599 Loans held for sale — 75,807 — 75,807 Interest rate lock commitment — — 1,750 1,750 Interest rate swap — 1,375 — 1,375 Interest rate cap — 8 — 8 Fair value hedge — 343 — 343 Liabilities: Interest rate swap — 1,375 — 1,375 Fair value hedge — 343 — 343 Mortgage-backed security hedges — 853 — 853 |
Non-recurring | |
Fair value of assets and liabilities | |
Financial Assets and Liabilities Measured at Fair Value | Assets measured at fair value on a nonrecurring basis as of March 31, 2019 and December 31, 2018 are included in the table below: March 31, 2019 (Dollars in thousands) Level I Level II Level III Total Impaired loans $ — $ — $ 11,838 $ 11,838 Other real estate owned — — 2,108 2,108 December 31, 2018 (Dollars in thousands) Level I Level II Level III Total Impaired loans $ — $ — $ 11,735 $ 11,735 Other real estate owned — — 2,145 2,145 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income Per Common Share | Three Months Ended March 31 (Dollars in thousands except shares and per share data) 2019 2018 Numerator for basic earnings per share: Net income $ 3,192 $ 2,594 Less: Dividends on preferred stock 121 121 Net income available to common shareholders - basic $ 3,071 $ 2,473 Numerator for diluted earnings per share: Net income available to common shareholders - basic $ 3,071 $ 2,473 Add: Dividends on convertible preferred stock 121 — Add: Interest on subordinated debt (tax effected) 184 404 Net income available to common shareholders - diluted $ 3,376 $ 2,877 Denominator: Total average shares outstanding 11,607,543 10,474,138 Effect of dilutive convertible preferred stock 489,625 — Effect of dilutive convertible subordinated debt 837,500 1,837,500 Effect of dilutive stock options and restricted stock units 242,613 402,715 Total diluted average shares outstanding 13,177,281 12,714,353 Earnings per share - basic $ 0.26 $ 0.24 Earnings per share - diluted $ 0.26 $ 0.23 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Information About the Reportable Segments and Reconciliation to the Consolidated Financial Statements | Information about the reportable segments and reconciliation to the consolidated financial statements for the three month periods ended March 31, 2019 and March 31, 2018 are as follows: Three Months Ended March 31, 2019 Commercial & Retail Banking Mortgage Banking Financial Holding Company Intercompany Eliminations Consolidated (Dollars in thousands) Interest income $ 18,327 $ 1,538 $ 1 $ (243) $ 19,623 Interest expense 4,754 993 285 (381) 5,651 Net interest income 13,573 545 (284) 138 13,972 Provision for loan losses 247 53 — — 300 Net interest income after provision for loan losses 13,326 492 (284) 138 13,672 Noninterest Income: Mortgage fee income 109 6,697 — (136) 6,670 Other income 1,566 476 1,779 (1,726) 2,095 Total noninterest income 1,675 7,173 1,779 (1,862) 8,765 Noninterest Expenses: Salaries and employee benefits 4,395 5,159 2,180 — 11,734 Other expense 5,352 2,025 1,061 (1,724) 6,714 Total noninterest expenses 9,747 7,184 3,241 (1,724) 18,448 Income (loss) before income taxes 5,254 481 (1,746) — 3,989 Income tax expense (benefit) 1,054 146 (403) — 797 Net income (loss) $ 4,200 $ 335 $ (1,343) $ — $ 3,192 Preferred stock dividends — — 121 — 121 Net income (loss) available to common shareholders $ 4,200 $ 335 $ (1,464) $ — $ 3,071 Capital Expenditures for the three month period ended March 31, 2019 $ 89 $ 4 $ 22 $ — $ 115 Total Assets as of March 31, 2019 1,790,725 175,218 197,191 (373,226) 1,789,908 Total Assets as of December 31, 2018 1,753,932 165,430 196,537 (364,930) 1,750,969 Goodwill as of March 31, 2019 1,598 16,882 — — 18,480 Goodwill as of December 31, 2018 1,598 16,882 — — 18,480 Three Months Ended March 31, 2018 Commercial & Retail Banking Mortgage Banking Financial Holding Company Intercompany Eliminations Consolidated (Dollars in thousands) Interest income $ 13,838 $ 1,335 $ 1 $ (120) $ 15,054 Interest expense 2,674 727 558 (370) 3,589 Net interest income 11,164 608 (557) 250 11,465 Provision for loan losses 417 57 — — 474 Net interest income after provision for loan losses 10,747 551 (557) 250 10,991 Noninterest income: Mortgage fee income 140 6,673 — (250) 6,563 Other income 1,780 517 1,553 (1,374) 2,476 Total noninterest income 1,920 7,190 1,553 (1,624) 9,039 Noninterest Expense: Salaries and employee benefits 3,569 5,416 1,488 — 10,473 Other expense 4,559 2,122 959 (1,374) 6,266 Total noninterest expenses 8,128 7,538 2,447 (1,374) 16,739 Income (loss) before income taxes 4,539 203 (1,451) — 3,291 Income tax expense (benefit) 978 53 (334) — 697 Net income (loss) $ 3,561 $ 150 $ (1,117) $ — $ 2,594 Preferred stock dividends — — 121 — 121 Net income (loss) available to common shareholders $ 3,561 $ 150 $ (1,238) $ — $ 2,473 Capital Expenditures for the three month period ended March 31, 2018 $ 403 $ 78 $ 25 $ — $ 506 Total Assets as of March 31, 2018 1,581,673 148,789 185,012 (333,956) 1,581,518 Total Assets as of December 31, 2017 1,533,497 149,323 184,600 (333,118) 1,534,302 Goodwill as of March 31, 2018 1,598 16,882 — — 18,480 Goodwill as of December 31, 2017 1,598 16,882 — — 18,480 |
Pension and Supplemental Exec_2
Pension and Supplemental Executive Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Activity in the Defined Benefit Plan | Information pertaining to the activity in the Company’s defined benefit plan, using the latest available actuarial valuations with a measurement date of March 31, 2019 and 2018 is as follows: (Dollars in thousands) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Service cost $ — $ — Interest cost 98 88 Expected Return on Plan Assets (102) (93) Amortization of Net Actuarial Loss 68 77 Amortization of Prior Service Cost — — Net Periodic Benefit Cost $ 64 $ 72 Contributions Paid $ 90 $ 79 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Income | The following tables present the components of accumulated other comprehensive income (“AOCI”) three months ended March 31, 2019 and 2018: (Dollars in thousands) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Details about AOCI Components Amount Reclassified from AOCI Amount Reclassified from AOCI Affected line item in the Statement where Net Income is presented Available-for-sale securities Unrealized holding gains (losses) $ (118) $ 326 Gain (loss) on sale of securities (118) 326 Total before tax 32 (88) Income tax expense (86) 238 Net of tax Defined benefit pension plan items Amortization of net actuarial loss (68) (77) Salaries and benefits (68) (77) Total before tax 18 31 Income tax expense (50) (46) Net of tax Investment hedge Carrying value adjustment 458 — Interest on investment securities - taxable 458 — Total before tax (124) — Income tax expense 334 — Net of tax Total reclassifications $ 198 $ 192 |
Components of Accumulated Other Comprehensive Income | (Dollars in thousands) Unrealized gains (losses) on available for-sale securities Defined benefit pension plan items Investment Hedge Total Balance at January 1, 2019 $ (3,384) $ (3,422) $ — $ (6,806) Other comprehensive loss before reclassification 1,357 (242) — 1,115 Amounts reclassified from AOCI 86 50 (334) (198) Net current period OCI 1,443 (192) (334) 917 Balance at March 31, 2019 $ (1,941) $ (3,614) $ (334) $ (5,889) Balance at January 1, 2018 $ (5) $ (2,983) $ (2,988) Other comprehensive loss before reclassification (3,247) (46) (3,293) Amounts reclassified from AOCI (238) 46 (192) Net current period OCI (3,485) — (3,485) Stranded AOCI — (646) (646) Mark to Market on equity positions held at December 31, 2017 (98) — (98) Balance at March 31, 2018 $ (3,588) $ (3,629) $ (7,217) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue, Noninterest Income | The following presents noninterest income, segregated by revenue streams in scope and out of scope of Topic 606, for the periods indicated: (Dollars in thousands) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Service charges on deposit accounts $ 315 $ 185 Visa debit card and interchange income 141 150 Other 113 46 Noninterest income in scope of Topic 606 569 381 Noninterest income out of scope of Topic 606 8,196 8,658 Total noninterest income $ 8,765 $ 9,039 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease liability | $ 15,469 | |
Right-of-use assest | $ 12,900 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease liability | $ 15,700 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Income tax expense (benefit) | $ 646 | |
Lease liability | $ 15,469 | |
Accounting Standards Update 2016-02 | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Right-of-use asset | $ 12,900 | |
Lease liability | $ 15,700 |
Investment Securities - Held-to
Investment Securities - Held-to-maturity (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Held-to-maturity securities | $ 0 | $ 0 |
Investment Securities - Availab
Investment Securities - Available-for-sale (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 227,401 | |
Unrealized Gain | 340 | |
Unrealized Loss | (3,000) | |
Fair Value | 224,741 | $ 221,614 |
Amortized Cost Basis, Including Equity and Other | 226,250 | |
Unrealized Gain, Including Equity and Other | 288 | |
Unrealized Loss, Including Equity and Other | (4,924) | |
Securities available-for-sale, including equity and other | 221,614 | |
U. S. Agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 67,631 | 79,041 |
Unrealized Gain | 0 | 14 |
Unrealized Loss | (1,043) | (1,625) |
Fair Value | 66,588 | 77,430 |
U.S. Sponsored Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 49,223 | 52,154 |
Unrealized Gain | 1 | 0 |
Unrealized Loss | (1,453) | (2,039) |
Fair Value | 47,771 | 50,115 |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 100,253 | 84,747 |
Unrealized Gain | 241 | 206 |
Unrealized Loss | (487) | (1,192) |
Fair Value | 100,007 | 83,761 |
Total debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 217,107 | 215,942 |
Unrealized Gain | 242 | 220 |
Unrealized Loss | (2,983) | (4,856) |
Fair Value | 214,366 | 211,306 |
Other securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,294 | |
Unrealized Gain | 98 | |
Unrealized Loss | (17) | |
Fair Value | $ 10,375 | |
Amortized Cost Basis, Including Equity and Other | 10,308 | |
Unrealized Gain, Including Equity and Other | 68 | |
Unrealized Loss, Including Equity and Other | (68) | |
Securities available-for-sale, including equity and other | $ 10,308 |
Investment Securities - Summary
Investment Securities - Summary of Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Amortized Cost | $ 227,401 | |
Fair Value | ||
Fair Value | 224,741 | $ 221,614 |
Carrying value of investment securities pledged | 58,300 | |
Total debt securities | ||
Amortized Cost | ||
Within one year | 11,085 | |
After one year, but within five | 31,156 | |
After five years, but within ten | 23,163 | |
After ten years | 151,703 | |
Amortized Cost | 217,107 | 215,942 |
Fair Value | ||
Within one year | 11,280 | |
After one year, but within five | 30,716 | |
After five years, but within ten | 22,725 | |
After ten years | 149,645 | |
Fair Value | $ 214,366 | $ 211,306 |
Investment Securities - Summa_2
Investment Securities - Summary of Unrealized Loss Positions (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)security | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)security | |
Investments in an unrealized loss position | |||
Amount of pretax loss if securities in an unrealized loss position are sold | $ 3,000 | ||
Sales of debt securities, available-for-sale | 13,694 | $ 680 | |
Sales of investment securities, available-for-sale | 680 | ||
Gain on sale of debt securities | 33 | 326 | |
Gain on sale of available-for-sale securities | 326 | ||
Loss on sale of debt securities | 151 | 0 | |
Loss on sale of available-for-sale securities | 0 | ||
Sales of investment securities available-for-sale, unrealized gain | 180 | $ (30) | |
Investments in an Unrealized Loss Position | |||
Less than 12 months, fair value | 7,421 | $ 20,510 | |
Less than 12 months, unrealized loss | (77) | (249) | |
12 months or more, fair value | 135,164 | 148,468 | |
12 months or more, unrealized loss | $ (2,923) | $ (4,675) | |
U. S. Agency securities | |||
Investments in an unrealized loss position | |||
Number of investments in an unrealized loss position | security | 51 | 54 | |
Investments in an Unrealized Loss Position | |||
Less than 12 months, fair value | $ 6,898 | $ 9,762 | |
Less than 12 months, unrealized loss | (70) | (123) | |
12 months or more, fair value | 59,690 | 63,740 | |
12 months or more, unrealized loss | $ (973) | $ (1,502) | |
U.S. Sponsored Mortgage-backed securities | |||
Investments in an unrealized loss position | |||
Number of investments in an unrealized loss position | security | 39 | 42 | |
Investments in an Unrealized Loss Position | |||
Less than 12 months, fair value | $ 0 | $ 2,360 | |
Less than 12 months, unrealized loss | 0 | (32) | |
12 months or more, fair value | 45,326 | 47,755 | |
12 months or more, unrealized loss | $ (1,453) | $ (2,007) | |
Municipal securities | |||
Investments in an unrealized loss position | |||
Number of investments in an unrealized loss position | security | 55 | 78 | |
Investments in an Unrealized Loss Position | |||
Less than 12 months, fair value | $ 523 | $ 5,936 | |
Less than 12 months, unrealized loss | (7) | (46) | |
12 months or more, fair value | 29,130 | 35,955 | |
12 months or more, unrealized loss | $ (480) | $ (1,146) | |
Other securities | |||
Investments in an unrealized loss position | |||
Number of investments in an unrealized loss position | security | 2 | 2 | |
Investments in an Unrealized Loss Position | |||
Less than 12 months, fair value | $ 0 | $ 2,452 | |
Less than 12 months, unrealized loss | 0 | (48) | |
12 months or more, fair value | 1,018 | 1,018 | |
12 months or more, unrealized loss | $ (17) | $ (20) |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2019USD ($)componentloanpropertyborrowercategorynumberOfQuartersrelationshipmethod | Dec. 31, 2018USD ($) | |
Financing Receivable, Impaired [Line Items] | ||
Allowance for loan losses, number of evaluation components | component | 2 | |
Impaired loans collectively evaluated | $ 1,800,000 | $ 1,700,000 |
Impaired loans, related reserves | $ 187,000 | 218,000 |
Number of rolling quarters | numberOfQuarters | 12 | |
Liability for unfunded commitments | $ 284,000 | $ 284,000 |
Total valuation methods used on impaired loans | method | 3 | |
Impaired loans, identified during the period | $ 328,000 | |
Reclassification to other real estate owned | 63,000 | |
Classification to performing loans | 50,000 | |
Foreclosed properties held | $ 2,100,000 | |
Number of points in internal risk rating system | category | 9 | |
Number of categories in internal risk rating system considered as not criticized | category | 6 | |
Commercial relationship credit review threshold amount | $ 1,000,000 | |
Past due period before loans placed in non-accrual status | 90 days | |
Recent loan payment history before removal from non-accrual status | 6 months | |
Commercial and Non-Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Foreclosure of loan relationship | relationship | 2 | |
Forclosure of unrelated borrower | loan | 3 | |
Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans (as a percentage) | 42.00% | |
Number foreclosed properties held | property | 12 | |
Foreclosed properties held | $ 877,000 | |
Consumer | ||
Financing Receivable, Impaired [Line Items] | ||
Number of additional collateralized loans in the process of foreclosure | loan | 3 | |
Investment in loans in the process of foreclosure | $ 270,000 | |
Investment in loans in the process of foreclosure, related allowance | 0 | |
Total Recorded Investment In Impaired Financing Receivables | Credit Concentration Risk | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans | $ 183,000 | |
Increase (decrease) in impaired loans (as a percentage) | 1.40% | |
Commercial Loan Relationship One | Commercial and Non-Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Number foreclosed properties held | property | 2 | |
Commercial Loan Relationship One | Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Foreclosed properties held | $ 294,000 | |
Commercial Loan Relationship Two | Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Number foreclosed properties held | property | 7 | |
Foreclosed properties held | $ 174,000 | |
Commercial Loan Relationship Three | Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Foreclosed properties held | $ 409,000 | |
Forclosure of unrelated borrower | borrower | 3 | |
Other Loan Relationships | Residential Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Increase (decrease) in impaired loans (as a percentage) | 58.00% | |
Number foreclosed properties held | property | 3 | |
Foreclosed properties held | $ 1,200,000 |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses - Loan Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Components of loans | |||
Total Loans | $ 1,340,921 | $ 1,304,582 | $ 1,156,573 |
Deferred loan origination fees and costs, net | 297 | (216) | |
Loans receivable | 1,341,218 | 1,304,366 | |
Commercial and Non-Residential Real Estate | |||
Components of loans | |||
Total Loans | 962,064 | 941,033 | 824,625 |
Residential Real Estate | |||
Components of loans | |||
Total Loans | 310,713 | 294,929 | 260,513 |
Home Equity | |||
Components of loans | |||
Total Loans | 58,675 | 59,015 | |
Consumer | |||
Components of loans | |||
Total Loans | $ 9,469 | $ 9,605 | $ 11,909 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses - Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Changes in the allowance for loan losses | ||
Balance at beginning of period | $ 10,939 | $ 9,878 |
Charge-offs | 0 | (356) |
Recoveries | 3 | 71 |
Provision (recovery) | 300 | 474 |
Balance at end of period | 11,242 | 10,067 |
Individually evaluated for impairment | 1,123 | 915 |
Collectively evaluated for impairment | 10,119 | 9,152 |
Commercial and Non-Residential Real Estate | ||
Changes in the allowance for loan losses | ||
Balance at beginning of period | 8,605 | 7,804 |
Charge-offs | 0 | (324) |
Recoveries | 0 | 2 |
Provision (recovery) | 259 | 516 |
Balance at end of period | 8,864 | 7,998 |
Individually evaluated for impairment | 1,123 | 915 |
Collectively evaluated for impairment | 7,741 | 7,083 |
Residential Real Estate | ||
Changes in the allowance for loan losses | ||
Balance at beginning of period | 1,405 | 1,119 |
Charge-offs | 0 | (11) |
Recoveries | 1 | 9 |
Provision (recovery) | 11 | 60 |
Balance at end of period | 1,417 | 1,177 |
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 1,417 | 1,177 |
Home Equity | ||
Changes in the allowance for loan losses | ||
Balance at beginning of period | 684 | 705 |
Charge-offs | 0 | 0 |
Recoveries | 1 | 56 |
Provision (recovery) | 19 | (68) |
Balance at end of period | 704 | 693 |
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 704 | 693 |
Consumer | ||
Changes in the allowance for loan losses | ||
Balance at beginning of period | 245 | 250 |
Charge-offs | 0 | (21) |
Recoveries | 1 | 4 |
Provision (recovery) | 11 | (34) |
Balance at end of period | 257 | 199 |
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | $ 257 | $ 199 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses - Primary Segments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Primary segments of the loan portfolio: | |||
Individually evaluated for impairment | $ 12,961 | $ 14,751 | |
Collectively evaluated for impairment | 1,327,960 | 1,141,822 | |
Total Loans | 1,340,921 | $ 1,304,582 | 1,156,573 |
Commercial and Non-Residential Real Estate | |||
Primary segments of the loan portfolio: | |||
Individually evaluated for impairment | 9,914 | 12,957 | |
Collectively evaluated for impairment | 952,150 | 811,668 | |
Total Loans | 962,064 | 941,033 | 824,625 |
Residential Real Estate | |||
Primary segments of the loan portfolio: | |||
Individually evaluated for impairment | 2,890 | 1,707 | |
Collectively evaluated for impairment | 307,823 | 258,806 | |
Total Loans | 310,713 | 294,929 | 260,513 |
Home Equity | |||
Primary segments of the loan portfolio: | |||
Individually evaluated for impairment | 121 | 44 | |
Collectively evaluated for impairment | 58,554 | 59,482 | |
Total Loans | 58,675 | 59,015 | 59,526 |
Consumer | |||
Primary segments of the loan portfolio: | |||
Individually evaluated for impairment | 36 | 43 | |
Collectively evaluated for impairment | 9,433 | 11,866 | |
Total Loans | $ 9,469 | $ 9,605 | $ 11,909 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | $ 8,538 | $ 6,727 | |
Impaired loans with specific allowance, related allowance | 1,123 | 1,043 | |
Impaired loans with no specific allowance, recorded investment | 4,423 | 6,051 | |
Total impaired loans, recorded investment | 12,961 | 12,778 | |
Total impaired loans, unpaid principal balance | 14,453 | 14,514 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 12,920 | $ 15,737 | |
Interest Income Recognized on Accrual Basis | 75 | 64 | |
Interest Income Recognized on Cash Basis | 72 | 124 | |
Commercial and Non-Residential Real Estate | |||
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | 8,538 | 6,727 | |
Impaired loans with specific allowance, related allowance | 1,123 | 1,043 | |
Impaired loans with no specific allowance, recorded investment | 1,376 | 3,007 | |
Total impaired loans, recorded investment | 9,914 | 9,734 | |
Total impaired loans, unpaid principal balance | 11,376 | 11,193 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 9,861 | 13,793 | |
Interest Income Recognized on Accrual Basis | 71 | 59 | |
Interest Income Recognized on Cash Basis | 68 | 76 | |
Commercial and Non-Residential Real Estate | Commercial Business | |||
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | 4,925 | 4,885 | |
Impaired loans with specific allowance, related allowance | 744 | 668 | |
Impaired loans with no specific allowance, recorded investment | 616 | 387 | |
Total impaired loans, recorded investment | 5,541 | 5,272 | |
Total impaired loans, unpaid principal balance | 5,566 | 5,292 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 3,608 | 4,525 | |
Interest Income Recognized on Accrual Basis | 0 | 38 | |
Interest Income Recognized on Cash Basis | 0 | 53 | |
Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | 1,826 | 1,842 | |
Impaired loans with specific allowance, related allowance | 374 | 375 | |
Impaired loans with no specific allowance, recorded investment | 343 | 396 | |
Total impaired loans, recorded investment | 2,169 | 2,238 | |
Total impaired loans, unpaid principal balance | 2,227 | 2,300 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 4,038 | 7,431 | |
Interest Income Recognized on Accrual Basis | 40 | 21 | |
Interest Income Recognized on Cash Basis | 39 | 23 | |
Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | 1,787 | 0 | |
Impaired loans with specific allowance, related allowance | 5 | 0 | |
Impaired loans with no specific allowance, recorded investment | 417 | 2,224 | |
Total impaired loans, recorded investment | 2,204 | 2,224 | |
Total impaired loans, unpaid principal balance | 3,583 | 3,601 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 2,215 | 1,837 | |
Interest Income Recognized on Accrual Basis | 31 | 0 | |
Interest Income Recognized on Cash Basis | 29 | 0 | |
Residential Real Estate | |||
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | 0 | 0 | |
Impaired loans with specific allowance, related allowance | 0 | 0 | |
Impaired loans with no specific allowance, recorded investment | 2,890 | 2,831 | |
Total impaired loans, recorded investment | 2,890 | 2,831 | |
Total impaired loans, unpaid principal balance | 2,915 | 2,882 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 2,858 | 1,747 | |
Interest Income Recognized on Accrual Basis | 3 | 5 | |
Interest Income Recognized on Cash Basis | 3 | 48 | |
Home Equity | |||
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | 0 | 0 | |
Impaired loans with specific allowance, related allowance | 0 | 0 | |
Impaired loans with no specific allowance, recorded investment | 121 | 123 | |
Total impaired loans, recorded investment | 121 | 123 | |
Total impaired loans, unpaid principal balance | 126 | 123 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 122 | 65 | |
Interest Income Recognized on Accrual Basis | 1 | 0 | |
Interest Income Recognized on Cash Basis | 1 | 0 | |
Consumer | |||
Impaired loans by class | |||
Impaired loans with specific allowance, recorded investment | 0 | 0 | |
Impaired loans with specific allowance, related allowance | 0 | 0 | |
Impaired loans with no specific allowance, recorded investment | 36 | 90 | |
Total impaired loans, recorded investment | 36 | 90 | |
Total impaired loans, unpaid principal balance | 36 | $ 316 | |
Average recorded investment in impaired loans and related interest income recognized | |||
Average Investment in Impaired Loans | 79 | 132 | |
Interest Income Recognized on Accrual Basis | 0 | 0 | |
Interest Income Recognized on Cash Basis | $ 0 | $ 0 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses - Internal Risk Rating Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | $ 1,340,921 | $ 1,304,582 | $ 1,156,573 |
Commercial and Non-Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 962,064 | 941,033 | 824,625 |
Commercial and Non-Residential Real Estate | Commercial Business | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 476,551 | 443,531 | |
Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 389,535 | 375,561 | |
Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 95,978 | 121,941 | |
Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 310,713 | 294,929 | 260,513 |
Home Equity | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 58,675 | 59,015 | 59,526 |
Consumer | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 9,469 | 9,605 | $ 11,909 |
Pass | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 1,312,255 | 1,280,713 | |
Pass | Commercial and Non-Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 938,854 | 922,652 | |
Pass | Commercial and Non-Residential Real Estate | Commercial Business | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 463,995 | 432,589 | |
Pass | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 382,037 | 371,309 | |
Pass | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 92,822 | 118,754 | |
Pass | Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 306,347 | 290,602 | |
Pass | Home Equity | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 57,767 | 58,100 | |
Pass | Consumer | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 9,287 | 9,359 | |
Special Mention | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 15,007 | 11,188 | |
Special Mention | Commercial and Non-Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 11,400 | 7,540 | |
Special Mention | Commercial and Non-Residential Real Estate | Commercial Business | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 6,238 | 5,290 | |
Special Mention | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 4,985 | 2,071 | |
Special Mention | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 177 | 179 | |
Special Mention | Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 2,573 | 2,608 | |
Special Mention | Home Equity | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 870 | 876 | |
Special Mention | Consumer | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 164 | 164 | |
Substandard | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 13,416 | 12,370 | |
Substandard | Commercial and Non-Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 11,685 | 10,712 | |
Substandard | Commercial and Non-Residential Real Estate | Commercial Business | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 6,318 | 5,652 | |
Substandard | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 2,513 | 2,181 | |
Substandard | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 2,854 | 2,879 | |
Substandard | Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 1,675 | 1,600 | |
Substandard | Home Equity | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 38 | 39 | |
Substandard | Consumer | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 18 | 19 | |
Doubtful | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 243 | 311 | |
Doubtful | Commercial and Non-Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 125 | 129 | |
Doubtful | Commercial and Non-Residential Real Estate | Commercial Business | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 0 | 0 | |
Doubtful | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 0 | 0 | |
Doubtful | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 125 | 129 | |
Doubtful | Residential Real Estate | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 118 | 119 | |
Doubtful | Home Equity | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | 0 | 0 | |
Doubtful | Consumer | |||
Classes of the loan portfolio summarized by credit quality indicators: | |||
Total Loans | $ 0 | $ 63 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses - Aging (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Aging categories of performing loans and nonaccrual loans | |||
Current | $ 1,333,697 | $ 1,288,346 | |
Total Past Due | 7,224 | 16,236 | |
Total Loans | 1,340,921 | 1,304,582 | $ 1,156,573 |
Non-Accrual | 7,075 | 7,103 | |
90 Plus Days Still Accruing | 0 | 0 | |
Commercial and Non-Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Current | 957,869 | 928,621 | |
Total Past Due | 4,195 | 12,412 | |
Total Loans | 962,064 | 941,033 | 824,625 |
Non-Accrual | 4,457 | 4,495 | |
90 Plus Days Still Accruing | 0 | 0 | |
Commercial and Non-Residential Real Estate | Commercial Business | |||
Aging categories of performing loans and nonaccrual loans | |||
Current | 472,847 | 432,097 | |
Total Past Due | 3,704 | 11,434 | |
Total Loans | 476,551 | 443,531 | |
Non-Accrual | 3,707 | 3,684 | |
90 Plus Days Still Accruing | 0 | 0 | |
Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Current | 389,336 | 374,880 | |
Total Past Due | 199 | 681 | |
Total Loans | 389,535 | 375,561 | |
Non-Accrual | 333 | 385 | |
90 Plus Days Still Accruing | 0 | 0 | |
Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Aging categories of performing loans and nonaccrual loans | |||
Current | 95,686 | 121,644 | |
Total Past Due | 292 | 297 | |
Total Loans | 95,978 | 121,941 | |
Non-Accrual | 417 | 426 | |
90 Plus Days Still Accruing | 0 | 0 | |
Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Current | 307,936 | 291,665 | |
Total Past Due | 2,777 | 3,264 | |
Total Loans | 310,713 | 294,929 | 260,513 |
Non-Accrual | 2,506 | 2,442 | |
90 Plus Days Still Accruing | 0 | 0 | |
Home Equity | |||
Aging categories of performing loans and nonaccrual loans | |||
Current | 58,457 | 58,575 | |
Total Past Due | 218 | 440 | |
Total Loans | 58,675 | 59,015 | 59,526 |
Non-Accrual | 83 | 84 | |
90 Plus Days Still Accruing | 0 | 0 | |
Consumer | |||
Aging categories of performing loans and nonaccrual loans | |||
Current | 9,435 | 9,485 | |
Total Past Due | 34 | 120 | |
Total Loans | 9,469 | 9,605 | $ 11,909 |
Non-Accrual | 29 | 82 | |
90 Plus Days Still Accruing | 0 | 0 | |
Financing Receivables, 30 to 59 Days Past Due | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 2,946 | 8,489 | |
Financing Receivables, 30 to 59 Days Past Due | Commercial and Non-Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 364 | 7,061 | |
Financing Receivables, 30 to 59 Days Past Due | Commercial and Non-Residential Real Estate | Commercial Business | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 165 | 6,380 | |
Financing Receivables, 30 to 59 Days Past Due | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 199 | 681 | |
Financing Receivables, 30 to 59 Days Past Due | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 0 | 0 | |
Financing Receivables, 30 to 59 Days Past Due | Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 2,384 | 1,000 | |
Financing Receivables, 30 to 59 Days Past Due | Home Equity | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 193 | 400 | |
Financing Receivables, 30 to 59 Days Past Due | Consumer | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 5 | 28 | |
Financing Receivables, 60 to 89 Days Past Due | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 205 | 2,556 | |
Financing Receivables, 60 to 89 Days Past Due | Commercial and Non-Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 130 | 1,746 | |
Financing Receivables, 60 to 89 Days Past Due | Commercial and Non-Residential Real Estate | Commercial Business | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 130 | 1,746 | |
Financing Receivables, 60 to 89 Days Past Due | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 0 | 0 | |
Financing Receivables, 60 to 89 Days Past Due | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 0 | 0 | |
Financing Receivables, 60 to 89 Days Past Due | Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 50 | 760 | |
Financing Receivables, 60 to 89 Days Past Due | Home Equity | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 25 | 40 | |
Financing Receivables, 60 to 89 Days Past Due | Consumer | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 0 | 10 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 4,073 | 5,191 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial and Non-Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 3,701 | 3,605 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial and Non-Residential Real Estate | Commercial Business | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 3,409 | 3,308 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 0 | 0 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 292 | 297 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | Residential Real Estate | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 343 | 1,504 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | Home Equity | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | 0 | 0 | |
Financing Receivables, Equal to Greater than 90 Days Past Due | Consumer | |||
Aging categories of performing loans and nonaccrual loans | |||
Total Past Due | $ 29 | $ 82 |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)contractborrowerloan | Mar. 31, 2018USD ($)contract | Dec. 31, 2018USD ($) | |
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Specific reserve allocations for TDR's | $ 484 | $ 439 | |
Troubled debt restructuring loans | $ 8,200 | 8,000 | |
Number of contracts | contract | 1 | 1 | |
Pre-modification outstanding recorded investment | $ 268 | $ 128 | |
Post-modification outstanding recorded investment | 267 | 128 | |
Acquisition & Development | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Loans defaulted under the restructured terms | $ 3,700 | ||
Number of loans to defaulted borrowers | loan | 3 | ||
Number of borrower defaulted | borrower | 2 | ||
Commercial and Non-Residential Real Estate | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Impaired loan | $ 268 | $ 128 | |
Commercial Borrower One | Acquisition & Development | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Loans defaulted under the restructured terms | $ 417 | ||
Number of borrower defaulted | borrower | 2 | ||
Commercial Borrower Two | Acquisition & Development | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Loans defaulted under the restructured terms | $ 3,300 | ||
Accruing | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Troubled debt restructuring loans | $ 4,500 | $ 4,200 | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Percentage of total impaired loans | 35.00% | 27.00% | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | Commercial and Non-Residential Real Estate | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Number of contracts | contract | 1 | 1 | |
Pre-modification outstanding recorded investment | $ 268 | $ 128 | |
Post-modification outstanding recorded investment | $ 267 | $ 128 | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | Commercial and Non-Residential Real Estate | Commercial Business | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Number of contracts | contract | 1 | 1 | |
Pre-modification outstanding recorded investment | $ 268 | $ 128 | |
Post-modification outstanding recorded investment | $ 267 | $ 128 | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | Commercial and Non-Residential Real Estate | Commercial Real Estate | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Number of contracts | contract | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | Commercial and Non-Residential Real Estate | Acquisition & Development | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Number of contracts | contract | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | Residential Real Estate | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Number of contracts | contract | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | Home Equity | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Number of contracts | contract | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 | |
Portfolio Risk | Troubled Debt Restructured Loans | Accruing | Consumer | |||
Details related to loans identified as Troubled Debt Restructurings (TDRs): | |||
Number of contracts | contract | 0 | 0 | |
Pre-modification outstanding recorded investment | $ 0 | $ 0 | |
Post-modification outstanding recorded investment | $ 0 | $ 0 |
Premises and Equipment - Narrat
Premises and Equipment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Lease liability | $ 15,700 | |
Right-of-use assest | $ 12,900 | |
Finance lease, weighted average remaining lease term (in years) | 3 years 4 months 24 days | |
Finance lease, weighted average discount rate, (as a percentage) | 2.86% | |
Operating lease, weighted average remaining lease term (in years) | 12 years 3 months 18 days | |
Operating lease, weighted average discount rate, (as a percentage) | 3.52% | |
Rent expense | $ 512 | |
Leases not yet commenced, lease liabilities | $ 2,400 | |
Leases not yet commenced, right of use assets | $ 4,100 |
Premises and Equipment - Lease
Premises and Equipment - Lease Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Amortization of right-of-use assets, finance leases | $ 20 |
Interest on lease liabilities, finance leases | 2 |
Operating lease cost | 530 |
Short-term lease cost | 25 |
Variable lease cost | 10 |
Total lease cost | $ 587 |
Premises and Equipment - Summar
Premises and Equipment - Summary of Lease Liability (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases | |
2019 | $ 1,851 |
2020 | 1,753 |
2021 | 1,783 |
2022 | 1,655 |
2023 | 1,425 |
2024 and thereafter | 11,050 |
Total future minimum lease payments | 19,517 |
Less: Amounts representing interest | (4,048) |
Present value of net future minimum lease payments | 15,469 |
Finance Leases | |
2019 | 69 |
2020 | 66 |
2021 | 66 |
2022 | 27 |
2023 | 0 |
2024 and thereafter | 0 |
Total future minimum lease payments | 228 |
Less: Amounts representing interest | (10) |
Present value of net future minimum lease payments | $ 218 |
Borrowed Funds - Short-term Bor
Borrowed Funds - Short-term Borrowings and Repurchase Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Short-term Borrowings from FHLB | ||
Short-term Borrowings and Repurchase Agreements | ||
Balance at end of period | $ 112,412 | $ 212,395 |
Average balance during the period | 176,428 | 171,117 |
Maximum month-end balance | $ 177,164 | $ 264,297 |
Weighted-average rate during the year | 2.63% | 2.27% |
Weighted-average rate at end of period | 2.70% | 2.62% |
Investment Securities | ||
Short-term Borrowings and Repurchase Agreements | ||
Investment securities held as collateral | $ 13,000 | $ 15,400 |
Repurchase Agreements | ||
Short-term Borrowings and Repurchase Agreements | ||
Balance at end of period | 12,553 | 14,925 |
Average balance during the period | 14,206 | 18,536 |
Maximum month-end balance | $ 14,655 | $ 20,903 |
Weighted-average rate during the year | 0.38% | 0.30% |
Weighted-average rate at end of period | 0.52% | 0.16% |
Borrowed Funds - Term Notes fro
Borrowed Funds - Term Notes from the FHLB (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Borrowed funds | ||
Long-term notes from the FHLB | $ 2,472 | $ 2,492 |
Fixed interest rate notes, originating between October 2006 and April 2007, due between October 2021 and April 2022, interest of between 5.18% and 5.20% payable monthly | ||
Borrowed funds | ||
Long-term notes from the FHLB | $ 1,727 | $ 1,741 |
Fixed interest rate notes, originating between October 2006 and April 2007, due between October 2021 and April 2022, interest of between 5.18% and 5.20% payable monthly | Minimum | ||
Borrowed funds | ||
Interest rate on debt security | 5.18% | 5.18% |
Fixed interest rate notes, originating between October 2006 and April 2007, due between October 2021 and April 2022, interest of between 5.18% and 5.20% payable monthly | Maximum | ||
Borrowed funds | ||
Interest rate on debt security | 5.20% | 5.20% |
Amortizing fixed interest rate note, originating February 2007, due February 2022, payable in monthly installments of $5 thousand, including interest of 5.22% | ||
Borrowed funds | ||
Long-term notes from the FHLB | $ 745 | $ 751 |
Interest rate on debt security | 5.22% | 5.22% |
Monthly installments | $ 5 | $ 5 |
Borrowed Funds - Subordinated D
Borrowed Funds - Subordinated Debt (Details) - USD ($) $ / shares in Units, shares in Millions | Jun. 30, 2014 | Mar. 31, 2007 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Subordinated Debt | |||||
Balance at end of period | $ 17,524,000 | $ 17,524,000 | |||
Interest expense on borrowed funds | 285,000 | $ 558,000 | |||
Subordinated Debt | |||||
Subordinated Debt | |||||
Balance at end of period | 17,524,000 | 17,524,000 | |||
Average balance during the period | 17,524,000 | 25,774,000 | |||
Maximum month-end balance | $ 17,524,000 | $ 33,524,000 | |||
Weighted-average rate during the year | 6.51% | 6.81% | |||
Weighted-average rate at end of period | 6.53% | 6.57% | |||
Interest expense on borrowed funds | $ 285,000 | $ 558,000 | |||
Subordinated debt converted, amount | $ 16,000,000 | ||||
Converted subordinated debt, shares issued | 1 | ||||
Annual interest expense savings | $ 1,100,000 | ||||
Subordinated Debt | Subordinated Debentures | |||||
Subordinated Debt | |||||
Face amount of debt issued | $ 4,000,000 | ||||
Subordinated Debt | Subordinated Debentures | LIBOR | |||||
Subordinated Debt | |||||
Variable rate basis spread | 1.62% | ||||
Subordinated Debt | Convertible Subordinated Promissory Notes Due 2024 | |||||
Subordinated Debt | |||||
Face amount of debt issued | $ 29,400,000 | ||||
Debt instrument, increment amounts | 100,000 | ||||
Debt instrument, minimum investment amount | $ 1,000,000 | ||||
Term of debt instrument | 10 years | ||||
Debt instrument, maximum interest rate after fifth anniversary | 9.00% | ||||
Debt instrument, minimum period from issuance that principal may be prepaid | 5 years | ||||
Debt instrument, threshold consecutive trading days for conversion after first, second, third, fourth, and fifth anniversaries of the issuance | 5 days | ||||
Debt instrument, conversion price (in dollars per share) | $ 16 | ||||
Debt instrument, notice period of intent to prepay | 20 days | ||||
Debt instrument, issuance threshold amount requiring consent of holders | $ 15,000,000 | ||||
Debt instrument, redemption price percentage | 100.00% | ||||
Debt instrument, required period before redemption | 5 years | ||||
Subordinated Debt | Convertible Subordinated Promissory Notes Due 2024 | LIBOR | |||||
Subordinated Debt | |||||
Debt instrument, basis spread on variable rate after fifth anniversary | 5.00% | ||||
Subordinated Debt | Convertible Subordinated Promissory Notes Due 2024 | Debtholder Investments Less Than Three Million Dollars | |||||
Subordinated Debt | |||||
Debt instrument, investment amount of holder | $ 3,000,000 | ||||
Debt instrument, minimum ownership of common stock as percentage of principal acquired | 30.00% | ||||
Interest rate on debt security | 7.00% | ||||
Subordinated Debt | Convertible Subordinated Promissory Notes Due 2024 | Debtholder Investments Of Three Million Dollars Or Greater | |||||
Subordinated Debt | |||||
Debt instrument, investment amount of holder | $ 3,000,000 | ||||
Debt instrument, minimum ownership of common stock as percentage of principal acquired | 30.00% | ||||
Interest rate on debt security | 7.50% | ||||
Subordinated Debt | Convertible Subordinated Promissory Notes Due 2024 | Debtholder Investments Of Ten Million Dollars Or Greater | |||||
Subordinated Debt | |||||
Debt instrument, investment amount of holder | $ 10,000,000 | ||||
Interest rate on debt security | 7.00% |
Borrowed Funds - Summary of Mat
Borrowed Funds - Summary of Maturities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Maturities of Borrowings and Subordinated Debt | |
2019 | $ 112,477 |
2020 | 90 |
2021 | 886 |
2022 | 1,431 |
2023 | 0 |
Thereafter | 17,524 |
Total | $ 132,408 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | $ 224,741 | $ 221,614 |
Equity securities | 9,841 | 9,599 |
Recurring | ||
Fair value of assets and liabilities | ||
Equity securities | 9,841 | 9,599 |
Loans held for sale | 65,955 | 75,807 |
Fair value hedge, assets | 630 | 343 |
Fair value hedge, liabilities | 630 | 343 |
Recurring | Level I | ||
Fair value of assets and liabilities | ||
Equity securities | 5,819 | 6,027 |
Loans held for sale | 0 | 0 |
Fair value hedge, assets | 0 | 0 |
Fair value hedge, liabilities | 0 | 0 |
Recurring | Level II | ||
Fair value of assets and liabilities | ||
Equity securities | 3,272 | 3,272 |
Loans held for sale | 65,955 | 75,807 |
Fair value hedge, assets | 630 | 343 |
Fair value hedge, liabilities | 630 | 343 |
Recurring | Level III | ||
Fair value of assets and liabilities | ||
Equity securities | 750 | 300 |
Loans held for sale | 0 | 0 |
Fair value hedge, assets | 0 | 0 |
Fair value hedge, liabilities | 0 | 0 |
U. S. Agency securities | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 66,588 | 77,430 |
U. S. Agency securities | Recurring | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 66,588 | 77,430 |
U. S. Agency securities | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 0 | 0 |
U. S. Agency securities | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 66,588 | 77,430 |
U. S. Agency securities | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 0 | 0 |
U.S. Sponsored Mortgage-backed securities | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 47,771 | 50,115 |
U.S. Sponsored Mortgage-backed securities | Recurring | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 47,771 | 50,115 |
U.S. Sponsored Mortgage-backed securities | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 0 | 0 |
U.S. Sponsored Mortgage-backed securities | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 47,771 | 50,115 |
U.S. Sponsored Mortgage-backed securities | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 0 | 0 |
Municipal securities | Recurring | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 100,007 | 83,761 |
Municipal securities | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 0 | 0 |
Municipal securities | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 63,206 | 50,639 |
Municipal securities | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 36,801 | 33,122 |
Other securities | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 10,375 | |
Other securities | Recurring | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 10,375 | 10,308 |
Other securities | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 0 | 0 |
Other securities | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 10,375 | 10,308 |
Other securities | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Securities available-for-sale, at fair value | 0 | 0 |
Interest rate lock commitment | Recurring | ||
Fair value of assets and liabilities | ||
Derivative asset | 2,256 | 1,750 |
Interest rate lock commitment | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 0 |
Interest rate lock commitment | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 0 |
Interest rate lock commitment | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Derivative asset | 2,256 | 1,750 |
Interest rate swap | Recurring | ||
Fair value of assets and liabilities | ||
Derivative asset | 2,666 | 1,375 |
Derivative liability | 2,666 | 1,375 |
Interest rate swap | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Interest rate swap | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Derivative asset | 2,666 | 1,375 |
Derivative liability | 2,666 | 1,375 |
Interest rate swap | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Interest rate cap | Recurring | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 8 |
Interest rate cap | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 0 |
Interest rate cap | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 8 |
Interest rate cap | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Derivative asset | 0 | 0 |
Mortgage-backed security hedges | Recurring | ||
Fair value of assets and liabilities | ||
Derivative liability | 687 | 853 |
Mortgage-backed security hedges | Recurring | Level I | ||
Fair value of assets and liabilities | ||
Derivative liability | 0 | 0 |
Mortgage-backed security hedges | Recurring | Level II | ||
Fair value of assets and liabilities | ||
Derivative liability | 687 | 853 |
Mortgage-backed security hedges | Recurring | Level III | ||
Fair value of assets and liabilities | ||
Derivative liability | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Recurring Level III Assets (Details) - Level III - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 35,172 | $ 25,235 |
Realized and unrealized gains included in earnings | 506 | 886 |
Purchase of securities | 450 | |
Unrealized gain included in other comprehensive income (loss) | 5,012 | (338) |
Unrealized loss included in other comprehensive income (loss) | (1,333) | |
Ending balance | 39,807 | 25,783 |
Loans receivable | Interest rate lock commitment | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 1,750 | 1,426 |
Realized and unrealized gains included in earnings | 506 | 886 |
Purchase of securities | 0 | |
Unrealized gain included in other comprehensive income (loss) | 0 | 0 |
Unrealized loss included in other comprehensive income (loss) | 0 | |
Ending balance | 2,256 | 2,312 |
Municipal Securities | Municipal Securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 33,122 | 22,909 |
Realized and unrealized gains included in earnings | 0 | 0 |
Purchase of securities | 0 | |
Unrealized gain included in other comprehensive income (loss) | 5,012 | (338) |
Unrealized loss included in other comprehensive income (loss) | (1,333) | |
Ending balance | 36,801 | 22,571 |
Equity securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 300 | 900 |
Realized and unrealized gains included in earnings | 0 | 0 |
Purchase of securities | 450 | |
Unrealized gain included in other comprehensive income (loss) | 0 | 0 |
Unrealized loss included in other comprehensive income (loss) | 0 | |
Ending balance | $ 750 | $ 900 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Assets Measured at Fair Value on Nonrecurring Basis (Details) - Non-recurring - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Impaired loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | $ 11,838 | $ 11,735 |
Impaired loans | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | 0 |
Impaired loans | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | 0 |
Impaired loans | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 11,838 | 11,735 |
Other real estate owned | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 2,108 | 2,145 |
Other real estate owned | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | 0 |
Other real estate owned | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0 | 0 |
Other real estate owned | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | $ 2,108 | $ 2,145 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Quantitative Information About Level III Significant Unobservable Inputs (Details) $ in Thousands | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Non-recurring | Impaired loans | ||
Quantitative Information about Level III Fair Value Measurements | ||
Assets, fair value | $ 11,838 | $ 11,735 |
Non-recurring | Impaired loans | Level III | ||
Quantitative Information about Level III Fair Value Measurements | ||
Assets, fair value | 11,838 | 11,735 |
Non-recurring | Other real estate owned | ||
Quantitative Information about Level III Fair Value Measurements | ||
Assets, fair value | 2,108 | 2,145 |
Non-recurring | Other real estate owned | Level III | ||
Quantitative Information about Level III Fair Value Measurements | ||
Assets, fair value | 2,108 | 2,145 |
Recurring | Municipal Securities | Level III | ||
Quantitative Information about Level III Fair Value Measurements | ||
Assets, fair value | 36,801 | 33,122 |
Recurring | Interest rate lock commitment | Level III | ||
Quantitative Information about Level III Fair Value Measurements | ||
Assets, fair value | 2,256 | 1,750 |
Recurring | Equity securities | Level III | ||
Quantitative Information about Level III Fair Value Measurements | ||
Assets, fair value | $ 750 | $ 300 |
Appraisal adjustments | Non-recurring | Impaired loans | Appraisal of collateral | Level III | Minimum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Impaired loans | 0.20 | 0.20 |
Appraisal adjustments | Non-recurring | Impaired loans | Appraisal of collateral | Level III | Maximum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Impaired loans | 0.62 | 0.62 |
Appraisal adjustments | Non-recurring | Other real estate owned | Appraisal of collateral | Level III | Minimum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Other real estate owned | 0.20 | 0.20 |
Appraisal adjustments | Non-recurring | Other real estate owned | Appraisal of collateral | Level III | Maximum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Other real estate owned | 0.30 | 0.30 |
Appraisal adjustments | Recurring | Municipal Securities | Appraisal of bond | Level III | Minimum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Debt securities | 0.05 | 0.05 |
Appraisal adjustments | Recurring | Municipal Securities | Appraisal of bond | Level III | Maximum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Debt securities | 0.15 | 0.15 |
Liquidation expense | Non-recurring | Impaired loans | Appraisal of collateral | Level III | Minimum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Impaired loans | 0.05 | 0.05 |
Liquidation expense | Non-recurring | Impaired loans | Appraisal of collateral | Level III | Maximum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Impaired loans | 0.10 | 0.10 |
Liquidation expense | Non-recurring | Other real estate owned | Appraisal of collateral | Level III | Minimum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Other real estate owned | 0.05 | 0.05 |
Liquidation expense | Non-recurring | Other real estate owned | Appraisal of collateral | Level III | Maximum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Other real estate owned | 0.10 | 0.10 |
Pull through rates | Recurring | Interest rate lock commitment | Pricing model | Level III | Minimum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Debt securities | 0.77 | 0.80 |
Pull through rates | Recurring | Interest rate lock commitment | Pricing model | Level III | Maximum | ||
Quantitative Information about Level III Fair Value Measurements | ||
Debt securities | 0.82 | 0.88 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Carrying Values and Estimated Fair Values (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financial assets: | ||
Cash and cash equivalents | $ 17,958 | $ 22,221 |
Certificates of deposit with other banks | 14,778 | 14,778 |
Securities available-for-sale, at fair value | 224,741 | 221,614 |
Equity securities | 9,841 | 9,599 |
Securities available-for-sale, including equity and other | 221,614 | |
Financial liabilities: | ||
FHLB and other borrowings | 114,884 | 214,887 |
Carrying Value | ||
Financial assets: | ||
Cash and cash equivalents | 17,958 | 22,221 |
Certificates of deposit with other banks | 14,778 | 14,778 |
Securities available-for-sale, at fair value | 224,741 | |
Equity securities | 9,841 | 9,599 |
Loans held for sale | 65,955 | 75,807 |
Loans, net | 1,329,976 | 1,293,427 |
Mortgage servicing rights | 171 | 173 |
Fair value hedge, assets | 630 | 343 |
Accrued interest receivable | 7,205 | 7,710 |
Securities available-for-sale, including equity and other | 221,614 | |
Financial liabilities: | ||
Deposits | 1,430,659 | 1,309,154 |
Repurchase agreements | 12,553 | 14,925 |
Fair value hedge, liabilities | 630 | 343 |
Accrued interest payable | 959 | 1,064 |
Subordinated debt | 17,524 | 17,524 |
Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 17,958 | 22,221 |
Certificates of deposit with other banks | 14,498 | 14,300 |
Securities available-for-sale, at fair value | 224,741 | |
Equity securities | 9,841 | 9,599 |
Loans held for sale | 65,955 | 75,807 |
Loans, net | 1,322,042 | 1,276,065 |
Mortgage servicing rights | 171 | 173 |
Fair value hedge, assets | 630 | 343 |
Accrued interest receivable | 7,205 | 7,710 |
Securities available-for-sale, including equity and other | 221,614 | |
Financial liabilities: | ||
Deposits | 1,376,015 | 1,249,164 |
Repurchase agreements | 12,553 | 14,925 |
Fair value hedge, liabilities | 630 | 343 |
Accrued interest payable | 959 | 1,064 |
Subordinated debt | 18,250 | 18,250 |
Quoted Prices in Active Markets for Identical Assets (Level I) | Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 17,958 | 22,221 |
Certificates of deposit with other banks | 0 | 0 |
Securities available-for-sale, at fair value | 0 | |
Equity securities | 5,819 | 6,027 |
Loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Fair value hedge, assets | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Securities available-for-sale, including equity and other | 0 | |
Financial liabilities: | ||
Deposits | 0 | 0 |
Repurchase agreements | 0 | 0 |
Fair value hedge, liabilities | 0 | 0 |
Accrued interest payable | 0 | 0 |
Subordinated debt | 0 | 0 |
Significant Other Observable Inputs (Level II) | Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Certificates of deposit with other banks | 14,498 | 14,300 |
Securities available-for-sale, at fair value | 187,940 | |
Equity securities | 3,272 | 3,272 |
Loans held for sale | 65,955 | 75,807 |
Loans, net | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Fair value hedge, assets | 630 | 343 |
Accrued interest receivable | 1,789 | 1,368 |
Securities available-for-sale, including equity and other | 188,492 | |
Financial liabilities: | ||
Deposits | 1,376,015 | 1,249,164 |
Repurchase agreements | 12,553 | 14,925 |
Fair value hedge, liabilities | 630 | 343 |
Accrued interest payable | 959 | 1,064 |
Subordinated debt | 18,250 | 18,250 |
Significant Unobservable Inputs (Level III) | Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Certificates of deposit with other banks | 0 | 0 |
Securities available-for-sale, at fair value | 36,801 | |
Equity securities | 750 | 300 |
Loans held for sale | 0 | 0 |
Loans, net | 1,322,042 | 1,276,065 |
Mortgage servicing rights | 171 | 173 |
Fair value hedge, assets | 0 | 0 |
Accrued interest receivable | 5,416 | 6,342 |
Securities available-for-sale, including equity and other | 33,122 | |
Financial liabilities: | ||
Deposits | 0 | 0 |
Repurchase agreements | 0 | 0 |
Fair value hedge, liabilities | 0 | 0 |
Accrued interest payable | 0 | 0 |
Subordinated debt | 0 | 0 |
Interest rate lock commitment | Carrying Value | ||
Financial assets: | ||
Derivative asset | 2,256 | 1,750 |
Interest rate lock commitment | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 2,256 | 1,750 |
Interest rate lock commitment | Quoted Prices in Active Markets for Identical Assets (Level I) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Interest rate lock commitment | Significant Other Observable Inputs (Level II) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Interest rate lock commitment | Significant Unobservable Inputs (Level III) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 2,256 | 1,750 |
Interest rate swap | Carrying Value | ||
Financial assets: | ||
Derivative asset | 2,666 | 1,375 |
Financial liabilities: | ||
Derivative liability | 2,666 | 1,375 |
Interest rate swap | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 2,666 | 1,375 |
Financial liabilities: | ||
Derivative liability | 2,666 | 1,375 |
Interest rate swap | Quoted Prices in Active Markets for Identical Assets (Level I) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Financial liabilities: | ||
Derivative liability | 0 | 0 |
Interest rate swap | Significant Other Observable Inputs (Level II) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 2,666 | 1,375 |
Financial liabilities: | ||
Derivative liability | 2,666 | 1,375 |
Interest rate swap | Significant Unobservable Inputs (Level III) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 0 | 0 |
Financial liabilities: | ||
Derivative liability | 0 | 0 |
Forward contracts | Carrying Value | ||
Financial liabilities: | ||
FHLB and other borrowings | 114,884 | 214,887 |
Forward contracts | Estimated Fair Value | ||
Financial liabilities: | ||
FHLB and other borrowings | 114,886 | 214,969 |
Forward contracts | Quoted Prices in Active Markets for Identical Assets (Level I) | Estimated Fair Value | ||
Financial liabilities: | ||
FHLB and other borrowings | 0 | 0 |
Forward contracts | Significant Other Observable Inputs (Level II) | Estimated Fair Value | ||
Financial liabilities: | ||
FHLB and other borrowings | 114,886 | 214,969 |
Forward contracts | Significant Unobservable Inputs (Level III) | Estimated Fair Value | ||
Financial liabilities: | ||
FHLB and other borrowings | 0 | 0 |
Mortgage-backed security hedges | Carrying Value | ||
Financial liabilities: | ||
Derivative liability | 687 | 853 |
Mortgage-backed security hedges | Estimated Fair Value | ||
Financial liabilities: | ||
Derivative liability | 687 | 853 |
Mortgage-backed security hedges | Quoted Prices in Active Markets for Identical Assets (Level I) | Estimated Fair Value | ||
Financial liabilities: | ||
Derivative liability | 0 | 0 |
Mortgage-backed security hedges | Significant Other Observable Inputs (Level II) | Estimated Fair Value | ||
Financial liabilities: | ||
Derivative liability | 687 | 853 |
Mortgage-backed security hedges | Significant Unobservable Inputs (Level III) | Estimated Fair Value | ||
Financial liabilities: | ||
Derivative liability | $ 0 | 0 |
Interest rate cap | Carrying Value | ||
Financial assets: | ||
Derivative asset | 8 | |
Interest rate cap | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 8 | |
Interest rate cap | Quoted Prices in Active Markets for Identical Assets (Level I) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 0 | |
Interest rate cap | Significant Other Observable Inputs (Level II) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | 8 | |
Interest rate cap | Significant Unobservable Inputs (Level III) | Estimated Fair Value | ||
Financial assets: | ||
Derivative asset | $ 0 |
Stock Offerings (Details)
Stock Offerings (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 20, 2017 | Mar. 13, 2017 | Jun. 30, 2014 | Mar. 31, 2019 | Dec. 31, 2018 |
Stock offering | |||||
Number of designated preferred shares (in shares) | 783 | 783 | |||
Series B Preferred Stock | |||||
Stock offering | |||||
Number of designated preferred shares (in shares) | 400 | ||||
Dividend rate | 6.00% | ||||
Period from first, second, third, fourth, and fifth anniversary of original issue date that stock may be convertible | 30 days | ||||
Conversion price (in dollars per share) | $ 16 | ||||
Series C Preferred Stock | |||||
Stock offering | |||||
Number of designated preferred shares (in shares) | 383.4 | ||||
Dividend rate | 6.50% | ||||
Period from first, second, third, fourth, and fifth anniversary of original issue date that stock may be convertible | 30 days | ||||
Conversion price (in dollars per share) | $ 16 | ||||
Rights Offering | |||||
Stock offering | |||||
Number of shares into which rights may be converted (in shares) | 434,783 | ||||
Stock offering (in shares) | 434,783 | ||||
Proceeds from issuance of common stock | $ 5 | ||||
Chief Executive Officer | |||||
Stock offering | |||||
Stock offering (in shares) | 100,000 | ||||
Chief Executive Officer | Investment Agreement | |||||
Stock offering | |||||
Stock offering (in shares) | 9,001 | ||||
Chief Executive Officer | Rights Offering | |||||
Stock offering | |||||
Stock offering (in shares) | 90,999 | ||||
Maximum | Chief Executive Officer | Investment Agreement | |||||
Stock offering | |||||
Number of shares into which rights may be converted (in shares) | 100,000 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator for basic earnings per share: | ||
Net income | $ 3,192 | $ 2,594 |
Less: Dividends on preferred stock | 121 | 121 |
Net income available to common shareholders - basic | 3,071 | 2,473 |
Numerator for diluted earnings per share: | ||
Net income available to common shareholders - basic | 3,071 | 2,473 |
Add: Dividends on convertible preferred stock | 121 | 0 |
Add: Interest on subordinated debt (tax effected) | 184 | 404 |
Net income available to common shareholders - diluted | $ 3,376 | $ 2,877 |
Denominator: | ||
Total average shares outstanding | 11,607,543 | 10,474,138 |
Effect of dilutive convertible preferred stock (in shares) | 489,625 | 0 |
Effect of dilutive convertible subordinated debt (in shares) | 837,500 | 1,837,500 |
Effect of dilutive stock options (in shares) | 242,613 | 402,715 |
Total diluted average shares outstanding (in shares) | 13,177,281 | 12,714,353 |
Earnings per share - basic (in dollars per share) | $ 0.26 | $ 0.24 |
Earnings per share - diluted (in dollars per share) | $ 0.26 | $ 0.23 |
Stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded form computation of earnings per share (in shares) | 0 | 490,000 |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded form computation of earnings per share (in shares) | 0 | 3,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Interest income | $ 19,623 | $ 15,054 |
Interest expense | 5,651 | 3,589 |
NET INTEREST INCOME | 13,972 | 11,465 |
Provision for loan losses | 300 | 474 |
Net interest income after provision for loan losses | 13,672 | 10,991 |
Noninterest Income: | ||
Mortgage fee income | 6,670 | 6,563 |
Other income | 2,095 | 2,476 |
Total noninterest income | 8,765 | 9,039 |
Noninterest Expenses: | ||
Salaries and employee benefits | 11,734 | 10,473 |
Other expense | 6,714 | 6,266 |
Total noninterest expenses | 18,448 | 16,739 |
Income before income taxes | 3,989 | 3,291 |
Income tax (benefit) - continuing operations | 797 | 697 |
Net income | 3,192 | 2,594 |
Preferred dividends | 121 | 121 |
Net income available to common shareholders - basic | 3,071 | 2,473 |
Capital Expenditures for the three month period ended March 31, 2019 | 115 | 506 |
Assets, beginning balance | 1,750,969 | 1,534,302 |
Assets, ending balance | 1,789,908 | 1,581,518 |
Goodwill, Beginning Balance | 18,480 | 18,480 |
Goodwill, Ending Balance | 18,480 | 18,480 |
Operating Segments | Commercial & Retail Banking | ||
Segment Reporting Information [Line Items] | ||
Interest income | 18,327 | 13,838 |
Interest expense | 4,754 | 2,674 |
NET INTEREST INCOME | 13,573 | 11,164 |
Provision for loan losses | 247 | 417 |
Net interest income after provision for loan losses | 13,326 | 10,747 |
Noninterest Income: | ||
Mortgage fee income | 109 | 140 |
Other income | 1,566 | 1,780 |
Total noninterest income | 1,675 | 1,920 |
Noninterest Expenses: | ||
Salaries and employee benefits | 4,395 | 3,569 |
Other expense | 5,352 | 4,559 |
Total noninterest expenses | 9,747 | 8,128 |
Income before income taxes | 5,254 | 4,539 |
Income tax (benefit) - continuing operations | 1,054 | 978 |
Net income | 4,200 | 3,561 |
Preferred dividends | 0 | 0 |
Net income available to common shareholders - basic | 4,200 | 3,561 |
Capital Expenditures for the three month period ended March 31, 2019 | 89 | 403 |
Assets, beginning balance | 1,753,932 | 1,533,497 |
Assets, ending balance | 1,790,725 | 1,581,673 |
Goodwill, Beginning Balance | 1,598 | 1,598 |
Goodwill, Ending Balance | 1,598 | 1,598 |
Operating Segments | Mortgage Banking | ||
Segment Reporting Information [Line Items] | ||
Interest income | 1,538 | 1,335 |
Interest expense | 993 | 727 |
NET INTEREST INCOME | 545 | 608 |
Provision for loan losses | 53 | 57 |
Net interest income after provision for loan losses | 492 | 551 |
Noninterest Income: | ||
Mortgage fee income | 6,697 | 6,673 |
Other income | 476 | 517 |
Total noninterest income | 7,173 | 7,190 |
Noninterest Expenses: | ||
Salaries and employee benefits | 5,159 | 5,416 |
Other expense | 2,025 | 2,122 |
Total noninterest expenses | 7,184 | 7,538 |
Income before income taxes | 481 | 203 |
Income tax (benefit) - continuing operations | 146 | 53 |
Net income | 335 | 150 |
Preferred dividends | 0 | 0 |
Net income available to common shareholders - basic | 335 | 150 |
Capital Expenditures for the three month period ended March 31, 2019 | 4 | 78 |
Assets, beginning balance | 165,430 | 149,323 |
Assets, ending balance | 175,218 | 148,789 |
Goodwill, Beginning Balance | 16,882 | 16,882 |
Goodwill, Ending Balance | 16,882 | 16,882 |
Operating Segments | Financial Holding Company | ||
Segment Reporting Information [Line Items] | ||
Interest income | 1 | 1 |
Interest expense | 285 | 558 |
NET INTEREST INCOME | (284) | (557) |
Provision for loan losses | 0 | 0 |
Net interest income after provision for loan losses | (284) | (557) |
Noninterest Income: | ||
Mortgage fee income | 0 | 0 |
Other income | 1,779 | 1,553 |
Total noninterest income | 1,779 | 1,553 |
Noninterest Expenses: | ||
Salaries and employee benefits | 2,180 | 1,488 |
Other expense | 1,061 | 959 |
Total noninterest expenses | 3,241 | 2,447 |
Income before income taxes | (1,746) | (1,451) |
Income tax (benefit) - continuing operations | (403) | (334) |
Net income | (1,300) | (1,117) |
Preferred dividends | 121 | 121 |
Net income available to common shareholders - basic | (1,464) | (1,238) |
Capital Expenditures for the three month period ended March 31, 2019 | 22 | 25 |
Assets, beginning balance | 196,537 | 184,600 |
Assets, ending balance | 197,191 | 185,012 |
Goodwill, Beginning Balance | 0 | 0 |
Goodwill, Ending Balance | 0 | 0 |
Intercompany Eliminations | ||
Segment Reporting Information [Line Items] | ||
Interest income | (243) | (120) |
Interest expense | (381) | (370) |
NET INTEREST INCOME | 138 | 250 |
Provision for loan losses | 0 | 0 |
Net interest income after provision for loan losses | 138 | 250 |
Noninterest Income: | ||
Mortgage fee income | (136) | (250) |
Other income | (1,726) | (1,374) |
Total noninterest income | (1,862) | (1,624) |
Noninterest Expenses: | ||
Salaries and employee benefits | 0 | 0 |
Other expense | (1,724) | (1,374) |
Total noninterest expenses | (1,724) | (1,374) |
Income before income taxes | 0 | 0 |
Income tax (benefit) - continuing operations | 0 | 0 |
Net income | 0 | 0 |
Preferred dividends | 0 | 0 |
Net income available to common shareholders - basic | 0 | 0 |
Capital Expenditures for the three month period ended March 31, 2019 | 0 | 0 |
Assets, beginning balance | (364,930) | (333,118) |
Assets, ending balance | (373,226) | (333,956) |
Goodwill, Beginning Balance | 0 | 0 |
Goodwill, Ending Balance | $ 0 | $ 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 3 | |
Net Income | $ 3,192 | $ 2,594 |
Increase (decrease) professional fees | 828 | 745 |
Mortgage Banking | ||
Segment Reporting Information [Line Items] | ||
Increase (decrease) in mortgage processing expense | (83) | |
Operating Segments | Commercial & Retail Banking | ||
Segment Reporting Information [Line Items] | ||
Net Income | 4,200 | 3,561 |
Increase (decrease) in net interest income | 2,400 | |
Increase (decrease) in loan interest and fee income | 4,300 | |
Increase (decrease) in deposit interest | 1,800 | |
Increase (decrease) in noninterest income | (245) | |
Increase (decrease) in gain on sale of securities | (260) | |
Increase (decrease) in noninterest expense | 1,600 | |
Increase (decrease) in salaries and employee benefits expense | 826 | |
Increase (decrease) in other operating expense | 347 | |
Increase (decrease) occupancy and equipment expense | 210 | |
Increase (decrease) in data processing expense | 150 | |
Increase (decrease) in provision expense | (170) | |
Operating Segments | Mortgage Banking | ||
Segment Reporting Information [Line Items] | ||
Net Income | 335 | $ 150 |
Increase (decrease) in net interest income | (63) | |
Increase (decrease) in noninterest income | (17) | |
Increase (decrease) in noninterest expense | (354) | |
Increase (decrease) in salaries and employee benefits expense | (257) | |
Increase (decrease) in FHLB and other borrowings interest income | 266 | |
Increase (decrease) in interest and fees on loans | 203 | |
Increase (decrease) in average borrowings | 5,600 | |
Increase (decrease) in derivative performance | (56) | |
Increase (decrease) in mortgage fee income | 24 | |
Increase (decrease) in locked mortgage pipeline | $ (26,900) | |
Increase (decrease) locked mortgage pipeline (percentage) | 42.70% | 67.60% |
Operating Segments | Financial Holding Company | ||
Segment Reporting Information [Line Items] | ||
Net Income | $ (1,300) | $ (1,117) |
Increase (decrease) in net interest income | (273) | |
Increase (decrease) in noninterest income | 226 | |
Increase (decrease) in gain on sale of securities | (184) | |
Increase (decrease) in noninterest expense | 794 | |
Increase (decrease) in salaries and employee benefits expense | 692 | |
Increase (decrease) in interest on subordinated debt | (273) | |
Increase (decrease) in income tax expense | 69 | |
Increase (decrease), intercompany services income | 350 | |
Increase (decrease) professional fees | $ 60 |
Pension and Supplemental Exec_3
Pension and Supplemental Executive Retirement Plans - Defined Benefit Plan Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | May 31, 2014 | |
Weighted average assumptions used to determine the benefit obligation | |||
Discount rate used to re-measure pension obligation | 4.46% | ||
Components of net periodic pension cost | |||
Service cost | $ 0 | $ 0 | |
Interest cost | 98 | 88 | |
Expected Return on Plan Assets | (102) | (93) | |
Amortization of Net Actuarial Loss | 68 | 77 | |
Amortization of Prior Service Cost | 0 | 0 | |
Net Periodic Benefit Cost | 64 | 72 | |
Contributions Paid | $ 90 | $ 79 |
Pension and Supplemental Exec_4
Pension and Supplemental Executive Retirement Plans - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)installment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | May 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Discount rate used to re-measure pension obligation | 4.46% | |||
Service cost | $ 0 | $ 0 | ||
Supplemental Employee Retirement Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Benefit obligation | $ 1,800 | |||
Number of equal consecutive installments | installment | 180 | |||
Consecutive installments, amount | $ 10 | |||
Discount rate used to re-measure pension obligation | 4.00% | |||
Accrued liability | $ 478 | $ 377 | ||
Service cost | $ 102 | $ 94 |
Comprehensive Income - Reclassi
Comprehensive Income - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Comprehensive Income | ||
(Loss) gain on sale of available-for-sale securities, net | $ (118) | $ 326 |
Salaries and benefits | (11,734) | (10,473) |
Interest on investment securities - taxable | 879 | 895 |
Income before income taxes | 3,989 | 3,291 |
Income tax expense | (797) | (697) |
Net income | 3,192 | 2,594 |
Amount reclassified from AOCI | ||
Comprehensive Income | ||
Net income | 198 | 192 |
Available-for-sale securities | Amount reclassified from AOCI | ||
Comprehensive Income | ||
(Loss) gain on sale of available-for-sale securities, net | (118) | 326 |
Income before income taxes | (118) | 326 |
Income tax expense | 32 | (88) |
Net income | (86) | 238 |
Defined benefit pension plan items | Amount reclassified from AOCI | ||
Comprehensive Income | ||
Salaries and benefits | (68) | (77) |
Income before income taxes | (68) | (77) |
Income tax expense | 18 | 31 |
Net income | (50) | (46) |
Investment Hedge | Amount reclassified from AOCI | ||
Comprehensive Income | ||
Interest on investment securities - taxable | 458 | 0 |
Income before income taxes | 458 | 0 |
Income tax expense | (124) | 0 |
Net income | $ 334 | $ 0 |
Comprehensive Income - Componen
Comprehensive Income - Components of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (AOCI) | |||
Beginning balance | $ 176,773 | $ 150,192 | |
Total other comprehensive income (loss) | 917 | (3,485) | |
Ending balance | 180,872 | 150,421 | |
Unrealized gains (losses) on available for-sale securities | |||
Accumulated Other Comprehensive Income (AOCI) | |||
Beginning balance | (3,384) | (5) | |
Other comprehensive loss before reclassification | 1,357 | (3,247) | |
Amounts reclassified from AOCI | 86 | (238) | |
Total other comprehensive income (loss) | 1,443 | (3,485) | |
Stranded AOCI | 0 | ||
Mark to market on equity positions | $ (98) | ||
Ending balance | (1,941) | (3,588) | |
Defined benefit pension plan items | |||
Accumulated Other Comprehensive Income (AOCI) | |||
Beginning balance | (3,422) | (2,983) | |
Other comprehensive loss before reclassification | (242) | (46) | |
Amounts reclassified from AOCI | 50 | 46 | |
Total other comprehensive income (loss) | (192) | 0 | |
Stranded AOCI | (646) | ||
Mark to market on equity positions | 0 | ||
Ending balance | (3,614) | (3,629) | |
Investment Hedge | |||
Accumulated Other Comprehensive Income (AOCI) | |||
Beginning balance | 0 | ||
Other comprehensive loss before reclassification | 0 | ||
Amounts reclassified from AOCI | (334) | ||
Total other comprehensive income (loss) | (334) | ||
Ending balance | (334) | ||
Accumulated Other Comprehensive (Loss) | |||
Accumulated Other Comprehensive Income (AOCI) | |||
Beginning balance | (6,806) | (2,988) | |
Other comprehensive loss before reclassification | 1,115 | (3,293) | |
Amounts reclassified from AOCI | (198) | (192) | |
Total other comprehensive income (loss) | 917 | (3,485) | |
Stranded AOCI | (646) | ||
Mark to market on equity positions | $ (98) | ||
Ending balance | $ (5,889) | $ (7,217) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Service charges on deposit accounts | $ 315 | $ 185 |
Visa debit card and interchange income | 141 | 150 |
Other | 113 | 46 |
Noninterest income in scope of Topic 606 | 569 | 381 |
Noninterest income out of scope of Topic 606 | 8,196 | 8,658 |
Total noninterest income | $ 8,765 | $ 9,039 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2019 | May 01, 2019 | Apr. 30, 2019 | |
Subsequent Event [Line Items] | |||
Investment in fintech companies | $ 3.1 | ||
Fintech investment porfolio value | $ 17.3 | ||
Forecast | |||
Subsequent Event [Line Items] | |||
Pre-tax gain on investment | $ 13.5 |