Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 08, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Level One Bancorp Inc | |
Entity Central Index Key | 1,412,707 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | false | |
Entity Ex Transition Period | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 7,750,216 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 77,837 | $ 63,661 |
Securities available-for-sale | 199,051 | 150,969 |
Federal Home Loan Bank stock | 8,325 | 8,303 |
Mortgage loans held for sale, at fair value | 9,392 | 4,548 |
Loans: | ||
Total loans | 1,114,999 | 1,034,923 |
Less: Allowance for loan losses | (11,890) | (11,713) |
Net loans | 1,103,109 | 1,023,210 |
Premises and equipment | 13,506 | 13,435 |
Goodwill | 9,387 | 9,387 |
Other intangible assets, net | 502 | 667 |
Bank-owned life insurance | 11,785 | 11,542 |
Income tax benefit | 3,201 | 3,102 |
Other assets | 10,174 | 12,467 |
Total assets | 1,446,269 | 1,301,291 |
Deposits: | ||
Noninterest-bearing demand deposits | 380,369 | 324,923 |
Interest-bearing demand deposits | 50,226 | 62,644 |
Money market and savings deposits | 238,351 | 289,363 |
Time deposits | 461,365 | 443,452 |
Total deposits | 1,130,311 | 1,120,382 |
Borrowings | 146,483 | 47,833 |
Subordinated notes | 14,882 | 14,844 |
Other liabilities | 9,134 | 10,272 |
Total liabilities | 1,300,810 | 1,193,331 |
Common stock: | ||
Issued and outstanding—7,749,216 shares at 9/30/2018 and 6,435,461 shares at 12/31/2017 | 90,411 | 59,511 |
Retained earnings | 59,173 | 49,232 |
Accumulated other comprehensive loss, net of tax | (4,125) | (783) |
Total shareholders' equity | 145,459 | 107,960 |
Total liabilities and shareholders' equity | 1,446,269 | 1,301,291 |
Originated | ||
Loans: | ||
Total loans | 1,022,119 | 920,895 |
Acquired | ||
Loans: | ||
Total loans | $ 92,880 | $ 114,028 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2018 | Dec. 31, 2017 |
Common stock: | ||
Shares authorized (in shares) | 20,000,000 | 20,000,000 |
Shares issued (in shares) | 7,749,216 | 6,435,461 |
Shares outstanding (in shares) | 7,749,216 | 6,435,461 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Securities: | ||||
Taxable | $ 816 | $ 422 | $ 2,057 | $ 1,238 |
Tax-exempt | 450 | 260 | 1,181 | 641 |
Federal funds sold and other | 256 | 288 | 708 | 648 |
Total interest income | 16,629 | 13,752 | 46,783 | 41,233 |
Interest Expense | ||||
Deposits | 2,802 | 1,604 | 7,467 | 4,332 |
Borrowed funds | 502 | 214 | 946 | 614 |
Subordinated notes | 256 | 256 | 759 | 759 |
Total interest expense | 3,560 | 2,074 | 9,172 | 5,705 |
Net interest income | 13,069 | 11,678 | 37,611 | 35,528 |
Provision expense for loan losses | 619 | 194 | 463 | 460 |
Net interest income after provision for loan losses | 12,450 | 11,484 | 37,148 | 35,068 |
Noninterest income | ||||
Service charges on deposits | 655 | 607 | 1,915 | 1,905 |
Net gain on sales of securities | 0 | 118 | 0 | 176 |
Mortgage banking activities | 754 | 548 | 1,394 | 1,260 |
Net gain on sale of commercial loans | 0 | 0 | 11 | 146 |
Other charges and fees | 515 | 668 | 1,428 | 1,618 |
Total noninterest income | 1,924 | 1,941 | 4,748 | 5,105 |
Noninterest expense | ||||
Salary and employee benefits | 6,888 | 5,413 | 19,013 | 16,003 |
Occupancy and equipment expense | 1,173 | 1,106 | 3,293 | 3,130 |
Professional service fees | 494 | 603 | 1,231 | 1,683 |
Marketing expense | 264 | 289 | 697 | 768 |
Printing and supplies expense | 127 | 137 | 343 | 371 |
Data processing expense | 565 | 492 | 1,512 | 1,384 |
Other expense | 943 | 1,291 | 3,205 | 3,520 |
Total noninterest expense | 10,454 | 9,331 | 29,294 | 26,859 |
Income before income taxes | 3,920 | 4,094 | 12,602 | 13,314 |
Income tax provision | 665 | 1,259 | 2,167 | 4,406 |
Net income | $ 3,255 | $ 2,835 | $ 10,435 | $ 8,908 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.42 | $ 0.44 | $ 1.44 | $ 1.40 |
Diluted (in dollars per share) | $ 0.41 | $ 0.43 | $ 1.41 | $ 1.35 |
Average common shares outstanding—basic (in shares) | 7,749,047 | 6,392,041 | 7,264,494 | 6,382,723 |
Average common shares outstanding—diluted (in shares) | 7,901,109 | 6,609,616 | 7,413,676 | 6,602,356 |
Cash dividends declared per common share (in dollars per share) | $ 0.03 | $ 0 | $ 0.09 | $ 0 |
Originated | ||||
Interest income | ||||
Loans, including fees | $ 12,653 | $ 10,172 | $ 35,664 | $ 29,265 |
Acquired | ||||
Interest income | ||||
Loans, including fees | $ 2,454 | $ 2,610 | $ 7,173 | $ 9,441 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 3,255 | $ 2,835 | $ 10,435 | $ 8,908 | |
Other comprehensive income: | |||||
Unrealized holding gains (losses) on securities available-for-sale arising during the period | (1,247) | (225) | (4,016) | 1,545 | |
Reclassification adjustment for gains included in income | 0 | (118) | 0 | (176) | |
Tax effect | [1] | 261 | 120 | 842 | (479) |
Net unrealized gains (losses) on securities available-for-sale, net of tax | (986) | (223) | (3,174) | 890 | |
Total comprehensive income, net of tax | $ 2,269 | $ 2,612 | $ 7,261 | $ 9,798 | |
[1] | Includes $41 thousand and $62 thousand of tax expense related to reclassification for the three and nine months ended September 30, 2017, respectively. |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Tax expense related to reclassification | $ 41 | $ 62 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2016 | $ 96,571 | $ 58,306 | $ 39,391 | $ (1,126) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 8,908 | 8,908 | ||
Other comprehensive income (loss) | 890 | 890 | ||
Exercise of stock options, including tax benefit | 151 | 151 | ||
Stock-based compensation expense, net of tax impact | 465 | 465 | ||
Balance at Sep. 30, 2017 | 106,985 | 58,922 | 48,299 | (236) |
Balance at Jun. 30, 2017 | 104,206 | 58,755 | 45,464 | (13) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 2,835 | 2,835 | ||
Other comprehensive income (loss) | (223) | (223) | ||
Stock-based compensation expense, net of tax impact | 167 | 167 | ||
Balance at Sep. 30, 2017 | 106,985 | 58,922 | 48,299 | (236) |
Balance at Dec. 31, 2017 | 107,960 | 59,511 | 49,232 | (783) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 10,435 | 10,435 | ||
Other comprehensive income (loss) | (3,174) | (3,174) | ||
Reclass of tax reform adjustments due to early adoption of ASU 2018-02 | 168 | (168) | ||
Initial public offering of 1,150,765 shares of common stock, net of issuance costs | 29,030 | 29,030 | ||
Common stock dividend | (662) | (662) | ||
Exercise of stock options, including tax benefit | 1,269 | 1,269 | ||
Stock-based compensation expense, net of tax impact | 601 | 601 | ||
Balance at Sep. 30, 2018 | 145,459 | 90,411 | 59,173 | (4,125) |
Balance at Jun. 30, 2018 | 143,445 | 90,201 | 56,383 | (3,139) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 3,255 | 3,255 | ||
Other comprehensive income (loss) | (986) | (986) | ||
Common stock dividend | (465) | (465) | ||
Exercise of stock options, including tax benefit | 12 | 12 | ||
Stock-based compensation expense, net of tax impact | 198 | 198 | ||
Balance at Sep. 30, 2018 | $ 145,459 | $ 90,411 | $ 59,173 | $ (4,125) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Initial public offering, shares of common stock (in shares) | 1,150,765 |
Cash dividend declared (in dollars per share) | $ / shares | $ 0.09 |
Exercise of stock options (in shares) | 126,494 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net income | $ 10,435 | $ 8,908 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of fixed assets | 1,008 | 1,030 |
Amortization of core deposit intangibles | 165 | 176 |
Stock-based compensation expense | 615 | 465 |
Provision expense for loan losses | 463 | 460 |
Net securities premium amortization | 1,001 | 557 |
Net gain on sales of securities | 0 | (176) |
Originations of loans held for sale | (53,918) | (45,972) |
Proceeds from sales of loans originated for sale | 50,160 | 51,832 |
Net gain on sales of loans | (1,550) | (1,406) |
Accretion on acquired purchase credit impaired loans | (3,076) | (4,188) |
Gain on sale of other real estate owned | (48) | (204) |
Increase in cash surrender value of life insurance | (243) | (246) |
Amortization of debt issuance costs | 38 | 44 |
Net (increase) decrease in accrued interest receivable and other assets | 2,586 | (1,586) |
Net increase (decrease) in accrued interest payable and other liabilities | (1,370) | 3,729 |
Deferred income tax benefit (expense) | (180) | 878 |
Net cash provided by operating activities | 6,086 | 14,301 |
Cash flows from investing activities | ||
Net increase in loans | (76,822) | (22,497) |
Principal payments on securities available-for-sale | 7,073 | 6,687 |
Purchases of securities available-for-sale | (60,877) | (59,356) |
Purchases of FHLB Stock | (22) | (2,475) |
Additions to premises and equipment | (1,100) | (867) |
Proceeds from: | ||
Sale of securities available-for-sale | 704 | 12,490 |
Sale of other real estate owned | 700 | 0 |
Net cash used in investing activities | (130,344) | (66,018) |
Cash flows from financing activities | ||
Net increase in deposits | 9,929 | 144,950 |
Change in short-term borrowings | 98,702 | (5,243) |
Repayment of long-term debt | (52) | (14,506) |
Net proceeds from issuance of common stock related to initial public offering | 29,030 | 0 |
Proceeds from exercised stock options | 1,269 | 150 |
Payments related to tax-withholding for share based compensation awards | (14) | 0 |
Common stock dividend paid | (430) | 0 |
Net cash provided by financing activities | 138,434 | 125,351 |
Net change in cash and cash equivalents | 14,176 | 73,634 |
Beginning cash and cash equivalents | 63,661 | 19,116 |
Ending cash and cash equivalents | 77,837 | 92,750 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 8,678 | 5,236 |
Income taxes paid | 1,300 | 3,485 |
Transfer of loans held for sale to loans held for investment | 453 | 947 |
Transfer from premises and equipment to other assets | 20 | 1,794 |
Transfer from loans to other real estate owned | $ 0 | $ 385 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations: Level One Bancorp, Inc. (the "Company") was organized to become a bank holding company to establish and operate a bank, Level One Bank (the "Bank") in Farmington Hills, Michigan. The Company was incorporated on July 17, 2006 under Michigan law. The Bank began operations on October 5, 2007. The Bank is a Michigan banking corporation with depository accounts insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (the "FDIC"). The Bank provides a wide range of business and consumer financial services in the greater Farmington Hills, Novi, Northville, Birmingham, Ferndale, Sterling Heights, Bloomfield Township, Detroit and Grand Rapids areas. Its primary deposit products are checking, interest-bearing demand, money market and savings, and term certificate accounts, and its primary lending products are commercial real estate, commercial and industrial, residential real estate, and consumer loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Other financial instruments, which potentially represent concentrations of credit risk, include federal funds sold. On July 9, 2017, the Company formed a new subsidiary, Hamilton Court Insurance Company ("Hamilton Court"), which is a wholly owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company and the Bank, and reinsurance to ten other third party insurance captives for which insurance may not be currently available or economically feasible in the insurance marketplace. Hamilton Court was designed to insure the risks of the Company and the Bank by providing additional insurance coverage for deductibles, excess limits and uninsured exposures. Hamilton Court is domiciled in Nevada. On April 24, 2018, the Company sold 1,150,765 shares of common stock in its initial public offering, including 180,000 shares of common stock pursuant to the exercise in full by the underwriters of their option to purchase additional shares. The aggregate offering price for the shares sold by the Company was $ 32.2 million , and after deducting $ 2.1 million of underwriting discounts and $ 1.1 million of offering expenses paid to third parties, the Company received total net proceeds of $ 29.0 million from the initial public offering. In addition, certain selling shareholders participated in the offering and sold an aggregate of 229,235 shares of our common stock at an aggregate offering price of $ 6.4 million . The Company did not receive any proceeds from the sales of shares by the selling shareholders. Basis of Presentation and Principles of Consolidation: The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2017, included in our registration statement on Form S-1, as amended, filed with the SEC on April 12, 2018 and declared effective on April 19, 2018. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank and Hamilton Court, after elimination of significant intercompany transactions and accounts. Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided; therefore future results could differ. Emerging Growth Company Status: We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period when complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period, which means these financial statements, as well as financial statements we file in the future for as long as we remain an emerging growth company, will be subject to all new or revised accounting standards generally applicable to private companies. Recent Accounting Standards: Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)," which provides a framework for revenue recognition that replaces the existing industry and transaction specific requirements under the existing standards. ASU 2014-09 requires an entity to apply a five-step model to determine when to recognize revenue and at what amount. The model specifies that revenue should be recognized when (or as) an entity transfers control of goods or services to a customer at the amount in which the entity expects to be entitled. Depending on whether certain criteria are met, revenue should be recognized either over time, in a manner that depicts the entity's performance, or at a point in time, when control of the goods or services are transferred to the customer. The amendments of ASU 2014-09 may be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The guidance will be effective for the Company for the fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The Company plans to adopt these amendments within the time frames stated above. The Company is continuing to evaluate the impact ASU 2014-09 will have on our consolidated financial statements. Based on this evaluation to date, management has determined that the majority of the revenues earned by the Company are not within the scope of ASU 2014-09, and that a few of the revenue streams that have been identified as being in scope would include service charges and interchange fees. Management will continue to evaluate the impact the adoption of ASU 2014-09 will have on our consolidated financial statements, focusing on noninterest income sources within the scope of ASU 2014-09 as well as new disclosures required by these amendments; however, the adoption of ASU 2014-09 is not expected to have a material impact on the Company's consolidated financial statements but is expected to result in additional disclosures. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," to improve the accounting for financial instruments. This ASU requires equity investments with readily determinable fair values to be measured at fair value with changes recognized in net income regardless of classification. For equity investments without a readily determinable fair value, the value of the investment would be measured 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 instead of fair value, unless a qualitative assessment indicates impairment. Additionally, this ASU requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, as well as the required use of exit pricing when measuring the fair value of financial instruments for disclosure purposes. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, and is to be applied prospectively with a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is in the planning stages of developing processes and procedures to comply with the disclosures requirements of this ASU, which could impact the disclosures the Company makes related to fair value of its financial instruments. This standard is not expected to have a material impact to the Company's consolidated financial statements. The Company is planning to adopt this new guidance within the time frames stated above. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to improve transparency and comparability across entities regarding leasing arrangements. This ASU requires the recognition of a separate lease liability representing the required discounted lease payments over the lease term and a separate lease asset representing the right to use the underlying asset during the same lease term. Additionally, this ASU provides clarification regarding the identification of certain components of contracts that would represent a lease as well as requires additional disclosures to the notes of the financial statements. The guidance will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, and is to be applied under an optional transition method. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. Additionally, the Company does not expect to significantly change operating lease agreements prior to adoption. The Company is planning to adopt this new guidance within the time frames stated above. Allowance for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," to replace the current incurred loss methodology for recognizing credit losses, which delays recognition until it is probable a loss has been incurred, with a methodology that reflects an estimate of all expected credit losses and considers additional reasonable and supportable forecasted information when determining credit loss estimates. This impacts the calculation of the allowance for credit losses for all financial assets measured under the amortized cost basis, including PCI loans at the time of and subsequent to acquisition. Additionally, credit losses related to available-for-sale debt securities would be recorded through the allowance for credit losses and not as a direct adjustment to the amortized cost of the securities. The guidance will be effective for the Company for fiscal years beginning after December 15, 2020, including interim periods after that fiscal year, and is to be applied under a modified retrospective approach. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements as well as the impact on current systems and processes. At this time, the Company is reviewing potential methodologies for estimating expected credit losses using reasonable and supportable forecast information as well as has identified certain data and system requirements. Once adopted, we expect our allowance for loan losses to increase through a one-time adjustment to retained earnings; however, until our evaluation is complete, the estimated increase in allowance will be unknown. The Company is planning to adopt this new guidance within the time frames stated above. Investment Securities The Company elected to early adopt ASU No. 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08")" during the first quarter of 2017. The guidance in ASU 2017-08 shortens the amortization period for certain callable debt securities that are held at a premium to the earliest call date. Debt securities held at a discount will continue to be amortized as a yield adjustment over the life of the instrument. The early adoption of ASU 2017-08 in the first quarter of 2017 did not have a material impact on the Company's Consolidated Financial Statements. Income Taxes - Tax Cuts and Jobs Act In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)," which allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act ("TCJA"). The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. In addition, the ASU requires that an entity state if an election to reclassify the tax effects to retained earnings is made, along with a description of other income tax effects that are reclassified from AOCI. This guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the ASU and reclassified $168 thousand from retained earnings to AOCI during the first quarter of 2018. In May 2018, the FASB issued an update to ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118," regarding the accounting implications of the recently issued TCJA. The update clarifies that in a company's financial statements that include the reporting period in which the TCJA was enacted, a company must first reflect the income tax effects of the TCJA in which the accounting under GAAP is complete. These amounts would not be provisional amounts. The Company would also report provisional amounts for those specific income tax effects for which the accounting under GAAP will be incomplete but for which a reasonable estimate can be determined. This accounting update is effective immediately. The Company believes its accounting for the income tax effects of the TCJA is complete. Technical corrections or other forthcoming guidance could change how we interpret provisions of the TCJA, which may impact our effective tax rate and could affect our deferred tax assets, tax positions and/or our tax liabilities. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | SECURITIES The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at September 30, 2018 and December 31, 2017 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2018 U.S. government sponsored entities & agencies $ 2,401 $ — $ (74 ) $ 2,327 State and political subdivision 71,417 205 (1,419 ) 70,203 Mortgage-backed securities: residential 10,413 1 (557 ) 9,857 Mortgage-backed securities: commercial 12,662 — (480 ) 12,182 Collateralized mortgage obligations: residential 19,897 138 (459 ) 19,576 Collateralized mortgage obligations: commercial 33,027 13 (1,001 ) 32,039 U.S. Treasury 24,239 — (1,272 ) 22,967 SBA 16,269 — (189 ) 16,080 Asset backed securities 3,870 5 (12 ) 3,863 Corporate Bonds 10,077 — (120 ) 9,957 Total available-for-sale $ 204,272 $ 362 $ (5,583 ) $ 199,051 December 31, 2017 State and political subdivision $ 52,951 $ 602 $ (329 ) $ 53,224 Mortgage-backed securities: residential 8,689 3 (261 ) 8,431 Mortgage-backed securities: commercial 9,879 12 (72 ) 9,819 Collateralized mortgage obligations: residential 19,304 125 (208 ) 19,221 Collateralized mortgage obligations: commercial 20,879 11 (333 ) 20,557 U.S. Treasury 24,283 — (710 ) 23,573 SBA 12,644 10 (38 ) 12,616 Corporate Bonds 3,545 — (17 ) 3,528 Total available-for-sale $ 152,174 $ 763 $ (1,968 ) $ 150,969 The proceeds from sales of securities and the associated gains and losses for the periods below are as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Proceeds $ 704 $ 7,503 $ 704 $ 12,490 Gross gains 2 118 2 176 Gross losses (2 ) — (2 ) — The amortized cost and fair value of securities are shown in the table below by contractual maturity. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage-backed securities and collateralized mortgage obligations receive monthly principal payments, which are not reflected below. September 30, 2018 (Dollars in thousands) Amortized Cost Fair Value Within one year $ 1,213 $ 1,211 One to five years 53,448 51,656 Five to ten years 36,986 36,012 Beyond ten years 112,625 110,172 Total $ 204,272 $ 199,051 Securities pledged at September 30, 2018 and December 31, 2017 had a carrying amount of $41.3 million and $36.5 million , respectively, and were pledged to secure Federal Home Loan Bank ("FHLB") advances, Federal Reserve Bank line of credit, repurchase agreements and deposits. As of September 30, 2018 , the Bank held 50 tax-exempt state and local municipal securities totaling $36.2 million backed by the Michigan School Bond Loan Fund. Other than the aforementioned investments, at September 30, 2018 and December 31, 2017, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders' equity. The following table summarizes securities with unrealized losses at September 30, 2018 and December 31, 2017 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Fair value Unrealized Losses Fair value Unrealized Losses Fair value Unrealized Losses September 30, 2018 Available-for-sale U.S. government sponsored entities & agencies $ 2,327 $ (74 ) $ — $ — $ 2,327 $ (74 ) State and political subdivision 35,807 (701 ) 15,956 (718 ) 51,763 (1,419 ) Mortgage-backed securities: residential 2,669 (47 ) 7,119 (510 ) 9,788 (557 ) Mortgage-backed securities: commercial 7,683 (298 ) 4,500 (182 ) 12,183 (480 ) Collateralized mortgage obligations: residential 4,056 (64 ) 8,254 (395 ) 12,310 (459 ) Collateralized mortgage obligations: commercial 17,566 (363 ) 13,496 (638 ) 31,062 (1,001 ) U.S. Treasury 2,867 (100 ) 20,099 (1,172 ) 22,966 (1,272 ) SBA 12,738 (104 ) 3,342 (85 ) 16,080 (189 ) Asset backed securities 1,927 (12 ) — — 1,927 (12 ) Corporate Bonds 8,473 (87 ) 975 (33 ) 9,448 (120 ) Total available-for-sale $ 96,113 $ (1,850 ) $ 73,741 $ (3,733 ) $ 169,854 $ (5,583 ) December 31, 2017 Available-for-sale State and political subdivision $ 17,285 $ (127 ) $ 6,002 $ (202 ) $ 23,287 $ (329 ) Mortgage-backed securities: residential 1,966 (33 ) 6,226 (228 ) 8,192 (261 ) Mortgage-backed securities: commercial 5,874 (31 ) 1,867 (41 ) 7,741 (72 ) Collateralized mortgage obligations: residential 4,609 (40 ) 7,828 (168 ) 12,437 (208 ) Collateralized mortgage obligations: commercial 15,717 (294 ) 2,813 (39 ) 18,530 (333 ) U.S. Treasury 3,937 (27 ) 19,637 (683 ) 23,574 (710 ) SBA 8,516 (25 ) 367 (13 ) 8,883 (38 ) Corporate Bonds 3,528 (17 ) — — 3,528 (17 ) Total available-for-sale $ 61,432 $ (594 ) $ 44,740 $ (1,374 ) $ 106,172 $ (1,968 ) As of September 30, 2018 , the Company's investment portfolio consisted of 259 securities, 205 of which were in an unrealized loss position. The unrealized losses for these securities resulted primarily from changes in interest rates. The Company expects full recovery of the carrying amount of these securities and does not intend to sell the securities in an unrealized loss position nor does it believe it will be required to sell securities in an unrealized loss position before the value is recovered. The Company does not consider these securities to be other-than-temporarily impaired at September 30, 2018 . |
Loans
Loans | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Loans | LOANS The following table presents the recorded investment in loans at September 30, 2018 and December 31, 2017 . The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2018 Commercial real estate $ 484,614 $ 67,967 $ 552,581 Commercial and industrial 387,919 9,141 397,060 Residential real estate 148,648 15,708 164,356 Consumer 938 64 1,002 Total $ 1,022,119 $ 92,880 $ 1,114,999 December 31, 2017 Commercial real estate $ 431,872 $ 79,890 $ 511,762 Commercial and industrial 365,679 12,007 377,686 Residential real estate 122,551 21,888 144,439 Consumer 793 243 1,036 Total $ 920,895 $ 114,028 $ 1,034,923 Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Nonaccrual loans: Commercial real estate $ 4,559 $ 2,257 Commercial and industrial 5,763 9,024 Residential real estate 2,546 2,767 Consumer 5 — Total nonperforming loans 12,873 14,048 Other real estate owned — 652 Total nonperforming assets $ 12,873 $ 14,700 Loans 90 days or more past due and still accruing $ 354 $ 440 The loans 90 days or more past due and still accruing consisted of $341 thousand of PCI loans and $13 thousand of restructured PCI loans as of September 30, 2018 and $440 thousand of PCI loans as of December 31, 2017 . Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total September 30, 2018 Commercial real estate $ 549,992 $ 2,515 $ 74 $ — $ 552,581 Commercial and industrial 392,685 3,305 916 154 397,060 Residential real estate 159,376 2,414 1,255 1,311 164,356 Consumer 997 — — 5 1,002 Total $ 1,103,050 $ 8,234 $ 2,245 $ 1,470 $ 1,114,999 December 31, 2017 Commercial real estate $ 507,250 $ 3,066 $ 1,412 $ 34 $ 511,762 Commercial and industrial 373,829 1,397 2,455 5 377,686 Residential real estate 138,613 3,808 1,258 760 144,439 Consumer 985 51 — — 1,036 Total $ 1,020,677 $ 8,322 $ 5,125 $ 799 $ 1,034,923 Impaired Loans: Information as to impaired loans, excluding purchased credit impaired loans, is as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Nonaccrual loans $ 12,873 $ 14,048 Performing troubled debt restructurings: Commercial real estate 1,511 — Commercial and industrial 574 961 Residential real estate 365 261 Total performing troubled debt restructurings 2,450 1,222 Total impaired loans, excluding purchase credit impaired loans $ 15,323 $ 15,270 Troubled Debt Restructurings: The Company assesses loan modifications to determine whether a modification constitutes a troubled debt restructuring ("TDR"). This applies to all loan modifications except for modifications to loans accounted for in pools under ASC 310-30, which are not subject to TDR accounting/classification. For loans excluded from ASC 310-30 accounting, a modification is considered a TDR when a borrower is experiencing financial difficulties and the Company grants a concession to the borrower. For loans accounted for individually under ASC 310-30, a modification is considered a TDR when a borrower is experiencing financial difficulties and the effective yield after the modification is less than the effective yield at the time the loan was acquired or less than the effective yield of any re-estimation of cash flows subsequent to acquisition in association with consideration of qualitative factors included within ASC 310-40. All TDRs are considered impaired loans. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses. As of September 30, 2018 and December 31, 2017 , the Company had a recorded investment in troubled debt restructurings of $8.7 million and $7.6 million, respectively. The Company has allocated a specific reserve of $938 thousand for those loans at September 30, 2018 and a specific reserve of $975 thousand for those loans at December 31, 2017 . The Company has not committed to lend additional amounts to borrowers whose loans have been modified. As of September 30, 2018 , there were $6.2 million of nonperforming TDRs and $2.5 million of performing TDRs included in impaired loans. As of December 31, 2017 , there were $6.4 million of nonperforming TDRs and $1.2 million of performing TDRs included in impaired loans. All TDRs are considered impaired loans in the calendar year of their restructuring. A loan that has been modified will return to performing status if it satisfies a six-month performance requirement; however, it will continue to be reported as a TDR and considered impaired. The following table presents the recorded investment of loans modified as TDRs during the nine months ended September 30, 2018 and the three and nine months ended September 30, 2017 , by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2018. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession. Concession type Financial effects of (Dollars in thousands) Principal Interest Forbearance Total Total Net Provision For the three months ended September 30, 2017 Commercial and industrial $ — $ — $ 4,408 5 $ 4,408 $ — $ 547 Residential real estate 784 — — 1 784 — — Total $ 784 $ — $ 4,408 6 $ 5,192 $ — $ 547 For the nine months ended September 30, 2018 Commercial real estate $ — $ — $ 2,087 4 $ 2,087 $ 101 $ — Commercial and industrial 133 — 990 3 1,123 — — Residential real estate — — 112 2 112 — 5 Total $ 133 $ — $ 3,189 9 $ 3,322 $ 101 $ 5 For the nine months ended September 30, 2017 Commercial and industrial $ — $ — $ 4,408 5 $ 4,408 $ — $ 547 Residential real estate 784 361 — 3 1,145 — — Total $ 784 $ 361 $ 4,408 8 $ 5,553 $ — $ 547 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. The following tables present the number of loans modified in TDRs during the previous 12 months for which there was payment default during the three and nine months ended September 30, 2018 and September 30, 2017, including the recorded investment as of each period end. A payment on a TDR is considered to be in default once it is greater than 30 days past due. Three months ended September 30, 2018 Nine months ended September 30, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,087 $ — 3 $ 2,087 $ — Commercial and industrial 2 1,182 — 3 1,316 — Residential real estate — — — 1 111 — Total 5 $ 3,269 $ — 7 $ 3,514 $ — Three months ended September 30, 2017 Nine months ended September 30, 2017 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Residential real estate 1 $ 301 $ — 1 $ 301 $ — Total 1 $ 301 $ — 1 $ 301 $ — Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial and industrial and commercial real estate loans and is performed on an annual basis. The Company uses the following definitions for risk ratings: Pass. Higher quality loans that do not fit any of the other categories described below. This category includes loans risk rated with the following ratings: cash/stock secured, excellent credit risk, superior credit risk, good credit risk, satisfactory credit risk, and marginal credit risk. Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company's credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total September 30, 2018 Commercial real estate $ 535,570 $ 10,762 $ 6,208 $ 41 $ 552,581 Commercial and industrial 376,155 4,707 16,089 109 397,060 Total $ 911,725 $ 15,469 $ 22,297 $ 150 $ 949,641 December 31, 2017 Commercial real estate $ 492,731 $ 10,664 $ 8,323 $ 44 $ 511,762 Commercial and industrial 361,740 5,945 9,963 38 377,686 Total $ 854,471 $ 16,609 $ 18,286 $ 82 $ 889,448 For residential real estate loans and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. Residential real estate loans and consumer loans are considered nonperforming if 90 days or more past due. Consumer loan types are continuously monitored for changes in delinquency trends and other asset quality indicators. The following presents residential real estate and consumer loans by credit quality: (Dollars in thousands) Performing Nonperforming Total September 30, 2018 Residential real estate $ 161,810 $ 2,546 $ 164,356 Consumer 997 5 1,002 Total $ 162,807 $ 2,551 $ 165,358 December 31, 2017 Residential real estate $ 141,672 $ 2,767 $ 144,439 Consumer 1,036 — 1,036 Total $ 142,708 $ 2,767 $ 145,475 Purchased Credit Impaired Loans: As part of the Company's previous four acquisitions, the Company acquired purchase credit impaired ("PCI") loans for which there was evidence of credit quality deterioration since origination, and we determined that it was probable that the Company would be unable to collect all contractually required principal and interest payments. The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2018 Commercial real estate $ 9,500 $ 5,537 Commercial and industrial 338 111 Residential real estate 5,043 3,413 Total PCI loans $ 14,881 $ 9,061 December 31, 2017 Commercial real estate $ 10,084 $ 5,771 Commercial and industrial 808 417 Residential real estate 4,068 3,558 Total PCI loans $ 14,960 $ 9,746 The following table reflects the activity in the accretable yield of PCI loans from past acquisitions, which includes total expected cash flows, including interest, in excess of the recorded investment. Three months ended September 30 Nine months ended September 30 (Dollars in thousands) 2018 2017 2018 2017 Balance at beginning of period $ 12,390 $ 16,850 $ 14,452 $ 19,893 Accretion of income (1,167 ) (1,011 ) (3,076 ) (4,188 ) Adjustments to accretable yield — (1 ) (159 ) 133 Other activity, net — — 6 — Balance at end of period $ 11,223 $ 15,838 $ 11,223 $ 15,838 "Accretion of income" represents the income earned on these loans for the year. "Adjustments to accretable yield" represents the net amount of accretable yield added or removed as a result of the semi-annual re-estimation of expected cash flows. For the nine months ended September 30, 2018 and year ended December 31, 2017 , respectively, allowance for loans losses on PCI loans decreased by $96 thousand and increased by $234 thousand. OFF-BALANCE SHEET ACTIVITIES In the normal course of business, the Company offers a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include outstanding commitments to extend credit, credit lines, commercial letters of credit and standby letters of credit. These are agreements to provide credit, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies used for loans are used to make such commitments, including obtaining collateral at exercise of the commitment. A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2018 December 31, 2017 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 16,273 $ 2,325 $ 5,041 $ 8,837 Unused lines of credit 14,121 213,270 12,407 189,787 Unused standby letters of credit 3,705 232 3,584 1,411 Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments have interest rates ranging from 4.75% to 6.15% and maturities ranging from 1 to 10 years. |
Allowance
Allowance | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Allowance | ALLOWANCE An allowance for loan losses is maintained to absorb losses from the loan portfolio. The allowance for loan losses 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 nonperforming loans. The Company established an allowance for loan losses associated with PCI loans (accounted for under ASC 310-30) based on credit deterioration subsequent to the acquisition date. As of September 30, 2018 , the Company had six PCI loan pools and 12 non-pooled PCI loans. The Company re-estimates cash flows expected to be collected for PCI loans on a semi-annual basis, with any decline in expected cash flows recorded as provision for loan losses on a discounted basis during the period. For any increases in cash flows expected to be collected, the Company adjusts the amount of accretable yield recognized on a prospective basis over the loan's remaining life. For loans not accounted for under ASC 310-30, the Company individually evaluates certain impaired loans on a quarterly basis and establishes specific allowances for such loans, if required. A loan is considered impaired when it is probable that interest or principal payments will not be made in accordance with the contractual terms of the loan agreement. Consistent with this definition, all loans for which the accrual of interest has been discontinued (nonaccrual loans) and all TDRs are considered impaired. The Company individually evaluates nonaccrual loans with book balances of $250 thousand or more, all loans whose terms have been modified in a TDR, and certain other loans. The threshold for individual evaluation is revised on an infrequent basis, generally when economic circumstances change significantly. Specific allowances for impaired loans are estimated using one of several methods, including the estimated fair value of underlying collateral, observable market value of similar debt or discounted expected future cash flows. All other impaired loans are individually evaluated by identifying its risk characteristics and applying the standard reserve factor for the corresponding loan pool. Loans which do not meet the criteria to be individually evaluated are evaluated in pools of loans with similar risk characteristics. Business loans are assigned to pools based on the Company's internal risk rating system. Internal risk ratings are assigned to each business loan at the time of approval and are subjected to subsequent periodic reviews by the Company's senior management, generally at least annually or more frequently upon the occurrence of a circumstance that affects the credit risk of the loan. For business loans not individually evaluated, losses inherent to the pool are estimated by applying standard reserve factors to outstanding principal balances. The allowance for loans not individually evaluated is determined by applying estimated loss rates to various pools of loans within the portfolios with similar risk characteristics. Estimated loss rates for all pools are updated quarterly, incorporating quantitative and qualitative factors such as recent charge-off experience, current economic conditions and trends, changes in collateral values of properties securing loans (using index-based estimates), and trends with respect to past due and nonaccrual amounts. Loans acquired in business combinations are initially recorded at fair value, which includes an estimate of credit losses expected to be realized over the remaining lives of the loans, and therefore no corresponding allowance for loan losses is recorded for these loans at acquisition. Methods utilized to estimate any subsequently required allowance for loan losses for acquired loans not deemed credit-impaired at acquisition are similar to originated loans; however, the estimate of loss is based on the unpaid principal balance less any remaining purchase discount. Information as to loans individually evaluated for impairment, including impaired PCI loans, is as follows: (Dollars in thousands) Recorded with no related allowance Recorded with related allowance Total recorded investment Contractual principal balance Related allowance September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 6,039 $ 5,183 $ 11,222 $ 15,362 $ 828 Commercial and industrial 2,927 3,379 6,306 7,532 982 Residential real estate 1,681 3,262 4,943 6,672 145 Total $ 10,647 $ 11,824 $ 22,471 $ 29,566 $ 1,955 December 31, 2017 Individually evaluated impaired loans: Commercial real estate $ 2,222 $ 5,339 $ 7,561 $ 13,536 $ 876 Commercial and industrial 5,238 5,059 10,297 11,677 1,549 Residential real estate 1,696 3,132 4,828 6,502 154 Total $ 9,156 $ 13,530 $ 22,686 $ 31,715 $ 2,579 (Dollars in thousands) Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized For the three months ended September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 9,524 $ 430 $ 142 Commercial and industrial 6,559 22 — Residential real estate 5,217 90 — Total $ 21,300 $ 542 $ 142 For the nine months ended September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 9,258 $ 1,275 $ 142 Commercial and industrial 7,736 71 112 Residential real estate 5,256 277 — Total $ 22,250 $ 1,623 $ 254 For the three months ended September 30, 2017 Individually evaluated impaired loans: Commercial real estate $ 6,554 $ 403 $ — Commercial and industrial 11,542 59 — Residential real estate 4,170 74 — Total $ 22,266 $ 536 $ — For the nine months ended September 30, 2017 Individually evaluated impaired loans: Commercial real estate $ 6,225 $ 1,318 $ — Commercial and industrial 13,301 179 — Residential real estate 4,431 231 — Total $ 23,957 $ 1,728 $ — Activity in the allowance for loan losses and the allocation of the allowance for loans were as follows: (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total For the three months ended September 30, 2018 Allowance for loan losses: Beginning Balance $ 5,060 $ 5,423 $ 977 $ 5 $ 11,465 Provision for loan losses 34 475 101 9 619 Gross chargeoffs — (237 ) — (8 ) (245 ) Recoveries 23 8 19 1 51 Net (chargeoffs) recoveries 23 (229 ) 19 (7 ) (194 ) Ending Allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 For the nine months ended September 30, 2018 Allowance for loan losses: Beginning Balance $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Provision for loan losses 352 (53 ) 143 21 463 Gross chargeoffs (112 ) (995 ) (47 ) (23 ) (1,177 ) Recoveries 25 814 51 1 891 Net (chargeoffs) recoveries (87 ) (181 ) 4 (22 ) (286 ) Ending Allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 September 30, 2018 Allowance for loan losses: Individually evaluated for impairment $ — $ 957 $ 13 $ — $ 970 Collectively evaluated for impairment 4,289 4,687 952 7 9,935 Acquired with deteriorated credit quality 828 25 132 — 985 Ending Allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 Balance of loans: Individually evaluated for impairment $ 6,039 $ 6,194 $ 1,870 $ — $ 14,103 Collectively evaluated for impairment 541,005 390,755 159,073 1,002 1,091,835 Acquired with deteriorated credit quality 5,537 111 3,413 — 9,061 Total loans $ 552,581 $ 397,060 $ 164,356 $ 1,002 $ 1,114,999 (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total For the three months ended September 30, 2017 Allowance for loan losses: Beginning Balance $ 4,829 $ 5,749 $ 821 $ 5 $ 11,404 Provision for loan losses (412 ) 710 (104 ) — 194 Gross chargeoffs — (38 ) (3 ) — (41 ) Recoveries 2 16 55 — 73 Net (chargeoffs) recoveries 2 (22 ) 52 — 32 Ending Allowance for loan losses $ 4,419 $ 6,437 $ 769 $ 5 $ 11,630 For the nine months ended September 30, 2017 Allowance for loan losses: Beginning Balance $ 4,124 $ 5,932 $ 1,030 $ 3 $ 11,089 Provision for loan losses 279 465 (285 ) 1 460 Gross chargeoffs — (139 ) (86 ) — (225 ) Recoveries 16 179 110 1 306 Net (chargeoffs) recoveries 16 40 24 1 81 Ending Allowance for loan losses $ 4,419 $ 6,437 $ 769 $ 5 $ 11,630 December 31, 2017 Allowance for loan losses: Individually evaluated for impairment $ — $ 1,480 $ 18 $ — $ 1,498 Collectively evaluated for impairment 3,976 4,354 796 8 9,134 Acquired with deteriorated credit quality 876 69 136 — 1,081 Ending Allowance for loan losses $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Balance of loans: Individually evaluated for impairment $ 2,222 $ 9,976 $ 1,778 $ — $ 13,976 Collectively evaluated for impairment 503,769 367,293 139,103 1,036 1,011,201 Acquired with deteriorated credit quality 5,771 417 3,558 — 9,746 Total loans $ 511,762 $ 377,686 $ 144,439 $ 1,036 $ 1,034,923 |
Premises and Equipment
Premises and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | PREMISES AND EQUIPMENT Premises and equipment were as follows at September 30, 2018 and December 31, 2017 : (Dollars in thousands) September 30, 2018 December 31, 2017 Land $ 2,197 $ 2,197 Building 9,746 9,132 Leasehold improvements 1,691 1,655 Furniture, fixtures and equipment 5,986 5,614 Total premises and equipment $ 19,620 $ 18,598 Less: Accumulated depreciation 6,114 5,163 Net premises and equipment $ 13,506 $ 13,435 Depreciation expense was $ 345 thousand and $333 thousand for the three months ended September 30, 2018 and 2017 , respectively, and $ 1,008 thousand and $ 1,030 thousand for the nine months ended September 30, 2018 and 2017 , respectively. Most of the Company's branch facilities are rented under non-cancelable operating lease agreements. Total rent expense for the three months ended September 30, 2018 and 2017 , was $285 thousand and $ 288 thousand respectively, and $790 thousand and $662 thousand for the nine months ended September 30, 2018 and 2017 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill : The Company acquired two banks, Lotus Bank in March 2015 and Bank of Michigan in March 2016, which resulted in the recognition of $4.6 million and $4.8 million of goodwill, respectively. Goodwill was $9.4 million at both September 30, 2018 and December 31, 2017 . Goodwill is not amortized but is evaluated at least annually for impairment. The Company's most recent annual goodwill impairment review performed with September 30, 2017 data did not indicate that an impairment of goodwill existed. The Company also determined that no triggering events have occurred that indicated impairment from the most recent valuation date through September 30, 2018 and that the Company's goodwill was not impaired at September 30, 2018 . There was no change in goodwill for the three and nine months ended September 30, 2018 and year ended December 31, 2017 . Acquired Intangible Assets : The Company has recorded core deposit intangibles ("CDIs") associated with each of its acquisitions. CDIs are amortized on an accelerated basis over their estimated useful lives. The table below presents the Company's net carrying amount of CDIs: (Dollars in thousands) September 30, 2018 December 31, 2017 Gross carrying amount $ 2,045 $ 2,045 Accumulated amortization (1,543 ) (1,378 ) Net Intangible $ 502 $ 667 Aggregate amortization expense was $55 thousand and $59 thousand for the three months ended September 30, 2018 and 2017 , respectively, and $165 thousand and $176 thousand for the nine months ended September 30, 2018 and 2017 , respectively. |
Borrowings and Subordinated Deb
Borrowings and Subordinated Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings and Subordinated Debt | BORROWINGS AND SUBORDINATED DEBT The following table presents the components of our short-term borrowings and long-term debt. September 30, 2018 December 31, 2017 (Dollars in thousands) Amount Weighted Amount Weighted Short-term borrowings: Securities sold under agreements to repurchase 10,021 2.34 1,319 0.30 FHLB Advances 125,000 1.94 35,000 1.25 Total short-term borrowings 135,021 1.97 36,319 1.22 Long-term debt: Secured borrowing due in 2022 1,462 1.00 1,514 1.00 FHLB advances due in 2022 10,000 1.75 10,000 1.75 Subordinated notes due in 2025 (2) 14,882 6.38 14,844 6.38 Total long-term debt 26,344 4.32 26,358 4.31 Total short-term and long-term borrowings $ 161,365 2.35 % $ 62,677 2.52 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) The September 30, 2018 balance includes subordinated notes of $15.0 million and debt issuance costs of $118 thousand . The December 31, 2017 balance includes subordinated notes of $15.0 million and debt issuance costs of $156 thousand . The Bank is a member of the FHLB of Indianapolis, which provides short- and long-term funding collateralized by mortgage-related assets to its members. FHLB short-term borrowings bear interest at variable rates based on LIBOR. The advances were secured by a blanket lien on $368.5 million of real estate-related loans as of September 30, 2018 . Based on this collateral and the Company's holdings of FHLB stock, the Company was eligible to borrow up to an additional $78 million at September 30, 2018 . At September 30, 2018 , the Company had $418 thousand of securities sold under agreements to repurchase with customers, which mature overnight. These borrowings were secured by residential collateralized mortgage obligation securities with a fair value of $1.8 million at September 30, 2018 . Additionally, at September 30, 2018 , the Company had $ 9.6 million of U.S. Treasury securities sold under agreements to repurchase with a correspondent bank, which mature on October 29, 2018, and were secured by securities with a fair value of $9.6 million . The Company had a secured borrowing of $1.5 million as of September 30, 2018 relating to certain loan participations sold by the Company that did not qualify for sales treatment. The secured borrowing bears a fixed rate of 1.00% and matures on September 15, 2022. As of September 30, 2018 , the Company had outstanding $15.0 million of subordinated notes. The notes bear a fixed interest rate of 6.375% per annum, payable semiannually through December 15, 2020. The notes will bear a floating interest rate of three-month LIBOR plus 477 basis points payable quarterly after December 15, 2020 through maturity. The notes mature no later than December 15, 2025, and the Company has the option to redeem or prepay any or all of the subordinated notes without premium or penalty any time after December 15, 2020 or upon an occurrence of a Tier 2 capital event or tax event. The notes are subordinated to all other borrowings. At September 30, 2018 , there was $118 thousand of debt issuance costs remaining, which are netted against the balance of the subordinated notes and recognized as expense over the expected term of the notes. Selected financial information pertaining to the components of our short-term borrowings is as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 FHLB Line of Credit Average Daily Balance $ 3,026 $ 45 $ 4,085 $ 2,347 Weighted-average rate 2.40 % 1.40 % 2.06 % 0.91 % Maximum month-end balance $ 37,081 $ — $ 37,081 $ 20,551 Securities sold under agreements to repurchase Average Daily Balance $ 9,824 $ 707 $ 4,413 $ 806 Weighted-average rate 2.34 % 0.30 % 2.34 % 0.30 % Maximum month-end balance $ 10,276 $ 896 $ 10,761 $ 1,085 FHLB Advances Average Daily Balance $ 71,054 $ 74,140 $ 47,077 $ 33,224 Weighted-average rate 2.14 % 1.13 % 1.94 % 0.92 % Maximum month-end balance $ 125,000 $ 72,000 $ 125,000 $ 120,000 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company records its federal income tax expense using its estimate of the effective income tax rate expected for the full year and applies that rate on a year-to-date basis. The fluctuations in the Company’s effective federal income tax rate reflect changes related to interest income exempt from federal taxation and other nondeductible expenses relative to income tax credits. A reconciliation of expected income tax expense using the federal corporate tax rate of 21% and 35% as of September 30, 2018 and 2017 , respectively, and actual income tax expense is as follows : For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Income tax expense based on federal corporate tax rate $ 823 $ 1,433 $ 2,646 $ 4,660 Changes resulting from: Tax-exempt income 104 120 289 307 Other, net (262 ) (294 ) (768 ) (561 ) Income tax expense $ 665 $ 1,259 $ 2,167 $ 4,406 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | STOCK BASED COMPENSATION 2007 Stock Option Plan On January 16, 2008, the shareholders of the Company approved the Level One Bancorp, Inc. 2007 Stock Option Plan (the "Stock Option Plan"). The Stock Option Plan was intended to promote equity ownership of the Company by (i) selected officers and employees of the Company and the Bank; (ii) directors of the Company and the Bank; and (iii) the organizers. Such ownership was intended to promote the proprietary interest of the individuals to whom stock options will be granted ("Optionees"), to attract and retain qualified officers, employees and directors, and to further align the interests of Optionees with the interests of the Company's shareholders. The Company's Board of Directors had reserved (with consent of the Company's shareholders) 630,265 shares of common stock for issuance under the Stock Option Plan. During the nine months ended September 30, 2018 , the Company granted 30,000 stock options. No options were granted during the nine months ended September 30, 2017 . The term of the options is ten years and options vest over three years , one-third each year. The Company will use authorized but unissued shares to satisfy share option exercises. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. Expected volatilities are based on historical volatilities of the Company's common stock. The Company assumes all awards will vest. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The fair value of the stock options granted was determined using the following weighted-average assumptions as of grant date: September 30, 2018 Risk Free Interest Rate 2.83% Expected Term (years) 7.0 Expected Volatility 0.04% Dividend Yield —% Weighted average fair value of options granted $4.46 The employee stock option activity for the nine months ended September 30, 2018 is summarized below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at 1/1/2018 484,147 $ 13.96 4.76 $ 6,700 Granted 30,000 24.80 Exercised (126,494 ) 10.04 Forfeited (9,885 ) 10.00 Outstanding at 9/30/2018 377,768 $ 16.24 6.05 $ 4,367 Exercisable at 9/30/2018 318,263 $ 15.02 5.61 $ 4,069 Share-based compensation expense charged against income was $ 38 thousand and $ 39 thousand for the three months ended September 30, 2018 and 2017, and $128 thousand for both the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018 , there was $ 132 thousand of total unrecognized compensation cost related to stock options granted under the Stock Option Plan. The cost is expected to be recognized over a weighted-average period of 1.4 years. 2014 Equity Incentive Plan Under the 2014 Equity Incentive Plan ("2014 Plan"), the Company could grant restricted stock awards to its directors ("Plan A") and employees ("Plan B"). Restricted stock awards are participating shares that vest upon completion of future service requirements. If an individual awarded restricted stock awards terminates employment prior to the end of the vesting period, the unvested portion of the stock award is forfeited. The fair value of these awards is equal to the fair value of the stock as of the issuance date. The Company recognizes stock-based compensation expense for these awards over the vesting period, using the straight-line method, based upon the number of shares of restricted stock ultimately expected to vest. The Company had reserved 150,000 shares of common stock for issuance under the 2014 Plan. During the nine months ended September 30, 2018 , the Company granted 30,271 restricted stock awards under the 2014 Plan. 2018 Equity Incentive Plan On March 15, 2018, the Company’s Board of Directors approved the 2018 Equity Incentive Compensation Plan ("2018 Plan"). The 2018 Plan became effective upon shareholder approval at the annual shareholders meeting held on April 17, 2018. Under the 2018 Plan, the Company can grant incentive and non-qualified stock options, stock awards, stock appreciation rights, and other incentive awards to directors and employees of, and certain service providers to, the Company and its subsidiaries. Once the 2018 Plan became effective, no further awards could be granted from the Stock Option Plan or the 2014 Plan. However, any outstanding equity award granted under the Stock Option Plan or the 2014 Plan will remain subject to the terms of such plans until the time it is no longer outstanding. The Company has reserved 250,000 shares of common stock for issuance under the 2018 Plan. During the nine months ended September 30, 2018 , the Company granted 6,750 restricted stock awards under the 2018 Plan. A summary of changes in the Company's nonvested shares for the nine months ended September 30, 2018 is as follows: Nonvested Shares Shares Weighted Average Grant-Date Fair Value Nonvested at 1/1/2018 30,150 $ 22.03 Granted 37,021 25.53 Vested (10,747 ) 22.81 Nonvested at 9/30/2018 56,424 $ 24.18 Total expense for restricted stock awards totaled $ 175 thousand and $128 thousand for the three months ended September 30, 2018 and 2017, and $487 thousand and $337 thousand for the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 , there was $ 858 thousand of total unrecognized compensation cost related to nonvested shares granted under the 2014 Plan and 2018 Plan. The cost is expected to be recognized over a weighted average period of 2.0 years. The total fair value of shares vested during the three and nine months ended September 30, 2018 , was $114 thousand and $245 thousand respectively. |
Off-Balance Sheet Activities
Off-Balance Sheet Activities | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Off-Balance Sheet Activities | LOANS The following table presents the recorded investment in loans at September 30, 2018 and December 31, 2017 . The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2018 Commercial real estate $ 484,614 $ 67,967 $ 552,581 Commercial and industrial 387,919 9,141 397,060 Residential real estate 148,648 15,708 164,356 Consumer 938 64 1,002 Total $ 1,022,119 $ 92,880 $ 1,114,999 December 31, 2017 Commercial real estate $ 431,872 $ 79,890 $ 511,762 Commercial and industrial 365,679 12,007 377,686 Residential real estate 122,551 21,888 144,439 Consumer 793 243 1,036 Total $ 920,895 $ 114,028 $ 1,034,923 Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Nonaccrual loans: Commercial real estate $ 4,559 $ 2,257 Commercial and industrial 5,763 9,024 Residential real estate 2,546 2,767 Consumer 5 — Total nonperforming loans 12,873 14,048 Other real estate owned — 652 Total nonperforming assets $ 12,873 $ 14,700 Loans 90 days or more past due and still accruing $ 354 $ 440 The loans 90 days or more past due and still accruing consisted of $341 thousand of PCI loans and $13 thousand of restructured PCI loans as of September 30, 2018 and $440 thousand of PCI loans as of December 31, 2017 . Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total September 30, 2018 Commercial real estate $ 549,992 $ 2,515 $ 74 $ — $ 552,581 Commercial and industrial 392,685 3,305 916 154 397,060 Residential real estate 159,376 2,414 1,255 1,311 164,356 Consumer 997 — — 5 1,002 Total $ 1,103,050 $ 8,234 $ 2,245 $ 1,470 $ 1,114,999 December 31, 2017 Commercial real estate $ 507,250 $ 3,066 $ 1,412 $ 34 $ 511,762 Commercial and industrial 373,829 1,397 2,455 5 377,686 Residential real estate 138,613 3,808 1,258 760 144,439 Consumer 985 51 — — 1,036 Total $ 1,020,677 $ 8,322 $ 5,125 $ 799 $ 1,034,923 Impaired Loans: Information as to impaired loans, excluding purchased credit impaired loans, is as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Nonaccrual loans $ 12,873 $ 14,048 Performing troubled debt restructurings: Commercial real estate 1,511 — Commercial and industrial 574 961 Residential real estate 365 261 Total performing troubled debt restructurings 2,450 1,222 Total impaired loans, excluding purchase credit impaired loans $ 15,323 $ 15,270 Troubled Debt Restructurings: The Company assesses loan modifications to determine whether a modification constitutes a troubled debt restructuring ("TDR"). This applies to all loan modifications except for modifications to loans accounted for in pools under ASC 310-30, which are not subject to TDR accounting/classification. For loans excluded from ASC 310-30 accounting, a modification is considered a TDR when a borrower is experiencing financial difficulties and the Company grants a concession to the borrower. For loans accounted for individually under ASC 310-30, a modification is considered a TDR when a borrower is experiencing financial difficulties and the effective yield after the modification is less than the effective yield at the time the loan was acquired or less than the effective yield of any re-estimation of cash flows subsequent to acquisition in association with consideration of qualitative factors included within ASC 310-40. All TDRs are considered impaired loans. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses. As of September 30, 2018 and December 31, 2017 , the Company had a recorded investment in troubled debt restructurings of $8.7 million and $7.6 million, respectively. The Company has allocated a specific reserve of $938 thousand for those loans at September 30, 2018 and a specific reserve of $975 thousand for those loans at December 31, 2017 . The Company has not committed to lend additional amounts to borrowers whose loans have been modified. As of September 30, 2018 , there were $6.2 million of nonperforming TDRs and $2.5 million of performing TDRs included in impaired loans. As of December 31, 2017 , there were $6.4 million of nonperforming TDRs and $1.2 million of performing TDRs included in impaired loans. All TDRs are considered impaired loans in the calendar year of their restructuring. A loan that has been modified will return to performing status if it satisfies a six-month performance requirement; however, it will continue to be reported as a TDR and considered impaired. The following table presents the recorded investment of loans modified as TDRs during the nine months ended September 30, 2018 and the three and nine months ended September 30, 2017 , by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2018. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession. Concession type Financial effects of (Dollars in thousands) Principal Interest Forbearance Total Total Net Provision For the three months ended September 30, 2017 Commercial and industrial $ — $ — $ 4,408 5 $ 4,408 $ — $ 547 Residential real estate 784 — — 1 784 — — Total $ 784 $ — $ 4,408 6 $ 5,192 $ — $ 547 For the nine months ended September 30, 2018 Commercial real estate $ — $ — $ 2,087 4 $ 2,087 $ 101 $ — Commercial and industrial 133 — 990 3 1,123 — — Residential real estate — — 112 2 112 — 5 Total $ 133 $ — $ 3,189 9 $ 3,322 $ 101 $ 5 For the nine months ended September 30, 2017 Commercial and industrial $ — $ — $ 4,408 5 $ 4,408 $ — $ 547 Residential real estate 784 361 — 3 1,145 — — Total $ 784 $ 361 $ 4,408 8 $ 5,553 $ — $ 547 On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. The following tables present the number of loans modified in TDRs during the previous 12 months for which there was payment default during the three and nine months ended September 30, 2018 and September 30, 2017, including the recorded investment as of each period end. A payment on a TDR is considered to be in default once it is greater than 30 days past due. Three months ended September 30, 2018 Nine months ended September 30, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,087 $ — 3 $ 2,087 $ — Commercial and industrial 2 1,182 — 3 1,316 — Residential real estate — — — 1 111 — Total 5 $ 3,269 $ — 7 $ 3,514 $ — Three months ended September 30, 2017 Nine months ended September 30, 2017 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Residential real estate 1 $ 301 $ — 1 $ 301 $ — Total 1 $ 301 $ — 1 $ 301 $ — Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial and industrial and commercial real estate loans and is performed on an annual basis. The Company uses the following definitions for risk ratings: Pass. Higher quality loans that do not fit any of the other categories described below. This category includes loans risk rated with the following ratings: cash/stock secured, excellent credit risk, superior credit risk, good credit risk, satisfactory credit risk, and marginal credit risk. Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company's credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total September 30, 2018 Commercial real estate $ 535,570 $ 10,762 $ 6,208 $ 41 $ 552,581 Commercial and industrial 376,155 4,707 16,089 109 397,060 Total $ 911,725 $ 15,469 $ 22,297 $ 150 $ 949,641 December 31, 2017 Commercial real estate $ 492,731 $ 10,664 $ 8,323 $ 44 $ 511,762 Commercial and industrial 361,740 5,945 9,963 38 377,686 Total $ 854,471 $ 16,609 $ 18,286 $ 82 $ 889,448 For residential real estate loans and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. Residential real estate loans and consumer loans are considered nonperforming if 90 days or more past due. Consumer loan types are continuously monitored for changes in delinquency trends and other asset quality indicators. The following presents residential real estate and consumer loans by credit quality: (Dollars in thousands) Performing Nonperforming Total September 30, 2018 Residential real estate $ 161,810 $ 2,546 $ 164,356 Consumer 997 5 1,002 Total $ 162,807 $ 2,551 $ 165,358 December 31, 2017 Residential real estate $ 141,672 $ 2,767 $ 144,439 Consumer 1,036 — 1,036 Total $ 142,708 $ 2,767 $ 145,475 Purchased Credit Impaired Loans: As part of the Company's previous four acquisitions, the Company acquired purchase credit impaired ("PCI") loans for which there was evidence of credit quality deterioration since origination, and we determined that it was probable that the Company would be unable to collect all contractually required principal and interest payments. The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2018 Commercial real estate $ 9,500 $ 5,537 Commercial and industrial 338 111 Residential real estate 5,043 3,413 Total PCI loans $ 14,881 $ 9,061 December 31, 2017 Commercial real estate $ 10,084 $ 5,771 Commercial and industrial 808 417 Residential real estate 4,068 3,558 Total PCI loans $ 14,960 $ 9,746 The following table reflects the activity in the accretable yield of PCI loans from past acquisitions, which includes total expected cash flows, including interest, in excess of the recorded investment. Three months ended September 30 Nine months ended September 30 (Dollars in thousands) 2018 2017 2018 2017 Balance at beginning of period $ 12,390 $ 16,850 $ 14,452 $ 19,893 Accretion of income (1,167 ) (1,011 ) (3,076 ) (4,188 ) Adjustments to accretable yield — (1 ) (159 ) 133 Other activity, net — — 6 — Balance at end of period $ 11,223 $ 15,838 $ 11,223 $ 15,838 "Accretion of income" represents the income earned on these loans for the year. "Adjustments to accretable yield" represents the net amount of accretable yield added or removed as a result of the semi-annual re-estimation of expected cash flows. For the nine months ended September 30, 2018 and year ended December 31, 2017 , respectively, allowance for loans losses on PCI loans decreased by $96 thousand and increased by $234 thousand. OFF-BALANCE SHEET ACTIVITIES In the normal course of business, the Company offers a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include outstanding commitments to extend credit, credit lines, commercial letters of credit and standby letters of credit. These are agreements to provide credit, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies used for loans are used to make such commitments, including obtaining collateral at exercise of the commitment. A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2018 December 31, 2017 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 16,273 $ 2,325 $ 5,041 $ 8,837 Unused lines of credit 14,121 213,270 12,407 189,787 Unused standby letters of credit 3,705 232 3,584 1,411 Commitments to make loans are generally made for periods of 90 days or less. The fixed rate loan commitments have interest rates ranging from 4.75% to 6.15% and maturities ranging from 1 to 10 years. |
Regulatory Capital Matters
Regulatory Capital Matters | 9 Months Ended |
Sep. 30, 2018 | |
Regulated Operations [Abstract] | |
Regulatory Capital Matters | REGULATORY CAPITAL MATTERS Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believed as of September 30, 2018 , the Company and Bank met all capital adequacy requirements to which they were subject. During the first quarter of 2015, regulations implementing the Basel III regulatory capital framework and the Dodd-Frank Wall Street Reform and Consumer Protection Act became effective, certain provisions of which are subject to a multi-year phase-in period. These rules modified the calculation of the various capital ratios, added a new ratio, common equity tier 1, and revised the adequately and well capitalized thresholds. When fully phased in on January 1, 2019, the rules will require the Company to maintain a capital conservation buffer of common equity capital that exceeds by more than 2.5% the minimum risk-weighted assets ratios. The capital conservation buffer was 1.875% at September 30, 2018 and was 1.25% at December 31, 2017 . Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2018 and December 31, 2017 , the most recent regulatory notifications categorized the Bank as "well capitalized" under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's category. Actual and required capital amounts and ratios are presented below: Actual For Capital Adequacy Purposes For Capital Adequacy Purposes + Capital Conservation Buffer(1) Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2018 Common equity tier 1 to risk-weighted assets: Consolidated $ 140,050 11.75 % $ 53,657 4.50 % $ 76,074 6.38 % Bank 143,368 12.00 % 53,757 4.50 % 76,215 6.38 % $ 77,649 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 140,050 11.75 % $ 71,543 6.00 % $ 93,959 7.88 % Bank 143,368 12.00 % 71,676 6.00 % 94,134 7.88 % $ 95,567 8.00 % Total capital to risk-weighted assets: Consolidated $ 166,852 13.99 % $ 95,390 8.00 % $ 117,807 9.88 % Bank 155,288 13.00 % 95,567 8.00 % 118,026 9.88 % $ 119,459 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 140,050 10.31 % $ 54,344 4.00 % $ 54,344 4.00 % Bank 143,368 10.62 % 54,018 4.00 % 54,018 4.00 % $ 67,522 5.00 % December 31, 2017 Common equity tier 1 to risk-weighted assets: Consolidated $ 98,912 9.10 % $ 48,904 4.50 % $ 62,488 5.75 % Bank 111,781 10.29 % 48,891 4.50 % 62,472 5.75 % $ 70,620 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 98,912 9.10 % $ 65,205 6.00 % $ 78,790 7.25 % Bank 111,781 10.29 % 65,188 6.00 % 78,768 7.25 % $ 86,917 8.00 % Total capital to risk-weighted assets: Consolidated $ 125,472 11.55 % $ 86,940 8.00 % $ 100,525 9.25 % Bank 123,496 11.37 % 86,917 8.00 % 100,498 9.25 % $ 108,646 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 98,912 7.92 % $ 49,978 4.00 % $ 49,978 4.00 % Bank 111,781 8.96 % 49,893 4.00 % 49,893 4.00 % $ 62,366 5.00 % _______________________________________________________________________________ (1) Reflects the capital conservation buffer of 1.875% and 1.25% applicable during 2018 and 2017, respectively. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1—Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Investment Securities: Securities available for sale are recorded at fair value on a recurring basis as follows: the fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). No securities are valued using a Level 3 approach. Interest Rate Contracts: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). Loans Held for Sale, at Fair Value: The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2). Mortgage banking related derivatives including interest rate locks with customers and commitments to sell loans are also recorded at fair value using observable market data as of the measurement date (Level 2) but were not significant for the periods ended September 30, 2018 or December 31, 2017 . Loans Measured at Fair Value: During the normal course of business, loans originated with the initial intention to sell but not ultimately sold, are transferred from held for sale to our portfolio of loans held for investment at fair value as the Company adopted the fair value option at origination. The fair value of these loans is determined by obtaining fair value pricing from a third-party software, and then layering an additional adjustment, ranging from 5 to 75 basis points, as determined by management, depending on the reason for the transfer. Due to the adjustments made, the Company classifies the loans transferred from loans held for sale as recurring Level 3. Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate or collateral appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower's financial statements, or aging reports, adjusted or discounted based on management's historical knowledge, changes in market conditions from the time of the valuation, and management's expertise and knowledge of the client and client's business, resulting in a Level 3 fair value classification. Other Real Estate Owned: The fair value of other real estate owned is based on recent real estate appraisals which are generally updated annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales, cost, and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Other real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Appraisals for both collateral-dependent impaired loans and real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Management monitors the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. Assets and liabilities measured at fair value on a recurring basis are summarized below: (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2018 Securities available for sale: U.S. government sponsored entities and agencies $ 2,327 $ — $ 2,327 $ — State and political subdivision 70,203 — 70,203 — Mortgage-backed securities: residential 9,857 — 9,857 — Mortgage-backed securities: commercial 12,182 — 12,182 Collateralized mortgage obligations: residential 19,576 19,576 — Collateralized mortgage obligations: commercial 32,039 — 32,039 — U.S. Treasury 22,967 — 22,967 — SBA 16,080 — 16,080 — Asset backed securities 3,863 — 3,863 — Corporate Bonds 9,957 — 9,957 — Total securities available for sale 199,051 — 199,051 — Loans held for sale 9,392 — 9,392 — Loans measured at fair value: Residential real estate 4,487 — — 4,487 Other assets (interest rate swaps) 17 17 Total assets at fair value $ 212,947 $ — $ 208,460 $ 4,487 Other liabilities (interest rate swaps) 17 — 17 — Total liabilities at fair value $ 17 $ — $ 17 $ — December 31, 2017 Securities available for sale: State and political subdivision $ 53,224 $ — $ 53,224 $ — Mortgage-backed securities: residential 8,431 — 8,431 — Mortgage-backed securities: commercial 9,819 — 9,819 — Collateralized mortgage obligations: residential 19,221 — 19,221 — Collateralized mortgage obligations: commercial 20,557 — 20,557 — U.S. Treasury 23,573 — 23,573 — SBA 12,616 — 12,616 — Corporate Bonds 3,528 — 3,528 — Total securities available for sale $ 150,969 $ — $ 150,969 $ — Loans held for sale 4,548 — 4,548 — Loans measured at fair value: Residential real estate 4,291 — — 4,291 Total assets at fair value $ 159,808 $ — $ 155,517 $ 4,291 There were no transfers between levels within the fair value hierarchy, within a specific category, during the nine months ended September 30, 2018 . The following table summarizes the changes in Level 3 assets measured at fair value on a recurring basis. (Dollars in thousands) Loans held for investment For the three months ended September 30, 2018 Beginning balance $ 4,414 Transfers from loans held for sale 149 Gains (losses): Recorded in "Mortgage banking activities" (32 ) Repayments (44 ) Ending balance $ 4,487 For the nine months ended September 30, 2018 Beginning balance $ 4,291 Transfers from loans held for sale 453 Gains (losses): Recorded in "Mortgage banking activities" (144 ) Repayments (113 ) Ending balance $ 4,487 The Company has elected the fair value option for loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company's policy on loans held for investment. There were no loans held for sale that were on nonaccrual status or 90 days past due as of September 30, 2018 and December 31, 2017 . As of September 30, 2018 and December 31, 2017 , the aggregate fair value, contractual balance (including accrued interest), and gain or loss for loans held for sale carried at fair value was as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Aggregate fair value $ 9,392 $ 4,548 Contractual balance 9,210 4,466 Unrealized gain 182 82 The total amount of gains (losses) from changes in fair value of loans held for sale included in "Mortgage banking activities" were as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Change in fair value $ 69 $ (5 ) $ 100 $ (154 ) Assets measured at fair value on a non-recurring basis are summarized below: (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2018 Impaired loans: Commercial and industrial $ 185 $ — $ — $ 185 Total $ 185 $ — $ — $ 185 December 31, 2017 Other real estate owned $ 652 $ — $ — $ 652 Other assets (1) 1,654 — — 1,654 Total $ 2,306 $ — $ — $ 2,306 (1) Impaired other assets represent building and furniture held-for-sale, which had a writedown of $140 thousand during the year ended December 31, 2017 and a writedown of $10 thousand during the nine months ended September 30, 2018 . The building held for sale was sold prior to September 30, 2018. At September 30, 2018, the Company had reduced the carrying value of its impaired loans (all of which are included in nonaccrual loans) by $233 thousand to the estimated fair value of $185 thousand . The $233 thousand adjustment to reduce the carrying value of such impaired loans to estimated fair value consisted of partial charge-offs and no specific allowance allocations for loan losses. There were no impaired loans at fair value at December 31, 2017 . Other real estate owned measured at fair value had a net carrying amount of $652 thousand at December 31, 2017 . There were no write downs in other real estate owned during the year ended December 31, 2017 . There were no other real estate owned assets at fair value at September 30, 2018 . The table below presents quantitative information about the significant unobservable inputs for assets measured at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017 : (Dollars in thousands) Fair value at September 30, 2018 Valuation Technique(s) Significant Unobservable Input(s) Discount % Impaired loans $ 185 Appraisal value and cash surrender value of life insurance Discount for type of collateral and age of appraisal 0-35% (Dollars in thousands) Fair value at Valuation Significant Discount % Range Other real estate owned $ 652 Sales comparison approach per appraisal Discount for type of collateral and age of appraisal 0-5% Other assets (building held for sale) 1,654 Sales comparison approach per appraisal Discount for type of collateral and age of appraisal 0-10% The carrying amounts and estimated fair values of financial instruments, excluding those previously presented unless otherwise noted, at September 30, 2018 and December 31, 2017 were as follows: (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2018 Financial assets: Cash and cash equivalents $ 77,837 $ 21,750 $ 56,087 $ — Federal Home Loan Bank stock 8,325 NA NA NA Net loans 1,103,109 — — 1,102,005 Accrued interest receivable 4,714 — 1,673 3,041 Financial liabilities: Deposits 1,130,311 — 1,122,317 — Borrowings 146,483 — 146,947 — Subordinated notes 14,882 — 15,000 — Accrued interest payable 1,402 — 1,402 — December 31, 2017 Financial assets: Cash and cash equivalents $ 63,661 $ 17,712 $ 45,949 $ — Federal Home Loan Bank stock 8,303 NA NA NA Net loans 1,023,210 — — 1,025,319 Accrued interest receivable 3,730 — 807 2,923 Financial liabilities: Deposits 1,120,382 — 1,122,473 — Borrowings 47,833 — 47,473 — Subordinated notes 14,844 — 14,993 — Accrued interest payable 908 — 908 — The methods and assumptions, not previously presented, used to estimate fair value are described as follows: (a) Cash and Cash Equivalents The carrying amounts of cash on hand and non-interest due from bank accounts approximate fair values and are classified as Level 1. The carrying amounts of fed funds sold and interest bearing due from bank accounts approximate fair values and are classified as Level 2. (b) FHLB Stock It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability. (c) Loans Fair value of loans, excluding loans held for sale, are estimated as follows: Fair values for all loans are estimated using present value of future estimated cash flows, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality, resulting in a Level 3 classification. Impaired loans are values at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. (d) Deposits The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. Fair values for fixed and variable rate certificates of deposit are estimated using a present value of future estimated cash flows calculation that applies interest rates currently being offered on certificates of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. (e) Borrowings The fair values of the Company's short-term and long-term borrowings are estimated using present value of future estimated cash flows using current interest rates offered to the Company for similar types of borrowing arrangements, resulting in a Level 2 classification. (f) Subordinated notes The fair value of the Company's subordinated notes is calculated based on present value of future estimated cash flows using current interest rates offered to the Company for similar types of borrowing arrangements, resulting in a Level 2 classification. (g) Accrued Interest Receivable/Payable The carrying amounts of accrued interest approximate fair value resulting in a Level 3 classification for receivable and a Level 2 classification for payable, consistent with their associated assets/liabilities. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DERIVATIVES The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. The notional amounts of these interest rate swaps and the offsetting counterparty derivative instruments were $10.4 million at September 30, 2018. There were no open interest rate swap agreements as of December 31, 2017. These interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions with approved, reputable, independent counterparties with substantially matching terms. The agreements are considered stand alone derivatives and changes in the fair value of derivatives are reporting in earnings as non-interest income. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Company's exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. There are provisions in the agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, the Company minimizes credit risk through credit approvals, limits, and monitoring procedures. The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of the date indicated: September 30, 2018 (Dollars in thousands) Notional Amount Fair Value Included in other assets: Interest rate swaps $ 10,394 $ 17 Included in other liabilities: Interest rate swaps $ 10,394 $ 17 There was no effect of derivative instruments on the Consolidated Statements of Income for the three or nine months ended September 30, 2018. |
Parent Company Financial Statem
Parent Company Financial Statements | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Statements | PARENT COMPANY FINANCIAL STATEMENTS Balance Sheets—Parent Company (Dollars in thousands) September 30, 2018 December 31, 2017 Assets Cash and cash equivalents $ 10,399 $ 1,158 Investment in banking subsidiary 148,777 120,829 Investment in captive subsidiary 1,373 663 Income tax benefit 298 339 Other assets 38 30 Total assets $ 160,885 $ 123,019 Liabilities Subordinated notes $ 14,882 $ 14,844 Accrued expenses and other liabilities 544 215 Total liabilities 15,426 15,059 Shareholders' equity 145,459 107,960 Total liabilities and shareholders' equity $ 160,885 $ 123,019 Statements of Income and Comprehensive Income—Parent Company For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Expenses Interest on subordinated notes $ 256 $ 256 $ 759 $ 759 Salaries and employee benefits — 12 86 41 Professional services 9 223 23 446 Other expenses 142 120 371 347 Total expenses 407 611 1,239 1,593 Loss before income taxes and equity in undistributed net earnings of subsidiaries (407 ) (611 ) (1,239 ) (1,593 ) Income tax benefit (expense) (2 ) 187 201 531 Equity in undistributed earnings of subsidiaries 3,664 3,259 11,473 9,970 Net income $ 3,255 $ 2,835 $ 10,435 $ 8,908 Other comprehensive income (loss) (986 ) (223 ) (3,174 ) 890 Total comprehensive income, net of tax $ 2,269 $ 2,612 $ 7,261 $ 9,798 Statements of Cash Flows—Parent Company For the nine months ended September 30, (Dollars in thousands) 2018 2017 Cash flows from operating activities Net income $ 10,435 $ 8,908 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (11,473 ) (9,970 ) Stock based compensation expense 242 246 Decrease in other assets, net 33 917 Increase (decrease) in other liabilities, net 135 512 Net cash provided by (used in) operating activities (628 ) 613 Cash flows from investing activities Capital infusion to subsidiaries (20,000 ) (250 ) Net cash used in investing activities (20,000 ) (250 ) Cash flows from financing activities Net proceeds from issuance of common stock related to initial public offering 29,030 — Common stock dividend paid (430 ) — Proceeds from exercised stock options 1,269 150 Net cash provided by financing activities 29,869 150 Net increase in cash and cash equivalents 9,241 513 Beginning cash and cash equivalents 1,158 539 Ending cash and cash equivalents $ 10,399 $ 1,052 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The calculation of basic and diluted earnings per share for each period noted below was as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands, except per share data) 2018 2017 2018 2017 Basic: Net Income attributable to common shareholders $ 3,255 $ 2,835 $ 10,435 $ 8,908 Weighted average common shares outstanding 7,749,047 6,392,041 7,264,494 6,382,723 Basic earnings per share $ 0.42 $ 0.44 $ 1.44 $ 1.40 Diluted: Net Income attributable to common shareholders $ 3,255 $ 2,835 $ 10,435 $ 8,908 Weighted average common shares outstanding 7,749,047 6,392,041 7,264,494 6,382,723 Add: Dilutive effects of assumed exercises of stock options 152,062 217,575 149,182 219,633 Weighted average common and dilutive potential common shares outstanding 7,901,109 6,609,616 7,413,676 6,602,356 Diluted earnings per common share $ 0.41 $ 0.43 $ 1.41 $ 1.35 Stock options for 30,000 and 25,055 shares of common stock were not considered in computing diluted earnings per common share for the three and nine months ended September 30, 2018 because they were antidilutive. There were no antidilutive stock options for the three and nine months ended September 30, 2017 . |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation: The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2017, included in our registration statement on Form S-1, as amended, filed with the SEC on April 12, 2018 and declared effective on April 19, 2018. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the Bank and Hamilton Court, after elimination of significant intercompany transactions and accounts. |
Use of Estimates | Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided; therefore future results could differ. |
Recent Accounting Standards | Recent Accounting Standards: Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)," which provides a framework for revenue recognition that replaces the existing industry and transaction specific requirements under the existing standards. ASU 2014-09 requires an entity to apply a five-step model to determine when to recognize revenue and at what amount. The model specifies that revenue should be recognized when (or as) an entity transfers control of goods or services to a customer at the amount in which the entity expects to be entitled. Depending on whether certain criteria are met, revenue should be recognized either over time, in a manner that depicts the entity's performance, or at a point in time, when control of the goods or services are transferred to the customer. The amendments of ASU 2014-09 may be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The guidance will be effective for the Company for the fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The Company plans to adopt these amendments within the time frames stated above. The Company is continuing to evaluate the impact ASU 2014-09 will have on our consolidated financial statements. Based on this evaluation to date, management has determined that the majority of the revenues earned by the Company are not within the scope of ASU 2014-09, and that a few of the revenue streams that have been identified as being in scope would include service charges and interchange fees. Management will continue to evaluate the impact the adoption of ASU 2014-09 will have on our consolidated financial statements, focusing on noninterest income sources within the scope of ASU 2014-09 as well as new disclosures required by these amendments; however, the adoption of ASU 2014-09 is not expected to have a material impact on the Company's consolidated financial statements but is expected to result in additional disclosures. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," to improve the accounting for financial instruments. This ASU requires equity investments with readily determinable fair values to be measured at fair value with changes recognized in net income regardless of classification. For equity investments without a readily determinable fair value, the value of the investment would be measured 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 instead of fair value, unless a qualitative assessment indicates impairment. Additionally, this ASU requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements, as well as the required use of exit pricing when measuring the fair value of financial instruments for disclosure purposes. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, and is to be applied prospectively with a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is in the planning stages of developing processes and procedures to comply with the disclosures requirements of this ASU, which could impact the disclosures the Company makes related to fair value of its financial instruments. This standard is not expected to have a material impact to the Company's consolidated financial statements. The Company is planning to adopt this new guidance within the time frames stated above. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to improve transparency and comparability across entities regarding leasing arrangements. This ASU requires the recognition of a separate lease liability representing the required discounted lease payments over the lease term and a separate lease asset representing the right to use the underlying asset during the same lease term. Additionally, this ASU provides clarification regarding the identification of certain components of contracts that would represent a lease as well as requires additional disclosures to the notes of the financial statements. The guidance will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, and is to be applied under an optional transition method. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. Additionally, the Company does not expect to significantly change operating lease agreements prior to adoption. The Company is planning to adopt this new guidance within the time frames stated above. Allowance for Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," to replace the current incurred loss methodology for recognizing credit losses, which delays recognition until it is probable a loss has been incurred, with a methodology that reflects an estimate of all expected credit losses and considers additional reasonable and supportable forecasted information when determining credit loss estimates. This impacts the calculation of the allowance for credit losses for all financial assets measured under the amortized cost basis, including PCI loans at the time of and subsequent to acquisition. Additionally, credit losses related to available-for-sale debt securities would be recorded through the allowance for credit losses and not as a direct adjustment to the amortized cost of the securities. The guidance will be effective for the Company for fiscal years beginning after December 15, 2020, including interim periods after that fiscal year, and is to be applied under a modified retrospective approach. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements as well as the impact on current systems and processes. At this time, the Company is reviewing potential methodologies for estimating expected credit losses using reasonable and supportable forecast information as well as has identified certain data and system requirements. Once adopted, we expect our allowance for loan losses to increase through a one-time adjustment to retained earnings; however, until our evaluation is complete, the estimated increase in allowance will be unknown. The Company is planning to adopt this new guidance within the time frames stated above. Investment Securities The Company elected to early adopt ASU No. 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08")" during the first quarter of 2017. The guidance in ASU 2017-08 shortens the amortization period for certain callable debt securities that are held at a premium to the earliest call date. Debt securities held at a discount will continue to be amortized as a yield adjustment over the life of the instrument. The early adoption of ASU 2017-08 in the first quarter of 2017 did not have a material impact on the Company's Consolidated Financial Statements. Income Taxes - Tax Cuts and Jobs Act In February 2018, the FASB issued ASU No. 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)," which allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act ("TCJA"). The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. In addition, the ASU requires that an entity state if an election to reclassify the tax effects to retained earnings is made, along with a description of other income tax effects that are reclassified from AOCI. This guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the ASU and reclassified $168 thousand from retained earnings to AOCI during the first quarter of 2018. In May 2018, the FASB issued an update to ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118," regarding the accounting implications of the recently issued TCJA. The update clarifies that in a company's financial statements that include the reporting period in which the TCJA was enacted, a company must first reflect the income tax effects of the TCJA in which the accounting under GAAP is complete. These amounts would not be provisional amounts. The Company would also report provisional amounts for those specific income tax effects for which the accounting under GAAP will be incomplete but for which a reasonable estimate can be determined. This accounting update is effective immediately. The Company believes its accounting for the income tax effects of the TCJA is complete. Technical corrections or other forthcoming guidance could change how we interpret provisions of the TCJA, which may impact our effective tax rate and could affect our deferred tax assets, tax positions and/or our tax liabilities. |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale Securities | The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at September 30, 2018 and December 31, 2017 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2018 U.S. government sponsored entities & agencies $ 2,401 $ — $ (74 ) $ 2,327 State and political subdivision 71,417 205 (1,419 ) 70,203 Mortgage-backed securities: residential 10,413 1 (557 ) 9,857 Mortgage-backed securities: commercial 12,662 — (480 ) 12,182 Collateralized mortgage obligations: residential 19,897 138 (459 ) 19,576 Collateralized mortgage obligations: commercial 33,027 13 (1,001 ) 32,039 U.S. Treasury 24,239 — (1,272 ) 22,967 SBA 16,269 — (189 ) 16,080 Asset backed securities 3,870 5 (12 ) 3,863 Corporate Bonds 10,077 — (120 ) 9,957 Total available-for-sale $ 204,272 $ 362 $ (5,583 ) $ 199,051 December 31, 2017 State and political subdivision $ 52,951 $ 602 $ (329 ) $ 53,224 Mortgage-backed securities: residential 8,689 3 (261 ) 8,431 Mortgage-backed securities: commercial 9,879 12 (72 ) 9,819 Collateralized mortgage obligations: residential 19,304 125 (208 ) 19,221 Collateralized mortgage obligations: commercial 20,879 11 (333 ) 20,557 U.S. Treasury 24,283 — (710 ) 23,573 SBA 12,644 10 (38 ) 12,616 Corporate Bonds 3,545 — (17 ) 3,528 Total available-for-sale $ 152,174 $ 763 $ (1,968 ) $ 150,969 |
Schedule of Realized Gain (Loss) [Table Text Block] | The proceeds from sales of securities and the associated gains and losses for the periods below are as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Proceeds $ 704 $ 7,503 $ 704 $ 12,490 Gross gains 2 118 2 176 Gross losses (2 ) — (2 ) — |
Securities by Contractual Maturity | The amortized cost and fair value of securities are shown in the table below by contractual maturity. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage-backed securities and collateralized mortgage obligations receive monthly principal payments, which are not reflected below. September 30, 2018 (Dollars in thousands) Amortized Cost Fair Value Within one year $ 1,213 $ 1,211 One to five years 53,448 51,656 Five to ten years 36,986 36,012 Beyond ten years 112,625 110,172 Total $ 204,272 $ 199,051 |
Securities with Unrealized Losses | The following table summarizes securities with unrealized losses at September 30, 2018 and December 31, 2017 aggregated by security type and length of time in a continuous unrealized loss position: Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Fair value Unrealized Losses Fair value Unrealized Losses Fair value Unrealized Losses September 30, 2018 Available-for-sale U.S. government sponsored entities & agencies $ 2,327 $ (74 ) $ — $ — $ 2,327 $ (74 ) State and political subdivision 35,807 (701 ) 15,956 (718 ) 51,763 (1,419 ) Mortgage-backed securities: residential 2,669 (47 ) 7,119 (510 ) 9,788 (557 ) Mortgage-backed securities: commercial 7,683 (298 ) 4,500 (182 ) 12,183 (480 ) Collateralized mortgage obligations: residential 4,056 (64 ) 8,254 (395 ) 12,310 (459 ) Collateralized mortgage obligations: commercial 17,566 (363 ) 13,496 (638 ) 31,062 (1,001 ) U.S. Treasury 2,867 (100 ) 20,099 (1,172 ) 22,966 (1,272 ) SBA 12,738 (104 ) 3,342 (85 ) 16,080 (189 ) Asset backed securities 1,927 (12 ) — — 1,927 (12 ) Corporate Bonds 8,473 (87 ) 975 (33 ) 9,448 (120 ) Total available-for-sale $ 96,113 $ (1,850 ) $ 73,741 $ (3,733 ) $ 169,854 $ (5,583 ) December 31, 2017 Available-for-sale State and political subdivision $ 17,285 $ (127 ) $ 6,002 $ (202 ) $ 23,287 $ (329 ) Mortgage-backed securities: residential 1,966 (33 ) 6,226 (228 ) 8,192 (261 ) Mortgage-backed securities: commercial 5,874 (31 ) 1,867 (41 ) 7,741 (72 ) Collateralized mortgage obligations: residential 4,609 (40 ) 7,828 (168 ) 12,437 (208 ) Collateralized mortgage obligations: commercial 15,717 (294 ) 2,813 (39 ) 18,530 (333 ) U.S. Treasury 3,937 (27 ) 19,637 (683 ) 23,574 (710 ) SBA 8,516 (25 ) 367 (13 ) 8,883 (38 ) Corporate Bonds 3,528 (17 ) — — 3,528 (17 ) Total available-for-sale $ 61,432 $ (594 ) $ 44,740 $ (1,374 ) $ 106,172 $ (1,968 ) |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Recorded Investment in Loans | The following table presents the recorded investment in loans at September 30, 2018 and December 31, 2017 . The recorded investment in loans excludes accrued interest receivable. (Dollars in thousands) Originated Acquired Total September 30, 2018 Commercial real estate $ 484,614 $ 67,967 $ 552,581 Commercial and industrial 387,919 9,141 397,060 Residential real estate 148,648 15,708 164,356 Consumer 938 64 1,002 Total $ 1,022,119 $ 92,880 $ 1,114,999 December 31, 2017 Commercial real estate $ 431,872 $ 79,890 $ 511,762 Commercial and industrial 365,679 12,007 377,686 Residential real estate 122,551 21,888 144,439 Consumer 793 243 1,036 Total $ 920,895 $ 114,028 $ 1,034,923 |
Information as to Nonperforming Assets | Information as to nonperforming assets was as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Nonaccrual loans: Commercial real estate $ 4,559 $ 2,257 Commercial and industrial 5,763 9,024 Residential real estate 2,546 2,767 Consumer 5 — Total nonperforming loans 12,873 14,048 Other real estate owned — 652 Total nonperforming assets $ 12,873 $ 14,700 Loans 90 days or more past due and still accruing $ 354 $ 440 |
Summary of Loan Delinquency | Loan delinquency as of the dates presented below was as follows: (Dollars in thousands) Current 30 - 59 Days 60 - 89 Days 90+ Days Total September 30, 2018 Commercial real estate $ 549,992 $ 2,515 $ 74 $ — $ 552,581 Commercial and industrial 392,685 3,305 916 154 397,060 Residential real estate 159,376 2,414 1,255 1,311 164,356 Consumer 997 — — 5 1,002 Total $ 1,103,050 $ 8,234 $ 2,245 $ 1,470 $ 1,114,999 December 31, 2017 Commercial real estate $ 507,250 $ 3,066 $ 1,412 $ 34 $ 511,762 Commercial and industrial 373,829 1,397 2,455 5 377,686 Residential real estate 138,613 3,808 1,258 760 144,439 Consumer 985 51 — — 1,036 Total $ 1,020,677 $ 8,322 $ 5,125 $ 799 $ 1,034,923 |
Information as to Impaired Loans, Excluding PCI Loans | Information as to impaired loans, excluding purchased credit impaired loans, is as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Nonaccrual loans $ 12,873 $ 14,048 Performing troubled debt restructurings: Commercial real estate 1,511 — Commercial and industrial 574 961 Residential real estate 365 261 Total performing troubled debt restructurings 2,450 1,222 Total impaired loans, excluding purchase credit impaired loans $ 15,323 $ 15,270 The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2018 Commercial real estate $ 9,500 $ 5,537 Commercial and industrial 338 111 Residential real estate 5,043 3,413 Total PCI loans $ 14,881 $ 9,061 December 31, 2017 Commercial real estate $ 10,084 $ 5,771 Commercial and industrial 808 417 Residential real estate 4,068 3,558 Total PCI loans $ 14,960 $ 9,746 Information as to loans individually evaluated for impairment, including impaired PCI loans, is as follows: (Dollars in thousands) Recorded with no related allowance Recorded with related allowance Total recorded investment Contractual principal balance Related allowance September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 6,039 $ 5,183 $ 11,222 $ 15,362 $ 828 Commercial and industrial 2,927 3,379 6,306 7,532 982 Residential real estate 1,681 3,262 4,943 6,672 145 Total $ 10,647 $ 11,824 $ 22,471 $ 29,566 $ 1,955 December 31, 2017 Individually evaluated impaired loans: Commercial real estate $ 2,222 $ 5,339 $ 7,561 $ 13,536 $ 876 Commercial and industrial 5,238 5,059 10,297 11,677 1,549 Residential real estate 1,696 3,132 4,828 6,502 154 Total $ 9,156 $ 13,530 $ 22,686 $ 31,715 $ 2,579 (Dollars in thousands) Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized For the three months ended September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 9,524 $ 430 $ 142 Commercial and industrial 6,559 22 — Residential real estate 5,217 90 — Total $ 21,300 $ 542 $ 142 For the nine months ended September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 9,258 $ 1,275 $ 142 Commercial and industrial 7,736 71 112 Residential real estate 5,256 277 — Total $ 22,250 $ 1,623 $ 254 For the three months ended September 30, 2017 Individually evaluated impaired loans: Commercial real estate $ 6,554 $ 403 $ — Commercial and industrial 11,542 59 — Residential real estate 4,170 74 — Total $ 22,266 $ 536 $ — For the nine months ended September 30, 2017 Individually evaluated impaired loans: Commercial real estate $ 6,225 $ 1,318 $ — Commercial and industrial 13,301 179 — Residential real estate 4,431 231 — Total $ 23,957 $ 1,728 $ — |
Summary of Recorded Investment of Loans Modified in TDRs | The following tables present the number of loans modified in TDRs during the previous 12 months for which there was payment default during the three and nine months ended September 30, 2018 and September 30, 2017, including the recorded investment as of each period end. A payment on a TDR is considered to be in default once it is greater than 30 days past due. Three months ended September 30, 2018 Nine months ended September 30, 2018 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Commercial real estate 3 $ 2,087 $ — 3 $ 2,087 $ — Commercial and industrial 2 1,182 — 3 1,316 — Residential real estate — — — 1 111 — Total 5 $ 3,269 $ — 7 $ 3,514 $ — Three months ended September 30, 2017 Nine months ended September 30, 2017 (Dollars in thousands) Total number of Total recorded Provision for loan losses following a Total number of Total recorded Provision for loan losses following a Residential real estate 1 $ 301 $ — 1 $ 301 $ — Total 1 $ 301 $ — 1 $ 301 $ — The following table presents the recorded investment of loans modified as TDRs during the nine months ended September 30, 2018 and the three and nine months ended September 30, 2017 , by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2018. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession. Concession type Financial effects of (Dollars in thousands) Principal Interest Forbearance Total Total Net Provision For the three months ended September 30, 2017 Commercial and industrial $ — $ — $ 4,408 5 $ 4,408 $ — $ 547 Residential real estate 784 — — 1 784 — — Total $ 784 $ — $ 4,408 6 $ 5,192 $ — $ 547 For the nine months ended September 30, 2018 Commercial real estate $ — $ — $ 2,087 4 $ 2,087 $ 101 $ — Commercial and industrial 133 — 990 3 1,123 — — Residential real estate — — 112 2 112 — 5 Total $ 133 $ — $ 3,189 9 $ 3,322 $ 101 $ 5 For the nine months ended September 30, 2017 Commercial and industrial $ — $ — $ 4,408 5 $ 4,408 $ — $ 547 Residential real estate 784 361 — 3 1,145 — — Total $ 784 $ 361 $ 4,408 8 $ 5,553 $ — $ 547 |
Risk Category of Loans by Class of Loans | Based on the most recent analysis performed, the risk category of loans by class of loans was as follows: (Dollars in thousands) Pass Special Mention Substandard Doubtful Total September 30, 2018 Commercial real estate $ 535,570 $ 10,762 $ 6,208 $ 41 $ 552,581 Commercial and industrial 376,155 4,707 16,089 109 397,060 Total $ 911,725 $ 15,469 $ 22,297 $ 150 $ 949,641 December 31, 2017 Commercial real estate $ 492,731 $ 10,664 $ 8,323 $ 44 $ 511,762 Commercial and industrial 361,740 5,945 9,963 38 377,686 Total $ 854,471 $ 16,609 $ 18,286 $ 82 $ 889,448 The following presents residential real estate and consumer loans by credit quality: (Dollars in thousands) Performing Nonperforming Total September 30, 2018 Residential real estate $ 161,810 $ 2,546 $ 164,356 Consumer 997 5 1,002 Total $ 162,807 $ 2,551 $ 165,358 December 31, 2017 Residential real estate $ 141,672 $ 2,767 $ 144,439 Consumer 1,036 — 1,036 Total $ 142,708 $ 2,767 $ 145,475 |
Total Balance of PCI Loans and Activity in Accretable Yield | The following table reflects the activity in the accretable yield of PCI loans from past acquisitions, which includes total expected cash flows, including interest, in excess of the recorded investment. Three months ended September 30 Nine months ended September 30 (Dollars in thousands) 2018 2017 2018 2017 Balance at beginning of period $ 12,390 $ 16,850 $ 14,452 $ 19,893 Accretion of income (1,167 ) (1,011 ) (3,076 ) (4,188 ) Adjustments to accretable yield — (1 ) (159 ) 133 Other activity, net — — 6 — Balance at end of period $ 11,223 $ 15,838 $ 11,223 $ 15,838 |
Allowance (Tables)
Allowance (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Information as to Impaired Loans, including PCI Loans | Information as to impaired loans, excluding purchased credit impaired loans, is as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Nonaccrual loans $ 12,873 $ 14,048 Performing troubled debt restructurings: Commercial real estate 1,511 — Commercial and industrial 574 961 Residential real estate 365 261 Total performing troubled debt restructurings 2,450 1,222 Total impaired loans, excluding purchase credit impaired loans $ 15,323 $ 15,270 The total balance of all PCI loans from these acquisitions was as follows: (Dollars in thousand) Unpaid Principal Balance Recorded Investment September 30, 2018 Commercial real estate $ 9,500 $ 5,537 Commercial and industrial 338 111 Residential real estate 5,043 3,413 Total PCI loans $ 14,881 $ 9,061 December 31, 2017 Commercial real estate $ 10,084 $ 5,771 Commercial and industrial 808 417 Residential real estate 4,068 3,558 Total PCI loans $ 14,960 $ 9,746 Information as to loans individually evaluated for impairment, including impaired PCI loans, is as follows: (Dollars in thousands) Recorded with no related allowance Recorded with related allowance Total recorded investment Contractual principal balance Related allowance September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 6,039 $ 5,183 $ 11,222 $ 15,362 $ 828 Commercial and industrial 2,927 3,379 6,306 7,532 982 Residential real estate 1,681 3,262 4,943 6,672 145 Total $ 10,647 $ 11,824 $ 22,471 $ 29,566 $ 1,955 December 31, 2017 Individually evaluated impaired loans: Commercial real estate $ 2,222 $ 5,339 $ 7,561 $ 13,536 $ 876 Commercial and industrial 5,238 5,059 10,297 11,677 1,549 Residential real estate 1,696 3,132 4,828 6,502 154 Total $ 9,156 $ 13,530 $ 22,686 $ 31,715 $ 2,579 (Dollars in thousands) Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized For the three months ended September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 9,524 $ 430 $ 142 Commercial and industrial 6,559 22 — Residential real estate 5,217 90 — Total $ 21,300 $ 542 $ 142 For the nine months ended September 30, 2018 Individually evaluated impaired loans: Commercial real estate $ 9,258 $ 1,275 $ 142 Commercial and industrial 7,736 71 112 Residential real estate 5,256 277 — Total $ 22,250 $ 1,623 $ 254 For the three months ended September 30, 2017 Individually evaluated impaired loans: Commercial real estate $ 6,554 $ 403 $ — Commercial and industrial 11,542 59 — Residential real estate 4,170 74 — Total $ 22,266 $ 536 $ — For the nine months ended September 30, 2017 Individually evaluated impaired loans: Commercial real estate $ 6,225 $ 1,318 $ — Commercial and industrial 13,301 179 — Residential real estate 4,431 231 — Total $ 23,957 $ 1,728 $ — |
Activity in the Allowance for Loan Losses and Allocation of the Allowance for Loans | Activity in the allowance for loan losses and the allocation of the allowance for loans were as follows: (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total For the three months ended September 30, 2018 Allowance for loan losses: Beginning Balance $ 5,060 $ 5,423 $ 977 $ 5 $ 11,465 Provision for loan losses 34 475 101 9 619 Gross chargeoffs — (237 ) — (8 ) (245 ) Recoveries 23 8 19 1 51 Net (chargeoffs) recoveries 23 (229 ) 19 (7 ) (194 ) Ending Allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 For the nine months ended September 30, 2018 Allowance for loan losses: Beginning Balance $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Provision for loan losses 352 (53 ) 143 21 463 Gross chargeoffs (112 ) (995 ) (47 ) (23 ) (1,177 ) Recoveries 25 814 51 1 891 Net (chargeoffs) recoveries (87 ) (181 ) 4 (22 ) (286 ) Ending Allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 September 30, 2018 Allowance for loan losses: Individually evaluated for impairment $ — $ 957 $ 13 $ — $ 970 Collectively evaluated for impairment 4,289 4,687 952 7 9,935 Acquired with deteriorated credit quality 828 25 132 — 985 Ending Allowance for loan losses $ 5,117 $ 5,669 $ 1,097 $ 7 $ 11,890 Balance of loans: Individually evaluated for impairment $ 6,039 $ 6,194 $ 1,870 $ — $ 14,103 Collectively evaluated for impairment 541,005 390,755 159,073 1,002 1,091,835 Acquired with deteriorated credit quality 5,537 111 3,413 — 9,061 Total loans $ 552,581 $ 397,060 $ 164,356 $ 1,002 $ 1,114,999 (Dollars in thousands) Commercial Real Estate Commercial and Industrial Residential Real Estate Consumer Total For the three months ended September 30, 2017 Allowance for loan losses: Beginning Balance $ 4,829 $ 5,749 $ 821 $ 5 $ 11,404 Provision for loan losses (412 ) 710 (104 ) — 194 Gross chargeoffs — (38 ) (3 ) — (41 ) Recoveries 2 16 55 — 73 Net (chargeoffs) recoveries 2 (22 ) 52 — 32 Ending Allowance for loan losses $ 4,419 $ 6,437 $ 769 $ 5 $ 11,630 For the nine months ended September 30, 2017 Allowance for loan losses: Beginning Balance $ 4,124 $ 5,932 $ 1,030 $ 3 $ 11,089 Provision for loan losses 279 465 (285 ) 1 460 Gross chargeoffs — (139 ) (86 ) — (225 ) Recoveries 16 179 110 1 306 Net (chargeoffs) recoveries 16 40 24 1 81 Ending Allowance for loan losses $ 4,419 $ 6,437 $ 769 $ 5 $ 11,630 December 31, 2017 Allowance for loan losses: Individually evaluated for impairment $ — $ 1,480 $ 18 $ — $ 1,498 Collectively evaluated for impairment 3,976 4,354 796 8 9,134 Acquired with deteriorated credit quality 876 69 136 — 1,081 Ending Allowance for loan losses $ 4,852 $ 5,903 $ 950 $ 8 $ 11,713 Balance of loans: Individually evaluated for impairment $ 2,222 $ 9,976 $ 1,778 $ — $ 13,976 Collectively evaluated for impairment 503,769 367,293 139,103 1,036 1,011,201 Acquired with deteriorated credit quality 5,771 417 3,558 — 9,746 Total loans $ 511,762 $ 377,686 $ 144,439 $ 1,036 $ 1,034,923 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Premises and equipment were as follows at September 30, 2018 and December 31, 2017 : (Dollars in thousands) September 30, 2018 December 31, 2017 Land $ 2,197 $ 2,197 Building 9,746 9,132 Leasehold improvements 1,691 1,655 Furniture, fixtures and equipment 5,986 5,614 Total premises and equipment $ 19,620 $ 18,598 Less: Accumulated depreciation 6,114 5,163 Net premises and equipment $ 13,506 $ 13,435 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Core Deposit Intangibles | The table below presents the Company's net carrying amount of CDIs: (Dollars in thousands) September 30, 2018 December 31, 2017 Gross carrying amount $ 2,045 $ 2,045 Accumulated amortization (1,543 ) (1,378 ) Net Intangible $ 502 $ 667 |
Borrowings and Subordinated D_2
Borrowings and Subordinated Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Components of Long-term Debt and Short-term Borrowings | The following table presents the components of our short-term borrowings and long-term debt. September 30, 2018 December 31, 2017 (Dollars in thousands) Amount Weighted Amount Weighted Short-term borrowings: Securities sold under agreements to repurchase 10,021 2.34 1,319 0.30 FHLB Advances 125,000 1.94 35,000 1.25 Total short-term borrowings 135,021 1.97 36,319 1.22 Long-term debt: Secured borrowing due in 2022 1,462 1.00 1,514 1.00 FHLB advances due in 2022 10,000 1.75 10,000 1.75 Subordinated notes due in 2025 (2) 14,882 6.38 14,844 6.38 Total long-term debt 26,344 4.32 26,358 4.31 Total short-term and long-term borrowings $ 161,365 2.35 % $ 62,677 2.52 % _______________________________________________________________________________ (1) Weighted average rate presented is the contractual rate which excludes premiums and discounts related to purchase accounting. (2) The September 30, 2018 balance includes subordinated notes of $15.0 million and debt issuance costs of $118 thousand . The December 31, 2017 balance includes subordinated notes of $15.0 million and debt issuance costs of $156 thousand . |
Selected Financial Information Pertaining to Components of Short-term Borrowings | Selected financial information pertaining to the components of our short-term borrowings is as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 FHLB Line of Credit Average Daily Balance $ 3,026 $ 45 $ 4,085 $ 2,347 Weighted-average rate 2.40 % 1.40 % 2.06 % 0.91 % Maximum month-end balance $ 37,081 $ — $ 37,081 $ 20,551 Securities sold under agreements to repurchase Average Daily Balance $ 9,824 $ 707 $ 4,413 $ 806 Weighted-average rate 2.34 % 0.30 % 2.34 % 0.30 % Maximum month-end balance $ 10,276 $ 896 $ 10,761 $ 1,085 FHLB Advances Average Daily Balance $ 71,054 $ 74,140 $ 47,077 $ 33,224 Weighted-average rate 2.14 % 1.13 % 1.94 % 0.92 % Maximum month-end balance $ 125,000 $ 72,000 $ 125,000 $ 120,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Expected Income Tax Expense | A reconciliation of expected income tax expense using the federal corporate tax rate of 21% and 35% as of September 30, 2018 and 2017 , respectively, and actual income tax expense is as follows : For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Income tax expense based on federal corporate tax rate $ 823 $ 1,433 $ 2,646 $ 4,660 Changes resulting from: Tax-exempt income 104 120 289 307 Other, net (262 ) (294 ) (768 ) (561 ) Income tax expense $ 665 $ 1,259 $ 2,167 $ 4,406 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Weighted-Average Assumptions Used in Determining the Fair Value of Stock Options Granted | The fair value of the stock options granted was determined using the following weighted-average assumptions as of grant date: September 30, 2018 Risk Free Interest Rate 2.83% Expected Term (years) 7.0 Expected Volatility 0.04% Dividend Yield —% Weighted average fair value of options granted $4.46 |
Summary of Employee Stock Option Activity | The employee stock option activity for the nine months ended September 30, 2018 is summarized below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at 1/1/2018 484,147 $ 13.96 4.76 $ 6,700 Granted 30,000 24.80 Exercised (126,494 ) 10.04 Forfeited (9,885 ) 10.00 Outstanding at 9/30/2018 377,768 $ 16.24 6.05 $ 4,367 Exercisable at 9/30/2018 318,263 $ 15.02 5.61 $ 4,069 |
Summary of Changes in Nonvested Shares | A summary of changes in the Company's nonvested shares for the nine months ended September 30, 2018 is as follows: Nonvested Shares Shares Weighted Average Grant-Date Fair Value Nonvested at 1/1/2018 30,150 $ 22.03 Granted 37,021 25.53 Vested (10,747 ) 22.81 Nonvested at 9/30/2018 56,424 $ 24.18 |
Off-Balance Sheet Activities (T
Off-Balance Sheet Activities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Exposure to Off-balance Sheet Risk | A summary of the contractual amounts of the Company's exposure to off-balance sheet risk is as follows: September 30, 2018 December 31, 2017 (Dollars in thousands) Fixed Variable Fixed Variable Commitments to make loans $ 16,273 $ 2,325 $ 5,041 $ 8,837 Unused lines of credit 14,121 213,270 12,407 189,787 Unused standby letters of credit 3,705 232 3,584 1,411 |
Regulatory Capital Matters (Tab
Regulatory Capital Matters (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Regulated Operations [Abstract] | |
Schedule of actual and required capital amounts and ratios | Actual and required capital amounts and ratios are presented below: Actual For Capital Adequacy Purposes For Capital Adequacy Purposes + Capital Conservation Buffer(1) Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2018 Common equity tier 1 to risk-weighted assets: Consolidated $ 140,050 11.75 % $ 53,657 4.50 % $ 76,074 6.38 % Bank 143,368 12.00 % 53,757 4.50 % 76,215 6.38 % $ 77,649 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 140,050 11.75 % $ 71,543 6.00 % $ 93,959 7.88 % Bank 143,368 12.00 % 71,676 6.00 % 94,134 7.88 % $ 95,567 8.00 % Total capital to risk-weighted assets: Consolidated $ 166,852 13.99 % $ 95,390 8.00 % $ 117,807 9.88 % Bank 155,288 13.00 % 95,567 8.00 % 118,026 9.88 % $ 119,459 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 140,050 10.31 % $ 54,344 4.00 % $ 54,344 4.00 % Bank 143,368 10.62 % 54,018 4.00 % 54,018 4.00 % $ 67,522 5.00 % December 31, 2017 Common equity tier 1 to risk-weighted assets: Consolidated $ 98,912 9.10 % $ 48,904 4.50 % $ 62,488 5.75 % Bank 111,781 10.29 % 48,891 4.50 % 62,472 5.75 % $ 70,620 6.50 % Tier 1 capital to risk-weighted assets: Consolidated $ 98,912 9.10 % $ 65,205 6.00 % $ 78,790 7.25 % Bank 111,781 10.29 % 65,188 6.00 % 78,768 7.25 % $ 86,917 8.00 % Total capital to risk-weighted assets: Consolidated $ 125,472 11.55 % $ 86,940 8.00 % $ 100,525 9.25 % Bank 123,496 11.37 % 86,917 8.00 % 100,498 9.25 % $ 108,646 10.00 % Tier 1 capital to average assets (leverage ratio): Consolidated $ 98,912 7.92 % $ 49,978 4.00 % $ 49,978 4.00 % Bank 111,781 8.96 % 49,893 4.00 % 49,893 4.00 % $ 62,366 5.00 % _______________________________________________________________________________ (1) Reflects the capital conservation buffer of 1.875% and 1.25% applicable during 2018 and 2017, respectively. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2018 Securities available for sale: U.S. government sponsored entities and agencies $ 2,327 $ — $ 2,327 $ — State and political subdivision 70,203 — 70,203 — Mortgage-backed securities: residential 9,857 — 9,857 — Mortgage-backed securities: commercial 12,182 — 12,182 Collateralized mortgage obligations: residential 19,576 19,576 — Collateralized mortgage obligations: commercial 32,039 — 32,039 — U.S. Treasury 22,967 — 22,967 — SBA 16,080 — 16,080 — Asset backed securities 3,863 — 3,863 — Corporate Bonds 9,957 — 9,957 — Total securities available for sale 199,051 — 199,051 — Loans held for sale 9,392 — 9,392 — Loans measured at fair value: Residential real estate 4,487 — — 4,487 Other assets (interest rate swaps) 17 17 Total assets at fair value $ 212,947 $ — $ 208,460 $ 4,487 Other liabilities (interest rate swaps) 17 — 17 — Total liabilities at fair value $ 17 $ — $ 17 $ — December 31, 2017 Securities available for sale: State and political subdivision $ 53,224 $ — $ 53,224 $ — Mortgage-backed securities: residential 8,431 — 8,431 — Mortgage-backed securities: commercial 9,819 — 9,819 — Collateralized mortgage obligations: residential 19,221 — 19,221 — Collateralized mortgage obligations: commercial 20,557 — 20,557 — U.S. Treasury 23,573 — 23,573 — SBA 12,616 — 12,616 — Corporate Bonds 3,528 — 3,528 — Total securities available for sale $ 150,969 $ — $ 150,969 $ — Loans held for sale 4,548 — 4,548 — Loans measured at fair value: Residential real estate 4,291 — — 4,291 Total assets at fair value $ 159,808 $ — $ 155,517 $ 4,291 |
Level 3 Rollforward | The following table summarizes the changes in Level 3 assets measured at fair value on a recurring basis. (Dollars in thousands) Loans held for investment For the three months ended September 30, 2018 Beginning balance $ 4,414 Transfers from loans held for sale 149 Gains (losses): Recorded in "Mortgage banking activities" (32 ) Repayments (44 ) Ending balance $ 4,487 For the nine months ended September 30, 2018 Beginning balance $ 4,291 Transfers from loans held for sale 453 Gains (losses): Recorded in "Mortgage banking activities" (144 ) Repayments (113 ) Ending balance $ 4,487 |
Information for Loans Held for Sale Carried at Fair Value | As of September 30, 2018 and December 31, 2017 , the aggregate fair value, contractual balance (including accrued interest), and gain or loss for loans held for sale carried at fair value was as follows: (Dollars in thousands) September 30, 2018 December 31, 2017 Aggregate fair value $ 9,392 $ 4,548 Contractual balance 9,210 4,466 Unrealized gain 182 82 The total amount of gains (losses) from changes in fair value of loans held for sale included in "Mortgage banking activities" were as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Change in fair value $ 69 $ (5 ) $ 100 $ (154 ) |
Assets Measured at Fair Value on a Non-recurring Basis | Assets measured at fair value on a non-recurring basis are summarized below: (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2018 Impaired loans: Commercial and industrial $ 185 $ — $ — $ 185 Total $ 185 $ — $ — $ 185 December 31, 2017 Other real estate owned $ 652 $ — $ — $ 652 Other assets (1) 1,654 — — 1,654 Total $ 2,306 $ — $ — $ 2,306 (1) Impaired other assets represent building and furniture held-for-sale, which had a writedown of $140 thousand during the year ended December 31, 2017 and a writedown of $10 thousand during the nine months ended September 30, 2018 . The building held for sale was sold prior to September 30, 2018. |
Inputs for Assets Measured at Fair Value on a Nonrecurring Basis | The table below presents quantitative information about the significant unobservable inputs for assets measured at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017 : (Dollars in thousands) Fair value at September 30, 2018 Valuation Technique(s) Significant Unobservable Input(s) Discount % Impaired loans $ 185 Appraisal value and cash surrender value of life insurance Discount for type of collateral and age of appraisal 0-35% (Dollars in thousands) Fair value at Valuation Significant Discount % Range Other real estate owned $ 652 Sales comparison approach per appraisal Discount for type of collateral and age of appraisal 0-5% Other assets (building held for sale) 1,654 Sales comparison approach per appraisal Discount for type of collateral and age of appraisal 0-10% |
Carrying Amounts and Estimated Fair Values of Financial Instruments | The carrying amounts and estimated fair values of financial instruments, excluding those previously presented unless otherwise noted, at September 30, 2018 and December 31, 2017 were as follows: (Dollars in thousands) Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2018 Financial assets: Cash and cash equivalents $ 77,837 $ 21,750 $ 56,087 $ — Federal Home Loan Bank stock 8,325 NA NA NA Net loans 1,103,109 — — 1,102,005 Accrued interest receivable 4,714 — 1,673 3,041 Financial liabilities: Deposits 1,130,311 — 1,122,317 — Borrowings 146,483 — 146,947 — Subordinated notes 14,882 — 15,000 — Accrued interest payable 1,402 — 1,402 — December 31, 2017 Financial assets: Cash and cash equivalents $ 63,661 $ 17,712 $ 45,949 $ — Federal Home Loan Bank stock 8,303 NA NA NA Net loans 1,023,210 — — 1,025,319 Accrued interest receivable 3,730 — 807 2,923 Financial liabilities: Deposits 1,120,382 — 1,122,473 — Borrowings 47,833 — 47,473 — Subordinated notes 14,844 — 14,993 — Accrued interest payable 908 — 908 — |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value Hedges Included in the Consoldiated Balance Sheets | The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of the date indicated: September 30, 2018 (Dollars in thousands) Notional Amount Fair Value Included in other assets: Interest rate swaps $ 10,394 $ 17 Included in other liabilities: Interest rate swaps $ 10,394 $ 17 |
Parent Company Financial Stat_2
Parent Company Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheet | Balance Sheets—Parent Company (Dollars in thousands) September 30, 2018 December 31, 2017 Assets Cash and cash equivalents $ 10,399 $ 1,158 Investment in banking subsidiary 148,777 120,829 Investment in captive subsidiary 1,373 663 Income tax benefit 298 339 Other assets 38 30 Total assets $ 160,885 $ 123,019 Liabilities Subordinated notes $ 14,882 $ 14,844 Accrued expenses and other liabilities 544 215 Total liabilities 15,426 15,059 Shareholders' equity 145,459 107,960 Total liabilities and shareholders' equity $ 160,885 $ 123,019 |
Schedule of condensed income statement and comprehensive income | Statements of Income and Comprehensive Income—Parent Company For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands) 2018 2017 2018 2017 Expenses Interest on subordinated notes $ 256 $ 256 $ 759 $ 759 Salaries and employee benefits — 12 86 41 Professional services 9 223 23 446 Other expenses 142 120 371 347 Total expenses 407 611 1,239 1,593 Loss before income taxes and equity in undistributed net earnings of subsidiaries (407 ) (611 ) (1,239 ) (1,593 ) Income tax benefit (expense) (2 ) 187 201 531 Equity in undistributed earnings of subsidiaries 3,664 3,259 11,473 9,970 Net income $ 3,255 $ 2,835 $ 10,435 $ 8,908 Other comprehensive income (loss) (986 ) (223 ) (3,174 ) 890 Total comprehensive income, net of tax $ 2,269 $ 2,612 $ 7,261 $ 9,798 |
Schedule of condensed statements of cash flows | Statements of Cash Flows—Parent Company For the nine months ended September 30, (Dollars in thousands) 2018 2017 Cash flows from operating activities Net income $ 10,435 $ 8,908 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (11,473 ) (9,970 ) Stock based compensation expense 242 246 Decrease in other assets, net 33 917 Increase (decrease) in other liabilities, net 135 512 Net cash provided by (used in) operating activities (628 ) 613 Cash flows from investing activities Capital infusion to subsidiaries (20,000 ) (250 ) Net cash used in investing activities (20,000 ) (250 ) Cash flows from financing activities Net proceeds from issuance of common stock related to initial public offering 29,030 — Common stock dividend paid (430 ) — Proceeds from exercised stock options 1,269 150 Net cash provided by financing activities 29,869 150 Net increase in cash and cash equivalents 9,241 513 Beginning cash and cash equivalents 1,158 539 Ending cash and cash equivalents $ 10,399 $ 1,052 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The calculation of basic and diluted earnings per share for each period noted below was as follows: For the three months ended September 30, For the nine months ended September 30, (Dollars in thousands, except per share data) 2018 2017 2018 2017 Basic: Net Income attributable to common shareholders $ 3,255 $ 2,835 $ 10,435 $ 8,908 Weighted average common shares outstanding 7,749,047 6,392,041 7,264,494 6,382,723 Basic earnings per share $ 0.42 $ 0.44 $ 1.44 $ 1.40 Diluted: Net Income attributable to common shareholders $ 3,255 $ 2,835 $ 10,435 $ 8,908 Weighted average common shares outstanding 7,749,047 6,392,041 7,264,494 6,382,723 Add: Dilutive effects of assumed exercises of stock options 152,062 217,575 149,182 219,633 Weighted average common and dilutive potential common shares outstanding 7,901,109 6,609,616 7,413,676 6,602,356 Diluted earnings per common share $ 0.41 $ 0.43 $ 1.41 $ 1.35 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | Apr. 24, 2018 | Mar. 31, 2018 | Sep. 30, 2018 |
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares of common stock sold (in shares) | 1,150,765 | ||
Proceeds from sale of stock | $ 32,200,000 | ||
Underwriting discounts | 2,100,000 | ||
Offering expenses paid to third parties | 1,100,000 | ||
Proceeds from the initial public offering | $ 29,000,000 | ||
Over - Allotment Option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares of common stock sold (in shares) | 180,000 | ||
IPO - Shares From Existing Shareholders | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares of common stock sold (in shares) | 229,235 | ||
Proceeds from sale of stock | $ 6,400,000 | ||
Proceeds from the initial public offering | $ 0 | ||
Retained Earnings | |||
Subsidiary, Sale of Stock [Line Items] | |||
Reclassifications of tax effects from retained earnings to AOCI | $ (168,000) | $ (168,000) | |
Accumulated Other Comprehensive Loss | |||
Subsidiary, Sale of Stock [Line Items] | |||
Reclassifications of tax effects from retained earnings to AOCI | $ 168,000 | $ 168,000 |
Securities (Available-for-sale
Securities (Available-for-sale Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 204,272 | $ 152,174 |
Gross Unrealized Gains | 362 | 763 |
Gross Unrealized Losses | (5,583) | (1,968) |
Fair Value | 199,051 | 150,969 |
U.S. government sponsored entities & agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,401 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (74) | |
Fair Value | 2,327 | |
State and political subdivision | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 71,417 | 52,951 |
Gross Unrealized Gains | 205 | 602 |
Gross Unrealized Losses | (1,419) | (329) |
Fair Value | 70,203 | 53,224 |
Mortgage-backed securities: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,413 | 8,689 |
Gross Unrealized Gains | 1 | 3 |
Gross Unrealized Losses | (557) | (261) |
Fair Value | 9,857 | 8,431 |
Mortgage-backed securities: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 12,662 | 9,879 |
Gross Unrealized Gains | 0 | 12 |
Gross Unrealized Losses | (480) | (72) |
Fair Value | 12,182 | 9,819 |
Collateralized mortgage obligations: residential | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 19,897 | 19,304 |
Gross Unrealized Gains | 138 | 125 |
Gross Unrealized Losses | (459) | (208) |
Fair Value | 19,576 | 19,221 |
Collateralized mortgage obligations: commercial | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 33,027 | 20,879 |
Gross Unrealized Gains | 13 | 11 |
Gross Unrealized Losses | (1,001) | (333) |
Fair Value | 32,039 | 20,557 |
U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 24,239 | 24,283 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1,272) | (710) |
Fair Value | 22,967 | 23,573 |
SBA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16,269 | 12,644 |
Gross Unrealized Gains | 0 | 10 |
Gross Unrealized Losses | (189) | (38) |
Fair Value | 16,080 | 12,616 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 3,870 | |
Gross Unrealized Gains | 5 | |
Gross Unrealized Losses | (12) | |
Fair Value | 3,863 | |
Corporate Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,077 | 3,545 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (120) | (17) |
Fair Value | $ 9,957 | $ 3,528 |
Securities (Proceeds from Sales
Securities (Proceeds from Sales of Securities and Gains and Losses) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds | $ 704,000 | $ 7,503,000 | $ 704,000 | $ 12,490,000 |
Gross gains | 2,000 | 118,000 | 2,000 | 176,000 |
Gross losses | $ (2,000) | $ 0 | $ (2,000) | $ 0 |
Securities (Maturity) (Details)
Securities (Maturity) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Amortized Cost | |
Within one year | $ 1,213 |
One to five years | 53,448 |
Five to ten years | 36,986 |
Beyond ten years | 112,625 |
Amortized Cost | 204,272 |
Fair Value | |
Within one year | 1,211 |
One to five years | 51,656 |
Five to ten years | 36,012 |
Beyond ten years | 110,172 |
Fair Value | $ 199,051 |
Securities (Additional Informat
Securities (Additional Information) (Details) $ in Thousands | Sep. 30, 2018USD ($)securities | Dec. 31, 2017USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Securities available-for-sale | $ 199,051 | $ 150,969 |
Number of securities | 259 | |
Number of securities in an unrealized loss position | securities | 205 | |
Credit Concentration Risk | Securities | 39 tax-exempt securities backed by the Michigan School Bond Loan Fund | ||
Debt Securities, Available-for-sale [Line Items] | ||
Securities available-for-sale | $ 36,200 | |
Collateral pledged | ||
Debt Securities, Available-for-sale [Line Items] | ||
Securities pledged | $ 41,300 | $ 36,500 |
Securities (Securities with Unr
Securities (Securities with Unrealized Losses) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair value | ||
Less than 12 Months | $ 96,113 | $ 61,432 |
12 Months or Longer | 73,741 | 44,740 |
Total | 169,854 | 106,172 |
Unrealized Losses | ||
Less than 12 Months | (1,850) | (594) |
12 Months or Longer | (3,733) | (1,374) |
Total | (5,583) | (1,968) |
U.S. government sponsored entities & agencies | ||
Fair value | ||
Less than 12 Months | 2,327 | |
12 Months or Longer | 0 | |
Total | 2,327 | |
Unrealized Losses | ||
Less than 12 Months | (74) | |
12 Months or Longer | 0 | |
Total | (74) | |
State and political subdivision | ||
Fair value | ||
Less than 12 Months | 35,807 | 17,285 |
12 Months or Longer | 15,956 | 6,002 |
Total | 51,763 | 23,287 |
Unrealized Losses | ||
Less than 12 Months | (701) | (127) |
12 Months or Longer | (718) | (202) |
Total | (1,419) | (329) |
Mortgage-backed securities: residential | ||
Fair value | ||
Less than 12 Months | 2,669 | 1,966 |
12 Months or Longer | 7,119 | 6,226 |
Total | 9,788 | 8,192 |
Unrealized Losses | ||
Less than 12 Months | (47) | (33) |
12 Months or Longer | (510) | (228) |
Total | (557) | (261) |
Mortgage-backed securities: commercial | ||
Fair value | ||
Less than 12 Months | 7,683 | 5,874 |
12 Months or Longer | 4,500 | 1,867 |
Total | 12,183 | 7,741 |
Unrealized Losses | ||
Less than 12 Months | (298) | (31) |
12 Months or Longer | (182) | (41) |
Total | (480) | (72) |
Collateralized mortgage obligations: residential | ||
Fair value | ||
Less than 12 Months | 4,056 | 4,609 |
12 Months or Longer | 8,254 | 7,828 |
Total | 12,310 | 12,437 |
Unrealized Losses | ||
Less than 12 Months | (64) | (40) |
12 Months or Longer | (395) | (168) |
Total | (459) | (208) |
Collateralized mortgage obligations: commercial | ||
Fair value | ||
Less than 12 Months | 17,566 | 15,717 |
12 Months or Longer | 13,496 | 2,813 |
Total | 31,062 | 18,530 |
Unrealized Losses | ||
Less than 12 Months | (363) | (294) |
12 Months or Longer | (638) | (39) |
Total | (1,001) | (333) |
U.S. Treasury | ||
Fair value | ||
Less than 12 Months | 2,867 | 3,937 |
12 Months or Longer | 20,099 | 19,637 |
Total | 22,966 | 23,574 |
Unrealized Losses | ||
Less than 12 Months | (100) | (27) |
12 Months or Longer | (1,172) | (683) |
Total | (1,272) | (710) |
SBA | ||
Fair value | ||
Less than 12 Months | 12,738 | 8,516 |
12 Months or Longer | 3,342 | 367 |
Total | 16,080 | 8,883 |
Unrealized Losses | ||
Less than 12 Months | (104) | (25) |
12 Months or Longer | (85) | (13) |
Total | (189) | (38) |
Asset backed securities | ||
Fair value | ||
Less than 12 Months | 1,927 | |
12 Months or Longer | 0 | |
Total | 1,927 | |
Unrealized Losses | ||
Less than 12 Months | (12) | |
12 Months or Longer | 0 | |
Total | (12) | |
Corporate Bonds | ||
Fair value | ||
Less than 12 Months | 8,473 | 3,528 |
12 Months or Longer | 975 | 0 |
Total | 9,448 | 3,528 |
Unrealized Losses | ||
Less than 12 Months | (87) | (17) |
12 Months or Longer | (33) | 0 |
Total | $ (120) | $ (17) |
Loans (Recorded Investment in L
Loans (Recorded Investment in Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | $ 1,114,999 | $ 1,034,923 |
Commercial real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 552,581 | 511,762 |
Commercial and industrial | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 397,060 | 377,686 |
Residential real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 164,356 | 144,439 |
Consumer | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 1,002 | 1,036 |
Originated | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 1,022,119 | 920,895 |
Originated | Commercial real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 484,614 | 431,872 |
Originated | Commercial and industrial | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 387,919 | 365,679 |
Originated | Residential real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 148,648 | 122,551 |
Originated | Consumer | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 938 | 793 |
Acquired | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 92,880 | 114,028 |
Acquired | Commercial real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 67,967 | 79,890 |
Acquired | Commercial and industrial | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 9,141 | 12,007 |
Acquired | Residential real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | 15,708 | 21,888 |
Acquired | Consumer | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans | $ 64 | $ 243 |
Loans (Nonperforming Assets) (D
Loans (Nonperforming Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans 90 days or more past due and still accruing | $ 354 | $ 440 |
Restructured loans 90 days or more past due and still accruing | 13 | |
Acquired with deteriorated credit quality | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Loans 90 days or more past due and still accruing | 341 | 440 |
Nonperforming | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total nonperforming loans | 12,873 | 14,048 |
Other real estate owned | 0 | 652 |
Total nonperforming assets | 12,873 | 14,700 |
Nonperforming | Commercial real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total nonperforming loans | 4,559 | 2,257 |
Nonperforming | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total nonperforming loans | 5,763 | 9,024 |
Nonperforming | Residential real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total nonperforming loans | 2,546 | 2,767 |
Nonperforming | Consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total nonperforming loans | $ 5 | $ 0 |
Loans (Loan Delinquency) (Detai
Loans (Loan Delinquency) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | $ 1,114,999 | $ 1,034,923 |
Current | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,103,050 | 1,020,677 |
30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 8,234 | 8,322 |
60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 2,245 | 5,125 |
90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,470 | 799 |
Commercial real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 552,581 | 511,762 |
Commercial real estate | Current | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 549,992 | 507,250 |
Commercial real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 2,515 | 3,066 |
Commercial real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 74 | 1,412 |
Commercial real estate | 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 0 | 34 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 397,060 | 377,686 |
Commercial and industrial | Current | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 392,685 | 373,829 |
Commercial and industrial | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 3,305 | 1,397 |
Commercial and industrial | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 916 | 2,455 |
Commercial and industrial | 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 154 | 5 |
Residential real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 164,356 | 144,439 |
Residential real estate | Current | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 159,376 | 138,613 |
Residential real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 2,414 | 3,808 |
Residential real estate | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,255 | 1,258 |
Residential real estate | 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,311 | 760 |
Consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 1,002 | 1,036 |
Consumer | Current | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 997 | 985 |
Consumer | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 0 | 51 |
Consumer | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | 0 | 0 |
Consumer | 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total loans | $ 5 | $ 0 |
Loans (Information as to Impair
Loans (Information as to Impaired Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 8,700 | $ 7,600 |
Total impaired loans, excluding purchase credit impaired loans | 22,471 | 22,686 |
Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 2,500 | 1,200 |
Commercial real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Total impaired loans, excluding purchase credit impaired loans | 11,222 | 7,561 |
Commercial and industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Total impaired loans, excluding purchase credit impaired loans | 6,306 | 10,297 |
Residential real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Total impaired loans, excluding purchase credit impaired loans | 4,943 | 4,828 |
Financial Asset, Excluding Purchased Credit Impaired Loans | ||
Financing Receivable, Impaired [Line Items] | ||
Total nonperforming loans | 12,873 | 14,048 |
Total impaired loans, excluding purchase credit impaired loans | 15,323 | 15,270 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 2,450 | 1,222 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Commercial real estate | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 1,511 | 0 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Commercial and industrial | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | 574 | 961 |
Financial Asset, Excluding Purchased Credit Impaired Loans | Residential real estate | Performing | ||
Financing Receivable, Impaired [Line Items] | ||
Total performing troubled debt restructurings | $ 365 | $ 261 |
Loans (Troubled Debt Restructur
Loans (Troubled Debt Restructuring Additional Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Modifications [Line Items] | ||
Recorded investment in troubled debt restructurings | $ 8,700 | $ 7,600 |
Recorded investment in troubled debt restructurings, reserve | 938 | 975 |
Nonperforming | ||
Financing Receivable, Modifications [Line Items] | ||
Recorded investment in troubled debt restructurings | 6,200 | 6,400 |
Performing | ||
Financing Receivable, Modifications [Line Items] | ||
Recorded investment in troubled debt restructurings | $ 2,500 | $ 1,200 |
Loans (Recorded Investment of L
Loans (Recorded Investment of Loans Modified in TDRs) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017USD ($)loan | Sep. 30, 2018USD ($)loan | Sep. 30, 2017USD ($)loan | |
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | $ 5,192 | $ 3,322 | $ 5,553 |
Total number of loans | loan | 6 | 9 | 8 |
Financial effects of modification, net charge offs | $ 0 | $ 101 | $ 0 |
Financial effects of modification, provision for loan losses | 547 | 5 | 547 |
Principal deferral | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 784 | 133 | 784 |
Interest rate | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 0 | 0 | 361 |
Forbearance agreement | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | $ 4,408 | 3,189 | 4,408 |
Commercial real estate | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | $ 2,087 | ||
Total number of loans | loan | 0 | 4 | |
Financial effects of modification, net charge offs | $ 101 | ||
Financial effects of modification, provision for loan losses | 0 | ||
Commercial real estate | Principal deferral | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 0 | ||
Commercial real estate | Interest rate | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 0 | ||
Commercial real estate | Forbearance agreement | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 2,087 | ||
Commercial and industrial | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | $ 4,408 | $ 1,123 | $ 4,408 |
Total number of loans | loan | 5 | 3 | 5 |
Financial effects of modification, net charge offs | $ 0 | $ 0 | $ 0 |
Financial effects of modification, provision for loan losses | 547 | 0 | 547 |
Commercial and industrial | Principal deferral | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 0 | 133 | 0 |
Commercial and industrial | Interest rate | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 0 | 0 | 0 |
Commercial and industrial | Forbearance agreement | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 4,408 | 990 | 4,408 |
Residential real estate | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | $ 784 | $ 112 | $ 1,145 |
Total number of loans | loan | 1 | 2 | 3 |
Financial effects of modification, net charge offs | $ 0 | $ 0 | $ 0 |
Financial effects of modification, provision for loan losses | 0 | 5 | 0 |
Residential real estate | Principal deferral | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 784 | 0 | 784 |
Residential real estate | Interest rate | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | 0 | 0 | 361 |
Residential real estate | Forbearance agreement | |||
Financing Receivable, Modifications [Line Items] | |||
Total recorded investment | $ 0 | $ 112 | $ 0 |
Loans (Number of Loans Modified
Loans (Number of Loans Modified in TDRs During Previous 12 Months For Which There Was Payment Default) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)loan | Sep. 30, 2017USD ($)loan | Sep. 30, 2018USD ($)loan | Sep. 30, 2017USD ($)loan | |
Financing Receivable, Modifications [Line Items] | ||||
Total number of loans | loan | 5 | 1 | 7 | 1 |
Total recorded investment | $ 3,269 | $ 301 | $ 3,514 | $ 301 |
Charged off following a subsequent default | $ 0 | $ 0 | $ 0 | $ 0 |
Commercial real estate | ||||
Financing Receivable, Modifications [Line Items] | ||||
Total number of loans | loan | 3 | 3 | ||
Total recorded investment | $ 2,087 | $ 2,087 | ||
Charged off following a subsequent default | $ 0 | $ 0 | ||
Commercial and industrial | ||||
Financing Receivable, Modifications [Line Items] | ||||
Total number of loans | loan | 2 | 3 | ||
Total recorded investment | $ 1,182 | $ 1,316 | ||
Charged off following a subsequent default | $ 0 | $ 0 | ||
Residential real estate | ||||
Financing Receivable, Modifications [Line Items] | ||||
Total number of loans | loan | 0 | 1 | 1 | 1 |
Total recorded investment | $ 0 | $ 301 | $ 111 | $ 301 |
Charged off following a subsequent default | $ 0 | $ 0 | $ 0 | $ 0 |
Loans (Risk Category of Loans b
Loans (Risk Category of Loans by Class of Loans) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 1,114,999 | $ 1,034,923 |
Commercial real estate and Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 949,641 | 889,448 |
Commercial real estate and Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 911,725 | 854,471 |
Commercial real estate and Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 15,469 | 16,609 |
Commercial real estate and Commercial and industrial | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 22,297 | 18,286 |
Commercial real estate and Commercial and industrial | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 150 | 82 |
Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 552,581 | 511,762 |
Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 535,570 | 492,731 |
Commercial real estate | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 10,762 | 10,664 |
Commercial real estate | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 6,208 | 8,323 |
Commercial real estate | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 41 | 44 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 397,060 | 377,686 |
Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 376,155 | 361,740 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 4,707 | 5,945 |
Commercial and industrial | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 16,089 | 9,963 |
Commercial and industrial | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 109 | 38 |
Residential real estate and Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 165,358 | 145,475 |
Residential real estate and Consumer | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 162,807 | 142,708 |
Residential real estate and Consumer | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,551 | 2,767 |
Residential real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 164,356 | 144,439 |
Residential real estate | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 161,810 | 141,672 |
Residential real estate | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 2,546 | 2,767 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,002 | 1,036 |
Consumer | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 997 | 1,036 |
Consumer | Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 5 | $ 0 |
Loans (Purchased Credit Impaire
Loans (Purchased Credit Impaired Loans Additional Information) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018USD ($)acquisition | Dec. 31, 2017USD ($) | |
Receivables [Abstract] | ||
Number of previous acquisitions | acquisition | 4 | |
Purchased credit impaired loans, decrease of allowance for loans losses | $ 96 | |
Purchased credit impaired loans, increase of allowance for loans losses | $ 234 |
Loans (Total Balance of all Pur
Loans (Total Balance of all Purchase Credit Impaired Loans from Acquisitions) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | $ 22,471 | $ 22,686 |
Commercial real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | 11,222 | 7,561 |
Commercial and industrial | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | 6,306 | 10,297 |
Residential real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Recorded Investment | 4,943 | 4,828 |
Acquired with deteriorated credit quality | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 14,881 | 14,960 |
Recorded Investment | 9,061 | 9,746 |
Acquired with deteriorated credit quality | Commercial real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 9,500 | 10,084 |
Recorded Investment | 5,537 | 5,771 |
Acquired with deteriorated credit quality | Commercial and industrial | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 338 | 808 |
Recorded Investment | 111 | 417 |
Acquired with deteriorated credit quality | Residential real estate | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | ||
Unpaid Principal Balance | 5,043 | 4,068 |
Recorded Investment | $ 3,413 | $ 3,558 |
Loans (Activity in the Accretab
Loans (Activity in the Accretable Yield of PCI Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||||
Balance at beginning of period | $ 12,390 | $ 16,850 | $ 14,452 | $ 19,893 |
Accretion of income | (1,167) | (1,011) | (3,076) | (4,188) |
Adjustments to accretable yield | 0 | (1) | (159) | 133 |
Other activity, net | 0 | 0 | 6 | 0 |
Balance at end of period | $ 11,223 | $ 15,838 | $ 11,223 | $ 15,838 |
Allowance (Additional Informati
Allowance (Additional Information) (Details) | Sep. 30, 2018loanloan_pool |
Receivables [Abstract] | |
Number of purchase credit impaired loan pools | loan_pool | 6 |
Number of non-pooled purchase credit impaired loans | loan | 12 |
Allowance (Loans Individually E
Allowance (Loans Individually Evaluated for Impairment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | |||||
Recorded with no related allowance | $ 10,647 | $ 10,647 | $ 9,156 | ||
Recorded with related allowance | 11,824 | 11,824 | 13,530 | ||
Total recorded investment | 22,471 | 22,471 | 22,686 | ||
Contractual principal balance | 29,566 | 29,566 | 31,715 | ||
Related allowance | 1,955 | 1,955 | 2,579 | ||
Average Recorded Investment | 21,300 | $ 22,266 | 22,250 | $ 23,957 | |
Interest Income Recognized | 542 | 536 | 1,623 | 1,728 | |
Cash Basis Interest Recognized | 142 | 0 | 254 | 0 | |
Commercial real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded with no related allowance | 6,039 | 6,039 | 2,222 | ||
Recorded with related allowance | 5,183 | 5,183 | 5,339 | ||
Total recorded investment | 11,222 | 11,222 | 7,561 | ||
Contractual principal balance | 15,362 | 15,362 | 13,536 | ||
Related allowance | 828 | 828 | 876 | ||
Average Recorded Investment | 9,524 | 6,554 | 9,258 | 6,225 | |
Interest Income Recognized | 430 | 403 | 1,275 | 1,318 | |
Cash Basis Interest Recognized | 142 | 0 | 142 | 0 | |
Commercial and industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded with no related allowance | 2,927 | 2,927 | 5,238 | ||
Recorded with related allowance | 3,379 | 3,379 | 5,059 | ||
Total recorded investment | 6,306 | 6,306 | 10,297 | ||
Contractual principal balance | 7,532 | 7,532 | 11,677 | ||
Related allowance | 982 | 982 | 1,549 | ||
Average Recorded Investment | 6,559 | 11,542 | 7,736 | 13,301 | |
Interest Income Recognized | 22 | 59 | 71 | 179 | |
Cash Basis Interest Recognized | 0 | 0 | 112 | 0 | |
Residential real estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded with no related allowance | 1,681 | 1,681 | 1,696 | ||
Recorded with related allowance | 3,262 | 3,262 | 3,132 | ||
Total recorded investment | 4,943 | 4,943 | 4,828 | ||
Contractual principal balance | 6,672 | 6,672 | 6,502 | ||
Related allowance | 145 | 145 | $ 154 | ||
Average Recorded Investment | 5,217 | 4,170 | 5,256 | 4,431 | |
Interest Income Recognized | 90 | 74 | 277 | 231 | |
Cash Basis Interest Recognized | $ 0 | $ 0 | $ 0 | $ 0 |
Allowance (Activity in Allowanc
Allowance (Activity in Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | $ 11,465 | $ 11,404 | $ 11,713 | $ 11,089 | ||
Provision expense for loan losses | 619 | 194 | 463 | 460 | ||
Gross chargeoffs | (245) | (41) | (1,177) | (225) | ||
Recoveries | 51 | 73 | 891 | 306 | ||
Net (chargeoffs) recoveries | (194) | 32 | (286) | 81 | ||
Ending Allowance for loan losses | 11,890 | 11,630 | 11,890 | 11,630 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | $ 970 | $ 1,498 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 9,935 | 9,134 | ||||
Ending Allowance for loan losses | 11,465 | 11,404 | 11,713 | 11,089 | 11,890 | 11,713 |
Balance of loans, individually evaluated for impairment | 14,103 | 13,976 | ||||
Balance of loans, collectively evaluated for impairment | 1,091,835 | 1,011,201 | ||||
Total loans | 1,114,999 | 1,034,923 | ||||
Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 1,081 | |||||
Ending Allowance for loan losses | 985 | 985 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 985 | 1,081 | 985 | 1,081 | ||
Total loans | 9,061 | 9,746 | ||||
Commercial real estate | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 5,060 | 4,829 | 4,852 | 4,124 | ||
Provision expense for loan losses | 34 | (412) | 352 | 279 | ||
Gross chargeoffs | 0 | 0 | (112) | 0 | ||
Recoveries | 23 | 2 | 25 | 16 | ||
Net (chargeoffs) recoveries | 23 | 2 | (87) | 16 | ||
Ending Allowance for loan losses | 5,117 | 4,419 | 5,117 | 4,419 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | 0 | 0 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 4,289 | 3,976 | ||||
Ending Allowance for loan losses | 5,060 | 4,829 | 4,852 | 4,124 | 5,117 | 4,852 |
Balance of loans, individually evaluated for impairment | 6,039 | 2,222 | ||||
Balance of loans, collectively evaluated for impairment | 541,005 | 503,769 | ||||
Total loans | 552,581 | 511,762 | ||||
Commercial real estate | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 876 | |||||
Ending Allowance for loan losses | 828 | 828 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 828 | 876 | 828 | 876 | ||
Total loans | 5,537 | 5,771 | ||||
Commercial and industrial | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 5,423 | 5,749 | 5,903 | 5,932 | ||
Provision expense for loan losses | 475 | 710 | (53) | 465 | ||
Gross chargeoffs | (237) | (38) | (995) | (139) | ||
Recoveries | 8 | 16 | 814 | 179 | ||
Net (chargeoffs) recoveries | (229) | (22) | (181) | 40 | ||
Ending Allowance for loan losses | 5,669 | 6,437 | 5,669 | 6,437 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | 957 | 1,480 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 4,687 | 4,354 | ||||
Ending Allowance for loan losses | 5,423 | 5,749 | 5,903 | 5,932 | 5,669 | 5,903 |
Balance of loans, individually evaluated for impairment | 6,194 | 9,976 | ||||
Balance of loans, collectively evaluated for impairment | 390,755 | 367,293 | ||||
Total loans | 397,060 | 377,686 | ||||
Commercial and industrial | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 69 | |||||
Ending Allowance for loan losses | 25 | 25 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 25 | 69 | 25 | 69 | ||
Total loans | 111 | 417 | ||||
Residential real estate | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 977 | 821 | 950 | 1,030 | ||
Provision expense for loan losses | 101 | (104) | 143 | (285) | ||
Gross chargeoffs | 0 | (3) | (47) | (86) | ||
Recoveries | 19 | 55 | 51 | 110 | ||
Net (chargeoffs) recoveries | 19 | 52 | 4 | 24 | ||
Ending Allowance for loan losses | 1,097 | 769 | 1,097 | 769 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | 13 | 18 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 952 | 796 | ||||
Ending Allowance for loan losses | 977 | 821 | 950 | 1,030 | 1,097 | 950 |
Balance of loans, individually evaluated for impairment | 1,870 | 1,778 | ||||
Balance of loans, collectively evaluated for impairment | 159,073 | 139,103 | ||||
Total loans | 164,356 | 144,439 | ||||
Residential real estate | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 136 | |||||
Ending Allowance for loan losses | 132 | 132 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | 132 | 136 | 132 | 136 | ||
Total loans | 3,413 | 3,558 | ||||
Consumer | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 5 | 5 | 8 | 3 | ||
Provision expense for loan losses | 9 | 0 | 21 | 1 | ||
Gross chargeoffs | (8) | 0 | (23) | 0 | ||
Recoveries | 1 | 0 | 1 | 1 | ||
Net (chargeoffs) recoveries | (7) | 0 | (22) | 1 | ||
Ending Allowance for loan losses | 7 | 5 | 7 | 5 | ||
Allowance for loan losses and Balance of loans | ||||||
Allowance for loan losses, individually evaluated for impairment | 0 | 0 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 7 | 8 | ||||
Ending Allowance for loan losses | 5 | $ 5 | 8 | $ 3 | 7 | 8 |
Balance of loans, individually evaluated for impairment | 0 | 0 | ||||
Balance of loans, collectively evaluated for impairment | 1,002 | 1,036 | ||||
Total loans | 1,002 | 1,036 | ||||
Consumer | Acquired with deteriorated credit quality | ||||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||||
Beginning Balance | 0 | |||||
Ending Allowance for loan losses | 0 | 0 | ||||
Allowance for loan losses and Balance of loans | ||||||
Ending Allowance for loan losses | $ 0 | $ 0 | 0 | 0 | ||
Total loans | $ 0 | $ 0 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 19,620 | $ 19,620 | $ 18,598 | ||
Less: Accumulated depreciation | 6,114 | 6,114 | 5,163 | ||
Net premises and equipment | 13,506 | 13,506 | 13,435 | ||
Depreciation of fixed assets | 345 | $ 333 | 1,008 | $ 1,030 | |
Operating lease, rent expense | 285 | $ 288 | 790 | $ 662 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 2,197 | 2,197 | 2,197 | ||
Building | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 9,746 | 9,746 | 9,132 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | 1,691 | 1,691 | 1,655 | ||
Furniture, fixtures and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total premises and equipment | $ 5,986 | $ 5,986 | $ 5,614 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Additional Information) (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 13 Months Ended | |||
Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Mar. 31, 2016acquisition | |
Goodwill [Line Items] | ||||||||
Number of banks acquired | acquisition | 2 | |||||||
Goodwill | $ 9,387,000 | $ 9,387,000 | $ 9,387,000 | |||||
Change in goodwill | 0 | 0 | $ 0 | |||||
Amortization of core deposit intangibles | $ 55,000 | $ 59,000 | $ 165,000 | $ 176,000 | ||||
Lotus Bank | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill acquired | $ 4,600,000 | |||||||
Bank of Michigan | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill acquired | $ 4,800,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 2,045 | $ 2,045 |
Accumulated amortization | (1,543) | (1,378) |
Net Intangible | $ 502 | $ 667 |
Borrowings and Subordinated D_3
Borrowings and Subordinated Debt (Components of Long-term Debt and Short-term Borrowings) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 135,021 | $ 36,319 |
Total short-term borrowings, weighted average rate | 1.97% | 1.22% |
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 26,344 | $ 26,358 |
Total long-term debt, weighted average rate | 4.32% | 4.31% |
Total short-term and long-term borrowings | $ 161,365 | $ 62,677 |
Total short-term and long-term borrowings, weighted average rate | 2.35% | 2.52% |
Securities sold under agreements to repurchase | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 10,021 | $ 1,319 |
Total short-term borrowings, weighted average rate | 2.34% | 0.30% |
FHLB Advances | ||
Short-term Debt [Line Items] | ||
Total short-term borrowings | $ 125,000 | $ 35,000 |
Total short-term borrowings, weighted average rate | 1.94% | 1.25% |
Secured borrowings | Secured borrowing due in 2022 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 1,462 | $ 1,514 |
Total long-term debt, weighted average rate | 1.00% | 1.00% |
FHLB Advances | FHLB advances due in 2022 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 10,000 | $ 10,000 |
Total long-term debt, weighted average rate | 1.75% | 1.75% |
Subordinated notes | Subordinated notes due in 2025 | ||
Debt Instrument [Line Items] | ||
Total long-term debt, amount | $ 14,882 | $ 14,844 |
Total long-term debt, weighted average rate | 6.38% | 6.38% |
Long-term debt gross | $ 15,000 | $ 15,000 |
Debt issuance costs | $ 118 | $ 156 |
Borrowings and Subordinated D_4
Borrowings and Subordinated Debt (Narrative) (Details) - USD ($) $ in Thousands | Dec. 16, 2020 | Sep. 30, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | |||
Total short-term borrowings | $ 135,021 | $ 36,319 | |
Debt Instrument [Line Items] | |||
Federal Home Loan Bank, advances, collateral | 368,500 | ||
Federal Home Loan Bank, advances, maximum borrowing capacity | 78,000 | ||
Subordinated notes | 26,344 | 26,358 | |
Maturity overnight | |||
Short-term Debt [Line Items] | |||
Fair value of collateralized mortgage obligations | 1,800 | ||
Mature weekly | |||
Short-term Debt [Line Items] | |||
Fair value of collateralized mortgage obligations | 9,600 | ||
Secured borrowings | Secured borrowing due in 2022 | |||
Debt Instrument [Line Items] | |||
Subordinated notes | $ 1,462 | 1,514 | |
Fixed interest rate | 1.00% | ||
Subordinated notes | Subordinated notes due in 2025 | |||
Debt Instrument [Line Items] | |||
Subordinated notes | $ 14,882 | 14,844 | |
Fixed interest rate | 6.375% | ||
Long-term debt gross | $ 15,000 | 15,000 | |
Debt issuance costs | 118 | 156 | |
Securities sold under agreements to repurchase | |||
Short-term Debt [Line Items] | |||
Total short-term borrowings | 10,021 | $ 1,319 | |
Securities sold under agreements to repurchase | Maturity overnight | |||
Short-term Debt [Line Items] | |||
Total short-term borrowings | 418 | ||
Securities sold under agreements to repurchase | Mature weekly | |||
Short-term Debt [Line Items] | |||
Total short-term borrowings | $ 9,600 | ||
Forecast | Subordinated notes | Subordinated notes due in 2025 | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 4.77% |
Borrowings and Subordinated D_5
Borrowings and Subordinated Debt (Selected Financial Information of Short-term Borrowings) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
FHLB line of credit | ||||
Short-term Debt [Line Items] | ||||
Average Daily Balance | $ 3,026,000 | $ 45,000 | $ 4,085,000 | $ 2,347,000 |
Weighted-average rate | 2.40% | 1.40% | 2.06% | 0.91% |
Maximum month-end balance | $ 37,081,000 | $ 0 | $ 37,081,000 | $ 20,551,000 |
Securities sold under agreements to repurchase | ||||
Short-term Debt [Line Items] | ||||
Average Daily Balance | $ 9,824,000 | $ 707,000 | $ 4,413,000 | $ 806,000 |
Weighted-average rate | 2.34% | 0.30% | 2.34% | 0.30% |
Maximum month-end balance | $ 10,276,000 | $ 896,000 | $ 10,761,000 | $ 1,085,000 |
FHLB Advances | ||||
Short-term Debt [Line Items] | ||||
Average Daily Balance | $ 71,054,000 | $ 74,140,000 | $ 47,077,000 | $ 33,224,000 |
Weighted-average rate | 2.14% | 1.13% | 1.94% | 0.92% |
Maximum month-end balance | $ 125,000,000 | $ 72,000,000 | $ 125,000,000 | $ 120,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate | 21.00% | 35.00% | ||
Income tax expense based on federal corporate tax rate | $ 823 | $ 1,433 | $ 2,646 | $ 4,660 |
Changes resulting from: | ||||
Tax-exempt income | 104 | 120 | 289 | 307 |
Other, net | (262) | (294) | (768) | (561) |
Income tax expense | $ 665 | $ 1,259 | $ 2,167 | $ 4,406 |
Stock Based Compensation (2007
Stock Based Compensation (2007 Stock Option Plan) (Details) - 2007 Stock Option Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 16, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock reserved for issuance (in shares) | 630,265 | ||||
Stock options granted during period (in shares) | 30,000 | 0 | |||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of options | P10Y | ||||
Vesting period | 3 years | ||||
Share-based compensation expense | $ 38 | $ 39 | $ 128 | $ 128 | |
Unrecognized compensation costs | $ 132 | $ 132 | |||
Weighted-average recognition period for unrecognized compensation costs | 1 year 4 months 30 days | ||||
Stock Options | Tranche 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Stock Options | Tranche 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Stock Options | Tranche 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% |
Stock Based Compensation (Weigh
Stock Based Compensation (Weighted-Average Assumptions) (Details) - Stock Options - 2007 Stock Option Plan | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk Free Interest Rate | 2.83% |
Expected Term | 7 years |
Expected Volatility | 0.04% |
Dividend Yield | 0.00% |
Weighted average fair value of options granted (in dollars per share) | $ 4.46 |
Stock Based Compensation (Emplo
Stock Based Compensation (Employee Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Shares | |||
Exercised (in shares) | (126,494) | ||
2007 Stock Option Plan | |||
Shares | |||
Outstanding at beginning of period (in shares) | 484,147 | ||
Granted (in shares) | 30,000 | 0 | |
Exercised (in shares) | (126,494) | ||
Forfeited (in shares) | (9,885) | ||
Outstanding at end of period (in shares) | 377,768 | 484,147 | |
Exercisable (in shares) | 318,263 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 13.96 | ||
Granted (in dollars per share) | 24.80 | ||
Exercised (in dollars per share) | 10.04 | ||
Forfeited (in dollars per share) | 10 | ||
Outstanding at end of period (in dollars per share) | 16.24 | $ 13.96 | |
Exercisable (in dollars per share) | $ 15.02 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at end of period | 6 years 20 days | 4 years 8 months 35 days | |
Exercisable at end of period | 5 years 7 months 10 days | ||
Aggregate Intrinsic Value | |||
Outstanding at end of period | $ 4,367 | $ 6,700 | |
Exercisable at end of period | $ 4,069 |
Stock Based Compensation (2014
Stock Based Compensation (2014 Equity Incentive Plan) (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2014 | |
Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 37,021 | |
2014 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares of common stock reserved for issuance (in shares) | 150,000 | |
2014 Equity Incentive Plan | Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 30,271 |
Stock Based Compensation (2018
Stock Based Compensation (2018 Equity Incentive Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 17, 2018 | |
Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 37,021 | ||||
Share-based compensation expense | $ 175 | $ 128 | $ 487 | $ 337 | |
Unrecognized compensation costs | 858 | $ 858 | |||
Weighted-average recognition period for unrecognized compensation costs | 2 years | ||||
Fair value of shares vested during period | $ 114 | $ 245 | |||
2018 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock reserved for issuance (in shares) | 250,000 | ||||
2018 Plan | Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 6,750 |
Stock Based Compensation (Chang
Stock Based Compensation (Changes in Nonvested Shares) (Details) - Restricted Stock Awards | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Shares | |
Nonvested at beginning of period (in shares) | shares | 30,150 |
Granted (in shares) | shares | 37,021 |
Vested (in shares) | shares | (10,747) |
Nonvested at end of period (in shares) | shares | 56,424 |
Weighted Average Grant-Date Fair Value | |
Nonvested at beginning of period (in dollars per share) | $ / shares | $ 22.03 |
Granted (in dollars per share) | $ / shares | 25.53 |
Vested (in dollars per share) | $ / shares | 22.81 |
Nonvested at end of period (in dollars per share) | $ / shares | $ 24.18 |
Off-Balance Sheet Activities (D
Off-Balance Sheet Activities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitment to make loans, maximum term | 90 days | |
Commitments to make loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | $ 16,273 | $ 5,041 |
Off-balance sheet exposure, variable rates | 2,325 | 8,837 |
Unused lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | 14,121 | 12,407 |
Off-balance sheet exposure, variable rates | 213,270 | 189,787 |
Unused standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet exposure, fixed rates | 3,705 | 3,584 |
Off-balance sheet exposure, variable rates | $ 232 | $ 1,411 |
Minimum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 4.75% | |
Fixed rate loan commitments, maturity | 1 year | |
Maximum | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Fixed rate loan commitments, interest rate | 6.15% | |
Fixed rate loan commitments, maturity | 10 years |
Regulatory Capital Matters (Det
Regulatory Capital Matters (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 166,852 | $ 125,472 |
Actual capital, ratio | 13.99% | 11.55% |
Required capital adequacy, amount | $ 95,390 | $ 86,940 |
Required capital adequacy, ratio | 8.00% | 8.00% |
Required capital adequacy with capital conservation buffer, amount | $ 117,807 | $ 100,525 |
Required capital adequacy, ratio | 9.88% | 9.25% |
Tier 1 capital to risk-weighted assets: | ||
Actual capital, amount | $ 140,050 | $ 98,912 |
Actual capital, ratio | 11.75% | 9.10% |
Required capital adequacy, amount | $ 71,543 | $ 65,205 |
Required capital adequacy, ratio | 6.00% | 6.00% |
Required capital adequacy with capital conservation buffer, amount | $ 93,959 | $ 78,790 |
Required capital adequacy, ratio | 7.88% | 7.25% |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 140,050 | $ 98,912 |
Actual capital, ratio | 11.75% | 9.10% |
Required capital adequacy, amount | $ 53,657 | $ 48,904 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 76,074 | $ 62,488 |
Required capital adequacy with capital conservation buffer, ratio | 6.38% | 5.75% |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 140,050 | $ 98,912 |
Actual capital, ratio | 10.31% | 7.92% |
Required capital adequacy, amount | $ 54,344 | $ 49,978 |
Required capital adequacy, ratio | 4.00% | 4.00% |
Required capital adequacy with capital conservation buffer, amount | $ 54,344 | $ 49,978 |
Required capital adequacy with capital conservation buffer, ratio | 4.00% | 4.00% |
Bank | ||
Common equity tier 1 to risk-weighted assets: | ||
Actual capital, amount | $ 155,288 | $ 123,496 |
Actual capital, ratio | 13.00% | 11.37% |
Required capital adequacy, amount | $ 95,567 | $ 86,917 |
Required capital adequacy, ratio | 8.00% | 8.00% |
Required capital adequacy with capital conservation buffer, amount | $ 118,026 | $ 100,498 |
Required capital adequacy, ratio | 9.88% | 9.25% |
Prompt corrective action provisions, amount | $ 119,459 | $ 108,646 |
Prompt corrective action provisions, ratio | 10.00% | 10.00% |
Tier 1 capital to risk-weighted assets: | ||
Actual capital, amount | $ 143,368 | $ 111,781 |
Actual capital, ratio | 12.00% | 10.29% |
Required capital adequacy, amount | $ 71,676 | $ 65,188 |
Required capital adequacy, ratio | 6.00% | 6.00% |
Required capital adequacy with capital conservation buffer, amount | $ 94,134 | $ 78,768 |
Required capital adequacy, ratio | 7.88% | 7.25% |
Prompt corrective action provisions, amount | $ 95,567 | $ 86,917 |
Prompt corrective action provisions, ratio | 8.00% | 8.00% |
Total capital to risk-weighted assets: | ||
Actual capital, amount | $ 143,368 | $ 111,781 |
Actual capital, ratio | 12.00% | 10.29% |
Required capital adequacy, amount | $ 53,757 | $ 48,891 |
Required capital adequacy, ratio | 4.50% | 4.50% |
Required capital adequacy with capital conservation buffer, amount | $ 76,215 | $ 62,472 |
Required capital adequacy with capital conservation buffer, ratio | 6.38% | 5.75% |
Prompt corrective action provisions, amount | $ 77,649 | $ 70,620 |
Prompt corrective action provisions, ratio | 6.50% | 6.50% |
Tier 1 capital to average assets (leverage ratio): | ||
Actual capital, amount | $ 143,368 | $ 111,781 |
Actual capital, ratio | 10.62% | 8.96% |
Required capital adequacy, amount | $ 54,018 | $ 49,893 |
Required capital adequacy, ratio | 4.00% | 4.00% |
Required capital adequacy with capital conservation buffer, amount | $ 54,018 | $ 49,893 |
Required capital adequacy with capital conservation buffer, ratio | 4.00% | 4.00% |
Prompt corrective action provisions, amount | $ 67,522 | $ 62,366 |
Prompt corrective action provisions, ratio | 5.00% | 5.00% |
Fair Value (Fair Value Measurem
Fair Value (Fair Value Measurements of Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financial assets: | ||
Securities available-for-sale | $ 199,051 | $ 150,969 |
Recurring | ||
Financial assets: | ||
Securities available-for-sale | 199,051 | 150,969 |
Loans held for sale | 9,392 | 4,548 |
Other assets (interest rate swaps) | 17 | |
Total assets at fair value | 212,947 | 159,808 |
Other liabilities (interest rate swaps) | 17 | |
Total liabilities at fair value | 17 | |
Recurring | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 4,487 | 4,291 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Other assets (interest rate swaps) | ||
Total assets at fair value | 0 | 0 |
Other liabilities (interest rate swaps) | 0 | |
Total liabilities at fair value | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 199,051 | 150,969 |
Loans held for sale | 9,392 | 4,548 |
Other assets (interest rate swaps) | 17 | |
Total assets at fair value | 208,460 | 155,517 |
Other liabilities (interest rate swaps) | 17 | |
Total liabilities at fair value | 17 | |
Recurring | Significant Other Observable Inputs (Level 2) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Other assets (interest rate swaps) | ||
Total assets at fair value | 4,487 | 4,291 |
Other liabilities (interest rate swaps) | 0 | |
Total liabilities at fair value | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Residential real estate | ||
Financial assets: | ||
Loans measured at fair value | 4,487 | 4,291 |
U.S. government sponsored entities & agencies | ||
Financial assets: | ||
Securities available-for-sale | 2,327 | |
U.S. government sponsored entities & agencies | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 2,327 | |
U.S. government sponsored entities & agencies | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
U.S. government sponsored entities & agencies | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 2,327 | |
U.S. government sponsored entities & agencies | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
State and political subdivision | ||
Financial assets: | ||
Securities available-for-sale | 70,203 | 53,224 |
State and political subdivision | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 70,203 | 53,224 |
State and political subdivision | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
State and political subdivision | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 70,203 | 53,224 |
State and political subdivision | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: residential | ||
Financial assets: | ||
Securities available-for-sale | 9,857 | 8,431 |
Mortgage-backed securities: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 9,857 | 8,431 |
Mortgage-backed securities: residential | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: residential | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 9,857 | 8,431 |
Mortgage-backed securities: residential | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: commercial | ||
Financial assets: | ||
Securities available-for-sale | 12,182 | 9,819 |
Mortgage-backed securities: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 12,182 | 9,819 |
Mortgage-backed securities: commercial | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Mortgage-backed securities: commercial | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 12,182 | 9,819 |
Mortgage-backed securities: commercial | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
Collateralized mortgage obligations: residential | ||
Financial assets: | ||
Securities available-for-sale | 19,576 | 19,221 |
Collateralized mortgage obligations: residential | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 19,576 | 19,221 |
Collateralized mortgage obligations: residential | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
Collateralized mortgage obligations: residential | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 19,576 | 19,221 |
Collateralized mortgage obligations: residential | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Collateralized mortgage obligations: commercial | ||
Financial assets: | ||
Securities available-for-sale | 32,039 | 20,557 |
Collateralized mortgage obligations: commercial | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 32,039 | 20,557 |
Collateralized mortgage obligations: commercial | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Collateralized mortgage obligations: commercial | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 32,039 | 20,557 |
Collateralized mortgage obligations: commercial | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
U.S. Treasury | ||
Financial assets: | ||
Securities available-for-sale | 22,967 | 23,573 |
U.S. Treasury | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 22,967 | 23,573 |
U.S. Treasury | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
U.S. Treasury | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 22,967 | 23,573 |
U.S. Treasury | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
SBA | ||
Financial assets: | ||
Securities available-for-sale | 16,080 | 12,616 |
SBA | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 16,080 | 12,616 |
SBA | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
SBA | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 16,080 | 12,616 |
SBA | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Asset backed securities | ||
Financial assets: | ||
Securities available-for-sale | 3,863 | |
Asset backed securities | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 3,863 | |
Asset backed securities | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
Asset backed securities | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 3,863 | |
Asset backed securities | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | 0 | |
Corporate Bonds | ||
Financial assets: | ||
Securities available-for-sale | 9,957 | 3,528 |
Corporate Bonds | Recurring | ||
Financial assets: | ||
Securities available-for-sale | 9,957 | 3,528 |
Corporate Bonds | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Securities available-for-sale | 0 | 0 |
Corporate Bonds | Recurring | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Securities available-for-sale | 9,957 | 3,528 |
Corporate Bonds | Recurring | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Securities available-for-sale | $ 0 | $ 0 |
Fair Value (Level 3 Assets Roll
Fair Value (Level 3 Assets Rollforward) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | ||
Beginning balance | $ 4,414 | $ 4,291 |
Transfers from loans held for sale | 149 | 453 |
Gains (losses): | ||
Recorded in Mortgage banking activities | (32) | (144) |
Repayments | (44) | (113) |
Ending balance | $ 4,487 | $ 4,487 |
Fair Value (Contractual Obligat
Fair Value (Contractual Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Aggregate fair value | $ 9,392 | $ 4,548 |
Loans held for sale, contractual balance | 9,210 | 4,466 |
Loans held for sale, unrealized gain | $ 182 | $ 82 |
Fair Value (Total Amount of Gai
Fair Value (Total Amount of Gains (Losses) from Changes in Fair Value of Loans Held For Sale) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | ||||
Total amount of gains (losses) from changes in fair value of loans held for sale | $ 69 | $ (5) | $ 100 | $ (154) |
Fair Value (Assets Measured at
Fair Value (Assets Measured at Fair Value on a Non-Recurring Basis) (Details) - Non-recurring - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired other asset, building and furniture held-for-sale | $ 10,000 | $ 140,000 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | 652,000 | |
Contractual balance | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Other real estate owned | 0 | 652,000 |
Other assets (interest rate swaps) | 1,654,000 | |
Total assets at fair value | 185,000 | 2,306,000 |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | 0 | |
Other assets (interest rate swaps) | 0 | |
Total assets at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | 0 | |
Other assets (interest rate swaps) | 0 | |
Total assets at fair value | 0 | 0 |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | 652,000 | |
Other assets (interest rate swaps) | 1,654,000 | |
Total assets at fair value | 185,000 | $ 2,306,000 |
Commercial and industrial | Contractual balance | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 185,000 | |
Commercial and industrial | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Commercial and industrial | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Commercial and industrial | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 185,000 |
Fair Value (Additional Informat
Fair Value (Additional Information) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Chargeoffs to impaired loans | $ 194,000 | $ (32,000) | $ 286,000 | $ (81,000) | |
Write downs in other real estate owned | $ 0 | ||||
Contractual balance | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Chargeoffs to impaired loans | 233,000 | ||||
Contractual balance | Non-recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impaired loans | 0 | ||||
Other real estate owned | 0 | 0 | $ 652,000 | ||
Commercial and industrial | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Chargeoffs to impaired loans | 229,000 | $ 22,000 | 181,000 | $ (40,000) | |
Commercial and industrial | Contractual balance | Non-recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impaired loans | $ 185,000 | $ 185,000 |
Fair Value (Quantitative Inform
Fair Value (Quantitative Information About Significant Unobservable Inputs for Assets Measured at Fair Value on a Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 22,471 | $ 22,686 |
Other assets | 10,174 | 12,467 |
Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans | $ 185 | |
Other real estate owned | 652 | |
Other assets | $ 1,654 | |
Minimum | Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, measurement input | 0.00% | |
Other asset, measurement input | 0.00% | |
Other real estate owned, measurement input | 0.00% | |
Maximum | Non-recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Impaired loans, measurement input | 35.00% | |
Other asset, measurement input | 10.00% | |
Other real estate owned, measurement input | 5.00% |
Fair Value (Fair Value Measur_2
Fair Value (Fair Value Measurement of Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Contractual balance | ||
Financial assets: | ||
Cash and cash equivalents | $ 77,837 | $ 63,661 |
Federal Home Loan Bank stock | 8,325 | 8,303 |
Net loans | 1,103,109 | 1,023,210 |
Accrued interest receivable | 4,714 | 3,730 |
Financial liabilities: | ||
Deposits | 1,130,311 | 1,120,382 |
Borrowings | 146,483 | 47,833 |
Subordinated notes | 14,882 | 14,844 |
Accrued interest payable | 1,402 | 908 |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 21,750 | 17,712 |
Net loans | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Borrowings | 0 | 0 |
Subordinated notes | 0 | 0 |
Accrued interest payable | 0 | 0 |
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Cash and cash equivalents | 56,087 | 45,949 |
Net loans | 0 | 0 |
Accrued interest receivable | 1,673 | 807 |
Financial liabilities: | ||
Deposits | 1,122,317 | 1,122,473 |
Borrowings | 146,947 | 47,473 |
Subordinated notes | 15,000 | 14,993 |
Accrued interest payable | 1,402 | 908 |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Net loans | 1,102,005 | 1,025,319 |
Accrued interest receivable | 3,041 | 2,923 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Borrowings | 0 | 0 |
Subordinated notes | 0 | 0 |
Accrued interest payable | $ 0 | $ 0 |
Derivatives (Details)
Derivatives (Details) - Interest Rate Swap - Designated as Hedging Instrument $ in Thousands | Sep. 30, 2018USD ($) |
Derivatives, Fair Value [Line Items] | |
Notional amount | $ 10,400 |
Other Assets | |
Notional Amount | |
Derivative asset | 10,394 |
Fair Value | |
Derivative asset | 17 |
Other Liabilities | |
Notional Amount | |
Derivative liability | 10,394 |
Fair Value | |
Derivative liability | $ 17 |
Parent Company Financial Stat_3
Parent Company Financial Statements (Balance Sheets - Parent Company) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||||||
Cash and cash equivalents | $ 77,837 | $ 63,661 | $ 92,750 | $ 19,116 | ||
Income tax benefit | 3,201 | 3,102 | ||||
Other assets | 10,174 | 12,467 | ||||
Total assets | 1,446,269 | 1,301,291 | ||||
Liabilities | ||||||
Subordinated notes | 14,882 | 14,844 | ||||
Total liabilities | 1,300,810 | 1,193,331 | ||||
Shareholders' equity | 145,459 | $ 143,445 | 107,960 | 106,985 | $ 104,206 | 96,571 |
Total liabilities and shareholders' equity | 1,446,269 | 1,301,291 | ||||
Parent Company | ||||||
Assets | ||||||
Cash and cash equivalents | 10,399 | 1,158 | $ 1,052 | $ 539 | ||
Investment in banking subsidiary | 148,777 | 120,829 | ||||
Investment in captive subsidiary | 1,373 | 663 | ||||
Income tax benefit | 298 | 339 | ||||
Other assets | 38 | 30 | ||||
Total assets | 160,885 | 123,019 | ||||
Liabilities | ||||||
Subordinated notes | 14,882 | 14,844 | ||||
Accrued expenses and other liabilities | 544 | 215 | ||||
Total liabilities | 15,426 | 15,059 | ||||
Shareholders' equity | 145,459 | 107,960 | ||||
Total liabilities and shareholders' equity | $ 160,885 | $ 123,019 |
Parent Company Financial Stat_4
Parent Company Financial Statements (Statements of Income and Comprehensive Income - Parent Company) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Expenses | ||||
Subordinated notes | $ 256 | $ 256 | $ 759 | $ 759 |
Salary and employee benefits | 6,888 | 5,413 | 19,013 | 16,003 |
Professional services | 494 | 603 | 1,231 | 1,683 |
Income tax benefit (expense) | (665) | (1,259) | (2,167) | (4,406) |
Net income | 3,255 | 2,835 | 10,435 | 8,908 |
Other comprehensive income (loss) | (986) | (223) | (3,174) | 890 |
Total comprehensive income, net of tax | 2,269 | 2,612 | 7,261 | 9,798 |
Parent Company | ||||
Expenses | ||||
Subordinated notes | 256 | 256 | 759 | 759 |
Salary and employee benefits | 0 | 12 | 86 | 41 |
Professional services | 9 | 223 | 23 | 446 |
Other expenses | 142 | 120 | 371 | 347 |
Total expenses | 407 | 611 | 1,239 | 1,593 |
Loss before income taxes and equity in undistributed net earnings of subsidiaries | (407) | (611) | (1,239) | (1,593) |
Income tax benefit (expense) | (2) | 187 | 201 | 531 |
Equity in undistributed earnings of subsidiaries | 3,664 | 3,259 | 11,473 | 9,970 |
Net income | 3,255 | 2,835 | 10,435 | 8,908 |
Other comprehensive income (loss) | (986) | (223) | (3,174) | 890 |
Total comprehensive income, net of tax | $ 2,269 | $ 2,612 | $ 7,261 | $ 9,798 |
Parent Company Financial Stat_5
Parent Company Financial Statements (Statements of Cash Flows - Parent Company) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||||
Net income | $ 3,255 | $ 2,835 | $ 10,435 | $ 8,908 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Stock-based compensation expense | 615 | 465 | ||
Net cash provided by operating activities | 6,086 | 14,301 | ||
Cash flows from investing activities | ||||
Net cash used in investing activities | (130,344) | (66,018) | ||
Cash flows from financing activities | ||||
Net proceeds from issuance of common stock related to initial public offering | 29,030 | 0 | ||
Common stock dividend paid | (430) | 0 | ||
Proceeds from exercised stock options | 1,269 | 150 | ||
Net cash provided by financing activities | 138,434 | 125,351 | ||
Net change in cash and cash equivalents | 14,176 | 73,634 | ||
Beginning cash and cash equivalents | 63,661 | 19,116 | ||
Ending cash and cash equivalents | 77,837 | 92,750 | 77,837 | 92,750 |
Parent Company | ||||
Cash flows from operating activities | ||||
Net income | 3,255 | 2,835 | 10,435 | 8,908 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in undistributed earnings of subsidiaries | (3,664) | (3,259) | (11,473) | (9,970) |
Stock-based compensation expense | 242 | 246 | ||
Decrease in other assets, net | 33 | 917 | ||
Increase (decrease) in other liabilities, net | 135 | 512 | ||
Net cash provided by operating activities | (628) | 613 | ||
Cash flows from investing activities | ||||
Capital infusion to subsidiaries | (20,000) | (250) | ||
Net cash used in investing activities | (20,000) | (250) | ||
Cash flows from financing activities | ||||
Net proceeds from issuance of common stock related to initial public offering | 29,030 | 0 | ||
Common stock dividend paid | (430) | 0 | ||
Proceeds from exercised stock options | 1,269 | 150 | ||
Net cash provided by financing activities | 29,869 | 150 | ||
Net change in cash and cash equivalents | 9,241 | 513 | ||
Beginning cash and cash equivalents | 1,158 | 539 | ||
Ending cash and cash equivalents | $ 10,399 | $ 1,052 | $ 10,399 | $ 1,052 |
Earnings Per Share (Calculation
Earnings Per Share (Calculation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic: | ||||
Net Income attributable to common shareholders | $ 3,255 | $ 2,835 | $ 10,435 | $ 8,908 |
Weighted average common shares outstanding (in shares) | 7,749,047 | 6,392,041 | 7,264,494 | 6,382,723 |
Basic earnings per share (in dollars per share) | $ 0.42 | $ 0.44 | $ 1.44 | $ 1.40 |
Diluted: | ||||
Net Income attributable to common shareholders | $ 3,255 | $ 2,835 | $ 10,435 | $ 8,908 |
Weighted average common shares outstanding (in shares) | 7,749,047 | 6,392,041 | 7,264,494 | 6,382,723 |
Add: Dilutive effects of assumed exercises of stock options (in shares) | 152,062 | 217,575 | 149,182 | 219,633 |
Weighted average common and dilutive potential common shares outstanding (in shares) | 7,901,109 | 6,609,616 | 7,413,676 | 6,602,356 |
Diluted earnings per common share (in dollars per share) | $ 0.41 | $ 0.43 | $ 1.41 | $ 1.35 |
Earnings Per Share (Additional
Earnings Per Share (Additional Information) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from diluted earnings per share calculation (in shares) | 30,000 | 0 | 25,055 | 0 |