Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 09, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | COASTAL FINANCIAL CORP | ||
Entity Central Index Key | 0001437958 | ||
Trading Symbol | CCB | ||
Amendment Flag | false | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Common Stock, Shares Outstanding | 11,928,413 | ||
Entity Public Float | $ 143.1 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Security Exchange Name | NASDAQ | ||
Title of 12(b) Security | Common Stock, no par value per share | ||
Entity Interactive Data Current | Yes | ||
Entity File Number | 001-38589 | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 56-2392007 | ||
Entity Address, Address Line One | 5415 Evergreen Way | ||
Entity Address, City or Town | Everett | ||
Entity Address, State or Province | WA | ||
Entity Address, Country | US | ||
Entity Address, Postal Zip Code | 98203 | ||
City Area Code | 425 | ||
Local Phone Number | 257-9000 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s Definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A for its 2020 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 16,555,000 | $ 16,315,000 |
Interest earning deposits with other banks (restricted cash of $27,355 and $24,004 at December 31, 2019 and December 31, 2018, respectively) | 111,259,000 | 109,467,000 |
Investment securities, available for sale, at fair value | 28,360,000 | 36,660,000 |
Investment securities, held to maturity, at amortized cost | 4,350,000 | 1,262,000 |
Other investments | 4,505,000 | 3,766,000 |
Loans receivable | 939,103,000 | 767,899,000 |
Allowance for loan losses | (11,470,000) | (9,407,000) |
Total loans receivable, net | 927,633,000 | 758,492,000 |
Premises and equipment, net | 13,108,000 | 13,167,000 |
Operating lease right-of-use assets | 8,493,000 | |
Accrued interest receivable | 2,980,000 | 2,526,000 |
Bank-owned life insurance, net | 6,882,000 | 6,688,000 |
Deferred tax asset, net | 2,743,000 | 2,518,000 |
Other assets | 1,658,000 | 1,249,000 |
Total assets | 1,128,526,000 | 952,110,000 |
LIABILITIES | ||
Deposits | 967,959,000 | 803,614,000 |
Federal Home Loan Bank (FHLB) advances | 10,000,000 | 20,000,000 |
Principal amount $10,000 (less unamortized debt issuance costs of $21 and $35 at December 31, 2019 and December 31, 2018, respectively) | 9,979,000 | 9,965,000 |
Principal amount $3,609 (less unamortized debt issuance costs of $26 and $28 at December 31, 2019 and December 31, 2018, respectively) | 3,583,000 | 3,581,000 |
Deferred compensation | 974,000 | 1,078,000 |
Operating lease liabilities | 8,679,000 | |
Accrued interest payable | 308,000 | 279,000 |
Other liabilities | 2,871,000 | 4,437,000 |
Total liabilities | 1,004,353,000 | 842,954,000 |
Commitments and contingencies (Note 13) | ||
SHAREHOLDERS’ EQUITY | ||
Authorized: 25,000,000 shares at December 31, 2019 and December 31, 2018; issued and outstanding: zero shares at December 31, 2019 and December 31, 2018 | ||
Authorized: 300,000,000 shares at December 31, 2019 and December 31, 2018; 11,913,885 voting shares at December 31, 2019 issued and outstanding and 11,893,203 voting shares at December 31, 2018 issued and outstanding | 86,983,000 | 86,431,000 |
Retained earnings | 37,222,000 | 24,021,000 |
Accumulated other comprehensive loss, net of tax | (32,000) | (1,296,000) |
Total shareholders’ equity | 124,173,000 | 109,156,000 |
Total liabilities and shareholders’ equity | $ 1,128,526,000 | $ 952,110,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted cash | $ 27,355,000 | $ 24,004,000 |
Preferred stock, no par value | ||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Voting Common Stock | ||
Common stock, shares, issued | 11,913,885 | 11,893,203 |
Common stock, shares, outstanding | 11,913,885 | 11,893,203 |
Subordinated Debt | ||
Principal amount | $ 10,000,000 | $ 10,000,000 |
Unamortized debt issuance cost | 21,000 | 35,000 |
Junior Subordinated Debentures | ||
Principal amount | 3,609,000 | 3,609,000 |
Unamortized debt issuance cost | $ 26,000 | $ 28,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INTEREST AND DIVIDEND INCOME | ||
Interest and fees on loans | $ 45,350,000 | $ 36,537,000 |
Interest on investment securities | 635,000 | 618,000 |
Interest on interest earning deposits with other banks | 2,423,000 | 1,432,000 |
Dividends on other investments | 179,000 | 156,000 |
Total interest income | 48,587,000 | 38,743,000 |
INTEREST EXPENSE | ||
Interest on deposits | 5,802,000 | 3,141,000 |
Interest on borrowed funds | 774,000 | 785,000 |
Total interest expense | 6,576,000 | 3,926,000 |
Net interest income | 42,011,000 | 34,817,000 |
PROVISION FOR LOAN LOSSES | 2,544,000 | 1,826,000 |
Net interest income after provision for loan losses | 39,467,000 | 32,991,000 |
NONINTEREST INCOME | ||
Gain on sales of loans, net | 490,000 | 264,000 |
Sublease and lease income | 58,000 | 81,000 |
Gain on sale of securities, net | 171,000 | |
Other income | 487,000 | 519,000 |
Total noninterest income | 8,258,000 | 5,467,000 |
NONINTEREST EXPENSE | ||
Salaries and employee benefits | 18,959,000 | 16,026,000 |
Occupancy | 3,775,000 | 3,314,000 |
Data processing | 2,081,000 | 1,971,000 |
Director and staff expenses | 1,000,000 | 701,000 |
Legal and professional fees | 1,103,000 | 677,000 |
Excise taxes | 719,000 | 559,000 |
Marketing and promotional | 393,000 | 391,000 |
Business development | 431,000 | 326,000 |
Federal Deposit Insurance Corporation (FDIC) assessments | 184,000 | 295,000 |
Other expense | 2,418,000 | 1,956,000 |
Total noninterest expense | 31,063,000 | 26,216,000 |
Income before provision for income taxes | 16,662,000 | 12,242,000 |
PROVISION FOR INCOME TAXES | 3,461,000 | 2,541,000 |
NET INCOME | $ 13,201,000 | $ 9,701,000 |
Basic earnings per common share | $ 1.11 | $ 0.93 |
Diluted earnings per common share | $ 1.08 | $ 0.91 |
Weighted average number of common shares outstanding: | ||
Basic | 11,896,258 | 10,440,740 |
Diluted | 12,196,120 | 10,608,764 |
Deposit Service Charges and Fees | ||
NONINTEREST INCOME | ||
Noninterest income | $ 3,107,000 | $ 3,061,000 |
BaaS fees | ||
NONINTEREST INCOME | ||
Noninterest income | 2,060,000 | 709,000 |
Loan Referral Fees | ||
NONINTEREST INCOME | ||
Noninterest income | 1,438,000 | 618,000 |
Mortgage Broker Fees | ||
NONINTEREST INCOME | ||
Noninterest income | $ 447,000 | $ 215,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
NET INCOME | $ 13,201 | $ 9,701 |
Securities available-for-sale | ||
Unrealized holding gain (loss) gain during the year | 1,771 | (210) |
Income tax benefit (provision) related to unrealized holding gain (loss) | (372) | 44 |
Reclassification adjustment for net gain from sale of investment securities available for sale included in income | (171) | |
Income tax provision related to net gain from sale of investment securities available for sale included in income | 36 | |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 1,264 | (166) |
COMPREHENSIVE INCOME | $ 14,465 | $ 9,535 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2017 | $ 65,711 | $ 52,521 | $ 14,134 | $ (944) |
Beginning balance, Shares at Dec. 31, 2017 | 9,248,898 | |||
Net income | 9,701 | 9,701 | ||
Reclassification of stranded tax effect due to federal tax rate change | 186 | (186) | ||
Issuance of restricted stock awards, Shares | 8,405 | |||
Exercise of stock options | 357 | $ 357 | ||
Exercise of stock options, Shares | 58,400 | |||
Stock-based compensation | 310 | $ 310 | ||
Stock issuance and net proceeds from initial public offering | 33,243 | $ 33,243 | ||
Stock issuance and net proceeds from initial public offering, Shares | 2,577,500 | |||
Other comprehensive income (loss) | (166) | (166) | ||
Ending balance at Dec. 31, 2018 | 109,156 | $ 86,431 | 24,021 | (1,296) |
Ending balance, Shares at Dec. 31, 2018 | 11,893,203 | |||
Net income | 13,201 | 13,201 | ||
Issuance of restricted stock awards, net of forfeitures, Shares | 1,152 | |||
Exercise of stock options | $ 129 | $ 121 | ||
Exercise of stock options, Shares | 19,530 | 19,530 | ||
Stock-based compensation | $ 423 | $ 431 | ||
Other comprehensive income (loss) | 1,264 | 1,264 | ||
Ending balance at Dec. 31, 2019 | $ 124,173 | $ 86,983 | $ 37,222 | $ (32) |
Ending balance, Shares at Dec. 31, 2019 | 11,913,885 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 13,201,000 | $ 9,701,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 2,544,000 | 1,826,000 |
Depreciation and amortization | 1,241,000 | 1,071,000 |
Loss on disposition of fixed assets | 31,000 | 32,000 |
Decrease in operating lease right-of-use assets | 1,019,000 | |
Decrease in operating lease liabilities | (960,000) | |
Gain on sales of loans | (490,000) | (264,000) |
Gain on sales of securities | (171,000) | |
Net discount accretion on investment securities | (59,000) | (24,000) |
Stock-based compensation | 431,000 | 310,000 |
Bank-owned life insurance earnings | (194,000) | (188,000) |
Deferred tax expense | (561,000) | (382,000) |
Net change in other assets and liabilities | (2,361,000) | 2,320,000 |
Total adjustments | 470,000 | 4,701,000 |
Net cash provided by operating activities | 13,671,000 | 14,402,000 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net decrease (increase) in interest earning deposits with other banks | 1,559,000 | (26,831,000) |
Purchase of investment securities available-for-sale | (29,944,000) | |
Proceeds from sale of investment securities available-for-sale | 30,026,000 | 0 |
Purchase of investment securities held-to-maturity | (3,182,000) | |
Purchase of other investments, net | (739,000) | (86,000) |
Principal paydowns of investment securities available-for-sale | 53,000 | 88,000 |
Principal paydowns of investment securities held-to-maturity | 89,000 | 141,000 |
Maturities and calls of investment securities available -for-sale | 10,000,000 | |
Purchase of participation loans | (8,081,000) | (32,653,000) |
Proceeds from sale of loans | 4,915,000 | 3,174,000 |
Purchase of loans | (14,094,000) | |
Increase in loans receivable, net | (168,029,000) | (67,711,000) |
Purchases of premises and equipment, net | (1,213,000) | (1,149,000) |
Net cash used by investing activities | (164,546,000) | (139,121,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net increase in demand deposits, NOW, money market and savings | 179,532,000 | 93,924,000 |
Net (decrease) increase in time deposits | (15,187,000) | 6,395,000 |
Net proceeds from short-term FHLB borrowings | (10,000,000) | |
Net proceeds from initial public offering | 33,243,000 | |
Proceeds from exercise of stock options | 121,000 | 357,000 |
Net cash provided by financing activities | 154,466,000 | 133,919,000 |
NET INCREASE IN CASH, DUE FROM BANKS AND RESTRICTED CASH | 3,591,000 | 9,200,000 |
CASH, DUE FROM BANKS AND RESTRICTED CASH, beginning of year | 40,319,000 | 31,119,000 |
CASH, DUE FROM BANKS AND RESTRICTED CASH, end of year | 43,910,000 | 40,319,000 |
SUPPLEMENTAL SCHEDULE OF OPERATING AND INVESTING ACTIVITIES | ||
Interest paid | 6,547,000 | 3,875,000 |
Income taxes paid | 4,480,000 | 2,520,000 |
SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS | ||
Fair value adjustment of securities available-for-sale, gross | 1,771,000 | $ (210,000) |
In conjunction with the adoption of ASU 2016-02 as detailed in Note 6 to the Consolidated Financial Statements, the following assets and liabilities were recognized: | ||
Operating lease right-of-use assets | 9,421,000 | |
Operating lease liabilities | $ 9,591,000 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1 - Description of Business and Summary of Significant Accounting Policies Nature of operations - Coastal Financial Corporation (Corporation or Company) is a registered bank holding company whose wholly owned subsidiaries are Coastal Community Bank (Bank) and Arlington Olympic LLC. The Company is a Washington state corporation that was organized in 2003. The Bank was incorporated and commenced operations in 1997 and is a Washington state-chartered commercial bank and Federal Reserve System (Federal Reserve) state member bank. Arlington Olympic LLC was formed in 2019 and owns the Arlington branch, which the Bank leases from the LLC. The Company provides a full range of banking services to small and medium-sized businesses, professionals, and individuals throughout the greater Puget Sound area through its 14 branches in Snohomish, Island, and King Counties, the Internet, and its mobile banking application. The Company also has a CCBX Division which provides Banking as a Service (BaaS) enabling broker dealers and digital financial service providers to offer their clients banking services. The Bank’s main branch and the headquarters of the Bank and Company are located in Everett, Washington. The Bank’s deposits are insured in whole or in part by the Federal Deposit Insurance Corporation (FDIC). The Bank’s loans and deposits are primarily within the greater Puget Sound area, and the Bank’s primary funding source is deposits from customers. The Bank is subject to regulation by the Federal Reserve and the Washington State Department of Financial Institutions Division of Banks (DFI). The Federal Reserve also has supervisory authority over the Company. Financial statement presentation - The accompanying audited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for reporting requirements and practices within the banking industry. Amounts presented in the consolidated financial statements and footnote tables are rounded and presented in thousands of dollars except per-share amounts, which are presented in dollars. In the narrative footnote discussion, amounts are rounded to thousands and presented in dollars. In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying consolidated financial statements have been made. These adjustments include normal and recurring accruals considered necessary for a fair and accurate presentation. Principles of consolidation - The consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts have been eliminated in consolidation. Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that its critical accounting estimates include determining the allowance for loan losses, the fair value of the Company’s financial instruments, and the valuation of deferred tax assets, financial instruments, and other fair value measurements. Actual results could differ significantly from those estimates. Subsequent Events - The Company has evaluated events and transactions subsequent to December 31, 2019 for potential recognition or disclosure. Cash equivalents - For the purpose of presentation in the statements of cash flows, the Company considers all amounts included in the balance sheet under “cash and due from banks”, all of which have maturity dates of three months or less, and restricted cash, as cash equivalents. Interest-bearing deposits at other financial institutions (excluding restricted cash), federal funds sold, and cash flows from loans and deposits are reported as net increases or decreases under cash flows from investing activities or from financing activities. The Company maintains Investment - Debt securities that management has the ability and intent to hold to maturity are classified as held-to-maturity and carried at amortized cost. The amortization of premiums and accretion of discounts are recognized in interest income using the interest method or methods approximating the interest method over the period to maturity. Debt securities Declines Other - Other investments on the balance sheet consists of investments in stock of Federal Home Loan Bank, Federal Reserve Bank, Pacific Coast Banker’s Bancshares and Neocova Corporation. As a Federal The Bank, as a member The investment The Company purchased a $500,000 equity interest which consists of 9,000 shares of stock and is carried at cost at December 31, 2019, which approximates its fair value. This is a new investment for 2019, therefore there was no balance as of December 31, 2018. The Company elects to account for the investment under ASC 321 Investments – Equity Securities without Readily Determinable Value. The investment will be held at cost minus impairment, the measurement should be applied until the investment does not qualify for the measurement election (e.g., if the investment has a readily determinable fair value). The Company will reassess at each reporting period whether this equity investment without a readily determinable fair value qualifies to be measured at cost minus impairment. Loans and allowance - Loans are stated at the principal amount outstanding less the allowance for loan losses and net of any deferred fees or costs on originated loans, and unamortized premiums or discounts on purchased loans. Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the level yield methodology and a method that approximates the level yield methodology. Interest income on loans is recognized based upon the principal amounts outstanding. Generally, the accrual of interest on loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due or when they are 90 days past due as to either principal or interest, unless they are well secured and in the process of collection. When interest accrual is discontinued, all unpaid accrued interest is reversed against current income. If management determines that the ultimate collectability of principal or interest is in doubt, cash receipts on nonaccrual loans are applied to reduce the principal balance on a cash-basis method, until the loans qualify for return to accrual status or principal is paid in full. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current, borrower has demonstrated ability to make regular payments, generally a period of at least six months, and future payments are reasonably assured. Past due status is determined based on contractual terms. The allowance The allowance The allowance A loan A troubled Periodically, Loans held-for-sale - Loans held-for-sale consist of the guaranteed portion of SBA loans and United States Department of Agriculture (USDA) loans the Company intends to sell after origination and are reflected at the lower of aggregate cost or fair value. Loans are generally sold with servicing of the sold portion retained by the Company when the sale of the loan occurs, the premium received is combined with the estimated present value of future cash flows on the related servicing asset and recorded as a gain on sale of loans in noninterest income. There were no loans held for sale at December 31, 2019 and 2018. Loan - The Company recognizes a sale on loans if the transferred portion (or portions) and any portion that continues to be held by the transferor are participating interests. Participating interest is defined as a portion of a financial asset that (a) conveys proportionate ownership rights with equal priority to each participating interest holder, (b) involves no recourse (other than standard representations and warranties), and (c) does not entitle any participating interest holder to receive cash before any other participating interest holder. The transfer of the participating interest (or participating interests) must also meet the conditions for surrender of control. To determine The Company retains SBA and USDA - The Company accounts for SBA and USDA servicing rights as separately recognized servicing rights and initially measure them at fair value. Fair value is based on market prices for comparable servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The Company subsequently measures each SBA and USDA servicing asset using the amortization method. Under the amortization method, servicing assets are amortized into noninterest income in proportion to, and over the period of, estimated net servicing income. The amortized assets are assessed for impairment or increased obligations, at the loan level, based on the fair value of each reporting date. As of December 31, 2019 and 2018, SBA and USDA servicing assets totaled $350,000 and $395,000, respectively, and are included in other assets on the balance sheets, and SBA and USDA loans serviced totaled $21,498,000 and $20,966,000, as of December 31, 2019 and 2018 respectively. Reserve - A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Company’s commitment to lend funds under existing agreements, such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based on review of individual credit facilities, current economic conditions, and risk characteristics of the various categories of commitments and other relevant factors. The reserve is based on estimates, and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and adjustments are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance for loan losses. Provision for unfunded commitments losses are added to the reserve for unfunded commitments, which is included in the other liabilities section of the consolidated balance sheets. The reserve for unfunded commitments was $422,000 and $304,000 as of December 31, 2019 and 2018, respectively. Premises - Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method based upon the estimated useful lives of the assets. Asset lives range from three to thirty-nine years. Leasehold improvements are amortized over the expected term of the lease or the estimated useful life of the improvement, whichever is less. Maintenance Transfers - Transfers of an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Other - Other real estate owned and repossessed assets are foreclosed property held pending disposition and is initially recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. At foreclosure, if the fair value of the asset acquired less estimated selling costs is less than the Company’s recorded investment in the related loan, a write-down is recognized through a charge to the allowance for loan losses. Costs of significant property improvements that increase the value of the property are capitalized, whereas costs relating to holding the property are expensed. Valuations are periodically performed by management, and a valuation allowance is established for subsequent declines, which are recorded as a charge to income, if necessary, to reduce the carrying value of the property to its fair value less estimated selling costs. Federal - The Company and the Bank file a consolidated federal income tax return. Deferred federal income taxes result from temporary differences between the tax basis of assets and liabilities, and their reported amounts in the financial statements. Deferred taxes are temporary differences that will be recognized in future periods. As changes in tax law or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Taxes are paid by the Bank to the Company based on the separate taxable income of the Bank. The Company and Bank maintain their records on the accrual basis of accounting for financial reporting and for income tax reporting purposes. With few exceptions, the Company is no longer subject to income tax examination for years before 2016. As of December Stock-based - Compensation expense is recognized for stock options and restricted stock awards, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the grant date is used for restricted stock awards and is determined on the basis of objective criteria including trade data. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Earnings per common - Earnings per common share (EPS) is computed under the two-class method. Pursuant to the two-class method, nonvested stock based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of EPS. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Application of the two-class method resulted in the equivalent earnings per share to the treasury method. Basic that Comprehensive - Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale investments, are reported as a separate component of the shareholders’ equity section of the balance sheets. Accumulated other comprehensive loss consists of only one component: unrealized gains or losses on investment securities available-for-sale. Business Segments The Company is managed by legal entity and not by lines of business. The entity’s primary business is that of a traditional banking institution, gathering deposits and originating loans for portfolio in its market areas. The Bank offers a wide variety of deposit products to their customers. Lending activities include the origination of real estate, commercial and industrial, and consumer loans. Interest income on loans is the Company’s primary source of revenue, and is supplemented by interest income from investment securities, deposit service charges, and other service provided activities. In addition to traditional banking services the Company also has a CCBX division which provides BaaS offerings that enable broker dealers and digital financial service providers to offer their clients banking services. The performance of the Company is reviewed and monitored by the Company’s executive management on a daily basis and the Board of Directors reviews and monitors the performance of the Company at minimum, on a monthly basis. The Company has determined that its current business and operations consist of a single reporting segment and, therefore, segment disclosures are not required. Advertising - Advertising costs are expensed as incurred or over the period of the campaign/promotion. Advertising costs in the amount of $393,000 and $391,000 were expensed during the year ended December 31, 2019 and 2018, respectively Reclassifications - Certain amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current presentation with no effect on shareholders’ equity or net income. |
Recent Accounting Standards
Recent Accounting Standards | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Standards | Note 2 - Recent accounting standards Accounting Standards Adopted in 2019 On January 1, 2019, the Company adopted ASU No 2016-02, Leases (Topic 842) Our operating leases relate primarily to office space and bank branches. As a result of implementing ASU 2016-02, an operating lease right-of-use ("ROU") asset of $9.4 million and an operating lease liability of $9.6 million was recognized on January 1, 2019, with no impact on the consolidated statement of income or consolidated statement of cash flows compared to the prior lease accounting model. The ROU asset and operating lease liability are recorded on the face on the consolidated balance sheets. See Note 6 - Leases for additional information. On January 1, 2019, the Company adopted ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU was issued to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Previously, these awards were recorded at the fair value of consideration received or the fair value of the equity instruments issued and was measured as of the earlier of the commitment date or the date performance was completed. The amendments in this ASU require the awards to be measured at the grant-date fair value of the equity instrument. ASU No. 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of ASU No. 2018-07 did not have a material impact on the Company's consolidated financial statements. Recent Accounting Guidance Not Yet Effective In September 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Investment Securities | Note 3 - Investment Securities The amortized cost and fair values of investment securities at the date indicated are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in thousands) December 31, 2019 Available-for-sale U.S. Treasury securities $ 24,988 $ 1 $ (44 ) $ 24,945 U.S. Government agencies 3,000 - (1 ) 2,999 U.S. Agency collateralized mortgage obligations 129 - - 129 U.S. Agency residential mortgage-backed securities 27 - - 27 Municipals 257 3 - 260 Total available-for-sale securities 28,401 4 (45 ) 28,360 Held-to-maturity U.S. Agency residential mortgage-backed securities 4,350 - (21 ) 4,329 Total investment securities $ 32,751 $ 4 $ (66 ) $ 32,689 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in thousands) December 31, 2018 Available-for-sale U.S. Treasury securities $ 34,831 $ - $ (1,590 ) $ 33,241 U.S. Government agencies 3,000 - (43 ) 2,957 U.S. Agency collateralized mortgage obligations 172 - (3 ) 169 U.S. Agency residential mortgage-backed securities 39 - (1 ) 38 Municipals 259 - (4 ) 255 Total available-for-sale securities 38,301 - (1,641 ) 36,660 Held-to-maturity U.S. Agency residential mortgage-backed securities 1,262 - (57 ) 1,205 Total investment securities $ 39,563 $ - $ (1,698 ) $ 37,865 The amortized cost and fair value of debt securities at December 31, 2019, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers in mortgage backed securities or obligations may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are shown separately, since they are not due at a single maturity date. Available-for-Sale Held-to-Maturity Amortized Cost Fair Value Amortized Cost Fair Value (dollars in thousands) Amounts maturing in One year or less $ 22,990 $ 22,988 $ - $ - After one year through five years 5,255 5,216 - - After five years through ten years - - - - 28,245 28,204 - - U.S. Agency residential mortgage-backed securities and collateralized mortgage obligations 156 156 4,350 4,329 $ 28,401 $ 28,360 $ 4,350 $ 4,329 Investment securities with carrying values of $16,843,000 and $19,678,000 at December 31, 2019 and December 31, 2018 respectively, were pledged to secure public deposits and for other purposes as required or permitted by law. There were 5 investment securities sold totaling $30.0 million using the year ended December 31, 2019 resulting in gross gains of $242,000 and gross losses of $71,000, respectively. There were no sales of investment securities during the year ended December 31, 2018. Information pertaining to securities with gross unrealized losses at the dates indicated, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (dollars in thousands) December 31, 2019 Available-for-sale U.S. Treasury securities $ 9,994 $ (3 ) $ 4,956 $ (41 ) $ 14,950 $ (44 ) U.S. Government agencies - - 2,999 (1 ) 2,999 (1 ) Total available-for-sale securities 9,994 (3 ) 7,955 (42 ) 17,949 (45 ) Held-to-maturity U.S. Agency residential mortgage-backed securities 3,140 (14 ) 1,189 (7 ) 4,329 (21 ) Total investment securities $ 13,134 $ (17 ) $ 9,144 $ (49 ) $ 22,278 $ (66 ) December 31, 2018 Available-for-sale U.S. Treasury securities $ - $ - $ 33,241 $ (1,590 ) $ 33,241 $ (1,590 ) U.S. Government agencies - - 2,957 (43 ) 2,957 (43 ) U.S. Agency collateralized mortgage obligations - - 169 (3 ) 169 (3 ) Municipals - - 255 (4 ) 255 (4 ) U.S. Agency residential mortgage-backed securities 38 (1 ) - - 38 (1 ) Total available-for-sale securities 38 (1 ) 36,622 (1,640 ) 36,660 (1,641 ) Held-to-maturity U.S. Agency residential mortgage-backed securities - - 1,205 (57 ) 1,205 (57 ) Total investment securities $ 38 $ (1 ) $ 37,827 $ (1,697 ) $ 37,865 $ (1,698 ) At December 31, 2019 and December 31, 2018, there were 6 and 12 securities, respectively, in an unrealized loss position. Unrealized losses have not been recognized into income because management does not intend to sell and does not expect it will be required to sell the investments. The decline is largely due to changes in market conditions and interest rates, rather than credit quality. The fair value is expected to recover as the underlying securities in the portfolio approach maturity date and market conditions improve. The Company does not consider these securities to be other than temporarily impaired at December 31, 2019 and December 31, 2018. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Loans and Allowance for Loan Losses | Note 4 - Loans and Allowance for Loan Losses The composition of the loan portfolio is as follows as of the periods indicated: December 31, December 31, 2019 2018 (dollars in thousands) Commercial and industrial loans $ 111,401 $ 90,390 Real estate loans: Construction, land, and land development 97,034 64,045 Residential real estate 115,011 94,745 Commercial real estate 613,398 515,959 Consumer and other loans 4,214 3,584 Gross loans receivable 941,058 768,723 Net deferred origination fees and premiums (1,955 ) (824 ) Loans receivable $ 939,103 $ 767,899 Included in consumer and other loans are overdrafts of $26,000 and $36,000 at December 31, 2019 and December 31, 2018, respectively. The Company has pledged loans totaling $163,522,000 and $155,029,000 at December 31, 2019 and December 31, 2018, respectively, for borrowing lines at the FHLB and FRB. The balance of SBA and USDA loans and participations serviced for others totaled $21,498,000 and $24,878,000 at December 31, 2019 and December 31, 2018, respectively. The Company, at times, purchases individual whole loans at fair value as of the acquisition date. Purchased loans with remaining balances totaled $32,937,000 and $45,368,000 as of December 31, 2019 and December 31, 2018, respectively. Unamortized premiums totaled $527,000 and $701,000 as of December 31, 2019 and December 31, 2018, respectively, and are amortized into interest income over the life of the loans. The Company has purchased participation loans with remaining balances totaling $31,352,000 and $36,561,000 as of December 31, 2019 and December 31, 2018, respectively. The following is a summary of the Company’s loan portfolio segments: Commercial and industrial loans - Commercial and industrial loans are secured by business assets including inventory, receivables and machinery and equipment of businesses located generally in the Company’s primary market area. Loan types include revolving lines of credit, term loans, and loans secured by liquid collateral such as cash deposits or marketable securities. The Company also issues letters of credit on behalf of its customers. Risk arises primarily due to the difference between expected and actual cash flows of the borrowers. In addition, the recoverability of the Company’s investment in these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans. The fair value of the collateral securing these loans may fluctuate as market conditions change. In the case of loans secured by accounts receivable, the recovery of the Company’s investment is dependent upon the borrower’s ability to collect amounts due from its customers. Construction, land and land development loans – The Company originates loans for the construction of 1-4 family, multifamily, and CRE properties in the Company’s market area. Construction loans are considered to have higher risks due to construction completion and timing risk, the ultimate repayment being sensitive to interest rate changes, government regulation of real property and the availability of long-term financing. Additionally, economic conditions may impact the Company’s ability to recover its investment in construction loans, as adverse economic conditions may negatively impact the real estate market, which could affect the borrower’s ability to complete and sell the project. Additionally, the fair value of the underlying collateral may fluctuate as market conditions change. The Company occasionally originates land loans for the purpose of facilitating the ultimate construction of a home or commercial building. The primary risks include the borrower’s ability to pay and the inability of the Company to recover its investment due to a material decline in the fair value of the underlying collateral. Residential real estate - Residential real estate includes various types of loans for which the Company holds real property as collateral. Included in this segment are multi-family loans, first lien single family loans, which the Company occasionally purchases to diversify its loan portfolio, and rental portfolios secured by one-to-four family homes. The primary risks of residential real estate loans include the borrower’s inability to pay, material decreases in the value of the collateral, and significant increases in interest rates which may make the loan unprofitable. Commercial real estate (includes owner occupied and nonowner occupied) - Commercial real estate includes various types of loans for which the Company holds real property as collateral. The primary risks of commercial real estate loans include the borrower’s inability to pay, material decreases in the value of the collateralized real estate and significant increases in interest rates, which may make the real estate loan unprofitable. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. Consumer and other loans – The Company originates a limited number of consumer loans, generally for banking customers only, which consist primarily of home equity lines of credit, saving account secured loans, and auto loans. This loan category also includes overdrafts. Repayment of these loans is dependent on the borrower’s ability to pay and the fair value of the underlying collateral. The following table illustrates an age analysis of past due loans as of the dates indicated: 30-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Recorded Investment 90 Days or More Past Due and Still Accruing (dollars in thousands) December 31, 2019 Commercial and industrial loans $ 143 $ 965 $ 1,108 $ 110,293 $ 111,401 $ - Real estate loans: Construction, land and land development - - - 97,034 97,034 - Residential real estate - 65 65 114,946 115,011 - Commercial real estate 417 - 417 612,981 613,398 - Consumer and other loans 4 - 4 4,210 4,214 - $ 564 $ 1,030 $ 1,594 $ 939,464 $ 941,058 $ - Less net deferred origination fees and premiums (1,955 ) Loans receivable $ 939,103 30-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Recorded Investment 90 Days or More Past Due and Still Accruing (dollars in thousands) December 31, 2018 Commercial and industrial loans $ 171 $ 494 $ 665 $ 89,725 $ 90,390 $ - Real estate loans: Construction, land and land development 823 - 823 63,222 64,045 - Residential real estate - 72 72 94,673 94,745 - Commercial real estate - - - 515,959 515,959 - Consumer and other loans 2 - 2 3,582 3,584 - $ 996 $ 566 $ 1,562 $ 767,161 $ 768,723 $ - Less net deferred origination fees and premiums (824 ) Loans receivable $ 767,899 A summary of information pertaining to impaired loans as of the period indicated: Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance (dollars in thousands) December 31, 2019 Commercial and industrial loans $ 1,431 $ 965 $ - $ 965 $ - Real estate loans: Residential real estate 73 65 - 65 - Commercial real estate - - - - - Consumer loans 2 - 2 2 2 Total $ 1,506 $ 1,030 $ 2 $ 1,032 $ 2 December 31, 2018 Commercial and industrial loans $ 766 $ 493 $ - $ 493 $ - Real estate loans: Residential real estate 74 72 - 72 - Commercial real estate 1,491 1,261 - 1,261 - Total $ 2,331 $ 1,826 $ - $ 1,826 $ - The following tables summarize the average recorded investment and interest income recognized on impaired loans by loan class for the year ended December 31, 2019 and 2018: December 31, 2019 December 31, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (dollars in thousands) Commercial and industrial loans $ 1,026 $ - $ 1,103 $ 28 Real estate loans: Construction, land and land development - - - - Residential real estate 69 - 306 5 Commercial real estate 252 - 1,288 - Consumer loans 1 - - - Total $ 1,348 $ - $ 2,697 $ 33 The Company grants restructurings in response to borrower financial difficulty, and generally provides for a temporary modification of loan repayment terms. The restructured loans on accrual status represent the only impaired loans accruing interest. In order for a restructured loan to be considered for accrual status, the loan’s collateral coverage generally will be greater than or equal to 100% of the loan balance, the loan is current on payments, and the borrower must either prefund an interest reserve or demonstrate the ability to make payments from a verified source of cash flow for an extended period of time, usually at least six months in duration. The following table presents troubled debt restructurings by accrual versus nonaccrual status and by loan class as of December 31, 2018. There were no troubled debt restructurings at December 31, 2019. Accrual Status Nonaccrual Status Total Restructured Loans (dollars in thousands) December 31, 2018 Commercial real estate $ - $ 1,261 $ 1,261 No loans were restructured in the year ended December 31, 2019 and December 31, 2018 that qualified as troubled debt restructurings. When loans are placed on nonaccrual status, all accrued interest is reversed from current period earnings. Payments received on nonaccrual loans are generally applied as a reduction to the loan principal balance. If the likelihood of further loss is removed, the Company will recognize interest on a cash basis only. Loans may be returned to accruing status if the Company believes that all remaining principal and interest is fully collectible and there has been at least six months of sustained repayment performance since the loan was placed on nonaccrual. An analysis of nonaccrual loans by category consisted of the following at the periods indicated: December 31, December 31, 2019 2018 (dollars in thousands) Commercial and industrial loans $ 965 $ 493 Real estate loans: Residential real estate 65 72 Commercial real estate - 1,261 Total nonaccrual loans $ 1,030 $ 1,826 Credit Quality and Credit Risk Federal regulations require that the Company periodically evaluate the risks inherent in its loan portfolio. In addition, the Company’s regulatory agencies have authority to identify problem loans and, if appropriate, require them to be reclassified. There are three classifications for problem loans: Substandard, Doubtful, and Loss. Substandard loans have one or more defined weaknesses and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful loans have the weaknesses of loans classified as Substandard, with additional characteristics that suggest the weaknesses make collection or recovery in full after liquidation of collateral questionable on the basis of currently existing facts, conditions, and values. There is a high possibility of loss in loans classified as Doubtful. A loan classified as Loss is considered uncollectible and of such little value that continued classification of the credit as a loan is not warranted. If a loan or a portion thereof is classified as Loss, it must be charged-off, meaning the amount of the loss is charged against the allowance for loan losses, thereby reducing that reserve. The Company also classifies some loans as Watch or Other Loans Especially Mentioned (OLEM). Loans classified as Watch are performing assets and classified as pass credits but have elements of risk that require more monitoring than other performing loans and are reported in the OLEM column in the following table. Loans classified as OLEM are assets that continue to perform but have shown deterioration in credit quality and require close monitoring. Loans by credit quality risk rating are as follows as of the periods indicated: Pass Other Loans Especially Mentioned Sub- Standard Doubtful Total (dollars in thousands) December 31, 2019 Commercial and industrial loans $ 104,911 $ 4,740 $ 1,750 $ - $ 111,401 Real estate loans: Construction, land, and land development 97,034 - - - 97,034 Residential real estate 114,823 123 65 - 115,011 Commercial real estate 608,773 4,625 - - 613,398 Consumer and other loans 4,212 - 2 - 4,214 $ 929,753 $ 9,488 $ 1,817 $ - 941,058 Less net deferred origination fees and premiums (1,955 ) Loans receivable $ 939,103 December 31, 2018 Commercial and industrial loans $ 84,859 $ 3,908 $ 1,623 $ - $ 90,390 Real estate loans: Construction, land, and land development 55,666 8,379 - - 64,045 Residential real estate 94,548 125 72 - 94,745 Commercial real estate 512,151 2,547 1,261 - 515,959 Consumer and other loans 3,584 - - - 3,584 $ 750,808 $ 14,959 $ 2,956 $ - 768,723 Less net deferred origination fees and premiums (824 ) Loans receivable $ 767,899 Allowance for Loan Losses The Company’s ALLL covers estimated credit losses on individually evaluated loans that are determined to be impaired as well as estimated probable losses inherent in the remainder of the loan portfolio. The ALLL is prepared using the information provided by the Company’s credit review process and our historical loss data, together with data from peer institutions and economic information gathered from published sources. The loan portfolio is segmented into groups of loans with similar risk profiles. Each segment possesses varying degrees of risk based on the type of loan, the type of collateral, and the sensitivity of the borrower or industry to changes in external factors such as economic conditions. An estimated loss rate calculated the Company’s actual historical loss rates adjusted for current portfolio trends, economic conditions, and other relevant internal and external factors, is applied to each group’s aggregate loan balances. The following tables summarize the allocation of the allowance for loan loss, as well as the activity in the allowance for loan loss attributed to various segments in the loan portfolio, as of and for the year ended December 31, 2019: Commercial and Industrial Construction, Land, and Land Development Residential Real Estate Commercial Real Estate Consumer and Other Unallocated Total (dollars in thousands) ALLL balance, December 31, 2018 $ 2,039 $ 1,806 $ 1,647 $ 2,648 $ 77 $ 1,190 $ 9,407 Provision for loan losses or (recapture) 677 1,014 422 507 54 (130 ) 2,544 2,716 2,820 2,069 3,155 131 1,060 11,951 Loans charged-off (355 ) (75 ) - (29 ) (35 ) - (494 ) Recoveries of loans previously charged-off 5 - - - 8 - 13 Net (charge-offs) recoveries (350 ) (75 ) - (29 ) (27 ) - (481 ) ALLL balance, December 31, 2019 $ 2,366 $ 2,745 $ 2,069 $ 3,126 $ 104 $ 1,060 $ 11,470 ALLL amounts allocated to Individually evaluated for impairment $ - $ - $ - $ - $ 2 $ - $ 2 Collectively evaluated for impairment 2,366 2,745 2,069 3,126 102 1,060 11,468 ALLL balance, December 31, 2019 $ 2,366 $ 2,745 $ 2,069 $ 3,126 $ 104 $ 1,060 $ 11,470 Loans individually evaluated for impairment $ 965 $ - $ 65 $ - $ 2 $ 1,032 Loans collectively evaluated for impairment 110,436 97,034 114,946 613,398 4,212 940,026 Loan balance, December 31, 2019 $ 111,401 $ 97,034 $ 115,011 $ 613,398 $ 4,214 $ 941,058 The following tables summarize the allocation of the allowance for loan loss, as well as the activity in the allowance for loan loss attributed to various segments in the loan portfolio, as of and for the year ended December 31, 2018: Commercial and Industrial Construction, Land, and Land Development Residential Real Estate Commercial Real Estate Consumer and Other Unallocated Total (dollars in thousands) ALLL balance, December 31, 2017 $ 1,864 $ 1,063 $ 1,343 $ 2,014 $ 43 $ 1,690 $ 8,017 Provision for loan losses or (recapture) 579 743 239 718 47 (500 ) 1,826 2,443 1,806 1,582 2,732 90 1,190 9,843 Loans charged-off (408 ) - - (84 ) (27 ) - (519 ) Recoveries of loans previously charged-off 4 - 65 - 14 - 83 Net (charge-offs) recoveries (404 ) - 65 (84 ) (13 ) - (436 ) ALLL balance, December 31, 2018 $ 2,039 $ 1,806 $ 1,647 $ 2,648 $ 77 $ 1,190 $ 9,407 ALLL amounts allocated to Individually evaluated for impairment - - - - - - - Collectively evaluated for impairment 2,039 1,806 1,647 2,648 77 1,190 9,407 ALLL balance, December 31, 2018 $ 2,039 $ 1,806 $ 1,647 $ 2,648 $ 77 $ 1,190 $ 9,407 Loans individually evaluated for impairment $ 493 - $ 72 $ 1,261 - $ 1,826 Loans collectively evaluated for impairment 89,897 64,045 94,673 514,698 3,584 766,897 Loan balance, December 31, 2018 $ 90,390 $ 64,045 $ 94,745 $ 515,959 $ 3,584 $ 768,723 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Premises and Equipment | Note 5 – Premises and Equipment The investment in premises and equipment consisted of the following at December 31: 2019 2018 (dollars in thousands) Land $ 2,673 $ 2,426 Buildings 7,525 7,429 Leasehold Improvements 3,906 3,439 Furniture 1,991 1,894 Equipment 3,708 3,439 Software 600 772 Projects in process 62 332 . 20,465 19,731 Less accumulated depreciation and amortization (7,357 ) (6,564 ) Premises and equipment, net $ 13,108 $ 13,167 Depreciation and amortization on premises and equipment charged to expense totaled $1,241,000 and $1,071,000 for the years ended December 31, 2019 and 2018, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 6 – Leases The Company has committed to rent premises used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception. The Company adopted the provisions of ASU 2016-02 (Topic 842) on January 1, 2019. Operating lease right-of-use (“ROU”) assets represent a right to use an underlying asset for the contractual lease term. Operating lease liabilities represent an obligation to make lease payments arising from the lease. Upon adoption, operating lease ROU assets totaling $9.4 million and operating lease liabilities totaling $9.6 million were recognized in our Unaudited Consolidated Balance Sheets for leases that existed at the adoption date, based on the present value of lease payments over the remaining lease term. ROU assets are further adjusted for lease incentives. Operating leases entered into after the adoption date will be recognized as an operating lease ROU asset and operating lease liability at the commencement date of the new lease. The Company’s leases do not provide an implicit interest rate, therefore the Company used its incremental collateralized borrowing rates commensurate with the underlying lease terms to determine the present value of operating lease liabilities. The weighted average discount rate used to discount operating lease liabilities at December 31, 2019 was 3.3%. The Company’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Company’s lease agreements do not contain any residual value guarantees. Operating leases with terms of 12 months or less are not included in ROU assets and operating lease liabilities recorded in our consolidated balance sheets. Operating lease terms include options to extend when it is reasonably certain that the Company will exercise such options, determined on a lease-by-lease basis. During the third quarter of 2019 the Bank entered into a new lease in Arlington, WA, that will serve as a new branch location. The Arlington property was purchased through a LLC owned by the Company, and the Bank will lease that property from the LLC. As of December 31, 2019, the Company does not have any leases that have not yet commenced. At December 31, 2019, lease expiration dates ranged from two to 26 years, with additional renewal options on certain leases typically ranging from 5 to 10 years. At December 31, 2019, the dollar weighted average remaining lease term for the Company’s operating leases was 9.5 years. Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $1.4 million and $1.2 million, respectively, for the years ended December 31, 2019 and 2018. Variable lease components, such as fair market value adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. The following sets forth, as of December 31, 2019, the minimum annual lease payments under the terms of these leases, inclusive of renewal options that the Company is reasonably certain to renew: December 31, (dollars in thousands) 2019 2020 $ 1,322 2021 1,309 2022 1,314 2023 1,325 2024 919 2025 and thereafter 4,033 Total lease payments 10,222 Less: amounts representing interest 1,543 Present value of lease liabilities $ 8,679 The Company leases its Silver Lake and Everett facilities from related parties (Note 12). Office space at a small number of branches is leased and sub-leased to a few tenants on month-to-month and multi-year leases. In 2018 a long-term renter did not renew their lease. Lease and sublease income was $58,000 and $81,000 for 2019 and 2018, respectively. The following table sets forth the future minimum income receivable under noncancelable operating leases and subleases as of December 31, 2019: December 31, (dollars in thousands) 2019 2020 $ 121 2021 118 2022 115 2023 74 2024 62 Thereafter - $ 490 The following table presents the components of total lease expense and operating cash flows for the year ended December 31, 2019: December 31, (dollars in thousands) 2019 Lease expense: Operating lease expense $ 1,323 Variable lease expense 148 Total lease expense (1) $ 1,471 Cash paid: Cash paid reducing operating lease liabilities $ 1,451 (1) Included in net occupancy expense in the Consolidated Statements of Income. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Deposits | Note 7 - Deposits The composition of consolidated deposits consisted of the following at the periods indicated: December 31, December 31, 2019 2018 (dollars in thousands) Demand, noninterest bearing $ 371,243 $ 293,525 Now and money market 437,908 349,952 Savings 53,365 52,572 Total core deposits 862,516 696,049 BaaS brokered deposits 23,586 10,521 Time deposits less than $250,000 51,644 62,272 Time deposits $250,000 and over 30,213 34,772 Total deposits $ 967,959 $ 803,614 The following table presents the maturity distribution of time deposits as of December 31, 2019 (dollars in thousands): Twelve months $ 60,618 One to two years 15,739 Two to three years 3,588 Three to four years 464 Four to five years 1,448 $ 81,857 |
Federal Home Loan Bank Advances
Federal Home Loan Bank Advances and Other Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Advances From Federal Home Loan Banks [Abstract] | |
Federal Home Loan Bank Advances and Other Borrowings | Note 8 – Federal Home Loan Bank Advances and Other Borrowings At December 31, 2019 and 2018 the Company had $10,000,000 and $20,000,000, respectively, in overnight FHLB advances. The advances are secured by a blanket pledge of eligible collateral including first lien single family and multi-family mortgages with a carrying value of $119,695,000 and $112,117,000 at December 31, 2019 and 2018, respectively. The Company has available borrowing capacity of an additional $74,891,000 from FHLB at December 31, 2019, subject to certain collateral requirements and with interest at then stated rate. The following table summarizes activities in advances from the FHLB for the periods indicated: Year Ended December 31, 2019 2018 (dollars in thousands) Average balance outstanding $ 746 $ 1,900 Maximum amount outstanding at any month-end during the year 20,000 20,000 Balance outstanding at year end 10,000 20,000 Weighted average interest rate during the year 2.30 % 2.07 % The Company has established an $8,000,000 unsecured line of credit with interest payable at the then-stated rate, with PCBB, which expires in June 2020. There were no borrowings on this line at December 31, 2019 or 2018. The Company has established a Borrower-in-Custody (BIC) arrangement with the FRB, which is secured by eligible loans, with interest payable at the then-stated rate. At December 31, 2019, the Company had pledged commercial real estate loans totaling $43,827,000, which provided available borrowing capacity of $21,448,000. At December 31, 2018, the Company had pledged commercial real estate loans totaling $42,912,000, which provided available borrowing capacity of $20,780,000. There were no borrowings outstanding on this line of credit at December 31, 2019 or 2018. |
Subordinated Debt
Subordinated Debt | 12 Months Ended |
Dec. 31, 2019 | |
Subordinated Borrowings [Abstract] | |
Subordinated Debt | Note 9 – Subordinated Debt At December 31, 2019 and 2018, the Company’s subordinated debt was as follows: Aggregate Principal Amount December 31, 2019 Aggregate Principal Amount December 31, 2018 (dollars in thousands) Total liability, at par $ 10,000 $ 10,000 Less: unamortized debt issuance costs (21 ) (35 ) Total liability, at carrying value $ 9,979 $ 9,965 Stated Maturity: August 1, 2026 Interest Rate: Fixed 5.65% 5 years; then Wall Street Prime +2.5% starting August 1, 2021 On July |
Junior Subordinated Debentures
Junior Subordinated Debentures | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Junior Subordinated Debentures | Note 10 – Junior Subordinated Debentures At December 31, 2019 and 2018, the Company’s junior subordinated debentures were as follows: Coastal (WA) Statutory Trust I Aggregate Principal Amount December 31, 2019 Aggregate Principal Amount December 31, 2018 (dollars in thousands) Total liability, at par $ 3,609 $ 3,609 Less: unamortized debt issuance costs (26 ) (28 ) Total liability, at carrying value $ 3,583 $ 3,581 Stated Maturity: December 15, 2034 Interest Rate Spread: Three-month LIBOR +2.10% On December The Trust |
Federal Income Taxes
Federal Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Federal Income Taxes | Note 11 – Federal Income Taxes The components of the federal income tax for the Company consisted of the following at December 31: 2019 2018 (dollars in thousands) Current tax expense $ 4,022 $ 2,923 Deferred tax benefit (561 ) (382 ) Total tax expense $ 3,461 $ 2,541 At December 31, 2019 the current net income tax receivable was $191,000 and at December 31, 2018 the net income tax payable was $216,000. A reconciliation of the income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate to the income before income taxes is as follows for the year ended December 31: 2019 2018 (dollars in thousands) Amount Rate Amount Rate Federal income tax at statutory rate $ 3,499 21.0 % $ 2,571 21.0 % Effect of tax-exempt interest income (98 ) (0.6 ) (70 ) (0.6 ) Stock-based compensation 64 0.4 42 0.4 Bank owned life insurance earnings (41 ) (0.2 ) (39 ) (0.3 ) Other 37 0.2 37 0.3 $ 3,461 20.8 % $ 2,541 20.8 % The Company did not record or accrue any interest and penalties related to income taxes for the years ended December 31, 2019 or 2018. The Company and Bank have entered into a tax allocation agreement, which provides that income taxes shall be allocated between the parties on a separate monthly basis. The intent of this agreement is that each member of the consolidated group will incur no greater tax liability than it would have incurred on a stand-alone basis. The net deferred tax asset consists of the following temporary differences and carryforward items at December 31: 2019 2018 (dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,409 $ 1,975 Lease liability 1,761 - Accrued expenses 334 178 Deferred compensation 205 226 Allowance for unfunded commitments 89 64 Nonqualified stock options 88 52 Interest on nonaccrual loans 28 59 Deferred income 21 34 Net unrealized loss on available-for-sale securities 9 345 Total deferred tax assets 4,944 2,933 Deferred tax liabilities: Right of use asset (1,748 ) - Depreciation and amortization (453 ) (415 ) Total deferred tax liabilities (2,201 ) (415 ) Net deferred tax asset $ 2,743 $ 2,518 The determination At December 31, 2019, the Company had no federal net operating loss carryforwards or tax credit carryforwards. The Company files federal income tax returns. Federal tax returns for the 2016 tax year and later are open for examination. The total amount of unrecognized tax benefits, including interest and penalties, at December 31, 2019 was not material. The amount of tax benefits that would impact the effective rate, if recognized, is not expected to be material. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next 12 months. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Text Block [Abstract] | |
Related Party Transactions | Note 12 – Related Party Transactions During 2019 and 2018, the A summary of loan transactions follows: 2019 2018 (dollars in thousands) Beginning Balance January 1 $ 9,753 $ 5,189 Additions 1,420 6,831 Payments (858 ) (2,267 ) Ending Balance December 31 $ 10,315 $ 9,753 The Company held As discussed |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 – Commitments and Contingencies In the credit and standby letters of credit, which are not reflected in the consolidated financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the consolidated balance sheets. At December Financial instruments whose contract amount represents credit risk were as follows at December 31: 2019 2018 (dollars in thousands) Commitments to extend credit Commercial and industrial $ 66,563 $ 47,033 Construction - commercial real estate 42,371 33,128 Construction - residential real estate 21,361 30,269 Commercial real estate 9,888 12,871 Residential real estate 19,082 12,543 Other 1,181 656 Total commitments to extend credit $ 160,446 $ 136,500 Standby letters of credit $ 2,250 $ 2,331 Commitments of a fee. Since many of the commercial and industrial loan commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. The type of collateral held varies but may include accounts receivable, inventory, property and equipment, and income- producing commercial properties. The Company also has agreements with certain key officers that provide for potential payments upon retirement, disability, termination, change in control and death. Standby letters The Company is primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the financial position of the Company. |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2019 | |
Risks And Uncertainties [Abstract] | |
Concentration of Credit Risk | Note 14 – Concentration of Credit Risk Most of the Company’s business activity is with customers who are concentrated in the state of Washington. Investments in municipal securities involve governmental entities within the state. Generally, amounts placed or invested in bank accounts are insured by the FDIC up to $250,000 per bank. Uninsured deposits in bank accounts at December 31, 2019 and 2018, totaled $54,354,000 and $36,055,000, respectively. Loans are generally limited, by state regulations, to 20% of the Bank’s capital and surplus. The Company manages asset and controls credit risk through diversification of the loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Company regularly utilizes real estate as collateral to reduce the risk of credit loss in the loan portfolio. As of December 31, 2019 and 2018, the Company has a concentration of credit in commercial real estate. Commercial real estate loans are typically secured by the Bank’s first lien position on the subject property. Standby letters of credit were granted primarily to commercial borrowers. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 15 - Stock-Based Compensation Stock Options and Restricted Stock On April 30, 2018, the Company’s shareholders approved the Coastal Financial Corporation 2018 Omnibus Incentive Plan (2018 Plan). The 2018 Plan authorizes the Company to grant awards, including but not limited to, stock options and restricted stock awards, to eligible employees, directors or individuals that provide service to the Company, up to an aggregate of 500,000 shares of common stock. The 2018 Plan replaces both the 2006 Plan and our Directors’ Stock Bonus Plan (2006 Plan). Existing awards will vest under the terms granted and no further awards will be made under these previous plans. Shares available to be granted under the 2018 plan were 361,411 at December 31, 2019. Stock Option Awards In January 2019, the Company granted 26,737 nonqualified stock options under the 2018 Plan to an employee, which vest ratably over 10 years. The Company also granted 99,100 qualified stock options under the 2019 Plan to employees, which vest ratably over 10 years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock and other factors. The Company uses the vesting term and contractual life to determine the expected life. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation expense related to unvested stock option awards is reversed at date of forfeiture. The following assumptions were used to estimate the value of options granted under the 2018 Plan as applicable in the period indicated: Year Ended December 31, 2019 Expected term 10.0 Expected stock price volatility 48.79 % Risk-free interest rate 2.74 % Expected dividends Zero Weighted average grant date fair value $ 9.22 A summary of stock option activity under the Company’s Plan during the year ended December 31, 2019: Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 688,310 $ 6.39 6.38 6,094,217 Granted 125,837 14.91 Exercised (19,530 ) 6.20 Forfeited or expired (10,400 ) 8.81 Outstanding at December 31, 2019 784,217 $ 7.73 5.95 6,586,968 Vested or expected to vest at December 31, 2019 784,217 $ 7.73 5.95 6,586,968 Exercisable at December 31, 2019 271,221 $ 6.07 4.28 2,820,827 The total intrinsic value (which is the amount by which the stock price exceeds the exercise price) of options exercised during the year ended December 31, 2019 was $185,000. The intrinsic value of options exercised during the year ended December 31, 2018 was $193,000. As of December 31, 2019, there was $2,326,000 of total unrecognized compensation cost related to nonvested stock options granted under the Plan. Total unrecognized compensation costs is adjusted for unvested forfeitures. The Company expects to recognize that cost over a weighted-average period of approximately 7.4 years. Compensation expense recorded related to stock options was $391,000 and $276,000 for the years ended December 31, 2019 and 2018, respectively. Restricted Stock Awards The fair value of restricted stock awards is equal to the fair value of the Company’s stock at the date of grant. Compensation expense is recognized over the vesting period that the awards are based. Restricted stock awards are participating securities. As of December 31, 2019 there was $52,000 of total unrecognized compensation cost related to nonvested restricted stock awards. The Company expects to recognize that cost over the remaining weighted-average vesting period of approximately 7.0 years. Compensation expense recorded related to restricted stock awards was $8,000 and $3,000 for the years ended December 31, 2019 and 2018, respectively. A summary of the Company’s nonvested shares at December 31, 2019 and changes during the year is presented below: Nonvested shares Shares Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value Nonvested shares at December 31, 2018 14,415 $ 9.12 $ 88,580 Granted 2,352 14.91 Forfeited (1,200 ) 6.25 Vested (5,310 ) 7.33 Nonvested shares at December 31, 2019 10,257 $ 11.71 $ 48,864 Director’s Stock Bonus The Company adopted and subsequently amended the Director’s Stock Bonus Plan (Bonus Plan). The Bonus Plan was replaced on April 30, 2018, when the shareholders approved the 2018 Omnibus Incentive Plan. The Bonus Plan granted shares with a total market value of $5,000 per director, per year, with the exception of the board chairman receiving $7,500 per year, and committee chairmen receiving $6,250 per year. Directors unable to receive stock will receive cash in lieu upon completion of the vesting period. Cash awards are recognized over the vesting period and recorded in other liabilities until paid. The amended Bonus Plan would have expired on May 31, 2018 but was replaced on April 30, 2018 by the 2018 Plan. Awards previously granted under the Bonus Plan will vest under the term granted. Directors are now granted shares with a total market value of $5,000 per director under the 2018 Plan. Directors unable to receive stock will receive cash ($5,000) in lieu upon completion of the vesting period. In January 2019, there were 2,352 shares granted to seven directors at an estimated fair value of $14.91 per share. During 2018, there were 4,405 shares granted to five directors at an estimated fair value of $7.10 per share. Compensation expense recorded related to the Plan totaled $32,000 and $31,000 for the years ended December 31, 2019 and 2018, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Note 16 – Employee Benefit Plans 401(k) - The Company has a combined 401(k) and profit-sharing plan covering substantially all employees. Contributions to the 401(k) plan may consist of matching contributions for employees. Match eligibility coincides with the first of the month following hire date in accordance with the 401(k) plan. Matching contributions are usually equal to a percentage of employee compensation. The and sets 401(k) contributions Deferred - The Company established a deferred compensation plan in 2003 for certain management personnel. Two former employees were covered by this plan and the plan is now distributing benefits to these retired individuals. The plan was designed to help supplement retirement benefits for participants. The benefits may be funded by bank-owned life insurance policies. The life insurance policies had a cash surrender value of $6,882,000 and $6,688,000 at December 31, 2019 and 2018, respectively. Liabilities to employees, which are being accrued over the life of the participant’s Plan, were $974,000 and $1,078,000 at December 31, 2019 and 2018, respectively. Compensation expense related to this Plan was $72,000 and $78,000 for the years ended December 31, 2019 and 2018, respectively. Payments of accrued benefits totaling $175,000 were made during 2019 and 2018. |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Regulatory Matters | Note 17 - Regulatory Banks are Quantitative Under the The final The Bank’s actual unts and ratios are as follows: Actual Minimum Required for Capital Adequacy Purposes Required to be Well Capitalized Under the Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) December 31, 2019 Leverage Capital (to average assets) Consolidated $ 127,524 11.64 % $ 43,806 4.00 % $ 54,758 5.00 % Bank Only 122,904 11.22 % 43,801 4.00 % 54,751 5.00 % Common Equity Tier I risk-based capital ratio (to risk-weighted assets) Consolidated 124,024 12.78 % 43,659 4.50 % 63,064 6.50 % Bank Only 122,904 12.43 % 44,504 4.50 % 64,283 6.50 % Tier I Capital (to risk-weighted assets) Consolidated 127,524 13.14 % 58,213 6.00 % 77,617 8.00 % Bank Only 122,904 12.43 % 59,338 6.00 % 79,118 8.00 % Total Capital (to risk-weighted assets) Consolidated 149,416 15.40 % 77,617 8.00 % 97,021 10.00 % Bank Only 134,796 13.63 % 79,118 8.00 % 98,897 10.00 % December 31, 2018 Leverage Capital (to average assets) Consolidated $ 113,807 12.46 % $ 36,529 4.00 % $ 45,661 5.00 % Bank Only 103,597 11.35 % 36,524 4.00 % 45,655 5.00 % Common Equity Tier I risk-based capital ratio (to risk-weighted assets) Consolidated 110,307 13.70 % 36,238 4.50 % 52,343 6.50 % Bank Only 103,597 12.84 % 36,294 4.50 % 52,425 6.50 % Tier I Capital (to risk-weighted assets) Consolidated 113,807 14.13 % 48,317 6.00 % 64,423 8.00 % Bank Only 103,597 12.84 % 48,392 6.00 % 64,253 8.00 % Total Capital (to risk-weighted assets) Consolidated 133,518 16.58 % 64,423 8.00 % 80,528 10.00 % Bank Only 113,308 14.05 % 64,523 8.00 % 80,653 10.00 % |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Shareholders Equity | Note 18 - Shareholders’ Equity On May 4, 2018 the Company effected a 1-for-5 reverse stock split, decreasing the number of issued shares from 46,268,359 to 9,254,073, including 401 additional shares issued to shareholders with fractional shares. Authorized shares were not impacted by the reverse stock split. Share and per share amounts included in the consolidated financial statements and accompanying notes reflect the effect of the split for all periods presented. On September 26, 2018 all 100,000 shares of Class B nonvoting common stock were exchanged for voting common stock on terms and conditions approved by the Company’s board of directors. At December 31, 2019 and 2018, there were zero shares of Class B nonvoting common stock issued and outstanding. On September 26, 2018, 261,444 Class C shares were exchanged for 261,444 shares of common stock on terms and conditions approved by the Company’s board of directors. There were zero |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 19 - Fair Value Measurements The following tables present estimated fair values of the Company’s financial instruments as of the period indicated, whether or not recognized or recorded in the consolidated balance sheets at the period indicated: December 31, 2019 Fair Value Measurements Using Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 (dollars in thousands) Financial assets Cash and due from banks $ 16,555 $ 16,555 $ 16,555 - - Interest earning deposits with other banks 111,259 111,259 111,259 - - Investment securities 32,710 32,689 24,945 7,744 - Other investments 4,505 4,505 - 4,005 500 Loans receivable, net (1) 927,633 922,046 - - 922,046 Accrued interest receivable 2,980 2,980 - 2,980 - Financial liabilities Deposits (1) $ 967,959 967,804 $ - $ 967,804 $ - FHLB advances 10,000 10,000 - 10,000 - Subordinated debt 9,979 9,879 - 9,879 - Junior subordinated debentures 3,583 3,214 - 3,214 - Accrued interest payable 308 308 - 308 - December 31, 2018 Fair Value Measurements Using Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 (dollars in thousands) Financial assets Cash and due from banks $ 16,315 $ 16,315 $ 16,315 $ - $ - Interest earning deposits with other banks 109,467 109,467 109,467 - - Investment securities 37,922 37,865 33,241 4,624 - Other investments 3,766 3,766 - 3,766 - Loans receivable, net 758,491 743,354 - — 743,354 Accrued interest receivable 2,526 2,526 - 2,526 - Financial liabilities Deposits $ 803,614 802,645 $ - $ 802,645 $ - FHLB advances 20,000 20,000 - 20,000 - Subordinated debt 9,965 9,804 - 9,804 - Junior subordinated debentures 3,581 3,265 - 3,265 - Accrued interest payable 279 279 - 279 - The Company measures and discloses certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (that is, not a forced liquidation or distressed sale). GAAP establishes a consistent framework for measuring fair value and disclosure requirements about fair value measurements. Among other things, the accounting standard requires the reporting entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s estimates for market assumptions. These two types of inputs create the following fair value hierarchy: • Level 1 – Quoted prices in active markets for identical instruments. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. • Level 2 – Observable inputs other than Level 1 including quoted prices in active markets for similar instruments, quoted prices in less active markets for identical or similar instruments, or other observable inputs that can be corroborated by observable market data. • Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs from non-binding single dealer quotes not corroborated by observable market data. The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize at a future date. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. In addition, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates that must be made given the absence of active secondary markets for certain financial instruments. This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values. Items measured at fair value on a recurring basis – The following fair value hierarchy table presents information about the Company’s assets that are measured at fair value on a recurring basis at the dates indicated: Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) December 31, 2019 Available-for-sale U.S. Treasury securities $ 24,945 $ - $ - $ 24,945 U.S. Government agencies - 2,999 - 2,999 U.S. Agency collateralized mortgage obligations - 129 - 129 U.S. Agency residential mortgage-backed securities - 27 - 27 Municipals - 260 - 260 $ 24,945 $ 3,415 $ - $ 28,360 December 31, 2018 Available-for-sale U.S. Treasury securities $ 33,241 $ - $ - $ 33,241 U.S. Government agencies - 2,957 - 2,957 U.S. Agency collateralized mortgage obligations - 169 - 169 U.S. Agency residential mortgage-backed securities - 38 - 38 Municipals - 255 - 255 $ 33,241 $ 3,419 $ - $ 36,660 The following methods were used to estimate the fair value of the class of financial instruments above: Investment securities - The fair value of securities is based on quoted market prices, pricing models, quoted prices of similar securities, independent pricing sources, and discounted cash flows. Limitations: The fair value estimates presented herein are based on pertinent information available to management as of December 31, 2019 and December 31, 2018. The factors used in the fair values estimates are subject to change subsequent to the dates the fair value estimates are completed, therefore, current estimates of fair value may differ significantly from the amounts presented herein. Assets measured at fair value using significant unobservable inputs (Level 3) The following table provides a description of the valuation technique, unobservable inputs, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a nonrecurring basis at the dates indicated: Valuation Technique Unobservable Inputs December 31, 2019 Weighted Average Rate December 31, 2018 Weighted Average Rate Impaired loans Collateral valuations Discount to appraised value 10% 9% Items measured at fair value on a nonrecurring basis – The following table presents financial assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy of the fair value measurements for those assets at the dates indicated: Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) December 31, 2019 Impaired loans $ - $ - $ 1,030 $ 1,030 Total $ - $ - $ 1,030 $ 1,030 December 31, 2018 Impaired loans $ - $ - $ 493 $ 493 Total $ - $ - $ 493 $ 493 The amounts disclosed above represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported on. Impaired loans - A loan is considered impaired when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral or the discounted cash expected future cash flows. The need for valuation adjustments arises when observable market prices or current appraised values of collateral indicate a shortfall in collateral value compared to current carrying values of the related loan. If the Company determines that the value of the impaired loan is less than the carrying value of the loan, the Company either establishes an impairment reserve as a specific component of the allowance for loan losses or charges off the impairment amount. These valuation adjustments are considered nonrecurring fair value adjustments. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | Note 20 – Revenue from Contracts with Customers All of the Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income. The following table presents the Company’s noninterest income by revenue stream for the years ended December 31: 2019 2018 (dollars in thousands) Deposit service charges Interchange income $ 1,354 $ 1,436 Merchant service fees 494 455 Overdraft fees 479 464 Other 780 706 BaaS fees 2,060 709 Loan referral fees 1,438 618 Gain on sale of loans (1) 490 264 Mortgage broker fees 447 215 Earnings on life insurance (1) 194 188 Gain on sale of securities (1) 171 - Loan servicing fees (1) 70 138 Lease and sublease income (1) 58 81 Other (2) 223 193 Total noninterest income $ 8,258 $ 5,467 (1) Not within the scope of Topic 606. (2) Includes the following immaterial income streams that are within the scope of Topic 606: wire transfer fees, annuity fees, brokerage fees, and credit card revenue. A description of the Company’s revenue streams accounted for under Topic 606 is as follows: Service Charges on Deposit Accounts: Interchange Income: Merchant Service Fees: BaaS Fees: Loan Referral Fees: Mortgage Broker Fees: |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Note 21 - Earnings Per Common Share The following is a computation of basic and diluted earnings per common share at the periods indicated: Year ended December 31, 2019 December 31, 2018 (dollars in thousands, except share data) Net Income $ 13,201 $ 9,701 Basic weighted average number common shares outstanding 11,896,258 10,440,740 Dilutive effect of share-based compensation 299,862 168,024 Diluted weighted average number common shares outstanding 12,196,120 10,608,764 Basic earnings per share $ 1.11 $ 0.93 Diluted earnings per share $ 1.08 $ 0.91 For year ended December 31, 2019 and 2018, options and RSAs to purchase an additional 138,089 and 9,000 shares of common stock, respectively, were not included in the computation of diluted earnings per common share because their effect resulted in them being antidilutive. |
Parent Company Only Condensed F
Parent Company Only Condensed Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Parent Company Only Condensed Financial Information | Note 22 – Parent Company Only Condensed Financial Information Condensed financial information of Coastal Financial Corporation follows: December 31, December 31, 2019 2018 ASSETS Cash $ 13,861 $ 20,252 Investment in trust equities 109 109 Investment in subsidiaries 123,322 102,445 Other investments 500 - Other assets 52 6 TOTAL ASSETS $ 137,844 $ 122,812 LIABILITIES AND SHAREHOLDERS' EQUITY Junior subordinated debentures, net of issuances costs $ 3,583 $ 3,581 Subordinated debt, net of debt issuance costs 9,979 9,965 Interest and dividends payable 102 103 Other liabilities 7 7 Shareholders' equity 124,173 109,156 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 137,844 $ 122,812 Year ended December 31, 2019 2018 INCOME Interest bearing deposits $ 5 $ 5 Total income 5 5 EXPENSE Interest expense 755 744 Other expenses 209 85 Total expense 964 829 Loss before income taxes and undistributed net income of subsidiary (959 ) (824 ) Equity in undistributed income of consolidated subsidiaries 13,960 10,360 Income tax benefit (200 ) (165 ) NET INCOME $ 13,201 $ 9,701 Year ended December 31, 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,201 $ 9,701 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed income of consolidated subsidiaries (13,960 ) (10,360 ) Stock-based compensation 33 31 (Increase) decrease in other assets (46 ) 18 Increase in other liabilities 15 10 Net cash used by operating activities (757 ) (600 ) CASH FLOWS FROM INVESTING ACTIVITIES: Investments in subsidiaries (5,255 ) (15,000 ) Investments in other (500 ) - Net cash used by investing activities (5,755 ) (15,000 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from initial public offering, net - 33,243 Proceeds from exercise of stock options 121 357 Net cash provided by financing activities 121 33,600 NET CHANGE IN CASH (6,391 ) 18,000 Cash, beginning of year 20,252 2,252 Cash, end of year $ 13,861 $ 20,252 |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of operations - Coastal Financial Corporation (Corporation or Company) is a registered bank holding company whose wholly owned subsidiaries are Coastal Community Bank (Bank) and Arlington Olympic LLC. The Company is a Washington state corporation that was organized in 2003. The Bank was incorporated and commenced operations in 1997 and is a Washington state-chartered commercial bank and Federal Reserve System (Federal Reserve) state member bank. Arlington Olympic LLC was formed in 2019 and owns the Arlington branch, which the Bank leases from the LLC. The Company provides a full range of banking services to small and medium-sized businesses, professionals, and individuals throughout the greater Puget Sound area through its 14 branches in Snohomish, Island, and King Counties, the Internet, and its mobile banking application. The Company also has a CCBX Division which provides Banking as a Service (BaaS) enabling broker dealers and digital financial service providers to offer their clients banking services. The Bank’s main branch and the headquarters of the Bank and Company are located in Everett, Washington. The Bank’s deposits are insured in whole or in part by the Federal Deposit Insurance Corporation (FDIC). The Bank’s loans and deposits are primarily within the greater Puget Sound area, and the Bank’s primary funding source is deposits from customers. The Bank is subject to regulation by the Federal Reserve and the Washington State Department of Financial Institutions Division of Banks (DFI). The Federal Reserve also has supervisory authority over the Company. |
Financial Statement Preparation | Financial statement presentation - The accompanying audited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for reporting requirements and practices within the banking industry. Amounts presented in the consolidated financial statements and footnote tables are rounded and presented in thousands of dollars except per-share amounts, which are presented in dollars. In the narrative footnote discussion, amounts are rounded to thousands and presented in dollars. In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying consolidated financial statements have been made. These adjustments include normal and recurring accruals considered necessary for a fair and accurate presentation. |
Principles of Consolidation | Principles of consolidation - The consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts have been eliminated in consolidation. |
Estimates | Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that its critical accounting estimates include determining the allowance for loan losses, the fair value of the Company’s financial instruments, and the valuation of deferred tax assets, financial instruments, and other fair value measurements. Actual results could differ significantly from those estimates. |
Subsequent Events | Subsequent Events - The Company has evaluated events and transactions subsequent to December 31, 2019 for potential recognition or disclosure. |
Cash Equivalents and Cash Flows | Cash equivalents - For the purpose of presentation in the statements of cash flows, the Company considers all amounts included in the balance sheet under “cash and due from banks”, all of which have maturity dates of three months or less, and restricted cash, as cash equivalents. Interest-bearing deposits at other financial institutions (excluding restricted cash), federal funds sold, and cash flows from loans and deposits are reported as net increases or decreases under cash flows from investing activities or from financing activities. The Company maintains |
Investment Securities | Investment - Debt securities that management has the ability and intent to hold to maturity are classified as held-to-maturity and carried at amortized cost. The amortization of premiums and accretion of discounts are recognized in interest income using the interest method or methods approximating the interest method over the period to maturity. Debt securities Declines |
Other Investments | Other - Other investments on the balance sheet consists of investments in stock of Federal Home Loan Bank, Federal Reserve Bank, Pacific Coast Banker’s Bancshares and Neocova Corporation. As a Federal The Bank, as a member The investment The Company purchased a $500,000 equity interest which consists of 9,000 shares of stock and is carried at cost at December 31, 2019, which approximates its fair value. This is a new investment for 2019, therefore there was no balance as of December 31, 2018. The Company elects to account for the investment under ASC 321 Investments – Equity Securities without Readily Determinable Value. The investment will be held at cost minus impairment, the measurement should be applied until the investment does not qualify for the measurement election (e.g., if the investment has a readily determinable fair value). The Company will reassess at each reporting period whether this equity investment without a readily determinable fair value qualifies to be measured at cost minus impairment. |
Loans and Allowance for Loan Losses | Loans and allowance - Loans are stated at the principal amount outstanding less the allowance for loan losses and net of any deferred fees or costs on originated loans, and unamortized premiums or discounts on purchased loans. Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the level yield methodology and a method that approximates the level yield methodology. Interest income on loans is recognized based upon the principal amounts outstanding. Generally, the accrual of interest on loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due or when they are 90 days past due as to either principal or interest, unless they are well secured and in the process of collection. When interest accrual is discontinued, all unpaid accrued interest is reversed against current income. If management determines that the ultimate collectability of principal or interest is in doubt, cash receipts on nonaccrual loans are applied to reduce the principal balance on a cash-basis method, until the loans qualify for return to accrual status or principal is paid in full. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current, borrower has demonstrated ability to make regular payments, generally a period of at least six months, and future payments are reasonably assured. Past due status is determined based on contractual terms. The allowance The allowance The allowance A loan A troubled Periodically, |
Loans Held-for-Sale | Loans held-for-sale - Loans held-for-sale consist of the guaranteed portion of SBA loans and United States Department of Agriculture (USDA) loans the Company intends to sell after origination and are reflected at the lower of aggregate cost or fair value. Loans are generally sold with servicing of the sold portion retained by the Company when the sale of the loan occurs, the premium received is combined with the estimated present value of future cash flows on the related servicing asset and recorded as a gain on sale of loans in noninterest income. There were no loans held for sale at December 31, 2019 and 2018. |
Loan Sales Recognition | Loan - The Company recognizes a sale on loans if the transferred portion (or portions) and any portion that continues to be held by the transferor are participating interests. Participating interest is defined as a portion of a financial asset that (a) conveys proportionate ownership rights with equal priority to each participating interest holder, (b) involves no recourse (other than standard representations and warranties), and (c) does not entitle any participating interest holder to receive cash before any other participating interest holder. The transfer of the participating interest (or participating interests) must also meet the conditions for surrender of control. To determine The Company retains |
SBA and USDA Servicing Assets | SBA and USDA - The Company accounts for SBA and USDA servicing rights as separately recognized servicing rights and initially measure them at fair value. Fair value is based on market prices for comparable servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The Company subsequently measures each SBA and USDA servicing asset using the amortization method. Under the amortization method, servicing assets are amortized into noninterest income in proportion to, and over the period of, estimated net servicing income. The amortized assets are assessed for impairment or increased obligations, at the loan level, based on the fair value of each reporting date. As of December 31, 2019 and 2018, SBA and USDA servicing assets totaled $350,000 and $395,000, respectively, and are included in other assets on the balance sheets, and SBA and USDA loans serviced totaled $21,498,000 and $20,966,000, as of December 31, 2019 and 2018 respectively. |
Reserve for Unfunded Commitments | Reserve - A reserve for unfunded commitments is maintained at a level that, in the opinion of management, is adequate to absorb probable losses associated with the Company’s commitment to lend funds under existing agreements, such as letters or lines of credit. Management determines the adequacy of the reserve for unfunded commitments based on review of individual credit facilities, current economic conditions, and risk characteristics of the various categories of commitments and other relevant factors. The reserve is based on estimates, and ultimate losses may vary from the current estimates. These estimates are evaluated on a regular basis and adjustments are reported in earnings in the periods in which they become known. Draws on unfunded commitments that are considered uncollectible at the time funds are advanced are charged to the allowance for loan losses. Provision for unfunded commitments losses are added to the reserve for unfunded commitments, which is included in the other liabilities section of the consolidated balance sheets. The reserve for unfunded commitments was $422,000 and $304,000 as of December 31, 2019 and 2018, respectively. |
Premises and Equipment | Premises - Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method based upon the estimated useful lives of the assets. Asset lives range from three to thirty-nine years. Leasehold improvements are amortized over the expected term of the lease or the estimated useful life of the improvement, whichever is less. Maintenance |
Transfers of Financial Assets | Transfers - Transfers of an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) a group of financial assets or a participating interest in an entire financial asset has been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Other Real Estate Owned and Repossessed Assets | Other - Other real estate owned and repossessed assets are foreclosed property held pending disposition and is initially recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. At foreclosure, if the fair value of the asset acquired less estimated selling costs is less than the Company’s recorded investment in the related loan, a write-down is recognized through a charge to the allowance for loan losses. Costs of significant property improvements that increase the value of the property are capitalized, whereas costs relating to holding the property are expensed. Valuations are periodically performed by management, and a valuation allowance is established for subsequent declines, which are recorded as a charge to income, if necessary, to reduce the carrying value of the property to its fair value less estimated selling costs. |
Federal Income Taxes | Federal - The Company and the Bank file a consolidated federal income tax return. Deferred federal income taxes result from temporary differences between the tax basis of assets and liabilities, and their reported amounts in the financial statements. Deferred taxes are temporary differences that will be recognized in future periods. As changes in tax law or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Taxes are paid by the Bank to the Company based on the separate taxable income of the Bank. The Company and Bank maintain their records on the accrual basis of accounting for financial reporting and for income tax reporting purposes. With few exceptions, the Company is no longer subject to income tax examination for years before 2016. As of December |
Stock-Based Compensation | Stock-based - Compensation expense is recognized for stock options and restricted stock awards, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the grant date is used for restricted stock awards and is determined on the basis of objective criteria including trade data. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. |
Earnings Per Common Share | Earnings per common - Earnings per common share (EPS) is computed under the two-class method. Pursuant to the two-class method, nonvested stock based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of EPS. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Application of the two-class method resulted in the equivalent earnings per share to the treasury method. Basic that |
Comprehensive Income | Comprehensive - Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale investments, are reported as a separate component of the shareholders’ equity section of the balance sheets. Accumulated other comprehensive loss consists of only one component: unrealized gains or losses on investment securities available-for-sale. |
Business Segments | Business Segments The Company is managed by legal entity and not by lines of business. The entity’s primary business is that of a traditional banking institution, gathering deposits and originating loans for portfolio in its market areas. The Bank offers a wide variety of deposit products to their customers. Lending activities include the origination of real estate, commercial and industrial, and consumer loans. Interest income on loans is the Company’s primary source of revenue, and is supplemented by interest income from investment securities, deposit service charges, and other service provided activities. In addition to traditional banking services the Company also has a CCBX division which provides BaaS offerings that enable broker dealers and digital financial service providers to offer their clients banking services. The performance of the Company is reviewed and monitored by the Company’s executive management on a daily basis and the Board of Directors reviews and monitors the performance of the Company at minimum, on a monthly basis. The Company has determined that its current business and operations consist of a single reporting segment and, therefore, segment disclosures are not required. |
Advertising Costs | Advertising - Advertising costs are expensed as incurred or over the period of the campaign/promotion. Advertising costs in the amount of $393,000 and $391,000 were expensed during the year ended December 31, 2019 and 2018, respectively |
Reclassifications | Reclassifications - Certain amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current presentation with no effect on shareholders’ equity or net income. |
Accounting Standards Adopted in 2019 | Accounting Standards Adopted in 2019 On January 1, 2019, the Company adopted ASU No 2016-02, Leases (Topic 842) Our operating leases relate primarily to office space and bank branches. As a result of implementing ASU 2016-02, an operating lease right-of-use ("ROU") asset of $9.4 million and an operating lease liability of $9.6 million was recognized on January 1, 2019, with no impact on the consolidated statement of income or consolidated statement of cash flows compared to the prior lease accounting model. The ROU asset and operating lease liability are recorded on the face on the consolidated balance sheets. See Note 6 - Leases for additional information. On January 1, 2019, the Company adopted ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU was issued to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Previously, these awards were recorded at the fair value of consideration received or the fair value of the equity instruments issued and was measured as of the earlier of the commitment date or the date performance was completed. The amendments in this ASU require the awards to be measured at the grant-date fair value of the equity instrument. ASU No. 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of ASU No. 2018-07 did not have a material impact on the Company's consolidated financial statements. |
Recent Accounting Guidance Not Yet Effective | Recent Accounting Guidance Not Yet Effective In September 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Amortized Cost and Fair Values of Investment Securities | The amortized cost and fair values of investment securities at the date indicated are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in thousands) December 31, 2019 Available-for-sale U.S. Treasury securities $ 24,988 $ 1 $ (44 ) $ 24,945 U.S. Government agencies 3,000 - (1 ) 2,999 U.S. Agency collateralized mortgage obligations 129 - - 129 U.S. Agency residential mortgage-backed securities 27 - - 27 Municipals 257 3 - 260 Total available-for-sale securities 28,401 4 (45 ) 28,360 Held-to-maturity U.S. Agency residential mortgage-backed securities 4,350 - (21 ) 4,329 Total investment securities $ 32,751 $ 4 $ (66 ) $ 32,689 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in thousands) December 31, 2018 Available-for-sale U.S. Treasury securities $ 34,831 $ - $ (1,590 ) $ 33,241 U.S. Government agencies 3,000 - (43 ) 2,957 U.S. Agency collateralized mortgage obligations 172 - (3 ) 169 U.S. Agency residential mortgage-backed securities 39 - (1 ) 38 Municipals 259 - (4 ) 255 Total available-for-sale securities 38,301 - (1,641 ) 36,660 Held-to-maturity U.S. Agency residential mortgage-backed securities 1,262 - (57 ) 1,205 Total investment securities $ 39,563 $ - $ (1,698 ) $ 37,865 |
Amortized Cost and Fair Value of Debt Securities by Contractual Maturity | Mortgage-backed securities and collateralized mortgage obligations are shown separately, since they are not due at a single maturity date. Available-for-Sale Held-to-Maturity Amortized Cost Fair Value Amortized Cost Fair Value (dollars in thousands) Amounts maturing in One year or less $ 22,990 $ 22,988 $ - $ - After one year through five years 5,255 5,216 - - After five years through ten years - - - - 28,245 28,204 - - U.S. Agency residential mortgage-backed securities and collateralized mortgage obligations 156 156 4,350 4,329 $ 28,401 $ 28,360 $ 4,350 $ 4,329 |
Summary of Investment Securities Continuous Unrealized Loss Position | Information pertaining to securities with gross unrealized losses at the dates indicated, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: Less Than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (dollars in thousands) December 31, 2019 Available-for-sale U.S. Treasury securities $ 9,994 $ (3 ) $ 4,956 $ (41 ) $ 14,950 $ (44 ) U.S. Government agencies - - 2,999 (1 ) 2,999 (1 ) Total available-for-sale securities 9,994 (3 ) 7,955 (42 ) 17,949 (45 ) Held-to-maturity U.S. Agency residential mortgage-backed securities 3,140 (14 ) 1,189 (7 ) 4,329 (21 ) Total investment securities $ 13,134 $ (17 ) $ 9,144 $ (49 ) $ 22,278 $ (66 ) December 31, 2018 Available-for-sale U.S. Treasury securities $ - $ - $ 33,241 $ (1,590 ) $ 33,241 $ (1,590 ) U.S. Government agencies - - 2,957 (43 ) 2,957 (43 ) U.S. Agency collateralized mortgage obligations - - 169 (3 ) 169 (3 ) Municipals - - 255 (4 ) 255 (4 ) U.S. Agency residential mortgage-backed securities 38 (1 ) - - 38 (1 ) Total available-for-sale securities 38 (1 ) 36,622 (1,640 ) 36,660 (1,641 ) Held-to-maturity U.S. Agency residential mortgage-backed securities - - 1,205 (57 ) 1,205 (57 ) Total investment securities $ 38 $ (1 ) $ 37,827 $ (1,697 ) $ 37,865 $ (1,698 ) |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Composition of Loan Portfolio | The composition of the loan portfolio is as follows as of the periods indicated: December 31, December 31, 2019 2018 (dollars in thousands) Commercial and industrial loans $ 111,401 $ 90,390 Real estate loans: Construction, land, and land development 97,034 64,045 Residential real estate 115,011 94,745 Commercial real estate 613,398 515,959 Consumer and other loans 4,214 3,584 Gross loans receivable 941,058 768,723 Net deferred origination fees and premiums (1,955 ) (824 ) Loans receivable $ 939,103 $ 767,899 |
Summary of an Age Analysis of Past Due Loans | The following table illustrates an age analysis of past due loans as of the dates indicated: 30-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Recorded Investment 90 Days or More Past Due and Still Accruing (dollars in thousands) December 31, 2019 Commercial and industrial loans $ 143 $ 965 $ 1,108 $ 110,293 $ 111,401 $ - Real estate loans: Construction, land and land development - - - 97,034 97,034 - Residential real estate - 65 65 114,946 115,011 - Commercial real estate 417 - 417 612,981 613,398 - Consumer and other loans 4 - 4 4,210 4,214 - $ 564 $ 1,030 $ 1,594 $ 939,464 $ 941,058 $ - Less net deferred origination fees and premiums (1,955 ) Loans receivable $ 939,103 30-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Recorded Investment 90 Days or More Past Due and Still Accruing (dollars in thousands) December 31, 2018 Commercial and industrial loans $ 171 $ 494 $ 665 $ 89,725 $ 90,390 $ - Real estate loans: Construction, land and land development 823 - 823 63,222 64,045 - Residential real estate - 72 72 94,673 94,745 - Commercial real estate - - - 515,959 515,959 - Consumer and other loans 2 - 2 3,582 3,584 - $ 996 $ 566 $ 1,562 $ 767,161 $ 768,723 $ - Less net deferred origination fees and premiums (824 ) Loans receivable $ 767,899 |
Summary of Information Pertaining to Impaired Loans | A summary of information pertaining to impaired loans as of the period indicated: Unpaid Contractual Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance (dollars in thousands) December 31, 2019 Commercial and industrial loans $ 1,431 $ 965 $ - $ 965 $ - Real estate loans: Residential real estate 73 65 - 65 - Commercial real estate - - - - - Consumer loans 2 - 2 2 2 Total $ 1,506 $ 1,030 $ 2 $ 1,032 $ 2 December 31, 2018 Commercial and industrial loans $ 766 $ 493 $ - $ 493 $ - Real estate loans: Residential real estate 74 72 - 72 - Commercial real estate 1,491 1,261 - 1,261 - Total $ 2,331 $ 1,826 $ - $ 1,826 $ - |
Summary of Average Recorded Investment and Interest Income Recognized on Impaired Loans | The following tables summarize the average recorded investment and interest income recognized on impaired loans by loan class for the year ended December 31, 2019 and 2018: December 31, 2019 December 31, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (dollars in thousands) Commercial and industrial loans $ 1,026 $ - $ 1,103 $ 28 Real estate loans: Construction, land and land development - - - - Residential real estate 69 - 306 5 Commercial real estate 252 - 1,288 - Consumer loans 1 - - - Total $ 1,348 $ - $ 2,697 $ 33 |
Summary of Troubled Debt Restructurings by Accrual Versus Nonaccrual Status and by Loan Class | The following table presents troubled debt restructurings by accrual versus nonaccrual status and by loan class as of December 31, 2018. There were no troubled debt restructurings at December 31, 2019. Accrual Status Nonaccrual Status Total Restructured Loans (dollars in thousands) December 31, 2018 Commercial real estate $ - $ 1,261 $ 1,261 |
Analysis of Nonaccrual Loans by Category | An analysis of nonaccrual loans by category consisted of the following at the periods indicated: December 31, December 31, 2019 2018 (dollars in thousands) Commercial and industrial loans $ 965 $ 493 Real estate loans: Residential real estate 65 72 Commercial real estate - 1,261 Total nonaccrual loans $ 1,030 $ 1,826 |
Summary of Loans by Credit Quality Risk Rating | Loans by credit quality risk rating are as follows as of the periods indicated: Pass Other Loans Especially Mentioned Sub- Standard Doubtful Total (dollars in thousands) December 31, 2019 Commercial and industrial loans $ 104,911 $ 4,740 $ 1,750 $ - $ 111,401 Real estate loans: Construction, land, and land development 97,034 - - - 97,034 Residential real estate 114,823 123 65 - 115,011 Commercial real estate 608,773 4,625 - - 613,398 Consumer and other loans 4,212 - 2 - 4,214 $ 929,753 $ 9,488 $ 1,817 $ - 941,058 Less net deferred origination fees and premiums (1,955 ) Loans receivable $ 939,103 December 31, 2018 Commercial and industrial loans $ 84,859 $ 3,908 $ 1,623 $ - $ 90,390 Real estate loans: Construction, land, and land development 55,666 8,379 - - 64,045 Residential real estate 94,548 125 72 - 94,745 Commercial real estate 512,151 2,547 1,261 - 515,959 Consumer and other loans 3,584 - - - 3,584 $ 750,808 $ 14,959 $ 2,956 $ - 768,723 Less net deferred origination fees and premiums (824 ) Loans receivable $ 767,899 |
Summary of Allocation of Allowance for Loan Loss as well as Activity in Allowance for Loan Loss Attributed to Various Segments in Loan | The following tables summarize the allocation of the allowance for loan loss, as well as the activity in the allowance for loan loss attributed to various segments in the loan portfolio, as of and for the year ended December 31, 2019: Commercial and Industrial Construction, Land, and Land Development Residential Real Estate Commercial Real Estate Consumer and Other Unallocated Total (dollars in thousands) ALLL balance, December 31, 2018 $ 2,039 $ 1,806 $ 1,647 $ 2,648 $ 77 $ 1,190 $ 9,407 Provision for loan losses or (recapture) 677 1,014 422 507 54 (130 ) 2,544 2,716 2,820 2,069 3,155 131 1,060 11,951 Loans charged-off (355 ) (75 ) - (29 ) (35 ) - (494 ) Recoveries of loans previously charged-off 5 - - - 8 - 13 Net (charge-offs) recoveries (350 ) (75 ) - (29 ) (27 ) - (481 ) ALLL balance, December 31, 2019 $ 2,366 $ 2,745 $ 2,069 $ 3,126 $ 104 $ 1,060 $ 11,470 ALLL amounts allocated to Individually evaluated for impairment $ - $ - $ - $ - $ 2 $ - $ 2 Collectively evaluated for impairment 2,366 2,745 2,069 3,126 102 1,060 11,468 ALLL balance, December 31, 2019 $ 2,366 $ 2,745 $ 2,069 $ 3,126 $ 104 $ 1,060 $ 11,470 Loans individually evaluated for impairment $ 965 $ - $ 65 $ - $ 2 $ 1,032 Loans collectively evaluated for impairment 110,436 97,034 114,946 613,398 4,212 940,026 Loan balance, December 31, 2019 $ 111,401 $ 97,034 $ 115,011 $ 613,398 $ 4,214 $ 941,058 The following tables summarize the allocation of the allowance for loan loss, as well as the activity in the allowance for loan loss attributed to various segments in the loan portfolio, as of and for the year ended December 31, 2018: Commercial and Industrial Construction, Land, and Land Development Residential Real Estate Commercial Real Estate Consumer and Other Unallocated Total (dollars in thousands) ALLL balance, December 31, 2017 $ 1,864 $ 1,063 $ 1,343 $ 2,014 $ 43 $ 1,690 $ 8,017 Provision for loan losses or (recapture) 579 743 239 718 47 (500 ) 1,826 2,443 1,806 1,582 2,732 90 1,190 9,843 Loans charged-off (408 ) - - (84 ) (27 ) - (519 ) Recoveries of loans previously charged-off 4 - 65 - 14 - 83 Net (charge-offs) recoveries (404 ) - 65 (84 ) (13 ) - (436 ) ALLL balance, December 31, 2018 $ 2,039 $ 1,806 $ 1,647 $ 2,648 $ 77 $ 1,190 $ 9,407 ALLL amounts allocated to Individually evaluated for impairment - - - - - - - Collectively evaluated for impairment 2,039 1,806 1,647 2,648 77 1,190 9,407 ALLL balance, December 31, 2018 $ 2,039 $ 1,806 $ 1,647 $ 2,648 $ 77 $ 1,190 $ 9,407 Loans individually evaluated for impairment $ 493 - $ 72 $ 1,261 - $ 1,826 Loans collectively evaluated for impairment 89,897 64,045 94,673 514,698 3,584 766,897 Loan balance, December 31, 2018 $ 90,390 $ 64,045 $ 94,745 $ 515,959 $ 3,584 $ 768,723 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Investment in Premises and Equipment | The investment in premises and equipment consisted of the following at December 31: 2019 2018 (dollars in thousands) Land $ 2,673 $ 2,426 Buildings 7,525 7,429 Leasehold Improvements 3,906 3,439 Furniture 1,991 1,894 Equipment 3,708 3,439 Software 600 772 Projects in process 62 332 . 20,465 19,731 Less accumulated depreciation and amortization (7,357 ) (6,564 ) Premises and equipment, net $ 13,108 $ 13,167 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Minimum Annual Lease Payments under Lease Terms | The following sets forth, as of December 31, 2019, the minimum annual lease payments under the terms of these leases, inclusive of renewal options that the Company is reasonably certain to renew: December 31, (dollars in thousands) 2019 2020 $ 1,322 2021 1,309 2022 1,314 2023 1,325 2024 919 2025 and thereafter 4,033 Total lease payments 10,222 Less: amounts representing interest 1,543 Present value of lease liabilities $ 8,679 |
Schedule of Future Minimum Income Receivable Under Noncancelable Operating Leases and Subleases | The following table sets forth the future minimum income receivable under noncancelable operating leases and subleases as of December 31, 2019: December 31, (dollars in thousands) 2019 2020 $ 121 2021 118 2022 115 2023 74 2024 62 Thereafter - $ 490 |
Summary of Components of Total Lease Expense and Operating Cash Flows | The following table presents the components of total lease expense and operating cash flows for the year ended December 31, 2019: December 31, (dollars in thousands) 2019 Lease expense: Operating lease expense $ 1,323 Variable lease expense 148 Total lease expense (1) $ 1,471 Cash paid: Cash paid reducing operating lease liabilities $ 1,451 (1) Included in net occupancy expense in the Consolidated Statements of Income. |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Composition of Consolidated Deposits | The composition of consolidated deposits consisted of the following at the periods indicated: December 31, December 31, 2019 2018 (dollars in thousands) Demand, noninterest bearing $ 371,243 $ 293,525 Now and money market 437,908 349,952 Savings 53,365 52,572 Total core deposits 862,516 696,049 BaaS brokered deposits 23,586 10,521 Time deposits less than $250,000 51,644 62,272 Time deposits $250,000 and over 30,213 34,772 Total deposits $ 967,959 $ 803,614 |
Schedule of Maturity Distribution of Time Deposits | The following table presents the maturity distribution of time deposits as of December 31, 2019 (dollars in thousands): Twelve months $ 60,618 One to two years 15,739 Two to three years 3,588 Three to four years 464 Four to five years 1,448 $ 81,857 |
Federal Home Loan Bank Advanc_2
Federal Home Loan Bank Advances and Other Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Advances From Federal Home Loan Banks [Abstract] | |
Summary of Federal Home Loan Bank Advances and Other Borrowings | The following table summarizes activities in advances from the FHLB for the periods indicated: Year Ended December 31, 2019 2018 (dollars in thousands) Average balance outstanding $ 746 $ 1,900 Maximum amount outstanding at any month-end during the year 20,000 20,000 Balance outstanding at year end 10,000 20,000 Weighted average interest rate during the year 2.30 % 2.07 % |
Subordinated Debt (Tables)
Subordinated Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Subordinated Borrowings [Abstract] | |
Schedule of Subordinated Debt | At December 31, 2019 and 2018, the Company’s subordinated debt was as follows: Aggregate Principal Amount December 31, 2019 Aggregate Principal Amount December 31, 2018 (dollars in thousands) Total liability, at par $ 10,000 $ 10,000 Less: unamortized debt issuance costs (21 ) (35 ) Total liability, at carrying value $ 9,979 $ 9,965 Stated Maturity: August 1, 2026 Interest Rate: Fixed 5.65% 5 years; then Wall Street Prime +2.5% starting August 1, 2021 |
Junior Subordinated Debentures
Junior Subordinated Debentures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Junior Subordinated Debentures | |
Schedule of Junior Subordinated Debentures | At December 31, 2019 and 2018, the Company’s junior subordinated debentures were as follows: Coastal (WA) Statutory Trust I Aggregate Principal Amount December 31, 2019 Aggregate Principal Amount December 31, 2018 (dollars in thousands) Total liability, at par $ 3,609 $ 3,609 Less: unamortized debt issuance costs (26 ) (28 ) Total liability, at carrying value $ 3,583 $ 3,581 Stated Maturity: December 15, 2034 Interest Rate Spread: Three-month LIBOR +2.10% |
Federal Income Taxes (Table)
Federal Income Taxes (Table) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Federal Income Tax | The components of the federal income tax for the Company consisted of the following at December 31: 2019 2018 (dollars in thousands) Current tax expense $ 4,022 $ 2,923 Deferred tax benefit (561 ) (382 ) Total tax expense $ 3,461 $ 2,541 |
Summary of Reconciliation of Income Tax Expense (Benefit) | A reconciliation of the income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate to the income before income taxes is as follows for the year ended December 31: 2019 2018 (dollars in thousands) Amount Rate Amount Rate Federal income tax at statutory rate $ 3,499 21.0 % $ 2,571 21.0 % Effect of tax-exempt interest income (98 ) (0.6 ) (70 ) (0.6 ) Stock-based compensation 64 0.4 42 0.4 Bank owned life insurance earnings (41 ) (0.2 ) (39 ) (0.3 ) Other 37 0.2 37 0.3 $ 3,461 20.8 % $ 2,541 20.8 % |
Schedule of Net Deferred Tax Asset Temporary Differences and Carryforward Items | The net deferred tax asset consists of the following temporary differences and carryforward items at December 31: 2019 2018 (dollars in thousands) Deferred tax assets: Allowance for loan losses $ 2,409 $ 1,975 Lease liability 1,761 - Accrued expenses 334 178 Deferred compensation 205 226 Allowance for unfunded commitments 89 64 Nonqualified stock options 88 52 Interest on nonaccrual loans 28 59 Deferred income 21 34 Net unrealized loss on available-for-sale securities 9 345 Total deferred tax assets 4,944 2,933 Deferred tax liabilities: Right of use asset (1,748 ) - Depreciation and amortization (453 ) (415 ) Total deferred tax liabilities (2,201 ) (415 ) Net deferred tax asset $ 2,743 $ 2,518 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Loan Transactions | A summary of loan transactions follows: 2019 2018 (dollars in thousands) Beginning Balance January 1 $ 9,753 $ 5,189 Additions 1,420 6,831 Payments (858 ) (2,267 ) Ending Balance December 31 $ 10,315 $ 9,753 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Financial Instruments Contract Amount Represents Credit Risk | Financial instruments whose contract amount represents credit risk were as follows at December 31: 2019 2018 (dollars in thousands) Commitments to extend credit Commercial and industrial $ 66,563 $ 47,033 Construction - commercial real estate 42,371 33,128 Construction - residential real estate 21,361 30,269 Commercial real estate 9,888 12,871 Residential real estate 19,082 12,543 Other 1,181 656 Total commitments to extend credit $ 160,446 $ 136,500 Standby letters of credit $ 2,250 $ 2,331 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Assumptions Used to Estimate the Value of Options Granted | The following assumptions were used to estimate the value of options granted under the 2018 Plan as applicable in the period indicated: Year Ended December 31, 2019 Expected term 10.0 Expected stock price volatility 48.79 % Risk-free interest rate 2.74 % Expected dividends Zero Weighted average grant date fair value $ 9.22 |
Summary of Stock Option Activity | A summary of stock option activity under the Company’s Plan during the year ended December 31, 2019: Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2018 688,310 $ 6.39 6.38 6,094,217 Granted 125,837 14.91 Exercised (19,530 ) 6.20 Forfeited or expired (10,400 ) 8.81 Outstanding at December 31, 2019 784,217 $ 7.73 5.95 6,586,968 Vested or expected to vest at December 31, 2019 784,217 $ 7.73 5.95 6,586,968 Exercisable at December 31, 2019 271,221 $ 6.07 4.28 2,820,827 |
Summary of Nonvested Shares | A summary of the Company’s nonvested shares at December 31, 2019 and changes during the year is presented below: Nonvested shares Shares Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value Nonvested shares at December 31, 2018 14,415 $ 9.12 $ 88,580 Granted 2,352 14.91 Forfeited (1,200 ) 6.25 Vested (5,310 ) 7.33 Nonvested shares at December 31, 2019 10,257 $ 11.71 $ 48,864 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Banks's Actual and Required Capital Amounts and Ratios | The Bank’s actual unts and ratios are as follows: Actual Minimum Required for Capital Adequacy Purposes Required to be Well Capitalized Under the Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (dollars in thousands) December 31, 2019 Leverage Capital (to average assets) Consolidated $ 127,524 11.64 % $ 43,806 4.00 % $ 54,758 5.00 % Bank Only 122,904 11.22 % 43,801 4.00 % 54,751 5.00 % Common Equity Tier I risk-based capital ratio (to risk-weighted assets) Consolidated 124,024 12.78 % 43,659 4.50 % 63,064 6.50 % Bank Only 122,904 12.43 % 44,504 4.50 % 64,283 6.50 % Tier I Capital (to risk-weighted assets) Consolidated 127,524 13.14 % 58,213 6.00 % 77,617 8.00 % Bank Only 122,904 12.43 % 59,338 6.00 % 79,118 8.00 % Total Capital (to risk-weighted assets) Consolidated 149,416 15.40 % 77,617 8.00 % 97,021 10.00 % Bank Only 134,796 13.63 % 79,118 8.00 % 98,897 10.00 % December 31, 2018 Leverage Capital (to average assets) Consolidated $ 113,807 12.46 % $ 36,529 4.00 % $ 45,661 5.00 % Bank Only 103,597 11.35 % 36,524 4.00 % 45,655 5.00 % Common Equity Tier I risk-based capital ratio (to risk-weighted assets) Consolidated 110,307 13.70 % 36,238 4.50 % 52,343 6.50 % Bank Only 103,597 12.84 % 36,294 4.50 % 52,425 6.50 % Tier I Capital (to risk-weighted assets) Consolidated 113,807 14.13 % 48,317 6.00 % 64,423 8.00 % Bank Only 103,597 12.84 % 48,392 6.00 % 64,253 8.00 % Total Capital (to risk-weighted assets) Consolidated 133,518 16.58 % 64,423 8.00 % 80,528 10.00 % Bank Only 113,308 14.05 % 64,523 8.00 % 80,653 10.00 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Estimated Fair Values of Financial Instruments | The following tables present estimated fair values of the Company’s financial instruments as of the period indicated, whether or not recognized or recorded in the consolidated balance sheets at the period indicated: December 31, 2019 Fair Value Measurements Using Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 (dollars in thousands) Financial assets Cash and due from banks $ 16,555 $ 16,555 $ 16,555 - - Interest earning deposits with other banks 111,259 111,259 111,259 - - Investment securities 32,710 32,689 24,945 7,744 - Other investments 4,505 4,505 - 4,005 500 Loans receivable, net (1) 927,633 922,046 - - 922,046 Accrued interest receivable 2,980 2,980 - 2,980 - Financial liabilities Deposits (1) $ 967,959 967,804 $ - $ 967,804 $ - FHLB advances 10,000 10,000 - 10,000 - Subordinated debt 9,979 9,879 - 9,879 - Junior subordinated debentures 3,583 3,214 - 3,214 - Accrued interest payable 308 308 - 308 - December 31, 2018 Fair Value Measurements Using Carrying Value Estimated Fair Value Level 1 Level 2 Level 3 (dollars in thousands) Financial assets Cash and due from banks $ 16,315 $ 16,315 $ 16,315 $ - $ - Interest earning deposits with other banks 109,467 109,467 109,467 - - Investment securities 37,922 37,865 33,241 4,624 - Other investments 3,766 3,766 - 3,766 - Loans receivable, net 758,491 743,354 - — 743,354 Accrued interest receivable 2,526 2,526 - 2,526 - Financial liabilities Deposits $ 803,614 802,645 $ - $ 802,645 $ - FHLB advances 20,000 20,000 - 20,000 - Subordinated debt 9,965 9,804 - 9,804 - Junior subordinated debentures 3,581 3,265 - 3,265 - Accrued interest payable 279 279 - 279 - |
Summary of Assets Measured at Fair Value on Recurring Basis | Items measured at fair value on a recurring basis – The following fair value hierarchy table presents information about the Company’s assets that are measured at fair value on a recurring basis at the dates indicated: Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) December 31, 2019 Available-for-sale U.S. Treasury securities $ 24,945 $ - $ - $ 24,945 U.S. Government agencies - 2,999 - 2,999 U.S. Agency collateralized mortgage obligations - 129 - 129 U.S. Agency residential mortgage-backed securities - 27 - 27 Municipals - 260 - 260 $ 24,945 $ 3,415 $ - $ 28,360 December 31, 2018 Available-for-sale U.S. Treasury securities $ 33,241 $ - $ - $ 33,241 U.S. Government agencies - 2,957 - 2,957 U.S. Agency collateralized mortgage obligations - 169 - 169 U.S. Agency residential mortgage-backed securities - 38 - 38 Municipals - 255 - 255 $ 33,241 $ 3,419 $ - $ 36,660 |
Summary of Assets and Liabilities Classified as Level 3 and Measured at Fair Value on Nonrecurring Basis | The following table provides a description of the valuation technique, unobservable inputs, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a nonrecurring basis at the dates indicated: Valuation Technique Unobservable Inputs December 31, 2019 Weighted Average Rate December 31, 2018 Weighted Average Rate Impaired loans Collateral valuations Discount to appraised value 10% 9% |
Summary of Financial Assets and Liabilities Measured at Fair Value on Nonrecurring Basis | Items measured at fair value on a nonrecurring basis – The following table presents financial assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy of the fair value measurements for those assets at the dates indicated: Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) December 31, 2019 Impaired loans $ - $ - $ 1,030 $ 1,030 Total $ - $ - $ 1,030 $ 1,030 December 31, 2018 Impaired loans $ - $ - $ 493 $ 493 Total $ - $ - $ 493 $ 493 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Noninterest Income by Revenue Stream | All of the Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income. The following table presents the Company’s noninterest income by revenue stream for the years ended December 31: 2019 2018 (dollars in thousands) Deposit service charges Interchange income $ 1,354 $ 1,436 Merchant service fees 494 455 Overdraft fees 479 464 Other 780 706 BaaS fees 2,060 709 Loan referral fees 1,438 618 Gain on sale of loans (1) 490 264 Mortgage broker fees 447 215 Earnings on life insurance (1) 194 188 Gain on sale of securities (1) 171 - Loan servicing fees (1) 70 138 Lease and sublease income (1) 58 81 Other (2) 223 193 Total noninterest income $ 8,258 $ 5,467 (1) Not within the scope of Topic 606. (2) Includes the following immaterial income streams that are within the scope of Topic 606: wire transfer fees, annuity fees, brokerage fees, and credit card revenue. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Common Share | The following is a computation of basic and diluted earnings per common share at the periods indicated: Year ended December 31, 2019 December 31, 2018 (dollars in thousands, except share data) Net Income $ 13,201 $ 9,701 Basic weighted average number common shares outstanding 11,896,258 10,440,740 Dilutive effect of share-based compensation 299,862 168,024 Diluted weighted average number common shares outstanding 12,196,120 10,608,764 Basic earnings per share $ 1.11 $ 0.93 Diluted earnings per share $ 1.08 $ 0.91 |
Parent Company Only Condensed_2
Parent Company Only Condensed Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Summary of Condensed Financial Information of Coastal Financial Corporation | Condensed financial information of Coastal Financial Corporation follows: December 31, December 31, 2019 2018 ASSETS Cash $ 13,861 $ 20,252 Investment in trust equities 109 109 Investment in subsidiaries 123,322 102,445 Other investments 500 - Other assets 52 6 TOTAL ASSETS $ 137,844 $ 122,812 LIABILITIES AND SHAREHOLDERS' EQUITY Junior subordinated debentures, net of issuances costs $ 3,583 $ 3,581 Subordinated debt, net of debt issuance costs 9,979 9,965 Interest and dividends payable 102 103 Other liabilities 7 7 Shareholders' equity 124,173 109,156 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 137,844 $ 122,812 Year ended December 31, 2019 2018 INCOME Interest bearing deposits $ 5 $ 5 Total income 5 5 EXPENSE Interest expense 755 744 Other expenses 209 85 Total expense 964 829 Loss before income taxes and undistributed net income of subsidiary (959 ) (824 ) Equity in undistributed income of consolidated subsidiaries 13,960 10,360 Income tax benefit (200 ) (165 ) NET INCOME $ 13,201 $ 9,701 Year ended December 31, 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,201 $ 9,701 Adjustments to reconcile net income to net cash used by operating activities: Equity in undistributed income of consolidated subsidiaries (13,960 ) (10,360 ) Stock-based compensation 33 31 (Increase) decrease in other assets (46 ) 18 Increase in other liabilities 15 10 Net cash used by operating activities (757 ) (600 ) CASH FLOWS FROM INVESTING ACTIVITIES: Investments in subsidiaries (5,255 ) (15,000 ) Investments in other (500 ) - Net cash used by investing activities (5,755 ) (15,000 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from initial public offering, net - 33,243 Proceeds from exercise of stock options 121 357 Net cash provided by financing activities 121 33,600 NET CHANGE IN CASH (6,391 ) 18,000 Cash, beginning of year 20,252 2,252 Cash, end of year $ 13,861 $ 20,252 |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)Branchshares | Dec. 31, 2018USD ($)$ / shares | |
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Entity incorporation, state name | WA | |
Number of branches | Branch | 14 | |
Investment percentage in capital stock of FHLB, outstanding advances | 4.00% | |
Investment percentage in capital stock of FHLB, total assets | 0.12% | |
Federal home loan bank stock shares redeemed per share par value | $ / shares | $ 1 | |
Investment in federal home loan bank stock | $ 1,542,000 | $ 1,767,000 |
Loans held for sale | 0 | 0 |
Reserve for unfunded commitments | 422,000 | 304,000 |
Unrecognized tax benefits | 0 | 0 |
Unrecognized tax benefits, income tax penalties and interest expense | 0 | 0 |
Advertising costs | $ 393,000 | 391,000 |
Minimum | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Estimated useful lives of the assets | 3 years | |
Maximum | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Estimated useful lives of the assets | 39 years | |
SBA | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Loans serviced | $ 21,498,000 | |
SBA | Other Assets | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Servicing assets | 350,000 | |
USDA | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Loans serviced | 20,966,000 | |
USDA | Other Assets | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Servicing assets | 395,000 | |
Federal Reserve Bank Stock | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Investment in federal reserve bank stock | 2,363,000 | 1,899,000 |
Pacific Coast Banker’s Bancshares | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Investment at cost | 100,000 | 100,000 |
Neocova Corporation | ||
Description Of Business And Summary Of Accounting Policies [Line Items] | ||
Investment at cost | $ 500,000 | $ 0 |
Investment, shares | shares | 9,000 |
Recent Accounting Standards - A
Recent Accounting Standards - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Operating lease right-of-use asset | $ 8,493 | $ 9,400 |
Operating lease liability | $ 8,679 | 9,600 |
ASU 2016-02 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Operating lease right-of-use asset | 9,400 | |
Operating lease liability | $ 9,600 |
Investments Securities - Amorti
Investments Securities - Amortized Cost and Fair Values of Investment Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-sale, Amortized Cost | $ 28,401 | $ 38,301 |
Available-for-sale, Gross Unrealized Gains | 4 | |
Available-for-sale, Gross Unrealized Losses | (45) | (1,641) |
Available-for-sale, Fair Value | 28,360 | 36,660 |
Held-to-maturity, Amortized Cost | 4,350 | 1,262 |
Held-to-maturity, Fair Value | 4,329 | |
Total investment securities, Amortized Cost | 32,751 | 39,563 |
Total investment securities, Gross Unrealized Gains | 4 | |
Total investment securities, Gross Unrealized Losses | (66) | (1,698) |
Total investment securities, Fair Value | 32,689 | 37,865 |
U.S. Treasury Securities | ||
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 24,988 | 34,831 |
Available-for-sale, Gross Unrealized Gains | 1 | |
Available-for-sale, Gross Unrealized Losses | (44) | (1,590) |
Available-for-sale, Fair Value | 24,945 | 33,241 |
U.S. Government Agencies | ||
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 3,000 | 3,000 |
Available-for-sale, Gross Unrealized Losses | (1) | (43) |
Available-for-sale, Fair Value | 2,999 | 2,957 |
U.S. Agency Collateralized Mortgage Obligations | ||
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 129 | 172 |
Available-for-sale, Gross Unrealized Losses | (3) | |
Available-for-sale, Fair Value | 129 | 169 |
U.S. Agency Residential Mortgage-Backed Securities | ||
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 27 | 39 |
Available-for-sale, Gross Unrealized Losses | (1) | |
Available-for-sale, Fair Value | 27 | 38 |
Held-to-maturity, Amortized Cost | 4,350 | 1,262 |
Held-to-maturity, Gross Unrealized Losses | (21) | (57) |
Held-to-maturity, Fair Value | 4,329 | 1,205 |
Municipals | ||
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-sale, Amortized Cost | 257 | 259 |
Available-for-sale, Gross Unrealized Gains | 3 | |
Available-for-sale, Gross Unrealized Losses | (4) | |
Available-for-sale, Fair Value | $ 260 | $ 255 |
Investments Securities - Amor_2
Investments Securities - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-Sale, Amortized Cost, Amounts maturing in One year or less | $ 22,990 | |
Available-for-Sale, Amortized Cost, Amounts maturing in After one year through five years | 5,255 | |
Available-for-Sale, Amortized Cost. Amounts maturity with single maturity | 28,245 | |
Available-for-sale, Amortized Cost | 28,401 | $ 38,301 |
Available-for-Sale, Fair Value, Amounts maturing in One year or less | 22,988 | |
Available-for-Sale, Fair Value, Amounts maturing in After one year through five years | 5,216 | |
Available-for-Sale, Fair Value, Amounts maturing with single maturity | 28,204 | |
Available-for-Sale, Fair Value | 28,360 | 36,660 |
Held-to-maturity, Amortized Cost | 4,350 | $ 1,262 |
Held-to-Maturity, Fair Value | 4,329 | |
U.S. Agency Residential Mortgage-backed Securities and Collateralized Mortgage Obligations | ||
Available-for-Sale and Held-to-Maturity Securities [Line Items] | ||
Available-for-Sale, Amortized Cost, Amounts maturity without single maturity | 156 | |
Available-for-Sale, Fair Value, Amounts maturing without single maturity | 156 | |
Held-to-Maturity, Amortized Cost, Amounts maturity without single maturity | 4,350 | |
Held-to-Maturity, Fair Value, Amounts maturing without single maturity | $ 4,329 |
Investments Securities - Additi
Investments Securities - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)InvestmentSecuritySecurity | Dec. 31, 2018USD ($)Security | |
Investments [Abstract] | ||
Investment securities with carrying value pledged to secure public deposits | $ 16,843,000 | $ 19,678,000 |
Number of investment securities sold | InvestmentSecurity | 5 | |
Sales of investment securities | $ 30,026,000 | $ 0 |
Gross gains on investment securities | 242,000 | |
Gross losses on investment securities | $ 71,000 | |
Number of securities in unrealized loss position | Security | 6 | 12 |
Securities other than temporarily impaired | $ 0 | $ 0 |
Investments Securities - Summar
Investments Securities - Summary of Investment Securities Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Fair Value, Less Than 12 Months | $ 9,994 | $ 38 |
Available-for-sale, Gross Unrealized Losses, Less Than 12 Months | (3) | (1) |
Available-for-sale, Fair Value, 12 Months or Greater | 7,955 | 36,622 |
Available-for-sale, Gross Unrealized Losses, 12 Months or Greater | (42) | (1,640) |
Available-for-sale, Total Fair Value | 17,949 | 36,660 |
Available-for-sale, Total Gross Unrealized Losses | (45) | (1,641) |
Held-to-maturity, Fair Value, Less Than 12 Months | 13,134 | 38 |
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months | (17) | (1) |
Held-to-maturity, Fair Value, 12 Months or Greater | 9,144 | 37,827 |
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months | (49) | (1,697) |
Held-to-maturity, Total, Fair Value | 22,278 | 37,865 |
Held-to-maturity, Total, Gross Unrealized Losses | (66) | (1,698) |
U.S. Treasury Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Fair Value, Less Than 12 Months | 9,994 | |
Available-for-sale, Gross Unrealized Losses, Less Than 12 Months | (3) | |
Available-for-sale, Fair Value, 12 Months or Greater | 4,956 | 33,241 |
Available-for-sale, Gross Unrealized Losses, 12 Months or Greater | (41) | (1,590) |
Available-for-sale, Total Fair Value | 14,950 | 33,241 |
Available-for-sale, Total Gross Unrealized Losses | (44) | (1,590) |
U.S. Government Agencies | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Fair Value, 12 Months or Greater | 2,999 | 2,957 |
Available-for-sale, Gross Unrealized Losses, 12 Months or Greater | (1) | (43) |
Available-for-sale, Total Fair Value | 2,999 | 2,957 |
Available-for-sale, Total Gross Unrealized Losses | (1) | (43) |
U.S. Agency Collateralized Mortgage Obligations | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Fair Value, 12 Months or Greater | 169 | |
Available-for-sale, Gross Unrealized Losses, 12 Months or Greater | (3) | |
Available-for-sale, Total Fair Value | 169 | |
Available-for-sale, Total Gross Unrealized Losses | (3) | |
Municipals | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Fair Value, 12 Months or Greater | 255 | |
Available-for-sale, Gross Unrealized Losses, 12 Months or Greater | (4) | |
Available-for-sale, Total Fair Value | 255 | |
Available-for-sale, Total Gross Unrealized Losses | (4) | |
U.S. Agency Residential Mortgage-Backed Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale, Fair Value, Less Than 12 Months | 38 | |
Available-for-sale, Gross Unrealized Losses, Less Than 12 Months | (1) | |
Available-for-sale, Total Fair Value | 38 | |
Available-for-sale, Total Gross Unrealized Losses | (1) | |
Held-to-maturity, Fair Value, Less Than 12 Months | 3,140 | |
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months | (14) | |
Held-to-maturity, Fair Value, 12 Months or Greater | 1,189 | 1,205 |
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months | (7) | (57) |
Held-to-maturity, Total, Fair Value | 4,329 | 1,205 |
Held-to-maturity, Total, Gross Unrealized Losses | $ (21) | $ (57) |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Loans And Leases Receivable Disclosure [Line Items] | |||
Gross loans receivable | $ 941,058 | $ 768,723 | $ 768,723 |
Net deferred origination fees and premiums | (1,955) | (824) | |
Loans receivable | 939,103 | 767,899 | |
Commercial and Industrial Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Gross loans receivable | 111,401 | 90,390 | 90,390 |
Construction, Land and Land Development | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Gross loans receivable | 97,034 | 64,045 | 64,045 |
Residential Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Gross loans receivable | 115,011 | 94,745 | 94,745 |
Commercial Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Gross loans receivable | 613,398 | 515,959 | 515,959 |
Consumer and Other Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Gross loans receivable | $ 4,214 | $ 3,584 | $ 3,584 |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)Loan | Dec. 31, 2018USD ($)Loan | |
Loans And Leases Receivable Disclosure [Line Items] | ||
Overdrafts included in loans | $ 26,000 | $ 36,000 |
Pledged loans for borrowing lines at FHLB and FRB | 163,522,000 | 155,029,000 |
Balance of SBA and USDA loans and participations serviced | 21,498,000 | 24,878,000 |
Purchased loans | 32,937,000 | 45,368,000 |
Unamortized premiums | 527,000 | 701,000 |
Purchased participation loans | 31,352,000 | $ 36,561,000 |
Troubled debt restructuring | $ 0 | |
Number of loans restructured as troubled debt restructurings | Loan | 0 | 0 |
Additional funds to borrowers with troubled debt restructurings | $ 0 | |
Minimum | ||
Loans And Leases Receivable Disclosure [Line Items] | ||
Percentage of collateral coverage to loan balance | 100.00% | |
Loan repayment extended period of time | 6 months | |
Sustained repayment performance period of loan placed on nonaccrual | 6 months |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses - Summary of an Age Analysis of Past Due Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | $ 1,594 | $ 1,562 | |
Current | 939,464 | 767,161 | |
Total Loans | 941,058 | 768,723 | $ 768,723 |
Less net deferred origination fees and premiums | (1,955) | (824) | |
Loans receivable | 939,103 | 767,899 | |
30-89 Days Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 564 | 996 | |
90 Days or More Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 1,030 | 566 | |
Commercial and Industrial Loans | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 1,108 | 665 | |
Current | 110,293 | 89,725 | |
Total Loans | 111,401 | 90,390 | 90,390 |
Commercial and Industrial Loans | 30-89 Days Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 143 | 171 | |
Commercial and Industrial Loans | 90 Days or More Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 965 | 494 | |
Construction, Land and Land Development | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 823 | ||
Current | 97,034 | 63,222 | |
Total Loans | 97,034 | 64,045 | 64,045 |
Construction, Land and Land Development | 30-89 Days Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 823 | ||
Residential Real Estate | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 65 | 72 | |
Current | 114,946 | 94,673 | |
Total Loans | 115,011 | 94,745 | 94,745 |
Residential Real Estate | 90 Days or More Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 65 | 72 | |
Commercial Real Estate | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 417 | ||
Current | 612,981 | 515,959 | |
Total Loans | 613,398 | 515,959 | 515,959 |
Commercial Real Estate | 30-89 Days Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 417 | ||
Consumer and Other Loans | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | 4 | 2 | |
Current | 4,210 | 3,582 | |
Total Loans | 4,214 | 3,584 | $ 3,584 |
Consumer and Other Loans | 30-89 Days Past Due | |||
Financing Receivable Recorded Investment Past Due [Line Items] | |||
Total Past Due | $ 4 | $ 2 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses - Summary of Information Pertaining to Impaired Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | $ 1,506 | $ 2,331 | |
Recorded Investment With No Allowance | 1,030 | $ 1,826 | |
Recorded Investment With Allowance | 2 | ||
Total Recorded Investment | 1,032 | 1,826 | |
Related Allowance | 2 | ||
Commercial and Industrial Loans | |||
Financing Receivable Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 1,431 | 766 | |
Recorded Investment With No Allowance | 965 | 493 | |
Total Recorded Investment | 965 | 493 | |
Residential Real Estate | |||
Financing Receivable Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 73 | 74 | |
Recorded Investment With No Allowance | 65 | 72 | |
Total Recorded Investment | 65 | 72 | |
Commercial Real Estate | |||
Financing Receivable Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | $ 1,491 | ||
Recorded Investment With No Allowance | 1,261 | ||
Total Recorded Investment | $ 1,261 | ||
Consumer Loans | |||
Financing Receivable Impaired [Line Items] | |||
Unpaid Contractual Principal Balance | 2 | ||
Recorded Investment With Allowance | 2 | ||
Total Recorded Investment | 2 | ||
Related Allowance | $ 2 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses - Summary of Average Recorded Investment and Interest Income Recognized on Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable Impaired [Line Items] | ||
Average Recorded Investment | $ 1,348 | $ 2,697 |
Interest Income Recognized | 33 | |
Commercial and Industrial Loans | ||
Financing Receivable Impaired [Line Items] | ||
Average Recorded Investment | 1,026 | 1,103 |
Interest Income Recognized | 28 | |
Residential Real Estate | ||
Financing Receivable Impaired [Line Items] | ||
Average Recorded Investment | 69 | 306 |
Interest Income Recognized | 5 | |
Commercial Real Estate | ||
Financing Receivable Impaired [Line Items] | ||
Average Recorded Investment | 252 | $ 1,288 |
Consumer Loans | ||
Financing Receivable Impaired [Line Items] | ||
Average Recorded Investment | $ 1 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses - Summary of Troubled Debt Restructurings by Accrual Versus Nonaccrual Status and by Loan Class (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable Modifications [Line Items] | ||
Total Restructured Loans | $ 0 | |
Commercial Real Estate | ||
Financing Receivable Modifications [Line Items] | ||
Total Restructured Loans | $ 1,261,000 | |
Commercial Real Estate | Nonaccrual Status | ||
Financing Receivable Modifications [Line Items] | ||
Total Restructured Loans | $ 1,261,000 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses - Analysis of Nonaccrual Loans by Category (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total nonaccrual loans | $ 1,030 | $ 1,826 |
Commercial and Industrial Loans | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total nonaccrual loans | 965 | 493 |
Residential Real Estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total nonaccrual loans | $ 65 | 72 |
Commercial Real Estate | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total nonaccrual loans | $ 1,261 |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses - Summary of Loans by Credit Quality Risk Rating (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | $ 941,058 | $ 768,723 | $ 768,723 |
Less net deferred origination fees and premiums | (1,955) | (824) | |
Loans receivable | 939,103 | 767,899 | |
Commercial and Industrial Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 111,401 | 90,390 | 90,390 |
Construction, Land and Land Development | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 97,034 | 64,045 | 64,045 |
Residential Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 115,011 | 94,745 | 94,745 |
Commercial Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 613,398 | 515,959 | 515,959 |
Consumer and Other Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 4,214 | 3,584 | $ 3,584 |
Pass | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 929,753 | 750,808 | |
Pass | Commercial and Industrial Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 104,911 | 84,859 | |
Pass | Construction, Land and Land Development | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 97,034 | 55,666 | |
Pass | Residential Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 114,823 | 94,548 | |
Pass | Commercial Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 608,773 | 512,151 | |
Pass | Consumer and Other Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 4,212 | 3,584 | |
Other Loans Especially Mentioned | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 9,488 | 14,959 | |
Other Loans Especially Mentioned | Commercial and Industrial Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 4,740 | 3,908 | |
Other Loans Especially Mentioned | Construction, Land and Land Development | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 8,379 | ||
Other Loans Especially Mentioned | Residential Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 123 | 125 | |
Other Loans Especially Mentioned | Commercial Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 4,625 | 2,547 | |
Sub-Standard | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 1,817 | 2,956 | |
Sub-Standard | Commercial and Industrial Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 1,750 | 1,623 | |
Sub-Standard | Residential Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | 65 | 72 | |
Sub-Standard | Commercial Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | $ 1,261 | ||
Sub-Standard | Consumer and Other Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
Loans, gross | $ 2 |
Loans and Allowance for Loan_11
Loans and Allowance for Loan Losses - Summary of Allocation of Allowance for Loan Loss as well as Activity in Allowance for Loan Loss Attributed to Various Segments in Loan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loans And Leases Receivable Disclosure [Line Items] | |||
ALLL Balance | $ 9,407 | $ 8,017 | |
Provision for loan losses or (recapture) | 2,544 | $ 1,826 | |
Loans receivable allowance including provision losses or (recapture) | 11,951 | 9,843 | |
Loans charged-off | (494) | (519) | |
Recoveries of loans previously charged-off | 13 | 83 | |
Net (charge-offs) recoveries | (481) | (436) | |
ALLL Balance | 11,470 | 9,407 | |
Allowances | |||
Amounts allocated to Individually evaluated for impairment | 2 | ||
Amounts allocated to Collectively evaluated for impairment | 11,468 | 9,407 | |
ALLL Balance | 11,470 | 9,407 | |
Loans | |||
Loans individually evaluated for impairment | 1,032 | 1,826 | |
Loans collectively evaluated for impairment | 940,026 | 766,897 | |
Total Loans | 941,058 | 768,723 | 768,723 |
Commercial and Industrial Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
ALLL Balance | 2,039 | 1,864 | |
Provision for loan losses or (recapture) | 677 | 579 | |
Loans receivable allowance including provision losses or (recapture) | 2,716 | 2,443 | |
Loans charged-off | (355) | (408) | |
Recoveries of loans previously charged-off | 5 | 4 | |
Net (charge-offs) recoveries | (350) | (404) | |
ALLL Balance | 2,366 | 2,039 | |
Allowances | |||
Amounts allocated to Collectively evaluated for impairment | 2,366 | 2,039 | |
ALLL Balance | 2,366 | 2,039 | |
Loans | |||
Loans individually evaluated for impairment | 965 | 493 | |
Loans collectively evaluated for impairment | 110,436 | 89,897 | |
Total Loans | 111,401 | 90,390 | 90,390 |
Construction, Land and Land Development | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
ALLL Balance | 1,806 | 1,063 | |
Provision for loan losses or (recapture) | 1,014 | 743 | |
Loans receivable allowance including provision losses or (recapture) | 2,820 | 1,806 | |
Loans charged-off | (75) | ||
Net (charge-offs) recoveries | (75) | ||
ALLL Balance | 2,745 | 1,806 | |
Allowances | |||
Amounts allocated to Collectively evaluated for impairment | 2,745 | 1,806 | |
ALLL Balance | 2,745 | 1,806 | |
Loans | |||
Loans collectively evaluated for impairment | 97,034 | 64,045 | |
Total Loans | 97,034 | 64,045 | 64,045 |
Residential Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
ALLL Balance | 1,647 | 1,343 | |
Provision for loan losses or (recapture) | 422 | 239 | |
Loans receivable allowance including provision losses or (recapture) | 2,069 | 1,582 | |
Recoveries of loans previously charged-off | 65 | ||
Net (charge-offs) recoveries | 65 | ||
ALLL Balance | 2,069 | 1,647 | |
Allowances | |||
Amounts allocated to Collectively evaluated for impairment | 2,069 | 1,647 | |
ALLL Balance | 2,069 | 1,647 | |
Loans | |||
Loans individually evaluated for impairment | 65 | 72 | |
Loans collectively evaluated for impairment | 114,946 | 94,673 | |
Total Loans | 115,011 | 94,745 | 94,745 |
Commercial Real Estate | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
ALLL Balance | 2,648 | 2,014 | |
Provision for loan losses or (recapture) | 507 | 718 | |
Loans receivable allowance including provision losses or (recapture) | 3,155 | 2,732 | |
Loans charged-off | (29) | (84) | |
Net (charge-offs) recoveries | (29) | (84) | |
ALLL Balance | 3,126 | 2,648 | |
Allowances | |||
Amounts allocated to Collectively evaluated for impairment | 3,126 | 2,648 | |
ALLL Balance | 3,126 | 2,648 | |
Loans | |||
Loans individually evaluated for impairment | 1,261 | ||
Loans collectively evaluated for impairment | 613,398 | 514,698 | |
Total Loans | 613,398 | 515,959 | 515,959 |
Consumer and Other Loans | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
ALLL Balance | 77 | 43 | |
Provision for loan losses or (recapture) | 54 | 47 | |
Loans receivable allowance including provision losses or (recapture) | 131 | 90 | |
Loans charged-off | (35) | (27) | |
Recoveries of loans previously charged-off | 8 | 14 | |
Net (charge-offs) recoveries | (27) | (13) | |
ALLL Balance | 104 | 77 | |
Allowances | |||
Amounts allocated to Individually evaluated for impairment | 2 | ||
Amounts allocated to Collectively evaluated for impairment | 102 | 77 | |
ALLL Balance | 104 | 77 | |
Loans | |||
Loans individually evaluated for impairment | 2 | ||
Loans collectively evaluated for impairment | 4,212 | 3,584 | |
Total Loans | 4,214 | 3,584 | 3,584 |
Unallocated | |||
Loans And Leases Receivable Disclosure [Line Items] | |||
ALLL Balance | 1,190 | 1,690 | |
Provision for loan losses or (recapture) | (130) | (500) | |
Loans receivable allowance including provision losses or (recapture) | 1,060 | $ 1,190 | |
ALLL Balance | 1,060 | 1,190 | |
Allowances | |||
Amounts allocated to Collectively evaluated for impairment | 1,060 | 1,190 | |
ALLL Balance | $ 1,060 | $ 1,190 |
Premises and Equipment - Summar
Premises and Equipment - Summary of Investment in Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | $ 20,465 | $ 19,731 |
Less accumulated depreciation and amortization | (7,357) | (6,564) |
Premises and equipment, net | 13,108 | 13,167 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | 2,673 | 2,426 |
Buildings | ||
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | 7,525 | 7,429 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | 3,906 | 3,439 |
Furniture | ||
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | 1,991 | 1,894 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | 3,708 | 3,439 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | 600 | 772 |
Projects in process | ||
Property Plant And Equipment [Line Items] | ||
Premises and equipment, gross | $ 62 | $ 332 |
Premises and Equipment - Additi
Premises and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization on premises and equipment | $ 1,241 | $ 1,071 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Lessee Lease Description [Line Items] | |||
Operating lease ROU assets | $ 8,493,000 | $ 9,400,000 | |
Operating lease liabilities | $ 8,679,000 | $ 9,600,000 | |
Weighted average discount rate used to discount operating lease liabilities | 3.30% | ||
Operating lease not yet commenced | $ 0 | ||
Operating lease, option to extend description | Operating lease terms include options to extend when it is reasonably certain that the Company will exercise such options, determined on a lease-by-lease basis. | ||
Operating lease, existence of option to extend | true | ||
Operating leases weighted-average remaining lease term | 9 years 6 months | ||
Operating lease rental expense | $ 1,400,000 | $ 1,200,000 | |
Sublease and lease income | $ 58,000 | $ 81,000 | |
Minimum | |||
Lessee Lease Description [Line Items] | |||
Operating leases lease term | 2 years | ||
Operating lease, option to renewal period | 5 years | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Operating leases lease term | 26 years | ||
Operating lease, option to renewal period | 10 years |
Leases - Summary of Minimum Ann
Leases - Summary of Minimum Annual Lease Payments under Lease Terms (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2020 | $ 1,322 | |
2021 | 1,309 | |
2022 | 1,314 | |
2023 | 1,325 | |
2024 | 919 | |
2025 and thereafter | 4,033 | |
Total lease payments | 10,222 | |
Less: amounts representing interest | 1,543 | |
Present value of lease liabilities | $ 8,679 | $ 9,600 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Income Receivable Under Noncancelable Operating Leases and Subleases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Lease and Sublease Income | |
2020 | $ 121 |
2021 | 118 |
2022 | 115 |
2023 | 74 |
2024 | 62 |
Total | $ 490 |
Leases - Summary of Components
Leases - Summary of Components of Total Lease Expense and Operating Cash Flows (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease expense: | |
Operating lease expense | $ 1,323 |
Variable lease expense | 148 |
Total lease expense | 1,471 |
Cash paid: | |
Cash paid reducing operating lease liabilities | $ 1,451 |
Deposits - Composition of Conso
Deposits - Composition of Consolidated Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Time Deposits By Maturity [Abstract] | ||
Demand, noninterest bearing | $ 371,243 | $ 293,525 |
Now and money market | 437,908 | 349,952 |
Savings | 53,365 | 52,572 |
Total core deposits | 862,516 | 696,049 |
BaaS brokered deposits | 23,586 | 10,521 |
Time deposits less than $250,000 | 51,644 | 62,272 |
Time deposits $250,000 and over | 30,213 | 34,772 |
Total deposits | $ 967,959 | $ 803,614 |
Deposits - Schedule of Maturity
Deposits - Schedule of Maturity Distribution of Time Deposits (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Deposits [Abstract] | |
Twelve months | $ 60,618 |
One to two years | 15,739 |
Two to three years | 3,588 |
Three to four years | 464 |
Four to five years | 1,448 |
Total time deposits | $ 81,857 |
Federal Home Loan Bank Advanc_3
Federal Home Loan Bank Advances and Other Borrowings - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Federal Home Loan Bank Advances And Other Borrowings [Line Items] | ||
Federal home loan bank advances | $ 10,000,000 | $ 20,000,000 |
Federal home loan bank advances, collateral pledged | 119,695,000 | 112,117,000 |
Available borrowing capacity | 74,891,000 | |
Pledged loans for borrowing lines at FHLB and FRB | 163,522,000 | 155,029,000 |
PCBB | ||
Federal Home Loan Bank Advances And Other Borrowings [Line Items] | ||
Unsecured line of credit | $ 8,000,000 | |
Line of credit facility expiration date | Jun. 30, 2020 | |
Outstanding borrowing | $ 0 | 0 |
Borrower-in-Custody | ||
Federal Home Loan Bank Advances And Other Borrowings [Line Items] | ||
Unsecured line of credit | 21,448,000 | 20,780,000 |
Outstanding borrowing | 0 | 0 |
Pledged loans for borrowing lines at FHLB and FRB | $ 43,827,000 | $ 42,912,000 |
Summary of Federal Home Loan Ba
Summary of Federal Home Loan Bank Advances and Other Borrowings (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Advances From Federal Home Loan Banks [Abstract] | ||
Average balance outstanding | $ 746,000 | $ 1,900,000 |
Maximum amount outstanding at any month-end during the year | 20,000,000 | 20,000,000 |
Balance outstanding at year end | $ 10,000,000 | $ 20,000,000 |
Weighted average interest rate during the year | 2.30% | 2.07% |
Subordinated Debt - Schedule of
Subordinated Debt - Schedule of Subordinated Debt (Details) - USD ($) | Jul. 29, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Subordinated Borrowing [Line Items] | |||
Total liability, at carrying value | $ 9,979,000 | $ 9,965,000 | |
Subordinated Debt | |||
Subordinated Borrowing [Line Items] | |||
Principal amount | $ 10,000,000 | 10,000,000 | 10,000,000 |
Less: unamortized debt issuance costs | (21,000) | (35,000) | |
Total liability, at carrying value | $ 9,979,000 | $ 9,965,000 | |
Stated Maturity: | Aug. 1, 2026 | Aug. 1, 2026 | |
Debt instrument description | Fixed @ 5.65% 5 years; then Wall Street Prime +2.5% starting August 1, 2021 | ||
Interest Rate | 5.65% | 5.65% | |
Term | 5 years | 5 years | |
Subordinated Debt | Wall Street Prime | |||
Subordinated Borrowing [Line Items] | |||
Variable interest rate | 2.50% | 2.50% | |
Debt instrument variable interest rate commencement date | Aug. 1, 2021 |
Subordinated Debt - Additional
Subordinated Debt - Additional Information (Details) - USD ($) | Jul. 29, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Subordinated Borrowing [Line Items] | |||
Accrued interest payable | $ 308,000 | $ 279,000 | |
Subordinated Debt | |||
Subordinated Borrowing [Line Items] | |||
Debt instrument, carrying amount | $ 10,000,000 | $ 10,000,000 | 10,000,000 |
Debt instrument, maturity date | Aug. 1, 2026 | Aug. 1, 2026 | |
Debt instrument, term | 5 years | 5 years | |
Interest rate | 5.65% | 5.65% | |
Debt instrument, frequency of periodic payment | quarterly | ||
Debt instrument, periodic payment, principal | $ 500,000 | ||
Debt instrument, commencement of first payment | Nov. 1, 2021 | ||
Interest expense, debt | $ 587,000 | 587,000 | |
Accrued interest payable | $ 96,000 | $ 96,000 | |
Wall Street Prime | Subordinated Debt | |||
Subordinated Borrowing [Line Items] | |||
Debt instrument, variable rate | 2.50% | 2.50% |
Junior Subordinated Debenture_2
Junior Subordinated Debentures - Schedule of Junior Subordinated Debentures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 15, 2004 | |
Debt Instrument [Line Items] | |||
Total liability, at carrying value | $ 3,583 | $ 3,581 | |
Junior Subordinated Debentures | |||
Debt Instrument [Line Items] | |||
Principal amount | 3,609 | 3,609 | $ 3,609,000 |
Less: unamortized debt issuance costs | (26) | (28) | |
Total liability, at carrying value | $ 3,583 | $ 3,581 | |
Stated Maturity: | Dec. 15, 2034 | ||
Junior Subordinated Debentures | LIBOR | |||
Debt Instrument [Line Items] | |||
Interest Rate Spread: | 2.10% |
Junior Subordinated Debenture -
Junior Subordinated Debenture - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 15, 2004 | |
Debt Instrument [Line Items] | |||
Accrued interest payable | $ 308 | $ 279 | |
Junior Subordinated Debentures | |||
Debt Instrument [Line Items] | |||
Issuance of debentures | $ 3,609 | $ 3,609 | $ 3,609,000 |
Interest rate | 3.99% | 4.88% | |
Interest payable | quarterly | ||
Interest expenses | $ 168,000 | $ 157,000 | |
Accrued interest payable | 6,000 | $ 7,000 | |
Principal payments due in next five years | $ 0 | ||
Junior Subordinated Debentures | LIBOR | |||
Debt Instrument [Line Items] | |||
Debt instrument, variable rate | 2.10% |
Federal Income Taxes - Componen
Federal Income Taxes - Components of Federal Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current tax expense | $ 4,022 | $ 2,923 |
Deferred tax benefit | (561) | (382) |
Total tax expense | $ 3,461 | $ 2,541 |
Federal Income Taxes - Addition
Federal Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Federal Income Tax [Line Items] | ||
Current net income tax receivable | $ 191,000 | |
Net income tax payable | $ 216,000 | |
Valuation allowance changes, description | The realization of deferred income tax assets is regularly assessed and a valuation allowance is recorded if it is “more likely than not” that all or a portion of the deferred tax asset will not be realized. “More likely than not” is defined as greater than a 50% chance. | |
Deferred tax assets valuation allowance | $ 0 | |
Tax year open for examination | 2016 | |
Federal | ||
Federal Income Tax [Line Items] | ||
Operating loss carryforwards | $ 0 |
Federal Income Taxes - Summary
Federal Income Taxes - Summary of Reconciliation of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax at statutory rate | $ 3,499 | $ 2,571 |
Effect of tax-exempt interest income | (98) | (70) |
Stock-based compensation | 64 | 42 |
Bank owned life insurance earnings | (41) | (39) |
Other | 37 | 37 |
Total tax expense | $ 3,461 | $ 2,541 |
Federal income tax at statutory rate | 21.00% | 21.00% |
Effect of tax-exempt interest income | (0.60%) | (0.60%) |
Stock-based compensation | 0.40% | 0.40% |
Bank owned life insurance earnings | (0.20%) | (0.30%) |
Other | 0.20% | 0.30% |
Effective income tax rate reconciliation | 20.80% | 20.80% |
Federal Income Taxes - Schedule
Federal Income Taxes - Schedule of Net Deferred Tax Asset Temporary Differences and Carryforward Items (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Allowance for loan losses | $ 2,409 | $ 1,975 |
Lease liability | 1,761 | |
Accrued expenses | 334 | 178 |
Deferred compensation | 205 | 226 |
Allowance for unfunded commitments | 89 | 64 |
Nonqualified stock options | 88 | 52 |
Interest on nonaccrual loans | 28 | 59 |
Deferred income | 21 | 34 |
Net unrealized loss on available-for-sale securities | 9 | 345 |
Total deferred tax assets | 4,944 | 2,933 |
Deferred tax liabilities: | ||
Right of use asset | (1,748) | |
Depreciation and amortization | (453) | (415) |
Total deferred tax liabilities | (2,201) | (415) |
Net deferred tax asset | $ 2,743 | $ 2,518 |
Related Party Transactions - Su
Related Party Transactions - Summary of Loan Transations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Beginning Balance January 1 | $ 9,753 | $ 5,189 |
Additions | 1,420 | 6,831 |
Payments | (858) | (2,267) |
Ending Balance December 31 | $ 10,315 | $ 9,753 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)Facility | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Related Party Transaction [Line Items] | |||
Related party deposits held | $ 3,022,000 | $ 3,168,000 | |
Number of facilities under lease | Facility | 2 | ||
Loans, related parties | $ 10,315,000 | 9,753,000 | $ 5,189,000 |
Rent paid under related party | 728,000 | $ 721,000 | |
Silver Lake Facility | |||
Related Party Transaction [Line Items] | |||
Operating monthly rental payments | 15,000 | ||
Loans, related parties | 1,811,000 | ||
Everett Branch Facility | |||
Related Party Transaction [Line Items] | |||
Operating monthly rental payments | $ 46,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Reserve for unfunded commitments | $ 422,000 | $ 304,000 |
Commitment losses | $ 0 | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Financial Instruments Contract Amount Represents Credit Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Loss Contingencies [Line Items] | ||
Commitments to extend credit | $ 160,446 | $ 136,500 |
Standby Letters of Credit | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 2,250 | 2,331 |
Commercial and Industrial | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 66,563 | 47,033 |
Construction Commercial Real Estate | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 42,371 | 33,128 |
Construction Residential Real Estate | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 21,361 | 30,269 |
Commercial Real Estate | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 9,888 | 12,871 |
Residential Real Estate | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 19,082 | 12,543 |
Other | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | $ 1,181 | $ 656 |
Concentration of Credit Risk -
Concentration of Credit Risk - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | ||
Uninsured deposits in bank | $ 54,354,000 | $ 36,055,000 |
Maximum | ||
Concentration Risk [Line Items] | ||
Cash, FDIC Insured Amount | $ 250,000 | |
Banking regulations ,credit limitation percentage based on banks capital and surplus | 20.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) | Apr. 30, 2018shares | Jan. 31, 2019shares | Jan. 31, 2018Director$ / sharesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)Director$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted to employees | shares | 125,837 | ||||
Total intrinsic value of options exercise price | $ 185,000 | $ 193,000 | |||
Total unrecognized compensation cost related to nonvested stock options granted | 2,326,000 | ||||
Compensation expense | $ 431,000 | 310,000 | |||
Stock Option Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to nonvested stock options/ RSA granted, weighted-average period | 7 years 4 months 24 days | ||||
Compensation expense | $ 391,000 | 276,000 | |||
Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to nonvested stock options/ RSA granted, weighted-average period | 7 years | ||||
Compensation expense | $ 8,000 | 3,000 | |||
Total unrecognized compensation cost related to nonvested restricted stock awards | $ 52,000 | ||||
Number of shares granted | shares | 2,352 | ||||
2018 Omnibus Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, additional shares authorized | shares | 0 | ||||
Shares available to be granted | shares | 361,411 | ||||
2018 Omnibus Incentive Plan | Nonqualified Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted to employees | shares | 26,737 | ||||
Stock options vesting period | 10 years | ||||
2018 Omnibus Incentive Plan | Restricted Stock Awards | Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Market value of shares grants per year | $ 5,000 | ||||
Cash compensation | (5,000) | ||||
2018 Omnibus Incentive Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate of common stock, shares authorized | shares | 500,000 | ||||
2019 plan | Qualified Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted to employees | shares | 99,100 | ||||
Stock options vesting period | 10 years | ||||
Director's Stock Bonus Plan | Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 32,000 | $ 31,000 | |||
Amended bonus plan expiration date | May 31, 2018 | ||||
Director's Stock Bonus Plan | Restricted Stock Awards | Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Market value of shares grants per year | $ 5,000 | ||||
Number of shares granted | shares | 2,352 | 4,405 | |||
Number of directors | Director | 7 | 5 | |||
Estimated fair value per share | $ / shares | $ 14.91 | $ 7.10 | |||
Director's Stock Bonus Plan | Restricted Stock Awards | Board Chairman | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Market value of shares grants per year | 7,500 | ||||
Director's Stock Bonus Plan | Restricted Stock Awards | Committee Chairmen | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Market value of shares grants per year | $ 6,250 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Assumptions used to Estimate the Value of Options Granted (Details) - 2018 Omnibus Incentive Plan | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term | 10 years |
Expected stock price volatility | 48.79% |
Risk-free interest rate | 2.74% |
Expected dividends | 0.00% |
Weighted average grant date fair value | $ 9.22 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Outstanding, Shares, Beginning balance | 688,310 | |
Granted, Shares | 125,837 | |
Exercised, Shares | (19,530) | |
Forfeited or expired, Shares | (10,400) | |
Outstanding, Shares, Ending balance | 784,217 | 688,310 |
Vested or expected to vest, Shares | 784,217 | |
Exercisable, Shares | 271,221 | |
Outstanding, Weighted Average Exercise Price, Beginning balance | $ 6.39 | |
Granted, Weighted Average Exercise Price | 14.91 | |
Exercised, Weighted Average Exercise Price | 6.20 | |
Forfeited or expired, Weighted Average Exercise price | 8.81 | |
Outstanding, Weighted Average Exercise Price, Ending balance | 7.73 | $ 6.39 |
Vested or expected to vest, Weighted Average Exercise Price | 7.73 | |
Exercisable, Weighted Average Exercise Price | $ 6.07 | |
Outstanding, Weighted Average Remaining Contractual Term | 5 years 11 months 12 days | 6 years 4 months 17 days |
Vested or expected to vest, Weighted Average Remaining Contractual Term | 5 years 11 months 12 days | |
Exercisable, Weighted Average Remaining Contractual Term | 4 years 3 months 10 days | |
Outstanding, Aggregate Intrinsic Value | $ 6,586,968 | $ 6,094,217 |
Vested or expected to vest, Aggregate Intrinsic Value | 6,586,968 | |
Exercisable, Aggregate Intrinsic Value | $ 2,820,827 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Nonvested Shares (Details) - Restricted Stock Awards - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Nonvested shares, Beginning balance | 14,415 | |
Granted, Shares | 2,352 | |
Forfeited, Shares | (1,200) | |
Vested, Shares | (5,310) | |
Nonvested shares, Ending balance | 10,257 | 14,415 |
Nonvested, Weighted-Average Grant Date Fair Value, Beginning balance | $ 9.12 | |
Granted, Weighted-Average Grant Date Fair Value | 14.91 | |
Forfeited, Weighted-Average Grant Date Fair Value | 6.25 | |
Vested, Weighted-Average Grant Date Fair Value | 7.33 | |
Nonvested, Weighted-Average Grant Date Fair Value, Ending balance | $ 11.71 | $ 9.12 |
Nonvested, Aggregate Intrinsic Value | $ 48,864 | $ 88,580 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)Employee | Dec. 31, 2018USD ($) | |
Compensation And Retirement Disclosure [Abstract] | ||
Defined contribution plan, plan name | 401(k) plan | |
Contribution amount | $ 578,000 | $ 436,000 |
Number of former employees covered under deferred compensation plan | Employee | 2 | |
Cash surrender value of life insurance | $ 6,882,000 | 6,688,000 |
Deferred compensation | 974,000 | 1,078,000 |
Compensation expense | 72,000 | 78,000 |
Payment of accrued employee benefits made during period | $ 175,000 | $ 175,000 |
Regulatory Matters - Additional
Regulatory Matters - Additional Information (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 |
Regulated Operations [Abstract] | |||
Deferred tax regulatory assets | $ 0 | $ 0 | |
Capital conservation buffer | 2.50% | 1.875% | 0.00% |
Regulatory Matters - Summary of
Regulatory Matters - Summary of Banks's Actual and Required Capital Amounts and Ratios (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leverage Capital (to average assets) | ||
Leverage Capital, Actual | $ 127,524 | $ 113,807 |
Leverage Capital, Actual Ratio | 11.64% | 12.46% |
Leverage Capital, Minimum Required for Capital Adequacy Purposes | $ 43,806 | $ 36,529 |
Leverage Capital, Minimum Required for Capital Adequacy Purposes, Ratio | 4.00% | 4.00% |
Leverage Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 54,758 | $ 45,661 |
Leverage Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 5.00% | 5.00% |
Common Equity Tier I risk-based capital ratio (to risk-weighted assets) | ||
Common Equity Tier I risk-based capital ratio, Actual | $ 124,024 | $ 110,307 |
Common Equity Tier I risk-based capital ratio, Actual Ratio | 12.78% | 13.70% |
Common Equity Tier I risk-based capital ratio, Minimum Required for Capital Adequacy Purposes | $ 43,659 | $ 36,238 |
Common Equity Tier I risk-based capital ratio, Minimum Required for Capital Adequacy Purposes, Ratio | 4.50% | 4.50% |
Common Equity Tier I risk-based capital ratio, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 63,064 | $ 52,343 |
Common Equity Tier I risk-based capital ratio, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 6.50% | 6.50% |
Tier I Capital (to risk-weighted assets) | ||
Tier I Capital, Actual | $ 127,524 | $ 113,807 |
Tier I Capital, Actual Ratio | 13.14% | 14.13% |
Tier I Capital, Minimum Required for Capital Adequacy Purposes | $ 58,213 | $ 48,317 |
Tier I Capital, Minimum Required for Capital Adequacy Purposes, Ratio | 6.00% | 6.00% |
Tier I Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 77,617 | $ 64,423 |
Tier I Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 8.00% | 8.00% |
Total Capital (to risk-weighted assets) | ||
Capital, Actual | $ 149,416 | $ 133,518 |
Capital, Actual Ratio | 15.40% | 16.58% |
Capital, Minimum Required for Capital Adequacy Purposes | $ 77,617 | $ 64,423 |
Capital, Minimum Required for Capital Adequacy Purposes, Ratio | 8.00% | 8.00% |
Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 97,021 | $ 80,528 |
Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 10.00% | 10.00% |
Bank Only | ||
Leverage Capital (to average assets) | ||
Leverage Capital, Actual | $ 122,904 | $ 103,597 |
Leverage Capital, Actual Ratio | 11.22% | 11.35% |
Leverage Capital, Minimum Required for Capital Adequacy Purposes | $ 43,801 | $ 36,524 |
Leverage Capital, Minimum Required for Capital Adequacy Purposes, Ratio | 4.00% | 4.00% |
Leverage Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 54,751 | $ 45,655 |
Leverage Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 5.00% | 5.00% |
Common Equity Tier I risk-based capital ratio (to risk-weighted assets) | ||
Common Equity Tier I risk-based capital ratio, Actual | $ 122,904 | $ 103,597 |
Common Equity Tier I risk-based capital ratio, Actual Ratio | 12.43% | 12.84% |
Common Equity Tier I risk-based capital ratio, Minimum Required for Capital Adequacy Purposes | $ 44,504 | $ 36,294 |
Common Equity Tier I risk-based capital ratio, Minimum Required for Capital Adequacy Purposes, Ratio | 4.50% | 4.50% |
Common Equity Tier I risk-based capital ratio, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 64,283 | $ 52,425 |
Common Equity Tier I risk-based capital ratio, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 6.50% | 6.50% |
Tier I Capital (to risk-weighted assets) | ||
Tier I Capital, Actual | $ 122,904 | $ 103,597 |
Tier I Capital, Actual Ratio | 12.43% | 12.84% |
Tier I Capital, Minimum Required for Capital Adequacy Purposes | $ 59,338 | $ 48,392 |
Tier I Capital, Minimum Required for Capital Adequacy Purposes, Ratio | 6.00% | 6.00% |
Tier I Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 79,118 | $ 64,253 |
Tier I Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 8.00% | 8.00% |
Total Capital (to risk-weighted assets) | ||
Capital, Actual | $ 134,796 | $ 113,308 |
Capital, Actual Ratio | 13.63% | 14.05% |
Capital, Minimum Required for Capital Adequacy Purposes | $ 79,118 | $ 64,523 |
Capital, Minimum Required for Capital Adequacy Purposes, Ratio | 8.00% | 8.00% |
Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions | $ 98,897 | $ 80,653 |
Capital, Required to be Well Capitalized Under the Prompt Corrective Action Provisions, Ratio | 10.00% | 10.00% |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) | Sep. 26, 2018shares | May 04, 2018shares | Dec. 31, 2019shares | Dec. 31, 2018shares |
Class Of Stock [Line Items] | ||||
Reverse stock split, description | 1-for-5 reverse stock split | |||
Reverse stock split, conversion ratio | 0.2 | |||
Number of issued shares before reverse stock split | 46,268,359 | |||
Number of issued shares after reverse stock split | 9,254,073 | |||
Number of additional shares issued to shareholders with fractional shares | 401 | |||
Class B Nonvoting Common Stock Exchanged for Voting Common Stock | ||||
Class Of Stock [Line Items] | ||||
Shares converted to common stock | 100,000 | |||
Class C Nonvoting Common Stock Exchanged for Voting Common Stock | ||||
Class Of Stock [Line Items] | ||||
Shares converted to common stock | 261,444 | |||
Class B Nonvoting Common Stock | ||||
Class Of Stock [Line Items] | ||||
Common stock, shares issued | 0 | 0 | ||
Common stock, shares outstanding | 0 | 0 | ||
Class C Nonvoting Common Stock | ||||
Class Of Stock [Line Items] | ||||
Common stock, shares issued | 0 | 0 | ||
Common stock, shares outstanding | 0 | 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Estimated Fair Values of Financial Instruments (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Financial assets | ||
Other investments | $ 4,505,000 | $ 3,766,000 |
Financial liabilities | ||
FHLB advances | 10,000,000 | 20,000,000 |
Carrying Value | ||
Financial assets | ||
Cash and due from banks | 16,555,000 | 16,315,000 |
Interest earning deposits with other banks | 111,259,000 | 109,467,000 |
Investment securities | 32,710,000 | 37,922,000 |
Other investments | 4,505,000 | 3,766,000 |
Loans receivable, net | 927,633,000 | 758,491,000 |
Accrued interest receivable | 2,980,000 | 2,526,000 |
Financial liabilities | ||
Deposits | 967,959,000 | 803,614,000 |
FHLB advances | 10,000,000 | 20,000,000 |
Subordinated debt | 9,979,000 | 9,965,000 |
Junior subordinated debentures | 3,583,000 | 3,581,000 |
Accrued interest payable | 308,000 | 279,000 |
Estimated Fair Value | ||
Financial assets | ||
Cash and due from banks | 16,555,000 | 16,315,000 |
Interest earning deposits with other banks | 111,259,000 | 109,467,000 |
Investment securities | 32,689,000 | 37,865,000 |
Other investments | 4,505,000 | 3,766,000 |
Loans receivable, net | 922,046,000 | 743,354,000 |
Accrued interest receivable | 2,980,000 | 2,526,000 |
Financial liabilities | ||
Deposits | 967,804,000 | 802,645,000 |
FHLB advances | 10,000,000 | 20,000,000 |
Subordinated debt | 9,879,000 | 9,804,000 |
Junior subordinated debentures | 3,214,000 | 3,265,000 |
Accrued interest payable | 308,000 | 279,000 |
Estimated Fair Value | Level 1 | ||
Financial assets | ||
Cash and due from banks | 16,555,000 | 16,315,000 |
Interest earning deposits with other banks | 111,259,000 | 109,467,000 |
Investment securities | 24,945,000 | 33,241,000 |
Estimated Fair Value | Level 2 | ||
Financial assets | ||
Investment securities | 7,744,000 | 4,624,000 |
Other investments | 4,005,000 | 3,766,000 |
Accrued interest receivable | 2,980,000 | 2,526,000 |
Financial liabilities | ||
Deposits | 967,804,000 | 802,645,000 |
FHLB advances | 10,000,000 | 20,000,000 |
Subordinated debt | 9,879,000 | 9,804,000 |
Junior subordinated debentures | 3,214,000 | 3,265,000 |
Accrued interest payable | 308,000 | 279,000 |
Estimated Fair Value | Level 3 | ||
Financial assets | ||
Other investments | 500,000 | |
Loans receivable, net | $ 922,046,000 | $ 743,354,000 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | $ 28,360 | $ 36,660 |
Estimated Fair Value | Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 28,360 | 36,660 |
Estimated Fair Value | Recurring | U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 24,945 | 33,241 |
Estimated Fair Value | Recurring | U.S. Government Agencies | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 2,999 | 2,957 |
Estimated Fair Value | Recurring | U.S. Agency Collateralized Mortgage Obligations | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 129 | 169 |
Estimated Fair Value | Recurring | U.S. Agency Residential Mortgage-Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 27 | 38 |
Estimated Fair Value | Recurring | Municipals | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 260 | 255 |
Estimated Fair Value | Recurring | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 24,945 | 33,241 |
Estimated Fair Value | Recurring | Level 1 | U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 24,945 | 33,241 |
Estimated Fair Value | Recurring | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 3,415 | 3,419 |
Estimated Fair Value | Recurring | Level 2 | U.S. Government Agencies | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 2,999 | 2,957 |
Estimated Fair Value | Recurring | Level 2 | U.S. Agency Collateralized Mortgage Obligations | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 129 | 169 |
Estimated Fair Value | Recurring | Level 2 | U.S. Agency Residential Mortgage-Backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 27 | 38 |
Estimated Fair Value | Recurring | Level 2 | Municipals | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | $ 260 | $ 255 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Assets and Liabilities Classified as Level 3 and Measured at Fair Value on Nonrecurring Basis (Details) - Level 3 | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Valuation Technique | Collateral valuations | |
Unobservable Inputs | Discount to appraised value | |
Measurement Input, Discount Rate | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Weighted Average Rate | 10.00% | 9.00% |
Fair Value Measurements - Sum_4
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | $ 1,030 | $ 493 |
Impaired Loans | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 1,030 | 493 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | 1,030 | 493 |
Level 3 | Impaired Loans | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total Fair Value | $ 1,030 | $ 493 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Summary of Noninterest Income by Revenue Stream (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Total noninterest income | $ 8,258 | $ 5,467 |
Interchange Income | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customer | 1,354 | 1,436 |
Merchant Service Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customer | 494 | 455 |
Deposit Service Charges - Overdraft Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customer | 479 | 464 |
Deposit Service Charges - Other | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customer | 780 | 706 |
Deposit Service Charges - BaaS Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customer | 2,060 | 709 |
Loan Referral Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customer | 1,438 | 618 |
Gain on Sale of Loan | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue not from contracts with customer | 490 | 264 |
Mortgage Broker Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue from contracts with customer | 447 | 215 |
Earnings on Life Insurance | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue not from contracts with customer | 194 | 188 |
Gain on Sale of Securities | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue not from contracts with customer | 171 | |
Loan Servicing Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue not from contracts with customer | 70 | 138 |
Lease and Sublease Income | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue not from contracts with customer | 58 | 81 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Other | $ 223 | $ 193 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Details) - Loan Referral Fees | 12 Months Ended |
Dec. 31, 2019 | |
Minimum | |
Disaggregation Of Revenue [Line Items] | |
Interest rate swap agreement extended period | 20 years |
Maximum | |
Disaggregation Of Revenue [Line Items] | |
Interest rate swap agreement extended period | 25 years |
Earnings Per Common Share - Sch
Earnings Per Common Share - Schedule of Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income | $ 13,201 | $ 9,701 |
Basic weighted average number common shares outstanding | 11,896,258 | 10,440,740 |
Dilutive effect of share-based compensation | 299,862 | 168,024 |
Diluted weighted average number common shares outstanding | 12,196,120 | 10,608,764 |
Basic earnings per share | $ 1.11 | $ 0.93 |
Diluted earnings per share | $ 1.08 | $ 0.91 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Options and RSA [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 138,089 | 9,000 |
Parent Company Only Condensed_3
Parent Company Only Condensed Financial Information - Summary of Condensed Financial Information of Coastal Financial Corporation on Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Other investments | $ 4,505 | $ 3,766 |
Other assets | 1,658 | 1,249 |
Total assets | 1,128,526 | 952,110 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Junior subordinated debentures, net of issuances costs | 3,583 | 3,581 |
Subordinated debt, net of debt issuance costs | 9,979 | 9,965 |
Other liabilities | 2,871 | 4,437 |
Total liabilities and shareholders’ equity | 1,128,526 | 952,110 |
Coastal Financial Corporation [Member] | ||
ASSETS | ||
Cash | 13,861 | 20,252 |
Investment in trust equities | 109 | 109 |
Investment in subsidiaries | 123,322 | 102,445 |
Other investments | 500 | |
Other assets | 52 | 6 |
Total assets | 137,844 | 122,812 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Junior subordinated debentures, net of issuances costs | 3,583 | 3,581 |
Subordinated debt, net of debt issuance costs | 9,979 | 9,965 |
Interest and dividends payable | 102 | 103 |
Other liabilities | 7 | 7 |
Shareholders' equity | 124,173 | 109,156 |
Total liabilities and shareholders’ equity | $ 137,844 | $ 122,812 |
Parent Company Only Condensed_4
Parent Company Only Condensed Financial Information - Summary of Condensed Financial Information of Coastal Financial Corporation on Statement of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME | ||
Total interest income | $ 48,587 | $ 38,743 |
EXPENSE | ||
Interest expense | 6,576 | 3,926 |
PROVISION FOR INCOME TAXES | 3,461 | 2,541 |
NET INCOME | 13,201 | 9,701 |
Coastal Financial Corporation [Member] | ||
INCOME | ||
Interest bearing deposits | 5 | 5 |
Total interest income | 5 | 5 |
EXPENSE | ||
Interest expense | 755 | 744 |
Other expenses | 209 | 85 |
Total expense | 964 | 829 |
Loss before income taxes and undistributed net income of subsidiary | (959) | (824) |
Equity in undistributed income of consolidated subsidiaries | 13,960 | 10,360 |
PROVISION FOR INCOME TAXES | (200) | (165) |
NET INCOME | $ 13,201 | $ 9,701 |
Parent Company Only Condensed_5
Parent Company Only Condensed Financial Information - Summary of Condensed Financial Information of Coastal Financial Corporation on Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 13,201 | $ 9,701 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Stock-based compensation | 431 | 310 |
Net cash provided by operating activities | 13,671 | 14,402 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investments in other | (739) | (86) |
Net cash used by investing activities | (164,546) | (139,121) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from initial public offering, net | 33,243 | |
Proceeds from exercise of stock options | 121 | 357 |
Net cash provided by financing activities | 154,466 | 133,919 |
NET INCREASE IN CASH, DUE FROM BANKS AND RESTRICTED CASH | 3,591 | 9,200 |
CASH, DUE FROM BANKS AND RESTRICTED CASH, beginning of year | 40,319 | 31,119 |
CASH, DUE FROM BANKS AND RESTRICTED CASH, end of year | 43,910 | 40,319 |
Coastal Financial Corporation [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | 13,201 | 9,701 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Equity in undistributed income of consolidated subsidiaries | (13,960) | (10,360) |
Stock-based compensation | 33 | 31 |
(Increase) decrease in other assets | (46) | 18 |
Increase in other liabilities | 15 | 10 |
Net cash provided by operating activities | (757) | (600) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investments in subsidiaries | (5,255) | (15,000) |
Investments in other | (500) | |
Net cash used by investing activities | (5,755) | (15,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from initial public offering, net | 33,243 | |
Proceeds from exercise of stock options | 121 | 357 |
Net cash provided by financing activities | 121 | 33,600 |
NET INCREASE IN CASH, DUE FROM BANKS AND RESTRICTED CASH | (6,391) | 18,000 |
CASH, DUE FROM BANKS AND RESTRICTED CASH, beginning of year | 20,252 | 2,252 |
CASH, DUE FROM BANKS AND RESTRICTED CASH, end of year | $ 13,861 | $ 20,252 |