Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 05, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Community Bancorp /VT | |
Entity Central Index Key | 0000718413 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,207,060 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and due from banks | $ 18,977,402 | $ 14,906,529 |
Federal funds sold and overnight deposits | 10,558,075 | 53,028,286 |
Total cash and cash equivalents | 29,535,477 | 67,934,815 |
Securities available-for-sale | 47,557,774 | 39,366,831 |
Restricted equity securities, at cost | 1,347,850 | 1,749,450 |
Loans held-for-sale | 262,000 | 0 |
Loans | 567,378,298 | 578,450,517 |
Allowance for loan losses | (5,723,753) | (5,602,541) |
Deferred net loan costs | 354,981 | 363,614 |
Net loans | 562,009,526 | 573,211,590 |
Bank premises and equipment, net | 10,943,412 | 9,713,455 |
Accrued interest receivable | 2,193,025 | 2,300,841 |
Bank owned life insurance | 4,857,969 | 4,814,099 |
Goodwill | 11,574,269 | 11,574,269 |
Other real estate owned | 92,084 | 201,386 |
Other assets | 9,164,905 | 9,480,762 |
Total assets | 679,538,291 | 720,347,498 |
Deposits: | ||
Demand, non-interest bearing | 110,870,636 | 122,430,805 |
Interest-bearing transaction accounts | 149,487,155 | 177,815,417 |
Money market funds | 79,501,860 | 85,261,685 |
Savings | 95,455,903 | 93,129,875 |
Time deposits, $250,000 and over | 11,928,023 | 14,395,291 |
Other time deposits | 108,906,051 | 115,783,492 |
Total deposits | 556,149,628 | 608,816,565 |
Borrowed funds | 7,650,000 | 1,550,000 |
Repurchase agreements | 32,144,591 | 30,521,565 |
Junior subordinated debentures | 12,887,000 | 12,887,000 |
Accrued interest and other liabilities | 5,035,098 | 3,968,657 |
Total liabilities | 613,866,317 | 657,743,787 |
Shareholders' Equity | ||
Preferred stock, 1,000,000 shares authorized, 15 and 20 shares issued and outstanding in 2019 and 2018, respectively ($100,000 liquidation value) | 1,500,000 | 2,000,000 |
Common stock - $2.50 par value; 15,000,000 shares authorized, 5,418,599 shares issued at 06/30/19 and 5,382,103 shares issued at 12/31/18 | 13,546,498 | 13,455,258 |
Additional paid-in capital | 33,034,807 | 32,536,532 |
Retained earnings | 20,055,870 | 17,882,282 |
Accumulated other comprehensive income (loss) | 157,576 | (647,584) |
Less: treasury stock, at cost; 210,101 shares at 06/30/19 and 12/31/18 | (2,622,777) | (2,622,777) |
Total shareholders' equity | 65,671,974 | 62,603,711 |
Total liabilities and shareholders' equity | $ 679,538,291 | $ 720,347,498 |
Book value per common share outstanding | $ 12.32 | $ 11.72 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Shareholder's Equity | ||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 15 | 20 |
Preferred stock, shares outstanding (in shares) | 15 | 20 |
Preferred stock liquidation value | $ 100,000 | $ 100,000 |
Common stock par value (in dollars per share) | $ 2.50 | $ 2.50 |
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, shares issued (in shares) | 5,148,599 | 5,382,103 |
Treasury stock (in shares) | 210,101 | 210,101 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Interest income | ||||
Interest and fees on loans | $ 7,829,008 | $ 6,699,981 | $ 15,039,818 | $ 13,150,681 |
Interest on taxable debt securities | 270,026 | 221,016 | 518,134 | 423,901 |
Dividends | 26,788 | 30,857 | 52,747 | 59,548 |
Interest on federal funds sold and overnight deposits | 136,600 | 77,005 | 350,091 | 171,567 |
Total interest income | 8,262,422 | 7,028,859 | 15,960,790 | 13,805,697 |
Interest expense | ||||
Interest on deposits | 1,280,259 | 719,389 | 2,563,219 | 1,406,451 |
Interest on borrowed funds | 9,869 | 17,642 | 15,006 | 25,125 |
Interest on repurchase agreements | 73,070 | 37,641 | 145,901 | 68,847 |
Interest on junior subordinated debentures | 183,755 | 163,827 | 361,367 | 306,824 |
Total interest expense | 1,546,953 | 938,499 | 3,085,493 | 1,807,247 |
Net interest income | 6,715,469 | 6,090,360 | 12,875,297 | 11,998,450 |
Provision for loan losses | 141,666 | 180,000 | 354,169 | 360,000 |
Net interest income after provision for loan losses | 6,573,803 | 5,910,360 | 12,521,128 | 11,638,450 |
Non-interest income | ||||
Service fees | 820,657 | 810,731 | 1,611,023 | 1,580,813 |
Income from sold loans | 128,690 | 190,710 | 231,777 | 374,329 |
Other income from loans | 223,509 | 198,351 | 362,253 | 410,621 |
Net realized loss on sale of securities AFS | 0 | (6,375) | 0 | (10,236) |
Other income | 261,282 | 496,744 | 547,786 | 730,304 |
Total non-interest income | 1,434,138 | 1,690,161 | 2,752,839 | 3,085,831 |
Non-interest expense | ||||
Salaries and wages | 1,792,930 | 1,914,616 | 3,635,860 | 3,530,002 |
Employee benefits | 806,340 | 722,302 | 1,582,680 | 1,396,304 |
Occupancy expenses, net | 642,284 | 657,596 | 1,333,113 | 1,332,470 |
Other expenses | 1,837,506 | 1,809,461 | 3,683,332 | 3,576,316 |
Total non-interest expense | 5,079,060 | 5,103,975 | 10,234,985 | 9,835,092 |
Income before income taxes | 2,928,881 | 2,496,546 | 5,038,982 | 4,889,189 |
Income tax expense | 509,583 | 493,892 | 847,779 | 903,992 |
Net income | $ 2,419,298 | $ 2,002,654 | $ 4,191,203 | $ 3,985,197 |
Earnings per common share | $ 0.46 | $ 0.39 | $ .80 | $ 0.77 |
Weighted average number of common shares used in computing earnings per share | 5,197,045 | 5,130,809 | 5,188,735 | 5,123,947 |
Dividends declared per common share | $ 0.19 | $ 0.19 | $ 0.38 | $ 0.36 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,419,298 | $ 2,002,654 | $ 4,191,203 | $ 3,985,197 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized holding gain (loss) on securities AFS arising during the period | 447,432 | (127,242) | 1,019,191 | (704,367) |
Reclassification adjustment for loss realized in income | 0 | 6,375 | 0 | 10,236 |
Unrealized gain (loss) during the period | 447,432 | (120,867) | 1,019,191 | (694,131) |
Tax effect | (93,962) | 25,381 | (214,031) | 145,769 |
Other comprehensive income (loss), net of tax | 353,470 | (95,486) | 805,160 | (548,362) |
Total comprehensive income | $ 2,772,768 | $ 1,907,168 | $ 4,996,363 | $ 3,436,835 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Common Stock | Preferred Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total |
Beginning Balance at Dec. 31, 2017 | $ 13,305,800 | $ 2,500,000 | $ 31,639,189 | $ 13,387,739 | $ (274,097) | $ (2,622,777) | $ 57,935,854 |
Issuance of common stock | 33,345 | 207,208 | 240,553 | ||||
Cash dividends declared - common stock | (869,128) | (869,128) | |||||
Cash dividends declared - preferred stock | (28,125) | (28,125) | |||||
Redemption of preferred stock | (500,000) | (500,000) | |||||
Comprehensive income | |||||||
Net income | 1,982,543 | 1,982,543 | |||||
Other comprehensive loss | (452,876) | (452,876) | |||||
Ending Balance at Mar. 31, 2018 | 13,339,145 | 2,000,000 | 31,846,397 | 14,473,029 | (726,973) | (2,622,777) | 58,308,821 |
Beginning Balance at Dec. 31, 2017 | 13,305,800 | 2,500,000 | 31,639,189 | 13,387,739 | (274,097) | (2,622,777) | 57,935,854 |
Comprehensive income | |||||||
Net income | 3,985,197 | ||||||
Other comprehensive loss | (548,362) | ||||||
Ending Balance at Jun. 30, 2018 | 13,375,328 | 2,000,000 | 32,048,600 | 15,477,941 | (822,459) | (2,622,777) | 59,456,633 |
Beginning Balance at Mar. 31, 2018 | 13,339,145 | 2,000,000 | 31,846,397 | 14,473,029 | (726,973) | (2,622,777) | 58,308,821 |
Issuance of common stock | 36,183 | 202,203 | 238,386 | ||||
Cash dividends declared - common stock | (973,992) | (973,992) | |||||
Cash dividends declared - preferred stock | (23,750) | (23,750) | |||||
Comprehensive income | |||||||
Net income | 2,002,654 | 2,002,654 | |||||
Other comprehensive loss | (95,486) | (95,486) | |||||
Ending Balance at Jun. 30, 2018 | 13,375,328 | 2,000,000 | 32,048,600 | 15,477,941 | (822,459) | (2,622,777) | 59,456,633 |
Beginning Balance at Dec. 31, 2018 | 13,455,258 | 2,000,000 | 32,536,532 | 17,882,282 | (647,584) | (2,622,777) | 62,603,711 |
Issuance of common stock | 49,415 | 263,611 | 313,026 | ||||
Cash dividends declared - common stock | (983,122) | (983,122) | |||||
Cash dividends declared - preferred stock | (27,500) | (27,500) | |||||
Redemption of preferred stock | (500,000) | (500,000) | |||||
Comprehensive income | |||||||
Net income | 1,771,905 | 1,771,905 | |||||
Other comprehensive loss | 451,690 | 451,690 | |||||
Ending Balance at Mar. 31, 2019 | 13,504,673 | 1,500,000 | 32,800,143 | 18,643,565 | (195,894) | (2,622,777) | 63,629,710 |
Beginning Balance at Dec. 31, 2018 | 13,455,258 | 2,000,000 | 32,536,532 | 17,882,282 | (647,584) | (2,622,777) | 62,603,711 |
Comprehensive income | |||||||
Net income | 4,191,203 | ||||||
Other comprehensive loss | 805,160 | ||||||
Ending Balance at Jun. 30, 2019 | 13,546,498 | 1,500,000 | 33,034,807 | 20,055,870 | 157,576 | (2,622,777) | 65,671,974 |
Beginning Balance at Mar. 31, 2019 | 13,504,673 | 1,500,000 | 32,800,143 | 18,643,565 | (195,894) | (2,622,777) | 63,629,710 |
Issuance of common stock | 41,825 | 234,664 | 276,489 | ||||
Cash dividends declared - common stock | (986,368) | (986,368) | |||||
Cash dividends declared - preferred stock | (20,625) | (20,625) | |||||
Comprehensive income | |||||||
Net income | 2,419,298 | 2,419,298 | |||||
Other comprehensive loss | 353,470 | 353,470 | |||||
Ending Balance at Jun. 30, 2019 | $ 13,546,498 | $ 1,500,000 | $ 33,034,807 | $ 20,055,870 | $ 157,576 | $ (2,622,777) | $ 65,671,974 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities: | ||
Net income | $ 4,191,203 | $ 3,985,197 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization, bank premises and equipment | 461,502 | 490,702 |
Provision for loan losses | 354,169 | 360,000 |
Deferred income tax provision (credit) | 23,318 | (76,957) |
Net realized loss on sale of securities AFS | 0 | 10,236 |
Gain on sale of loans | (63,259) | (161,899) |
Gain on sale of bank premises and equipment | 0 | (264,087) |
Loss on sale of OREO | 817 | 0 |
Income from CFS Partners | (333,359) | (270,786) |
Amortization of bond premium, net | 69,789 | 65,691 |
Write down on OREO | 95,008 | 0 |
Proceeds from sales of loans held for sale | 1,522,404 | 5,078,916 |
Originations of loans held for sale | (1,721,145) | (3,879,730) |
(Decrease) increase in taxes payable | (41,593) | 82,207 |
Decrease in interest receivable | 107,816 | 99,614 |
Decrease in mortgage servicing rights | 71,305 | 49,607 |
Decrease in right-of-use assets | 116,320 | 0 |
Decrease in operating lease liabilities | (111,916) | 0 |
Decrease (increase) in other assets | 226,100 | (559,365) |
Increase in cash surrender value of BOLI | (43,870) | (45,864) |
Amortization of limited partnerships | 156,054 | 188,742 |
Decrease (increase) in unamortized loan costs | 8,633 | (26,526) |
Decrease in interest payable | (17,271) | (6,254) |
Decrease in accrued expenses | (140,451) | (200,085) |
(Decrease) increase in other liabilities | (85,517) | 36,223 |
Net cash provided by operating activities | 4,846,057 | 4,955,582 |
Cash Flows from Investing Activities: | ||
Investments - AFS: Maturities, calls, pay downs and sales | 2,459,484 | 5,187,588 |
Investments - AFS: Purchases | (9,701,025) | (6,267,361) |
Proceeds from redemption of restricted equity securities | 493,600 | 0 |
Purchases of restricted equity securities | (92,000) | (730,400) |
Decrease in limited partnership contributions payable | 0 | (380,250) |
Decrease (increase) in loans, net | 10,705,711 | (2,289,690) |
Capital expenditures net of proceeds from sales of bank premises and equipment | (317,000) | 400,558 |
Proceeds from sales of OREO | 105,561 | 169,900 |
Recoveries of loans charged off | 41,468 | 46,665 |
Net cash provided by (used in) investing activities | 3,695,799 | (3,862,990) |
Cash Flows from Financing Activities: | ||
Net decrease in demand and interest-bearing transaction accounts | (39,888,431) | (11,555,232) |
Net decrease in money market and savings accounts | (3,433,797) | (13,894,555) |
Net decrease in time deposits | (9,344,709) | (8,266,282) |
Net increase in repurchase agreements | 1,623,026 | 1,647,124 |
Net increase in short-term borrowings | 6,100,000 | 21,000,000 |
Repayments on long-term borrowings | 0 | (2,000,000) |
Decrease in finance lease obligations | (61,117) | (56,366) |
Redemption of preferred stock | (500,000) | (500,000) |
Dividends paid on preferred stock | (48,125) | (51,875) |
Dividends paid on common stock | (1,388,041) | (1,259,104) |
Net cash used in financing activities | (46,941,194) | (14,936,290) |
Net decrease in cash and cash equivalents | (38,399,338) | (13,843,698) |
Cash and cash equivalents: | ||
Beginning | 67,934,815 | 42,653,501 |
Ending | 29,535,477 | 28,809,803 |
Supplemental Schedule of Cash Paid During the Period: | ||
Interest | 3,102,764 | 1,813,501 |
Income taxes, net of refunds | 710,000 | 710,000 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Change in unrealized gain (loss) on securities AFS | 1,019,191 | (694,131) |
Loans transferred to OREO | 92,084 | 249,900 |
Common Shares Dividends Paid: | ||
Dividends declared | 1,969,490 | 1,843,120 |
Decrease (increase) in dividends payable attributable to dividends declared | 8,066 | (105,077) |
Dividends reinvested | (589,515) | (478,939) |
Total | $ 1,388,041 | $ 1,259,104 |
1. Basis of Presentation and Co
1. Basis of Presentation and Consolidation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Note 1. Basis of Presentation and Consolidation | The interim consolidated financial statements of Community Bancorp. and Subsidiary are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments necessary for the fair presentation of the consolidated financial condition and results of operations of the Company and its subsidiary, Community National Bank (the Bank), contained herein have been made. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full annual period ending December 31, 2019, or for any other interim period. Certain amounts in the 2018 consolidated financial statements have been reclassified to conform to the 2019 presentation. Reclassifications had no effect on prior period net income or shareholders’ equity. In addition to the definitions provided elsewhere in this quarterly report, the definitions, acronyms and abbreviations identified below are used throughout this report, including in Part I. “Financial Information” and Part II. “Other Information”, and are intended to aid the reader and provide a reference page when reviewing this report. ABS and OAS: Asset backed or other amortizing security FHLMC: Federal Home Loan Mortgage Corporation AFS: Available-for-sale FOMC: Federal Open Market Committee Agency MBS: MBS issued by a US government agency FRB: Federal Reserve Board or GSE FRBB: Federal Reserve Bank of Boston ALCO: Asset Liability Committee GAAP: Generally Accepted Accounting Principles ALL: Allowance for loan losses in the United States AOCI: Accumulated other comprehensive income GSE: Government sponsored enterprise ASC: Accounting Standards Codification HTM: Held-to-maturity ASU: Accounting Standards Update ICS: Insured Cash Sweeps of the Promontory Bancorp: Community Bancorp. Interfinancial Network Bank: Community National Bank IRS: Internal Revenue Service BIC: Borrower-in-Custody JNE: Jobs for New England Board: Board of Directors Jr: Junior BOLI: Bank owned life insurance LIBOR: London Interbank Offered Rate bp or bps: Basis point(s) MBS: Mortgage-backed security CBLR: Community Bank Leverage Ratio MPF: Mortgage Partnership Finance CDARS: Certificate of Deposit Accounts Registry MSRs: Mortgage servicing rights Service of the Promontory Interfinancial NII: Net interest income Network NMTC: New Market Tax Credits CDs: Certificates of deposit OCI: Other comprehensive income (loss) CDI: Core deposit intangible OREO: Other real estate owned CECL: Current Expected Credit Loss OTTI: Other-than-temporary impairment CFSG: Community Financial Services Group, LLC PMI: Private mortgage insurance CFS Partners: Community Financial Services Partners, RD: USDA Rural Development LLC SBA: U.S. Small Business Administration Company: Community Bancorp. and Subsidiary SEC: U.S. Securities and Exchange Commission CRE: Commercial Real Estate SERP: Supplemental Employee Retirement Plan DDA or DDAs: Demand Deposit Account(s) TDR: Troubled-debt restructuring DTC: Depository Trust Company USDA: U.S. Department of Agriculture DRIP: Dividend Reinvestment Plan VA: U.S. Veterans Administration Exchange Act: Securities Exchange Act of 1934 2017 Tax Act: Tax Cut and Jobs Act of 2017 FASB: Financial Accounting Standards Board 2018 Economic Growth, Regulatory Relief and FDIC: Federal Deposit Insurance Corporation Regulatory Consumer Protection Act of 2018 FHLBB: Federal Home Loan Bank of Boston Relief Act: |
2. Recent Accounting Developmen
2. Recent Accounting Developments | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Note 2. Recent Accounting Developments | In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments A modified version of these requirements also applies to debt securities classified as available for sale, which will require that credit losses on those securities be recorded through an allowance for credit losses rather than a write-down. evaluate the impact h e ASU was to be effec ti ve for fisca l years be g inn i n g aft er De c ember 15, 2019, in c lu d ing in teri m p e rio ds w i t hin t ho se fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018, including interim periods within such years. However, on July 17, 2019, the FASB announced its intention to propose an extended effective date of January 1, 2023 for compliance with the ASU by smaller reporting companies. The Company would qualify for this extension and management will evaluate its CECL compliance timetable in the event that the FASB finalizes its extension. In January 2017, the FASB issued ASU No. 2017-04, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The Company has goodwill from its acquisition of LyndonBank in 2007 and performs an impairment test annually or more frequently if circumstances warrant (see Note 6). The Company is currently evaluating the impact of the adoption of the ASU on its consolidated financial statements, but does not anticipate any material impact at this time. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
3. Earnings per Common Share
3. Earnings per Common Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Note 3. Earnings per Common Share | Earnings per common share amounts are computed based on the weighted average number of shares of common stock issued during the period (retroactively adjusted for stock splits and stock dividends, if any), including Dividend Reinvestment Plan shares issuable upon reinvestment of dividends declared, and reduced for shares held in treasury. The following tables illustrate the calculation of earnings per common share for the periods presented, as adjusted for the cash dividends declared on the preferred stock: Three Months Ended June 30, 2019 2018 Net income, as reported $ 2,419,298 $ 2,002,654 Less: dividends to preferred shareholders 20,625 23,750 Net income available to common shareholders $ 2,398,673 $ 1,978,904 Weighted average number of common shares used in calculating earnings per share 5,197,045 5,130,809 Earnings per common share $ 0.46 $ 0.39 Six Months Ended June 30, 2019 2018 Net income, as reported $ 4,191,203 $ 3,985,197 Less: dividends to preferred shareholders 48,125 51,875 Net income available to common shareholders $ 4,143,078 $ 3,933,322 Weighted average number of common shares used in calculating earnings per share 5,188,735 5,123,947 Earnings per common share $ 0.80 $ 0.77 |
4. Investment Securities
4. Investment Securities | 6 Months Ended |
Jun. 30, 2019 | |
Debt Securities, Available-for-sale [Abstract] | |
Note 4. Investment Securities | Change in Accounting Principle Prior to 2019, the entire balance of the Company’s HTM investment portfolio consisted of Municipal notes. Effective January 1, 2019, and in accordance with ASC 250 (Accounting Changes and Error Corrections), the Company chose to reclassify these debt instruments from the investment portfolio into the loan portfolio. This change represents a voluntary reclassification of municipal debt instruments from classification as investment securities under ASC 320 (Investments – Debt and Equity Securities) to classification as loans under ASC310 (Receivables). All periods presented have been restated to conform to this change. Accordingly, for all periods presented below, the Company’s investment portfolio consists entirely of AFS investments and municipal debt obligations are reported as a component of the Company’s loan portfolio (See Note 5). The reclassification of the municipal debt instruments in this portfolio did not have a material impact on the Company’s consolidated financial statements or results of operations. Debt securities as of the balance sheet dates consisted of the following: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2019 U.S. GSE debt securities $ 20,977,332 $ 84,133 $ 22,268 $ 21,039,197 Agency MBS 15,811,926 54,732 101,209 15,765,449 ABS and OAS 1,904,051 57,811 0 1,961,862 Other investments 8,665,000 127,598 1,332 8,791,266 Total $ 47,358,309 $ 324,274 $ 124,809 $ 47,557,774 December 31, 2018 U.S. GSE debt securities $ 14,010,100 $ 394 $ 259,391 $ 13,751,103 Agency MBS 16,020,892 2,701 449,068 15,574,525 ABS and OAS 1,988,565 3,806 6,242 1,986,129 Other investments 8,167,000 8,472 120,398 8,055,074 Total $ 40,186,557 $ 15,373 $ 835,099 $ 39,366,831 Investments pledged as collateral for repurchase agreements consisted of U.S. GSE debt securities, Agency MBS, ABS and OAS, and CDs. These repurchase agreements mature daily. These investments as of the balance sheet dates were as follows: Amortized Fair Cost Value June 30, 2019 $ 47,358,309 $ 47,557,774 December 31, 2018 40,186,557 39,366,831 The scheduled maturities of debt securities as of the balance sheet dates were as follows: Amortized Fair Cost Value June 30, 2019 Due in one year or less $ 496,000 $ 496,187 Due from one to five years 14,704,552 14,811,778 Due from five to ten years 15,368,394 15,504,360 Due after ten years 977,437 980,000 Agency MBS 15,811,926 15,765,449 Total $ 47,358,309 $ 47,557,774 December 31, 2018 Due from one to five years $ 12,714,642 $ 12,519,008 Due from five to ten years 11,451,023 11,273,298 Agency MBS 16,020,892 15,574,525 Total $ 40,186,557 $ 39,366,831 Agency MBS are not due at a single maturity date and have not been allocated to maturity groupings for purposes of the maturity table. Debt securities with unrealized losses as of the balance sheet dates are presented in the table below. Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Number of Fair Unrealized Value Loss Value Loss Securities Value Loss June 30, 2019 U.S. GSE debt securities $ 0 $ 0 $ 7,505,284 $ 22,268 6 $ 7,505,284 $ 22,268 Agency MBS 1,225,362 2,656 10,014,594 98,553 21 11,239,956 101,209 Other investments 0 0 742,667 1,332 3 742,667 1,332 Total $ 1,225,362 $ 2,656 $ 18,262,545 $ 122,153 30 $ 19,487,907 $ 124,809 December 31, 2018 U.S. GSE debt securities $ 1,465,947 $ 6,752 $ 11,284,761 $ 252,639 11 $ 12,750,708 $ 259,391 Agency MBS 2,317,838 22,029 12,223,386 427,039 24 14,541,224 449,068 ABS and OAS 976,226 6,242 0 0 1 976,226 6,242 Other investments 1,956,914 20,086 4,113,688 100,312 25 6,070,602 120,398 Total $ 6,716,925 $ 55,109 $ 27,621,835 $ 779,990 61 $ 34,338,760 $ 835,099 The unrealized losses for all periods presented were principally attributable to changes in prevailing interest rates for similar types of securities and not deterioration in the creditworthiness of the issuer. Management evaluates its investment securities for OTTI at least on a quarterly basis, and more frequently when economic or market conditions, or adverse developments relating to the issuer, warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than the carrying value, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies or other adverse developments in the status of the securities have occurred, and the results of reviews of the issuer's financial condition. As of June 30, 2019 and December 31, 2018, there were no declines in the fair value of any of the securities reflected in the table above that were deemed by management to be OTTI. |
5. Loans, Allowance for Loan Lo
5. Loans, Allowance for Loan Losses and Credit Quality | 6 Months Ended |
Jun. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Note 5. Loans, Allowance for Loan Losses and Credit Quality | Change in Accounting Principle As disclosed in Note 4 (Investment Securities), effective January 1, 2019 and in accordance with ASC 250 (Accounting Changes and Error Corrections), the Company chose to reclassify its municipal debt instruments from the investment portfolio into the loan portfolio. This change represents a voluntary reclassification of municipal debt instruments by management from classification as investment securities under ASC 320 (Investments – Debt and Equity Securities) to classification as loans under ASC 310 (Receivables). As stated in Note 4, the reclassification of this portfolio did not have a material impact on the Company’s consolidated financial statements or results of operations. The composition of net loans as of the balance sheet dates was as follows: June 30, December 31, 2019 2018 Commercial & industrial $ 85,469,062 $ 80,766,693 Commercial real estate 238,416,761 235,318,148 Municipal* 30,302,868 47,067,023 Residential real estate - 1st lien 164,798,474 165,665,175 Residential real estate - Jr lien 43,767,258 44,544,987 Consumer 4,623,875 5,088,491 Total loans 567,378,298 578,450,517 Deduct (add): ALL 5,723,753 5,602,541 Deferred net loan costs (354,981 ) (363,614 ) Net loans $ 562,009,526 $ 573,211,590 *Prior to 2019, all loans in this category were reported as HTM securities as a component of Investment Securities (see Note 4). All periods presented have been restated to conform to the reclassification. The following is an age analysis of loans (including non-accrual) as of the balance sheet dates, by portfolio segment: 90 Days or 90 Days Total Non-Accrual More and June 30, 2019 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 198,284 $ 293,524 $ 491,808 $ 84,977,254 $ 85,469,062 $ 606,832 $ 0 Commercial real estate 852,655 411,734 1,264,389 237,152,372 238,416,761 1,946,457 0 Municipal 0 0 0 30,302,868 30,302,868 0 0 Residential real estate - 1st lien 1,608,519 1,332,686 2,941,205 161,857,269 164,798,474 2,984,761 736,283 - Jr lien 312,942 240,320 553,262 43,213,996 43,767,258 287,499 108,365 Consumer 24,071 0 24,071 4,599,804 4,623,875 0 0 Totals $ 2,996,471 $ 2,278,264 $ 5,274,735 $ 562,103,563 $ 567,378,298 $ 5,825,549 $ 844,648 90 Days or 90 Days Total Non-Accrual More and December 31, 2018 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 217,385 $ 0 $ 217,385 $ 80,549,308 $ 80,766,693 $ 84,814 $ 0 Commercial real estate 1,509,839 190,789 1,700,628 233,617,520 235,318,148 1,742,993 0 Municipal 0 0 0 47,067,023 47,067,023 0 0 Residential real estate - 1st lien 4,108,319 1,371,061 5,479,380 160,185,795 165,665,175 2,026,939 622,486 - Jr lien 484,855 353,914 838,769 43,706,218 44,544,987 408,540 104,959 Consumer 43,277 1,661 44,938 5,043,553 5,088,491 0 1,661 Total $ 6,363,675 $ 1,917,425 $ 8,281,100 $ 570,169,417 $ 578,450,517 $ 4,263,286 $ 729,106 For all loan segments, loans over 30 days past due are considered delinquent. As of the balance sheet dates presented, residential mortgage loans in process of foreclosure consisted of the following: Number of loans Balance June 30, 2019 13 $ 861,821 December 31, 2018 12 961,709 Allowance for loan losses The ALL is established through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes that future payments of a loan balance are unlikely. Subsequent recoveries, if any, are credited to the allowance. Unsecured loans, primarily consumer loans, are charged off when they become uncollectible and no later than 120 days past due. Unsecured loans to customers who subsequently file bankruptcy are charged off within 30 days of receipt of the notification of filing or by the end of the month in which the loans become 120 days past due, whichever occurs first. For secured loans, both residential and commercial, the potential loss on impaired loans is carried as a loan loss reserve specific allocation; the loss portion is charged off when collection of the full loan appears unlikely. The unsecured portion of a real estate loan is that portion of the loan exceeding the "fair value" of the collateral less the estimated cost to sell. Value of the collateral is determined in accordance with the Company’s appraisal policy. The unsecured portion of an impaired real estate secured loan is charged off by the end of the month in which the loan becomes 180 days past due. As described below, the allowance consists of general, specific and unallocated components. However, the entire allowance is available to absorb losses in the loan portfolio, regardless of specific, general and unallocated components considered in determining the amount of the allowance. General component The general component of the ALL is based on historical loss experience and various qualitative factors and is stratified by the following loan segments: commercial and industrial, CRE, municipal, residential real estate 1st lien, residential real estate Jr lien and consumer loans. The Company does not disaggregate its portfolio segments further into classes. Loss ratios are calculated by loan segment for one year, two year, three year, four year and five year look back periods. Management uses an average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment in the current economic climate. During periods of economic stability, a relatively longer period (e.g., five years) may be appropriate. During periods of significant expansion or contraction, the Company may appropriately shorten the historical time period. The Company is currently using an extended look back period of five years. Qualitative factors include the levels of and trends in delinquencies and non-performing loans, levels of and trends in loan risk groups, trends in volumes and terms of loans, effects of any changes in loan related policies, experience, ability and the depth of management, documentation and credit data exception levels, national and local economic trends, external factors such as competition and regulation and lastly, concentrations of credit risk in a variety of areas, including portfolio product mix, the level of loans to individual borrowers and their related interests, loans to industry segments, and the geographic distribution of CRE loans. This evaluation is inherently subjective as it requires estimates that are susceptible to revision as more information becomes available. The qualitative factors are determined based on the various risk characteristics of each loan segment. The Company has policies, procedures and internal controls that management believes are commensurate with the risk profile of each of these segments. Major risk characteristics relevant to each portfolio segment are as follows: Commercial & Industrial – Commercial Real Estate – Municipal – Residential Real Estate - 1st Lien – Residential Real Estate – Jr Lien – Consumer – Specific component The specific component of the ALL relates to loans that are impaired. Impaired loans are loan(s) to a borrower that in the aggregate are greater than $100,000 and that are in non-accrual status or are TDRs regardless of amount. A specific allowance is established for an impaired loan when its estimated fair value or net present value of future cash flows is less than the carrying value of the loan. For all loan segments, except consumer loans, a loan is considered impaired when, based on current information and events, in management’s estimation it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant or temporary payment delays and payment shortfalls generally are not classified as impaired. Management evaluates the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and frequency of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis, by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Impaired loans also include troubled loans that are restructured. A TDR occurs when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that would otherwise not be granted. TDRs may include the transfer of assets to the Company in partial satisfaction of a troubled loan, a modification of a loan’s terms, or a combination of the two. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment evaluation, unless such loans are subject to a restructuring agreement. Unallocated component An unallocated component of the ALL is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component reflects management’s estimate of the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. The tables below summarize changes in the ALL and select loan information, by portfolio segment, for the periods indicated. As of or for the three months ended June 30, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 676,764 $ 3,153,156 $ 0 $ 1,407,132 $ 265,003 $ 49,715 $ 176,072 5,727,842 Charge-offs (3,573 ) (14,710 ) 0 (19,790 ) (102,000 ) (26,830 ) 0 (166,903 ) Recoveries 0 0 0 7,576 516 13,056 0 21,148 Provision (credit) 41,941 (43,665 ) 0 32,439 124,465 17,469 (30,983 ) 141,666 ALL ending balance $ 715,132 $ 3,094,781 $ 0 $ 1,427,357 $ 287,984 $ 53,410 $ 145,089 $ 5,723,753 As of or for the six months ended June 30, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 Charge-offs (3,573 ) (14,710 ) 0 (94,521 ) (102,000 ) (59,621 ) 0 (274,425 ) Recoveries 9,078 0 0 10,073 1,001 21,316 0 41,468 Provision 12,158 89,623 0 90,311 115,538 34,928 11,611 354,169 ALL ending balance $ 715,132 $ 3,094,781 $ 0 $ 1,427,357 $ 287,984 $ 53,410 $ 145,089 $ 5,723,753 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 110,375 $ 681 $ 0 $ 0 $ 111,056 Collectively 715,132 3,094,781 0 1,316,982 287,303 53,410 145,089 5,612,697 Total $ 715,132 $ 3,094,781 $ 0 $ 1,427,357 $ 287,984 $ 53,410 $ 145,089 $ 5,723,753 Loans evaluated for impairment Individually $ 606,831 $ 2,052,270 $ 0 $ 5,229,099 $ 200,036 $ 0 $ 8,088,236 Collectively 84,862,231 236,364,491 30,302,868 159,569,375 43,567,222 4,623,875 559,290,062 Total $ 85,469,062 $ 238,416,761 $ 30,302,868 $ 164,798,474 $ 43,767,258 $ 4,623,875 $ 567,378,298 As of or for the year ended December 31, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 675,687 $ 2,674,029 $ 0 $ 1,460,547 $ 316,982 $ 43,303 $ 267,551 $ 5,438,099 Charge-offs (152,860 ) (124,645 ) 0 (251,654 ) (69,173 ) (143,688 ) 0 (742,020 ) Recoveries 60,192 0 0 26,832 1,420 38,018 0 126,462 Provision (credit) 114,450 470,484 0 185,769 24,216 119,154 (134,073 ) 780,000 ALL ending balance $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 112,969 $ 1,757 $ 0 $ 0 $ 114,726 Collectively 697,469 3,019,868 0 1,308,525 271,688 56,787 133,478 5,487,815 Total $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 Loans evaluated for impairment Individually $ 60,846 $ 1,746,894 $ 0 $ 4,392,060 $ 319,321 $ 0 $ 6,519,121 Collectively 80,705,847 233,571,254 47,067,023 161,273,115 44,225,666 5,088,491 571,931,396 Total $ 80,766,693 $ 235,318,148 $ 47,067,023 $ 165,665,175 $ 44,544,987 $ 5,088,491 $ 578,450,517 As of or for the three months ended June 30, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate 1st Lien Jr Lien Consumer Unallocated Total Allowance for loan losses Beginning balance $ 666,660 $ 2,666,704 $ 1,407,801 $ 289,292 $ 44,162 $ 266,601 $ 5,341,220 Charge-offs (42,380 ) (3,645 ) (45,362 ) 0 (39,758 ) 0 (131,145 ) Recoveries 15,027 0 300 240 7,381 0 22,948 Provision (credit) 145,782 45,180 35,302 (1,930 ) 39,850 (84,184 ) 180,000 Ending balance $ 785,089 $ 2,708,239 $ 1,398,041 $ 287,602 $ 51,635 $ 182,417 $ 5,413,023 As of or for the six months ended June 30, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate 1st Lien Jr Lien Consumer Unallocated Total Allowance for loan losses Beginning balance $ 675,687 $ 2,674,029 $ 1,460,547 $ 316,982 $ 43,303 $ 267,551 $ 5,438,099 Charge-offs (131,273 ) (124,645 ) (78,435 ) (24,000 ) (73,388 ) 0 (431,741 ) Recoveries 20,041 0 9,158 675 16,791 0 46,665 Provision (credit) 220,634 158,855 6,771 (6,055 ) 64,929 (85,134 ) 360,000 Ending balance $ 785,089 $ 2,708,239 $ 1,398,041 $ 287,602 $ 51,635 $ 182,417 $ 5,413,023 Impaired loans, by portfolio segment, were as follows: As of June 30, 2019 Unpaid Average Average Interest Recorded Principal Related Recorded Recorded Income Investment Balance Allowance Investment (1) Investment (2) Recognized(2) Related allowance recorded Commercial real estate $ 0 $ 0 $ 0 $ 244,300 $ 162,867 $ 0 Residential real estate - 1st lien 1,064,058 1,085,467 110,375 978,652 972,556 39,905 - Jr lien 6,674 6,654 681 6,803 6,959 335 Total with related allowance 1,070,732 1,092,121 111,056 1,238,755 1,142,382 40,240 No related allowance recorded Commercial & industrial 606,831 610,660 323,209 235,754 213 Commercial real estate 2,053,151 2,342,542 1,883,114 1,838,184 9,178 Residential real estate - 1st lien 4,182,285 4,853,328 3,889,301 3,747,907 115,477 - Jr lien 193,382 341,138 244,731 267,178 0 Total with no related allowance 7,035,649 8,147,668 6,340,355 6,089,023 124,868 Total impaired loans $ 8,106,381 $ 9,239,789 $ 111,056 $ 7,579,110 $ 7,231,405 $ 165,108 (1) For the three months ended June 30, 2019 (2) For the six months ended June 30, 2019 In the table above, recorded investment in impaired loans as of June 30, 2019 includes accrued interest receivable and deferred net loan costs of $18,145. As of December 31, 2018 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment (1) Recognized (1) Related allowance recorded Commercial real estate $ 0 $ 0 $ 0 $ 57,658 $ 0 Residential real estate - 1st lien 942,365 963,367 112,969 836,326 45,139 - Jr lien 7,271 7,248 1,757 77,555 351 Total with related allowance 949,636 970,615 114,726 971,539 45,490 No related allowance recorded Commercial & industrial 60,846 80,894 120,924 0 Commercial real estate 1,748,323 1,975,831 1,663,794 13,131 Residential real estate - 1st lien 3,465,117 4,082,637 3,497,772 94,313 - Jr lien 312,072 351,139 235,970 0 Total with no related allowance 5,586,358 6,490,501 5,518,460 107,444 Total impaired loans $ 6,535,994 $ 7,461,116 $ 114,726 $ 6,489,999 $ 152,934 (1) For the year ended December 31, 2018 In the table above, recorded investment in impaired loans as of December 31, 2018 includes accrued interest receivable and deferred net loan costs of $16,873. As of June 30, 2018 Unpaid Average Average Interest Recorded Principal Related Recorded Recorded Income Investment Balance Allowance Investment(1) Investment(2) Recognized(2) Related allowance recorded Commercial real estate $ 0 $ 0 $ 0 $ 41,823 $ 96,097 $ 0 Residential real estate - 1st lien 789,471 831,434 129,488 791,676 793,859 31,785 - Jr lien 7,798 7,788 1,007 7,990 54,211 1,482 Total with related allowance 797,269 839,222 130,495 841,489 944,167 33,267 No related allowance recorded Commercial & industrial 197,079 216,691 191,045 160,299 0 Commercial real estate 2,065,267 2,235,772 1,794,217 1,563,764 37,813 Residential real estate - 1st lien 3,543,703 4,189,432 3,525,807 3,450,597 120,756 - Jr lien 297,575 298,931 280,965 238,682 0 Total with no related allowance 6,103,624 6,940,826 5,792,034 5,413,342 158,569 Total impaired loans $ 6,900,893 $ 7,780,048 $ 130,495 $ 6,633,523 $ 6,357,509 $ 191,836 (1) For the three months ended June 30, 2018 (2) For the six months ended June 30, 2018 In the table above, recorded investment in impaired loans as of June 30, 2018 includes accrued interest receivable and deferred net loan costs of $18,773. For all loan segments, the accrual of interest is discontinued when a loan is specifically determined to be impaired or when the loan is delinquent 90 days and management believes, after considering collection efforts and other factors, that the borrower's financial condition is such that collection of interest is considered by management to be doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is generally not recognized on specific impaired loans unless the likelihood of further loss is considered by management to be remote. Interest payments received on impaired loans are generally applied as a reduction of the loan principal balance. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are considered by management to be reasonably assured. Credit Quality Grouping In developing the ALL, management uses credit quality groupings to help evaluate trends in credit quality. The Company groups credit risk into Groups A, B and C. The manner the Company utilizes to assign risk grouping is driven by loan purpose. Commercial purpose loans are individually risk graded while the retail portion of the portfolio is generally grouped by delinquency pool. Group A loans - Acceptable Risk Group B loans – Management Involved Group C loans – Unacceptable Risk Commercial purpose loan ratings are assigned by the commercial account officer; for larger and more complex commercial loans, the credit rating is a collaborative assignment by the lender and the credit analyst. The credit risk rating is based on the borrower's expected performance, i.e., the likelihood that the borrower will be able to service its obligations in accordance with the loan terms. Credit risk ratings are meant to measure risk versus simply record history. Assessment of expected future payment performance requires consideration of numerous factors. While past performance is part of the overall evaluation, expected performance is based on an analysis of the borrower's financial strength, and historical and projected factors such as size and financing alternatives, capacity and cash flow, balance sheet and income statement trends, the quality and timeliness of financial reporting, and the quality of the borrower’s management. Other factors influencing the credit risk rating to a lesser degree include collateral coverage and control, guarantor strength and commitment, documentation, structure and covenants and industry conditions. There are uncertainties inherent in this process. Credit risk ratings are dynamic and require updating whenever relevant information is received. Risk ratings are assessed on an ongoing basis and at various points, including at delinquency or at the time of other adverse events. For larger, more complex or adversely rated loans, risk ratings are also assessed at the time of annual or periodic review. Lenders are required to make immediate disclosure to the Chief Credit Officer of any known increase in loan risk, even if considered temporary in nature. The risk ratings within the loan portfolio, by segment, as of the balance sheet dates were as follows: As of June 30, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 83,098,878 $ 226,974,452 $ 30,302,868 $ 159,998,274 $ 43,205,688 $ 4,623,875 $ 548,204,035 Group B 208,330 2,904,204 0 0 0 0 3,112,534 Group C 2,161,854 8,538,105 0 4,800,200 561,570 0 16,061,729 Total $ 85,469,062 $ 238,416,761 $ 30,302,868 $ 164,798,474 $ 43,767,258 $ 4,623,875 $ 567,378,298 As of December 31, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 78,585,348 $ 226,785,919 $ 47,067,023 $ 161,293,233 $ 43,817,872 $ 5,086,830 $ 562,636,225 Group B 90,763 246,357 0 224,992 0 0 562,112 Group C 2,090,582 8,285,872 0 4,146,950 727,115 1,661 15,252,180 Total $ 80,766,693 $ 235,318,148 $ 47,067,023 $ 165,665,175 $ 44,544,987 $ 5,088,491 $ 578,450,517 Modifications of Loans and TDRs A loan is classified as a TDR if, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. The Company is deemed to have granted such a concession if it has modified a troubled loan in any of the following ways: ● Reduced accrued interest; ● Reduced the original contractual interest rate to a rate that is below the current market rate for the borrower; ● Converted a variable-rate loan to a fixed-rate loan; ● Extended the term of the loan beyond an insignificant delay; ● Deferred or forgiven principal in an amount greater than three months of payments; or ● Performed a refinancing and deferred or forgiven principal on the original loan. An insignificant delay or insignificant shortfall in the amount of payments typically would not require the loan to be accounted for as a TDR. However, pursuant to regulatory guidance, any payment delay longer than three months is generally not considered insignificant. Management’s assessment of whether a concession has been granted also takes into account payments expected to be received from third parties, including third-party guarantors, provided that the third party has the ability to perform on the guarantee. The Company’s TDRs are principally a result of extending loan repayment terms to relieve cash flow difficulties. The Company has only, on a limited basis, reduced interest rates for borrowers below the current market rate for the borrower. The Company has not forgiven principal or reduced accrued interest within the terms of original restructurings, nor has it converted variable rate terms to fixed rate terms. However, the Company evaluates each TDR situation on its own merits and does not foreclose the granting of any particular type of concession. New TDRs, by portfolio segment, during the periods presented were as follows: Three months ended June 30, 2019 Six months ended June 30, 2019 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded Contracts Investment Investment Contracts Investment Investment Commercial & industrial 2 $ 49,217 $ 49,217 2 $ 49,217 $ 49,217 Commercial real estate 0 0 0 1 19,265 21,628 Residential real estate - 1st lien 3 413,446 441,833 4 509,345 538,202 Total 5 $ 462,663 $ 491,050 7 $ 577,827 $ 609,047 Year ended December 31, 2018 Pre- Post- Modification Modification Outstanding Outstanding Number of Recorded Recorded Contracts Investment Investment Commercial real estate 1 $ 406,920 $ 406,920 Residential real estate - 1st lien 10 1,031,330 1,142,089 Total 11 $ 1,438,250 $ 1,549,009 Three months ended June 30, 2018 Six months ended June 30, 2018 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded Contracts Investment Investment Contracts Investment Investment Residential real estate - 1st lien 2 $ 215,772 $ 218,157 7 $ 898,563 $ 1,003,466 The TDRs for which there was a payment default during the twelve month periods presented were as follows: For the twelve months ended June 30, 2019 Number of Recorded Contracts Investment Commercial real estate 1 $ 384,791 Residential real estate - 1st lien 1 132,304 Total 2 $ 517,095 For the twelve months ended December 31, 2018 Number of Recorded Contracts Investment Commercial real estate 1 400,646 Residential real estate - 1st lien 3 518,212 Total 4 $ 918,858 For the twelve months ended June 30, 2018 Number of Recorded Contracts Investment Residential real estate – 1st lien 3 $ 267,418 TDRs are treated as other impaired loans and carry individual specific reserves with respect to the calculation of the ALL. These loans are categorized as non-performing, may be past due, and are generally adversely risk rated. The TDRs that have defaulted under their restructured terms are generally in collection status and their reserve is typically calculated using the fair value of collateral method. The specific allowances related to TDRs as of the balance sheet dates are presented in the table below. June 30, 2019 December 31, 2018 Specific Allocation $ 111,056 $ 114,726 As of the balance sheet dates, the Company evaluates whether it is contractually committed to lend additional funds to debtors with impaired, non-accrual or modified loans. The Company is contractually committed to lend on one SBA guaranteed line of credit to a borrower whose lending relationship was previously restructured. |
6. Goodwill and Other Intangibl
6. Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Note 6. Goodwill and Other Intangible Assets | As a result of a merger with LyndonBank on December 31, 2007, the Company recorded goodwill amounting to $11,574,269. The goodwill is not amortizable and is not deductible for tax purposes. Management evaluates goodwill for impairment annually. As of December 31, 2018, the most recent evaluation, management concluded that no impairment existed. |
7. Leases
7. Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Note 7. Leases | The Company adopted ASU No. 2016-02 on January 1, 2019 with no adjustment to prior periods presented or a cumulative-effect adjustment to retained earnings. The Company has operating and finance leases for some of its bank premises, with remaining lease terms of one year to seven years. Some of the operating leases have options to renew, which are accounted for in the seven years. The Company’s operating lease right-of-use assets and finance lease assets are included in “Bank premises and equipment, net” in the consolidated balance sheet and operating lease liabilities and finance lease liabilities are included in other liabilities in the consolidated balance sheet. The components of lease expense for the periods presented were as follows: Three Months Ended June 30, 2019 2018 Operating lease cost $ 63,869 $ 56,573 Finance lease cost: Amortization of right-of-use assets $ 17,667 $ 17,667 Interest on lease liabilities 4,499 7,467 Variable rent expense 8,485 8,485 Total finance lease cost $ 30,651 $ 33,619 Six Months Ended June 30, 2019 2018 Operating lease cost $ 125,738 $ 113,146 Finance lease cost: Amortization of right-of-use assets $ 35,333 $ 35,333 Interest on lease liabilities 9,614 14,364 Variable rent expense 16,970 16,970 Total finance lease cost $ 61,917 $ 66,667 Supplemental cash flow information related to right-of-use assets and for lease obligations recorded upon adoption of ASU No. 2016-02 (Note 2) was as follows: Six Months Ended June 30, 2019 2018 Operating Leases $ 1,455,829 $ 0 Supplemental balance sheet information related to leases was as follows: June 30, 2019 December 31, 2018 Operating Leases Operating lease right-of-use assets $ 1,374,459 $ 0 Operating lease liabilities $ 1,378,863 $ 0 Finance Leases Property, at cost $ 991,014 $ 991,014 Accumulated depreciation (812,668 ) (777,335 ) Property, net $ 178,346 $ 213,679 Finance lease liabilities $ 205,630 $ 266,747 June 30, 2019 December 31, 2018 Weighted Average Remaining Lease Term Operating Leases 5.0 Years 6.0 Years Finance Leases 1.5 Years 2.0 Years Weighted Average Discount Rate Operating Leases 1.28% Finance Leases 7.83% 7.86% Maturities of lease liabilities as of June 30, 2019 were as follows: Operating Leases 2019 $ 125,346 2020 257,039 2021 210,350 2022 207,380 2023 210,232 Subsequent to 2023 435,872 Total $ 1,446,219 Finance Leases 2019 $ 70,730 2020 110,460 2021 39,117 Total minimum lease payments 220,307 Less amount representing interest (14,677 ) Present value of net minimum lease payments $ 205,630 A reconciliation of the undiscounted cash flows in the maturity analysis above and the lease liability recognized in the consolidated balance sheet as of June 30, 2019, is shown below: Operating Leases Finance Leases Undiscounted cash flows $ 1,446,219 $ 220,307 Discount effect of cash flows (67,356 ) (14,677 ) Lease liabilities $ 1,378,863 $ 205,630 |
8. Fair Value
8. Fair Value | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Note 8. Fair Value | Certain assets and liabilities are recorded at fair value to provide additional insight into the Company’s quality of earnings and comprehensive income. The fair values of some of these assets and liabilities are measured on a recurring basis while others are measured on a non-recurring basis, with the determination based upon applicable existing accounting pronouncements. For example, securities available-for-sale are recorded at fair value on a recurring basis. Other assets, such as MSRs, loans held-for-sale, impaired loans, and OREO are recorded at fair value on a non-recurring basis using the lower of cost or market methodology to determine impairment of individual assets. The Company groups assets and liabilities which are recorded 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. The level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). A brief description of each level follows. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasury, other U.S. Government debt securities that are highly liquid and are actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets and 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 assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes MSRs, impaired loans and OREO. Level 3 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 the determination of fair value requires significant management judgment or estimation. The following methods and assumptions were used by the Company in estimating its fair value measurements: Debt Securities AFS: Impaired loans: Loans held-for-sale: MSRs: OREO: Assets and Liabilities Recorded at Fair Value on a Recurring Basis Assets measured at fair value on a recurring basis and reflected in the consolidated balance sheets at the dates presented, segregated by fair value hierarchy, are summarized below. There were no Level 1 or Level 3 assets or liabilities measured on a recurring basis as of the balance sheet dates presented, nor were there any transfers of assets between Levels during 2019 or 2018. Level 2 June 30, 2019 December 31, 2018 Assets: (market approach) U.S. GSE debt securities $ 21,039,197 $ 13,751,103 Agency MBS 15,765,449 15,574,525 ABS and OAS 1,961,862 1,986,129 Other investments 8,791,266 8,055,074 Total $ 47,557,774 $ 39,366,831 Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis The following table includes assets measured at fair value on a non-recurring basis that have had a fair value adjustment since their initial recognition. Impaired loans measured at fair value only include collateral-dependent impaired loans with a related specific ALL and are presented net of specific allowances as disclosed in Note 5. As of June 30, 2019 and December 31, 2018, there were no collateral-dependend impaired loans. Assets measured at fair value on a non-recurring basis and reflected in the consolidated balance sheets at the dates presented, segregated by fair value hierarchy level, are summarized below. There were no Level 1 or Level 3 assets or liabilities measured on a non-recurring basis as of the balance sheet dates presented, nor were there any transfers of assets between levels during 2019 or 2018. Level 2 June 30, 2019 December 31, 2018 Assets: (market approach) Loans held-for-sale $ 262,000 $ 0 MSRs (1) 933,643 1,004,948 OREO 92,084 201,386 (1) Represents MSRs at lower of cost or fair value. FASB ASC Topic 825, “Financial Instruments”, requires disclosures of fair value information about financial instruments, whether or not recognized in the balance sheet, if the fair values can be reasonably determined. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’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 using observable inputs when available. 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. Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The estimated fair values of commitments to extend credit and letters of credit were immaterial as of the dates presented in the tables below. The estimated fair values of the Company's financial instruments were as follows: June 30, 2019 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 29,535 $ 29,535 $ 0 $ 0 $ 29,535 Debt securities AFS 47,558 0 47,558 0 47,558 Restricted equity securities 1,348 0 1,348 0 1,348 Loans and loans held-for-sale, net of ALL Commercial & industrial 84,731 0 0 84,729 84,729 Commercial real estate 235,258 0 0 237,025 237,025 Municipal (1) 30,303 0 0 30,112 30,112 Residential real estate - 1st lien 163,588 0 0 162,585 162,585 Residential real estate - Jr lien 43,467 0 0 43,467 43,467 Consumer 4,570 0 0 4,595 4,595 MSRs (2) 934 0 1,361 0 1,361 Accrued interest receivable 2,193 0 2,193 0 2,193 Financial liabilities: Deposits Other deposits 529,978 0 529,809 0 529,809 Brokered deposits 26,172 0 26,186 0 26,186 Short-term borrowings 6,100 0 6,100 0 6,100 Long-term borrowings 1,550 0 1,474 0 1,474 Repurchase agreements 32,145 0 32,145 0 32,145 Operating lease obligations 1,379 0 1,379 0 1,379 Finance lease obligations 206 0 206 0 206 Subordinated debentures 12,887 0 12,820 0 12,820 Accrued interest payable 96 0 96 0 96 (1) Prior to reclassification to the loan portfolio effective January 1, 2019, all loans in this category were reported as HTM securities as a component of Investment Securities. All prior periods have been restated to conform to the reclassification. (2) Reported fair value represents all MSRs for loans serviced by the Company at June 30, 2019, regardless of carrying amount. December 31, 2018 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 67,935 $ 67,935 $ 0 $ 0 $ 67,935 Debt securities AFS 39,367 0 39,367 0 39,367 Restricted equity securities 1,749 0 1,749 0 1,749 Loans and loans held-for-sale, net of ALL Commercial & industrial 80,049 0 0 79,773 79,773 Commercial real estate 232,239 0 0 230,532 230,532 Municipal (1) 47,067 0 0 47,228 47,228 Residential real estate - 1st lien 164,202 0 0 161,068 161,068 Residential real estate - Jr lien 44,260 0 0 44,127 44,127 Consumer 5,031 0 0 5,063 5,063 MSRs (2) 1,005 0 1,481 0 1,481 Accrued interest receivable 2,301 0 2,301 0 2,301 Financial liabilities: Deposits Other deposits 573,525 0 571,952 0 571,952 Brokered deposits 35,292 0 35,247 0 35,247 Long-term borrowings 1,550 0 1,425 0 1,425 Repurchase agreements 30,522 0 30,522 0 30,522 Capital lease obligations 267 0 267 0 267 Subordinated debentures 12,887 0 12,807 0 12,807 Accrued interest payable 113 0 113 0 113 (1) Prior to reclassification to the loan portfolio effective January 1, 2019, all loans in this category were reported as HTM securities as a component of Investment Securities. All prior periods have been restated to conform to the reclassification. (2) Reported fair value represents all MSRs for loans serviced by the Company at December 31, 2018, regardless of carrying amount. |
9. Loan Servicing
9. Loan Servicing | 6 Months Ended |
Jun. 30, 2019 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Note 9. Loan Servicing | The following table shows the changes in the carrying amount of the MSRs, included in other assets in the consolidated balance sheets, for the periods indicated: Six Months Ended Year Ended June 30, 2019 December 31, 2018 Balance at beginning of year $ 1,004,948 $ 1,083,286 MSRs capitalized 18,107 110,209 MSRs amortized (89,412 ) (188,547 ) Balance at end of period $ 933,643 $ 1,004,948 There was no valuation allowance recorded for MSRs for the periods presented. |
10. Legal Proceedings
10. Legal Proceedings | 6 Months Ended |
Jun. 30, 2019 | |
Legal Proceedings | |
Note 10. Legal Proceedings | In the normal course of business, the Company is involved in litigation that is considered incidental to its business. Management does not expect that any such litigation will be material to the Company's consolidated financial condition or results of operations. |
11. Subsequent Event
11. Subsequent Event | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Note 11. Subsequent Event | The Company has evaluated events and transactions through the date that the financial statements were issued for potential recognition or disclosure in these financial statements, as required by GAAP. On June 13, 2019, the Company’s Board declared a cash dividend of $0.19 per common share, payable August 1, 2019 to shareholders of record as of July 15, 2019. This dividend has been recorded in the Company’s consolidated financial statements as of the declaration date, including shares issuable under the DRIP. |
1. Basis of Presentation and _2
1. Basis of Presentation and Consolidation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | The interim consolidated financial statements of Community Bancorp. and Subsidiary are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments necessary for the fair presentation of the consolidated financial condition and results of operations of the Company and its subsidiary, Community National Bank (the Bank), contained herein have been made. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full annual period ending December 31, 2019, or for any other interim period. Certain amounts in the 2018 consolidated financial statements have been reclassified to conform to the 2019 presentation. Reclassifications had no effect on prior period net income or shareholders’ equity. In addition to the definitions provided elsewhere in this quarterly report, the definitions, acronyms and abbreviations identified below are used throughout this report, including in Part I. “Financial Information” and Part II. “Other Information”, and are intended to aid the reader and provide a reference page when reviewing this report. ABS and OAS: Asset backed or other amortizing security FHLMC: Federal Home Loan Mortgage Corporation AFS: Available-for-sale FOMC: Federal Open Market Committee Agency MBS: MBS issued by a US government agency FRB: Federal Reserve Board or GSE FRBB: Federal Reserve Bank of Boston ALCO: Asset Liability Committee GAAP: Generally Accepted Accounting Principles ALL: Allowance for loan losses in the United States AOCI: Accumulated other comprehensive income GSE: Government sponsored enterprise ASC: Accounting Standards Codification HTM: Held-to-maturity ASU: Accounting Standards Update ICS: Insured Cash Sweeps of the Promontory Bancorp: Community Bancorp. Interfinancial Network Bank: Community National Bank IRS: Internal Revenue Service BIC: Borrower-in-Custody JNE: Jobs for New England Board: Board of Directors Jr: Junior BOLI: Bank owned life insurance LIBOR: London Interbank Offered Rate bp or bps: Basis point(s) MBS: Mortgage-backed security CBLR: Community Bank Leverage Ratio MPF: Mortgage Partnership Finance CDARS: Certificate of Deposit Accounts Registry MSRs: Mortgage servicing rights Service of the Promontory Interfinancial NII: Net interest income Network NMTC: New Market Tax Credits CDs: Certificates of deposit OCI: Other comprehensive income (loss) CDI: Core deposit intangible OREO: Other real estate owned CECL: Current Expected Credit Loss OTTI: Other-than-temporary impairment CFSG: Community Financial Services Group, LLC PMI: Private mortgage insurance CFS Partners: Community Financial Services Partners, RD: USDA Rural Development LLC SBA: U.S. Small Business Administration Company: Community Bancorp. and Subsidiary SEC: U.S. Securities and Exchange Commission CRE: Commercial Real Estate SERP: Supplemental Employee Retirement Plan DDA or DDAs: Demand Deposit Account(s) TDR: Troubled-debt restructuring DTC: Depository Trust Company USDA: U.S. Department of Agriculture DRIP: Dividend Reinvestment Plan VA: U.S. Veterans Administration Exchange Act: Securities Exchange Act of 1934 2017 Tax Act: Tax Cut and Jobs Act of 2017 FASB: Financial Accounting Standards Board 2018 Economic Growth, Regulatory Relief and FDIC: Federal Deposit Insurance Corporation Regulatory Consumer Protection Act of 2018 FHLBB: Federal Home Loan Bank of Boston Relief Act: |
Recent Accounting Developments | In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments A modified version of these requirements also applies to debt securities classified as available for sale, which will require that credit losses on those securities be recorded through an allowance for credit losses rather than a write-down. evaluate the impact h e ASU was to be effec ti ve for fisca l years be g inn i n g aft er De c ember 15, 2019, in c lu d ing in teri m p e rio ds w i t hin t ho se fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018, including interim periods within such years. However, on July 17, 2019, the FASB announced its intention to propose an extended effective date of January 1, 2023 for compliance with the ASU by smaller reporting companies. The Company would qualify for this extension and management will evaluate its CECL compliance timetable in the event that the FASB finalizes its extension. In January 2017, the FASB issued ASU No. 2017-04, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The Company has goodwill from its acquisition of LyndonBank in 2007 and performs an impairment test annually or more frequently if circumstances warrant (see Note 6). The Company is currently evaluating the impact of the adoption of the ASU on its consolidated financial statements, but does not anticipate any material impact at this time. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
3. Earnings per Common Share (T
3. Earnings per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Three Months Ended June 30, 2019 2018 Net income, as reported $ 2,419,298 $ 2,002,654 Less: dividends to preferred shareholders 20,625 23,750 Net income available to common shareholders $ 2,398,673 $ 1,978,904 Weighted average number of common shares used in calculating earnings per share 5,197,045 5,130,809 Earnings per common share $ 0.46 $ 0.39 Six Months Ended June 30, 2019 2018 Net income, as reported $ 4,191,203 $ 3,985,197 Less: dividends to preferred shareholders 48,125 51,875 Net income available to common shareholders $ 4,143,078 $ 3,933,322 Weighted average number of common shares used in calculating earnings per share 5,188,735 5,123,947 Earnings per common share $ 0.80 $ 0.77 |
4. Investment Securities (Table
4. Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Securities, Available-for-sale [Abstract] | |
Schedule of available for sale securities | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value June 30, 2019 U.S. GSE debt securities $ 20,977,332 $ 84,133 $ 22,268 $ 21,039,197 Agency MBS 15,811,926 54,732 101,209 15,765,449 ABS and OAS 1,904,051 57,811 0 1,961,862 Other investments 8,665,000 127,598 1,332 8,791,266 Total $ 47,358,309 $ 324,274 $ 124,809 $ 47,557,774 December 31, 2018 U.S. GSE debt securities $ 14,010,100 $ 394 $ 259,391 $ 13,751,103 Agency MBS 16,020,892 2,701 449,068 15,574,525 ABS and OAS 1,988,565 3,806 6,242 1,986,129 Other investments 8,167,000 8,472 120,398 8,055,074 Total $ 40,186,557 $ 15,373 $ 835,099 $ 39,366,831 |
Schedule of investments pledged for collateral | Amortized Fair Cost Value June 30, 2019 $ 47,358,309 $ 47,557,774 December 31, 2018 40,186,557 39,366,831 |
Schedule of maturities of debt securities available for sale | Amortized Fair Cost Value June 30, 2019 Due in one year or less $ 496,000 $ 496,187 Due from one to five years 14,704,552 14,811,778 Due from five to ten years 15,368,394 15,504,360 Due after ten years 977,437 980,000 Agency MBS 15,811,926 15,765,449 Total $ 47,358,309 $ 47,557,774 December 31, 2018 Due from one to five years $ 12,714,642 $ 12,519,008 Due from five to ten years 11,451,023 11,273,298 Agency MBS 16,020,892 15,574,525 Total $ 40,186,557 $ 39,366,831 |
Schedule of unrealized loss | Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Number of Fair Unrealized Value Loss Value Loss Securities Value Loss June 30, 2019 U.S. GSE debt securities $ 0 $ 0 $ 7,505,284 $ 22,268 6 $ 7,505,284 $ 22,268 Agency MBS 1,225,362 2,656 10,014,594 98,553 21 11,239,956 101,209 Other investments 0 0 742,667 1,332 3 742,667 1,332 Total $ 1,225,362 $ 2,656 $ 18,262,545 $ 122,153 30 $ 19,487,907 $ 124,809 December 31, 2018 U.S. GSE debt securities $ 1,465,947 $ 6,752 $ 11,284,761 $ 252,639 11 $ 12,750,708 $ 259,391 Agency MBS 2,317,838 22,029 12,223,386 427,039 24 14,541,224 449,068 ABS and OAS 976,226 6,242 0 0 1 976,226 6,242 Other investments 1,956,914 20,086 4,113,688 100,312 25 6,070,602 120,398 Total $ 6,716,925 $ 55,109 $ 27,621,835 $ 779,990 61 $ 34,338,760 $ 835,099 |
5. Loans, Allowance for Loan _2
5. Loans, Allowance for Loan Losses and Credit Quality (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Composition of net loans | June 30, December 31, 2019 2018 Commercial & industrial $ 85,469,062 $ 80,766,693 Commercial real estate 238,416,761 235,318,148 Municipal* 30,302,868 47,067,023 Residential real estate - 1st lien 164,798,474 165,665,175 Residential real estate - Jr lien 43,767,258 44,544,987 Consumer 4,623,875 5,088,491 Total loans 567,378,298 578,450,517 Deduct (add): ALL 5,723,753 5,602,541 Deferred net loan costs (354,981 ) (363,614 ) Net loans $ 562,009,526 $ 573,211,590 *Prior to 2019, all loans in this category were reported as HTM securities as a component of Investment Securities (see Note 4). All periods presented have been restated to conform to the reclassification. |
Past due loans by segment | 90 Days or 90 Days Total Non-Accrual More and June 30, 2019 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 198,284 $ 293,524 $ 491,808 $ 84,977,254 $ 85,469,062 $ 606,832 $ 0 Commercial real estate 852,655 411,734 1,264,389 237,152,372 238,416,761 1,946,457 0 Municipal 0 0 0 30,302,868 30,302,868 0 0 Residential real estate - 1st lien 1,608,519 1,332,686 2,941,205 161,857,269 164,798,474 2,984,761 736,283 - Jr lien 312,942 240,320 553,262 43,213,996 43,767,258 287,499 108,365 Consumer 24,071 0 24,071 4,599,804 4,623,875 0 0 Totals $ 2,996,471 $ 2,278,264 $ 5,274,735 $ 562,103,563 $ 567,378,298 $ 5,825,549 $ 844,648 90 Days or 90 Days Total Non-Accrual More and December 31, 2018 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 217,385 $ 0 $ 217,385 $ 80,549,308 $ 80,766,693 $ 84,814 $ 0 Commercial real estate 1,509,839 190,789 1,700,628 233,617,520 235,318,148 1,742,993 0 Municipal 0 0 0 47,067,023 47,067,023 0 0 Residential real estate - 1st lien 4,108,319 1,371,061 5,479,380 160,185,795 165,665,175 2,026,939 622,486 - Jr lien 484,855 353,914 838,769 43,706,218 44,544,987 408,540 104,959 Consumer 43,277 1,661 44,938 5,043,553 5,088,491 0 1,661 Total $ 6,363,675 $ 1,917,425 $ 8,281,100 $ 570,169,417 $ 578,450,517 $ 4,263,286 $ 729,106 |
Residential mortgage loans in process of foreclosure | Number of loans Balance June 30, 2019 13 $ 861,821 December 31, 2018 12 961,709 |
Changes in the allowance for loan losses | As of or for the three months ended June 30, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 676,764 $ 3,153,156 $ 0 $ 1,407,132 $ 265,003 $ 49,715 $ 176,072 5,727,842 Charge-offs (3,573 ) (14,710 ) 0 (19,790 ) (102,000 ) (26,830 ) 0 (166,903 ) Recoveries 0 0 0 7,576 516 13,056 0 21,148 Provision (credit) 41,941 (43,665 ) 0 32,439 124,465 17,469 (30,983 ) 141,666 ALL ending balance $ 715,132 $ 3,094,781 $ 0 $ 1,427,357 $ 287,984 $ 53,410 $ 145,089 $ 5,723,753 As of or for the six months ended June 30, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 Charge-offs (3,573 ) (14,710 ) 0 (94,521 ) (102,000 ) (59,621 ) 0 (274,425 ) Recoveries 9,078 0 0 10,073 1,001 21,316 0 41,468 Provision 12,158 89,623 0 90,311 115,538 34,928 11,611 354,169 ALL ending balance $ 715,132 $ 3,094,781 $ 0 $ 1,427,357 $ 287,984 $ 53,410 $ 145,089 $ 5,723,753 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 110,375 $ 681 $ 0 $ 0 $ 111,056 Collectively 715,132 3,094,781 0 1,316,982 287,303 53,410 145,089 5,612,697 Total $ 715,132 $ 3,094,781 $ 0 $ 1,427,357 $ 287,984 $ 53,410 $ 145,089 $ 5,723,753 Loans evaluated for impairment Individually $ 606,831 $ 2,052,270 $ 0 $ 5,229,099 $ 200,036 $ 0 $ 8,088,236 Collectively 84,862,231 236,364,491 30,302,868 159,569,375 43,567,222 4,623,875 559,290,062 Total $ 85,469,062 $ 238,416,761 $ 30,302,868 $ 164,798,474 $ 43,767,258 $ 4,623,875 $ 567,378,298 As of or for the year ended December 31, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 675,687 $ 2,674,029 $ 0 $ 1,460,547 $ 316,982 $ 43,303 $ 267,551 $ 5,438,099 Charge-offs (152,860 ) (124,645 ) 0 (251,654 ) (69,173 ) (143,688 ) 0 (742,020 ) Recoveries 60,192 0 0 26,832 1,420 38,018 0 126,462 Provision (credit) 114,450 470,484 0 185,769 24,216 119,154 (134,073 ) 780,000 ALL ending balance $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 112,969 $ 1,757 $ 0 $ 0 $ 114,726 Collectively 697,469 3,019,868 0 1,308,525 271,688 56,787 133,478 5,487,815 Total $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 Loans evaluated for impairment Individually $ 60,846 $ 1,746,894 $ 0 $ 4,392,060 $ 319,321 $ 0 $ 6,519,121 Collectively 80,705,847 233,571,254 47,067,023 161,273,115 44,225,666 5,088,491 571,931,396 Total $ 80,766,693 $ 235,318,148 $ 47,067,023 $ 165,665,175 $ 44,544,987 $ 5,088,491 $ 578,450,517 As of or for the three months ended June 30, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate 1st Lien Jr Lien Consumer Unallocated Total Allowance for loan losses Beginning balance $ 666,660 $ 2,666,704 $ 1,407,801 $ 289,292 $ 44,162 $ 266,601 $ 5,341,220 Charge-offs (42,380 ) (3,645 ) (45,362 ) 0 (39,758 ) 0 (131,145 ) Recoveries 15,027 0 300 240 7,381 0 22,948 Provision (credit) 145,782 45,180 35,302 (1,930 ) 39,850 (84,184 ) 180,000 Ending balance $ 785,089 $ 2,708,239 $ 1,398,041 $ 287,602 $ 51,635 $ 182,417 $ 5,413,023 As of or for the six months ended June 30, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate 1st Lien Jr Lien Consumer Unallocated Total Allowance for loan losses Beginning balance $ 675,687 $ 2,674,029 $ 1,460,547 $ 316,982 $ 43,303 $ 267,551 $ 5,438,099 Charge-offs (131,273 ) (124,645 ) (78,435 ) (24,000 ) (73,388 ) 0 (431,741 ) Recoveries 20,041 0 9,158 675 16,791 0 46,665 Provision (credit) 220,634 158,855 6,771 (6,055 ) 64,929 (85,134 ) 360,000 Ending balance $ 785,089 $ 2,708,239 $ 1,398,041 $ 287,602 $ 51,635 $ 182,417 $ 5,413,023 |
Impaired loans by segment | As of June 30, 2019 Unpaid Average Average Interest Recorded Principal Related Recorded Recorded Income Investment Balance Allowance Investment (1) Investment (2) Recognized(2) Related allowance recorded Commercial real estate $ 0 $ 0 $ 0 $ 244,300 $ 162,867 $ 0 Residential real estate - 1st lien 1,064,058 1,085,467 110,375 978,652 972,556 39,905 - Jr lien 6,674 6,654 681 6,803 6,959 335 Total with related allowance 1,070,732 1,092,121 111,056 1,238,755 1,142,382 40,240 No related allowance recorded Commercial & industrial 606,831 610,660 323,209 235,754 213 Commercial real estate 2,053,151 2,342,542 1,883,114 1,838,184 9,178 Residential real estate - 1st lien 4,182,285 4,853,328 3,889,301 3,747,907 115,477 - Jr lien 193,382 341,138 244,731 267,178 0 Total with no related allowance 7,035,649 8,147,668 6,340,355 6,089,023 124,868 Total impaired loans $ 8,106,381 $ 9,239,789 $ 111,056 $ 7,579,110 $ 7,231,405 $ 165,108 (1) For the three months ended June 30, 2019 (2) For the six months ended June 30, 2019 As of December 31, 2018 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment (1) Recognized (1) Related allowance recorded Commercial real estate $ 0 $ 0 $ 0 $ 57,658 $ 0 Residential real estate - 1st lien 942,365 963,367 112,969 836,326 45,139 - Jr lien 7,271 7,248 1,757 77,555 351 Total with related allowance 949,636 970,615 114,726 971,539 45,490 No related allowance recorded Commercial & industrial 60,846 80,894 120,924 0 Commercial real estate 1,748,323 1,975,831 1,663,794 13,131 Residential real estate - 1st lien 3,465,117 4,082,637 3,497,772 94,313 - Jr lien 312,072 351,139 235,970 0 Total with no related allowance 5,586,358 6,490,501 5,518,460 107,444 Total impaired loans $ 6,535,994 $ 7,461,116 $ 114,726 $ 6,489,999 $ 152,934 (1) For the year ended December 31, 2018 As of June 30, 2018 Unpaid Average Average Interest Recorded Principal Related Recorded Recorded Income Investment Balance Allowance Investment(1) Investment(2) Recognized(2) Related allowance recorded Commercial real estate $ 0 $ 0 $ 0 $ 41,823 $ 96,097 $ 0 Residential real estate - 1st lien 789,471 831,434 129,488 791,676 793,859 31,785 - Jr lien 7,798 7,788 1,007 7,990 54,211 1,482 Total with related allowance 797,269 839,222 130,495 841,489 944,167 33,267 No related allowance recorded Commercial & industrial 197,079 216,691 191,045 160,299 0 Commercial real estate 2,065,267 2,235,772 1,794,217 1,563,764 37,813 Residential real estate - 1st lien 3,543,703 4,189,432 3,525,807 3,450,597 120,756 - Jr lien 297,575 298,931 280,965 238,682 0 Total with no related allowance 6,103,624 6,940,826 5,792,034 5,413,342 158,569 Total impaired loans $ 6,900,893 $ 7,780,048 $ 130,495 $ 6,633,523 $ 6,357,509 $ 191,836 (1) For the three months ended June 30, 2018 (2) For the six months ended June 30, 2018 |
Risk ratings | As of June 30, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 83,098,878 $ 226,974,452 $ 30,302,868 $ 159,998,274 $ 43,205,688 $ 4,623,875 $ 548,204,035 Group B 208,330 2,904,204 0 0 0 0 3,112,534 Group C 2,161,854 8,538,105 0 4,800,200 561,570 0 16,061,729 Total $ 85,469,062 $ 238,416,761 $ 30,302,868 $ 164,798,474 $ 43,767,258 $ 4,623,875 $ 567,378,298 As of December 31, 2018 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 78,585,348 $ 226,785,919 $ 47,067,023 $ 161,293,233 $ 43,817,872 $ 5,086,830 $ 562,636,225 Group B 90,763 246,357 0 224,992 0 0 562,112 Group C 2,090,582 8,285,872 0 4,146,950 727,115 1,661 15,252,180 Total $ 80,766,693 $ 235,318,148 $ 47,067,023 $ 165,665,175 $ 44,544,987 $ 5,088,491 $ 578,450,517 |
Loans modified as TDRs | Three months ended June 30, 2019 Six months ended June 30, 2019 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded Contracts Investment Investment Contracts Investment Investment Commercial & industrial 2 $ 49,217 $ 49,217 2 $ 49,217 $ 49,217 Commercial real estate 0 0 0 1 19,265 21,628 Residential real estate - 1st lien 3 413,446 441,833 4 509,345 538,202 Total 5 $ 462,663 $ 491,050 7 $ 577,827 $ 609,047 Year ended December 31, 2018 Pre- Post- Modification Modification Outstanding Outstanding Number of Recorded Recorded Contracts Investment Investment Commercial real estate 1 $ 406,920 $ 406,920 Residential real estate - 1st lien 10 1,031,330 1,142,089 Total 11 $ 1,438,250 $ 1,549,009 Three months ended June 30, 2018 Six months ended June 30, 2018 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding Number of Recorded Recorded Number of Recorded Recorded Contracts Investment Investment Contracts Investment Investment Residential real estate - 1st lien 2 $ 215,772 $ 218,157 7 $ 898,563 $ 1,003,466 |
TDRs payment default | For the twelve months ended June 30, 2019 Number of Recorded Contracts Investment Commercial real estate 1 $ 384,791 Residential real estate - 1st lien 1 132,304 Total 2 $ 517,095 For the twelve months ended December 31, 2018 Number of Recorded Contracts Investment Commercial real estate 1 400,646 Residential real estate - 1st lien 3 518,212 Total 4 $ 918,858 For the twelve months ended June 30, 2018 Number of Recorded Contracts Investment Residential real estate – 1st lien 3 $ 267,418 |
Specific allowances | June 30, 2019 December 31, 2018 Specific Allocation $ 111,056 $ 114,726 |
7. Leases (Tables)
7. Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Components of lease expense | Three Months Ended June 30, 2019 2018 Operating lease cost $ 63,869 $ 56,573 Finance lease cost: Amortization of right-of-use assets $ 17,667 $ 17,667 Interest on lease liabilities 4,499 7,467 Variable rent expense 8,485 8,485 Total finance lease cost $ 30,651 $ 33,619 Six Months Ended June 30, 2019 2018 Operating lease cost $ 125,738 $ 113,146 Finance lease cost: Amortization of right-of-use assets $ 35,333 $ 35,333 Interest on lease liabilities 9,614 14,364 Variable rent expense 16,970 16,970 Total finance lease cost $ 61,917 $ 66,667 |
Supplemental lease information | Six Months Ended June 30, 2019 2018 Operating Leases $ 1,455,829 $ 0 June 30, 2019 December 31, 2018 Operating Leases Operating lease right-of-use assets $ 1,374,459 $ 0 Operating lease liabilities $ 1,378,863 $ 0 Finance Leases Property, at cost $ 991,014 $ 991,014 Accumulated depreciation (812,668 ) (777,335 ) Property, net $ 178,346 $ 213,679 Finance lease liabilities $ 205,630 $ 266,747 June 30, 2019 December 31, 2018 Weighted Average Remaining Lease Term Operating Leases 5.0 Years 6.0 Years Finance Leases 1.5 Years 2.0 Years Weighted Average Discount Rate Operating Leases 1.28% Finance Leases 7.83% 7.86% |
Maturities of operating lease liabilities | 2019 $ 125,346 2020 257,039 2021 210,350 2022 207,380 2023 210,232 Subsequent to 2023 435,872 Total $ 1,446,219 |
Maturities of finance lease liabilities | 2019 $ 70,730 2020 110,460 2021 39,117 Total minimum lease payments 220,307 Less amount representing interest (14,677 ) Present value of net minimum lease payments $ 205,630 |
Reconciliation of the undiscounted cash flows in the maturity analysis | Operating Leases Finance Leases Undiscounted cash flows $ 1,446,219 $ 220,307 Discount effect of cash flows (67,356 ) (14,677 ) Lease liabilities $ 1,378,863 $ 205,630 |
8. Fair Value (Tables)
8. Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities on recurring basis | Level 2 June 30, 2019 December 31, 2018 Assets: (market approach) U.S. GSE debt securities $ 21,039,197 $ 13,751,103 Agency MBS 15,765,449 15,574,525 ABS and OAS 1,961,862 1,986,129 Other investments 8,791,266 8,055,074 Total $ 47,557,774 $ 39,366,831 |
Schedule of fair value assets and liabilities non-recurring basis | Level 2 June 30, 2019 December 31, 2018 Assets: (market approach) Loans held-for-sale $ 262,000 $ 0 MSRs (1) 933,643 1,004,948 OREO 92,084 201,386 (1) Represents MSRs at lower of cost or fair value. |
Schedule of estimated fair values of financial instruments | June 30, 2019 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 29,535 $ 29,535 $ 0 $ 0 $ 29,535 Debt securities AFS 47,558 0 47,558 0 47,558 Restricted equity securities 1,348 0 1,348 0 1,348 Loans and loans held-for-sale, net of ALL Commercial & industrial 84,731 0 0 84,729 84,729 Commercial real estate 235,258 0 0 237,025 237,025 Municipal (1) 30,303 0 0 30,112 30,112 Residential real estate - 1st lien 163,588 0 0 162,585 162,585 Residential real estate - Jr lien 43,467 0 0 43,467 43,467 Consumer 4,570 0 0 4,595 4,595 MSRs (2) 934 0 1,361 0 1,361 Accrued interest receivable 2,193 0 2,193 0 2,193 Financial liabilities: Deposits Other deposits 529,978 0 529,809 0 529,809 Brokered deposits 26,172 0 26,186 0 26,186 Short-term borrowings 6,100 0 6,100 0 6,100 Long-term borrowings 1,550 0 1,474 0 1,474 Repurchase agreements 32,145 0 32,145 0 32,145 Operating lease obligations 1,379 0 1,379 0 1,379 Finance lease obligations 206 0 206 0 206 Subordinated debentures 12,887 0 12,820 0 12,820 Accrued interest payable 96 0 96 0 96 (1) Prior to reclassification to the loan portfolio effective January 1, 2019, all loans in this category were reported as HTM securities as a component of Investment Securities. All prior periods have been restated to conform to the reclassification. (2) Reported fair value represents all MSRs for loans serviced by the Company at June 30, 2019, regardless of carrying amount. December 31, 2018 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 67,935 $ 67,935 $ 0 $ 0 $ 67,935 Debt securities AFS 39,367 0 39,367 0 39,367 Restricted equity securities 1,749 0 1,749 0 1,749 Loans and loans held-for-sale, net of ALL Commercial & industrial 80,049 0 0 79,773 79,773 Commercial real estate 232,239 0 0 230,532 230,532 Municipal (1) 47,067 0 0 47,228 47,228 Residential real estate - 1st lien 164,202 0 0 161,068 161,068 Residential real estate - Jr lien 44,260 0 0 44,127 44,127 Consumer 5,031 0 0 5,063 5,063 MSRs (2) 1,005 0 1,481 0 1,481 Accrued interest receivable 2,301 0 2,301 0 2,301 Financial liabilities: Deposits Other deposits 573,525 0 571,952 0 571,952 Brokered deposits 35,292 0 35,247 0 35,247 Long-term borrowings 1,550 0 1,425 0 1,425 Repurchase agreements 30,522 0 30,522 0 30,522 Capital lease obligations 267 0 267 0 267 Subordinated debentures 12,887 0 12,807 0 12,807 Accrued interest payable 113 0 113 0 113 (1) Prior to reclassification to the loan portfolio effective January 1, 2019, all loans in this category were reported as HTM securities as a component of Investment Securities. All prior periods have been restated to conform to the reclassification. (2) Reported fair value represents all MSRs for loans serviced by the Company at December 31, 2018, regardless of carrying amount. |
9. Loan Servicing (Tables)
9. Loan Servicing (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Schedule of mortgage servicing rights | Six Months Ended Year Ended June 30, 2019 December 31, 2018 Balance at beginning of year $ 1,004,948 $ 1,083,286 MSRs capitalized 18,107 110,209 MSRs amortized (89,412 ) (188,547 ) Balance at end of period $ 933,643 $ 1,004,948 |
3. Earnings per Common Share (D
3. Earnings per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||
Net income, as reported | $ 2,419,298 | $ 1,771,905 | $ 2,002,654 | $ 1,982,543 | $ 4,191,203 | $ 3,985,197 |
Less: dividends to preferred shareholders | 20,625 | 23,750 | 48,125 | 51,875 | ||
Net income available to common shareholders | $ 2,398,673 | $ 1,978,904 | $ 4,143,078 | $ 3,933,322 | ||
Weighted average number of common shares used in calculating earnings per share | 5,197,045 | 5,130,809 | 5,188,735 | 5,123,947 | ||
Earnings per common share | $ 0.46 | $ 0.39 | $ .80 | $ 0.77 |
4. Investment Securities (Detai
4. Investment Securities (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Amortized cost - available for sale securities | $ 47,358,309 | $ 40,186,557 |
Gross unrealized gains - available for sale securities | 324,274 | 15,373 |
Gross unrealized losses - available for sale securities | 124,809 | 835,099 |
Fair value - available for sale securities | 47,557,774 | 39,366,831 |
U.S. GSE debt securities | ||
Amortized cost - available for sale securities | 20,977,332 | 14,010,100 |
Gross unrealized gains - available for sale securities | 84,133 | 394 |
Gross unrealized losses - available for sale securities | 22,268 | 259,391 |
Fair value - available for sale securities | 21,039,197 | 13,751,103 |
Agency mortgage-backed securities (Agency MBS) | ||
Amortized cost - available for sale securities | 15,811,926 | 16,020,892 |
Gross unrealized gains - available for sale securities | 54,732 | 2,701 |
Gross unrealized losses - available for sale securities | 101,209 | 449,068 |
Fair value - available for sale securities | 15,765,449 | 15,574,525 |
ABS and OAS | ||
Amortized cost - available for sale securities | 1,904,051 | 1,988,565 |
Gross unrealized gains - available for sale securities | 57,811 | 3,806 |
Gross unrealized losses - available for sale securities | 6,242 | |
Fair value - available for sale securities | 1,961,862 | 1,986,129 |
Other investments | ||
Amortized cost - available for sale securities | 8,665,000 | 8,167,000 |
Gross unrealized gains - available for sale securities | 127,598 | 8,472 |
Gross unrealized losses - available for sale securities | 1,332 | 120,398 |
Fair value - available for sale securities | $ 8,791,266 | $ 8,055,074 |
4. Investment Securities (Det_2
4. Investment Securities (Details 1) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Abstract] | ||
Book value of available for sale securities, pledged as collateral for repurchase agreements | $ 47,358,309 | $ 40,186,557 |
Fair value of available for sale securities, pledged as collateral for repurchase agreements | $ 47,557,774 | $ 39,366,831 |
4. Investment Securities (Det_3
4. Investment Securities (Details 2) - Available for sale Securities - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less | $ 496,000 | |
Due from one to five years | 14,704,552 | $ 12,714,642 |
Due from five to ten years | 15,368,394 | 11,451,023 |
Due after ten years | 977,437 | |
Agency MBS | 15,811,926 | 16,020,892 |
Total | 47,358,309 | 40,186,557 |
Fair Value | ||
Due in one year or less | 496,187 | |
Due from one to five years | 14,811,778 | 12,519,008 |
Due from five to ten years | 15,504,360 | 11,273,298 |
Due after ten years | 980,000 | |
Agency MBS | 15,765,449 | 15,574,525 |
Total | $ 47,557,774 | $ 39,366,831 |
4. Investment Securities (Det_4
4. Investment Securities (Details 3) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)integer | Dec. 31, 2018USD ($)integer | |
Available for sale - fair value less than 12 months | $ 1,225,362 | $ 6,716,925 |
Available for sale - unrealized loss less than 12 months | 2,656 | 55,109 |
Available for sale - fair value 12 months or more | 18,262,545 | 27,621,835 |
Available for sale - unrealized loss 12 months or more | $ 122,153 | $ 779,990 |
Available for sale - number of securities | integer | 30 | 61 |
Available for sale - fair value | $ 19,487,907 | $ 34,338,760 |
Available for sale - unrealized loss | 124,809 | 835,099 |
U.S. GSE debt securities | ||
Available for sale - fair value less than 12 months | 0 | 1,465,947 |
Available for sale - unrealized loss less than 12 months | 0 | 6,752 |
Available for sale - fair value 12 months or more | 7,505,284 | 11,284,761 |
Available for sale - unrealized loss 12 months or more | $ 22,268 | $ 252,639 |
Available for sale - number of securities | integer | 6 | 11 |
Available for sale - fair value | $ 7,505,284 | $ 12,750,708 |
Available for sale - unrealized loss | 22,268 | 259,391 |
Agency mortgage-backed securities (Agency MBS) | ||
Available for sale - fair value less than 12 months | 1,225,362 | 2,317,838 |
Available for sale - unrealized loss less than 12 months | 2,656 | 22,029 |
Available for sale - fair value 12 months or more | 10,014,594 | 12,223,386 |
Available for sale - unrealized loss 12 months or more | $ 98,553 | $ 427,039 |
Available for sale - number of securities | integer | 21 | 24 |
Available for sale - fair value | $ 11,239,956 | $ 14,541,224 |
Available for sale - unrealized loss | 101,209 | 449,068 |
ABS and OAS | ||
Available for sale - fair value less than 12 months | 976,226 | |
Available for sale - unrealized loss less than 12 months | 6,242 | |
Available for sale - fair value 12 months or more | 0 | |
Available for sale - unrealized loss 12 months or more | $ 0 | |
Available for sale - number of securities | integer | 1 | |
Available for sale - fair value | $ 976,226 | |
Available for sale - unrealized loss | 6,242 | |
Other investments | ||
Available for sale - fair value less than 12 months | 0 | 1,956,914 |
Available for sale - unrealized loss less than 12 months | 0 | 20,086 |
Available for sale - fair value 12 months or more | 742,667 | 4,113,688 |
Available for sale - unrealized loss 12 months or more | $ 1,332 | $ 100,312 |
Available for sale - number of securities | integer | 3 | 25 |
Available for sale - fair value | $ 742,667 | $ 6,070,602 |
Available for sale - unrealized loss | $ 1,332 | $ 120,398 |
5. Loans, Allowance for Loan _3
5. Loans, Allowance for Loan Losses and Credit Quality (Details) - USD ($) | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Loans and Leases Receivable Disclosure [Abstract] | |||||||
Commercial & industrial | $ 85,469,062 | $ 80,766,693 | |||||
Commercial real estate | 238,416,761 | 235,318,148 | |||||
Municipal | [1] | 30,302,868 | 47,067,023 | ||||
Residential real estate - 1st lien | 164,798,474 | 165,665,175 | |||||
Residential real estate - Jr lien | 43,767,258 | 44,544,987 | |||||
Consumer | 4,623,875 | 5,088,491 | |||||
Gross loans | 567,378,298 | 578,450,517 | |||||
Deduct (add): | |||||||
Allowance for loan losses | 5,723,753 | $ 5,727,842 | 5,602,541 | $ 5,413,023 | $ 5,341,220 | $ 5,438,099 | |
Deferred net loan costs | (354,981) | (363,614) | |||||
Net loans | $ 562,009,526 | $ 573,211,590 | |||||
[1] | Prior to 2019, all loans in this category were reported as HTM securities as a component of Investment Securities (see Note 4). All periods presented have been restated to conform to the reclassification. |
5. Loans, Allowance for Loan _4
5. Loans, Allowance for Loan Losses and Credit Quality (Details 1) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
30-89 days | $ 2,996,471 | $ 6,363,675 |
90 days or more | 2,278,264 | 1,917,425 |
Total past due | 5,274,735 | 8,281,100 |
Current | 562,103,563 | 570,169,417 |
Total loans | 567,378,298 | 578,450,517 |
Non-accrual loans | 5,825,549 | 4,263,286 |
90 days or more and accruing | 844,648 | 729,106 |
Commercial and industrial | ||
30-89 days | 198,284 | 217,385 |
90 days or more | 293,524 | 0 |
Total past due | 491,808 | 217,385 |
Current | 84,977,254 | 80,549,308 |
Total loans | 85,469,062 | 80,766,693 |
Non-accrual loans | 606,832 | 84,814 |
90 days or more and accruing | 0 | 0 |
Commercial Real Estate | ||
30-89 days | 852,655 | 1,509,839 |
90 days or more | 411,734 | 190,789 |
Total past due | 1,264,389 | 1,700,628 |
Current | 237,152,372 | 233,617,520 |
Total loans | 238,416,761 | 235,318,148 |
Non-accrual loans | 1,946,457 | 1,742,993 |
90 days or more and accruing | 0 | 0 |
Municipal | ||
30-89 days | 0 | 0 |
90 days or more | 0 | 0 |
Total past due | 0 | 0 |
Current | 30,302,868 | 47,067,023 |
Total loans | 30,302,868 | 47,067,023 |
Non-accrual loans | 0 | 0 |
90 days or more and accruing | 0 | 0 |
Residential real estate - 1st lien | ||
30-89 days | 1,608,519 | 4,108,319 |
90 days or more | 1,332,686 | 1,371,061 |
Total past due | 2,941,205 | 5,479,380 |
Current | 161,857,269 | 160,185,795 |
Total loans | 164,798,474 | 165,665,175 |
Non-accrual loans | 2,984,761 | 2,026,939 |
90 days or more and accruing | 736,283 | 622,486 |
Residential real estate - Jr lien | ||
30-89 days | 312,942 | 484,855 |
90 days or more | 240,320 | 353,914 |
Total past due | 553,262 | 838,769 |
Current | 43,213,996 | 43,706,218 |
Total loans | 43,767,258 | 44,544,987 |
Non-accrual loans | 287,499 | 408,540 |
90 days or more and accruing | 108,365 | 104,959 |
Consumer | ||
30-89 days | 24,071 | 43,277 |
90 days or more | 0 | 1,661 |
Total past due | 24,071 | 44,938 |
Current | 4,599,804 | 5,043,553 |
Total loans | 4,623,875 | 5,088,491 |
Non-accrual loans | 0 | 0 |
90 days or more and accruing | $ 0 | $ 1,661 |
5. Loans, Allowance for Loan _5
5. Loans, Allowance for Loan Losses and Credit Quality (Details 2) | Jun. 30, 2019USD ($)integer | Dec. 31, 2018USD ($)integer |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ||
Residential mortgage loans in process of foreclosure, number of loans | integer | 13 | 12 |
Residential mortgage loans in process of foreclosure, current balance | $ | $ 861,821 | $ 961,709 |
5. Loans, Allowance for Loan _6
5. Loans, Allowance for Loan Losses and Credit Quality (Details 3) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Allowance for loan losses, beginning balance | $ 5,727,842 | $ 5,341,220 | $ 5,602,541 | $ 5,438,099 | $ 5,438,099 |
Charge-offs | (166,903) | (131,145) | (274,425) | (431,741) | (742,020) |
Recoveries | 21,148 | 22,948 | 41,468 | 46,665 | 126,462 |
Provisions (credit) | 141,666 | 180,000 | 354,169 | 360,000 | 780,000 |
Allowance for loan losses, ending balance | 5,723,753 | 5,413,023 | 5,723,753 | 5,413,023 | 5,602,541 |
Allowance for loan losses evaluated for impairment, individually | 111,056 | 111,056 | 114,726 | ||
Allowance for loan losses evaluated for impairment, collectively | 5,612,697 | 5,612,697 | 5,487,815 | ||
Allowance for loan losses | 5,723,753 | 5,723,753 | 5,602,541 | ||
Loans evaluated for impairment, individually | 8,088,236 | 8,088,236 | 6,519,121 | ||
Loans evaluated for impairment, collectively | 559,290,062 | 559,290,062 | 571,931,396 | ||
Total loans | 567,378,298 | 567,378,298 | 578,450,517 | ||
Commercial and industrial | |||||
Allowance for loan losses, beginning balance | 676,764 | 666,660 | 697,469 | 675,687 | 675,687 |
Charge-offs | (3,573) | (42,380) | (3,573) | (131,273) | (152,860) |
Recoveries | 0 | 15,027 | 9,078 | 20,041 | 60,192 |
Provisions (credit) | 41,941 | 145,782 | 12,158 | 220,634 | 114,450 |
Allowance for loan losses, ending balance | 715,132 | 785,089 | 715,132 | 785,089 | 697,469 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 | 0 | ||
Allowance for loan losses evaluated for impairment, collectively | 715,132 | 715,132 | 697,469 | ||
Allowance for loan losses | 715,132 | 715,132 | 697,469 | ||
Loans evaluated for impairment, individually | 606,831 | 606,831 | 60,846 | ||
Loans evaluated for impairment, collectively | 84,862,231 | 84,862,231 | 80,705,847 | ||
Total loans | 85,469,062 | 85,469,062 | 80,766,693 | ||
Commercial Real Estate | |||||
Allowance for loan losses, beginning balance | 3,153,156 | 2,666,704 | 3,019,868 | 2,674,029 | 2,674,029 |
Charge-offs | (14,710) | (3,645) | (14,710) | (124,645) | (124,645) |
Recoveries | 0 | 0 | 0 | 0 | 0 |
Provisions (credit) | (43,665) | 45,180 | 89,623 | 158,855 | 470,484 |
Allowance for loan losses, ending balance | 3,094,781 | 2,708,239 | 3,094,781 | 2,708,239 | 3,019,868 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 | 0 | ||
Allowance for loan losses evaluated for impairment, collectively | 3,094,781 | 3,094,781 | 3,019,868 | ||
Allowance for loan losses | 3,094,781 | 3,094,781 | 3,019,868 | ||
Loans evaluated for impairment, individually | 2,052,270 | 2,052,270 | 1,746,894 | ||
Loans evaluated for impairment, collectively | 236,364,491 | 236,364,491 | 233,571,254 | ||
Total loans | 238,416,761 | 238,416,761 | 235,318,148 | ||
Municipal | |||||
Allowance for loan losses, beginning balance | 0 | 0 | |||
Charge-offs | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 0 | ||
Provisions (credit) | 0 | 0 | 0 | ||
Allowance for loan losses, ending balance | 0 | 0 | 0 | ||
Allowance for loan losses evaluated for impairment, individually | 0 | 0 | 0 | ||
Allowance for loan losses evaluated for impairment, collectively | 0 | 0 | 0 | ||
Allowance for loan losses | 0 | 0 | 0 | ||
Loans evaluated for impairment, individually | 0 | 0 | 0 | ||
Loans evaluated for impairment, collectively | 30,302,868 | 30,302,868 | 47,067,023 | ||
Total loans | 30,302,868 | 30,302,868 | 47,067,023 | ||
Residential Real Estate - 1st Lien | |||||
Allowance for loan losses, beginning balance | 1,407,132 | 1,407,801 | 1,421,494 | 1,460,547 | 1,460,547 |
Charge-offs | (19,790) | (45,362) | (94,521) | (78,435) | (251,654) |
Recoveries | 7,576 | 300 | 10,073 | 9,158 | 26,832 |
Provisions (credit) | 32,439 | 35,302 | 90,311 | 6,771 | 185,769 |
Allowance for loan losses, ending balance | 1,427,357 | 1,398,041 | 1,427,357 | 1,398,041 | 1,421,494 |
Allowance for loan losses evaluated for impairment, individually | 110,375 | 110,375 | 112,969 | ||
Allowance for loan losses evaluated for impairment, collectively | 1,316,982 | 1,316,982 | 1,308,525 | ||
Allowance for loan losses | 1,427,357 | 1,427,357 | 1,421,494 | ||
Loans evaluated for impairment, individually | 5,229,099 | 5,229,099 | 4,392,060 | ||
Loans evaluated for impairment, collectively | 159,569,375 | 159,569,375 | 161,273,115 | ||
Total loans | 164,798,474 | 164,798,474 | 165,665,175 | ||
Residential Real Estate Jr Lien | |||||
Allowance for loan losses, beginning balance | 265,003 | 289,292 | 273,445 | 316,982 | 316,982 |
Charge-offs | (102,000) | 0 | (102,000) | (24,000) | (69,173) |
Recoveries | 516 | 240 | 1,001 | 675 | 1,420 |
Provisions (credit) | 124,465 | (1,930) | 115,538 | (6,055) | 24,216 |
Allowance for loan losses, ending balance | 287,984 | 287,602 | 287,984 | 287,602 | 273,445 |
Allowance for loan losses evaluated for impairment, individually | 681 | 681 | 1,757 | ||
Allowance for loan losses evaluated for impairment, collectively | 287,303 | 287,303 | 271,688 | ||
Allowance for loan losses | 287,984 | 287,984 | 273,445 | ||
Loans evaluated for impairment, individually | 200,036 | 200,036 | 319,321 | ||
Loans evaluated for impairment, collectively | 43,567,222 | 43,567,222 | 44,225,666 | ||
Total loans | 43,767,258 | 43,767,258 | 44,544,987 | ||
Consumer | |||||
Allowance for loan losses, beginning balance | 49,715 | 44,162 | 56,787 | 43,303 | 43,303 |
Charge-offs | (26,830) | (39,758) | (59,621) | (73,388) | (143,688) |
Recoveries | 13,056 | 7,381 | 21,316 | 16,791 | 38,018 |
Provisions (credit) | 17,469 | 39,850 | 34,928 | 64,929 | 119,154 |
Allowance for loan losses, ending balance | 53,410 | 51,635 | 53,410 | 51,635 | 56,787 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 | 0 | ||
Allowance for loan losses evaluated for impairment, collectively | 53,410 | 53,410 | 56,787 | ||
Allowance for loan losses | 53,410 | 53,410 | 56,787 | ||
Loans evaluated for impairment, individually | 0 | 0 | 0 | ||
Loans evaluated for impairment, collectively | 4,623,875 | 4,623,875 | 5,088,491 | ||
Total loans | 4,623,875 | 4,623,875 | 5,088,491 | ||
Unallocated | |||||
Allowance for loan losses, beginning balance | 176,072 | 266,601 | 133,478 | 267,551 | 267,551 |
Charge-offs | 0 | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 | 0 |
Provisions (credit) | (30,983) | (84,184) | 11,611 | (85,134) | (134,073) |
Allowance for loan losses, ending balance | 145,089 | $ 182,417 | 145,089 | $ 182,417 | 133,478 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 | 0 | ||
Allowance for loan losses evaluated for impairment, collectively | 145,089 | 145,089 | 133,478 | ||
Allowance for loan losses | $ 145,089 | $ 145,089 | $ 133,478 |
5. Loans, Allowance for Loan _7
5. Loans, Allowance for Loan Losses and Credit Quality (Details 4) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Recorded investment with an allowance recorded | $ 1,070,732 | $ 797,269 | $ 1,070,732 | $ 797,269 | $ 949,636 |
Unpaid principal balance with an allowance recorded | 1,092,121 | 839,222 | 1,092,121 | 839,222 | 970,615 |
Related allowance with an allowance recorded | 111,056 | 130,495 | 111,056 | 130,495 | 114,726 |
Average recorded investment with an allowance recorded | 1,238,755 | 841,489 | 1,142,382 | 944,167 | 971,539 |
Interest income recognized with an allowance recorded | 40,240 | 33,267 | 45,490 | ||
Recorded investment with no related allowance recorded | 7,035,649 | 6,103,624 | 7,035,649 | 6,103,624 | 5,586,358 |
Unpaid principal balance with no related allowance recorded | 8,147,668 | 6,940,826 | 8,147,668 | 6,940,826 | 6,490,501 |
Average recorded investment with no related allowance recorded | 6,340,355 | 5,792,034 | 6,089,023 | 5,413,342 | 5,518,460 |
Interest income recognized with no related allowance recorded | 124,868 | 158,569 | 107,444 | ||
Recorded investment allowance recorded | 8,106,381 | 6,900,893 | 8,106,381 | 6,900,893 | 6,535,994 |
Unpaid principal balance allowance recorded | 9,239,789 | 7,780,048 | 9,239,789 | 7,780,048 | 7,461,116 |
Average recorded investment allowance recorded | 7,579,110 | 6,633,523 | 7,231,405 | 6,357,509 | 6,489,999 |
Interest income recognized | 165,108 | 191,836 | 152,934 | ||
Commercial and industrial | |||||
Recorded investment with no related allowance recorded | 606,831 | 197,079 | 606,831 | 197,079 | 60,846 |
Unpaid principal balance with no related allowance recorded | 610,660 | 216,691 | 610,660 | 216,691 | 80,894 |
Average recorded investment with no related allowance recorded | 323,209 | 191,045 | 235,754 | 160,299 | 120,924 |
Interest income recognized with no related allowance recorded | 213 | 0 | 0 | ||
Commercial Real Estate | |||||
Recorded investment with an allowance recorded | 0 | 0 | 0 | 0 | 0 |
Unpaid principal balance with an allowance recorded | 0 | 0 | 0 | 0 | 0 |
Related allowance with an allowance recorded | 0 | 0 | 0 | 0 | 0 |
Average recorded investment with an allowance recorded | 244,300 | 41,823 | 162,867 | 96,097 | 57,658 |
Interest income recognized with an allowance recorded | 0 | 0 | 0 | ||
Recorded investment with no related allowance recorded | 2,053,151 | 2,065,267 | 2,053,151 | 2,065,267 | 1,748,323 |
Unpaid principal balance with no related allowance recorded | 2,342,542 | 2,235,772 | 2,342,542 | 2,235,772 | 1,975,831 |
Average recorded investment with no related allowance recorded | 1,883,114 | 1,794,217 | 1,838,184 | 1,563,764 | 1,663,794 |
Interest income recognized with no related allowance recorded | 9,178 | 37,813 | 13,131 | ||
Residential real estate - 1st lien | |||||
Recorded investment with an allowance recorded | 1,064,058 | 789,471 | 1,064,058 | 789,471 | 942,365 |
Unpaid principal balance with an allowance recorded | 1,085,467 | 831,434 | 1,085,467 | 831,434 | 963,367 |
Related allowance with an allowance recorded | 110,375 | 129,488 | 110,375 | 129,488 | 112,969 |
Average recorded investment with an allowance recorded | 978,652 | 791,676 | 972,556 | 793,859 | 836,326 |
Interest income recognized with an allowance recorded | 39,905 | 31,785 | 45,139 | ||
Recorded investment with no related allowance recorded | 4,182,285 | 3,543,703 | 4,182,285 | 3,543,703 | 3,465,117 |
Unpaid principal balance with no related allowance recorded | 4,853,328 | 4,189,432 | 4,853,328 | 4,189,432 | 4,082,637 |
Average recorded investment with no related allowance recorded | 3,889,301 | 3,525,807 | 3,747,907 | 3,450,597 | 3,497,772 |
Interest income recognized with no related allowance recorded | 115,477 | 120,756 | 94,313 | ||
Residential real estate - Jr lien | |||||
Recorded investment with an allowance recorded | 6,674 | 7,798 | 6,674 | 7,798 | 7,271 |
Unpaid principal balance with an allowance recorded | 6,654 | 7,788 | 6,654 | 7,788 | 7,248 |
Related allowance with an allowance recorded | 681 | 1,007 | 681 | 1,007 | 1,757 |
Average recorded investment with an allowance recorded | 6,803 | 7,990 | 6,959 | 54,211 | 77,555 |
Interest income recognized with an allowance recorded | 335 | 1,482 | 351 | ||
Recorded investment with no related allowance recorded | 193,382 | 297,575 | 193,382 | 297,575 | 312,072 |
Unpaid principal balance with no related allowance recorded | 341,138 | 298,931 | 341,138 | 298,931 | 351,139 |
Average recorded investment with no related allowance recorded | $ 244,731 | $ 280,965 | 267,178 | 238,682 | 235,970 |
Interest income recognized with no related allowance recorded | $ 0 | $ 0 | $ 0 |
5. Loans, Allowance for Loan _8
5. Loans, Allowance for Loan Losses and Credit Quality (Details 5) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Group A | $ 548,204,035 | $ 562,636,225 |
Group B | 3,112,534 | 562,112 |
Group C | 16,061,729 | 15,252,180 |
Total loans | 567,378,298 | 578,450,517 |
Commercial and industrial | ||
Group A | 83,098,878 | 78,585,348 |
Group B | 208,330 | 90,763 |
Group C | 2,161,854 | 2,090,582 |
Total loans | 85,469,062 | 80,766,693 |
Commercial Real Estate | ||
Group A | 226,974,452 | 226,785,919 |
Group B | 2,904,204 | 246,357 |
Group C | 8,538,105 | 8,285,872 |
Total loans | 238,416,761 | 235,318,148 |
Municipal | ||
Group A | 30,302,868 | 47,067,023 |
Group B | 0 | 0 |
Group C | 0 | 0 |
Total loans | 30,302,868 | 47,067,023 |
Residential real estate - 1st lien | ||
Group A | 159,998,274 | 161,293,233 |
Group B | 0 | 224,992 |
Group C | 4,800,200 | 4,146,950 |
Total loans | 164,798,474 | 165,665,175 |
Residential real estate - Jr lien | ||
Group A | 43,205,688 | 43,817,872 |
Group B | 0 | 0 |
Group C | 561,570 | 727,115 |
Total loans | 43,767,258 | 44,544,987 |
Consumer | ||
Group A | 4,623,875 | 5,086,830 |
Group B | 0 | 0 |
Group C | 0 | 1,661 |
Total loans | $ 4,623,875 | $ 5,088,491 |
5. Loans, Allowance for Loan _9
5. Loans, Allowance for Loan Losses and Credit Quality (Details 6) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019USD ($)integer | Jun. 30, 2018USD ($)integer | Jun. 30, 2019USD ($)integer | Jun. 30, 2018USD ($)integer | Dec. 31, 2018USD ($)integer | |
Number of contracts modified as TDRs | integer | 5 | 7 | 11 | ||
Pre-Modification outstanding recorded investment | $ 462,663 | $ 577,827 | $ 1,438,250 | ||
Post-Modification outstanding recorded investment | $ 491,050 | $ 609,047 | $ 1,549,009 | ||
Commercial and industrial | |||||
Number of contracts modified as TDRs | integer | 2 | 2 | |||
Pre-Modification outstanding recorded investment | $ 49,217 | $ 49,217 | |||
Post-Modification outstanding recorded investment | $ 49,217 | $ 49,217 | |||
Commercial Real Estate | |||||
Number of contracts modified as TDRs | integer | 0 | 1 | 1 | ||
Pre-Modification outstanding recorded investment | $ 0 | $ 19,265 | $ 406,920 | ||
Post-Modification outstanding recorded investment | $ 0 | $ 21,628 | $ 406,920 | ||
Residential real estate - 1st lien | |||||
Number of contracts modified as TDRs | integer | 3 | 2 | 4 | 7 | 10 |
Pre-Modification outstanding recorded investment | $ 413,446 | $ 215,772 | $ 509,345 | $ 898,563 | $ 1,031,330 |
Post-Modification outstanding recorded investment | $ 441,833 | $ 218,157 | $ 538,202 | $ 1,003,466 | $ 1,142,089 |
5. Loans, Allowance for Loan_10
5. Loans, Allowance for Loan Losses and Credit Quality (Details 7) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019USD ($)integer | Jun. 30, 2018USD ($)integer | Dec. 31, 2018USD ($)integer | |
Number of contracts | integer | 2 | 3 | 4 |
Recorded investment | $ | $ 517,095 | $ 267,418 | $ 918,858 |
Commercial Real Estate | |||
Number of contracts | integer | 1 | 1 | |
Recorded investment | $ | $ 384,791 | $ 400,646 | |
Residential Real Estate - 1st Lien | |||
Number of contracts | integer | 1 | 3 | 3 |
Recorded investment | $ | $ 132,304 | $ 267,418 | $ 518,212 |
5. Loans, Allowance for Loan_11
5. Loans, Allowance for Loan Losses and Credit Quality (Details 8) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ||
Specific allocation | $ 111,056 | $ 114,726 |
6. Goodwill and Other Intangi_2
6. Goodwill and Other Intangible Assets (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 11,574,269 | $ 11,574,269 |
7. Leases (Details)
7. Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Leases [Abstract] | ||||
Operating lease cost | $ 63,869 | $ 56,573 | $ 125,738 | $ 113,146 |
Amortization of right-of-use assets | 17,667 | 17,667 | 35,333 | 35,333 |
Interest on lease liabilities | 4,499 | 7,467 | 9,614 | 14,364 |
Variable rent expense | 8,485 | 8,485 | 16,970 | 16,970 |
Finance lease cost | $ 30,651 | $ 33,619 | $ 61,917 | $ 66,667 |
7. Leases (Details 1)
7. Leases (Details 1) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Operating leases | $ 1,455,829 | $ 0 | |
Operating Leases | |||
Operating lease right-of-use assets | 1,374,459 | $ 0 | |
Operating lease liabilities | 1,378,863 | 0 | |
Finance Leases | |||
Property, at cost | 991,014 | 991,014 | |
Accumulated depreciation | (812,668) | (777,335) | |
Property, net | 178,346 | 213,679 | |
Finance lease liabilities | $ 205,630 | $ 266,747 |
7. Leases (Details 2)
7. Leases (Details 2) | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Weighted average remaining lease term - operating leases | 5 years | 6 years |
Weighted average remaining lease term - finance leases | 1 year 6 months | 2 years |
Weighted average discount rate - operating leases | 1.28% | |
Weighted average discount rate - finance leases | 7.83% | 7.86% |
7. Leases (Details 3)
7. Leases (Details 3) | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 125,346 |
2020 | 257,039 |
2021 | 210,350 |
2022 | 207,380 |
2023 | 210,232 |
Subsequent to 2023 | 435,872 |
Total | $ 1,446,219 |
7. Leases (Details 4)
7. Leases (Details 4) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Finance Leases | ||
2019 | $ 70,730 | |
2020 | 110,460 | |
2021 | 39,117 | |
Total minimum lease payments | 220,307 | |
Less amount representing interest | (14,677) | |
Present value of net minimum lease payments | $ 205,630 | $ 266,747 |
7. Leases (Details 5)
7. Leases (Details 5) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease undiscounted cash flows | $ 1,446,219 | |
Operating lease discount effect of cash flows | (67,356) | |
Operating lease liabilities | 1,378,863 | $ 0 |
Finance lease undiscounted cash flows | 220,307 | |
Finance lease discount effect of cash flows | (14,677) | |
Finance lease liabilities | $ 205,630 | $ 266,747 |
8. Fair Value (Details)
8. Fair Value (Details) - Fair Value Level 2 - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: (market approach) | ||
U.S. GSE debt securities | $ 21,039,197 | $ 13,751,103 |
Agency MBS | 15,765,449 | 15,574,525 |
ABS and OAS | 1,961,862 | 1,986,129 |
Other investments | 8,791,266 | 8,055,074 |
Total | $ 47,557,774 | $ 39,366,831 |
8. Fair Value (Details 1)
8. Fair Value (Details 1) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | |
Assets: (market approach) | |||
Loans held-for-sale | $ 262,000 | $ 0 | |
Fair Value Level 2 | |||
Assets: (market approach) | |||
Loans held-for-sale | 262,000 | 0 | |
MSRs | [1] | 933,643 | 1,004,948 |
OREO | $ 92,084 | $ 201,386 | |
[1] | Represents MSRs at lower of cost or fair value. |
8. Fair Value (Details 2)
8. Fair Value (Details 2) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | |||
Deposits | |||||
Operating lease obligations | $ 1,378,863 | $ 0 | |||
Finance lease obligations | 205,630 | 266,747 | |||
Carrying Amount | |||||
Financial assets: (Dollars in Thousands) | |||||
Cash and cash equivalents | 29,535 | 67,935 | |||
Debt securities AFS | 47,558 | 39,367 | |||
Restricted equity securities | 1,348 | 1,749 | |||
Commercial & industrial | 84,731 | 80,049 | |||
Commercial real estate | 235,258 | 232,239 | |||
Municipal | [1] | 30,303 | 47,067 | ||
Residential real estate - 1st lien | 163,588 | 164,202 | |||
Residential real estate - Jr. lien | 43,467 | 44,260 | |||
Consumer | 4,570 | 5,031 | |||
MSRs | 934 | [2] | 1,005 | [3] | |
Accrued interest receivable | 2,193 | 2,301 | |||
Deposits | |||||
Deposits, other deposits | 529,978 | 573,525 | |||
Deposits, brokered deposits | 26,172 | 35,292 | |||
Short-term borrowings | 6,100 | ||||
Long-term borrowings | 1,550 | 1,550 | |||
Repurchase agreements | 32,145 | 30,522 | |||
Operating lease obligations | 1,379 | ||||
Finance lease obligations | 206 | 267 | |||
Subordinated debentures | 12,887 | 12,887 | |||
Accrued interest payable | 96 | 113 | |||
Fair Value Level 1 | |||||
Financial assets: (Dollars in Thousands) | |||||
Cash and cash equivalents | 29,535 | 67,935 | |||
Debt securities AFS | 0 | 0 | |||
Restricted equity securities | 0 | 0 | |||
Commercial & industrial | 0 | 0 | |||
Commercial real estate | 0 | 0 | |||
Municipal | [1] | 0 | 0 | ||
Residential real estate - 1st lien | 0 | 0 | |||
Residential real estate - Jr. lien | 0 | 0 | |||
Consumer | 0 | 0 | |||
MSRs | 0 | [2] | 0 | [3] | |
Accrued interest receivable | 0 | 0 | |||
Deposits | |||||
Deposits, other deposits | 0 | 0 | |||
Deposits, brokered deposits | 0 | 0 | |||
Short-term borrowings | 0 | ||||
Long-term borrowings | 0 | 0 | |||
Repurchase agreements | 0 | 0 | |||
Operating lease obligations | 0 | ||||
Finance lease obligations | 0 | 0 | |||
Subordinated debentures | 0 | 0 | |||
Accrued interest payable | 0 | 0 | |||
Fair Value Level 2 | |||||
Financial assets: (Dollars in Thousands) | |||||
Cash and cash equivalents | 0 | 0 | |||
Debt securities AFS | 47,558 | 39,367 | |||
Restricted equity securities | 1,348 | 1,749 | |||
Commercial & industrial | 0 | 0 | |||
Commercial real estate | 0 | 0 | |||
Municipal | [1] | 0 | 0 | ||
Residential real estate - 1st lien | 0 | 0 | |||
Residential real estate - Jr. lien | 0 | 0 | |||
Consumer | 0 | 0 | |||
MSRs | 1,361 | [2] | 1,481 | [3] | |
Accrued interest receivable | 2,193 | 2,301 | |||
Deposits | |||||
Deposits, other deposits | 529,809 | 571,952 | |||
Deposits, brokered deposits | 26,186 | 35,247 | |||
Short-term borrowings | 6,100 | ||||
Long-term borrowings | 1,474 | 1,425 | |||
Repurchase agreements | 32,145 | 30,522 | |||
Operating lease obligations | 1,379 | ||||
Finance lease obligations | 206 | 267 | |||
Subordinated debentures | 12,820 | 12,807 | |||
Accrued interest payable | 96 | 113 | |||
Fair Value Level 3 | |||||
Financial assets: (Dollars in Thousands) | |||||
Cash and cash equivalents | 0 | 0 | |||
Debt securities AFS | 0 | 0 | |||
Restricted equity securities | 0 | 0 | |||
Commercial & industrial | 84,729 | 79,773 | |||
Commercial real estate | 237,025 | 230,532 | |||
Municipal | [1] | 30,112 | 47,228 | ||
Residential real estate - 1st lien | 162,585 | 161,068 | |||
Residential real estate - Jr. lien | 43,467 | 44,127 | |||
Consumer | 4,595 | 5,063 | |||
MSRs | 0 | [2] | 0 | [3] | |
Accrued interest receivable | 0 | 0 | |||
Deposits | |||||
Deposits, other deposits | 0 | 0 | |||
Deposits, brokered deposits | 0 | 0 | |||
Short-term borrowings | 0 | ||||
Long-term borrowings | 0 | 0 | |||
Repurchase agreements | 0 | 0 | |||
Operating lease obligations | 0 | ||||
Finance lease obligations | 0 | 0 | |||
Subordinated debentures | 0 | 0 | |||
Accrued interest payable | 0 | 0 | |||
Fair Value | |||||
Financial assets: (Dollars in Thousands) | |||||
Cash and cash equivalents | 29,535 | 67,935 | |||
Debt securities AFS | 47,558 | 39,367 | |||
Restricted equity securities | 1,348 | 1,749 | |||
Commercial & industrial | 84,729 | 79,773 | |||
Commercial real estate | 237,025 | 230,532 | |||
Municipal | [1] | 30,112 | 47,228 | ||
Residential real estate - 1st lien | 162,585 | 161,068 | |||
Residential real estate - Jr. lien | 43,467 | 44,127 | |||
Consumer | 4,595 | 5,063 | |||
MSRs | 1,361 | [2] | 1,481 | [3] | |
Accrued interest receivable | 2,193 | 2,301 | |||
Deposits | |||||
Deposits, other deposits | 529,809 | 571,952 | |||
Deposits, brokered deposits | 26,186 | 35,247 | |||
Short-term borrowings | 6,100 | ||||
Long-term borrowings | 1,474 | 1,425 | |||
Repurchase agreements | 32,145 | 30,522 | |||
Operating lease obligations | 1,379 | ||||
Finance lease obligations | 206 | 267 | |||
Subordinated debentures | 12,820 | 12,807 | |||
Accrued interest payable | $ 96 | $ 113 | |||
[1] | Prior to reclassification to the loan portfolio effective January 1, 2019, all loans in this category were reported as HTM securities as a component of Investment Securities. All prior periods have been restated to conform to the reclassification. | ||||
[2] | Reported fair value represents all MSRs for loans serviced by the Company at June 30, 2019, regardless of carrying amount. | ||||
[3] | Reported fair value represents all MSRs for loans serviced by the Company at December 31, 2018, regardless of carrying amount. |
9. Loan Servicing (Details)
9. Loan Servicing (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Transfers and Servicing of Financial Assets [Abstract] | ||
Balance at beginning of year | $ 1,004,948 | $ 1,083,286 |
Mortgage servicing rights capitalized | 18,107 | 110,209 |
Mortgage servicing rights amortized | (89,412) | (188,547) |
Balance at end of period | $ 933,643 | $ 1,004,948 |