Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 14, 2018 | |
Document And Entity Information Abstract | ||
Entity Registrant Name | Meridian Corp | |
Entity Central Index Key | 1,750,735 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 6,406,795 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Cash and due from banks | $ 25,118 | $ 24,893 |
Federal funds sold | 705 | 10,613 |
Cash and cash equivalents | 25,823 | 35,506 |
Securities available-for-sale (amortized cost of $48,730 and $40,393 as of September 30, 2018 and December 31, 2017) | 47,678 | 40,006 |
Securities held-to-maturity (fair value of $12,572 and $12,869 as of September 30, 2018 and December 31, 2017) | 12,771 | 12,861 |
Mortgage loans held for sale (amortized cost of $33,934 and $34,673 as of September 30, 2018 and December 31, 2017) | 34,044 | 35,024 |
Loans, net of fees and costs (includes $11,308 and $9,972 of loans at fair value, amortized cost of $11,428 and $9,788 as of September 30, 2018 and December 31, 2017) | 806,788 | 694,637 |
Allowance for loan losses | (7,711) | (6,709) |
Total loans and leases | 799,077 | 687,928 |
Restricted investment in bank stock | 4,581 | 6,814 |
Bank premises and equipment, net | 9,947 | 9,741 |
Bank owned life insurance | 11,494 | 11,269 |
Accrued interest receivable | 2,913 | 2,536 |
Other real estate owned | 437 | |
Deferred income taxes | 1,932 | 1,312 |
Goodwill and intangible assets | 5,114 | 5,495 |
Other assets | 4,455 | 7,106 |
Total assets | 959,829 | 856,035 |
Deposits: | ||
Noninterest bearing | 124,855 | 100,454 |
Interest-bearing | 657,072 | 526,655 |
Total deposits | 781,927 | 627,109 |
Short-term borrowings | 43,755 | 99,750 |
Long-term debt | 6,444 | 8,863 |
Subordinated debentures | 9,308 | 13,308 |
Accrued interest payable | 353 | 216 |
Other liabilities | 11,024 | 5,426 |
Total liabilities | 852,811 | 754,672 |
Stockholders’ equity: | ||
Common stock, $1 par value. Authorized 10,000,000 shares; issued and outstanding 6,400,585 and 6,392,287 as of September 30, 2018 and December 31, 2017 | 6,407 | 6,392 |
Surplus | 79,852 | 79,501 |
Retained earnings | 21,567 | 15,768 |
Accumulated other comprehensive loss | (808) | (298) |
Total stockholders’ equity | 107,018 | 101,363 |
Total liabilities and stockholders’ equity | $ 959,829 | $ 856,035 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Available-for-sale, Amortized Cost | $ 48,730 | $ 40,393 |
Securities held-to-maturity, fair value | 12,572 | 12,869 |
Mortgage loans held for sale, amortized cost | 33,934 | 34,673 |
Loans at fair value | 11,188 | 9,972 |
Loans at amortized cost | $ 11,308 | $ 9,788 |
Common stock, par value | $ 1 | $ 1 |
Common stock, Authorized shares | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 6,406,795 | 6,392,287 |
Common Stock, Shares, Outstanding | 6,400,585 | 6,392,287 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest income: | ||||
Loans, including fees | $ 11,218 | $ 8,924 | $ 31,217 | $ 25,148 |
Securities: | ||||
Taxable | 213 | 143 | 549 | 366 |
Tax-exempt | 112 | 110 | 336 | 343 |
Cash and cash equivalents | 30 | 14 | 75 | 55 |
Total interest income | 11,573 | 9,191 | 32,177 | 25,912 |
Interest expense: | ||||
Deposits | 2,485 | 1,207 | 6,171 | 3,079 |
Borrowings | 710 | 643 | 1,790 | 1,728 |
Total interest expense | 3,195 | 1,850 | 7,961 | 4,807 |
Net interest income | 8,378 | 7,341 | 24,216 | 21,105 |
Provision for loan losses | 291 | 665 | 1,258 | 1,445 |
Net interest income after provision for loan losses | 8,087 | 6,676 | 22,958 | 19,660 |
Non-interest income: | ||||
Mortgage banking income | 8,274 | 9,904 | 20,407 | 25,089 |
Wealth management income | 930 | 934 | 2,996 | 1,905 |
Earnings on investment in life insurance | 74 | 83 | 225 | 194 |
Net change in the fair value of derivative instruments | 70 | (503) | 59 | (115) |
Net change in the fair value of loans held-for-sale | (300) | (115) | (241) | 102 |
Net change in the fair value of loans held-for-investment | (103) | 71 | (289) | 113 |
Gain on sale of investment securities available-for-sale | 4 | |||
Service charges | 27 | 22 | 87 | 62 |
Other | 195 | 54 | 1,647 | 168 |
Total non-interest income | 9,167 | 10,450 | 24,891 | 27,522 |
Non-interest expenses: | ||||
Salaries and employee benefits | 8,901 | 10,330 | 26,719 | 29,753 |
Occupancy and equipment | 920 | 992 | 2,870 | 2,818 |
Loan expenses | 769 | 1,000 | 1,962 | 3,008 |
Professional fees | 714 | 481 | 1,670 | 1,384 |
Advertising and promotion | 590 | 597 | 1,802 | 1,537 |
Data processing | 334 | 337 | 924 | 871 |
FDIC assessment | 179 | 183 | 358 | 479 |
Other | 1,346 | 1,092 | 4,084 | 3,207 |
Total non-interest expenses | 13,753 | 15,012 | 40,389 | 43,057 |
Income before income taxes | 3,501 | 2,114 | 7,460 | 4,125 |
Income tax expense | 774 | 716 | 1,661 | 1,381 |
Net income | 2,727 | 1,398 | 5,799 | 2,744 |
Dividends on preferred stock | (289) | (867) | ||
Net income for common stockholders | $ 2,727 | $ 1,109 | $ 5,799 | $ 1,877 |
Basic earnings per common share | $ 0.43 | $ 0.30 | $ 0.91 | $ 0.51 |
Diluted earnings per common share | $ 0.42 | $ 0.30 | $ 0.90 | $ 0.51 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income: | $ 2,727 | $ 1,398 | $ 5,799 | $ 2,744 |
Net change in unrealized gains on investment securities available for sale: | ||||
Net unrealized (losses) gains arising during the period, net of tax (benefit) expense of ($47), ($19), ($141) and $147, respectively | (166) | (31) | (510) | 277 |
Less: reclassification adjustment for net gains on sales realized in net income, net of tax expense of $0, $0, $0, and $1, respectively | (3) | |||
Unrealized investment gains (losses), net of tax expense (benefit) of ($47), ($19), ($141) and $148, respectively | (166) | (31) | (510) | 274 |
Total other comprehensive income | (166) | (31) | (510) | 274 |
Total comprehensive income | $ 2,561 | $ 1,367 | $ 5,289 | $ 3,018 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Tax (benefit) expense on unrealized (losses) gains arising during the period | $ (57) | $ (19) | $ (155) | $ 147 |
Tax expense on reclassification adjustment for net gains on sales realized in net income | 0 | 0 | 0 | 1 |
Tax (benefit) expense on unrealized investment gains (losses) | $ (57) | $ (19) | $ (155) | $ 148 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Common stock | Surplus | Retained Earnings | Accumulated Other Comprehensive Income (loss) | Total |
Balance beginning of the period at Dec. 31, 2017 | $ 6,392 | $ 79,501 | $ 15,768 | $ (298) | $ 101,363 |
Comprehensive income: | |||||
Net income | 5,799 | 5,799 | |||
Change in unrealized gains on securities available-for-sale, net of tax | (510) | (510) | |||
Total comprehensive income | 5,289 | ||||
Share-based awards and exercises | 15 | 15 | |||
Compensation expense related to stock option grants | 351 | 351 | |||
Balance ending of the period at Sep. 30, 2018 | $ 6,407 | $ 79,852 | $ 21,567 | $ (808) | $ 107,018 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Net income | $ 5,799 | $ 2,744 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,088 | 1,673 |
Gain on sale of investment securities | 4 | |
Provision for credit losses | 1,258 | 1,445 |
Compensation expense for stock options | 351 | 110 |
Net change in fair value of loans held for sale | 241 | (102) |
Net change in fair value of derivative instruments | (59) | 115 |
Net change in fair value of contingent assets | 177 | |
Gain on sale of OREO | (57) | |
Proceeds from sale of loans | 513,259 | 556,777 |
Loans originated for sale | (492,113) | (524,363) |
Mortgage banking income | (20,407) | (25,089) |
(Increase) decrease in accrued interest receivable | (377) | 79 |
Increase in other assets | (110) | (202) |
Earnings from investment in life insurance | (225) | (194) |
Deferred income tax benefit | (465) | 279 |
Increase in accrued interest payable | 137 | 185 |
Increase in other liabilities | 1,184 | 3,020 |
Net cash provided by operating activities | 9,681 | 16,481 |
Activity in available-for-sale securities: | ||
Maturities, repayments and calls | 4,080 | 2,928 |
Purchases | (12,768) | (7,178) |
Activity in held-to-maturity securities: | ||
Maturities, repayments and calls | 1,045 | |
Proceeds from sale of OREO | 494 | |
Settlement of forward contracts | (21) | (845) |
Acquisition of wealth management company | (3,225) | |
Decrease in restricted stock | 2,233 | 563 |
Net increase in loans | (107,068) | (72,613) |
Purchases of premises and equipment | (1,499) | (1,628) |
Proceeds from settlement of loans | 2,766 | |
Purchase of bank owned life insurance | (5,999) | |
Net cash used in investing activities | (111,783) | (86,952) |
Cash flows from financing activities: | ||
Net increase in deposits | 154,818 | 90,546 |
Decrease in short term borrowings | (57,795) | (28,358) |
Repayment of long term debt (Acquisition note) | (619) | (206) |
Principal repayment of long term debt (subordinated debt) | (4,000) | |
Share based awards and exercises | 15 | 10 |
Dividends paid on preferred stock | (866) | |
Net cash provided by financing activities | 92,419 | 61,126 |
Net change in cash and cash equivalents | (9,683) | (9,345) |
Cash and cash equivalents at beginning of period | 35,506 | 18,872 |
Cash and cash equivalents at end of period | 25,823 | 9,527 |
Supplemental disclosure of cash flow information: | ||
Interest | 7,392 | 4,622 |
Income taxes | 1,565 | 1,487 |
Supplemental non-cash disclosure: | ||
Net loan assets purchased, not settled | $ 4,490 | |
Acquisition note payable | $ 2,475 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation Meridian Corporation (the “Corporation”) was incorporated on June 8, 2009, by and at the direction of the board of directors of Meridian Bank (the “Bank”) for the sole purpose of acquiring the Bank and serving as the Bank’s parent bank holding company. On August 24, 2018, the Corporation acquired the Bank in a merger and reorganization effected under Pennsylvania law and in accordance with the terms of a Plan of Merger and Reorganization dated April 26, 2018 (the “Agreement”). Pursuant to the Agreement, on August 24, 2018 at 5:00 p.m. each of the 6,402,385 outstanding shares of the Bank’s $1.00 par value common stock formerly held by its shareholders was converted into and exchanged for one newly issued share of the Corporation’s par value common stock, and the Bank became a subsidiary of the Corporation. Because the Bank and the Corporation were entities under common control, this exchange of shares between entities under common control resulted in the retrospective combination of the Bank and the Corporation for all periods presented as if the combination had been in effect since inception of common control. As the Corporation had no assets, liabilities, revenues, expenses or operations prior to August 24, 2018, the historical financial statements of the Bank are the historical financial statements of the combined entity. The Corporation is subject to supervision and examination by, and the regulations and reporting requirements of, the Board of Governors of the Federal Reserve System. The Corporation’s unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position and the results of operations for the interim periods presented have been included. The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses. These unaudited consolidated financial statements should be read in conjunction with the Corporation’s filings with the Securities and Exchange Commission and, for periods prior to the completion of the holding company reorganization, the Bank’s filings with the FDIC, including the Bank’s most recent annual report on Form 10-K (the “2017 Annual Report”) for the year ended December 31, 2017, and subsequently filed quarterly reports on Form 10-Q. Certain prior period amounts have been reclassified to conform with current period presentation. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results for the year ended December 31, 2018 or for any other period. |
Earnings per Common Share
Earnings per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings per Common Share | |
Earnings per Common Share | (2) Earnings per Common Share Basic earnings per common share excludes dilution and is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per common share takes into account the potential dilution computed pursuant to the treasury stock method that could occur if stock options were exercised and converted into common stock. The effects of stock options are excluded from the computation of diluted earnings per share in periods in which the effect would be anti-dilutive. Three Months Ended Nine Months Ended September 30, September 30, (dollars in thousands, except per share data) 2018 2017 2018 2017 Numerator: Net income available to common stockholders $ 2,727 1,109 5,799 1,877 Denominator for basic earnings per share - weighted average shares outstanding 6,402 3,686 6,395 3,686 Effect of dilutive common shares 28 27 31 26 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 6,430 3,713 6,426 3,712 Basic earnings per share $ 0.43 0.30 0.91 0.51 Diluted earnings per share $ 0.42 0.30 0.90 0.51 Antidilutive shares excluded from computation of average dilutive earnings per share 116 50 116 50 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Other Intangibles | |
Goodwill and Other Intangibles | (3) Goodwill and Other Intangibles The Corporation’s goodwill and intangible assets related to the acquisition of HJ Wealth in April 2017 are detailed below: Balance Balance Amortization December 31, Accumulated Fair Value September 30, Period (dollars in thousands) 2017 Amortization Adjustment 2018 (in years) Goodwill - Wealth $ 899 — — 899 Indefinite Total Goodwill 899 — — 899 Intangible assets - trade name 266 — — 266 Indefinite Intangible assets - customer relationships 3,930 (152) — 3,778 20 Intangible assets - non competition agreements 223 (52) — 171 4 Contingent asset 177 (177) — N/A Total Intangible Assets 4,596 (204) (177) 4,215 Total $ 5,495 (204) (177) 5,114 We recognized amortization expense on intangible assets of $68 thousand and $204 thousand, respectively, during the three and nine month periods ended September 30, 2018. The contingent asset was being marked to fair value on a quarterly basis for 18 months after the closing date. As of September 30, 2018 the fair value of the contingent asset was marked to a fair value of $0 as it was determined during the current quarter that it no longer had value. The Corporation performed its annual review of goodwill and identifiable intangible assets in accordance with ASC 350, “Intangibles - Goodwill and Other” as of December 31, 2017. For the period from January 1, 2018 through September 30, 2018, the Corporation determined there were no events that would necessitate impairment testing of goodwill and other intangible assets. |
Securities
Securities | 9 Months Ended |
Sep. 30, 2018 | |
Securities | |
Securities | (4) Securities The amortized cost and fair value of securities as of September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Securities available-for-sale: U.S. government agency mortgage-backed securities $ 24,625 21 (431) 24,215 U.S. government agency collateralized mortgage obligations 13,159 — (271) 12,888 State and municipal securities 9,946 — (341) 9,605 Investments in mutual funds and other equity securities 1,000 — (30) 970 Total securities available-for-sale $ 48,730 21 (1,073) 47,678 Securities held to maturity: U.S. Treasuries $ 1,987 — (18) 1,969 State and municipal securities 10,784 15 (196) 10,603 Total securities held-to-maturity $ 12,771 15 (214) 12,572 December 31, 2017 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Securities available-for-sale: U.S. government agency mortgage-backed securities $ 21,439 19 (190) 21,268 U.S. government agency collateralized mortgage obligations 7,875 2 (99) 7,778 State and municipal securities 10,079 14 (134) 9,959 Investments in mutual funds and other equity securities 1,000 1 — 1,001 Total securities available-for-sale $ 40,393 36 (423) 40,006 Securities held to maturity: U.S. Treasuries $ 1,978 — (8) 1,970 State and municipal securities 10,883 86 (70) 10,899 Total securities held-to-maturity $ 12,861 86 (78) 12,869 At September 30, 2018, the Corporation had twenty-six U.S. government sponsored agency mortgage‑backed securities, seventeen U.S. government sponsored agency collateralized mortgage obligations, twenty-nine state and municipal securities, one mutual fund, and two U.S. treasuries in unrealized loss positions. At December 31, 2017, the Corporation had nineteen U.S. government sponsored agency mortgage‑backed securities, eight U.S. government sponsored agency collateralized mortgage obligations, twenty-two state and municipal securities and one mutual fund in unrealized loss positions. At September 30, 2018, the temporary impairment is primarily the result of changes in market interest rates subsequent to purchase and the Corporation does not intend to sell these securities prior to recovery and it is more likely than not that the Corporation will not be required to sell these securities prior to recovery to satisfy liquidity needs, and therefore, no securities are deemed to be other‑than‑temporarily impaired. The following table shows the Corporation’s investment gross unrealized losses and fair value aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at September 30, 2018 and December 31, 2017: September 30, 2018 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities U.S. government agency mortgage-backed securities $ 11,483 (128) 9,702 (303) 21,185 (431) U.S. government agency collateralized mortgage obligations 8,627 (102) 4,261 (169) 12,888 (271) State and municipal securities 5,019 (112) 4,587 (229) 9,606 (341) Investments in mutual funds and other equity securities 970 (30) — — 970 (30) Total securities available-for-sale $ 26,099 (372) 18,550 (701) 44,649 (1,073) Securities held-to-maturity: U.S. Treasuries $ 1,950 (18) — — 1,950 (18) State and municipal securities 6,537 (98) 2,211 (98) 8,748 (196) Total securities held-to-maturity $ 8,487 (116) 2,211 (98) 10,698 (214) December 31, 2017 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. government agency mortgage-backed securities $ 9,788 (28) 7,854 (162) 17,642 (190) U.S. government agency collateralized mortgage obligations 6,732 (81) 860 (18) 7,592 (99) State and municipal securities 6,147 (57) 2,818 (77) 8,965 (134) Total securities available-for-sale $ 22,667 (166) 11,532 (257) 34,199 (423) Securities held-to-maturity: U.S. Treasuries $ 1,962 (8) — — 1,962 (8) State and municipal securities 4,851 (70) — — 4,851 (70) Total securities held-to-maturity $ 6,813 (78) — — 6,813 (78) The amortized cost and carrying value of securities at September 30, 2018 are shown below by contractual maturities. Actual maturities may differ from contractual maturities as issuers may have the right to call or repay obligations with or without call or prepayment penalties. September 30, 2018 December 31, 2017 Available-for-sale Held-to-maturity Available-for-sale Held-to-maturity Amortized Fair Amortized Fair Amortized Fair Amortized Fair (dollars in thousands) cost value cost value cost value cost value Due in one year or less $ 1,706 1,671 994 985 $ — — — — Due after one year through five years 8,229 8,070 3,746 3,702 5,630 5,587 3,803 3,791 Due after five years through ten years 6,593 6,322 8,031 7,885 6,298 6,228 7,180 7,156 Due after ten years 32,202 31,615 — — 28,465 28,191 1,878 1,922 Total $ 48,730 47,678 12,771 12,572 $ 40,393 40,006 12,861 12,869 |
Loans Receivable
Loans Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Loans Receivable | |
Loans Receivable | (5) Loans Receivable Loans and leases outstanding at September 30, 2018 and December 31, 2017 are detailed by category as follows: September 30, December 31, (dollars in thousands) 2018 2017 Mortgage loans held for sale $ 34,044 35,024 Real estate loans: Commercial mortgage 316,671 263,141 Home equity lines and loans 82,773 84,039 Residential mortgage 50,363 32,375 Construction 104,518 104,970 Total real estate loans 554,325 484,525 Commercial and industrial 252,960 209,996 Consumer 783 1,022 Leases, net 364 762 Total portfolio loans and leases 808,432 696,305 Total loans and leases $ 842,476 731,329 Loans with predetermined rates $ 249,683 202,317 Loans with adjustable or floating rates 592,793 529,012 Total loans and leases $ 842,476 731,329 Net deferred loan origination (fees) costs $ (1,644) (1,668) Components of the net investment in leases at September 30, 2018 and December 31, 2017 are detailed as follows: September 30, December 31, (dollars in thousands) 2018 2017 Minimum lease payments receivable $ 376 793 Unearned lease income (12) (31) Total $ 364 762 Age Analysis of Past Due Loans and Leases The following tables present an aging of the Corporation’s loan and lease portfolio as of September 30, 2018 and December 31, 2017, respectively: Total 90+ days Accruing Nonaccrual September 30, 2018 30-89 days past due and Total past Loans and loans and Total loans Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ 1,155 — 1,155 315,022 316,177 494 316,671 0.52 % Home equity lines and loans 216 — 216 82,472 82,688 85 82,773 0.36 Residential mortgage — — — 48,212 48,212 2,151 50,363 4.27 Construction 315 — 315 104,203 104,518 — 104,518 0.30 Commercial and industrial — — — 252,768 252,768 192 252,960 0.08 Consumer — — — 783 783 — 783 — Leases 123 — 123 241 364 — 364 33.79 Total $ 1,809 — 1,809 803,701 805,510 2,922 808,432 0.59 % Total 90+ days Accruing Nonaccrual December 31, 2017 30-89 days past due and Total past Loans and loans and Total loans Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 262,727 262,727 414 263,141 0.16 % Home equity lines and loans 142 — 142 83,760 83,902 137 84,039 0.33 Residential mortgage 734 — 734 30,557 31,291 1,084 32,375 5.62 Construction — — — 104,785 104,785 185 104,970 0.18 Commercial and industrial — — — 208,670 208,670 1,326 209,996 0.63 Consumer — — — 1,022 1,022 — 1,022 — Leases 87 11 98 664 762 — 762 12.86 Total $ 963 11 974 692,185 693,159 3,146 696,305 0.59 % |
Allowance for Loan Losses (the
Allowance for Loan Losses (the "Allowance") | 9 Months Ended |
Sep. 30, 2018 | |
Allowance for Loan Losses (the "Allowance") | |
Allowance for Loan Losses (the "Allowance") | (6) Allowance for Loan Losses (the “Allowance”) The Allowance is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the Allowance, and subsequent recoveries, if any, are credited to the Allowance. The Allowance is maintained at a level considered adequate to provide for losses that are probable and estimable. Management’s periodic evaluation of the adequacy of the Allowance is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available. Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment The following tables detail the roll‑forward of the Corporation’s Allowance, by portfolio segment, for the three and nine month periods ended September 30, 2018 and 2017, respectively: Balance, Balance, (dollars in thousands) June 30, 2018 Charge-offs Recoveries Provision September 30, 2018 Commercial mortgage $ 3,011 — 2 140 3,153 Home Equity lines and loans 269 — 10 37 316 Residential mortgage 166 — — 14 180 Construction 1,438 — — 59 1,497 Commercial and industrial 2,559 (50) 8 41 2,558 Consumer 3 — 1 — 4 Leases 3 — — — 3 Unallocated — — — — — Total $ 7,449 (50) 21 291 7,711 Balance, Balance, (dollars in thousands) December 31, 2017 Charge-offs Recoveries Provision September 30, 2018 Commercial mortgage $ 2,434 — 6 713 3,153 Home Equity lines and loans 280 (137) 14 159 316 Residential mortgage 82 — 61 37 180 Construction 1,689 — — (192) 1,497 Commercial and industrial 2,214 (244) 41 547 2,558 Consumer 5 — 3 (4) 4 Leases 5 — — (2) 3 Unallocated — — — — — Total $ 6,709 (381) 125 1,258 7,711 Balance, Balance, (dollars in thousands) June 30, 2017 Charge-offs Recoveries Provision September 30, 2017 Commercial mortgage $ 2,423 (52) — 9 2,380 Home Equity lines and loans 228 — 52 (58) 222 Residential mortgage 79 — — (2) 77 Construction 1,388 — — 93 1,481 Commercial and industrial 2,086 (528) 7 626 2,191 Consumer 2 — 1 (2) 1 Leases 8 — — (1) 7 Unallocated — — — — — Total $ 6,214 (580) 60 665 6,359 Balance, Balance, (dollars in thousands) December 31, 2016 Charge-offs Recoveries Provision September 30, 2017 Commercial mortgage $ 2,038 (83) 16 409 2,380 Home Equity lines and loans 460 (42) 46 (242) 222 Residential mortgage 85 — 2 (10) 77 Construction 690 — — 791 1,481 Commercial and industrial 1,973 (647) 193 672 2,191 Consumer 2 — 4 (5) 1 Leases 5 — — 2 7 Unallocated 172 — — (172) — Total $ 5,425 (772) 261 1,445 6,359 Allowance for Loan and Lease Losses Allocated by Portfolio Segment The following tables detail the allocation of the allowance for loan and lease losses and the carrying value for loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, 2018 and December 31, 2017. Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively September 30, 2018 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 3,153 3,153 $ 1,703 314,968 316,671 Home Equity lines and loans — 316 316 85 82,688 82,773 Residential mortgage — 180 180 249 38,926 39,175 Construction — 1,497 1,497 1,296 103,222 104,518 Commercial and industrial 7 2,551 2,558 3,143 249,817 252,960 Consumer — 4 4 — 783 783 Leases — 3 3 — 364 364 Unallocated — — — — — — Total $ 7 7,704 7,711 $ 6,476 790,768 797,244 (1) Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2017 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 2,434 2,434 $ 1,533 261,607 263,140 Home Equity lines and loans — 280 280 137 83,902 84,039 Residential mortgage — 82 82 249 22,155 22,404 Construction — 1,689 1,689 260 104,710 104,970 Commercial and industrial 1 2,213 2,214 2,506 207,490 209,996 Consumer — 5 5 — 1,022 1,022 Leases — 5 5 — 762 762 Unallocated — — — — — — Total $ 1 6,708 6,709 $ 4,685 681,648 686,333 (1) (1) Excludes deferred fees and loans carried at fair value. Loans and Leases by Credit Ratings As part of the process of determining the Allowance to the different segments of the loan and lease portfolio, management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by management. The results of these reviews are reflected in the risk grade assigned to each loan. These internally assigned grades are as follows: · Pass - Loans considered to be satisfactory with no indications of deterioration. · Special mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. · Substandard – Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. · Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing factors, conditions, and values, highly questionable and improbable. Loan balances classified as doubtful have been reduced by partial charge-offs and are carried at their net realizable values. The following tables detail the carrying value of loans and leases by portfolio segment based on the credit quality indicators used to allocate the allowance for loan and lease losses as of September 30, 2018 and December 31, 2017: September 30, 2018 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 311,857 4,539 275 — 316,671 Home equity lines and loans 82,606 — 167 — 82,773 Construction 102,361 2,157 — — 104,518 Commercial and industrial 234,055 16,016 2,859 30 252,960 Total $ 730,879 22,712 3,301 30 756,922 December 31, 2017 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 258,337 3,917 887 — 263,141 Home equity lines and loans 83,902 — 137 — 84,039 Construction 103,118 1,852 — — 104,970 Commercial and industrial 194,784 13,997 448 767 209,996 Total $ 640,141 19,766 1,472 767 662,146 In addition to credit quality indicators as shown in the above tables, allowance allocations for residential mortgages, consumer loans and leases are also applied based on their performance status as of September 30, 2018 and December 31, 2017. No troubled debt restructurings performing according to modified terms are included in performing residential mortgages below as of September 30, 2018 and December 31, 2017. September 30, 2018 December 31, 2017 (dollars in thousands) Performing Nonperforming Total Performing Nonperforming Total Residential mortgage $ 38,926 249 39,175 $ 22,154 249 22,403 Consumer 783 — 783 1,022 — 1,022 Leases 364 — 364 762 — 762 Total $ 40,073 249 40,322 $ 23,938 249 24,187 There were seven nonperforming residential mortgage loans at September 30, 2018 and four at December 31, 2017 with a combined outstanding principal balance of $1.9 million and $826 thousand, respectively, which were carried at fair value and not included in the table above. Impaired Loans The following tables detail the recorded investment and principal balance of impaired loans by portfolio segment, their related allowance for loan and lease losses and interest income recognized for the periods. At September 30, 2018 At December 31, 2017 Average Average Recorded Principal Related recorded Recorded Principal Related recorded (dollars in thousands) investment balance allowance investment investment balance allowance investment Impaired loans with related allowance: Commercial mortgage $ — — — — — — — — Commercial and industrial 479 479 7 476 124 491 1 173 Home equity lines and loans — — — — — — — — Residential mortgage — — — — — — — — Construction — — — — — — — — Total 479 479 7 476 124 491 1 173 Impaired loans without related allowance: Commercial mortgage $ 1,703 2,136 — 1,698 1,534 2,025 — 1,537 Commercial and industrial 2,664 2,746 — 2,748 1,907 3,180 — 2,945 Home equity lines and loans 85 89 — 86 137 137 — 137 Residential mortgage 249 258 — 254 249 249 — 249 Construction 1,296 1,296 — 1,401 260 260 — 267 Total 5,997 6,525 — 6,187 4,087 5,851 — 5,135 Grand Total $ 6,476 7,004 7 6,663 4,211 6,342 1 5,308 Interest income recognized on performing impaired loans amounted to $93 thousand and $63 thousand for the three months ended September 30, 2018 and 2017, respectively, and $218 thousand and $213 thousand for the nine months ended September 30, 2018 and 2017, respectively. Troubled Debt Restructuring The restructuring of a loan is considered a “troubled debt restructuring” (“TDR”) if both of the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the creditor has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan, and (e) for leases, a reduced lease payment. A less common concession granted is the forgiveness of a portion of the principal. The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower were a concession not granted. The determination of whether a concession has been granted is subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender. The balance of TDRs at September 30, 2018 and December 31, 2017 are as follows: September 30, December 31, (dollars in thousands) 2018 2017 TDRs included in nonperforming loans and leases $ TDRs in compliance with modified terms Total TDRs $ The following tables present information regarding loan and lease modifications granted during the three and nine months ended September 30, 2018 that were categorized as TDRs: For the Three Months Ended September 30, 2018 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Related (dollar in thousands) Contracts Investment Investment Allowance Real Estate: Land and Construction 1 $ 796 $ 796 $ — Total 1 $ 796 $ 796 $ — For the Nine Months Ended September 30, 2018 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Related (dollar in thousands) Contracts Investment Investment Allowance Real Estate: Land and Construction 2 $ 2,410 $ 2,410 $ — Commercial and industrial 1 120 120 — Total 3 $ 2,530 $ 2,530 $ — No loan and lease modifications granted during the three and nine months ended September 30, 2018 subsequently defaulted during the same time period. The following table presents information regarding loan and lease modifications granted during the nine months ended September 30, 2017 that were categorized as TDRs: For the Nine Months Ended September 30, 2017 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Related (dollar in thousands) Contracts Investment Investment Allowance Real Estate: Commercial and industrial 1 $ 165 $ 165 $ — Total 1 $ 165 $ 165 $ — No loan and lease modifications granted during the nine months ended September 30, 2017 subsequently defaulted during the same time period. There were no loan and lease modifications made for the three months ended September 30, 2017. The following tables present information regarding the types of loan and lease modifications made for the three and nine months ended September 30, 2018 and 2017: For the Three Months Ended For the Three Months Ended September 30, 2018 September 30, 2017 Interest Rate Interest Rate Loan Term Change and Loan Loan Term Change and Loan Extension Term Extension Extension Term Extension Land and Construction 1 — — — Total 1 — — — For the Nine Months Ended For the Nine Months Ended September 30, 2018 September 30, 2017 Interest Rate Interest Rate Loan Term Change and Loan Loan Term Change and Loan Extension Term Extension Extension Term Extension Land and Construction 2 — — — Commercial and industrial — 1 — 1 Total 2 1 — 1 |
Short-Term Borrowings and Long
Short-Term Borrowings and Long -Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Short-Term Borrowings and Long-Term Debt | |
Short-Term Borrowings and Long-Term Debt | (7) Short-Term Borrowings and Long‑Term Debt The Corporation’s short‑term borrowings generally consist of federal funds purchased and short‑term borrowings extended under agreements with the Federal Home Loan Bank of Pittsburgh (“FHLB”). The Corporation has two unsecured Federal Funds borrowing facilities with correspondent banks: one of $24,000,000 and one of $15,000,000. The Corporation had Federal funds purchased of $0 and $0 at September 30, 2018 and December 31, 2017, respectively. The Corporation also has a facility with the Federal Reserve discount window of $10,667,121. This facility is secured by investment securities and loans. There were no borrowings under this facility at September 30, 2018 or at December 31, 2017 Short‑term borrowings as of September 30, 2018 consisted of short‑term advances from the FHLB in the amount of $40,755,700 with interest at 2.10%, $1,800,000 with an original term of 4 years with interest at 1.70% and $1,200,000 with an original term of 2 years and interest at 0.97%. Short‑term borrowings as of December 31, 2017 consisted of short-term advances from the FHLB in the amount of $93,750,000 with interest at 1.54%, $2,500,000 with an original term of 5 years and interest at 1.92%, $1,200,000 with an original term of 2 years and interest at 0.97%, $1,000,000 with an original term of 4 years and interest at 1.68% and $1,300,000 with an original term of 4 years and interest at 1.55%. Long‑term debt at September 30, 2018 and December 31, 2017 consisted of the following fixed rate notes with the FHLB and the acquisition purchase note issued in connection with HJ Wealth: Balance as of Maturity Interest September 30, December 31, (dollars in thousands) date rate 2018 2017 Mid-term Repo-fixed 06/26/19 1.70 % — 1,800 Mid-term Repo-fixed 08/10/20 2.76 % 5,000 5,000 Acquisition Purchase Note 04/01/20 3.00 % 1,444 2,063 $ 6,444 8,863 The FHLB has also issued $88,100,000 of letters of credit to the Corporation for the benefit of the Corporation’s public deposit funds and loan customers. These letters of credit expire by December 31, 2018. The Corporation has a maximum borrowing capacity with the FHLB of $432,816,917 as of September 30, 2018 and $380,159,142 as of December 31, 2017. All advances and letters of credit from the FHLB are secured by qualifying assets of the Corporation. |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements and Disclosures | |
Fair Value Measurements and Disclosures | (8) Fair Value Measurements and Disclosures The Corporation uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of a financial instrument is 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. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Corporation’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation techniques or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. In accordance with this guidance, the Corporation groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation. For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 (dollars in thousands) Total Level 1 Level 2 Level 3 Securities available for sale: U.S. government agency mortgage-backed securities $ 24,215 — 24,215 — U.S. government agency collateralized mortgage obligations 12,888 — 12,888 — State and municipal securities 9,605 — 9,605 — Investments in mutual funds and other equity securities 970 — 970 — Mortgage loans held-for-sale 34,044 — 34,044 — Mortgage loans held-for-investment 11,188 — 11,188 — Interest rate lock commitments 200 — — 200 Total $ 93,110 — 92,910 200 December 31, 2017 (dollars in thousands) Total Level 1 Level 2 Level 3 Securities available for sale: U.S. government agency mortgage-backed securities $ 21,268 — 21,268 — U.S. government agency collateralized mortgage obligations 7,778 — 7,778 — State and municipal securities 9,959 — 9,959 — Investments in mutual funds and other equity securities 1,001 — 1,001 — Mortgage loans held-for-sale 35,024 — 35,024 — Mortgage loans held-for-investment 9,972 — 9,972 — Interest rate lock commitments 310 — — 310 Total $ 85,312 — 85,002 310 For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 (dollars in thousands) Total Level 1 Level 2 Level 3 Impaired loans (2) $ 6,476 — — 6,476 Other real estate owned (1) — — — — Total $ 6,476 — — 6,476 December 31, 2017 (dollars in thousands) Total Level 1 Level 2 Level 3 Impaired loans (2) $ 4,685 — — 4,685 Other real estate owned (1) 437 — — 437 Total $ 5,122 — — 5,122 (1) Real estate properties acquired through, or in lieu of, foreclosure are to be sold and are carried at fair value less estimated cost to sell. Fair value is based upon independent market prices or appraised value of the property. These assets are included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. Appraised values may be discounted based on management’s expertise, historical knowledge, changes in market conditions from the time of valuation and/or estimated costs to sell. (2) Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third‑party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Below is management’s estimate of the fair value of all financial instruments, whether carried at cost or fair value on the Corporation’s balance sheet. The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a fair value calculation is only provided for a limited portion of the Corporation’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair value of the Corporation’s financial instruments: (a) Cash and Cash Equivalents The carrying amounts reported in the balance sheet for cash and short‑term instruments approximate those assets’ fair values. (b) Securities The fair value of securities available‑for‑sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. (c) Mortgage Loans Held for Sale The fair value of mortgage loans held for sale is based on secondary market prices. (d) Loans Receivable The fair value of loans receivable is estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate‑risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair value below is not reflective of an exit price. (e) Mortgage Loans Held for Investment The fair value of mortgage loans held for investment is based on the price secondary markets are currently offering for similar loans using observable market data . (f) Impaired Loans Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third‑party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. (g) Restricted Investment in Bank Stock The carrying amount of restricted investment in bank stock approximates fair value, and considers the limited marketability of such securities. (h) Accrued Interest Receivable and Payable The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value. (i) Deposit Liabilities The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed‑rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. (j) Short‑Term Borrowings The carrying amounts of short‑term borrowings approximate their fair values. (k) Long‑Term Debt Fair values of FHLB advances and the acquisition purchase note payable are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party. (l) Subordinated Debt Fair values of junior subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity. (m) Off‑Balance Sheet Financial Instruments Off-balance sheet instruments are primarily comprised of loan commitments, which are generally priced at market at the time of funding. Fees on commitments to extend credit and stand-by letters of credit are deemed to be immaterial and these instruments are expected to be settled at face value or expire unused. It is impractical to assign any fair value to these instruments and as a result they are not included in the table below. Fair values assigned to the notional value of interest rate lock commitments and forward sale contracts are based on market quotes. (n) Derivative Financial Instruments The fair value of interest rate lock commitments is based on investor quotes which consider pull-through rates, while the fair value of forward commitments is based on market pricing. The estimated fair values of the Corporation’s financial instruments at September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 December 31, 2017 Fair Value Carrying Carrying (dollars in thousands) Hierarchy Level amount Fair value amount Fair value Financial assets: Cash and cash equivalents Level 1 $ 25,823 25,823 35,506 35,506 Securities available-for-sale Level 2 47,678 47,678 40,006 40,006 Securities held-to-maturity Level 2 12,771 12,572 12,861 12,869 Mortgage loans held-for-sale Level 2 34,044 34,044 35,024 35,024 Loans receivable, net Level 3 787,889 780,958 677,956 669,852 Mortgage loans held-for-investment Level 2 11,188 11,188 9,972 9,972 Interest rate lock commitments Level 3 200 200 310 310 Forward commitments Level 2 93 93 — — Restricted investment in bank stock Level 3 4,581 4,581 6,814 6,814 Accrued interest receivable Level 3 2,913 2,913 2,536 2,536 Financial liabilities: Deposits Level 2 781,927 775,300 627,109 626,635 Short-term borrowings Level 2 43,755 43,755 99,750 99,750 Long-term debt Level 2 6,444 6,458 8,863 8,865 Subordinated debentures Level 2 9,308 9,241 13,308 12,883 Accrued interest payable Level 2 353 353 216 216 Forward commitments Level 2 — — 75 75 Notional Notional Off-balance sheet financial instruments: amount Fair value amount Fair value Commitments to extend credit Level 2 $ 258,719 200 220,180 310 Letters of credit Level 2 2,529 — 1,809 — |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | (9) Derivative Financial Instruments Mortgage Banking Derivatives In connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans or interest rate locks at a fixed price at a future date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Interest rate lock commitments and forward commitments are recorded within other assets/liabilities on the consolidated balance sheets, with changes in fair values during the period recorded within net change in the fair value of derivative instruments on the unaudited consolidated statements of income. The following table presents a summary of the notional amounts and fair values of derivative financial instruments: September 30, 2018 December 31, 2017 (dollars in thousands) Notional Asset Notional Asset Interest Rate Lock Commitments Positive fair values $ 32,445 284 38,574 344 Negative fair values 9,603 (84) 7,201 (34) Net interest rate lock commitments 42,048 200 45,775 310 Forward Commitments Positive fair values 25,000 107 6,500 5 Negative fair values 8,500 (14) 32,250 (80) Net forward commitments 33,500 93 38,750 (75) Net derivative fair value asset $ 75,548 293 84,525 235 Interest rate lock commitments are considered Level 3 in the fair value hierarchy, while the forward commitments are considered Level 2 in the fair value hierarchy. The following table presents a summary of the fair value gains and losses on derivative financial instruments: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2018 2017 2018 2017 Interest Rate Lock Commitments $ (224) (423) (110) (162) Forward Commitments 294 (80) 169 47 Net fair value gains (losses) on derivative financial instrument $ 70 (503) 59 (115) Realized gains/(losses) on derivatives were ($170 thousand) thousand and $278 thousand for the three months ended September 30, 2018 and 2017, respectively, and $534 thousand and $845 thousand for the nine months ended September 30, 2018 and 2017, respectively, and are included in other non-interest income in the unaudited consolidated statements of income. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2018 | |
Segments | |
Segments | (10) Segments ASC Topic 280 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations. Our Banking segment consists of commercial and retail banking. The Banking segment generates interest income from its lending (including leasing) and investing activities and is dependent on the gathering of lower cost deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including gains on the sale of available for sale investment securities, gains on the sale of residential mortgage loans, service charges on deposit accounts, cash sweep fees, overdraft fees, BOLI income. Meridian Wealth, a registered investment advisor and wholly-owned subsidiary of the Corporation, provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future. The unit generates non-interest income through advisory fees. Meridian’s mortgage banking segment (“Mortgage”) consists of one central loan production facility and several retail and profit sharing loan production offices located throughout the Delaware Valley. The Mortgage segment originates 1 – 4 family residential mortgages and sells all of its production, including servicing to third party investors. The unit generates net interest income on the loans it originates and earns fee income (primarily gain on sales) at the time of the sale. The table below summarizes income and expenses, directly attributable to each business line, which has been included in the statement of operations. Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 8,107 71 200 8,378 $ 7,190 31 120 7,341 Provision for loan losses (291) — — (291) (665) — — (665) Net interest income after provision 7,816 71 200 8,087 6,525 31 120 6,676 Non-interest Income Mortgage banking income 105 — 8,169 8,274 67 — 9,837 9,904 Wealth management income 59 871 — 930 18 916 — 934 Net change in fair values — — (333) (333) — — (547) (547) Other 363 — (67) 296 353 — (194) 159 Total non-interest income 527 871 7,769 9,167 438 916 9,096 10,450 Non-interest Expense Salaries and employee benefits 3,264 445 5,192 8,901 3,237 411 6,682 10,330 Occupancy and equipment 521 29 370 920 575 26 391 992 Professional fees 590 9 115 714 394 5 82 481 Advertising and promotion 301 111 178 590 254 126 217 597 Other 1,259 314 1,055 2,628 1,238 198 1,176 2,612 Total non-interest expense 5,935 908 6,910 13,753 5,698 766 8,548 15,012 Operating Margin $ 2,408 34 1,059 3,501 $ 1,265 181 668 2,114 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 (dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 23,597 217 402 24,216 $ 20,733 70 302 21,105 Provision for loan losses (1,258) — — (1,258) (1,445) — — (1,445) Net interest income after provision 22,339 217 402 22,958 19,288 70 302 19,660 Non-interest Income Mortgage banking income 148 — 20,259 20,407 67 — 25,022 25,089 Wealth management income 149 2,847 — 2,996 233 1,672 — 1,905 Net change in fair values — — (471) (471) — — 100 100 Other 1,136 — 823 1,959 995 — (567) 428 Total non-interest income 1,433 2,847 20,611 24,891 1,295 1,672 24,555 27,522 Non-interest Expense Salaries and employee benefits 10,390 1,373 14,956 26,719 9,874 856 19,023 29,753 Occupancy and equipment 1,599 99 1,172 2,870 1,666 52 1,100 2,818 Professional feees 1,325 20 325 1,670 943 125 316 1,384 Advertising and promotion 917 319 566 1,802 746 205 586 1,537 Other 3,827 613 2,888 7,328 3,766 303 3,496 7,565 Total non-interest expense 18,058 2,424 19,907 40,389 16,995 1,541 24,521 43,057 Operating Margin $ 5,714 640 1,106 7,460 $ 3,588 201 336 4,125 |
Recent Litigation
Recent Litigation | 9 Months Ended |
Sep. 30, 2018 | |
Recent Litigation | |
Recent Litigation | (11) Recent Litigation On November 21, 2017, three former employees of the mortgage-banking division of the Bank filed suit in the United States District Court for the Eastern District of Pennsylvania, Juan Jordan et al. v. Meridian Bank, Thomas Campbell and Christopher Annas , against the Bank purporting to be a class and collective action seeking unpaid and overtime wages under the Fair Labor Standards Act of 1938, the New Jersey Wage and Hour Law, and the Pennsylvania Minimum Wage Act of 1968 on behalf of similarly situated plaintiffs. In February 2018, the Bank answered the complaint and presented affirmative defenses. In March 2018, plaintiffs’ counsel and the Bank agreed to move forward with non-binding mediation. Although the Bank believes it has strong and meritorious defenses, given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for, among other things, success on the merits, the Bank has recorded a $200 thousand reserve as a reasonable estimate for possible losses that may result from this action. This estimate may change from time to time, and actual losses could vary. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | (12) Recent Accounting Pronouncements As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), Meridian Corporation is permitted an extended transition period for complying with new or revised accounting standards affecting public companies. We will remain an emerging growth company until the earliest of (i) the end of the fiscal year during which we have total annual gross revenues of $1,070,000,000 or more, (ii) the end of the fiscal year following the fifth anniversary of the completion of our initial offering, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt and (iv) the end of the fiscal year in which the market value of our equity securities that are held by non-affiliates exceeds $700 million as of June 30 of that year. We have elected to take advantage of this extended transition period, which means that the financial statements included herein, as well as any financial statements that we file in the future, will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period for so long as we remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act. If we do so, we will prominently disclose this decision in the first periodic report following our decision, and such decision is irrevocable. As a filer under the JOBS Act, we will implement new accounting standards subject to the effective dates required for non-public entities. FASB Accounting Standards Update (“ASU”) No. 2014‑09 (Topic 606), “Revenue from Contracts with Customers” Issued in May 2014, ASU 2014‑09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. In August 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015‑14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This amendment defers the effective date of ASU 2014‑09 by one year. In March 2016, the FASB issued ASU 2016‑ 08”, “Principal versus Agent Considerations (Reporting Gross versus Net),” which amends the principal versus agent guidance and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer. In addition, the FASB issued ASU Nos. 2016‑20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” and 2016‑12, “Narrow-Scope Improvements and Practical Expedients”, both of which provide additional clarification of certain provisions in Topic 606. These Accounting Standards Codification (“ASC”) updates are effective for public companies for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. Early adoption is permitted only as of annual reporting periods after December 15, 2016. The standard permits the use of either the ‘retrospective’ or ‘retrospectively with the cumulative effect’ transition method. For non-public companies, the ASC updates are effective for annual reporting periods beginning after December 15, 2018, and interim periods beginning after December 15, 2019. The Corporation expects to adopt ASU 2014-09 for the fiscal year ending December 31, 2019 and is evaluating all revenue streams, accounting policies, practices and reporting to identify and understand any impact on the Corporation’s Consolidated Financial Statements and related disclosures. FASB ASU 2017‑04 (Topic 350), “Intangibles – Goodwill and Others” Issued in January 2017, ASU 2017‑04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017‑04 is effective for public companies for annual periods beginning after December 15, 2019 including interim periods within those periods. ASU 2017‑04 is effective for non-public companies for annual periods beginning after December 15, 2021 including interim periods within those periods. The Corporation is evaluating the effect that ASU 2017‑04 will have on its consolidated financial statements and related disclosures. FASB ASU 2017‑01 (Topic 805), “Business Combinations” Issued in January 2017, ASU 2017‑01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017‑01 is effective for public companies for annual periods beginning after December 15, 2017 including interim periods within those periods, while for non-public companies the ASU is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Corporation is evaluating the effect that ASU 2017‑01 will have on its consolidated financial statements and related disclosures. FASB ASU 2016‑15 (Topic 320), “Classification of Certain Cash Receipts and Cash Payments” Issued in August 2016, ASU 2016‑15 provides guidance on eight specific cash flow issues and their disclosure in the consolidated statements of cash flows. The issues addressed include debt prepayment, settlement of zero-coupon debt, contingent consideration in business combinations, proceeds from settlement of insurance claims, proceeds from settlement of BOLI, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the Predominance principle. ASU 2016‑15 is effective for public companies for the annual and interim periods in fiscal years beginning after December 15, 2017, with early adoption permitted. For non-public companies ASU 2016‑15 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The Corporation is evaluating the impact of this guidance and does not anticipate a material impact on its consolidated financial statements. FASB ASU 2016‑13 (Topic 326), “Measurement of Credit Losses on Financial Instruments” Issued in June 2016, ASU 2016‑13 significantly changes how companies measure and recognize credit impairment for many financial assets. The new current expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are in the scope of the standard. The ASU also makes targeted amendments to the current impairment model for available-for-sale debt securities. ASU 2016‑13 is effective for public companies for the annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within the fiscal years beginning after December 31, 2021. The Corporation is evaluating the effect that ASU 2016‑13 will have on its consolidated financial statements and related disclosures. FASB ASU 2016‑02 (Topic 842), “Leases” Issued in February 2016, ASU 2016‑02 revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. ASU 2016‑02 is effective for public companies for the first interim period within annual periods beginning after December 15, 2018, with early adoption permitted. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within the fiscal years beginning after December 31, 2020. In July 2018 ASU 2018-11 was issued which creates a new, optional transition method for implementing ASU 2016-02 and a lessor practical expedient for separating lease and non-lease components and has the same effective date as ASU 2016-02. Under the optional transition method of ASU 2018-11, the Corporation may initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Corporation is evaluating the effects that ASU 2016‑02 and ASU 2018-11 will have on its consolidated financial statements and related disclosures. FASB ASU 2016‑01 (Subtopic 825‑10), “Financial Instruments – Overall, Recognition and Measurement of Financial Assets and Financial Liabilities” Issued in January 2016, ASU 2016‑01 provides that equity investments will be measured at fair value with changes in fair value recognized in net income. When fair value is not readily determinable, an entity may elect to measure the equity investment at cost, minus impairment, plus or minus any change in the investment’s observable price. For financial liabilities that are measured at fair value, the amendment requires an entity to present separately, in other comprehensive income, any change in fair value resulting from a change in instrument-specific credit risk. For public companies, ASU 2016‑01 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within the fiscal years beginning after December 31, 2019. Early adoption is permitted. Entities may apply this guidance on a prospective or retrospective basis. ASU 2018‑03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825‑10) clarifies certain aspects of ASU 2016‑01 and has the same effective dates for non-public companies. The Corporation is evaluating the effects that ASU 2016‑01 and ASU 2018‑03 will have on its consolidated financial statements and related disclosures. FASB ASU 2017‑08 (Subtopic 310‑20), “Nonrefundable Fees and Other Costs (Subtopic 310‑20): Premium Amortization on Purchased Callable Debt Securities” Issued in March 2017, ASU 2017‑08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendment requires the premium to be amortized to the earliest call date. The amendment does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within the fiscal years beginning after December 31, 2020. The Corporation is evaluating the effect that ASU 2017‑08 will have on its consolidated financial statements and related disclosures. FASB ASU 2017‑12 (Subtopic 815), “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities” Issued in August 2017, ASU 2017‑12 better aligns hedge accounting with an organization’s risk management activities in the financial statements. In addition, the ASU simplifies the application of hedge accounting guidance in areas where practice issues exist. Specifically, the proposed ASU eases the requirements for effectiveness testing, hedge documentation and application of the shortcut and the critical terms match methods. Entities would be permitted to designate contractually specified components as the hedged risk in a cash flow hedge involving the purchase or sale of nonfinancial assets or variable rate financial instruments. In addition, entities would no longer separately measure and report hedge ineffectiveness. Also, entities, may choose refined measurement techniques to determine the changes in fair value of the hedged item in fair value hedges of benchmark interest rate risk. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early application is permitted in any interim period after issuance of the ASU for existing hedging relationships on the date of adoption and the effect of adoption should be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). The Corporation has evaluated ASU 2017‑12, and has determined it has no hedging strategies for which it plans to implement the ASU but we will consider the impact of the ASU on future hedging strategies that may arise. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), Meridian Corporation is permitted an extended transition period for complying with new or revised accounting standards affecting public companies. We will remain an emerging growth company until the earliest of (i) the end of the fiscal year during which we have total annual gross revenues of $1,070,000,000 or more, (ii) the end of the fiscal year following the fifth anniversary of the completion of our initial offering, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt and (iv) the end of the fiscal year in which the market value of our equity securities that are held by non-affiliates exceeds $700 million as of June 30 of that year. We have elected to take advantage of this extended transition period, which means that the financial statements included herein, as well as any financial statements that we file in the future, will not be subject to all new or revised accounting standards generally applicable to public companies for the transition period for so long as we remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act. If we do so, we will prominently disclose this decision in the first periodic report following our decision, and such decision is irrevocable. As a filer under the JOBS Act, we will implement new accounting standards subject to the effective dates required for non-public entities. FASB Accounting Standards Update (“ASU”) No. 2014‑09 (Topic 606), “Revenue from Contracts with Customers” Issued in May 2014, ASU 2014‑09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. In August 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015‑14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This amendment defers the effective date of ASU 2014‑09 by one year. In March 2016, the FASB issued ASU 2016‑ 08”, “Principal versus Agent Considerations (Reporting Gross versus Net),” which amends the principal versus agent guidance and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer. In addition, the FASB issued ASU Nos. 2016‑20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” and 2016‑12, “Narrow-Scope Improvements and Practical Expedients”, both of which provide additional clarification of certain provisions in Topic 606. These Accounting Standards Codification (“ASC”) updates are effective for public companies for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. Early adoption is permitted only as of annual reporting periods after December 15, 2016. The standard permits the use of either the ‘retrospective’ or ‘retrospectively with the cumulative effect’ transition method. For non-public companies, the ASC updates are effective for annual reporting periods beginning after December 15, 2018, and interim periods beginning after December 15, 2019. The Corporation expects to adopt ASU 2014-09 for the fiscal year ending December 31, 2019 and is evaluating all revenue streams, accounting policies, practices and reporting to identify and understand any impact on the Corporation’s Consolidated Financial Statements and related disclosures. FASB ASU 2017‑04 (Topic 350), “Intangibles – Goodwill and Others” Issued in January 2017, ASU 2017‑04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017‑04 is effective for public companies for annual periods beginning after December 15, 2019 including interim periods within those periods. ASU 2017‑04 is effective for non-public companies for annual periods beginning after December 15, 2021 including interim periods within those periods. The Corporation is evaluating the effect that ASU 2017‑04 will have on its consolidated financial statements and related disclosures. FASB ASU 2017‑01 (Topic 805), “Business Combinations” Issued in January 2017, ASU 2017‑01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017‑01 is effective for public companies for annual periods beginning after December 15, 2017 including interim periods within those periods, while for non-public companies the ASU is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Corporation is evaluating the effect that ASU 2017‑01 will have on its consolidated financial statements and related disclosures. FASB ASU 2016‑15 (Topic 320), “Classification of Certain Cash Receipts and Cash Payments” Issued in August 2016, ASU 2016‑15 provides guidance on eight specific cash flow issues and their disclosure in the consolidated statements of cash flows. The issues addressed include debt prepayment, settlement of zero-coupon debt, contingent consideration in business combinations, proceeds from settlement of insurance claims, proceeds from settlement of BOLI, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the Predominance principle. ASU 2016‑15 is effective for public companies for the annual and interim periods in fiscal years beginning after December 15, 2017, with early adoption permitted. For non-public companies ASU 2016‑15 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The Corporation is evaluating the impact of this guidance and does not anticipate a material impact on its consolidated financial statements. FASB ASU 2016‑13 (Topic 326), “Measurement of Credit Losses on Financial Instruments” Issued in June 2016, ASU 2016‑13 significantly changes how companies measure and recognize credit impairment for many financial assets. The new current expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are in the scope of the standard. The ASU also makes targeted amendments to the current impairment model for available-for-sale debt securities. ASU 2016‑13 is effective for public companies for the annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within the fiscal years beginning after December 31, 2021. The Corporation is evaluating the effect that ASU 2016‑13 will have on its consolidated financial statements and related disclosures. FASB ASU 2016‑02 (Topic 842), “Leases” Issued in February 2016, ASU 2016‑02 revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. ASU 2016‑02 is effective for public companies for the first interim period within annual periods beginning after December 15, 2018, with early adoption permitted. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within the fiscal years beginning after December 31, 2020. In July 2018 ASU 2018-11 was issued which creates a new, optional transition method for implementing ASU 2016-02 and a lessor practical expedient for separating lease and non-lease components and has the same effective date as ASU 2016-02. Under the optional transition method of ASU 2018-11, the Corporation may initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Corporation is evaluating the effects that ASU 2016‑02 and ASU 2018-11 will have on its consolidated financial statements and related disclosures. FASB ASU 2016‑01 (Subtopic 825‑10), “Financial Instruments – Overall, Recognition and Measurement of Financial Assets and Financial Liabilities” Issued in January 2016, ASU 2016‑01 provides that equity investments will be measured at fair value with changes in fair value recognized in net income. When fair value is not readily determinable, an entity may elect to measure the equity investment at cost, minus impairment, plus or minus any change in the investment’s observable price. For financial liabilities that are measured at fair value, the amendment requires an entity to present separately, in other comprehensive income, any change in fair value resulting from a change in instrument-specific credit risk. For public companies, ASU 2016‑01 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within the fiscal years beginning after December 31, 2019. Early adoption is permitted. Entities may apply this guidance on a prospective or retrospective basis. ASU 2018‑03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825‑10) clarifies certain aspects of ASU 2016‑01 and has the same effective dates for non-public companies. The Corporation is evaluating the effects that ASU 2016‑01 and ASU 2018‑03 will have on its consolidated financial statements and related disclosures. FASB ASU 2017‑08 (Subtopic 310‑20), “Nonrefundable Fees and Other Costs (Subtopic 310‑20): Premium Amortization on Purchased Callable Debt Securities” Issued in March 2017, ASU 2017‑08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendment requires the premium to be amortized to the earliest call date. The amendment does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. For non-public companies the ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within the fiscal years beginning after December 31, 2020. The Corporation is evaluating the effect that ASU 2017‑08 will have on its consolidated financial statements and related disclosures. FASB ASU 2017‑12 (Subtopic 815), “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities” Issued in August 2017, ASU 2017‑12 better aligns hedge accounting with an organization’s risk management activities in the financial statements. In addition, the ASU simplifies the application of hedge accounting guidance in areas where practice issues exist. Specifically, the proposed ASU eases the requirements for effectiveness testing, hedge documentation and application of the shortcut and the critical terms match methods. Entities would be permitted to designate contractually specified components as the hedged risk in a cash flow hedge involving the purchase or sale of nonfinancial assets or variable rate financial instruments. In addition, entities would no longer separately measure and report hedge ineffectiveness. Also, entities, may choose refined measurement techniques to determine the changes in fair value of the hedged item in fair value hedges of benchmark interest rate risk. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early application is permitted in any interim period after issuance of the ASU for existing hedging relationships on the date of adoption and the effect of adoption should be reflected as of the beginning of the fiscal year of adoption (that is, the initial application date). The Corporation has evaluated ASU 2017‑12, and has determined it has no hedging strategies for which it plans to implement the ASU but we will consider the impact of the ASU on future hedging strategies that may arise. |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings per Common Share | |
Schedule of basic and diluted earnings per common share | Three Months Ended Nine Months Ended September 30, September 30, (dollars in thousands, except per share data) 2018 2017 2018 2017 Numerator: Net income available to common stockholders $ 2,727 1,109 5,799 1,877 Denominator for basic earnings per share - weighted average shares outstanding 6,402 3,686 6,395 3,686 Effect of dilutive common shares 28 27 31 26 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 6,430 3,713 6,426 3,712 Basic earnings per share $ 0.43 0.30 0.91 0.51 Diluted earnings per share $ 0.42 0.30 0.90 0.51 Antidilutive shares excluded from computation of average dilutive earnings per share 116 50 116 50 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Other Intangibles | |
Schedule of goodwill and intangibles assets related to acquisition | Balance Balance Amortization December 31, Accumulated Fair Value September 30, Period (dollars in thousands) 2017 Amortization Adjustment 2018 (in years) Goodwill - Wealth $ 899 — — 899 Indefinite Total Goodwill 899 — — 899 Intangible assets - trade name 266 — — 266 Indefinite Intangible assets - customer relationships 3,930 (152) — 3,778 20 Intangible assets - non competition agreements 223 (52) — 171 4 Contingent asset 177 (177) — N/A Total Intangible Assets 4,596 (204) (177) 4,215 Total $ 5,495 (204) (177) 5,114 |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Securities | |
Schedule of amortized cost and fair value of securities | September 30, 2018 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Securities available-for-sale: U.S. government agency mortgage-backed securities $ 24,625 21 (431) 24,215 U.S. government agency collateralized mortgage obligations 13,159 — (271) 12,888 State and municipal securities 9,946 — (341) 9,605 Investments in mutual funds and other equity securities 1,000 — (30) 970 Total securities available-for-sale $ 48,730 21 (1,073) 47,678 Securities held to maturity: U.S. Treasuries $ 1,987 — (18) 1,969 State and municipal securities 10,784 15 (196) 10,603 Total securities held-to-maturity $ 12,771 15 (214) 12,572 December 31, 2017 Gross Gross Amortized unrealized unrealized Fair (dollars in thousands) cost gains losses value Securities available-for-sale: U.S. government agency mortgage-backed securities $ 21,439 19 (190) 21,268 U.S. government agency collateralized mortgage obligations 7,875 2 (99) 7,778 State and municipal securities 10,079 14 (134) 9,959 Investments in mutual funds and other equity securities 1,000 1 — 1,001 Total securities available-for-sale $ 40,393 36 (423) 40,006 Securities held to maturity: U.S. Treasuries $ 1,978 — (8) 1,970 State and municipal securities 10,883 86 (70) 10,899 Total securities held-to-maturity $ 12,861 86 (78) 12,869 |
Schedule of investment unrealized loss in continuous unrealized loss position | September 30, 2018 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities U.S. government agency mortgage-backed securities $ 11,483 (128) 9,702 (303) 21,185 (431) U.S. government agency collateralized mortgage obligations 8,627 (102) 4,261 (169) 12,888 (271) State and municipal securities 5,019 (112) 4,587 (229) 9,606 (341) Investments in mutual funds and other equity securities 970 (30) — — 970 (30) Total securities available-for-sale $ 26,099 (372) 18,550 (701) 44,649 (1,073) Securities held-to-maturity: U.S. Treasuries $ 1,950 (18) — — 1,950 (18) State and municipal securities 6,537 (98) 2,211 (98) 8,748 (196) Total securities held-to-maturity $ 8,487 (116) 2,211 (98) 10,698 (214) December 31, 2017 Less than 12 Months 12 Months or more Total Fair Unrealized Fair Unrealized Fair Unrealized (dollars in thousands) value losses value losses value losses Securities available-for-sale: U.S. government agency mortgage-backed securities $ 9,788 (28) 7,854 (162) 17,642 (190) U.S. government agency collateralized mortgage obligations 6,732 (81) 860 (18) 7,592 (99) State and municipal securities 6,147 (57) 2,818 (77) 8,965 (134) Total securities available-for-sale $ 22,667 (166) 11,532 (257) 34,199 (423) Securities held-to-maturity: U.S. Treasuries $ 1,962 (8) — — 1,962 (8) State and municipal securities 4,851 (70) — — 4,851 (70) Total securities held-to-maturity $ 6,813 (78) — — 6,813 (78) |
Schedule of amortized cost and fair value of held-to-maturity securities and available-for-sale securities by contractual maturity | September 30, 2018 December 31, 2017 Available-for-sale Held-to-maturity Available-for-sale Held-to-maturity Amortized Fair Amortized Fair Amortized Fair Amortized Fair (dollars in thousands) cost value cost value cost value cost value Due in one year or less $ 1,706 1,671 994 985 $ — — — — Due after one year through five years 8,229 8,070 3,746 3,702 5,630 5,587 3,803 3,791 Due after five years through ten years 6,593 6,322 8,031 7,885 6,298 6,228 7,180 7,156 Due after ten years 32,202 31,615 — — 28,465 28,191 1,878 1,922 Total $ 48,730 47,678 12,771 12,572 $ 40,393 40,006 12,861 12,869 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Loans Receivable | |
Summary of loans and leases outstanding | September 30, December 31, (dollars in thousands) 2018 2017 Mortgage loans held for sale $ 34,044 35,024 Real estate loans: Commercial mortgage 316,671 263,141 Home equity lines and loans 82,773 84,039 Residential mortgage 50,363 32,375 Construction 104,518 104,970 Total real estate loans 554,325 484,525 Commercial and industrial 252,960 209,996 Consumer 783 1,022 Leases, net 364 762 Total portfolio loans and leases 808,432 696,305 Total loans and leases $ 842,476 731,329 Loans with predetermined rates $ 249,683 202,317 Loans with adjustable or floating rates 592,793 529,012 Total loans and leases $ 842,476 731,329 Net deferred loan origination (fees) costs $ (1,644) (1,668) |
Schedule of components of the net investment in leases | September 30, December 31, (dollars in thousands) 2018 2017 Minimum lease payments receivable $ 376 793 Unearned lease income (12) (31) Total $ 364 762 |
Schedule of age analysis of past due loans and leases | Total 90+ days Accruing Nonaccrual September 30, 2018 30-89 days past due and Total past Loans and loans and Total loans Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ 1,155 — 1,155 315,022 316,177 494 316,671 0.52 % Home equity lines and loans 216 — 216 82,472 82,688 85 82,773 0.36 Residential mortgage — — — 48,212 48,212 2,151 50,363 4.27 Construction 315 — 315 104,203 104,518 — 104,518 0.30 Commercial and industrial — — — 252,768 252,768 192 252,960 0.08 Consumer — — — 783 783 — 783 — Leases 123 — 123 241 364 — 364 33.79 Total $ 1,809 — 1,809 803,701 805,510 2,922 808,432 0.59 % Total 90+ days Accruing Nonaccrual December 31, 2017 30-89 days past due and Total past Loans and loans and Total loans Delinquency (dollars in thousands) past due still accruing due Current leases leases and leases percentage Commercial mortgage $ — — — 262,727 262,727 414 263,141 0.16 % Home equity lines and loans 142 — 142 83,760 83,902 137 84,039 0.33 Residential mortgage 734 — 734 30,557 31,291 1,084 32,375 5.62 Construction — — — 104,785 104,785 185 104,970 0.18 Commercial and industrial — — — 208,670 208,670 1,326 209,996 0.63 Consumer — — — 1,022 1,022 — 1,022 — Leases 87 11 98 664 762 — 762 12.86 Total $ 963 11 974 692,185 693,159 3,146 696,305 0.59 % |
Allowance for Loan Losses (th_2
Allowance for Loan Losses (the "Allowance") (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Allowance for Loan Losses (the "Allowance") | |
Roll-forward of allowance for loan and lease losses by portfolio segment | Balance, Balance, (dollars in thousands) June 30, 2018 Charge-offs Recoveries Provision September 30, 2018 Commercial mortgage $ 3,011 — 2 140 3,153 Home Equity lines and loans 269 — 10 37 316 Residential mortgage 166 — — 14 180 Construction 1,438 — — 59 1,497 Commercial and industrial 2,559 (50) 8 41 2,558 Consumer 3 — 1 — 4 Leases 3 — — — 3 Unallocated — — — — — Total $ 7,449 (50) 21 291 7,711 Balance, Balance, (dollars in thousands) December 31, 2017 Charge-offs Recoveries Provision September 30, 2018 Commercial mortgage $ 2,434 — 6 713 3,153 Home Equity lines and loans 280 (137) 14 159 316 Residential mortgage 82 — 61 37 180 Construction 1,689 — — (192) 1,497 Commercial and industrial 2,214 (244) 41 547 2,558 Consumer 5 — 3 (4) 4 Leases 5 — — (2) 3 Unallocated — — — — — Total $ 6,709 (381) 125 1,258 7,711 Balance, Balance, (dollars in thousands) June 30, 2017 Charge-offs Recoveries Provision September 30, 2017 Commercial mortgage $ 2,423 (52) — 9 2,380 Home Equity lines and loans 228 — 52 (58) 222 Residential mortgage 79 — — (2) 77 Construction 1,388 — — 93 1,481 Commercial and industrial 2,086 (528) 7 626 2,191 Consumer 2 — 1 (2) 1 Leases 8 — — (1) 7 Unallocated — — — — — Total $ 6,214 (580) 60 665 6,359 Balance, Balance, (dollars in thousands) December 31, 2016 Charge-offs Recoveries Provision September 30, 2017 Commercial mortgage $ 2,038 (83) 16 409 2,380 Home Equity lines and loans 460 (42) 46 (242) 222 Residential mortgage 85 — 2 (10) 77 Construction 690 — — 791 1,481 Commercial and industrial 1,973 (647) 193 672 2,191 Consumer 2 — 4 (5) 1 Leases 5 — — 2 7 Unallocated 172 — — (172) — Total $ 5,425 (772) 261 1,445 6,359 |
Schedule of allocation of the allowance for loan and lease losses | Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively September 30, 2018 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 3,153 3,153 $ 1,703 314,968 316,671 Home Equity lines and loans — 316 316 85 82,688 82,773 Residential mortgage — 180 180 249 38,926 39,175 Construction — 1,497 1,497 1,296 103,222 104,518 Commercial and industrial 7 2,551 2,558 3,143 249,817 252,960 Consumer — 4 4 — 783 783 Leases — 3 3 — 364 364 Unallocated — — — — — — Total $ 7 7,704 7,711 $ 6,476 790,768 797,244 (1) Allowance on loans and leases Carrying value of loans and leases Individually Collectively Individually Collectively December 31, 2017 evaluated evaluated evaluated evaluated (dollars in thousands) for impairment for impairment Total for impairment for impairment Total Commercial mortgage $ — 2,434 2,434 $ 1,533 261,607 263,140 Home Equity lines and loans — 280 280 137 83,902 84,039 Residential mortgage — 82 82 249 22,155 22,404 Construction — 1,689 1,689 260 104,710 104,970 Commercial and industrial 1 2,213 2,214 2,506 207,490 209,996 Consumer — 5 5 — 1,022 1,022 Leases — 5 5 — 762 762 Unallocated — — — — — — Total $ 1 6,708 6,709 $ 4,685 681,648 686,333 (1) (1) Excludes deferred fees and loans carried at fair value. |
Schedule of carrying value of loans and leases by portfolio segment based on the credit quality indicators | September 30, 2018 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 311,857 4,539 275 — 316,671 Home equity lines and loans 82,606 — 167 — 82,773 Construction 102,361 2,157 — — 104,518 Commercial and industrial 234,055 16,016 2,859 30 252,960 Total $ 730,879 22,712 3,301 30 756,922 December 31, 2017 Special (dollars in thousands) Pass mention Substandard Doubtful Total Commercial mortgage $ 258,337 3,917 887 — 263,141 Home equity lines and loans 83,902 — 137 — 84,039 Construction 103,118 1,852 — — 104,970 Commercial and industrial 194,784 13,997 448 767 209,996 Total $ 640,141 19,766 1,472 767 662,146 |
Schedule of allocations based on the credit quality indicators | September 30, 2018 December 31, 2017 (dollars in thousands) Performing Nonperforming Total Performing Nonperforming Total Residential mortgage $ 38,926 249 39,175 $ 22,154 249 22,403 Consumer 783 — 783 1,022 — 1,022 Leases 364 — 364 762 — 762 Total $ 40,073 249 40,322 $ 23,938 249 24,187 |
Schedule of recorded investment and principal balance of impaired loans | At September 30, 2018 At December 31, 2017 Average Average Recorded Principal Related recorded Recorded Principal Related recorded (dollars in thousands) investment balance allowance investment investment balance allowance investment Impaired loans with related allowance: Commercial mortgage $ — — — — — — — — Commercial and industrial 479 479 7 476 124 491 1 173 Home equity lines and loans — — — — — — — — Residential mortgage — — — — — — — — Construction — — — — — — — — Total 479 479 7 476 124 491 1 173 Impaired loans without related allowance: Commercial mortgage $ 1,703 2,136 — 1,698 1,534 2,025 — 1,537 Commercial and industrial 2,664 2,746 — 2,748 1,907 3,180 — 2,945 Home equity lines and loans 85 89 — 86 137 137 — 137 Residential mortgage 249 258 — 254 249 249 — 249 Construction 1,296 1,296 — 1,401 260 260 — 267 Total 5,997 6,525 — 6,187 4,087 5,851 — 5,135 Grand Total $ 6,476 7,004 7 6,663 4,211 6,342 1 5,308 |
Schedule of balances of TDRs | September 30, December 31, (dollars in thousands) 2018 2017 TDRs included in nonperforming loans and leases $ TDRs in compliance with modified terms Total TDRs $ |
Schedule of loan and lease modifications granted | The following tables present information regarding loan and lease modifications granted during the three and nine months ended September 30, 2018 that were categorized as TDRs: For the Three Months Ended September 30, 2018 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Related (dollar in thousands) Contracts Investment Investment Allowance Real Estate: Land and Construction 1 $ 796 $ 796 $ — Total 1 $ 796 $ 796 $ — For the Nine Months Ended September 30, 2018 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Related (dollar in thousands) Contracts Investment Investment Allowance Real Estate: Land and Construction 2 $ 2,410 $ 2,410 $ — Commercial and industrial 1 120 120 — Total 3 $ 2,530 $ 2,530 $ — No loan and lease modifications granted during the three and nine months ended September 30, 2018 subsequently defaulted during the same time period. The following table presents information regarding loan and lease modifications granted during the nine months ended September 30, 2017 that were categorized as TDRs: For the Nine Months Ended September 30, 2017 Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Related (dollar in thousands) Contracts Investment Investment Allowance Real Estate: Commercial and industrial 1 $ 165 $ 165 $ — Total 1 $ 165 $ 165 $ — No loan and lease modifications granted during the nine months ended September 30, 2017 subsequently defaulted during the same time period. There were no loan and lease modifications made for the three months ended September 30, 2017. |
Schedule of types of loan and lease modifications | The following tables present information regarding the types of loan and lease modifications made for the three and nine months ended September 30, 2018 and 2017: For the Three Months Ended For the Three Months Ended September 30, 2018 September 30, 2017 Interest Rate Interest Rate Loan Term Change and Loan Loan Term Change and Loan Extension Term Extension Extension Term Extension Land and Construction 1 — — — Total 1 — — — For the Nine Months Ended For the Nine Months Ended September 30, 2018 September 30, 2017 Interest Rate Interest Rate Loan Term Change and Loan Loan Term Change and Loan Extension Term Extension Extension Term Extension Land and Construction 2 — — — Commercial and industrial — 1 — 1 Total 2 1 — 1 |
Short-Term Borrowings and Long-
Short-Term Borrowings and Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Short-Term Borrowings and Long-Term Debt | |
Schedule of long term debt | Balance as of Maturity Interest September 30, December 31, (dollars in thousands) date rate 2018 2017 Mid-term Repo-fixed 06/26/19 1.70 % — 1,800 Mid-term Repo-fixed 08/10/20 2.76 % 5,000 5,000 Acquisition Purchase Note 04/01/20 3.00 % 1,444 2,063 $ 6,444 8,863 |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements and Disclosures | |
Schedule of financial assets measured at fair value on a recurring basis | September 30, 2018 (dollars in thousands) Total Level 1 Level 2 Level 3 Securities available for sale: U.S. government agency mortgage-backed securities $ 24,215 — 24,215 — U.S. government agency collateralized mortgage obligations 12,888 — 12,888 — State and municipal securities 9,605 — 9,605 — Investments in mutual funds and other equity securities 970 — 970 — Mortgage loans held-for-sale 34,044 — 34,044 — Mortgage loans held-for-investment 11,188 — 11,188 — Interest rate lock commitments 200 — — 200 Total $ 93,110 — 92,910 200 December 31, 2017 (dollars in thousands) Total Level 1 Level 2 Level 3 Securities available for sale: U.S. government agency mortgage-backed securities $ 21,268 — 21,268 — U.S. government agency collateralized mortgage obligations 7,778 — 7,778 — State and municipal securities 9,959 — 9,959 — Investments in mutual funds and other equity securities 1,001 — 1,001 — Mortgage loans held-for-sale 35,024 — 35,024 — Mortgage loans held-for-investment 9,972 — 9,972 — Interest rate lock commitments 310 — — 310 Total $ 85,312 — 85,002 310 |
Schedule of financial assets measured at fair value on non-recurring basis | September 30, 2018 (dollars in thousands) Total Level 1 Level 2 Level 3 Impaired loans (2) $ 6,476 — — 6,476 Other real estate owned (1) — — — — Total $ 6,476 — — 6,476 December 31, 2017 (dollars in thousands) Total Level 1 Level 2 Level 3 Impaired loans (2) $ 4,685 — — 4,685 Other real estate owned (1) 437 — — 437 Total $ 5,122 — — 5,122 (1) Real estate properties acquired through, or in lieu of, foreclosure are to be sold and are carried at fair value less estimated cost to sell. Fair value is based upon independent market prices or appraised value of the property. These assets are included in Level 3 fair value based upon the lowest level of input that is significant to the fair value measurement. Appraised values may be discounted based on management’s expertise, historical knowledge, changes in market conditions from the time of valuation and/or estimated costs to sell. (2) Impaired loans are those in which the Corporation has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third‑party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. |
Schedule of estimated fair values of financial instruments | September 30, 2018 December 31, 2017 Fair Value Carrying Carrying (dollars in thousands) Hierarchy Level amount Fair value amount Fair value Financial assets: Cash and cash equivalents Level 1 $ 25,823 25,823 35,506 35,506 Securities available-for-sale Level 2 47,678 47,678 40,006 40,006 Securities held-to-maturity Level 2 12,771 12,572 12,861 12,869 Mortgage loans held-for-sale Level 2 34,044 34,044 35,024 35,024 Loans receivable, net Level 3 787,889 780,958 677,956 669,852 Mortgage loans held-for-investment Level 2 11,188 11,188 9,972 9,972 Interest rate lock commitments Level 3 200 200 310 310 Forward commitments Level 2 93 93 — — Restricted investment in bank stock Level 3 4,581 4,581 6,814 6,814 Accrued interest receivable Level 3 2,913 2,913 2,536 2,536 Financial liabilities: Deposits Level 2 781,927 775,300 627,109 626,635 Short-term borrowings Level 2 43,755 43,755 99,750 99,750 Long-term debt Level 2 6,444 6,458 8,863 8,865 Subordinated debentures Level 2 9,308 9,241 13,308 12,883 Accrued interest payable Level 2 353 353 216 216 Forward commitments Level 2 — — 75 75 Notional Notional Off-balance sheet financial instruments: amount Fair value amount Fair value Commitments to extend credit Level 2 $ 258,719 200 220,180 310 Letters of credit Level 2 2,529 — 1,809 — |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Financial Instruments | |
Summary of the notional amounts and fair values of derivative financial instruments | September 30, 2018 December 31, 2017 (dollars in thousands) Notional Asset Notional Asset Interest Rate Lock Commitments Positive fair values $ 32,445 284 38,574 344 Negative fair values 9,603 (84) 7,201 (34) Net interest rate lock commitments 42,048 200 45,775 310 Forward Commitments Positive fair values 25,000 107 6,500 5 Negative fair values 8,500 (14) 32,250 (80) Net forward commitments 33,500 93 38,750 (75) Net derivative fair value asset $ 75,548 293 84,525 235 |
Summary of the fair value gains and losses on derivative financial instruments | Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2018 2017 2018 2017 Interest Rate Lock Commitments $ (224) (423) (110) (162) Forward Commitments 294 (80) 169 47 Net fair value gains (losses) on derivative financial instrument $ 70 (503) 59 (115) |
Segment (Tables)
Segment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segments | |
Schedule of business segment financial information | Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 8,107 71 200 8,378 $ 7,190 31 120 7,341 Provision for loan losses (291) — — (291) (665) — — (665) Net interest income after provision 7,816 71 200 8,087 6,525 31 120 6,676 Non-interest Income Mortgage banking income 105 — 8,169 8,274 67 — 9,837 9,904 Wealth management income 59 871 — 930 18 916 — 934 Net change in fair values — — (333) (333) — — (547) (547) Other 363 — (67) 296 353 — (194) 159 Total non-interest income 527 871 7,769 9,167 438 916 9,096 10,450 Non-interest Expense Salaries and employee benefits 3,264 445 5,192 8,901 3,237 411 6,682 10,330 Occupancy and equipment 521 29 370 920 575 26 391 992 Professional fees 590 9 115 714 394 5 82 481 Advertising and promotion 301 111 178 590 254 126 217 597 Other 1,259 314 1,055 2,628 1,238 198 1,176 2,612 Total non-interest expense 5,935 908 6,910 13,753 5,698 766 8,548 15,012 Operating Margin $ 2,408 34 1,059 3,501 $ 1,265 181 668 2,114 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 (dollars in thousands) Bank Wealth Mortgage Total Bank Wealth Mortgage Total Net interest income $ 23,597 217 402 24,216 $ 20,733 70 302 21,105 Provision for loan losses (1,258) — — (1,258) (1,445) — — (1,445) Net interest income after provision 22,339 217 402 22,958 19,288 70 302 19,660 Non-interest Income Mortgage banking income 148 — 20,259 20,407 67 — 25,022 25,089 Wealth management income 149 2,847 — 2,996 233 1,672 — 1,905 Net change in fair values — — (471) (471) — — 100 100 Other 1,136 — 823 1,959 995 — (567) 428 Total non-interest income 1,433 2,847 20,611 24,891 1,295 1,672 24,555 27,522 Non-interest Expense Salaries and employee benefits 10,390 1,373 14,956 26,719 9,874 856 19,023 29,753 Occupancy and equipment 1,599 99 1,172 2,870 1,666 52 1,100 2,818 Professional feees 1,325 20 325 1,670 943 125 316 1,384 Advertising and promotion 917 319 566 1,802 746 205 586 1,537 Other 3,827 613 2,888 7,328 3,766 303 3,496 7,565 Total non-interest expense 18,058 2,424 19,907 40,389 16,995 1,541 24,521 43,057 Operating Margin $ 5,714 640 1,106 7,460 $ 3,588 201 336 4,125 |
Basis of Presentation (Details)
Basis of Presentation (Details) - $ / shares | Aug. 24, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Common stock, par value | $ 1 | $ 1 | |
Meridian Bank | |||
Business Acquisition [Line Items] | |||
Outstanding shares | 6,402,385 | ||
Common stock, par value | $ 1 |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income for common stockholders | $ 2,727 | $ 1,109 | $ 5,799 | $ 1,877 |
Denominator for basic earnings per share - weighted average shares outstanding | 6,402 | 3,686 | 6,395 | 3,686 |
Effect of dilutive common shares | 28 | 27 | 31 | 26 |
Denominator for diluted earnings per share - adjusted weighted average shares outstanding | 6,430 | 3,713 | 6,426 | 3,712 |
Basic earnings per share (in dollars per share) | $ 0.43 | $ 0.30 | $ 0.91 | $ 0.51 |
Diluted earnings per share (in dollars per share) | $ 0.42 | $ 0.30 | $ 0.90 | $ 0.51 |
Antidilutive shares excluded from computation of average dilutive earnings per share | 116 | 50 | 116 | 50 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill and intangible assets related to the acquisition | |||
Amortization expense | $ 68,000 | $ 204,000 | |
Grand total | 5,114,000 | $ 5,114,000 | $ 5,495,000 |
Contingent asset marked as fair value, Period | 18 months | ||
Contingent asset | 0 | $ 0 | |
HJ Wealth | |||
Goodwill and intangible assets related to the acquisition | |||
Goodwill, Beginning Balance | 899,000 | ||
Goodwill, Ending Balance | 899,000 | 899,000 | |
Amortization expense | 204,000 | ||
Contingent assets beginning balance | 177,000 | ||
Fair Value Adjustment | (177,000) | ||
Total Intangible Assets | 4,215,000 | 4,215,000 | 4,596,000 |
Grand total | 5,114,000 | 5,114,000 | $ 5,495,000 |
HJ Wealth | Trade name | |||
Goodwill and intangible assets related to the acquisition | |||
Indefinite-lived Intangible Assets (Excluding Goodwill), Beginning Balance | 266,000 | ||
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance | 266,000 | 266,000 | |
HJ Wealth | Customer relationships | |||
Goodwill and intangible assets related to the acquisition | |||
Finite-Lived Intangible Assets, Net, Beginning Balance | 3,930,000 | ||
Amortization expense | 152,000 | ||
Finite-Lived Intangible Assets, Net, Ending Balance | 3,778,000 | $ 3,778,000 | |
Amortization Period | 20 years | ||
HJ Wealth | Non competition agreements | |||
Goodwill and intangible assets related to the acquisition | |||
Finite-Lived Intangible Assets, Net, Beginning Balance | $ 223,000 | ||
Amortization expense | 52,000 | ||
Finite-Lived Intangible Assets, Net, Ending Balance | $ 171,000 | $ 171,000 | |
Amortization Period | 4 years |
Securities - Amortized cost and
Securities - Amortized cost and fair value (Details) $ in Thousands | Sep. 30, 2018USD ($)security | Dec. 31, 2017USD ($)security |
Securities available-for-sale: | ||
Available-for-sale, Amortized Cost | $ 48,730 | $ 40,393 |
Available-for-sale, Gross Unrealized Gains | 21 | 36 |
Available-for-sale, Gross Unrealized (Losses) | (1,073) | (423) |
Available-for-sale, Fair Value | 47,678 | 40,006 |
Securities held to maturity: | ||
Held-to-maturity, Amortized Cost | 12,771 | 12,861 |
Held-to-maturity, Gross Unrealized Gains | 15 | 86 |
Held-to-maturity, Gross Unrealized (Losses) | (214) | (78) |
Fair Value | 12,572 | 12,869 |
U.S. government agency mortgage-backed securities | ||
Securities available-for-sale: | ||
Available-for-sale, Amortized Cost | 24,625 | 21,439 |
Available-for-sale, Gross Unrealized Gains | 21 | 19 |
Available-for-sale, Gross Unrealized (Losses) | (431) | (190) |
Available-for-sale, Fair Value | $ 24,215 | $ 21,268 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 26 | 19 |
U.S. government agency collateralized mortgage obligations | ||
Securities available-for-sale: | ||
Available-for-sale, Amortized Cost | $ 13,159 | $ 7,875 |
Available-for-sale, Gross Unrealized Gains | 2 | |
Available-for-sale, Gross Unrealized (Losses) | (271) | (99) |
Available-for-sale, Fair Value | $ 12,888 | $ 7,778 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 17 | 8 |
State and municipal securities | ||
Securities available-for-sale: | ||
Available-for-sale, Amortized Cost | $ 9,946 | $ 10,079 |
Available-for-sale, Gross Unrealized Gains | 14 | |
Available-for-sale, Gross Unrealized (Losses) | (341) | (134) |
Available-for-sale, Fair Value | 9,605 | 9,959 |
Securities held to maturity: | ||
Held-to-maturity, Amortized Cost | 10,784 | 10,883 |
Held-to-maturity, Gross Unrealized Gains | 15 | 86 |
Held-to-maturity, Gross Unrealized (Losses) | (196) | (70) |
Fair Value | $ 10,603 | $ 10,899 |
Number of securities in unrealized loss positions | security | 29 | 22 |
Investments in mutual funds and other equity securities | ||
Securities available-for-sale: | ||
Available-for-sale, Amortized Cost | $ 1,000 | $ 1,000 |
Available-for-sale, Gross Unrealized Gains | 1 | |
Available-for-sale, Gross Unrealized (Losses) | (30) | |
Available-for-sale, Fair Value | $ 970 | $ 1,001 |
Securities held to maturity: | ||
Number of securities in unrealized loss positions | security | 1 | 1 |
U.S. Treasuries | ||
Securities held to maturity: | ||
Held-to-maturity, Amortized Cost | $ 1,987 | $ 1,978 |
Held-to-maturity, Gross Unrealized (Losses) | (18) | (8) |
Fair Value | $ 1,969 | $ 1,970 |
Number of securities in unrealized loss positions | security | 2 |
Securities - Continuous Unreali
Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | $ 26,099 | $ 22,667 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 18,550 | 11,532 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 44,649 | 34,199 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (372) | (166) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (701) | (257) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (1,073) | (423) |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 8,487 | 6,813 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 2,211 | |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Total | 10,698 | 6,813 |
Debt securities, Held-to-maturity securities, Continuous unrealized loss position, accumulated loss | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (116) | (78) |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (98) | |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (214) | (78) |
U.S. government agency mortgage-backed securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 11,483 | 9,788 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 9,702 | 7,854 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 21,185 | 17,642 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (128) | (28) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (303) | (162) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (431) | (190) |
U.S. government agency collateralized mortgage obligations | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 8,627 | 6,732 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 4,261 | 860 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 12,888 | 7,592 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (102) | (81) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (169) | (18) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (271) | (99) |
State and municipal securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 5,019 | 6,147 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 4,587 | 2,818 |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 9,606 | 8,965 |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (112) | (57) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (229) | (77) |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (341) | (134) |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 6,537 | 4,851 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, 12 Months or Longer | 2,211 | |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Total | 8,748 | 4,851 |
Debt securities, Held-to-maturity securities, Continuous unrealized loss position, accumulated loss | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (98) | (70) |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, 12 Months or Longer | (98) | |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (196) | (70) |
Investments in mutual funds and other equity securities | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 970 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Fair Value, Total | 970 | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | ||
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Less than 12 Months | (30) | |
Available-for-sale securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | (30) | |
U.S. Treasuries | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value | ||
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Less than 12 Months | 1,950 | 1,962 |
Held-to-maturity securities, Continuous Unrealized Loss Position, Fair Value, Total | 1,950 | 1,962 |
Debt securities, Held-to-maturity securities, Continuous unrealized loss position, accumulated loss | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (18) | (8) |
Held-to-maturity securities, Continuous Unrealized Loss Position, Gross Unrealized Losses, Total | $ (18) | $ (8) |
Securities - Contractual Maturi
Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Contractual Maturities, Available-for-sale, Amortized Cost | ||
Due in one year or less | $ 1,706 | |
Due after one year through five years | 8,229 | $ 5,630 |
Due after five years through ten years | 6,593 | 6,298 |
Due after ten years | 32,202 | 28,465 |
Amortized Cost | 48,730 | 40,393 |
Contractual Maturities, Available-for-sale, Fair Value | ||
Due in one year or less | 1,671 | |
Due after one year through five years | 8,070 | 5,587 |
Due after five years through ten year | 6,322 | 6,228 |
Due after ten years | 31,615 | 28,191 |
Fair Value | 47,678 | 40,006 |
Contractual Maturities, Held-to-maturity, Amortized Cost | ||
Due in one year or less | 994 | |
Due after one year through five years | 3,746 | 3,803 |
Due after five years through ten years | 8,031 | 7,180 |
Due after ten years | 1,878 | |
Amortized Cost | 12,771 | 12,861 |
Contractual Maturities, Held-to-maturity, Fair Value | ||
Due in one year or less | 985 | |
Due after one year through five years | 3,702 | 3,791 |
Due after five years through ten years | 7,885 | 7,156 |
Due after ten years | 1,922 | |
Fair Value | $ 12,572 | $ 12,869 |
Loans Receivable - Loans and le
Loans Receivable - Loans and leases outstanding by category (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Loans Receivable | ||
Mortgage loans held for sale | $ 34,044 | $ 35,024 |
Total portfolio loans and leases | 808,432 | 696,305 |
Total loans and leases | 842,476 | 731,329 |
Net deferred loan origination (fees) costs | (1,644) | (1,668) |
Commercial mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 316,671 | 263,141 |
Home equity lines and loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 82,773 | 84,039 |
Residential mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 50,363 | 32,375 |
Construction | ||
Loans Receivable | ||
Total portfolio loans and leases | 104,518 | 104,970 |
Consumer | ||
Loans Receivable | ||
Total portfolio loans and leases | 783 | 1,022 |
Leases, net | ||
Loans Receivable | ||
Total portfolio loans and leases | 364 | 762 |
Real estate loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 554,325 | 484,525 |
Real estate loans | Commercial mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 316,671 | 263,141 |
Real estate loans | Home equity lines and loans | ||
Loans Receivable | ||
Total portfolio loans and leases | 82,773 | 84,039 |
Real estate loans | Residential mortgage | ||
Loans Receivable | ||
Total portfolio loans and leases | 50,363 | 32,375 |
Real estate loans | Construction | ||
Loans Receivable | ||
Total portfolio loans and leases | 104,518 | 104,970 |
Commercial and industrial | ||
Loans Receivable | ||
Total portfolio loans and leases | $ 252,960 | $ 209,996 |
Loans Receivable - Loans and _2
Loans Receivable - Loans and leases outstanding by rate type (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Loans Receivable | ||
Loans with predetermined rates | $ 249,683 | $ 202,317 |
Loans with adjustable or floating rates | 592,793 | 529,012 |
Total loans and leases | 842,476 | 731,329 |
Net deferred loan origination (fees) costs | $ (1,644) | $ (1,668) |
Loans Receivable - Components o
Loans Receivable - Components of the net investment in leases (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Loans Receivable | ||
Minimum lease payments receivable | $ 376 | $ 793 |
Unearned lease income | (12) | (31) |
Total | $ 364 | $ 762 |
Loans Receivable - Age analysis
Loans Receivable - Age analysis of past due loans and leases (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 1,809 | $ 974 |
Current | 803,701 | 692,185 |
Total Accruing Loans and leases | 805,510 | 693,159 |
Nonaccrual loans and leases | 2,922 | 3,146 |
Total loans and leases | $ 808,432 | $ 696,305 |
Delinquency percentage | 0.59% | 0.59% |
Consumer | ||
Age Analysis of Past Due Loans and Leases | ||
Current | $ 783 | $ 1,022 |
Total Accruing Loans and leases | 783 | 1,022 |
Total loans and leases | 783 | 1,022 |
Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 123 | 98 |
Current | 241 | 664 |
Total Accruing Loans and leases | 364 | 762 |
Total loans and leases | $ 364 | $ 762 |
Delinquency percentage | 33.79% | 12.86% |
Commercial and industrial | ||
Age Analysis of Past Due Loans and Leases | ||
Current | $ 252,768 | $ 208,670 |
Total Accruing Loans and leases | 252,768 | 208,670 |
Nonaccrual loans and leases | 192 | 1,326 |
Total loans and leases | $ 252,960 | $ 209,996 |
Delinquency percentage | 0.08% | 0.63% |
Commercial mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 1,155 | |
Current | 315,022 | $ 262,727 |
Total Accruing Loans and leases | 316,177 | 262,727 |
Nonaccrual loans and leases | 494 | 414 |
Total loans and leases | $ 316,671 | $ 263,141 |
Delinquency percentage | 0.52% | 0.16% |
Home equity lines and loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 216 | $ 142 |
Current | 82,472 | 83,760 |
Total Accruing Loans and leases | 82,688 | 83,902 |
Nonaccrual loans and leases | 85 | 137 |
Total loans and leases | $ 82,773 | $ 84,039 |
Delinquency percentage | 0.36% | 0.33% |
Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 734 | |
Current | $ 48,212 | 30,557 |
Total Accruing Loans and leases | 48,212 | 31,291 |
Nonaccrual loans and leases | 2,151 | 1,084 |
Total loans and leases | $ 50,363 | $ 32,375 |
Delinquency percentage | 4.27% | 5.62% |
Construction | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 315 | |
Current | 104,203 | $ 104,785 |
Total Accruing Loans and leases | 104,518 | 104,785 |
Nonaccrual loans and leases | 185 | |
Total loans and leases | $ 104,518 | $ 104,970 |
Delinquency percentage | 0.30% | 0.18% |
30-89 days past due | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 1,809 | $ 963 |
30-89 days past due | Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 123 | 87 |
30-89 days past due | Commercial mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 1,155 | |
30-89 days past due | Home equity lines and loans | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 216 | 142 |
30-89 days past due | Residential mortgage | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 734 | |
30-89 days past due | Construction | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 315 | |
90+days past due and still accruing | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | 11 | |
90+days past due and still accruing | Leases, net | ||
Age Analysis of Past Due Loans and Leases | ||
Total past due | $ 11 |
Allowance for Loan Losses (th_3
Allowance for Loan Losses (the "Allowance") - Roll-forward of allowance by portfolio segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | $ 7,449 | $ 6,214 | $ 6,709 | $ 5,425 |
Charge-offs | (50) | (580) | (381) | (772) |
Recoveries | 21 | 60 | 125 | 261 |
Provision | 291 | 665 | 1,258 | 1,445 |
Balance at end of period | 7,711 | 6,359 | 7,711 | 6,359 |
Unallocated | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 172 | |||
Provision | (172) | |||
Consumer | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 3 | 2 | 5 | 2 |
Recoveries | 1 | 3 | 4 | |
Recoveries | 1 | |||
Provision | (2) | (4) | (5) | |
Balance at end of period | 4 | 1 | 4 | 1 |
Leases, net | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 3 | 8 | 5 | 5 |
Provision | (1) | (2) | 2 | |
Balance at end of period | 3 | 7 | 3 | 7 |
Commercial and industrial | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 2,559 | 2,086 | 2,214 | 1,973 |
Charge-offs | (50) | (528) | (244) | (647) |
Recoveries | 8 | 7 | 41 | 193 |
Provision | 41 | 626 | 547 | 672 |
Balance at end of period | 2,558 | 2,191 | 2,558 | 2,191 |
Commercial mortgage | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 3,011 | 2,423 | 2,434 | 2,038 |
Charge-offs | (52) | (83) | ||
Recoveries | 2 | 6 | 16 | |
Provision | 140 | 9 | 713 | 409 |
Balance at end of period | 3,153 | 2,380 | 3,153 | 2,380 |
Home equity lines and loans | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 269 | 228 | 280 | 460 |
Charge-offs | (137) | (42) | ||
Recoveries | 10 | 14 | ||
Recoveries | 52 | 46 | ||
Provision | 37 | (58) | 159 | (242) |
Balance at end of period | 316 | 222 | 316 | 222 |
Residential mortgage | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 166 | 79 | 82 | 85 |
Recoveries | 61 | 2 | ||
Provision | 14 | (2) | 37 | (10) |
Balance at end of period | 180 | 77 | 180 | 77 |
Construction | ||||
Roll-Forward of Allowance for Loan and Lease Losses by Portfolio Segment | ||||
Balance at beginning of period | 1,438 | 1,388 | 1,689 | 690 |
Provision | 59 | 93 | (192) | 791 |
Balance at end of period | $ 1,497 | $ 1,481 | $ 1,497 | $ 1,481 |
Allowance for Loan Losses (th_4
Allowance for Loan Losses (the "Allowance") - Allowance allocated by portfolio segment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Impaired Loans | ||||||
Allowance on loans and leases individually evaluated for impairment | $ 7 | $ 1 | ||||
Allowance on loans and leases collectively evaluated for impairment | 7,704 | 6,708 | ||||
Total | 7,711 | $ 7,449 | 6,709 | $ 6,359 | $ 6,214 | $ 5,425 |
Carrying value of loans and leases individually evaluated for impairment | 6,476 | 4,685 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 790,768 | 681,648 | ||||
Total | 797,244 | 686,333 | ||||
Unallocated | ||||||
Impaired Loans | ||||||
Total | 172 | |||||
Consumer | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 4 | 5 | ||||
Total | 4 | 3 | 5 | 1 | 2 | 2 |
Carrying value of loans and leases collectively evaluated for impairment | 783 | 1,022 | ||||
Total | 783 | 1,022 | ||||
Leases, net | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 3 | 5 | ||||
Total | 3 | 3 | 5 | 7 | 8 | 5 |
Carrying value of loans and leases collectively evaluated for impairment | 364 | 762 | ||||
Total | 364 | 762 | ||||
Commercial and industrial | ||||||
Impaired Loans | ||||||
Allowance on loans and leases individually evaluated for impairment | 7 | 1 | ||||
Allowance on loans and leases collectively evaluated for impairment | 2,551 | 2,213 | ||||
Total | 2,558 | 2,559 | 2,214 | 2,191 | 2,086 | 1,973 |
Carrying value of loans and leases individually evaluated for impairment | 3,143 | 2,506 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 249,817 | 207,490 | ||||
Total | 252,960 | 209,996 | ||||
Commercial mortgage | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 3,153 | 2,434 | ||||
Total | 3,153 | 3,011 | 2,434 | 2,380 | 2,423 | 2,038 |
Carrying value of loans and leases individually evaluated for impairment | 1,703 | 1,533 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 314,968 | 261,607 | ||||
Total | 316,671 | 263,140 | ||||
Home equity lines and loans | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 316 | 280 | ||||
Total | 316 | 269 | 280 | 222 | 228 | 460 |
Carrying value of loans and leases individually evaluated for impairment | 85 | 137 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 82,688 | 83,902 | ||||
Total | 82,773 | 84,039 | ||||
Residential mortgage | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 180 | 82 | ||||
Total | 180 | 166 | 82 | 77 | 79 | 85 |
Carrying value of loans and leases individually evaluated for impairment | 249 | 249 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 38,926 | 22,155 | ||||
Total | 39,175 | 22,404 | ||||
Construction | ||||||
Impaired Loans | ||||||
Allowance on loans and leases collectively evaluated for impairment | 1,497 | 1,689 | ||||
Total | 1,497 | $ 1,438 | 1,689 | $ 1,481 | $ 1,388 | $ 690 |
Carrying value of loans and leases individually evaluated for impairment | 1,296 | 260 | ||||
Carrying value of loans and leases collectively evaluated for impairment | 103,222 | 104,710 | ||||
Total | $ 104,518 | $ 104,970 |
Allowance for Loan Losses (th_5
Allowance for Loan Losses (the "Allowance") - Carrying value based on credit quality indicators (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | $ 756,922 | $ 662,146 |
Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 730,879 | 640,141 |
Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 22,712 | 19,766 |
Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 3,301 | 1,472 |
Doubtful | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 30 | 767 |
Commercial and industrial | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 252,960 | 209,996 |
Commercial and industrial | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 234,055 | 194,784 |
Commercial and industrial | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 16,016 | 13,997 |
Commercial and industrial | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 2,859 | 448 |
Commercial and industrial | Doubtful | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 30 | 767 |
Commercial mortgage | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 316,671 | 263,141 |
Commercial mortgage | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 311,857 | 258,337 |
Commercial mortgage | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 4,539 | 3,917 |
Commercial mortgage | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 275 | 887 |
Home equity lines and loans | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 82,773 | 84,039 |
Home equity lines and loans | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 82,606 | 83,902 |
Home equity lines and loans | Substandard | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 167 | 137 |
Construction | Evaluated based on credit quality indicators | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 104,518 | 104,970 |
Construction | Pass | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | 102,361 | 103,118 |
Construction | Special mention | ||
Loans and Leases by Credit Ratings | ||
Carry value of loans and leases excluding residential mortgage, consumer and leases | $ 2,157 | $ 1,852 |
Allowance for Loan Losses (th_6
Allowance for Loan Losses (the "Allowance") - Carrying value based on performance status (Details) $ in Thousands | Sep. 30, 2018USD ($)item | Dec. 31, 2017USD ($)item |
Loans and Leases by Credit Ratings | ||
Troubled debt restructurings | $ 4,017 | $ 2,641 |
Carrying value of residential mortgage, consumer and leases | 40,322 | 24,187 |
Loans at fair value | 11,188 | 9,972 |
Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 40,073 | 23,938 |
Nonperforming | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 249 | 249 |
Consumer | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 783 | 1,022 |
Consumer | Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 783 | 1,022 |
Leases, net | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 364 | 762 |
Leases, net | Performing | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 364 | 762 |
Residential mortgage | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | 39,175 | 22,403 |
Residential mortgage | Performing | ||
Loans and Leases by Credit Ratings | ||
Troubled debt restructurings | 0 | 0 |
Carrying value of residential mortgage, consumer and leases | 38,926 | 22,154 |
Residential mortgage | Nonperforming | ||
Loans and Leases by Credit Ratings | ||
Carrying value of residential mortgage, consumer and leases | $ 249 | $ 249 |
Number of loans | item | 7 | 4 |
Loans at fair value | $ 1,900 | $ 826 |
Allowance for Loan Losses (th_7
Allowance for Loan Losses (the "Allowance") - Impaired loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Impaired loans with related allowance: | |||||
Recorded investment | $ 479 | $ 479 | $ 124 | ||
Principal balance | 479 | 479 | 491 | ||
Related allowance | 7 | 7 | 1 | ||
Average recorded investment | 476 | 173 | |||
Impaired loans without related allowance: | |||||
Recorded investment | 5,997 | 5,997 | 4,087 | ||
Principal balance | 6,525 | 6,525 | 5,851 | ||
Average recorded investment | 6,187 | 5,135 | |||
Grand Total | |||||
Recorded investment | 6,476 | 6,476 | 4,211 | ||
Principal balance | 7,004 | 7,004 | 6,342 | ||
Average recorded investment | 6,663 | 5,308 | |||
Interest income recognized on performing impaired loans | 93 | $ 63 | 218 | $ 213 | |
Commercial and industrial | |||||
Impaired loans with related allowance: | |||||
Recorded investment | 479 | 479 | 124 | ||
Principal balance | 479 | 479 | 491 | ||
Related allowance | 7 | 7 | 1 | ||
Average recorded investment | 476 | 173 | |||
Impaired loans without related allowance: | |||||
Recorded investment | 2,664 | 2,664 | 1,907 | ||
Principal balance | 2,746 | 2,746 | 3,180 | ||
Average recorded investment | 2,748 | 2,945 | |||
Commercial mortgage | |||||
Impaired loans without related allowance: | |||||
Recorded investment | 1,703 | 1,703 | 1,534 | ||
Principal balance | 2,136 | 2,136 | 2,025 | ||
Average recorded investment | 1,698 | 1,537 | |||
Home equity lines and loans | |||||
Impaired loans without related allowance: | |||||
Recorded investment | 85 | 85 | 137 | ||
Principal balance | 89 | 89 | 137 | ||
Average recorded investment | 86 | 137 | |||
Residential mortgage | |||||
Impaired loans without related allowance: | |||||
Recorded investment | 249 | 249 | 249 | ||
Principal balance | 258 | 258 | 249 | ||
Average recorded investment | 254 | 249 | |||
Construction | |||||
Impaired loans without related allowance: | |||||
Recorded investment | 1,296 | 1,296 | 260 | ||
Principal balance | $ 1,296 | 1,296 | 260 | ||
Average recorded investment | $ 1,401 | $ 267 |
Allowance for Loan Losses (th_8
Allowance for Loan Losses (the "Allowance") - Troubled debt restructuring (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Allowance for Loan Losses (the "Allowance") | ||
TDRs included in nonperforming loans and leases | $ 554 | $ 741 |
TDRs in compliance with modified terms | 3,463 | 1,900 |
Total TDRs | $ 4,017 | $ 2,641 |
Allowance for Loan Losses (th_9
Allowance for Loan Losses (the "Allowance") - Loan and lease modifications granted categorized as TDRs (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)contract | Sep. 30, 2017contract | Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($)contract | |
Loan and lease modifications | ||||
Number of Contracts | 1 | 0 | 3 | 1 |
Pre-Modification Outstanding Recorded Investment | $ 796 | $ 2,530 | $ 165 | |
Post-Modification Outstanding Recorded Investment | $ 796 | $ 2,530 | 165 | |
Loan and lease modifications granted and subsequently defaulted | $ 0 | |||
Land and Construction | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 2 | ||
Pre-Modification Outstanding Recorded Investment | $ 796 | $ 2,410 | ||
Post-Modification Outstanding Recorded Investment | $ 796 | $ 2,410 | ||
Commercial and industrial | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 120 | $ 165 | ||
Post-Modification Outstanding Recorded Investment | $ 120 | $ 165 |
Allowance for Loan Losses (t_10
Allowance for Loan Losses (the "Allowance") - Loan and lease modifications made by type (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018contract | Sep. 30, 2017contract | Sep. 30, 2018contractitem | Sep. 30, 2017contract | |
Loan and lease modifications | ||||
Number of Contracts | 1 | 0 | 3 | 1 |
Loan Term Extension | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 2 | ||
Interest Rate Change and Loan Term Extension | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 1 | ||
Land and Construction | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 2 | ||
Land and Construction | Loan Term Extension | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 2 | ||
Commercial and industrial | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 1 | ||
Commercial and industrial | Interest Rate Change and Loan Term Extension | ||||
Loan and lease modifications | ||||
Number of Contracts | 1 | 1 |
Short-Term Borrowings and Lon_2
Short-Term Borrowings and Long-Term Debt - Short-term borrowings (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Short-Term Borrowings | |||
Amount of short term borrowings | $ (57,795,000) | $ (28,358,000) | |
Short term borrowings | $ 43,755,000 | $ 99,750,000 | |
Federal funds purchased | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Number of borrowing facilities | item | 2 | ||
Short term borrowings | $ 0 | 0 | |
Federal funds purchased, facility one | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Maximum borrowing capacity | 24,000,000 | ||
Federal funds purchased, facility two | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Maximum borrowing capacity | 15,000,000 | ||
Federal Reserve discount window | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Maximum borrowing capacity | 10,667,121 | ||
Short term borrowings | 0 | 0 | |
Short-term borrowing with interest rate 2.10% | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Short term borrowings | $ 40,755,700 | ||
Interest rate (as a percent) | 2.10% | ||
Short-term borrowing with interest rate 1.92% | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Short term borrowings | $ 2,500,000 | ||
Interest rate (as a percent) | 1.92% | ||
Duration of debt (in years) | 5 years | ||
Short-term borrowing with interest rate 1.70% | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Short term borrowings | $ 1,800,000 | ||
Interest rate (as a percent) | 1.70% | ||
Duration of debt (in years) | 4 years | ||
Short-term borrowing with interest rate 0.97% | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Short term borrowings | $ 1,200,000 | $ 1,200,000 | |
Interest rate (as a percent) | 0.97% | 0.97% | |
Duration of debt (in years) | 2 years | 2 years | |
Short-term borrowing with interest rate 1.54% | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Short term borrowings | $ 93,750,000 | ||
Interest rate (as a percent) | 1.54% | ||
Short-term borrowing with interest rate 1.68% | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Short term borrowings | $ 1,000,000 | ||
Interest rate (as a percent) | 1.68% | ||
Duration of debt (in years) | 4 years | ||
Short-term borrowing with interest rate 1.55% | Federal Home Loan Bank of Pittsburgh | |||
Short-Term Borrowings | |||
Short term borrowings | $ 1,300,000 | ||
Interest rate (as a percent) | 1.55% | ||
Duration of debt (in years) | 4 years |
Short-Term Borrowings and Lon_3
Short-Term Borrowings and Long-Term Debt - Long-term debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Long Term Debt | ||
Long-term debt | $ 6,444,000 | $ 8,863,000 |
Acquisition Purchase Note | ||
Long Term Debt | ||
Long-term debt | $ 1,444,000 | $ 2,063,000 |
Fixed interest rate (as a percent) | 3.00% | 3.00% |
Federal Home Loan Bank of Pittsburgh | Mid-term Repo-fixed Maturing On 06/26/2019 | ||
Long Term Debt | ||
Long-term debt | $ 1,800,000 | |
Fixed interest rate (as a percent) | 1.70% | |
Federal Home Loan Bank of Pittsburgh | Mid-term Repo-fixed Maturing On 08/10/2020 | ||
Long Term Debt | ||
Long-term debt | $ 5,000,000 | $ 5,000,000 |
Fixed interest rate (as a percent) | 2.76% | 2.76% |
Federal Home Loan Bank of Pittsburgh | Letter of Credit | ||
Long Term Debt | ||
Proceeds from long term debt | $ 88,100,000 | |
Maximum borrowing capacity | $ 432,816,917 | $ 380,159,142 |
Fair Value Measurements and D_3
Fair Value Measurements and Disclosures - Financial assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Measurements and Disclosures | ||
Securities available for sale | $ 47,678 | $ 40,006 |
Recurring | ||
Fair Value Measurements and Disclosures | ||
Mortgage loans held-for-sale | 34,044 | 35,024 |
Mortgage loans held-for-investment | 11,188 | 9,972 |
Total | 93,110 | 85,312 |
Recurring | U.S. government agency mortgage-backed securities | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 24,215 | 21,268 |
Recurring | U.S. government agency collateralized mortgage obligations | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 12,888 | 7,778 |
Recurring | State and municipal securities | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 9,605 | 9,959 |
Recurring | Investments in mutual funds and other equity securities | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 970 | 1,001 |
Recurring | Interest rate lock commitments | ||
Fair Value Measurements and Disclosures | ||
Derivative assets, Fair value | 200 | 310 |
Recurring | Level 2 | ||
Fair Value Measurements and Disclosures | ||
Mortgage loans held-for-sale | 34,044 | 35,024 |
Mortgage loans held-for-investment | 11,188 | 9,972 |
Total | 92,910 | 85,002 |
Recurring | Level 2 | U.S. government agency mortgage-backed securities | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 24,215 | 21,268 |
Recurring | Level 2 | U.S. government agency collateralized mortgage obligations | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 12,888 | 7,778 |
Recurring | Level 2 | State and municipal securities | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 9,605 | 9,959 |
Recurring | Level 2 | Investments in mutual funds and other equity securities | ||
Fair Value Measurements and Disclosures | ||
Securities available for sale | 970 | 1,001 |
Recurring | Level 3 | ||
Fair Value Measurements and Disclosures | ||
Total | 200 | 310 |
Recurring | Level 3 | Interest rate lock commitments | ||
Fair Value Measurements and Disclosures | ||
Derivative assets, Fair value | $ 200 | $ 310 |
Fair Value Measurements and D_4
Fair Value Measurements and Disclosures - Financial assets measured at fair value on non-recurring basis (Details) - Nonrecurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financial assets measured at fair value on a nonrecurring basis | ||
Impaired loans | $ 6,476 | $ 4,685 |
Other real estate owned | 437 | |
Total | 6,476 | 5,122 |
Level 3 | ||
Financial assets measured at fair value on a nonrecurring basis | ||
Impaired loans | 6,476 | 4,685 |
Other real estate owned | 437 | |
Total | $ 6,476 | $ 5,122 |
Fair Value Measurements and D_5
Fair Value Measurements and Disclosures - Estimated fair values of financial instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Financial assets: | ||
Securities available-for-sale | $ 47,678 | $ 40,006 |
Securities held-to-maturity, fair value | 12,572 | 12,869 |
Loans at fair value | 11,188 | 9,972 |
Carrying amount | ||
Financial assets: | ||
Cash and cash equivalents | 25,823 | 35,506 |
Securities available-for-sale | 47,678 | 40,006 |
Securities held-to-maturity, fair value | 12,771 | 12,861 |
Mortgage loans held for sale, amortized cost of $45,161 and $34,673 as of June 30, 2018 and December 31, 2017, respectively | 34,044 | 35,024 |
Loans at fair value | 787,889 | 677,956 |
Mortgage loans held-for-investment | 11,188 | 9,972 |
Restricted investment in bank stock | 4,581 | 6,814 |
Accrued interest receivable | 2,913 | 2,536 |
Financial liabilities: | ||
Deposits | 781,927 | 627,109 |
Short-term borrowings | 43,755 | 99,750 |
Long-term debt | 6,444 | 8,863 |
Subordinated debentures | 9,308 | 13,308 |
Accrued interest payable | 353 | 216 |
Forward commitments | 75 | |
Carrying amount | Interest rate lock commitments | ||
Financial assets: | ||
Derivative asset | 200 | 310 |
Carrying amount | Forward Commitments | ||
Financial assets: | ||
Derivative asset | 93 | |
Fair value | ||
Financial liabilities: | ||
Deposits | 626,635 | |
Short-term borrowings | 99,750 | |
Fair value | Forward Commitments | ||
Financial assets: | ||
Derivative asset | 93 | |
Level 1 | Fair value | ||
Financial assets: | ||
Cash and cash equivalents | 25,823 | 35,506 |
Level 2 | Fair value | ||
Financial assets: | ||
Securities available-for-sale | 47,678 | 40,006 |
Securities held-to-maturity, fair value | 12,572 | 12,869 |
Mortgage loans held for sale, amortized cost of $45,161 and $34,673 as of June 30, 2018 and December 31, 2017, respectively | 34,044 | 35,024 |
Mortgage loans held-for-investment | 11,188 | 9,972 |
Financial liabilities: | ||
Deposits | 775,300 | |
Short-term borrowings | 43,755 | |
Long-term debt | 6,458 | 8,865 |
Subordinated debentures | 9,241 | 12,883 |
Accrued interest payable | 353 | 216 |
Forward commitments | 75 | |
Level 3 | Fair value | ||
Financial assets: | ||
Loans at fair value | 780,958 | 669,852 |
Restricted investment in bank stock | 4,581 | 6,814 |
Accrued interest receivable | 2,913 | 2,536 |
Level 3 | Fair value | Interest rate lock commitments | ||
Financial assets: | ||
Derivative asset | $ 200 | $ 310 |
Fair Value Measurements and D_6
Fair Value Measurements and Disclosures - Off-balance sheet financial instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Carrying amount | Commitments to extend credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | $ 258,719 | $ 220,180 |
Carrying amount | Letter of Credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | 2,529 | 1,809 |
Fair value | Level 2 | Commitments to extend credit | ||
Off-balance sheet financial instruments: | ||
Off-balance sheet financial instruments | $ 200 | $ 310 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Notional amounts and fair values of derivative financial instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative Financial Instruments | ||
Notional Amount | $ 75,548 | $ 84,525 |
Asset (Liability) Fair Value | 293 | 235 |
Interest rate lock commitments | ||
Derivative Financial Instruments | ||
Notional Amount | 42,048 | 45,775 |
Asset (Liability) Fair Value | 200 | 310 |
Positive fair values | ||
Derivative Financial Instruments | ||
Notional Amount | 32,445 | 38,574 |
Asset (Liability) Fair Value | 284 | 344 |
Negative fair values | ||
Derivative Financial Instruments | ||
Notional Amount | 9,603 | 7,201 |
Asset (Liability) Fair Value | (84) | (34) |
Forward Commitments | ||
Derivative Financial Instruments | ||
Notional Amount | 33,500 | 38,750 |
Asset (Liability) Fair Value | 93 | (75) |
Positive fair values | ||
Derivative Financial Instruments | ||
Notional Amount | 25,000 | 6,500 |
Asset (Liability) Fair Value | 107 | 5 |
Negative fair values | ||
Derivative Financial Instruments | ||
Notional Amount | 8,500 | 32,250 |
Asset (Liability) Fair Value | $ (14) | $ (80) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair value gains and losses on derivative financial instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summary of the fair value gains and losses on derivative financial instruments | ||||
Net fair value gains (losses) on derivative financial instrument | $ 70 | $ (503) | $ 59 | $ (115) |
Realized gains/(losses) on derivatives | 170 | 278 | 534 | 845 |
Interest rate lock commitments | ||||
Summary of the fair value gains and losses on derivative financial instruments | ||||
Net fair value gains (losses) on derivative financial instrument | (224) | (423) | (110) | (162) |
Forward Commitments | ||||
Summary of the fair value gains and losses on derivative financial instruments | ||||
Net fair value gains (losses) on derivative financial instrument | $ 294 | $ (80) | $ 169 | $ 47 |
Segment (Details)
Segment (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)loanfacility | Sep. 30, 2017USD ($) | |
Segments | ||||
Number of central loan production facilities | loanfacility | 1 | |||
Non-interest Income | ||||
Net interest income | $ 8,378 | $ 7,341 | $ 24,216 | $ 21,105 |
Provision for loan losses | (291) | (665) | (1,258) | (1,445) |
Net interest income after provision | 8,087 | 6,676 | 22,958 | 19,660 |
Non-interest income: | ||||
Mortgage banking income | 8,274 | 9,904 | 20,407 | 25,089 |
Wealth management income | 930 | 934 | 2,996 | 1,905 |
Net change in fair values | (333) | (547) | (471) | 100 |
Other | 296 | 159 | 1,959 | 428 |
Total non-interest income | 9,167 | 10,450 | 24,891 | 27,522 |
Non-interest expenses: | ||||
Salaries and employee benefits | 8,901 | 10,330 | 26,719 | 29,753 |
Occupancy and equipment | 920 | 992 | 2,870 | 2,818 |
Professional fees | 714 | 481 | 1,670 | 1,384 |
Advertising & promotion | 590 | 597 | 1,802 | 1,537 |
Other | 2,628 | 2,612 | 7,328 | 7,565 |
Total non-interest expenses | 13,753 | 15,012 | 40,389 | 43,057 |
Operating Margin | 3,501 | 2,114 | 7,460 | 4,125 |
Bank | ||||
Non-interest Income | ||||
Net interest income | 8,107 | 7,190 | 23,597 | 20,733 |
Provision for loan losses | (291) | (665) | (1,258) | (1,445) |
Net interest income after provision | 7,816 | 6,525 | 22,339 | 19,288 |
Non-interest income: | ||||
Mortgage banking income | 105 | 67 | 148 | 67 |
Wealth management income | 59 | 18 | 149 | 233 |
Other | 363 | 353 | 1,136 | 995 |
Total non-interest income | 527 | 438 | 1,433 | 1,295 |
Non-interest expenses: | ||||
Salaries and employee benefits | 3,264 | 3,237 | 10,390 | 9,874 |
Occupancy and equipment | 521 | 575 | 1,599 | 1,666 |
Professional fees | 590 | 394 | 1,325 | 943 |
Advertising & promotion | 301 | 254 | 917 | 746 |
Other | 1,259 | 1,238 | 3,827 | 3,766 |
Total non-interest expenses | 5,935 | 5,698 | 18,058 | 16,995 |
Operating Margin | 2,408 | 1,265 | 5,714 | 3,588 |
Wealth | ||||
Non-interest Income | ||||
Net interest income | 71 | 31 | 217 | 70 |
Net interest income after provision | 71 | 31 | 217 | 70 |
Non-interest income: | ||||
Wealth management income | 871 | 916 | 2,847 | 1,672 |
Total non-interest income | 871 | 916 | 2,847 | 1,672 |
Non-interest expenses: | ||||
Salaries and employee benefits | 445 | 411 | 1,373 | 856 |
Occupancy and equipment | 29 | 26 | 99 | 52 |
Professional fees | 9 | 5 | 20 | 125 |
Advertising & promotion | 111 | 126 | 319 | 205 |
Other | 314 | 198 | 613 | 303 |
Total non-interest expenses | 908 | 766 | 2,424 | 1,541 |
Operating Margin | 34 | 181 | 640 | 201 |
Mortgage | ||||
Non-interest Income | ||||
Net interest income | 200 | 120 | 402 | 302 |
Net interest income after provision | 200 | 120 | 402 | 302 |
Non-interest income: | ||||
Mortgage banking income | 8,169 | 9,837 | 20,259 | 25,022 |
Net change in fair values | (333) | (547) | (471) | 100 |
Other | (67) | (194) | 823 | (567) |
Total non-interest income | 7,769 | 9,096 | 20,611 | 24,555 |
Non-interest expenses: | ||||
Salaries and employee benefits | 5,192 | 6,682 | 14,956 | 19,023 |
Occupancy and equipment | 370 | 391 | 1,172 | 1,100 |
Professional fees | 115 | 82 | 325 | 316 |
Advertising & promotion | 178 | 217 | 566 | 586 |
Other | 1,055 | 1,176 | 2,888 | 3,496 |
Total non-interest expenses | 6,910 | 8,548 | 19,907 | 24,521 |
Operating Margin | $ 1,059 | $ 668 | $ 1,106 | $ 336 |
Recent Litigation (Details)
Recent Litigation (Details) $ in Thousands | Nov. 21, 2017employee | Mar. 31, 2018USD ($) |
Recent Litigation | ||
Number of employees filed suit | employee | 3 | |
Reserve for estimated possible losses | $ | $ 200 |