Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 12, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39285 | |
Document Period End Date | Sep. 30, 2021 | |
Entity Registrant Name | Partners Bancorp | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-1559535 | |
Entity Address, Address Line One | 2245 Northwood Drive | |
Entity Address, City or Town | Salisbury | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 21801 | |
City Area Code | 410 | |
Local Phone Number | 548-1100 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | PTRS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,856,472 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000832090 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and due from banks | $ 16,176 | $ 13,643 |
Interest bearing deposits in other financial institutions | 300,771 | 218,667 |
Federal funds sold | 29,995 | 50,301 |
Cash and cash equivalents | 346,942 | 282,611 |
Securities available for sale, at fair value | 115,550 | 124,925 |
Loans held for sale | 5,803 | 9,858 |
Loans, less allowance for credit losses of $15,031 at September 30, 2021 and $13,203 at December 31, 2020 | 1,090,169 | 1,022,302 |
Accrued interest receivable | 4,408 | 5,229 |
Premises and equipment, less accumulated depreciation | 16,347 | 15,439 |
Restricted stock | 4,869 | 5,445 |
Operating lease right-of-use assets | 6,726 | 3,983 |
Financing lease right-of-use assets | 1,721 | 1,824 |
Other investments | 5,075 | 5,091 |
Bank owned life insurance | 18,141 | 14,841 |
Other real estate owned, net | 1,303 | 2,677 |
Core deposit intangible, net | 2,205 | 2,660 |
Goodwill | 9,582 | 9,582 |
Other assets | 9,007 | 7,754 |
Total assets | 1,637,848 | 1,514,221 |
Deposits: | ||
Non-interest bearing demand | 493,786 | 390,511 |
Interest bearing demand | 148,955 | 125,131 |
Savings and money market | 382,992 | 323,488 |
Time | 409,720 | 429,010 |
Deposits, Total | 1,435,453 | 1,268,140 |
Accrued interest payable on deposits | 311 | 402 |
Long-term borrowings with the Federal Home Loan Bank | 26,478 | 32,972 |
Subordinated notes payable, net | 22,157 | 24,101 |
Other borrowings | 640 | 42,382 |
Operating lease liabilities | 7,053 | 4,301 |
Financing lease liabilities | 2,155 | 2,242 |
Other liabilities | 4,053 | 2,986 |
Total liabilities | 1,498,300 | 1,377,526 |
COMMITMENTS, CONTINGENCIES & SUBSEQUENT EVENT | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value $.01, authorized 40,000,000 shares, issued and outstanding 17,788,472 as of September 30, 2021 and 17,758,448 as of December 31, 2020, including 58,824 nonvested shares as of September 30, 2021 and 0 nonvested shares as of December 31, 2020 | 177 | 178 |
Surplus | 87,058 | 87,200 |
Retained earnings | 50,289 | 45,673 |
Noncontrolling interest in consolidated subsidiaries | 1,121 | 1,346 |
Accumulated other comprehensive income, net of tax | 903 | 2,298 |
Total stockholders' equity | 139,548 | 136,695 |
Total liabilities and stockholders' equity | $ 1,637,848 | $ 1,514,221 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for credit losses | $ 15,031 | $ 13,203 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 17,788,472 | 17,758,448 |
Common stock, shares outstanding | 17,788,472 | 17,758,448 |
Nonvested shares | 58,824 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
INTEREST INCOME ON: | ||||
Loans, including fees | $ 13,381 | $ 12,816 | $ 39,619 | $ 39,308 |
Investment securities: | ||||
Taxable | 310 | 473 | 757 | 1,337 |
Tax -Exempt | 216 | 241 | 661 | 702 |
Federal funds sold | 25 | 5 | 44 | 117 |
Other interest income | 149 | 119 | 404 | 478 |
TOTAL INTEREST INCOME | 14,081 | 13,654 | 41,485 | 41,942 |
INTEREST EXPENSE ON: | ||||
Deposits | 1,639 | 2,288 | 5,234 | 7,331 |
Borrowings | 507 | 816 | 1,667 | 2,053 |
TOTAL INTEREST EXPENSE | 2,146 | 3,104 | 6,901 | 9,384 |
NET INTEREST INCOME | 11,935 | 10,550 | 34,584 | 32,558 |
Provisions for (recovery of) credit losses | (30) | 1,967 | 2,568 | 5,142 |
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) CREDIT LOSSES | 11,965 | 8,583 | 32,016 | 27,416 |
OTHER INCOME: | ||||
Service charges on deposit accounts | 225 | 197 | 575 | 628 |
Gain on sales and calls of investment securities | 3 | 22 | 568 | |
Mortgage banking income | 957 | 1,305 | 3,065 | 2,589 |
Gain on disposal of other assets | 1 | |||
Other income | 891 | 828 | 2,880 | 2,236 |
TOTAL OTHER INCOME | 2,076 | 2,330 | 6,543 | 6,021 |
OTHER EXPENSES: | ||||
Salaries and employee benefits | 5,837 | 5,124 | 16,783 | 14,725 |
Premises and equipment | 1,313 | 1,150 | 3,789 | 3,407 |
Amortization of core deposit intangible | 148 | 177 | 455 | 540 |
Losses on other real estate owned | 35 | 31 | 183 | 75 |
Other expenses | 3,057 | 2,767 | 9,130 | 8,347 |
TOTAL OTHER EXPENSES | 10,390 | 9,249 | 30,340 | 27,094 |
INCOME BEFORE TAXES ON INCOME | 3,651 | 1,664 | 8,219 | 6,343 |
Federal and state income taxes | 839 | 308 | 1,847 | 1,410 |
NET INCOME | 2,812 | 1,356 | 6,372 | 4,933 |
Net (income) attributable to noncontrolling interest | (116) | (239) | (426) | (370) |
NET INCOME ATTRIBUTABLE TO PARTNERS BANCORP | $ 2,696 | $ 1,117 | $ 5,946 | $ 4,563 |
Earnings per common share | ||||
Basic earnings per share | $ 0.152 | $ 0.063 | $ 0.335 | $ 0.256 |
Diluted earnings per share | $ 0.151 | $ 0.063 | $ 0.334 | $ 0.256 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
NET INCOME | $ 2,812 | $ 1,356 | $ 6,372 | $ 4,933 |
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||||
Unrealized holding gains (losses) on securities available for sale arising during the period | 287 | 65 | (1,818) | 2,452 |
Deferred income tax liabilities | (490) | (17) | 440 | (650) |
Other comprehensive income (loss), net of tax | (203) | 48 | (1,378) | 1,802 |
Reclassification adjustment for gains included in net income | (2) | (22) | (568) | |
Deferred income tax liabilities | 4 | 5 | 151 | |
Other comprehensive loss, net of tax | 2 | (17) | (417) | |
TOTAL OTHER COMPREHENSIVE INCOME | (201) | 48 | (1,395) | 1,385 |
TOTAL COMPREHENSIVE INCOME | 2,611 | 1,404 | 4,977 | 6,318 |
COMPREHENSIVE (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST | (116) | (239) | (426) | (370) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO PARTNERS BANCORP | $ 2,495 | $ 1,165 | $ 4,551 | $ 5,948 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Surplus | Retained Earnings | Noncontrolling Interest | Accumulated Other Comprehensive Income | Total |
Balances at beginning of period at Dec. 31, 2019 | $ 178 | $ 87,437 | $ 41,785 | $ 738 | $ 739 | $ 130,877 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 4,563 | 370 | 4,933 | |||
Other comprehensive income, net of tax | 1,385 | 1,385 | ||||
TOTAL COMPREHENSIVE INCOME | 6,318 | |||||
Cash dividends | (1,335) | (1,335) | ||||
Minority interest equity distribution | (45) | (45) | ||||
Stock option exercises, net | 98 | 98 | ||||
Warrant exercises, net | 10 | 10 | ||||
Stock-based compensation expense | 17 | 17 | ||||
Balances at end of period at Sep. 30, 2020 | 178 | 87,562 | 45,013 | 1,063 | 2,124 | 135,940 |
Balances at beginning of period at Jun. 30, 2020 | 178 | 87,552 | 44,341 | 824 | 2,076 | 134,971 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 1,117 | 239 | 1,356 | |||
Other comprehensive income, net of tax | 48 | 48 | ||||
TOTAL COMPREHENSIVE INCOME | 1,404 | |||||
Cash dividends | (445) | (445) | ||||
Stock option exercises, net | 4 | 4 | ||||
Stock-based compensation expense | 6 | 6 | ||||
Balances at end of period at Sep. 30, 2020 | 178 | 87,562 | 45,013 | 1,063 | 2,124 | 135,940 |
Balances at beginning of period at Dec. 31, 2020 | 178 | 87,200 | 45,673 | 1,346 | 2,298 | 136,695 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 5,946 | 426 | 6,372 | |||
Other comprehensive income, net of tax | (1,395) | (1,395) | ||||
TOTAL COMPREHENSIVE INCOME | 4,977 | |||||
Cash dividends | (1,330) | (1,330) | ||||
Stock repurchases | (1) | (208) | (209) | |||
Minority interest equity distribution | (651) | (651) | ||||
Stock-based compensation expense | 66 | 66 | ||||
Balances at end of period at Sep. 30, 2021 | 177 | 87,058 | 50,289 | 1,121 | 903 | 139,548 |
Balances at beginning of period at Jun. 30, 2021 | 177 | 87,021 | 48,038 | 1,005 | 1,104 | 137,345 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 2,696 | 116 | 2,812 | |||
Other comprehensive income, net of tax | (201) | (201) | ||||
TOTAL COMPREHENSIVE INCOME | 2,611 | |||||
Cash dividends | (445) | (445) | ||||
Stock-based compensation expense | 37 | 37 | ||||
Balances at end of period at Sep. 30, 2021 | $ 177 | $ 87,058 | $ 50,289 | $ 1,121 | $ 903 | $ 139,548 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||
Cash dividends per share | $ 0.025 | $ 0.025 | $ 0.075 | $ 0.075 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | $ 2,696 | $ 1,117 | $ 5,946 | $ 4,563 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Provision for credit losses | (30) | 1,967 | 2,568 | 5,142 | $ 6,894 |
Depreciation | 1,209 | 1,076 | |||
Amortization and accretion | 847 | 457 | |||
Gain on sales and calls of investment securities | (22) | (568) | |||
Net gains on sales of assets | (1) | ||||
Loss (gain) on equity securities | 38 | (47) | |||
Gain on sale of loans held for sale, originated | (2,863) | (2,434) | |||
Net losses (gains) on other real estate owned, including writedowns | 118 | (18) | |||
Increase in bank owned life insurance cash surrender value | (300) | (170) | |||
Stock-based compensation expense, net of employee tax obligation | 66 | 17 | |||
Net accretion of certain acquisition related fair value adjustments | (679) | (843) | |||
Changes in assets and liabilities: | |||||
Loans held for sale | 6,918 | (1,776) | |||
Accrued interest receivable | 821 | (3,116) | |||
Other assets | (3,447) | (399) | |||
Accrued interest payable | (91) | (124) | |||
Other liabilities | 3,819 | (1,033) | |||
Net cash provided by operating activities | 14,947 | 727 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Purchases of securities available for sale | (43,912) | (59,258) | |||
Purchases of other investments | (23) | (1,890) | |||
Purchases of bank owned life insurance | (3,000) | (6,760) | |||
Purchase of restricted stock | (90) | ||||
Proceeds from maturities and paydowns of securities available for sale | 24,477 | 19,509 | |||
Proceeds from sales of securities available for sale | 26,200 | 18,052 | |||
Net increase in loans | (69,460) | (60,718) | |||
Proceeds from sale of assets | 174 | 1 | |||
Purchases of premises and equipment | (2,116) | (3,040) | |||
Proceeds from the sales of foreclosed assets | 1,256 | 147 | |||
Proceeds from redemption of restricted stock | 666 | 890 | |||
Net cash used in investing activities | (65,828) | (93,067) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Increase in demand, money market, and savings deposits, net | 186,603 | 239,706 | |||
Cash received for the exercise of stock options | 98 | ||||
Cash received for the exercise of warrants | 10 | ||||
Decrease in time deposits, net | (19,301) | (11,564) | |||
(Decrease) increase in borrowings, net | (50,239) | 59,365 | |||
Net increase (decrease) in minority interest contributed capital | (225) | 325 | |||
Decrease in finance lease liability | (87) | (85) | |||
Cash paid for stock repurchases | (209) | ||||
Dividends paid | (1,330) | (1,335) | |||
Net cash provided by financing activities | 115,212 | 286,520 | |||
Net increase in cash and cash equivalents | 64,331 | 194,180 | |||
Cash and cash equivalents, beginning of period | 282,611 | 95,111 | 95,111 | ||
Cash and cash equivalents, ending of period | $ 346,942 | $ 289,291 | 346,942 | 289,291 | $ 282,611 |
Supplementary cash flow information: | |||||
Interest paid | 7,422 | 9,509 | |||
Income taxes paid | 2,400 | 3,559 | |||
Right of use assets and corresponding lease liabilities | 3,016 | ||||
Total (loss) gain on securities available for sale | $ (1,840) | 1,386 | |||
SUPPLEMENTARY NONCASH INVESTING ACTIVITIES | |||||
Loans converted to other real estate owned | $ 508 |
Nature of Business and Its Sign
Nature of Business and Its Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Nature of Business and Its Significant Accounting Policies | |
Nature of Business and Its Significant Accounting Policies | Note 1. Nature of Business and Its Significant Accounting Policies Partners Bancorp (the “Company”) is a multi-bank holding company with two wholly owned subsidiaries (the “Subsidiaries”), The Bank of Delmarva (“Delmarva”), a commercial bank headquartered in Seaford, Delaware that operates primarily in Wicomico and Worcester counties in Maryland, Sussex County in Delaware, and Camden and Burlington counties in New Jersey, and Virginia Partners Bank (“Partners”), a commercial bank headquartered in Fredericksburg, Virginia that operates primarily in and around the greater Fredericksburg, Virginia area, including Stafford County, Spotsylvania County, King George County, Caroline County, and the Cities of Fredericksburg and Reston, Virginia. Partners also operates in Anne Arundel County and the three counties of Southern Maryland, including Charles County, Calvert County, and St. Mary’s County. The Subsidiaries engage in the general banking business and provide a broad range of financial services to individual and corporate customers, and are subject to competition from other financial institutions. The Subsidiaries are also subject to the regulations of certain federal and state agencies and undergo periodic examinations by those regulatory authorities. The accounting and reporting policies of the Company and its Subsidiaries conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and practices within the banking industry. Significant accounting policies not disclosed elsewhere in the consolidated financial statements are as follows: Principles of Consolidation: The consolidated financial statements include the accounts of the Company; the Subsidiaries, along with their consolidated subsidiaries: Delmarva Real Estate Holdings, LLC., a wholly owned subsidiary of Delmarva, which is a real estate holding company; Davie Circle, LLC, a wholly owned subsidiary of Delmarva, which is a real estate holding company; Delmarva BK Holdings, LLC, a wholly owned subsidiary of Delmarva, which is a real estate holding company; DHB Development, LLC, of which Delmarva holds a 40.55% interest, and which is a real estate holding company; West Nithsdale Enterprises, LLC, of which Delmarva holds a 10% interest, and which is a real estate holding company; and FBW, LLC, of which Delmarva holds 50% interest, and which is a real estate holding company; Bear Holdings, Inc., a wholly owned subsidiary of Partners, which is a real estate holding company; Johnson Mortgage Company, LLC, of which Partners owns a 51% interest, and which is a residential mortgage company; and 410 William Street, LLC, a wholly owned subsidiary of Partners, which holds investment property. All significant intercompany accounts and transactions have been eliminated in consolidation. Financial Statement Presentation: The unaudited interim consolidated financial statements do not include all information and notes necessary for a complete presentation of financial position, results of operations, changes in stockholder's equity, and cash flows in conformity with U.S. GAAP. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position at September 30, 2021 and December 31, 2020, the results of its operations for three and nine months and its cash flows for the nine months ended September 30, 2021 and 2020 are in conformity with U.S. GAAP. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, or for any other period. Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Securities Available for Sale: Marketable debt securities not classified as held to maturity are classified as available for sale. Securities available for sale are acquired as part of the Subsidiaries' asset/liability management strategy and may be sold in response to changes in interest rates, loan demand, changes in prepayment risk, and other factors. Securities available for sale are carried at fair value as determined by quoted market prices. Unrealized gains or losses based on the difference between amortized cost and fair value are reported in other comprehensive income, net of deferred tax. Realized gains and losses, using the specific identification method, are included as a separate component of other income (expense) and, when applicable, are reported as a reclassification adjustment, net of tax, in other comprehensive income. Premiums and discounts are recognized in interest income using the interest method over the period to maturity. Additionally, declines in the fair value of individual investment securities below their cost that are other than temporary are reflected as realized losses in the consolidated statements of income. Impairment may result from credit deterioration of the issuer or collateral underlying the security. In performing an assessment of recoverability, all relevant information is considered, including the length of time and extent to which fair value has been less than the amortized cost basis, the cause of the price decline, credit performance of the issuer and underlying collateral, and recoveries or further declines in fair value subsequent to the balance sheet date. For debt securities, the Company measures and recognizes other-than-temporary impairment (“OTTI”) losses through earnings if (1) the Company has the intent to sell the security or (2) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. In these circumstances, the impairment loss is equal to the full difference between the amortized cost basis and the fair value of the security. For securities that are considered OTTI that the Company has the intent and ability to hold in an unrealized loss position, the OTTI write-down is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to other factors, which is recognized as a component of other comprehensive income (“OCI”). Restricted Stock, Equity Securities and Other Investments: Federal Reserve Bank (“FRB”) stock, at cost, Federal Home Loan Bank (“FHLB”) stock, at cost, Atlantic Central Bankers Bank (“ACBB”) stock, at cost, and Community Bankers Bank (“CBB”) stock, are equity interests in the FRB, FHLB, ACBB, and CBB, respectively. These securities do not have a readily determinable fair value for purposes of ASC 320-10 Investments-Debts and Equity Securities Equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in net income. Any equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. The entirety of any impairment on equity securities is recognized in earnings. Other investments includes an equity ownership of Solomon Hess SBA Loan Fund LLC which the value is adjusted for its prorata share of assets in the fund. Other investments also includes equity securities the Company holds with Community Capital Management in their Community Reinvestment Act (“CRA”) Qualified Investment Fund. Bank Owned Life Insurance The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other changes or amounts due that are probable at settlement. Loans and the Allowance for Credit Losses: Loans are generally carried at the amount of unpaid principal, adjusted for unearned loan fees, which are amortized over the term of the loan using the effective interest rate method. Interest on loans is accrued based on the principal amounts outstanding. It is the Subsidiaries' policy to discontinue the accrual of interest when a loan is specifically determined to be impaired or when principal or interest is delinquent for ninety days or more. When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest income generally is not recognized on specific impaired loans unless the likelihood of further loss is remote. Cash collections on such loans are applied as reductions of the loan principal balance and no interest income is recognized on those loans until the principal balance has been collected. Interest income on other nonaccrual loans is recognized only to the extent of interest payments received. The carrying value of impaired loans is based on the present value of the loan's expected future cash flows or, alternatively, the observable market price of the loan or the fair value of the collateral. The allowance for loan losses is maintained at a level believed to be adequate by management to absorb probable losses inherent in the loan portfolio and is based on the size and current risk characteristics of the loan portfolio, an assessment of individual problem loans and actual loss experience, the value of the underlying collateral, and current economic events in specific industries and geographical areas, including unemployment levels, and other pertinent factors, including regulatory guidance and general economic conditions. Determination of the allowance is inherently subjective, as it requires significant estimates, including the amounts and timing on historical loss experience, and consideration of current economic trends, all of which may be susceptible to significant change. Loan losses are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for credit losses is charged to operations based on management's periodic evaluation of the factors previously mentioned, as well as other pertinent factors. Evaluations are conducted at least monthly and more often if deemed necessary. The allowance for credit losses typically consists of an allocated component and an unallocated component. The allocated component of the allowance for credit losses reflects expected losses resulting from analyses developed through specific credit allocations for individual loans and historical loss experience for each loan category. The specific credit allocations are based on regular analyses of all loans over a fixed-dollar amount where the internal credit rating is at or below a predetermined classification. The historical loan loss element is determined statistically using an informal loss migration analysis that examines loss experience and the related internal gradings of loans charged off over a current 3 year period. The loss migration analysis is performed quarterly and loss factors are updated regularly based on actual experience. The allocated component of the allowance for credit losses also includes consideration of concentrations and changes in portfolio mix and volume. Any unallocated portion of the allowance reflects management's estimate of probable inherent but undetected losses within the portfolio due to uncertainties in economic conditions, delays in obtaining information, including unfavorable information about a borrower's financial condition, the difficulty in identifying triggering events that correlate perfectly to subsequent loss rates, and risk factors that have not yet manifested themselves in loss allocation factors. The historical losses used in the migration analysis may not be representative of actual unrealized losses inherent in the portfolio. It is management's intent to continually refine the methodology for the allowance for credit losses in an attempt to directly allocate potential losses in the loan portfolio under ASC Topic 310 and minimize the unallocated portion of the allowance for credit losses. Loan Charge-off Policies Loans are generally fully or partially charged down to the fair value of securing collateral when: ● management deems the asset to be uncollectible; ● repayment is deemed to be made beyond the reasonable time frames; ● the asset has been classified as a loss by internal or external review; and ● the borrower has filed bankruptcy and the loss becomes evident owing to a lack of assets. Acquired Loans Loans acquired in connection with business combinations are recorded at their acquisition-date fair value with no carry over of related allowance for credit losses. Any allowance for credit loss on these pools reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately are not expected to be received). Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considered a number of factors in evaluating the acquisition-date fair value including the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment. Acquired loans that meet the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans, including the impact of any accretable yield. Loans acquired with deteriorated credit quality are accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality Under the ASC 310-30 model, the excess of cash flows expected to be collected at acquisition over recorded fair value is referred to as the accretable yield and is the interest component of expected cash flow. The accretable yield is recognized into income over the remaining life of the loan if the timing and/or amount of cash flows expected to be collected can be reasonably estimated (the accretion method). If the timing or amount of cash flows expected to be collected cannot be reasonably estimated, the cost recovery method of income recognition is used. The difference between the loan's total scheduled principal and interest payment over all cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the non-accretable difference. The non-accretable difference represents contractually required principal and interest payments which the Company does not expect to collect. Over the life of the loan, management continues to estimate cash flows expected to be collected. Decreases in expected cash flows are recognized as impairments through a charge to the provision for credit losses resulting in an increase in the allowance for credit losses. Subsequent improvements in cash flows result in first, reversal of existing valuation allowances recognized subsequent to acquisition, if any, and next, an increase in the amount of accretable yield to be subsequently recognized as interest income on a prospective basis over the loan's remaining life. Acquired loans that were not individually determined to be purchased with deteriorated credit quality are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs Troubled Debt Restructurings A loan is accounted for and reported as a troubled debt restructuring (“TDR”) when, for economic or legal reasons, we grant a concession to a borrower experiencing financial difficulty that we would not otherwise consider. Management strives to identify borrowers in financial difficulty early and works with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. A restructuring that results in only an insignificant delay in payment is not considered a concession. A delay may be considered insignificant if the payments subject to the delay are insignificant relative to the unpaid principal or collateral value and the contractual amount due, or the delay in timing of the restructured payment period is insignificant relative to the frequency of the payments, the debt’s original contractual maturity or original expected duration. TDRs are designated as impaired loans because interest and principal payments will not be received in accordance with the original contract terms. TDRs that are performing and on accrual status as of the date of the modification remain on accrual status. TDRs that are nonperforming as of the date of modification generally remain as nonaccrual until the prospect of future payments in accordance with the modified loan agreement is reasonably assured, generally demonstrated when the borrower maintains compliance with the restructured terms for a predetermined period, normally at least six months. TDRs with temporary below-market concessions remain designated as a TDR and impaired regardless of the accrual or performance status until the loan is paid off. However, if the TDR loan has been modified in a subsequent restructure with market terms and the borrower is not currently experiencing financial difficulty, then the loan may be no longer designated as a TDR. The COVID-19 pandemic has caused a significant disruption in economic activity worldwide, including in market areas served by the Company. Estimates for the allowance for loan losses at September 30, 2021 include probable losses related to the pandemic. The Company expects that the pandemic will continue to have an effect on its results of operations. If economic conditions deteriorate further, then additional provision for loan losses may be required in future periods. It is unknown how long these conditions will last and what the ultimate financial impact will be to the Company. Depending on the severity and duration of the economic consequences of the pandemic, the Company’s goodwill may become impaired. The Company had accommodated certain borrowers affected by the COVID-19 pandemic by granting short-term payment deferrals or periods of interest-only payments. As of September 30, 2021, all of the loan balances that were approved by the Company, on a consolidated basis, for loan payment deferrals or payments of interest only have either resumed regular payments or have been paid off. Generally, a short-term payment deferral does not result in a loan modification being classified as a TDR. Additionally, the Coronavirus Aid, Relief and Economic Security Act (CARES Act), enacted on March 27, 2020, and as subsequently supplemented, provided that certain loan modifications that were (1) related to COVID-19 and (2) for loans that were not more than 30 days past due as of December 31, 2019 are not required to be designated as TDRs. Loans Held for Sale: These loans consist of loans made through Partners’ majority owned subsidiary Johnson Mortgage Company, LLC (“JMC”). JMC is engaged in the mortgage brokerage business in which JMC originates, closes, and immediately sells mortgage loans and related servicing rights to permanent investors in the secondary market. JMC has written commitments from several permanent investors (large financial institutions) and only closes loans that meet the lending requirements of the permanent investors. Loans are made in connection with the purchase or refinancing of existing and new family residences primarily in southeastern and northern Virginia. Loans are initially funded primarily by JMC’s lines of credit. With the concurrent sale and delivery of mortgage loans to the permanent investors, JMC records receivables for mortgage loans sold and recognizes the related gains and losses on such sales. The receivables for mortgage loans sold are usually satisfied within of sale, whereupon the related borrowings on the lines of credit are repaid. Because of the short holding period, these loans are carried at the lower of cost or market and market adjustments were deemed necessary in the first three quarters of 2021 or during 2020. JMC’s agreements with its permanent investors include provisions that could require JMC to repurchase loans under certain circumstances, and also provide for the assessment of fees if loans go into default or are refinanced within specified periods of time. JMC has never been required to repurchase a loan and 2021 or December 31, 2020 for possible repurchases. Management does not believe that a provision for early default or refinancing costs is necessary at September 30, 2021 or December 31, 2020. JMC enters into commitments with its customers to originate loans where the interest rate on the loans is determined (locked) prior to funding. While this subjects JMC to the risk that interest rates may change from the commitment date to the funding date, JMC simultaneously enters into financial agreements (best efforts forward sales commitments) with its permanent investors giving JMC the right to deliver (put) loans to the investors at specified yields, thus enabling JMC to manage its exposure to changes in interest rates such that JMC is not subject to fluctuations in fair values of these agreements due to changes in interest rates. However, a default by a permanent investor required to purchase loans under such an agreement would expose JMC to potential fluctuation in selling prices of loans due to changes in interest rate. The fair value of rate lock commitments and forward sales commitments was considered immaterial at September 30, 2021 and December 31, 2020 and an adjustment was not recorded. Gains and losses on the sale of mortgages as well as origination fees, brokerage fees, interest rate lock-in fees and other fees paid by mortgagors are included in Mortgage banking income on the Company’s consolidated statements of income. Other Real Estate Owned (“OREO”): OREO comprises properties acquired in partial or total satisfaction of problem loans. The properties are recorded at fair value at the date acquired. Losses arising at the time of acquisition of such properties are charged against the allowance for credit losses. Subsequent write-downs that may be required and expenses of operation are included in other expenses. Gains and losses realized from the sale of OREO are included in other expenses. At September 30, 2021 there were three properties with a combined estimated value of $1.3 million included in OREO and at December 31, 2020, there were five properties with a combined estimated value of $2.7 million included in OREO. Intangible Assets and Amortization: During the fourth quarter of 2019, the Company acquired Partners and during the first quarter of 2018, the Company acquired Liberty Bell Bank (“Liberty”). ASC 350, Intangibles-Goodwill and Other Goodwill The Company’s goodwill was recognized in connection with the acquisitions of Partners and Liberty. The Company reviews the carrying value of goodwill at least annually or more frequently if certain impairment indicators exist. In testing goodwill for impairment, the Company may first consider qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, we conclude that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further testing is required and the goodwill of the reporting unit is not impaired. If the Company elects to bypass the qualitative assessment or if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the fair value of the reporting unit is compared with its carrying amount to determine whether an impairment exists. Accounting for Stock Based Compensation: The Company follows ASC 718-10, Compensation—Stock Compensation Earnings Per Share: Basic earnings per common share are determined by dividing net income and accretion of warrants by the weighted average number of shares outstanding for each period, giving retroactive effect to stock splits and dividends. Weighted average common shares outstanding were |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2021 | |
Investment Securities | |
Investment Securities | Note 2. Investment Securities Securities available for sale are as follows: September 30, 2021 Dollars in Thousands Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Obligations of U.S. Government agencies and corporations $ 5,575 $ 65 $ 118 $ 5,522 Obligations of States and political subdivisions 34,047 1,395 35 35,407 Mortgage-backed securities 72,700 421 540 72,581 Subordinated debt investments 1,990 52 2 2,040 $ 114,312 $ 1,933 $ 695 $ 115,550 December 31, 2020 Dollars in Thousands Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Obligations of U.S. Government agencies and corporations $ 6,758 $ 137 $ 12 $ 6,883 Obligations of States and political subdivisions 36,245 1,878 — 38,123 Mortgage-backed securities 74,857 1,127 108 75,876 Subordinated debt investments 3,985 62 4 4,043 $ 121,845 $ 3,204 $ 124 $ 124,925 Gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2021 and December 31, 2020, are as follows: September 30, 2021 Dollars in Thousands Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss Obligations of U.S. Government agencies and corporations $ 2,233 $ 91 $ 1,473 $ 27 $ 3,706 $ 118 Obligations of States and political subdivisions 1,252 35 — — 1,252 35 Mortgage-backed securities 50,226 502 2,613 38 52,839 540 Subordinated debt investments 498 2 — — 498 2 Total securities with unrealized losses $ 54,209 $ 630 $ 4,086 $ 65 $ 58,295 $ 695 December 31, 2020 Dollars in Thousands Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss Obligations of U.S. Government agencies and corporations $ 2,494 $ 12 $ — $ — $ 2,494 $ 12 Obligations of States and political subdivisions — — — — — — Mortgage-backed securities 18,525 108 — — 18,525 108 Subordinated debt investments 996 4 — — 996 4 Total securities with unrealized losses $ 22,015 $ 124 $ — $ — $ 22,015 $ 124 For individual securities classified as either available for sale or held to maturity, the Company must determine whether a decline in fair value below the amortized cost basis is other than temporary. In estimating OTTI losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. If the decline in fair value is considered to be other than temporary, the cost basis of the individual security shall be written down to the fair value as a new cost basis and the amount of the write-down shall be included in earnings (that is, accounted for as a realized loss). At September 30, 2021 there were sixteen mortgage-backed securities (“MBS”), three agency investments, one subordinated debt investment and four municipal securities that have been in a continuous unrealized loss position for less than twelve months. At September 30, 2021 there was one MBS security and one agency security that had been in a continuous unrealized loss position for more than twelve months. Management found no evidence of OTTI on any of these securities and believes that unrealized losses are due to fluctuations in fair values resulting from changes in market interest rates and are considered temporary. As of September 30, 2021, management also believes it has the ability and intent to hold the securities for a period of time sufficient for a recovery of cost. During the three and nine months ended September 30, 2021 the Company sold four and fourteen securities, respectively, resulting in a gain of $3 thousand and $17 thousand, respectively. During the three and nine months ended September 30, 2020, the Company sold thousand. During the three and nine months ended September 30, 2021, thousand, respectively. During the three and nine months ended September 30, 2020, thousand for both periods. The Company has pledged certain securities as collateral for qualified customers’ deposit accounts at September 30, 2021 and December 31, 2020. The amortized cost and fair value of these pledged securities was 2021. The amortized cost and fair value of these pledged securities was Contractual maturities of investment securities at September 30, 2021 are shown below. Actual maturities may differ from contractual maturities because debtors may have the right to call or prepay obligations with or without call or prepayment penalties. MBS have no stated maturity and primarily reflect investments in various Pass-through and Participation Certificates issued by the Federal National Mortgage Association and the Government National Mortgage Association. Repayment of MBS is affected by the contractual repayment terms of the underlying mortgages collateralizing these obligations and the current level of interest rates. The following is a summary of maturities, calls, or repricing of securities available for sale: September 30, 2021 Securities Available for Sale Dollars in Thousands Amortized Fair Cost Value Due in one year or less $ — $ — Due after one year through five years 2,719 2,913 Due after five years through ten years 19,865 20,415 Due after ten years or more 19,028 19,641 Mortgage-backed securities, due in monthly installments 72,700 72,581 $ 114,312 $ 115,550 |
Loans, Allowance for Credit Los
Loans, Allowance for Credit Losses and Impaired Loans | 9 Months Ended |
Sep. 30, 2021 | |
Loans, Allowance for Credit Losses and Impaired Loans | |
Loans, Allowance for Credit Losses and Impaired Loans | Note 3. Loans, Allowance for Credit Losses and Impaired Loans Major categories of loans as of September 30, 2021 and December 31, 2020 are as follows: (Dollars in thousands) September 30, 2021 December 31, 2020 Originated Loans Real Estate Mortgage Construction and land development $ 102,550 $ 71,361 Residential real estate 159,243 128,285 Nonresidential 477,229 394,539 Home equity loans 21,433 18,526 Commercial 108,953 115,387 Consumer and other loans 3,708 2,924 873,116 731,022 Acquired Loans Real Estate Mortgage Construction and land development $ 583 $ 3,345 Residential real estate 50,653 71,064 Nonresidential 141,048 175,206 Home equity loans 12,067 15,700 Commercial 26,662 37,411 Consumer and other loans 1,071 1,757 232,084 304,483 Total Loans Real Estate Mortgage Construction and land development $ 103,133 $ 74,706 Residential real estate 209,896 199,349 Nonresidential 618,277 569,745 Home equity loans 33,500 34,226 Commercial 135,615 152,798 Consumer and other loans 4,779 4,681 1,105,200 1,035,505 Less: Allowance for credit losses (15,031) (13,203) $ 1,090,169 $ 1,022,302 Allowance for Credit Losses Management has an established methodology to determine the adequacy of the allowance for credit losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for credit losses, the Company has segmented the loan portfolio into the following classifications: ● Real Estate Mortgage (which includes Construction and Land Development, Residential Real Estate, Nonresidential Real Estate and Home Equity Loans) ● Commercial ● Consumer and other loans Each of these segments are reviewed and analyzed quarterly using historical charge-off experience for their respective segments as well as the following qualitative factors: ● Changes in the levels and trends in delinquencies, non-accruals, classified assets and TDRs ● Changes in the value of underlying collateral ● Changes in the nature and volume of the portfolio ● Effects of any changes in lending policies, procedures, including underwriting standards and collections, charge off and recovery practices ● Changes in the experience, depth and ability of management ● Changes in the national and local economic conditions and developments, including the condition of various market segments ● Changes in the concentration of credits within each pool ● Changes in the quality of the Company’s loan review system and the degree of oversight by the Company’s Board of Directors ● Changes in external factors such as competition and the legal environment. The above factors result in a FASB ASC 450-10- 20 calculated reserve for environmental factors. All credit exposures graded at a rating of “non-pass” with outstanding balances less than or equal to $250 thousand and credit exposures graded at a rating of “pass” are reviewed and analyzed quarterly using historical charge-off experience for their respective segments as well as the qualitative factors discussed above. The historical charge-off experience is further adjusted based on delinquency risk trend assessments and concentration risk assessments. All credit exposures graded at a rating of “non-pass” with outstanding balances greater than $250 thousand and all credit exposures classified as TDR’s are to be reviewed no less than quarterly for the purpose of determining if a specific allocation is needed for that credit. The determination for a specific reserve is measured based on the present value of expected future cash flows, discounted at the loan's effective interest rate, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases management uses the current fair value of the collateral, less selling cost when foreclosure is probable, instead of discounted cash flows. If management determines that the value of the loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance for credit losses estimate or a charge-off to the allowance for credit losses. The establishment of a specific reserve does not necessarily mean that the credit with the specific reserve will definitely incur loss at the reserve level. It is only an estimation of the potential loss based upon anticipated events. A specific reserve will not be established unless loss elements can be determined and quantified based on known facts. The total allowance reflects management's estimate of credit losses inherent in the loan portfolio as of September 30, 2021 and December 31, 2020. The following tables include impairment information relating to loans and the allowance for credit losses as of September 30, 2021 and December 31, 2020: Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Balance at September 30, 2021 Purchased credit impaired loans Balance in allowance $ — $ — $ — $ — $ 41 $ — $ — $ 41 Related loan balance 45 1,652 1,896 — 160 — — 3,753 Individually evaluated for impairment: Balance in allowance $ — $ 89 $ 1,239 $ — $ 459 $ — $ — $ 1,787 Related loan balance 598 2,332 7,427 52 595 — — 11,004 Collectively evaluated for impairment: Balance in allowance $ 1,126 $ 2,062 $ 7,842 $ 268 $ 1,401 $ 37 $ 467 $ 13,203 Related loan balance 102,490 205,912 608,954 33,448 134,860 4,779 — 1,090,443 Note: The balances above include unamortized discounts on acquired loans of $2.7 million. Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Balance at December 31, 2020 Purchased credit impaired loans Balance in allowance $ — $ — $ — $ — $ 41 $ — $ — $ 41 Related loan balance 44 1,839 2,237 — 361 — — 4,481 Individually evaluated for impairment: Balance in allowance $ — $ 156 $ 17 $ — $ 500 $ — $ — $ 673 Related loan balance 175 2,947 6,990 — 489 — — 10,601 Collectively evaluated for impairment: Balance in allowance $ 903 $ 2,195 $ 7,567 $ 271 $ 1,402 $ 37 $ 114 $ 12,489 Related loan balance 74,487 194,563 560,518 34,226 151,948 4,681 — 1,020,423 Note: The balances above include unamortized discounts on acquired loans of The following tables provide a summary of the activity in the allowance for credit losses allocated by loan class for three and nine months ended September 30, 2021 and the year ended December 31, 2020. Allocation of a portion of the allowance to one loan class does not preclude its availability to absorb losses in other loan classes. September 30, 2021 Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Quarter Ended Beginning Balance $ 1,038 $ 2,206 $ 8,654 $ 228 $ 1,803 $ 32 $ 1,348 $ 15,309 Charge-offs — (11) (138) — (91) (23) — (263) Recoveries — 6 — — 2 7 — 15 Provision/(recovery) 88 (50) 565 40 187 21 (881) (30) Ending Balance $ 1,126 $ 2,151 $ 9,081 $ 268 $ 1,901 $ 37 $ 467 $ 15,031 Nine Months Ended Beginning Balance $ 903 $ 2,351 $ 7,584 $ 271 $ 1,943 $ 37 $ 114 $ 13,203 Charge-offs — (39) (570) (6) (185) (46) — (846) Recoveries 1 22 53 — 11 19 — 106 Provision/(recovery) 222 (183) 2,014 3 132 27 353 2,568 Ending Balance $ 1,126 $ 2,151 $ 9,081 $ 268 $ 1,901 $ 37 $ 467 $ 15,031 December 31, 2020 Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Year Ended Beginning Balance $ 602 $ 1,380 $ 4,074 $ 142 $ 826 $ 14 $ 266 $ 7,304 Charge-offs — (112) (575) (13) (918) (120) — (1,738) Recoveries 1 70 512 10 109 41 — 743 Provision 300 1,013 3,573 132 1,926 102 (152) 6,894 Ending Balance $ 903 $ 2,351 $ 7,584 $ 271 $ 1,943 $ 37 $ 114 $ 13,203 On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law, which established the Paycheck Protection Program (“PPP”) and allocated $349.0 billion of loans to be issued by financial institutions. Under the PPP, the Small Business Administration (“SBA”) will forgive loans, in whole or in part, made by approved lenders to eligible borrowers for Paycheck and other permitted purposes in accordance with the requirements of the PPP. These loans carry a fixed rate of 1.00% and a term of two years, if not forgiven, in whole or in part. The loans are 100% guaranteed by the SBA and payments are deferred for the first six months of the loan. The Bank receives a processing fee ranging from 1% to 5% based on the size of the loan from the SBA. In April 2020, the PPP was established and the Health Care Enhancement Act was signed into law and authorized additional funding of $310.0 billion for PPP loans. In December 2020, the Consolidated Appropriations Act 2021 (“CAA”) was passed, which extended the PPP and allocated additional funds for 2021. The Company has provided $ 2021. Because these loans are 100% guaranteed by the SBA and did not undergo the Bank’s typical underwriting process, they are not graded and do not have an associated reserve at this time. At September 30, 2021, the Company had $13.7 million of PPP loans outstanding, net of fees, included in commercial loan balances. Credit Quality Information The following tables represent credit exposures by creditworthiness category at September 30, 2021 and December 31, 2020. The use of creditworthiness categories to grade loans permits management to estimate a portion of credit risk. The Company’s internal creditworthiness is based on experience with similarly graded credits. The Company uses the definitions below for categorizing and managing its criticized loans. Loans categorized as “Pass” do not meet the criteria set forth below and are not considered criticized. Marginal — Loans in this category are presently protected from loss, but weaknesses are apparent which, if not corrected, could cause future problems. Loans in this category may not meet required underwriting criteria and have no mitigating factors. More than the ordinary amount of attention is warranted for these loans. Substandard — Loans in this category exhibit well-defined weaknesses that would typically bring normal repayment into jeopardy. These loans are no longer adequately protected due to well-defined weaknesses that affect the repayment capacity of the borrower. The possibility of loss is much more evident and above average supervision is required for these loans. Doubtful — Loans in this category have all the weaknesses inherent in a loan categorized as Substandard, with the characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loss — Loans in this category are of little value and are not warranted as a bankable asset. Non-accruals In general, a loan will be placed on non-accrual status at the end of the reporting month in which the interest or principal is past due more than 90 days. Exceptions to the policy are those loans that are in the process of collection and are well-secured. A well-secured loan is secured by collateral with sufficient market value to repay principal and all accrued interest. A summary of loans by risk rating is as follows: Real Estate Secured Construction & Land Residential Consumer & September 30, 2021 Development Real Estate Nonresidential Home Equity Commercial Other Total Dollars in Thousands Pass $ 102,490 $ 207,180 $ 597,275 $ 32,732 $ 133,341 $ 4,252 $ 1,077,270 Marginal 45 508 16,598 684 1,679 527 20,041 Substandard 598 2,208 4,404 84 595 — 7,889 TOTAL $ 103,133 $ 209,896 $ 618,277 $ 33,500 $ 135,615 $ 4,779 $ 1,105,200 Non-Accrual $ 598 $ 1,533 $ 4,131 $ 32 $ 463 $ — $ 6,757 Real Estate Secured Construction & Land Residential Consumer & December 31, 2020 Development Real Estate Nonresidential Home Equity Commercial Other Total Dollars in Thousands Pass $ 74,487 $ 195,599 $ 552,758 $ 33,479 $ 151,779 $ 4,681 $ 1,012,783 Marginal 44 575 12,542 693 420 — 14,274 Substandard 175 3,175 4,445 54 599 — 8,448 TOTAL $ 74,706 $ 199,349 $ 569,745 $ 34,226 $ 152,798 $ 4,681 $ 1,035,505 Non-Accrual $ 175 $ 2,022 $ 2,170 $ 54 $ 489 $ — $ 4,910 A summary of loans that were modified under the terms of a TDR for the three and nine months ended September 30, 2021 and 2020 is shown below by class. The post-modification recorded balance reflects the period end balances, inclusive of any interest capitalized to principal, partial principal pay-downs, and principal charge-offs since the modification date. Loans modified as TDRs that were fully paid down, charged off, or foreclosed upon by period end are not reported. Real Estate Secured Construction & Land Residential Consumer & Development Real Estate Nonresidential Home Equity Commercial Other Total Dollars in Thousands Three months ended September 30, 2021 Number of loans modified during the period — — 1 — — — 1 Pre-modification recorded balance $ — $ — $ 2,919 $ — $ — $ — $ 2,919 Post- modification recorded balance — — 2,907 — — — 2,907 Nine months ended September 30, 2021 Number of loans modified during the period — — 2 — — — 2 Pre-modification recorded balance $ — $ — $ 3,197 $ — $ — $ — $ 3,197 Post- modification recorded balance — — 2,907 — — — 2,907 Three months ended September 30, 2020 Number of loans modified during the period — — — — — — — Pre-modification recorded balance $ — $ — $ — $ — $ — $ — $ — Post- modification recorded balance — — — — — — — Nine months ended September 30, 2020 Number of loans modified during the period — — — — 1 — 1 Pre-modification recorded balance $ — $ — $ — $ — $ 1,196 $ — $ 1,196 Post- modification recorded balance — — — — 489 — 489 During the nine months ended September 30, 2021, there were no loans modified as TDRs that subsequently defaulted during the period ended September 30, 2021 which had been modified as TDRs during the twelve months prior to default. loan modified as a TDR that subsequently defaulted which had been modified as a TDR during the twelve months prior to default. This loan had a balance of thousand. There was one loan secured by 1-4 family residential properties with a balance of $266 thousand that was in the process of foreclosure at September 30, 2021. There were The following tables include an aging analysis of the recorded investment of past due financing receivables as of September 30, 2021 and December 31, 2020: Recorded Investment Greater than Total >90 Days 30 - 59 Days 60 - 89 Days 90 Days Total Current Financing Past Due At September 30, 2021 Past Due* Past Due** Past Due*** Past Due Balance**** Receivables and Accruing Dollars in Thousands Real Estate Construction and land development $ — $ — $ 598 $ 598 $ 102,535 $ 103,133 $ — Residential real estate 184 79 504 767 209,129 209,896 — Nonresidential 1,585 2,652 534 4,771 613,506 618,277 — Home equity loans 30 32 — 62 33,438 33,500 — Commercial — — 77 77 135,538 135,615 — Consumer and other loans 4 — — 4 4,775 4,779 — TOTAL $ 1,803 $ 2,763 $ 1,713 $ 6,279 $ 1,098,921 $ 1,105,200 $ — * Includes $39 thousand of non-accrual loans. ** Includes *** Includes ****Includes $4.9 million of non-accrual loans. Recorded Investment Greater than Total >90 Days 30 - 59 Days 60 - 89 Days 90 Days Total Current Financing Past Due At December 31, 2020 Past Due* Past Due** Past Due*** Past Due Balance**** Receivables and Accruing Dollars in Thousands Real Estate Construction and land development $ 642 $ 66 $ 175 $ 883 $ 73,823 $ 74,706 $ — Residential real estate 2,520 244 679 3,443 195,906 199,349 — Nonresidential 2,552 1,240 2,377 6,169 563,576 569,745 — Home equity loans 80 — 54 134 34,092 34,226 — Commercial 86 169 489 744 152,054 152,798 — Consumer and other loans 7 — 2 9 4,672 4,681 2 TOTAL $ 5,887 $ 1,719 $ 3,776 $ 11,382 $ 1,024,123 $ 1,035,505 $ 2 * Includes $683 thousand of non-accrual loans. ** Includes $227 thousand of non-accrual loans. *** Includes $3.5 million of non-accrual loans. ****Includes $458 thousand of non-accrual loans. Impaired Loans Impaired loans are defined as non-accrual loans, TDRs, purchased credit impaired loans (“PCI”) and loans risk rated substandard or above. When management identifies a loan as impaired, the impairment is measured for potential loss based on the present value of expected future cash flows, discounted at the loan's effective interest rate, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the collateral. In these cases management uses the current fair value of the collateral, less selling cost when foreclosure is probable, instead of discounted cash flows. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on non-accrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan is not in doubt and the loan is on non-accrual status, contractual interest is credited to interest income when received, under the cash basis method. The following tables include the recorded investment and unpaid principal balances for impaired financing receivables, excluding purchased credit impaired, with the associated allowance amount, if applicable. Also presented are the average recorded investments in the impaired loans and the related amount of interest recognized during the time within the period that the impaired loans were impaired. Unpaid Interest Average Recorded Principal Income Specific Recorded September 30, 2021 Investment Balance Recognized Reserve Investment Dollars in Thousands Impaired loans with specific reserves: Real Estate Mortgage Construction and land development $ — $ — $ — $ — $ — Residential real estate 430 430 15 89 435 Nonresidential 5,863 5,863 202 1,239 5,886 Home equity loans — — — — — Commercial 518 528 108 459 590 Consumer and other loans — — — — — Total impaired loans with specific reserves $ 6,811 $ 6,821 $ 325 $ 1,787 $ 6,911 Impaired loans with no specific reserve: Real Estate Mortgage Construction and land development $ 598 $ 598 $ 13 $ — $ 599 Residential real estate 1,902 1,941 27 — 1,932 Nonresidential 1,564 1,561 354 — 1,587 Home equity loans 52 52 — — 53 Commercial 77 154 2 — 120 Consumer and other loans — — — — — Total impaired loans with no specific reserve $ 4,193 $ 4,306 $ 396 $ — $ 4,291 TOTAL $ 11,004 $ 11,127 $ 721 $ 1,787 $ 11,202 Total impaired loans of $11.0 million at September 30, 2021 do not include PCI loan balances of $3.8 million, which are net of a discount of $426,000. Unpaid Interest Average Recorded Principal Income Specific Recorded December 31, 2020 Investment Balance Recognized Reserve Investment Dollars in Thousands Impaired loans with specific reserves: Real Estate Mortgage Construction and land development $ — $ — $ — $ — $ — Residential real estate 614 614 — 156 671 Nonresidential 2,151 2,151 259 17 2,304 Home equity loans — — — — — Commercial 489 1,196 11 500 881 Consumer and other loans — — — — — Total impaired loans with specific reserves $ 3,254 $ 3,961 $ 270 $ 673 $ 3,856 Impaired loans with no specific reserve: Real Estate Mortgage Construction and land development $ 175 $ 175 $ — $ — $ 176 Residential real estate 2,333 2,425 107 — 2,365 Nonresidential 4,839 5,260 174 — 5,944 Home equity loans — — — — — Commercial — — — — — Consumer and other loans — — — — — Total impaired loans with no specific reserve $ 7,347 $ 7,860 $ 281 $ — $ 8,485 TOTAL $ 10,601 $ 11,821 $ 551 $ 673 $ 12,341 All acquired loans were initially recorded at fair value at the acquisition date. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheets are as follows: Dollars in Thousands September 30, 2021 December 31, 2020 Accountable for under ASC 310-30 (PCI loans) Outstanding balance $ 4,179 $ 5,125 Carrying amount 3,753 4,481 Accountable for under ASC 310-20 (non-PCI loans) Outstanding balance $ 230,565 $ 303,363 Carrying amount 228,331 300,002 Total acquired loans Outstanding balance $ 234,744 $ 308,488 Carrying amount 232,084 304,483 The following table provides changes in accretable yield for all acquired loans accounted for under ASC 310-20: Dollars in Thousands September 30, 2021 December 31, 2020 Balance at beginning of period $ 3,361 $ 5,081 Acquisitions — (1) Accretion (1,126) (1,718) Other changes, net (1) (1) Balance at end of period $ 2,234 $ 3,361 During the three and nine months ended September 30, 2021, the Company recorded $9 thousand and $23 thousand, respectively, in accretion on acquired loans accounted for under ASC 310-30. During the three and nine months ended September 30, 2020, the Company recorded Non-accretable yield on PCI loans was $1.4 million and $1.6 million at September 30, 2021 and December 31, 2020, respectively. Concentration of Risk: The Company makes loans to customers located primarily within Anne Arundel, Charles, Calvert, St. Mary’s, Wicomico, and Worcester Counties, Maryland; Sussex County, Delaware; Camden and Burlington Counties, New Jersey; Stafford, Spotsylvania, King George, and Caroline Counties, Virginia; and the Cities of Fredericksburg and Reston, Virginia. A substantial portion of its loan portfolio consists of residential and commercial real estate mortgages. The ability of the Company’s debtors to honor their contracts is dependent upon the real estate and general economic conditions in these areas. The Company had no commitments to loan additional funds to the borrowers of restructured, impaired, or non-accrual loans as of September 30, 2021 and December 31, 2020. |
Borrowings and Notes Payable
Borrowings and Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Borrowings and Notes Payable | |
Borrowings and Notes Payable | Note 4. Borrowings and Notes Payable The Company owns capital stock of the FHLB as a condition for a $401.8 million convertible advance credit facility from the FHLB. As of September 30, 2021, the Company had remaining credit availability of $375.3 million under this facility. The following table details the advances the Company had outstanding with the FHLB at September 30, 2021 and December 31, 2020 and outstanding lines of credit: September 30, 2021 Dollars in Thousands Outstanding Balance Interest Rate Maturity Date Interest Payment Fixed rate hybrid $ 5,000 3.15 % October 2022 Fixed, paid monthly Principal reducing credit 643 1.62 % March 2023 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Principal reducing credit 1,035 1.99 % March 2026 Fixed, paid quarterly Total advances $ 26,478 December 31, 2020 Dollars in Thousands Outstanding Balance Interest Rate Maturity Date Interest Payment Fixed rate hybrid $ 6,000 2.44 % April 2021 Fixed, paid quarterly Fixed rate hybrid 5,000 3.15 % October 2022 Fixed, paid monthly Principal reducing credit 964 1.62 % March 2023 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Principal reducing credit 1,208 1.99 % March 2026 Fixed, paid quarterly Total advances $ 32,972 The Company did not have any short-term borrowings from the FHLB for the nine months ended September 30, 2021 and average short-term borrowings from FHLB approximated $24.8 million for the year ended December 31, 2020. Borrowings from the FHLB are considered short-term if they have an original maturity of less than a year. The Company has pledged a portion of its residential and commercial mortgage loan portfolio as collateral for these credit facilities. Principal balances outstanding on these pledged loans totaled approximately $188.0 million and $178.6 million at September 30, 2021 and December 31, 2020, respectively. In addition to the FHLB credit facility, in October 2015, the Company entered into a subordinated loan agreement for an aggregate principal amount of $2.0 million, net of issuance costs. Interest-only payments were due quarterly at 6.710% per annum, and the outstanding principal balance would have matured in October 2025. During July 2021, the prepayment provisions in the agreement were exercised, and the principal balance and any remaining accrued interest of this subordinated debt were paid in full. In January 2018, the Company entered into a subordinated loan agreement for an aggregate principal amount of 2028. In June 2020, the Company entered into a subordinated loan agreement for an aggregate principal amount of million, net of issuance costs, to provide capital to support organic growth or growth through strategic acquisitions and capital expenditures. Partners owns a one-half undivided interest in 410 William Street, Fredericksburg, Virginia. Partners purchased a one-half interest in the land for cash, plus additional settlement costs, and assumption of one-half of the remaining deed of trust loan on December 14, 2012. Partners indemnified the personal guarantors of the deed of trust loan in the amount of thousand, which was one-half of the outstanding balance of the loan as of the purchase date. Partners has a remaining obligation under the note payable of 2021. This note is carried on the balance sheet net of a discount of thousand. The loan was refinanced on April 30, 2015 with a amortization. The interest rate is fixed at The Company provides JMC a warehouse line of credit, which is eliminated in consolidation. In addition, JMC has a warehouse line of credit with another financial institution in the amount of million. The interest rate is the weekly average of the 2021 and December 31, 2020). The rate is subject to change the first of every month. Amounts borrowed are collateralized by a security interest in the mortgage loans financed under the line and are payable upon demand. The warehouse line of credit is set to renew or mature on November 30, 2021. The balance outstanding at September 30, 2021 and December 31, 2020 was thousand, respectively. Interest expense on the warehouse lines of credit was During the second quarter of 2020, in connection with the loans originated as part of the PPP, the Company borrowed under the Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”). Under the terms of the PPPLF, the Company can borrow funds which are secured by the Company’s PPP loans. As of September 30, 2021, the Company did no t have any outstanding advances under the PPPLF. At December 31, 2020, the Company had outstanding advances under the PPPLF of The proceeds of these long-term borrowings were generally used to purchase higher yielding investment securities, fund additional loans, redeem preferred stock, or fund acquisitions. Additionally, the Company has secured credit availability of $5.0 million with a correspondent bank and unsecured credit availability of $87.0 million with several other correspondent banks for short-term liquidity needs, if necessary. The secured facility must be collateralized by specific securities at the time of any usage. At September 30, 2021 and December 31, 2020, there were no borrowings outstanding under these credit agreements. The Company has pledged investment securities available for sale with an amortized cost and fair value of $3.9 million with the FRB to secure Discount Window borrowings at September 30, 2021. The combined amortized cost and fair value of these pledged investment securities were million, respectively, at December 31, 2020. At September 30, 2021 and December 31, 2020 there were Maturities on debt are as follows (dollars in thousands): 2021 $ 158 2022 5,634 2023 314 2024 20,008 2025 210 Thereafter 22,951 $ 49,275 |
Lease Commitments
Lease Commitments | 9 Months Ended |
Sep. 30, 2021 | |
Lease Commitments | |
Lease Commitments | Note 5. Lease Commitments The Company leases nineteen locations for administrative offices and branch locations. Seventeen leases were classified as operating leases and two as finance leases. Leases with an initial term of 12 months or less as well as leases with a discounted present value of future cash flows below $25 thousand are not recorded on the balance sheet and the related lease expense is recognized over the lease term. The Company elected to use the practical expedient to not recognize short-term leases on the consolidated balance sheet and instead account for them as executory contracts. Certain leases include options The following tables present information about the Company’s leases for the periods ended: Dollars in Thousands September 30, 2021 December 31, 2020 Balance Sheet Operating Lease Amounts Right-of-use asset $ 6,726 $ 3,983 Lease liability 7,053 4,301 Finance Lease Amounts Right-of-use asset $ 1,721 $ 1,824 Lease liability 2,155 2,242 Supplemental balance sheet information Weighted average lease term - Operating Leases (Yrs.) 8.46 8.00 Weighted average lease term - Finance Leases (Yrs.) 12.34 13.09 Weighted average discount rate - Operating Leases (1) 2.33 % 2.74 % Weighted average discount rate - Finance Leases (1) 2.84 % 2.84 % Income Statement Three Months Ended September 30, 2021 September 30, 2020 Operating lease cost classified as premises and equipment $ 252 $ 223 Finance lease cost classified as interest on borrowings 15 22 Nine Months Ended Operating lease cost classified as premises and equipment $ 691 $ 457 Finance lease cost classified as interest on borrowings 47 33 Operating outgoing cash flows from operating leases $ 643 $ 433 Operating outgoing cash flows from finance leases $ 134 $ 89 (1) The discount rate was developed by using the fixed rate credit advance borrowing rate at the FHLB of Atlanta for a term correlating to the remaining life of each lease. Management believes this rate closely mirrors its incremental borrowing rate for similar terms. Minimum lease payments at September 30, 2021, for the next five years and thereafter, assuming renewal options are exercised, are approximately as follows: Dollars in Thousands Operating Leases: One year or less $ 1,031 One to three years 1,934 Three to five years 1,445 Over 5 years 3,555 Total undiscounted cash flows 7,965 Less: Discount (912) Lease Liabilities $ 7,053 Finance Leases: One year or less $ 178 One to three years 376 Three to five years 406 Over 5 years 1,620 Total undiscounted cash flows 2,580 Less: Discount (425) Lease Liabilities $ 2,155 |
Stock Option Plans
Stock Option Plans | 9 Months Ended |
Sep. 30, 2021 | |
Stock Option Plans | |
Stock Option Plans | Note 6. Stock Option Plans Partners Bancorp Stock Option Plan The Company had employee and director stock option plans and had reserved shares of stock for issuance thereunder. Options granted under these plans had a ten-year life with a four-year vesting period that began one year after date of grant, and were exercisable at a price equal to the fair value of the Company’s stock on the date of the grant. Each award from all plans was evidenced by an award agreement that specifies the option price, the duration of the option, the number of shares to which the option pertains, and such other provisions as the grantor determines. The plan term ended in 2014, therefore no new options can be granted. Liberty Bell Bank Stock Option Plans In 2004, Liberty adopted the 2004 Incentive Stock Option Plan and the 2004 Non-Qualified Stock Option Plan, which were stock-based incentive compensation plans (the “Liberty Plans”). In February 2014, the Liberty Plans expired pursuant to their terms. Options under these plans had a 10 year life and vested over 5 years. Remaining options under the Liberty Plans became fully vested with the approval by the board of directors of Liberty signing the Agreement of Merger with the Company in July 2017 (the “Liberty Merger”). In accordance with the terms of the Agreement of Merger between the Company and Liberty, the Liberty Plans were assumed by the Company, and the options were converted into and became an option to purchase an adjusted number of shares of the common stock of the Company at an adjusted exercise price per share. The number of shares was determined by multiplying the number of shares of Liberty common stock for which the option was exercisable by the number of shares of the Company’s common stock into which shares of Liberty common stock were convertible in the Liberty Merger, which was 0.2857 (the “Liberty Conversion Ratio”), rounded to the next lower whole share. The exercise price was determined by dividing the exercise price per share of Liberty common stock by the Liberty Conversion Ratio, rounded up to the nearest cent. At the effective time of the Liberty Merger there were 48,225 options outstanding at an exercise price of $1.18. These shares were converted to 13,771 options outstanding at an exercise price of $4.14. A summary of stock option transactions with respect to such options for the nine months ended September 30, 2021 is as follows: September 30, 2021 Weighted Weighted Average Average Remaining Exercise Contractual Intrinsic Shares Price Life Value Outstanding at beginning of period 7,681 $ 4.14 2.23 Granted — — — Exercised — — — Forfeited — — — Outstanding at end of period 7,681 $ 4.14 1.48 $ 31,723 Options exercisable at September 30, 2021 7,681 $ 4.14 Virginia Partners Bank Stock Option Plan In 2015 Virginia Partners Bank adopted the 2015 Stock Option Plan (the “2015 Partners Plan”), which allowed both incentive stock options and nonqualified stock options to be granted. The exercise price of each stock option equaled the market price of Partners' common stock on the date of grant and a stock option’s maximum term was . Stock options granted in the years ended December 31, 2018 and 2017 vested over . Partners previous stock compensation plan (the “2008 Partners Plan”) provided for the grant of share based awards in the form of incentive stock options and nonqualified stock options to Partners’ directors, officers and employees. In April 2015, the 2008 Partners Plan was terminated and replaced with the 2015 Partners Plan. Stock options outstanding prior to April 2015 were granted under the 2008 Partners Plan and became subject to the provisions of the 2015 Partners Plan. The 2008 Partners Plan also provided for stock options to be granted to seed investors as a reward for the contribution to organizational funds which were at risk if Partners’ organization had not been successful. Under the 2008 Partners Plan, Partners granted stock options to seed investors in 2008, which were fully vested upon the date of the grant. As a result of the Share Exchange, each stock option (the "Partners Options"), whether vested or unvested, issued and outstanding immediately prior to the effective time under the 2008 Partners Plan or the 2015 Partners Plan and together with the 2008 Partners Plan, (the "Partners Stock Plans"), immediately 100% vested, to the extent not already vested, and converted into and became stock options to purchase the Company common stock. In addition, the Company assumed each Partners Stock Plan, and assumed each Partners Option in accordance with the terms and conditions of the Partners Stock Plan pursuant to which it was issued. As such, Partners Options to acquire per share. The number of shares was determined by multiplying the number of shares of Partners’ common stock for which the option was exercisable by the number of shares of the Company common stock into which shares of Partners common stock were convertible in the Share Exchange, which was (the “Conversion Ratio”), rounded to the next lower whole share. The exercise price was determined by dividing the exercise price per share of Partners common stock by the Conversion Ratio, rounded up to the nearest cent. A summary of stock option transactions with respect to such options for the nine months ended September 30, 2021 is as follows: September 30, 2021 Weighted Weighted Average Average Remaining Exercise Contractual Intrinsic Shares Price Life Value Outstanding at beginning of period 186,552 $ 6.22 3.47 Granted — — — Exercised — — — Forfeited — — — Outstanding at end of period 186,552 $ 6.22 2.73 $ 382,267 Options exercisable at September 30, 2021 186,552 $ 6.22 The intrinsic value represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock options exceeds the exercise price) that would have been received by the holders had they exercised their stock options on September 30, 2021. As stated in Note 1, the Company follows ASC 718-10 which requires that stock-based compensation to employees and directors be recognized as compensation cost in the income statement based on their fair values on the measurement date, which, for the Company, is the date of the grant. All stock option expenses had been fully recognized prior to 2020. |
Restricted Stock Plan
Restricted Stock Plan | 9 Months Ended |
Sep. 30, 2021 | |
Restricted Stock Plan | |
Restricted Stock Plan | Note 7. Restricted Stock Plan The Company had an employee and director restricted stock plan (the “Company Plan”) and reserved 405,805 shares of stock for issuance thereunder. The Company adopted the Company Plan, pursuant to which employee and directors of the Company could acquire shares of common stock. The Company Plan was adopted by the Company’s Board of Directors in April 2014, and was subject to the right of the Board of Directors to terminate the Company Plan at any time. The Company Plan terminated at its scheduled date on June 30, 2018. The termination of the Company Plan, either at the scheduled termination date or before such date, did not affect any award issued prior to termination. During 2017 and 2018 the Company awarded As of September 30, 2021 there were no remaining non- vested restricted stock awards. A schedule of vested awards in 2021 as of September 30, 2021 is as follows: Employees Weighted Average Shares Fair Value Nonvested Awards December 31, 2020 3,000 $ 7.30 Vested in 2021 (3,000) 7.30 Nonvested Awards September 30, 2021 — $ — As stated in Note 1, the Company follows ASC 718-10 which requires that restricted stock- based compensation to employees and directors be recognized as compensation cost in the income statement based on their fair values on the measurement date. The fair value of restricted stock granted is equal to the underlying fair value of the stock. expense was recognized during the three months ended September 30, 2021. During the net of tax, related to the restricted stock awards under the Company Plan. During net of tax, related to the restricted stock awards under the Company Plan. During |
Incentive Stock Plan
Incentive Stock Plan | 9 Months Ended |
Sep. 30, 2021 | |
Incentive Stock Plan | |
Incentive Stock Plan | Note 8. Incentive Stock Plan At the 2021 annual meeting of shareholders held on May 19, 2021 (the “2021 Annual Meeting”), the Company’s shareholders approved the Partners Bancorp 2021 Incentive Stock Plan (the “2021 Incentive Stock Plan”), which the Company’s Board of Directors had adopted, subject to shareholder approval, on January 27, 2021, based on the recommendation of the Compensation Committee of the Company’s Board of Directors (the “Committee”). The 2021 Incentive Stock Plan became effective upon shareholder approval at the 2021 Annual Meeting. The 2021 Incentive Stock Plan authorizes the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards and performance units to key employees and non-employee directors, including members of advisory boards, of the Company and certain of its subsidiaries, as determined by the Committee. Subject to the right of the Board of Directors to terminate the 2021 Incentive Stock Plan at any time, awards may be granted under the 2021 Incentive Stock Plan until May 18, 2031. Subject to adjustment in the event of certain changes in the Company’s capital structure, the maximum number of shares of the Company’s common stock that may be issued under the 2021 Incentive Stock Plan is 1,250,000. As of September 30, 2021, there are no awards outstanding under the 2021 Incentive Stock Plan. On April 28, 2021, the Company’s Board of Directors granted 58,824 shares of restricted stock to two senior officers of Partners in accordance with Nasdaq Listing Rule 5635(c)(4) as inducements material to each of them accepting employment with Partners. All of these shares are subject to time vesting in three equal annual installments beginning on April 28, 2022. As of September 30, 2021, there were 58,824 non-vested shares related to restricted stock awards. A schedule of non-vested shares related to restricted stock awards as of September 30, 2021 is as follows: Employees Weighted Average Shares Fair Value Nonvested Awards December 31, 2020 — $ — Awarded in 2021 58,824 7.65 Nonvested Awards September 30, 2021 58,824 $ 7.65 As a result of applying the provisions of ASC 718-10, during the three and nine months ended September 30, 2021, the Company recognized restricted stock-based compensation expense of $37 thousand, or $28 thousand net of tax, and $62 thousand, or $46 thousand net of tax, respectively, related to the restricted stock awards. Restricted stock-based compensation expense is accounted for using the fair value of the Company’s common stock on the date the restricted shares were awarded, which was $7.65 for the awards granted on April 28, 2021. Unrecognized restricted stock-based compensation expense related to the restricted stock awards totaled approximately $388 thousand at September 30, 2021. The remaining period over which this unrecognized restricted stock-compensation expense is expected to be recognized is approximately 2. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share | |
Earnings Per Share | Note 9. Earnings Per Share Basic earnings per share (EPS) is computed by dividing net income or loss by the weighted average number of shares outstanding during the period. Diluted EPS is computed using the weighted average number of shares outstanding during the period, including the effect of all potentially dilutive shares outstanding attributable to stock instruments. Applicable guidance requires that outstanding, unvested share-based payment awards that contain voting rights and rights to nonforfeitable dividends participate in undistributed earnings with common shareholders. Accordingly, the weighted average number of shares of the Company’s common stock used in the calculation of basic and diluted net income per common share includes unvested shares of the Company’s outstanding restricted common stock. The following table presents basic and diluted EPS for the three and nine months ended September 30, 2021 and 2020: Net Income Applicable to Basic Earnings Weighted Average (Dollars in thousands, except per share data) Per Common Share Shares Outstanding For the three months ended September 30, 2021 Basic EPS $ 2,696 17,788 $ 0.152 Effect of dilutive stock awards — 56 — Diluted EPS $ 2,696 17,844 $ 0.151 For the nine months ended September 30, 2021 Basic EPS $ 5,946 17,758 $ 0.335 Effect of dilutive stock awards — 42 — Diluted EPS $ 5,946 17,800 $ 0.334 For the three months ended September 30, 2020 Basic EPS $ 1,117 17,810 $ 0.063 Effect of dilutive stock awards — 1 — Diluted EPS $ 1,117 17,811 $ 0.063 For the nine months ended September 30, 2020 Basic EPS $ 4,563 17,808 $ 0.256 Effect of dilutive stock awards — 30 — Diluted EPS $ 4,563 17,838 $ 0.256 |
Regulatory Capital Requirements
Regulatory Capital Requirements | 9 Months Ended |
Sep. 30, 2021 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | Note 10. Regulatory Capital Requirements The Company’s subsidiaries are subject to various regulatory capital requirements administered by Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company’s subsidiaries must meet specific capital adequacy guidelines that involve quantitative measures of the Company’s subsidiaries assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s subsidiaries’ capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weighting, and other factors. Federal banking regulations also impose regulatory capital requirements on bank holding companies. Under the small bank holding company policy statement of the Federal Reserve Board, which applies to certain bank holding companies with consolidated total assets of less than $3 billion, the Company is not subject to regulatory capital requirements. On September 17, 2019, the Federal Deposit Insurance Corporation finalized a rule that introduced an optional simplified measure of capital adequacy for qualifying community banking organizations (i.e., the community bank leverage ratio (CBLR) framework), as required by the Economic Growth, Regulatory Relief and Consumer Protection Act. The CBLR framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of at least 9 percent, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. A qualifying community banking organization that opts into the CBLR framework and meets all requirements under the framework will be considered to have met the well-capitalized ratio requirements under the Prompt Corrective Action regulations and will not be required to report or calculate risk-based capital. The Company has elected not to opt into the CBLR framework at this time. Quantitative measures established by regulation to ensure capital adequacy require the Company’s subsidiaries to maintain minimum amounts and ratios (as defined in the regulations) of total and Tier 1 capital to risk-weighted assets, Tier 1 capital to average assets, and common equity Tier 1 capital to risk-weighted assets. Management believes as of September 30, 2021 that the Company’s subsidiaries met all capital adequacy requirements to which they are subject. As of September 30, 2021, the most recent notification from the Federal Deposit Insurance Corporation (“FDIC”) categorized the Company’s subsidiaries as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Company’s subsidiaries must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage and common equity Tier 1 risk-based ratios. There are no conditions or events since that notification that management believes have changed the Company’s subsidiaries category. The Common Equity Tier 1, Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. Risk-weighted assets are calculated based on regulatory requirements and include total assets, with certain exclusions, allocated by risk weight category, and certain off-balance-sheet items, among other things. The Tier 1 leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets, among other things. The Basel III Capital Rules require the Company’s subsidiaries to maintain (i) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% Common Equity Tier 1 capital ratio, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 7.0%), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio, effectively resulting in a minimum Tier 1 capital ratio of 8.5%), (iii) a minimum ratio of Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% Total capital ratio, effectively resulting in a minimum Total capital ratio of 10.5%) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average quarterly assets. The implementation of the capital conservation buffer became fully phased in on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress and, as detailed above, effectively increases the minimum required risk-weighted capital ratios. Banking institutions with a ratio of Common Equity Tier 1 capital to risk-weighted assets below the effective minimum (4.5% plus the capital conservation buffer and, if applicable, the countercyclical capital buffer) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The following table presents actual and required capital ratios as of September 30, 2021 and December 31, 2020 for the Company’s subsidiaries under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of September 30, 2021 and December 31, 2020 based on the fully phased-in provisions of the Basel III Capital Rules. Capital levels required to be considered well capitalized are based on prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules. A comparison of the Company’s subsidiaries’ capital amounts and ratios as of September 30, 2021 and December 31, 2020 with the minimum requirements are presented below. To Be Well Capitalized For Capital Under Prompt Adequacy Corrective Action In Thousands Actual Purposes Provisions Amount Ratio Amount Ratio Amount Ratio As of September 30, 2021 Total Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva $ 89,443 12.8 % $ 73,341 10.5 % $ 69,848 10.0 % Virginia Partners Bank 55,846 12.4 % 47,450 10.5 % 45,190 10.0 % Tier I Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva 80,670 11.5 % 59,371 8.5 % 55,879 8.0 % Virginia Partners Bank 52,703 11.7 % 38,412 8.5 % 36,152 8.0 % Common Equity Tier I Ratio (To Risk Weighted Assets) The Bank of Delmarva 80,670 11.5 % 48,894 7.0 % 45,401 6.5 % Virginia Partners Bank 52,703 11.7 % 31,633 7.0 % 29,374 6.5 % Tier I Leverage Ratio (To Average Assets) The Bank of Delmarva 80,670 7.9 % 40,823 4.0 % 51,029 5.0 % Virginia Partners Bank 52,703 8.8 % 23,920 4.0 % 29,900 5.0 % As of December 31, 2020 Total Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva $ 85,497 12.9 % $ 69,608 10.5 % $ 66,294 10.0 % Virginia Partners Bank 51,971 13.5 % 40,381 10.5 % 38,459 10.0 % Tier I Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva 77,168 11.6 % 56,350 8.5 % 53,035 8.0 % Virginia Partners Bank 50,271 13.1 % 32,690 8.5 % 30,767 8.0 % Common Equity Tier I Ratio (To Risk Weighted Assets) The Bank of Delmarva 77,168 11.6 % 46,406 7.0 % 43,091 6.5 % Virginia Partners Bank 50,271 13.1 % 26,921 7.0 % 24,998 6.5 % Tier I Leverage Ratio (To Average Assets) The Bank of Delmarva 77,168 8.1 % 38,262 4.0 % 47,827 5.0 % Virginia Partners Bank 50,271 9.5 % 21,253 4.0 % 26,567 5.0 % Banking regulations also limit the amount of dividends that may be paid without prior approval of the Company’s regulatory agencies. Regulatory approval is required to pay dividends, which exceed the Company’s net profits for the current year plus its retained net profits for the preceding two years. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Fair Values of Financial Instruments | |
Fair Values of Financial Instruments | Note 11. Fair Values of Financial Instruments FASB ASC 825, Financial Instruments (“ASC 825”) requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 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. Additionally, in accordance with ASU 2016-01, the Company uses the exit price notion, rather than the entry price notion, in calculating the fair values of financial instruments not measured at fair value on a recurring basis. Dollars are in thousands Fair Value Measurements at September 30, 2021 Quoted Prices in Significant Significant Active Markets for Other Unobservable Carrying Identical Assets Observable Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Balance Financial assets: Cash and due from banks $ 16,176 $ 16,176 $ — $ — $ 16,176 Interest bearing deposits 300,771 300,771 — — 300,771 Federal funds sold 29,995 29,995 — — 29,995 Securities: Available for sale 115,550 — 115,550 — 115,550 Loans held for sale 5,803 — 5,803 — 5,803 Loans, net of allowance for credit losses 1,090,169 — — 1,081,854 1,081,854 Accrued interest receivable 4,408 — 4,408 — 4,408 Restricted stock 4,869 — 4,869 — 4,869 Other investments 5,075 — 5,075 — 5,075 Bank owned life insurance 18,141 — 18,141 — 18,141 Other real estate owned 1,303 — — 1,303 1,303 Financial liabilities: Deposits $ 1,435,453 $ — $ 1,026,186 $ 413,171 $ 1,439,357 Accrued interest payable 311 — 311 — 311 FHLB advances 26,478 — 27,297 — 27,297 Subordinated notes payable 22,157 — 30,468 — 30,468 Other borrowings 640 — — 640 640 Dollars are in thousands Fair Value Measurements at December 31, 2020 Quoted Prices in Significant Significant Active Markets for Other Unobservable Carrying Identical Assets Observable Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Balance Financial assets: Cash and due from banks $ 13,643 $ 13,643 $ — $ — $ 13,643 Interest bearing deposits 218,667 218,667 — — 218,667 Federal funds sold 50,301 50,301 — — 50,301 Securities: Available for sale 124,925 — 124,925 — 124,925 Loans held for sale 9,858 — 9,858 — 9,858 Loans, net of allowance for credit losses 1,022,302 — — 1,018,649 1,018,649 Accrued interest receivable 5,229 — 5,229 — 5,229 Restricted stock 5,445 — 5,445 — 5,445 Other investments 5,091 — 5,091 — 5,091 Bank owned life insurance 14,841 — 14,841 — 14,841 Other real estate owned 2,677 — — 2,677 2,677 Financial liabilities: Deposits $ 1,268,140 $ — $ 839,122 $ 435,910 $ 1,275,032 Accrued interest payable 402 — 402 — 402 FHLB advances 32,972 — 34,147 798 34,945 Subordinated notes payable 24,101 — 34,810 — 34,810 Other borrowings 42,382 — 41,585 — 41,585 The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to repay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Bank's overall interest rate risk. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | Note 12. Fair Value Measurements The Company follows ASC 820-10 Fair Value Measurements and Disclosures ASC Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. Fair Value Hierarchy In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 - Level 2 - Level 3 - The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a recurring basis in the financial statements: Investment Securities Available for Sale: Investment securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data. Third party vendors compile prices from various sources and may determine the fair value of identical or similar securities by using pricing models that consider observable market data (Level 2). In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. Currently, all of the Company’s investment securities available for sale are considered to be Level 2 securities. The following tables present the balances of financial assets measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020: Fair Dollars are in thousands Level 1 Level 2 Level 3 Value September 30, 2021 Securities available for sale: Obligations of U.S. Government agencies and corporations $ — $ 5,522 $ — $ 5,522 Obligations of States and political subdivisions — 35,407 — 35,407 Mortgage-backed securities — 72,581 — 72,581 Subordinated debt investments — 2,040 — 2,040 Total securities available for sale $ — $ 115,550 $ — $ 115,550 December 31, 2020 Securities available for sale: Obligations of U.S. Government agencies and corporations $ — $ 6,883 $ — $ 6,883 Obligations of States and political subdivisions — 38,123 — 38,123 Mortgage-backed securities — 75,876 — 75,876 Subordinated debt investments — 4,043 — 4,043 Total securities available for sale $ — $ 124,925 $ — $ 124,925 Certain financial assets are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. Adjustments to the fair value of these financial assets usually result from the application of lower of cost or market accounting or write-downs of individual assets. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements: Loans Held for Sale: Loans held for sale are loans originated by JMC for sale in the secondary market. Loans originated for sale by JMC are recorded at lower of cost or market. No market adjustments were required at September 30, 2021; therefore, loans held for sale were carried at cost. Because of the short-term nature, the book value of these loans approximates fair value at September 30, 2021. Impaired Loans: Other Real Estate Owned: Fair Dollars are in thousands Level 1 Level 2 Level 3 Value September 30, 2021 Impaired loans $ — $ — $ 5,024 $ 5,024 OREO — — 1,303 1,303 Total $ — $ — $ 6,327 $ 6,327 December 31, 2020 Impaired loans $ — $ — $ 2,581 $ 2,581 OREO — — 2,677 2,677 Total $ — $ — $ 5,258 $ 5,258 The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair value as of September 30, 2021 and December 31, 2020: September 30, 2021 Valuation Unobservable Range of Dollars are in thousands Fair Value Technique Inputs Inputs Impaired loans $ 5,024 Appraisals Discount to reflect current market conditions and estimated selling costs 8% OREO 1,303 Appraisals Discount to reflect current market conditions and estimated selling costs 8-10% Total $ 6,327 December 31, 2020 Valuation Unobservable Range of Dollars are in thousands Fair Value Technique Inputs Inputs Impaired loans $ 2,581 Appraisals Discount to reflect current market conditions and estimated selling costs 8% OREO 2,677 Appraisals Discount to reflect current market conditions and estimated selling costs 8-10% Total $ 5,258 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 13. Goodwill and Intangible Assets The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, Intangibles—Goodwill and Other Goodwill: The following table provides changes in goodwill for the nine months ended September 30, 2021 and the year ended December 31, 2020: September 30, December 31, Dollars in Thousands 2021 2020 Balance at the beginning of the period $ 9,582 $ 9,391 Measurement period adjustments — 191 Balance at the end of the period $ 9,582 $ 9,582 The measurement period adjustments in the table above relate to the finalization of tax and related deferred tax adjustments in connection with the acquisition of Partners. Core Deposit Intangible: The Company acquired core deposit intangibles in the Liberty merger and the Partners Share Exchange. For the core deposit intangible related to Liberty, the Company utilizes the double declining balance method of amortization, in which the straight line amortization rate is doubled and applied to the remaining unamortized portion of the intangible asset. The amortization method changes to the straight line method of amortization when the straight line amortization amount exceeds the amount that would be calculated under the double declining balance method. This core deposit intangible is being amortized over . The following table provides changes for the nine months ended September 30, 2021, and the year ended December 31, 2020: September 30, December 31, Dollars in Thousands 2021 2020 Balance at the beginning of the period $ 2,660 $ 3,373 Amortization (455) (713) Balance at the end of the period $ 2,205 $ 2,660 The following table provides the amortization expense for the core deposit intangible over the years indicated below: September 30, Dollars in Thousands 2021 2021 $ 145 2022 520 2023 467 2024 415 2025 246 Thereafter 412 $ 2,205 Net Deposits Purchased Premium and Discount: The Company paid a deposit premium in the Liberty Merger and received a deposit discount in the Partners Share Exchange, which are included in the balances of time deposits on the balance sheets. The premium amount is amortized as a reduction in interest expense over the life of the acquired time deposits and the discount is accreted as an increase in interest expense over the life of the acquired time deposits. The premium and discount on deposits will both be amortized and accreted over approximately The following table provides changes in the net deposit discount for the nine months ended September 30, 2021 and the year ended December 31, 2020: September 30, December 31, Dollars in Thousands 2021 2020 Balance at the beginning of the period $ (23) $ (31) Amortization, net 11 8 Balance at the end of the period $ (12) $ (23) The following table provides the accretion for the net deposit discount over the years indicated below: September 30, Dollars in Thousands 2021 2021 $ 3 2022 6 2023 2 2024 1 $ 12 The net effect of the amortization of premiums and accretion of discounts associated with the Bank’s acquisition accounting adjustments to assets acquired and liabilities assumed had the following impact on the consolidated statement of income for the periods indicated below: September 30, September 30, 2021 2020 Nine Months Ended Dollars in Thousands Adjustments to net income Loans (1) $ 1,149 $ 1,391 Time deposits (2) (11) (3) Core deposit intangible (3) (455) (540) Note Payable (4) (4) (5) Net impact to income before taxes $ 679 $ 843 (1) Loan discount accretion is included in the "Loans, including fees" section of "Interest Income" in the Consolidated Statement of Income. (2) Time deposit discount accretion is included in the "Deposits" section of "Interest Expense" in the Consolidated Statement of Income. (3) Core deposit intangible premium amortization is included in the "Other Expense" section of "Non-interest Expense" in the Consolidated Statement of Income. (4) Note payable discount accretion is included in the "Borrowings" section of "Interest Expense" in the Consolidated Statement of Income. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition | |
Revenue Recognition | Note 14. Revenue Recognition The Company follows ASU No. 2014-09 Revenue from Contracts with Customers (“Topic 606”) and all subsequent ASUs that modified Topic 606. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees and merchant income. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or at the end of the month through a direct charge to customers’ accounts. Mortgage Banking Income Mortgage banking income, which is included in noninterest income, consists of gains and losses on the sale of mortgages as well as origination fees, brokerage fees, interest rate lock-in fees and other fees paid by mortgagors generated through Partners majority owned subsidiary JMC. JMC is engaged in the mortgage brokerage business in which JMC originates, closes, and immediately sells mortgage loans and related servicing rights to permanent investors in the secondary market. Loans are initially funded primarily by JMC’s warehouse lines of credit. With the concurrent sale and delivery of mortgage loans to the permanent investors, JMC records receivables for mortgage loans sold and recognizes the related gains and losses on such sales. The receivables for mortgage loans sold are usually satisfied within 30 days of sale, whereupon the related borrowings on the warehouse lines of credit are repaid. Mortgage Division Income Mortgage banking income, which is included is noninterest income, consists of fees for loans originated by the Company through an application process that are sent to a mortgage broker. The loan application and underwriting processes are completed by other various financial institutions. The Company receives a pre-negotiated fee at settlement for initiating the loan origination. The Company receives the fee and recognizes the income when the loan goes to settlement. Other Noninterest Income Other noninterest income consists of: fees, exchange, other service charges, safety deposit box rental fees, and other miscellaneous revenue streams. Fees and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Event | |
Subsequent Event | Note 15. Subsequent Event On November 4, 2021, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with OceanFirst Financial Corp., a Delaware corporation (“OCFC”) and Coastal Merger Sub Corp., a Maryland corporation and a direct wholly-owned subsidiary of OCFC (“Merger Sub”). Pursuant to the Agreement, Merger Sub will be merged with and into the Company, whereby the separate corporate existence of Merger Sub will cease and the Company will be the surviving corporation as a wholly-owned direct subsidiary of OCFC (the “First-Step Merger”). Immediately thereafter, the Company will be merged with and into OCFC, whereby the separate corporate existence of the Company will cease and OCFC will be the surviving corporation in the merger (the “Second-Step Merger”, and together with the First-Step Merger, the “Integrated Mergers”). Immediately following the consummation of the Integrated Mergers, Delmarva will be merged with and into OceanFirst Bank N.A., the wholly-owned national banking association subsidiary of OCFC (“OceanFirst Bank”), with OceanFirst Bank as the surviving bank (the “Delmarva Merger”). Immediately following the consummation of the Delmarva Merger, Partners will be merged with and into OceanFirst Bank, with OceanFirst Bank as the surviving bank (the “Partners Merger”). At the effective time of the First-Step Merger, each share of Company common stock that is issued and outstanding immediately prior to the effective time of the First-Step Merger, other than Exception Shares (as defined in the Agreement), will be converted into the right to receive either (a) 0.4512 shares of common stock, par value $0.01 per share, of OCFC or (b) $10.00, in each case, at the election of the holder of the Company’s common stock, subject to (x) a maximum of forty percent (40%) of the shares of the Company’s common stock being convertible into cash and (y) the allocation and proration provisions of the Agreement. For more information on this pending transaction refer to the Company's Current Report on Form 8-K filed with the SEC on November 4, 2021. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments – Credit Losses” (“Topic 326”): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASU’s have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (“SEC”) and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The Company is currently evaluating the potential impact of ASU 2016-13 on our consolidated financial statements. We are currently working through our implementation plan which includes assessment and documentation of processes, internal controls and data sources; model development and documentation; and systems configuration, among other things. We are also in the process of implementing a third-party vendor solution to assist us in the application of the ASU 2016-13. The adoption of the ASU 2016-13 could result in an increase in the allowance for loan losses as a result of changing from an “incurred loss” model, which encompasses allowances for current known and inherent losses within the portfolio, to an “expected loss” model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore, ASU 2016-13 will necessitate that we establish an allowance for expected credit losses for certain debt securities and other financial assets. While we are currently unable to reasonably estimate the impact of adopting ASU 2016-13, we expect that the impact of adoption will be significantly influenced by the composition, characteristics and quality of our loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date. Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin (SAB) 119. SAB 119 updated portions of SEC interpretative guidance to align with ASC 326. It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). The ASU is expected to reduce cost and complexity related to the accounting for income taxes by removing specific exceptions to general principles in Topic 740 (eliminating the need for an organization to analyze whether certain exceptions apply in a given period) and improving financial statement preparers’ application of certain income tax-related guidance. This ASU is part of the FASB’s simplification initiative to make narrow-scope simplifications and improvements to accounting standards through a series of short-term projects. ASU 2019-12 was effective for the Company on January 1, 2021, and did not have a material impact on the Company’s consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures” (“Topic 323”), and “Derivatives and Hedging” (“Topic 815”) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. ASU 2020-01 was effective for the Company on January 1, 2021 and did not have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“Topic 848”). These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in January 2021, the FASB issued ASU No. 2021-01 “Reference Rate Reform (Topic 848): Scope”. This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU No. 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU No. 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments, and is currently evaluating the effect that ASU 2020-04 will have on the Company’s consolidated financial statements. In August 2020, In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable fees and Other Costs” (“ASU 2020-08”). This ASU clarifies that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. ASU 2020-08 was effective for the Company on January 1, 2021 and did not have a material impact on its consolidated financial statements. In December 2020, the CAA was passed. Under Section 541 of the CAA, Congress extended or modified many of the relief programs first created by the CARES Act, including the PPP loan program and treatment of certain loan modifications related to the COVID-19 pandemic. The CAA did not have a material impact on the Company’s consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, “Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity – Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force).” The ASU addresses how an issuer should account for modifications or an exchange of freestanding written call options classified as equity that is not within the scope of another Topic. For both public and private companies, the ASU is effective for fiscal years beginning after December 15, 2021. Transition is prospective. Early adoption is permitted. The Company does not expect the adoption of ASU 2021-04 to have a material impact on its consolidated financial statements. In August 2021, the FASB issued ASU 2021-06, “'Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants”. The ASU is effective upon addition to the FASB Codification. The Company does not expect the adoption of ASU 2021-06 to have a material impact on its financial statements. |
Nature of Business and Its Si_2
Nature of Business and Its Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Nature of Business and Its Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation: The consolidated financial statements include the accounts of the Company; the Subsidiaries, along with their consolidated subsidiaries: Delmarva Real Estate Holdings, LLC., a wholly owned subsidiary of Delmarva, which is a real estate holding company; Davie Circle, LLC, a wholly owned subsidiary of Delmarva, which is a real estate holding company; Delmarva BK Holdings, LLC, a wholly owned subsidiary of Delmarva, which is a real estate holding company; DHB Development, LLC, of which Delmarva holds a 40.55% interest, and which is a real estate holding company; West Nithsdale Enterprises, LLC, of which Delmarva holds a 10% interest, and which is a real estate holding company; and FBW, LLC, of which Delmarva holds 50% interest, and which is a real estate holding company; Bear Holdings, Inc., a wholly owned subsidiary of Partners, which is a real estate holding company; Johnson Mortgage Company, LLC, of which Partners owns a 51% interest, and which is a residential mortgage company; and 410 William Street, LLC, a wholly owned subsidiary of Partners, which holds investment property. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Financial Statement Presentation | Financial Statement Presentation: The unaudited interim consolidated financial statements do not include all information and notes necessary for a complete presentation of financial position, results of operations, changes in stockholder's equity, and cash flows in conformity with U.S. GAAP. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position at September 30, 2021 and December 31, 2020, the results of its operations for three and nine months and its cash flows for the nine months ended September 30, 2021 and 2020 are in conformity with U.S. GAAP. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, or for any other period. |
Use of Estimates | Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Securities Available for Sale | Securities Available for Sale: Marketable debt securities not classified as held to maturity are classified as available for sale. Securities available for sale are acquired as part of the Subsidiaries' asset/liability management strategy and may be sold in response to changes in interest rates, loan demand, changes in prepayment risk, and other factors. Securities available for sale are carried at fair value as determined by quoted market prices. Unrealized gains or losses based on the difference between amortized cost and fair value are reported in other comprehensive income, net of deferred tax. Realized gains and losses, using the specific identification method, are included as a separate component of other income (expense) and, when applicable, are reported as a reclassification adjustment, net of tax, in other comprehensive income. Premiums and discounts are recognized in interest income using the interest method over the period to maturity. Additionally, declines in the fair value of individual investment securities below their cost that are other than temporary are reflected as realized losses in the consolidated statements of income. Impairment may result from credit deterioration of the issuer or collateral underlying the security. In performing an assessment of recoverability, all relevant information is considered, including the length of time and extent to which fair value has been less than the amortized cost basis, the cause of the price decline, credit performance of the issuer and underlying collateral, and recoveries or further declines in fair value subsequent to the balance sheet date. For debt securities, the Company measures and recognizes other-than-temporary impairment (“OTTI”) losses through earnings if (1) the Company has the intent to sell the security or (2) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. In these circumstances, the impairment loss is equal to the full difference between the amortized cost basis and the fair value of the security. For securities that are considered OTTI that the Company has the intent and ability to hold in an unrealized loss position, the OTTI write-down is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to other factors, which is recognized as a component of other comprehensive income (“OCI”). |
Restricted Stock, Equity Securities and Other Investment | Restricted Stock, Equity Securities and Other Investments: Federal Reserve Bank (“FRB”) stock, at cost, Federal Home Loan Bank (“FHLB”) stock, at cost, Atlantic Central Bankers Bank (“ACBB”) stock, at cost, and Community Bankers Bank (“CBB”) stock, are equity interests in the FRB, FHLB, ACBB, and CBB, respectively. These securities do not have a readily determinable fair value for purposes of ASC 320-10 Investments-Debts and Equity Securities Equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in net income. Any equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. The entirety of any impairment on equity securities is recognized in earnings. Other investments includes an equity ownership of Solomon Hess SBA Loan Fund LLC which the value is adjusted for its prorata share of assets in the fund. Other investments also includes equity securities the Company holds with Community Capital Management in their Community Reinvestment Act (“CRA”) Qualified Investment Fund. |
Bank Owned Life Insurance | Bank Owned Life Insurance The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other changes or amounts due that are probable at settlement. |
Loans and the Allowance for Credit Losses | Loans and the Allowance for Credit Losses: Loans are generally carried at the amount of unpaid principal, adjusted for unearned loan fees, which are amortized over the term of the loan using the effective interest rate method. Interest on loans is accrued based on the principal amounts outstanding. It is the Subsidiaries' policy to discontinue the accrual of interest when a loan is specifically determined to be impaired or when principal or interest is delinquent for ninety days or more. When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest income generally is not recognized on specific impaired loans unless the likelihood of further loss is remote. Cash collections on such loans are applied as reductions of the loan principal balance and no interest income is recognized on those loans until the principal balance has been collected. Interest income on other nonaccrual loans is recognized only to the extent of interest payments received. The carrying value of impaired loans is based on the present value of the loan's expected future cash flows or, alternatively, the observable market price of the loan or the fair value of the collateral. The allowance for loan losses is maintained at a level believed to be adequate by management to absorb probable losses inherent in the loan portfolio and is based on the size and current risk characteristics of the loan portfolio, an assessment of individual problem loans and actual loss experience, the value of the underlying collateral, and current economic events in specific industries and geographical areas, including unemployment levels, and other pertinent factors, including regulatory guidance and general economic conditions. Determination of the allowance is inherently subjective, as it requires significant estimates, including the amounts and timing on historical loss experience, and consideration of current economic trends, all of which may be susceptible to significant change. Loan losses are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for credit losses is charged to operations based on management's periodic evaluation of the factors previously mentioned, as well as other pertinent factors. Evaluations are conducted at least monthly and more often if deemed necessary. The allowance for credit losses typically consists of an allocated component and an unallocated component. The allocated component of the allowance for credit losses reflects expected losses resulting from analyses developed through specific credit allocations for individual loans and historical loss experience for each loan category. The specific credit allocations are based on regular analyses of all loans over a fixed-dollar amount where the internal credit rating is at or below a predetermined classification. The historical loan loss element is determined statistically using an informal loss migration analysis that examines loss experience and the related internal gradings of loans charged off over a current 3 year period. The loss migration analysis is performed quarterly and loss factors are updated regularly based on actual experience. The allocated component of the allowance for credit losses also includes consideration of concentrations and changes in portfolio mix and volume. Any unallocated portion of the allowance reflects management's estimate of probable inherent but undetected losses within the portfolio due to uncertainties in economic conditions, delays in obtaining information, including unfavorable information about a borrower's financial condition, the difficulty in identifying triggering events that correlate perfectly to subsequent loss rates, and risk factors that have not yet manifested themselves in loss allocation factors. The historical losses used in the migration analysis may not be representative of actual unrealized losses inherent in the portfolio. It is management's intent to continually refine the methodology for the allowance for credit losses in an attempt to directly allocate potential losses in the loan portfolio under ASC Topic 310 and minimize the unallocated portion of the allowance for credit losses. Loan Charge-off Policies Loans are generally fully or partially charged down to the fair value of securing collateral when: ● management deems the asset to be uncollectible; ● repayment is deemed to be made beyond the reasonable time frames; ● the asset has been classified as a loss by internal or external review; and ● the borrower has filed bankruptcy and the loss becomes evident owing to a lack of assets. Acquired Loans Loans acquired in connection with business combinations are recorded at their acquisition-date fair value with no carry over of related allowance for credit losses. Any allowance for credit loss on these pools reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately are not expected to be received). Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considered a number of factors in evaluating the acquisition-date fair value including the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment. Acquired loans that meet the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans, including the impact of any accretable yield. Loans acquired with deteriorated credit quality are accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality Under the ASC 310-30 model, the excess of cash flows expected to be collected at acquisition over recorded fair value is referred to as the accretable yield and is the interest component of expected cash flow. The accretable yield is recognized into income over the remaining life of the loan if the timing and/or amount of cash flows expected to be collected can be reasonably estimated (the accretion method). If the timing or amount of cash flows expected to be collected cannot be reasonably estimated, the cost recovery method of income recognition is used. The difference between the loan's total scheduled principal and interest payment over all cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the non-accretable difference. The non-accretable difference represents contractually required principal and interest payments which the Company does not expect to collect. Over the life of the loan, management continues to estimate cash flows expected to be collected. Decreases in expected cash flows are recognized as impairments through a charge to the provision for credit losses resulting in an increase in the allowance for credit losses. Subsequent improvements in cash flows result in first, reversal of existing valuation allowances recognized subsequent to acquisition, if any, and next, an increase in the amount of accretable yield to be subsequently recognized as interest income on a prospective basis over the loan's remaining life. Acquired loans that were not individually determined to be purchased with deteriorated credit quality are accounted for in accordance with ASC 310-20, Nonrefundable Fees and Other Costs Troubled Debt Restructurings A loan is accounted for and reported as a troubled debt restructuring (“TDR”) when, for economic or legal reasons, we grant a concession to a borrower experiencing financial difficulty that we would not otherwise consider. Management strives to identify borrowers in financial difficulty early and works with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. A restructuring that results in only an insignificant delay in payment is not considered a concession. A delay may be considered insignificant if the payments subject to the delay are insignificant relative to the unpaid principal or collateral value and the contractual amount due, or the delay in timing of the restructured payment period is insignificant relative to the frequency of the payments, the debt’s original contractual maturity or original expected duration. TDRs are designated as impaired loans because interest and principal payments will not be received in accordance with the original contract terms. TDRs that are performing and on accrual status as of the date of the modification remain on accrual status. TDRs that are nonperforming as of the date of modification generally remain as nonaccrual until the prospect of future payments in accordance with the modified loan agreement is reasonably assured, generally demonstrated when the borrower maintains compliance with the restructured terms for a predetermined period, normally at least six months. TDRs with temporary below-market concessions remain designated as a TDR and impaired regardless of the accrual or performance status until the loan is paid off. However, if the TDR loan has been modified in a subsequent restructure with market terms and the borrower is not currently experiencing financial difficulty, then the loan may be no longer designated as a TDR. The COVID-19 pandemic has caused a significant disruption in economic activity worldwide, including in market areas served by the Company. Estimates for the allowance for loan losses at September 30, 2021 include probable losses related to the pandemic. The Company expects that the pandemic will continue to have an effect on its results of operations. If economic conditions deteriorate further, then additional provision for loan losses may be required in future periods. It is unknown how long these conditions will last and what the ultimate financial impact will be to the Company. Depending on the severity and duration of the economic consequences of the pandemic, the Company’s goodwill may become impaired. The Company had accommodated certain borrowers affected by the COVID-19 pandemic by granting short-term payment deferrals or periods of interest-only payments. As of September 30, 2021, all of the loan balances that were approved by the Company, on a consolidated basis, for loan payment deferrals or payments of interest only have either resumed regular payments or have been paid off. Generally, a short-term payment deferral does not result in a loan modification being classified as a TDR. Additionally, the Coronavirus Aid, Relief and Economic Security Act (CARES Act), enacted on March 27, 2020, and as subsequently supplemented, provided that certain loan modifications that were (1) related to COVID-19 and (2) for loans that were not more than 30 days past due as of December 31, 2019 are not required to be designated as TDRs. |
Loans Held for Sale | Loans Held for Sale: These loans consist of loans made through Partners’ majority owned subsidiary Johnson Mortgage Company, LLC (“JMC”). JMC is engaged in the mortgage brokerage business in which JMC originates, closes, and immediately sells mortgage loans and related servicing rights to permanent investors in the secondary market. JMC has written commitments from several permanent investors (large financial institutions) and only closes loans that meet the lending requirements of the permanent investors. Loans are made in connection with the purchase or refinancing of existing and new family residences primarily in southeastern and northern Virginia. Loans are initially funded primarily by JMC’s lines of credit. With the concurrent sale and delivery of mortgage loans to the permanent investors, JMC records receivables for mortgage loans sold and recognizes the related gains and losses on such sales. The receivables for mortgage loans sold are usually satisfied within of sale, whereupon the related borrowings on the lines of credit are repaid. Because of the short holding period, these loans are carried at the lower of cost or market and market adjustments were deemed necessary in the first three quarters of 2021 or during 2020. JMC’s agreements with its permanent investors include provisions that could require JMC to repurchase loans under certain circumstances, and also provide for the assessment of fees if loans go into default or are refinanced within specified periods of time. JMC has never been required to repurchase a loan and 2021 or December 31, 2020 for possible repurchases. Management does not believe that a provision for early default or refinancing costs is necessary at September 30, 2021 or December 31, 2020. JMC enters into commitments with its customers to originate loans where the interest rate on the loans is determined (locked) prior to funding. While this subjects JMC to the risk that interest rates may change from the commitment date to the funding date, JMC simultaneously enters into financial agreements (best efforts forward sales commitments) with its permanent investors giving JMC the right to deliver (put) loans to the investors at specified yields, thus enabling JMC to manage its exposure to changes in interest rates such that JMC is not subject to fluctuations in fair values of these agreements due to changes in interest rates. However, a default by a permanent investor required to purchase loans under such an agreement would expose JMC to potential fluctuation in selling prices of loans due to changes in interest rate. The fair value of rate lock commitments and forward sales commitments was considered immaterial at September 30, 2021 and December 31, 2020 and an adjustment was not recorded. Gains and losses on the sale of mortgages as well as origination fees, brokerage fees, interest rate lock-in fees and other fees paid by mortgagors are included in Mortgage banking income on the Company’s consolidated statements of income. |
Other Real Estate Owned ("OREO"): | Other Real Estate Owned (“OREO”): OREO comprises properties acquired in partial or total satisfaction of problem loans. The properties are recorded at fair value at the date acquired. Losses arising at the time of acquisition of such properties are charged against the allowance for credit losses. Subsequent write-downs that may be required and expenses of operation are included in other expenses. Gains and losses realized from the sale of OREO are included in other expenses. At September 30, 2021 there were three properties with a combined estimated value of $1.3 million included in OREO and at December 31, 2020, there were five properties with a combined estimated value of $2.7 million included in OREO. |
Intangible Assets and Amortization | Intangible Assets and Amortization: During the fourth quarter of 2019, the Company acquired Partners and during the first quarter of 2018, the Company acquired Liberty Bell Bank (“Liberty”). ASC 350, Intangibles-Goodwill and Other |
Goodwill | Goodwill The Company’s goodwill was recognized in connection with the acquisitions of Partners and Liberty. The Company reviews the carrying value of goodwill at least annually or more frequently if certain impairment indicators exist. In testing goodwill for impairment, the Company may first consider qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, we conclude that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then no further testing is required and the goodwill of the reporting unit is not impaired. If the Company elects to bypass the qualitative assessment or if we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the fair value of the reporting unit is compared with its carrying amount to determine whether an impairment exists. |
Accounting for Stock Based Compensation | Accounting for Stock Based Compensation: The Company follows ASC 718-10, Compensation—Stock Compensation |
Earnings Per Share | Earnings Per Share: Basic earnings per common share are determined by dividing net income and accretion of warrants by the weighted average number of shares outstanding for each period, giving retroactive effect to stock splits and dividends. Weighted average common shares outstanding were |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investment Securities | |
Schedule of securities available for sale | September 30, 2021 Dollars in Thousands Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Obligations of U.S. Government agencies and corporations $ 5,575 $ 65 $ 118 $ 5,522 Obligations of States and political subdivisions 34,047 1,395 35 35,407 Mortgage-backed securities 72,700 421 540 72,581 Subordinated debt investments 1,990 52 2 2,040 $ 114,312 $ 1,933 $ 695 $ 115,550 December 31, 2020 Dollars in Thousands Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Obligations of U.S. Government agencies and corporations $ 6,758 $ 137 $ 12 $ 6,883 Obligations of States and political subdivisions 36,245 1,878 — 38,123 Mortgage-backed securities 74,857 1,127 108 75,876 Subordinated debt investments 3,985 62 4 4,043 $ 121,845 $ 3,204 $ 124 $ 124,925 |
Schedule of gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | September 30, 2021 Dollars in Thousands Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss Obligations of U.S. Government agencies and corporations $ 2,233 $ 91 $ 1,473 $ 27 $ 3,706 $ 118 Obligations of States and political subdivisions 1,252 35 — — 1,252 35 Mortgage-backed securities 50,226 502 2,613 38 52,839 540 Subordinated debt investments 498 2 — — 498 2 Total securities with unrealized losses $ 54,209 $ 630 $ 4,086 $ 65 $ 58,295 $ 695 December 31, 2020 Dollars in Thousands Less than 12 months 12 months or more Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss Obligations of U.S. Government agencies and corporations $ 2,494 $ 12 $ — $ — $ 2,494 $ 12 Obligations of States and political subdivisions — — — — — — Mortgage-backed securities 18,525 108 — — 18,525 108 Subordinated debt investments 996 4 — — 996 4 Total securities with unrealized losses $ 22,015 $ 124 $ — $ — $ 22,015 $ 124 |
Schedule of maturities, calls, or repricing of securities available for sale | September 30, 2021 Securities Available for Sale Dollars in Thousands Amortized Fair Cost Value Due in one year or less $ — $ — Due after one year through five years 2,719 2,913 Due after five years through ten years 19,865 20,415 Due after ten years or more 19,028 19,641 Mortgage-backed securities, due in monthly installments 72,700 72,581 $ 114,312 $ 115,550 |
Loans, Allowance for Credit L_2
Loans, Allowance for Credit Losses and Impaired Loans (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Loans, Allowance for Credit Losses and Impaired Loans | |
Schedule of major categories of loans | (Dollars in thousands) September 30, 2021 December 31, 2020 Originated Loans Real Estate Mortgage Construction and land development $ 102,550 $ 71,361 Residential real estate 159,243 128,285 Nonresidential 477,229 394,539 Home equity loans 21,433 18,526 Commercial 108,953 115,387 Consumer and other loans 3,708 2,924 873,116 731,022 Acquired Loans Real Estate Mortgage Construction and land development $ 583 $ 3,345 Residential real estate 50,653 71,064 Nonresidential 141,048 175,206 Home equity loans 12,067 15,700 Commercial 26,662 37,411 Consumer and other loans 1,071 1,757 232,084 304,483 Total Loans Real Estate Mortgage Construction and land development $ 103,133 $ 74,706 Residential real estate 209,896 199,349 Nonresidential 618,277 569,745 Home equity loans 33,500 34,226 Commercial 135,615 152,798 Consumer and other loans 4,779 4,681 1,105,200 1,035,505 Less: Allowance for credit losses (15,031) (13,203) $ 1,090,169 $ 1,022,302 |
Schedule of allowance for credit losses by loan category | Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Balance at September 30, 2021 Purchased credit impaired loans Balance in allowance $ — $ — $ — $ — $ 41 $ — $ — $ 41 Related loan balance 45 1,652 1,896 — 160 — — 3,753 Individually evaluated for impairment: Balance in allowance $ — $ 89 $ 1,239 $ — $ 459 $ — $ — $ 1,787 Related loan balance 598 2,332 7,427 52 595 — — 11,004 Collectively evaluated for impairment: Balance in allowance $ 1,126 $ 2,062 $ 7,842 $ 268 $ 1,401 $ 37 $ 467 $ 13,203 Related loan balance 102,490 205,912 608,954 33,448 134,860 4,779 — 1,090,443 Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Balance at December 31, 2020 Purchased credit impaired loans Balance in allowance $ — $ — $ — $ — $ 41 $ — $ — $ 41 Related loan balance 44 1,839 2,237 — 361 — — 4,481 Individually evaluated for impairment: Balance in allowance $ — $ 156 $ 17 $ — $ 500 $ — $ — $ 673 Related loan balance 175 2,947 6,990 — 489 — — 10,601 Collectively evaluated for impairment: Balance in allowance $ 903 $ 2,195 $ 7,567 $ 271 $ 1,402 $ 37 $ 114 $ 12,489 Related loan balance 74,487 194,563 560,518 34,226 151,948 4,681 — 1,020,423 September 30, 2021 Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Quarter Ended Beginning Balance $ 1,038 $ 2,206 $ 8,654 $ 228 $ 1,803 $ 32 $ 1,348 $ 15,309 Charge-offs — (11) (138) — (91) (23) — (263) Recoveries — 6 — — 2 7 — 15 Provision/(recovery) 88 (50) 565 40 187 21 (881) (30) Ending Balance $ 1,126 $ 2,151 $ 9,081 $ 268 $ 1,901 $ 37 $ 467 $ 15,031 Nine Months Ended Beginning Balance $ 903 $ 2,351 $ 7,584 $ 271 $ 1,943 $ 37 $ 114 $ 13,203 Charge-offs — (39) (570) (6) (185) (46) — (846) Recoveries 1 22 53 — 11 19 — 106 Provision/(recovery) 222 (183) 2,014 3 132 27 353 2,568 Ending Balance $ 1,126 $ 2,151 $ 9,081 $ 268 $ 1,901 $ 37 $ 467 $ 15,031 December 31, 2020 Real Estate Mortgage Construction and Land Residential Consumer Dollars in Thousands Development Real Estate Nonresidential Home Equity Commercial and Other Unallocated Total Year Ended Beginning Balance $ 602 $ 1,380 $ 4,074 $ 142 $ 826 $ 14 $ 266 $ 7,304 Charge-offs — (112) (575) (13) (918) (120) — (1,738) Recoveries 1 70 512 10 109 41 — 743 Provision 300 1,013 3,573 132 1,926 102 (152) 6,894 Ending Balance $ 903 $ 2,351 $ 7,584 $ 271 $ 1,943 $ 37 $ 114 $ 13,203 |
Schedule of loans by risk rating | Real Estate Secured Construction & Land Residential Consumer & September 30, 2021 Development Real Estate Nonresidential Home Equity Commercial Other Total Dollars in Thousands Pass $ 102,490 $ 207,180 $ 597,275 $ 32,732 $ 133,341 $ 4,252 $ 1,077,270 Marginal 45 508 16,598 684 1,679 527 20,041 Substandard 598 2,208 4,404 84 595 — 7,889 TOTAL $ 103,133 $ 209,896 $ 618,277 $ 33,500 $ 135,615 $ 4,779 $ 1,105,200 Non-Accrual $ 598 $ 1,533 $ 4,131 $ 32 $ 463 $ — $ 6,757 Real Estate Secured Construction & Land Residential Consumer & December 31, 2020 Development Real Estate Nonresidential Home Equity Commercial Other Total Dollars in Thousands Pass $ 74,487 $ 195,599 $ 552,758 $ 33,479 $ 151,779 $ 4,681 $ 1,012,783 Marginal 44 575 12,542 693 420 — 14,274 Substandard 175 3,175 4,445 54 599 — 8,448 TOTAL $ 74,706 $ 199,349 $ 569,745 $ 34,226 $ 152,798 $ 4,681 $ 1,035,505 Non-Accrual $ 175 $ 2,022 $ 2,170 $ 54 $ 489 $ — $ 4,910 |
Schedule of loans modified under the terms of a TDR by class | Real Estate Secured Construction & Land Residential Consumer & Development Real Estate Nonresidential Home Equity Commercial Other Total Dollars in Thousands Three months ended September 30, 2021 Number of loans modified during the period — — 1 — — — 1 Pre-modification recorded balance $ — $ — $ 2,919 $ — $ — $ — $ 2,919 Post- modification recorded balance — — 2,907 — — — 2,907 Nine months ended September 30, 2021 Number of loans modified during the period — — 2 — — — 2 Pre-modification recorded balance $ — $ — $ 3,197 $ — $ — $ — $ 3,197 Post- modification recorded balance — — 2,907 — — — 2,907 Three months ended September 30, 2020 Number of loans modified during the period — — — — — — — Pre-modification recorded balance $ — $ — $ — $ — $ — $ — $ — Post- modification recorded balance — — — — — — — Nine months ended September 30, 2020 Number of loans modified during the period — — — — 1 — 1 Pre-modification recorded balance $ — $ — $ — $ — $ 1,196 $ — $ 1,196 Post- modification recorded balance — — — — 489 — 489 |
Schedule of aging analysis of the recorded investment of past due financing receivables | Recorded Investment Greater than Total >90 Days 30 - 59 Days 60 - 89 Days 90 Days Total Current Financing Past Due At September 30, 2021 Past Due* Past Due** Past Due*** Past Due Balance**** Receivables and Accruing Dollars in Thousands Real Estate Construction and land development $ — $ — $ 598 $ 598 $ 102,535 $ 103,133 $ — Residential real estate 184 79 504 767 209,129 209,896 — Nonresidential 1,585 2,652 534 4,771 613,506 618,277 — Home equity loans 30 32 — 62 33,438 33,500 — Commercial — — 77 77 135,538 135,615 — Consumer and other loans 4 — — 4 4,775 4,779 — TOTAL $ 1,803 $ 2,763 $ 1,713 $ 6,279 $ 1,098,921 $ 1,105,200 $ — * Includes $39 thousand of non-accrual loans. ** Includes *** Includes ****Includes $4.9 million of non-accrual loans. Recorded Investment Greater than Total >90 Days 30 - 59 Days 60 - 89 Days 90 Days Total Current Financing Past Due At December 31, 2020 Past Due* Past Due** Past Due*** Past Due Balance**** Receivables and Accruing Dollars in Thousands Real Estate Construction and land development $ 642 $ 66 $ 175 $ 883 $ 73,823 $ 74,706 $ — Residential real estate 2,520 244 679 3,443 195,906 199,349 — Nonresidential 2,552 1,240 2,377 6,169 563,576 569,745 — Home equity loans 80 — 54 134 34,092 34,226 — Commercial 86 169 489 744 152,054 152,798 — Consumer and other loans 7 — 2 9 4,672 4,681 2 TOTAL $ 5,887 $ 1,719 $ 3,776 $ 11,382 $ 1,024,123 $ 1,035,505 $ 2 * Includes $683 thousand of non-accrual loans. ** Includes $227 thousand of non-accrual loans. *** Includes $3.5 million of non-accrual loans. ****Includes $458 thousand of non-accrual loans. |
Schedule of impaired loans | Unpaid Interest Average Recorded Principal Income Specific Recorded September 30, 2021 Investment Balance Recognized Reserve Investment Dollars in Thousands Impaired loans with specific reserves: Real Estate Mortgage Construction and land development $ — $ — $ — $ — $ — Residential real estate 430 430 15 89 435 Nonresidential 5,863 5,863 202 1,239 5,886 Home equity loans — — — — — Commercial 518 528 108 459 590 Consumer and other loans — — — — — Total impaired loans with specific reserves $ 6,811 $ 6,821 $ 325 $ 1,787 $ 6,911 Impaired loans with no specific reserve: Real Estate Mortgage Construction and land development $ 598 $ 598 $ 13 $ — $ 599 Residential real estate 1,902 1,941 27 — 1,932 Nonresidential 1,564 1,561 354 — 1,587 Home equity loans 52 52 — — 53 Commercial 77 154 2 — 120 Consumer and other loans — — — — — Total impaired loans with no specific reserve $ 4,193 $ 4,306 $ 396 $ — $ 4,291 TOTAL $ 11,004 $ 11,127 $ 721 $ 1,787 $ 11,202 Unpaid Interest Average Recorded Principal Income Specific Recorded December 31, 2020 Investment Balance Recognized Reserve Investment Dollars in Thousands Impaired loans with specific reserves: Real Estate Mortgage Construction and land development $ — $ — $ — $ — $ — Residential real estate 614 614 — 156 671 Nonresidential 2,151 2,151 259 17 2,304 Home equity loans — — — — — Commercial 489 1,196 11 500 881 Consumer and other loans — — — — — Total impaired loans with specific reserves $ 3,254 $ 3,961 $ 270 $ 673 $ 3,856 Impaired loans with no specific reserve: Real Estate Mortgage Construction and land development $ 175 $ 175 $ — $ — $ 176 Residential real estate 2,333 2,425 107 — 2,365 Nonresidential 4,839 5,260 174 — 5,944 Home equity loans — — — — — Commercial — — — — — Consumer and other loans — — — — — Total impaired loans with no specific reserve $ 7,347 $ 7,860 $ 281 $ — $ 8,485 TOTAL $ 10,601 $ 11,821 $ 551 $ 673 $ 12,341 |
Schedule of outstanding balance and carrying amount of acquired loans | Dollars in Thousands September 30, 2021 December 31, 2020 Accountable for under ASC 310-30 (PCI loans) Outstanding balance $ 4,179 $ 5,125 Carrying amount 3,753 4,481 Accountable for under ASC 310-20 (non-PCI loans) Outstanding balance $ 230,565 $ 303,363 Carrying amount 228,331 300,002 Total acquired loans Outstanding balance $ 234,744 $ 308,488 Carrying amount 232,084 304,483 |
Schedule of changes in accretable yield of acquired loans | Dollars in Thousands September 30, 2021 December 31, 2020 Balance at beginning of period $ 3,361 $ 5,081 Acquisitions — (1) Accretion (1,126) (1,718) Other changes, net (1) (1) Balance at end of period $ 2,234 $ 3,361 |
Borrowings and Notes Payable (T
Borrowings and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Borrowings and Notes Payable | |
Schedule of advances outstanding with the Federal Home Loan Bank and outstanding lines of credit | September 30, 2021 Dollars in Thousands Outstanding Balance Interest Rate Maturity Date Interest Payment Fixed rate hybrid $ 5,000 3.15 % October 2022 Fixed, paid monthly Principal reducing credit 643 1.62 % March 2023 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Principal reducing credit 1,035 1.99 % March 2026 Fixed, paid quarterly Total advances $ 26,478 December 31, 2020 Dollars in Thousands Outstanding Balance Interest Rate Maturity Date Interest Payment Fixed rate hybrid $ 6,000 2.44 % April 2021 Fixed, paid quarterly Fixed rate hybrid 5,000 3.15 % October 2022 Fixed, paid monthly Principal reducing credit 964 1.62 % March 2023 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Fixed rate hybrid 9,900 1.29 % March 2024 Fixed, paid quarterly Principal reducing credit 1,208 1.99 % March 2026 Fixed, paid quarterly Total advances $ 32,972 |
Schedule of maturities of debt | 2021 $ 158 2022 5,634 2023 314 2024 20,008 2025 210 Thereafter 22,951 $ 49,275 |
Lease Commitment (Tables)
Lease Commitment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Lease Commitments | |
Schedule of supplemental lease information | The following tables present information about the Company’s leases for the periods ended: Dollars in Thousands September 30, 2021 December 31, 2020 Balance Sheet Operating Lease Amounts Right-of-use asset $ 6,726 $ 3,983 Lease liability 7,053 4,301 Finance Lease Amounts Right-of-use asset $ 1,721 $ 1,824 Lease liability 2,155 2,242 Supplemental balance sheet information Weighted average lease term - Operating Leases (Yrs.) 8.46 8.00 Weighted average lease term - Finance Leases (Yrs.) 12.34 13.09 Weighted average discount rate - Operating Leases (1) 2.33 % 2.74 % Weighted average discount rate - Finance Leases (1) 2.84 % 2.84 % Income Statement Three Months Ended September 30, 2021 September 30, 2020 Operating lease cost classified as premises and equipment $ 252 $ 223 Finance lease cost classified as interest on borrowings 15 22 Nine Months Ended Operating lease cost classified as premises and equipment $ 691 $ 457 Finance lease cost classified as interest on borrowings 47 33 Operating outgoing cash flows from operating leases $ 643 $ 433 Operating outgoing cash flows from finance leases $ 134 $ 89 (1) The discount rate was developed by using the fixed rate credit advance borrowing rate at the FHLB of Atlanta for a term correlating to the remaining life of each lease. Management believes this rate closely mirrors its incremental borrowing rate for similar terms. |
Schedule of minimum operating lease payments | Dollars in Thousands Operating Leases: One year or less $ 1,031 One to three years 1,934 Three to five years 1,445 Over 5 years 3,555 Total undiscounted cash flows 7,965 Less: Discount (912) Lease Liabilities $ 7,053 Finance Leases: One year or less $ 178 One to three years 376 Three to five years 406 Over 5 years 1,620 Total undiscounted cash flows 2,580 Less: Discount (425) Lease Liabilities $ 2,155 |
Schedule of minimum finance lease payments | Dollars in Thousands Operating Leases: One year or less $ 1,031 One to three years 1,934 Three to five years 1,445 Over 5 years 3,555 Total undiscounted cash flows 7,965 Less: Discount (912) Lease Liabilities $ 7,053 Finance Leases: One year or less $ 178 One to three years 376 Three to five years 406 Over 5 years 1,620 Total undiscounted cash flows 2,580 Less: Discount (425) Lease Liabilities $ 2,155 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) - Stock options | 9 Months Ended |
Sep. 30, 2021 | |
Liberty 2004 Stock Option Plan | |
Stock options | |
Summary of stock option activity | September 30, 2021 Weighted Weighted Average Average Remaining Exercise Contractual Intrinsic Shares Price Life Value Outstanding at beginning of period 7,681 $ 4.14 2.23 Granted — — — Exercised — — — Forfeited — — — Outstanding at end of period 7,681 $ 4.14 1.48 $ 31,723 Options exercisable at September 30, 2021 7,681 $ 4.14 |
Virginia Partners Stock Option Plan | |
Stock options | |
Summary of stock option activity | September 30, 2021 Weighted Weighted Average Average Remaining Exercise Contractual Intrinsic Shares Price Life Value Outstanding at beginning of period 186,552 $ 6.22 3.47 Granted — — — Exercised — — — Forfeited — — — Outstanding at end of period 186,552 $ 6.22 2.73 $ 382,267 Options exercisable at September 30, 2021 186,552 $ 6.22 |
Restricted Stock Plan (Tables)
Restricted Stock Plan (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restricted Stock Plan | Restricted stock | |
Equity Compensation | |
Summary of non vested restricted stock awards | Employees Weighted Average Shares Fair Value Nonvested Awards December 31, 2020 3,000 $ 7.30 Vested in 2021 (3,000) 7.30 Nonvested Awards September 30, 2021 — $ — |
Incentive Stock Plan (Tables)
Incentive Stock Plan (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Employment Inducement | Restricted stock | |
Equity Compensation | |
Summary of non vested restricted stock awards | Employees Weighted Average Shares Fair Value Nonvested Awards December 31, 2020 — $ — Awarded in 2021 58,824 7.65 Nonvested Awards September 30, 2021 58,824 $ 7.65 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share | |
Schedule of basic and diluted EPS | Net Income Applicable to Basic Earnings Weighted Average (Dollars in thousands, except per share data) Per Common Share Shares Outstanding For the three months ended September 30, 2021 Basic EPS $ 2,696 17,788 $ 0.152 Effect of dilutive stock awards — 56 — Diluted EPS $ 2,696 17,844 $ 0.151 For the nine months ended September 30, 2021 Basic EPS $ 5,946 17,758 $ 0.335 Effect of dilutive stock awards — 42 — Diluted EPS $ 5,946 17,800 $ 0.334 For the three months ended September 30, 2020 Basic EPS $ 1,117 17,810 $ 0.063 Effect of dilutive stock awards — 1 — Diluted EPS $ 1,117 17,811 $ 0.063 For the nine months ended September 30, 2020 Basic EPS $ 4,563 17,808 $ 0.256 Effect of dilutive stock awards — 30 — Diluted EPS $ 4,563 17,838 $ 0.256 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Regulatory Capital Requirements | |
Summary of comparison of the Company's and the Bank's capital amounts and ratios with the minimum requirements | To Be Well Capitalized For Capital Under Prompt Adequacy Corrective Action In Thousands Actual Purposes Provisions Amount Ratio Amount Ratio Amount Ratio As of September 30, 2021 Total Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva $ 89,443 12.8 % $ 73,341 10.5 % $ 69,848 10.0 % Virginia Partners Bank 55,846 12.4 % 47,450 10.5 % 45,190 10.0 % Tier I Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva 80,670 11.5 % 59,371 8.5 % 55,879 8.0 % Virginia Partners Bank 52,703 11.7 % 38,412 8.5 % 36,152 8.0 % Common Equity Tier I Ratio (To Risk Weighted Assets) The Bank of Delmarva 80,670 11.5 % 48,894 7.0 % 45,401 6.5 % Virginia Partners Bank 52,703 11.7 % 31,633 7.0 % 29,374 6.5 % Tier I Leverage Ratio (To Average Assets) The Bank of Delmarva 80,670 7.9 % 40,823 4.0 % 51,029 5.0 % Virginia Partners Bank 52,703 8.8 % 23,920 4.0 % 29,900 5.0 % As of December 31, 2020 Total Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva $ 85,497 12.9 % $ 69,608 10.5 % $ 66,294 10.0 % Virginia Partners Bank 51,971 13.5 % 40,381 10.5 % 38,459 10.0 % Tier I Capital Ratio (To Risk Weighted Assets) The Bank of Delmarva 77,168 11.6 % 56,350 8.5 % 53,035 8.0 % Virginia Partners Bank 50,271 13.1 % 32,690 8.5 % 30,767 8.0 % Common Equity Tier I Ratio (To Risk Weighted Assets) The Bank of Delmarva 77,168 11.6 % 46,406 7.0 % 43,091 6.5 % Virginia Partners Bank 50,271 13.1 % 26,921 7.0 % 24,998 6.5 % Tier I Leverage Ratio (To Average Assets) The Bank of Delmarva 77,168 8.1 % 38,262 4.0 % 47,827 5.0 % Virginia Partners Bank 50,271 9.5 % 21,253 4.0 % 26,567 5.0 % |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Values of Financial Instruments | |
Summary of the estimated fair value and the related carrying values of the Company's financial instruments | Dollars are in thousands Fair Value Measurements at September 30, 2021 Quoted Prices in Significant Significant Active Markets for Other Unobservable Carrying Identical Assets Observable Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Balance Financial assets: Cash and due from banks $ 16,176 $ 16,176 $ — $ — $ 16,176 Interest bearing deposits 300,771 300,771 — — 300,771 Federal funds sold 29,995 29,995 — — 29,995 Securities: Available for sale 115,550 — 115,550 — 115,550 Loans held for sale 5,803 — 5,803 — 5,803 Loans, net of allowance for credit losses 1,090,169 — — 1,081,854 1,081,854 Accrued interest receivable 4,408 — 4,408 — 4,408 Restricted stock 4,869 — 4,869 — 4,869 Other investments 5,075 — 5,075 — 5,075 Bank owned life insurance 18,141 — 18,141 — 18,141 Other real estate owned 1,303 — — 1,303 1,303 Financial liabilities: Deposits $ 1,435,453 $ — $ 1,026,186 $ 413,171 $ 1,439,357 Accrued interest payable 311 — 311 — 311 FHLB advances 26,478 — 27,297 — 27,297 Subordinated notes payable 22,157 — 30,468 — 30,468 Other borrowings 640 — — 640 640 Dollars are in thousands Fair Value Measurements at December 31, 2020 Quoted Prices in Significant Significant Active Markets for Other Unobservable Carrying Identical Assets Observable Inputs Inputs Amount (Level 1) (Level 2) (Level 3) Balance Financial assets: Cash and due from banks $ 13,643 $ 13,643 $ — $ — $ 13,643 Interest bearing deposits 218,667 218,667 — — 218,667 Federal funds sold 50,301 50,301 — — 50,301 Securities: Available for sale 124,925 — 124,925 — 124,925 Loans held for sale 9,858 — 9,858 — 9,858 Loans, net of allowance for credit losses 1,022,302 — — 1,018,649 1,018,649 Accrued interest receivable 5,229 — 5,229 — 5,229 Restricted stock 5,445 — 5,445 — 5,445 Other investments 5,091 — 5,091 — 5,091 Bank owned life insurance 14,841 — 14,841 — 14,841 Other real estate owned 2,677 — — 2,677 2,677 Financial liabilities: Deposits $ 1,268,140 $ — $ 839,122 $ 435,910 $ 1,275,032 Accrued interest payable 402 — 402 — 402 FHLB advances 32,972 — 34,147 798 34,945 Subordinated notes payable 24,101 — 34,810 — 34,810 Other borrowings 42,382 — 41,585 — 41,585 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Measurements | |
Summary of fair value measurements on a recurring basis | Fair Dollars are in thousands Level 1 Level 2 Level 3 Value September 30, 2021 Securities available for sale: Obligations of U.S. Government agencies and corporations $ — $ 5,522 $ — $ 5,522 Obligations of States and political subdivisions — 35,407 — 35,407 Mortgage-backed securities — 72,581 — 72,581 Subordinated debt investments — 2,040 — 2,040 Total securities available for sale $ — $ 115,550 $ — $ 115,550 December 31, 2020 Securities available for sale: Obligations of U.S. Government agencies and corporations $ — $ 6,883 $ — $ 6,883 Obligations of States and political subdivisions — 38,123 — 38,123 Mortgage-backed securities — 75,876 — 75,876 Subordinated debt investments — 4,043 — 4,043 Total securities available for sale $ — $ 124,925 $ — $ 124,925 |
Summary of the balances of financial assets measured at fair value on a non-recurring basis | Fair Dollars are in thousands Level 1 Level 2 Level 3 Value September 30, 2021 Impaired loans $ — $ — $ 5,024 $ 5,024 OREO — — 1,303 1,303 Total $ — $ — $ 6,327 $ 6,327 December 31, 2020 Impaired loans $ — $ — $ 2,581 $ 2,581 OREO — — 2,677 2,677 Total $ — $ — $ 5,258 $ 5,258 |
Schedule of fair value financial assets measured on non-recurring basis valuation techniques | September 30, 2021 Valuation Unobservable Range of Dollars are in thousands Fair Value Technique Inputs Inputs Impaired loans $ 5,024 Appraisals Discount to reflect current market conditions and estimated selling costs 8% OREO 1,303 Appraisals Discount to reflect current market conditions and estimated selling costs 8-10% Total $ 6,327 December 31, 2020 Valuation Unobservable Range of Dollars are in thousands Fair Value Technique Inputs Inputs Impaired loans $ 2,581 Appraisals Discount to reflect current market conditions and estimated selling costs 8% OREO 2,677 Appraisals Discount to reflect current market conditions and estimated selling costs 8-10% Total $ 5,258 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Intangible assets | |
Schedule of changes in carrying amount of goodwill | September 30, December 31, Dollars in Thousands 2021 2020 Balance at the beginning of the period $ 9,582 $ 9,391 Measurement period adjustments — 191 Balance at the end of the period $ 9,582 $ 9,582 |
Schedule of the net effect of amortization of premiums and accretion of discounts associated with acquisition accounting adjustments to assets acquired and liabilities assumed | September 30, September 30, 2021 2020 Nine Months Ended Dollars in Thousands Adjustments to net income Loans (1) $ 1,149 $ 1,391 Time deposits (2) (11) (3) Core deposit intangible (3) (455) (540) Note Payable (4) (4) (5) Net impact to income before taxes $ 679 $ 843 (1) Loan discount accretion is included in the "Loans, including fees" section of "Interest Income" in the Consolidated Statement of Income. (2) Time deposit discount accretion is included in the "Deposits" section of "Interest Expense" in the Consolidated Statement of Income. (3) Core deposit intangible premium amortization is included in the "Other Expense" section of "Non-interest Expense" in the Consolidated Statement of Income. (4) Note payable discount accretion is included in the "Borrowings" section of "Interest Expense" in the Consolidated Statement of Income. |
Core deposit intangible | |
Intangible assets | |
Summary of changes in the intangible assets | September 30, December 31, Dollars in Thousands 2021 2020 Balance at the beginning of the period $ 2,660 $ 3,373 Amortization (455) (713) Balance at the end of the period $ 2,205 $ 2,660 |
Schedule of future amortization | September 30, Dollars in Thousands 2021 2021 $ 145 2022 520 2023 467 2024 415 2025 246 Thereafter 412 $ 2,205 |
Deposits Purchased Premium (Discount) Net | |
Intangible assets | |
Summary of changes in the intangible assets | September 30, December 31, Dollars in Thousands 2021 2020 Balance at the beginning of the period $ (23) $ (31) Amortization, net 11 8 Balance at the end of the period $ (12) $ (23) |
Schedule of future accretion | September 30, Dollars in Thousands 2021 2021 $ 3 2022 6 2023 2 2024 1 $ 12 |
Nature of Business and Its Si_3
Nature of Business and Its Significant Accounting Policies - Consolidation (Details) | 9 Months Ended |
Sep. 30, 2021subsidiary | |
Principles of Consolidation | |
Number of subsidiaries | 2 |
The Bank of Delmarva | DHB Development LLC | |
Principles of Consolidation | |
Ownership interest (as a percent) | 40.55% |
The Bank of Delmarva | West Nithsdale Enterprises LLC | |
Principles of Consolidation | |
Ownership interest (as a percent) | 10.00% |
The Bank of Delmarva | FBW LLC | |
Principles of Consolidation | |
Ownership interest (as a percent) | 50.00% |
Virginia Partners Bank | Johnson Mortgage Company LLC | |
Principles of Consolidation | |
Ownership interest (as a percent) | 51.00% |
Nature of Business and Its Si_4
Nature of Business and Its Significant Accounting Policies - Loans Held for Sale (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)item | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Loans held for sale | |||||
Provisions for (recovery of) credit losses | $ (30) | $ 1,967 | $ 2,568 | $ 5,142 | $ 6,894 |
Johnson Mortgage Company LLC | Real Estate | |||||
Loans held for sale | |||||
Receivable settlement period on mortgage loans sold | 30 days | ||||
Allowance for repurchase of loans sold | $ 0 | $ 0 | 0 | ||
Provisions for (recovery of) credit losses | $ 0 | $ 0 | |||
Johnson Mortgage Company LLC | Real Estate | Minimum | |||||
Loans held for sale | |||||
Number of family residences in structures for which mortgages are purchased or refinanced | item | 1 | ||||
Johnson Mortgage Company LLC | Real Estate | Maximum | |||||
Loans held for sale | |||||
Number of family residences in structures for which mortgages are purchased or refinanced | item | 4 |
Nature of Business and Its Si_5
Nature of Business and Its Significant Accounting Policies - OREO (Details) $ in Thousands | Sep. 30, 2021USD ($)property | Dec. 31, 2020USD ($)property |
Nature of Business and Its Significant Accounting Policies | ||
Number of properties | property | 3 | 5 |
Other real estate owned, net | $ | $ 1,303 | $ 2,677 |
Nature of Business and Its Si_6
Nature of Business and Its Significant Accounting Policies - Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Weighted average shares outstanding | ||||
Weighted average shares outstanding | 17,788,472 | 17,810,000 | 17,758,074 | 17,808,000 |
Investment Securities - Availab
Investment Securities - Available for sale (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Marketable securities | ||
Amortized Cost | $ 114,312 | $ 121,845 |
Gross Unrealized Gains | 1,933 | 3,204 |
Gross Unrealized Losses | 695 | 124 |
Fair Value | 115,550 | 124,925 |
Obligations of U.S. Government agencies | ||
Debt securities | ||
Amortized Cost | 5,575 | 6,758 |
Gross Unrealized Gains | 65 | 137 |
Gross Unrealized Losses | 118 | 12 |
Fair Value | 5,522 | 6,883 |
Obligations of States and political subdivisions | ||
Debt securities | ||
Amortized Cost | 34,047 | 36,245 |
Gross Unrealized Gains | 1,395 | 1,878 |
Gross Unrealized Losses | 35 | |
Fair Value | 35,407 | 38,123 |
Mortgage-backed securities | ||
Debt securities | ||
Amortized Cost | 72,700 | 74,857 |
Gross Unrealized Gains | 421 | 1,127 |
Gross Unrealized Losses | 540 | 108 |
Fair Value | 72,581 | 75,876 |
Subordinated debt investments | ||
Debt securities | ||
Amortized Cost | 1,990 | 3,985 |
Gross Unrealized Gains | 52 | 62 |
Gross Unrealized Losses | 2 | 4 |
Fair Value | $ 2,040 | $ 4,043 |
Investment Securities - Unreali
Investment Securities - Unrealized loss positions (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Marketable securities - Fair Value | ||
Less than 12 months | $ 54,209 | $ 22,015 |
12 months or more | 4,086 | |
Total | 58,295 | 22,015 |
Marketable securities - Unrealized Loss | ||
Less than 12 months | 630 | 124 |
12 months or more | 65 | |
Total | 695 | 124 |
Obligations of U.S. Government agencies | ||
Debt securities - Fair Value | ||
Less than 12 months | 2,233 | 2,494 |
12 months or more | 1,473 | |
Total | 3,706 | 2,494 |
Debt securities - Unrealized Loss | ||
Less than 12 months | 91 | 12 |
12 months or more | 27 | |
Total | 118 | 12 |
Obligations of States and political subdivisions | ||
Debt securities - Fair Value | ||
Less than 12 months | 1,252 | |
Total | 1,252 | |
Debt securities - Unrealized Loss | ||
Less than 12 months | 35 | |
Total | 35 | |
Mortgage-backed securities | ||
Debt securities - Fair Value | ||
Less than 12 months | 50,226 | 18,525 |
12 months or more | 2,613 | |
Total | 52,839 | 18,525 |
Debt securities - Unrealized Loss | ||
Less than 12 months | 502 | 108 |
12 months or more | 38 | |
Total | 540 | 108 |
Subordinated debt investments | ||
Debt securities - Fair Value | ||
Less than 12 months | 498 | 996 |
Total | 498 | 996 |
Debt securities - Unrealized Loss | ||
Less than 12 months | 2 | 4 |
Total | $ 2 | $ 4 |
Investment Securities - Number
Investment Securities - Number of positions (Details) | Sep. 30, 2021position |
Obligations of U.S. Government agencies | |
Investment Securities | |
Debt securities - Number of positions in unrealized loss position - less than 12 months | 4 |
Mortgage-backed securities | |
Investment Securities | |
Debt securities - Number of positions in unrealized loss position - less than 12 months | 16 |
Debt securities - Number of positions in unrealized loss position - 12 months or longer | 1 |
Collateralized mortgage obligations | |
Investment Securities | |
Debt securities - Number of positions in unrealized loss position - less than 12 months | 3 |
Debt securities - Number of positions in unrealized loss position - 12 months or longer | 1 |
Subordinated debt investments | |
Investment Securities | |
Debt securities - Number of positions in unrealized loss position - less than 12 months | 1 |
Investment Securities - Other i
Investment Securities - Other information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)security | Sep. 30, 2020USD ($)security | Sep. 30, 2021USD ($)security | Sep. 30, 2020USD ($)security | |
Investment holdings | ||||
Number of securities sold | security | 4 | 10 | 14 | 10 |
Net gain (loss) on sale of securities | $ | $ 3 | $ 401 | $ 17 | $ 401 |
Number of securities either matured or called | security | 3 | 14 | 10 | 14 |
Net gain (loss) on securities either matured or called | $ | $ 0 | $ 167 | $ 5 | $ 167 |
Investment Securities - Pledged
Investment Securities - Pledged certain securities (Details) - Secured Credit - Asset Pledged as Collateral - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Investment Securities | ||
Amortized cost | $ 11.2 | $ 8.9 |
Fair value | $ 11.6 | $ 9.3 |
Investment Securities - Maturit
Investment Securities - Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due after one year through five years | $ 2,719 | |
Due after five years through ten years | 19,865 | |
Due after ten years or more | 19,028 | |
Mortgage-backed, due in monthly installments | 72,700 | |
Amortized Cost | 114,312 | $ 121,845 |
Fair Value | ||
Due after one year through five years | 2,913 | |
Due after five years through ten years | 20,415 | |
Due after ten years or more | 19,641 | |
Mortgage-backed securities, due in monthly installments | 72,581 | |
Fair Value | $ 115,550 | $ 124,925 |
Loans, Allowance for Credit L_3
Loans, Allowance for Credit Losses and Impaired Loans - Major Categories of Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | $ 1,105,200 | $ 1,035,505 | ||
Less: Allowance for loan losses | (15,031) | $ (15,309) | (13,203) | $ (7,304) |
Carrying amount | 1,090,169 | 1,022,302 | ||
Real Estate Mortgage | Construction and Land Development | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 103,133 | 74,706 | ||
Less: Allowance for loan losses | (1,126) | (1,038) | (903) | (602) |
Real Estate Mortgage | Residential Real Estate | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 209,896 | 199,349 | ||
Less: Allowance for loan losses | (2,151) | (2,206) | (2,351) | (1,380) |
Real Estate Mortgage | Nonresidential | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 618,277 | 569,745 | ||
Less: Allowance for loan losses | (9,081) | (8,654) | (7,584) | (4,074) |
Real Estate Mortgage | Home Equity Loans | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 33,500 | 34,226 | ||
Less: Allowance for loan losses | (268) | (228) | (271) | (142) |
Commercial | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 135,615 | 152,798 | ||
Less: Allowance for loan losses | (1,901) | (1,803) | (1,943) | (826) |
Consumer and Other | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 4,779 | 4,681 | ||
Less: Allowance for loan losses | (37) | $ (32) | (37) | $ (14) |
Originated Loans | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 873,116 | 731,022 | ||
Originated Loans | Real Estate Mortgage | Construction and Land Development | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 102,550 | 71,361 | ||
Originated Loans | Real Estate Mortgage | Residential Real Estate | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 159,243 | 128,285 | ||
Originated Loans | Real Estate Mortgage | Nonresidential | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 477,229 | 394,539 | ||
Originated Loans | Real Estate Mortgage | Home Equity Loans | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 21,433 | 18,526 | ||
Originated Loans | Commercial | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 108,953 | 115,387 | ||
Originated Loans | Consumer and Other | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 3,708 | 2,924 | ||
Acquired Loans | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 232,084 | 304,483 | ||
Acquired Loans | Real Estate Mortgage | Construction and Land Development | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 583 | 3,345 | ||
Acquired Loans | Real Estate Mortgage | Residential Real Estate | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 50,653 | 71,064 | ||
Acquired Loans | Real Estate Mortgage | Nonresidential | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 141,048 | 175,206 | ||
Acquired Loans | Real Estate Mortgage | Home Equity Loans | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 12,067 | 15,700 | ||
Acquired Loans | Commercial | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | 26,662 | 37,411 | ||
Acquired Loans | Consumer and Other | ||||
Investment Securities | ||||
Loans and leases receivable net of unamortized discount | $ 1,071 | $ 1,757 |
Loans, Allowance for Credit L_4
Loans, Allowance for Credit Losses and Impaired Loans - Loan Impairment and Allowance for Credit Losses (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)customer | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)customer | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Allowance for credit losses | |||||
Beginning Balance | $ 15,309 | $ 13,203 | $ 7,304 | $ 7,304 | |
Charge-offs | (263) | (846) | (1,738) | ||
Recoveries | 15 | 106 | 743 | ||
Provisions for (recovery of) credit losses | (30) | $ 1,967 | 2,568 | 5,142 | 6,894 |
Ending Balance | 15,031 | 15,031 | 13,203 | ||
Purchased credit impaired loans: Balance in allowance | 41 | 41 | 41 | ||
Purchased credit impaired loans: Related loan balance | 3,753 | 3,753 | 4,481 | ||
Individually evaluated for impairment: Balance in allowance | 1,787 | 1,787 | 673 | ||
Individually evaluated for impairment: Related loan balance | 11,004 | 11,004 | 10,601 | ||
Collectively evaluated for impairment: Balance in allowance | 13,203 | 13,203 | 12,489 | ||
Collectively evaluated for impairment: Related loan balance | 1,090,443 | 1,090,443 | 1,020,423 | ||
Unamortized discounts on acquired loans | 2,700 | 2,700 | 4,000 | ||
Non-accrual loans | |||||
Loans past due 90 days or more still accruing interest | 2 | ||||
Paycheck Protection Program | |||||
Carrying amount | 1,105,200 | 1,105,200 | 1,035,505 | ||
PPP Loans | |||||
Paycheck Protection Program | |||||
Loans funded | $ 95,100 | $ 95,100 | |||
Number of customers through PPP | customer | 1,100 | 1,100 | |||
Real Estate Mortgage | Construction and Land Development | |||||
Allowance for credit losses | |||||
Beginning Balance | $ 1,038 | $ 903 | 602 | 602 | |
Recoveries | 1 | 1 | |||
Provisions for (recovery of) credit losses | 88 | 222 | 300 | ||
Ending Balance | 1,126 | 1,126 | 903 | ||
Purchased credit impaired loans: Related loan balance | 45 | 45 | 44 | ||
Individually evaluated for impairment: Related loan balance | 598 | 598 | 175 | ||
Collectively evaluated for impairment: Balance in allowance | 1,126 | 1,126 | 903 | ||
Collectively evaluated for impairment: Related loan balance | 102,490 | 102,490 | 74,487 | ||
Paycheck Protection Program | |||||
Carrying amount | 103,133 | 103,133 | 74,706 | ||
Real Estate Mortgage | Residential Real Estate | |||||
Allowance for credit losses | |||||
Beginning Balance | 2,206 | 2,351 | 1,380 | 1,380 | |
Charge-offs | (11) | (39) | (112) | ||
Recoveries | 6 | 22 | 70 | ||
Provisions for (recovery of) credit losses | (50) | (183) | 1,013 | ||
Ending Balance | 2,151 | 2,151 | 2,351 | ||
Purchased credit impaired loans: Related loan balance | 1,652 | 1,652 | 1,839 | ||
Individually evaluated for impairment: Balance in allowance | 89 | 89 | 156 | ||
Individually evaluated for impairment: Related loan balance | 2,332 | 2,332 | 2,947 | ||
Collectively evaluated for impairment: Balance in allowance | 2,062 | 2,062 | 2,195 | ||
Collectively evaluated for impairment: Related loan balance | 205,912 | 205,912 | 194,563 | ||
Paycheck Protection Program | |||||
Carrying amount | 209,896 | 209,896 | 199,349 | ||
Real Estate Mortgage | Nonresidential | |||||
Allowance for credit losses | |||||
Beginning Balance | 8,654 | 7,584 | 4,074 | 4,074 | |
Charge-offs | (138) | (570) | (575) | ||
Recoveries | 53 | 512 | |||
Provisions for (recovery of) credit losses | 565 | 2,014 | 3,573 | ||
Ending Balance | 9,081 | 9,081 | 7,584 | ||
Purchased credit impaired loans: Related loan balance | 1,896 | 1,896 | 2,237 | ||
Individually evaluated for impairment: Balance in allowance | 1,239 | 1,239 | 17 | ||
Individually evaluated for impairment: Related loan balance | 7,427 | 7,427 | 6,990 | ||
Collectively evaluated for impairment: Balance in allowance | 7,842 | 7,842 | 7,567 | ||
Collectively evaluated for impairment: Related loan balance | 608,954 | 608,954 | 560,518 | ||
Paycheck Protection Program | |||||
Carrying amount | 618,277 | 618,277 | 569,745 | ||
Real Estate Mortgage | Home Equity Loans | |||||
Allowance for credit losses | |||||
Beginning Balance | 228 | 271 | 142 | 142 | |
Charge-offs | (6) | (13) | |||
Recoveries | 10 | ||||
Provisions for (recovery of) credit losses | 40 | 3 | 132 | ||
Ending Balance | 268 | 268 | 271 | ||
Individually evaluated for impairment: Related loan balance | 52 | 52 | |||
Collectively evaluated for impairment: Balance in allowance | 268 | 268 | 271 | ||
Collectively evaluated for impairment: Related loan balance | 33,448 | 33,448 | 34,226 | ||
Paycheck Protection Program | |||||
Carrying amount | 33,500 | 33,500 | 34,226 | ||
Commercial | |||||
Allowance for credit losses | |||||
Beginning Balance | 1,803 | 1,943 | 826 | 826 | |
Charge-offs | (91) | (185) | (918) | ||
Recoveries | 2 | 11 | 109 | ||
Provisions for (recovery of) credit losses | 187 | 132 | 1,926 | ||
Ending Balance | 1,901 | 1,901 | 1,943 | ||
Purchased credit impaired loans: Balance in allowance | 41 | 41 | 41 | ||
Purchased credit impaired loans: Related loan balance | 160 | 160 | 361 | ||
Individually evaluated for impairment: Balance in allowance | 459 | 459 | 500 | ||
Individually evaluated for impairment: Related loan balance | 595 | 595 | 489 | ||
Collectively evaluated for impairment: Balance in allowance | 1,401 | 1,401 | 1,402 | ||
Collectively evaluated for impairment: Related loan balance | 134,860 | 134,860 | 151,948 | ||
Paycheck Protection Program | |||||
Carrying amount | 135,615 | 135,615 | 152,798 | ||
Commercial | PPP Loans | |||||
Paycheck Protection Program | |||||
Carrying amount | 13,700 | 13,700 | |||
Consumer and Other | |||||
Allowance for credit losses | |||||
Beginning Balance | 32 | 37 | 14 | 14 | |
Charge-offs | (23) | (46) | (120) | ||
Recoveries | 7 | 19 | 41 | ||
Provisions for (recovery of) credit losses | 21 | 27 | 102 | ||
Ending Balance | 37 | 37 | 37 | ||
Collectively evaluated for impairment: Balance in allowance | 37 | 37 | 37 | ||
Collectively evaluated for impairment: Related loan balance | 4,779 | 4,779 | 4,681 | ||
Non-accrual loans | |||||
Loans past due 90 days or more still accruing interest | 2 | ||||
Paycheck Protection Program | |||||
Carrying amount | 4,779 | 4,779 | 4,681 | ||
Unallocated | |||||
Allowance for credit losses | |||||
Beginning Balance | 1,348 | 114 | $ 266 | 266 | |
Provisions for (recovery of) credit losses | (881) | 353 | (152) | ||
Ending Balance | 467 | 467 | 114 | ||
Collectively evaluated for impairment: Balance in allowance | 467 | 467 | 114 | ||
Originated Loans | |||||
Paycheck Protection Program | |||||
Carrying amount | 873,116 | 873,116 | 731,022 | ||
Originated Loans | Real Estate Mortgage | Construction and Land Development | |||||
Paycheck Protection Program | |||||
Carrying amount | 102,550 | 102,550 | 71,361 | ||
Originated Loans | Real Estate Mortgage | Residential Real Estate | |||||
Paycheck Protection Program | |||||
Carrying amount | 159,243 | 159,243 | 128,285 | ||
Originated Loans | Real Estate Mortgage | Nonresidential | |||||
Paycheck Protection Program | |||||
Carrying amount | 477,229 | 477,229 | 394,539 | ||
Originated Loans | Real Estate Mortgage | Home Equity Loans | |||||
Paycheck Protection Program | |||||
Carrying amount | 21,433 | 21,433 | 18,526 | ||
Originated Loans | Commercial | |||||
Paycheck Protection Program | |||||
Carrying amount | 108,953 | 108,953 | 115,387 | ||
Originated Loans | Consumer and Other | |||||
Paycheck Protection Program | |||||
Carrying amount | 3,708 | 3,708 | 2,924 | ||
Acquired Loans | |||||
Paycheck Protection Program | |||||
Carrying amount | 232,084 | 232,084 | 304,483 | ||
Acquired Loans | Real Estate Mortgage | Construction and Land Development | |||||
Paycheck Protection Program | |||||
Carrying amount | 583 | 583 | 3,345 | ||
Acquired Loans | Real Estate Mortgage | Residential Real Estate | |||||
Paycheck Protection Program | |||||
Carrying amount | 50,653 | 50,653 | 71,064 | ||
Acquired Loans | Real Estate Mortgage | Nonresidential | |||||
Paycheck Protection Program | |||||
Carrying amount | 141,048 | 141,048 | 175,206 | ||
Acquired Loans | Real Estate Mortgage | Home Equity Loans | |||||
Paycheck Protection Program | |||||
Carrying amount | 12,067 | 12,067 | 15,700 | ||
Acquired Loans | Commercial | |||||
Paycheck Protection Program | |||||
Carrying amount | 26,662 | 26,662 | 37,411 | ||
Acquired Loans | Consumer and Other | |||||
Paycheck Protection Program | |||||
Carrying amount | $ 1,071 | $ 1,071 | $ 1,757 |
Loans, Allowance for Credit L_5
Loans, Allowance for Credit Losses and Impaired Loans - Loan by Risk Rating (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($)loan | Sep. 30, 2021USD ($)loan | Sep. 30, 2020USD ($)loan | Dec. 31, 2020USD ($)loan | |
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | $ 1,105,200 | $ 1,105,200 | $ 1,035,505 | |
Non-Accrual | $ 6,757 | $ 6,757 | 4,910 | |
Number of loans modified during the period | loan | 1 | 2 | 1 | |
Pre-modification recorded balance | $ 2,919 | $ 3,197 | $ 1,196 | |
Post- modification recorded balance | 2,907 | $ 2,907 | $ 489 | |
Number of loans modified as TDR that subsequently defaulted | loan | 0 | 1 | ||
Loan balance of defaulted loan modified as TDR | $ 1,200 | |||
Charge-off of defaulted loan | $ 707 | |||
Pass | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 1,077,270 | $ 1,077,270 | 1,012,783 | |
Marginal | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 20,041 | 20,041 | 14,274 | |
Substandard | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 7,889 | 7,889 | 8,448 | |
Real Estate Mortgage | Construction and Land Development | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 103,133 | 103,133 | 74,706 | |
Non-Accrual | 598 | 598 | 175 | |
Real Estate Mortgage | Construction and Land Development | Pass | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 102,490 | 102,490 | 74,487 | |
Real Estate Mortgage | Construction and Land Development | Marginal | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 45 | 45 | 44 | |
Real Estate Mortgage | Construction and Land Development | Substandard | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 598 | 598 | 175 | |
Real Estate Mortgage | Residential Real Estate | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 209,896 | 209,896 | 199,349 | |
Non-Accrual | 1,533 | $ 1,533 | $ 2,022 | |
Number of loans in the process of foreclosure | loan | 1 | 2 | ||
Aggregate balances of loans in the process of foreclosure | 266 | $ 266 | $ 353 | |
Real Estate Mortgage | Residential Real Estate | Pass | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 207,180 | 207,180 | 195,599 | |
Real Estate Mortgage | Residential Real Estate | Marginal | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 508 | 508 | 575 | |
Real Estate Mortgage | Residential Real Estate | Substandard | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 2,208 | 2,208 | 3,175 | |
Real Estate Mortgage | Nonresidential | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 618,277 | 618,277 | 569,745 | |
Non-Accrual | $ 4,131 | $ 4,131 | 2,170 | |
Number of loans modified during the period | loan | 1 | 2 | ||
Pre-modification recorded balance | $ 2,919 | $ 3,197 | ||
Post- modification recorded balance | 2,907 | 2,907 | ||
Real Estate Mortgage | Nonresidential | Pass | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 597,275 | 597,275 | 552,758 | |
Real Estate Mortgage | Nonresidential | Marginal | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 16,598 | 16,598 | 12,542 | |
Real Estate Mortgage | Nonresidential | Substandard | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 4,404 | 4,404 | 4,445 | |
Real Estate Mortgage | Home Equity Loans | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 33,500 | 33,500 | 34,226 | |
Non-Accrual | 32 | 32 | 54 | |
Real Estate Mortgage | Home Equity Loans | Pass | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 32,732 | 32,732 | 33,479 | |
Real Estate Mortgage | Home Equity Loans | Marginal | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 684 | 684 | 693 | |
Real Estate Mortgage | Home Equity Loans | Substandard | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 84 | 84 | 54 | |
Commercial | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 135,615 | 135,615 | 152,798 | |
Non-Accrual | 463 | 463 | 489 | |
Number of loans modified during the period | loan | 1 | |||
Pre-modification recorded balance | $ 1,196 | |||
Post- modification recorded balance | $ 489 | |||
Commercial | Pass | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 133,341 | 133,341 | 151,779 | |
Commercial | Marginal | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 1,679 | 1,679 | 420 | |
Commercial | Substandard | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 595 | 595 | 599 | |
Consumer and Other | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 4,779 | 4,779 | 4,681 | |
Consumer and Other | Pass | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | 4,252 | 4,252 | $ 4,681 | |
Consumer and Other | Marginal | ||||
Loans by risk rating | ||||
Loans and leases receivable net of unamortized discount | $ 527 | $ 527 |
Loans, Allowance for Credit L_6
Loans, Allowance for Credit Losses and Impaired Loans - Aging (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Past due financing receivables | ||
Total Past Due | $ 6,279 | $ 11,382 |
Current Balance | 1,098,921 | 1,024,123 |
Total Financing Receivables | 1,105,200 | 1,035,505 |
Recorded Investment >90 Days Past Due and Accruing | 2 | |
Non-accrual loans | 6,757 | 4,910 |
Non-accrual loans, not past due | 4,900 | 458 |
Unamortized discounts on acquired loans | 2,700 | 4,000 |
30-59 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 1,803 | 5,887 |
Non-accrual loans | 39 | 683 |
60-89 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 2,763 | 1,719 |
Non-accrual loans | 111 | 227 |
Greater than 90 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 1,713 | 3,776 |
Non-accrual loans | 1,700 | 3,500 |
Real Estate Mortgage | Construction and Land Development | ||
Past due financing receivables | ||
Total Past Due | 598 | 883 |
Current Balance | 102,535 | 73,823 |
Total Financing Receivables | 103,133 | 74,706 |
Non-accrual loans | 598 | 175 |
Real Estate Mortgage | Construction and Land Development | 30-59 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 642 | |
Real Estate Mortgage | Construction and Land Development | 60-89 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 66 | |
Real Estate Mortgage | Construction and Land Development | Greater than 90 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 598 | 175 |
Real Estate Mortgage | Residential Real Estate | ||
Past due financing receivables | ||
Total Past Due | 767 | 3,443 |
Current Balance | 209,129 | 195,906 |
Total Financing Receivables | 209,896 | 199,349 |
Non-accrual loans | 1,533 | 2,022 |
Real Estate Mortgage | Residential Real Estate | 30-59 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 184 | 2,520 |
Real Estate Mortgage | Residential Real Estate | 60-89 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 79 | 244 |
Real Estate Mortgage | Residential Real Estate | Greater than 90 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 504 | 679 |
Real Estate Mortgage | Nonresidential | ||
Past due financing receivables | ||
Total Past Due | 4,771 | 6,169 |
Current Balance | 613,506 | 563,576 |
Total Financing Receivables | 618,277 | 569,745 |
Non-accrual loans | 4,131 | 2,170 |
Real Estate Mortgage | Nonresidential | 30-59 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 1,585 | 2,552 |
Real Estate Mortgage | Nonresidential | 60-89 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 2,652 | 1,240 |
Real Estate Mortgage | Nonresidential | Greater than 90 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 534 | 2,377 |
Real Estate Mortgage | Home Equity Loans | ||
Past due financing receivables | ||
Total Past Due | 62 | 134 |
Current Balance | 33,438 | 34,092 |
Total Financing Receivables | 33,500 | 34,226 |
Non-accrual loans | 32 | 54 |
Real Estate Mortgage | Home Equity Loans | 30-59 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 30 | 80 |
Real Estate Mortgage | Home Equity Loans | 60-89 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 32 | |
Real Estate Mortgage | Home Equity Loans | Greater than 90 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 54 | |
Commercial | ||
Past due financing receivables | ||
Total Past Due | 77 | 744 |
Current Balance | 135,538 | 152,054 |
Total Financing Receivables | 135,615 | 152,798 |
Non-accrual loans | 463 | 489 |
Commercial | 30-59 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 86 | |
Commercial | 60-89 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 169 | |
Commercial | Greater than 90 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | 77 | 489 |
Consumer and Other | ||
Past due financing receivables | ||
Total Past Due | 4 | 9 |
Current Balance | 4,775 | 4,672 |
Total Financing Receivables | 4,779 | 4,681 |
Recorded Investment >90 Days Past Due and Accruing | 2 | |
Consumer and Other | 30-59 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | $ 4 | 7 |
Consumer and Other | Greater than 90 Days Past Due | ||
Past due financing receivables | ||
Total Past Due | $ 2 |
Loans, Allowance for Credit L_7
Loans, Allowance for Credit Losses and Impaired Loans - Impaired loans (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Impaired loans | ||
Impaired loans with specific reserves - Recorded Investment | $ 6,811 | $ 3,254 |
Impaired loans with specific reserves - Unpaid Principal Balance | 6,821 | 3,961 |
Impaired loans with specific reserves - Interest Income Recognized | 325 | 270 |
Impaired loans with specific reserves - Specific Reserve | 1,787 | 673 |
Impaired loans with specific reserves - Average Recorded Investment | 6,911 | 3,856 |
Impaired loans with no specific reserves - Recorded Investment | 4,193 | 7,347 |
Impaired loans with no specific reserves - Unpaid Principal Balance | 4,306 | 7,860 |
Impaired loans with no specific reserves - Interest Income Recognized | 396 | 281 |
Impaired loans with no specific reserves - Average Recorded Investment | 4,291 | 8,485 |
Impaired loans specific reserves - Recorded Investment | 11,004 | 10,601 |
Impaired loans specific reserves - Unpaid Principal Balance | 11,127 | 11,821 |
Impaired loans specific reserves - Interest Income Recognized | 721 | 551 |
Impaired loans specific reserves - Average Recorded Investment | 11,202 | 12,341 |
Loans | ||
Carrying amount | 1,105,200 | 1,035,505 |
Unamortized discounts on acquired loans | 2,700 | 4,000 |
PCI loans | ||
Loans | ||
Carrying amount | 3,753 | 4,481 |
Unamortized discounts on acquired loans | 426,000 | 644 |
Real Estate Mortgage | Construction and Land Development | ||
Impaired loans | ||
Impaired loans with no specific reserves - Recorded Investment | 598 | 175 |
Impaired loans with no specific reserves - Unpaid Principal Balance | 598 | 175 |
Impaired loans with no specific reserves - Interest Income Recognized | 13 | |
Impaired loans with no specific reserves - Average Recorded Investment | 599 | 176 |
Loans | ||
Carrying amount | 103,133 | 74,706 |
Real Estate Mortgage | Residential Real Estate | ||
Impaired loans | ||
Impaired loans with specific reserves - Recorded Investment | 430 | 614 |
Impaired loans with specific reserves - Unpaid Principal Balance | 430 | 614 |
Impaired loans with specific reserves - Interest Income Recognized | 15 | |
Impaired loans with specific reserves - Specific Reserve | 89 | 156 |
Impaired loans with specific reserves - Average Recorded Investment | 435 | 671 |
Impaired loans with no specific reserves - Recorded Investment | 1,902 | 2,333 |
Impaired loans with no specific reserves - Unpaid Principal Balance | 1,941 | 2,425 |
Impaired loans with no specific reserves - Interest Income Recognized | 27 | 107 |
Impaired loans with no specific reserves - Average Recorded Investment | 1,932 | 2,365 |
Loans | ||
Carrying amount | 209,896 | 199,349 |
Real Estate Mortgage | Nonresidential | ||
Impaired loans | ||
Impaired loans with specific reserves - Recorded Investment | 5,863 | 2,151 |
Impaired loans with specific reserves - Unpaid Principal Balance | 5,863 | 2,151 |
Impaired loans with specific reserves - Interest Income Recognized | 202 | 259 |
Impaired loans with specific reserves - Specific Reserve | 1,239 | 17 |
Impaired loans with specific reserves - Average Recorded Investment | 5,886 | 2,304 |
Impaired loans with no specific reserves - Recorded Investment | 1,564 | 4,839 |
Impaired loans with no specific reserves - Unpaid Principal Balance | 1,561 | 5,260 |
Impaired loans with no specific reserves - Interest Income Recognized | 354 | 174 |
Impaired loans with no specific reserves - Average Recorded Investment | 1,587 | 5,944 |
Loans | ||
Carrying amount | 618,277 | 569,745 |
Real Estate Mortgage | Home Equity Loans | ||
Impaired loans | ||
Impaired loans with no specific reserves - Recorded Investment | 52 | |
Impaired loans with no specific reserves - Unpaid Principal Balance | 52 | |
Impaired loans with no specific reserves - Average Recorded Investment | 53 | |
Loans | ||
Carrying amount | 33,500 | 34,226 |
Commercial | ||
Impaired loans | ||
Impaired loans with specific reserves - Recorded Investment | 518 | 489 |
Impaired loans with specific reserves - Unpaid Principal Balance | 528 | 1,196 |
Impaired loans with specific reserves - Interest Income Recognized | 108 | 11 |
Impaired loans with specific reserves - Specific Reserve | 459 | 500 |
Impaired loans with specific reserves - Average Recorded Investment | 590 | 881 |
Impaired loans with no specific reserves - Recorded Investment | 77 | |
Impaired loans with no specific reserves - Unpaid Principal Balance | 154 | |
Impaired loans with no specific reserves - Interest Income Recognized | 2 | |
Impaired loans with no specific reserves - Average Recorded Investment | 120 | |
Loans | ||
Carrying amount | 135,615 | 152,798 |
Consumer and Other | ||
Loans | ||
Carrying amount | $ 4,779 | $ 4,681 |
Loans, Allowance for Credit L_8
Loans, Allowance for Credit Losses and Impaired Loans - Acquired loans (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Acquired loans | ||
Carrying amount | $ 1,105,200 | $ 1,035,505 |
Acquired Loans | ||
Acquired loans | ||
Outstanding balance | 234,744 | 308,488 |
Carrying amount | 232,084 | 304,483 |
PCI loans | ||
Acquired loans | ||
Outstanding balance | 4,179 | 5,125 |
Carrying amount | 3,753 | 4,481 |
Non PCI loans | ||
Acquired loans | ||
Outstanding balance | 230,565 | 303,363 |
Carrying amount | $ 228,331 | $ 300,002 |
Loans, Allowance for Credit L_9
Loans, Allowance for Credit Losses and Impaired Loans - Accretable Yield (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Changes in accretable yield under ASC 310-20: | |||||
Commitments to loan additional funds to borrowers of restructured, impaired, or non-accrual loans | $ 0 | $ 0 | |||
PCI loans | |||||
Changes in accretable yield under ASC 310-20: | |||||
Accretion | $ (9) | $ (54) | (23) | $ (180) | |
Non-accretable yield on purchased credit impaired loans | 1,400 | 1,400 | 1,600 | ||
Non PCI loans | |||||
Changes in accretable yield under ASC 310-20: | |||||
Balance at beginning of period | 3,361 | $ 5,081 | 5,081 | ||
Acquisitions | (1) | ||||
Accretion | (1,126) | (1,718) | |||
Other changes, net | (1) | (1) | |||
Balance at end of period | $ 2,234 | $ 2,234 | $ 3,361 |
Borrowings and Notes Payable -
Borrowings and Notes Payable - Federal Home Loan Bank Advances (Details) - Federal Home Loan Bank of Atlanta - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Advances from Federal Home Loan Banks | ||
Credit facility from FHLB | $ 401,800 | |
Remaining credit availability | 375,300 | |
Outstanding Balance | 26,478 | $ 32,972 |
Average short-term borrowings | 0 | 24,800 |
Principal balances outstanding on pledged loans | 188,000 | 178,600 |
FHLB 2.44% Fixed Rate Hybrid Advance Maturing April 2021 | ||
Advances from Federal Home Loan Banks | ||
Outstanding Balance | $ 6,000 | |
Interest rate | 2.44% | |
FHLB 3.15% Fixed Rate Hybrid Advance Maturing October 2022 | ||
Advances from Federal Home Loan Banks | ||
Outstanding Balance | $ 5,000 | $ 5,000 |
Interest rate | 3.15% | 3.15% |
FHLB 1.62% Principal Reducing Credit Advance Maturing March 2023 | ||
Advances from Federal Home Loan Banks | ||
Outstanding Balance | $ 643 | $ 964 |
Interest rate | 1.62% | 1.62% |
FHLB 1.29% Fixed Rate Hybrid Advance 1 Maturing March 2024 | ||
Advances from Federal Home Loan Banks | ||
Outstanding Balance | $ 9,900 | $ 9,900 |
Interest rate | 1.29% | 1.29% |
FHLB 1.29% Fixed Rate Hybrid Advance 2 Maturing March 2024 | ||
Advances from Federal Home Loan Banks | ||
Outstanding Balance | $ 9,900 | $ 9,900 |
Interest rate | 1.29% | 1.29% |
FHLB 1.99% Principal Reducing Credit Advance Maturing March 2026 | ||
Advances from Federal Home Loan Banks | ||
Outstanding Balance | $ 1,035 | $ 1,208 |
Interest rate | 1.99% | 1.99% |
Borrowings and Notes Payable _2
Borrowings and Notes Payable - Subordinated Loans (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Jun. 30, 2020 | Jan. 31, 2018 | Oct. 31, 2015 | |
Subordinated loan maturing October 2025 | |||
Long-Term Obligations | |||
Aggregate principal amount | $ 2 | ||
Interest rate | 6.71% | ||
Subordinated loan maturing April 2028 | |||
Long-Term Obligations | |||
Aggregate principal amount | $ 4.5 | ||
Interest rate | 6.875% | ||
Subordinated Loan Maturing July 2030 | |||
Long-Term Obligations | |||
Aggregate principal amount | $ 17.6 | ||
Interest rate | 6.00% | ||
Subordinated Loan Maturing July 2030 | 3-month SOFR | |||
Long-Term Obligations | |||
Basis spread on variable rate effective after July 1, 2030 | 5.90% |
Borrowings and Notes Payable _3
Borrowings and Notes Payable - Partners Bank Debt (Details) - Virginia Partners Bank - USD ($) $ in Thousands | Apr. 30, 2015 | Dec. 14, 2012 | Sep. 30, 2021 |
Deed of Trust Loan | |||
Long-Term Obligations | |||
Amortization period | 25 years | ||
Interest rate | 3.60% | ||
Period contractual interest rate remains fixed | 10 years | ||
Deed of Trust Loan | 10 Year US Treasury (UST) Interest Rate | |||
Long-Term Obligations | |||
Basis spread on variable rate | 3.00% | ||
410 William Street, Fredericksburg, VA | |||
Long-Term Obligations | |||
Ownership percentage | 50.00% | ||
Ownership percentage acquired | 50.00% | ||
410 William Street, Fredericksburg, VA | Deed of Trust Loan | |||
Long-Term Obligations | |||
Indemnification of debt obligations | $ 886 | ||
Outstanding debt balance | $ 661 | ||
Loan discount | $ 21 |
Borrowings and Notes Payable _4
Borrowings and Notes Payable - Secured Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Credit Facilities | |||||
Interest expense | $ 2,146 | $ 3,104 | $ 6,901 | $ 9,384 | |
Secured Credit | |||||
Credit Facilities | |||||
Maximum borrowing capacity | 5,000 | 5,000 | |||
Borrowing outstanding | 0 | 0 | $ 0 | ||
Secured Credit | Asset Pledged as Collateral | |||||
Credit Facilities | |||||
Amortized cost | 11,200 | 11,200 | 8,900 | ||
Fair value | 11,600 | 11,600 | 9,300 | ||
Unsecured Credit | |||||
Credit Facilities | |||||
Maximum borrowing capacity | 87,000 | 87,000 | |||
Borrowing outstanding | 0 | 0 | 0 | ||
Federal Reserve Bank Discount Window | |||||
Credit Facilities | |||||
Borrowing outstanding | 0 | 0 | 0 | ||
Federal Reserve Bank Discount Window | Asset Pledged as Collateral | |||||
Credit Facilities | |||||
Amortized cost | 3,900 | 3,900 | 2,300 | ||
Fair value | 2,400 | ||||
Paycheck Protection Program Liquidity Fund (PPPLF) | |||||
Credit Facilities | |||||
Borrowing outstanding | 0 | 0 | 41,600 | ||
Johnson Mortgage Company LLC | Secured Credit | |||||
Credit Facilities | |||||
Maximum borrowing capacity | 3,000 | 3,000 | |||
Borrowing outstanding | 0 | 0 | $ 142 | ||
Interest expense | $ 21 | $ 77 | |||
Johnson Mortgage Company LLC | Secured Credit | LIBOR | |||||
Credit Facilities | |||||
Variable rate basis | one month LIBOR | ||||
Basis spread on variable rate | 2.25% | ||||
Rounding factor for effective interest rate | 0.125% | ||||
Effective interest rate | 2.75% | 2.75% |
Borrowings and Notes Payable _5
Borrowings and Notes Payable - Maturities (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Maturities on debt | |
2021 | $ 158 |
2022 | 5,634 |
2023 | 314 |
2024 | 20,008 |
2025 | 210 |
Thereafter | 22,951 |
Total | $ 49,275 |
Lease Commitments - Lease Infor
Lease Commitments - Lease Information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)lease | |
Leases | |
Number of lease locations | 19 |
Number of operating leases | 17 |
Number of finance leases | 2 |
Options to renew | true |
Renewal term of the lease | 5 years |
Maximum | |
Leases | |
Initial term of leases not recorded on the balance sheet | 12 months |
Threshold of discounted present value of future cash flows below which a lease is not recorded on the balance sheet | $ | $ 25 |
Term of lease including available lease renewal options | 15 years |
Lease Commitments - Supplementa
Lease Commitments - Supplemental Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Balance Sheet | |||||
Right-of-use asset, operating lease | $ 6,726 | $ 6,726 | $ 3,983 | ||
Lease liability, operating lease | 7,053 | 7,053 | 4,301 | ||
Right-of-use asset, finance lease | 1,721 | 1,721 | 1,824 | ||
Lease Liabilities, finance lease | 2,155 | 2,155 | $ 2,242 | ||
Income Statement | |||||
Operating lease cost classified as premises and equipment | 252 | $ 223 | 691 | $ 457 | |
Finance lease cost classified as interest on borrowings | $ 15 | $ 22 | $ 47 | 33 | |
Lease cost information | |||||
Weighted average lease term - Operating Leases | 8 years 5 months 15 days | 8 years 5 months 15 days | 8 years | ||
Weighted average lease term - Finance Leases | 12 years 4 months 2 days | 12 years 4 months 2 days | 13 years 1 month 2 days | ||
Weighted average discount rate - Operating Leases | 2.33% | 2.33% | 2.74% | ||
Weighted average discount rate - Finance Leases | 2.84% | 2.84% | 2.84% | ||
Operating outgoing cash flows from operating leases | $ 643 | 433 | |||
Operating outgoing cash flows from finance leases | $ 134 | $ 89 |
Lease Commitments - Maturities
Lease Commitments - Maturities of lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating Leases: | ||
One year or less | $ 1,031 | |
One to three years | 1,934 | |
Three to five years | 1,445 | |
Over 5 years | 3,555 | |
Total undiscounted cash flows | 7,965 | |
Less: Discount | (912) | |
Operating lease liabilities | 7,053 | $ 4,301 |
Finance Leases: | ||
One year or less | 178 | |
One to three years | 376 | |
Three to five years | 406 | |
Over 5 years | 1,620 | |
Total undiscounted cash flows | 2,580 | |
Less: Discount | (425) | |
Lease Liabilities, finance lease | $ 2,155 | $ 2,242 |
Stock Option Plans - Partners B
Stock Option Plans - Partners Bancorp Stock Option Plan (Details) - Delmar Bancorp Stock Option Plan - Stock options | 9 Months Ended |
Sep. 30, 2021shares | |
Equity Compensation | |
Contractual life | 10 years |
Vesting period (in years) | 4 years |
Options available to be granted | 0 |
Stock Option Plans - Liberty Be
Stock Option Plans - Liberty Bell Stock Option Plan (Details) - Liberty 2004 Stock Option Plan - Stock options $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2017$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | |
Equity Compensation | |||
Contractual life | 10 years | ||
Vesting period (in years) | 5 years | ||
Conversion ratio, stock based compensation | 0.2857 | ||
Number of options converted | 48,225 | ||
Exercise price of option converted | $ / shares | $ 1.18 | ||
Number of options outstanding after conversion | 13,771 | ||
Shares | |||
Outstanding at the beginning of year | 7,681 | ||
Outstanding at the end of year | 7,681 | 7,681 | |
Options exercisable at end of year | 7,681 | ||
Weighted Average Exercise Price | |||
Balance at the beginning of year | $ / shares | $ 4.14 | ||
Balance at the end of year | $ / shares | $ 4.14 | 4.14 | $ 4.14 |
Options exercisable at end of year | $ / shares | $ 4.14 | ||
Weighted-Average Remaining Contractual Life | |||
Outstanding at beginning of year | 1 year 5 months 23 days | 2 years 2 months 23 days | |
Outstanding at end of year | 1 year 5 months 23 days | 2 years 2 months 23 days | |
Intrinsic Value | $ | $ 31,723 |
Stock Option Plans - Virginia P
Stock Option Plans - Virginia Partners Stock Option Plan Information (Details) - Virginia Partners Stock Option Plan - Stock options - $ / shares | Nov. 15, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | Sep. 30, 2021 | Dec. 31, 2020 |
Equity Compensation | ||||||
Vesting period (in years) | 3 years | 3 years | ||||
Percentage of options vesting at the merger | 100.00% | |||||
Number of options converted | 149,200 | |||||
Exercise price of option converted | $ 10.52 | |||||
Number of options outstanding after conversion | 256,294 | |||||
Exercise price of option outstanding | $ 6.13 | $ 6.22 | $ 6.22 | |||
Conversion ratio, stock based compensation | 1.7179 | |||||
Maximum | ||||||
Equity Compensation | ||||||
Contractual life | 10 years |
Stock Option Plans - Virginia_2
Stock Option Plans - Virginia Partners Stock Option Activity (Details) - Virginia Partners Stock Option Plan - Stock options - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Outstanding shares | ||
Outstanding at the beginning of year | 186,552 | |
Outstanding at the end of year | 186,552 | 186,552 |
Options exercisable at end of year | 186,552 | |
Weighted Average Exercise Price | ||
Balance at the beginning of year | $ 6.22 | |
Balance at the end of year | 6.22 | $ 6.22 |
Options exercisable at end of year | $ 6.22 | |
Weighted-Average Remaining Contractual Life | ||
Outstanding at beginning of year | 2 years 8 months 23 days | 3 years 5 months 19 days |
Outstanding at end of year | 2 years 8 months 23 days | 3 years 5 months 19 days |
Intrinsic Value | $ 382,267 |
Restricted Stock Plan (Details)
Restricted Stock Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | ||||||
Non-vested balance at beginning of period (in shares) | 0 | |||||
Non-vested balance at end of period (in shares) | 58,824 | 58,824 | ||||
Restricted Stock Plan | Restricted stock | ||||||
Stock options | ||||||
Shares reserved for issuance | 405,805 | 405,805 | ||||
Weighted Average Grant Date Fair Value | ||||||
Stock-based compensation expense recognized in earnings, net of employee tax obligations | $ 0 | $ 6 | $ 4 | $ 17 | ||
Stock based compensation expense, net of tax | $ 4 | 3 | $ 12 | |||
Total unrecognized compensation cost related to non-vested restricted stock units | $ 0 | $ 0 | ||||
Restricted Stock Plan | Employees | Restricted stock | ||||||
Shares | ||||||
Non-vested balance at beginning of period (in shares) | 3,000 | |||||
Granted (in shares) | 9,000 | 5,000 | ||||
Vested (in shares) | (3,000) | |||||
Non-vested balance at end of period (in shares) | 0 | 0 | ||||
Weighted Average Grant Date Fair Value | ||||||
Non-vested balance at beginning of period (in dollars per share) | $ 7.30 | |||||
Vested (in dollars per share) | $ 7.30 | |||||
Restricted Stock Plan | Employees | Restricted stock | Minimum | ||||||
Stock options | ||||||
Vesting period (in years) | 2 years | 2 years | ||||
Restricted Stock Plan | Employees | Restricted stock | Maximum | ||||||
Stock options | ||||||
Vesting period (in years) | 3 years | 3 years |
Incentive Stock Plan (Details)
Incentive Stock Plan (Details) $ / shares in Units, $ in Thousands | Apr. 28, 2021employeeinstallment$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | May 19, 2021shares |
Shares | ||||
Non-vested balance at beginning of period (in shares) | 0 | |||
Non-vested balance at end of period (in shares) | 58,824 | 58,824 | ||
2021 Incentive Stock Plan | ||||
Equity Compensation | ||||
Awards outstanding | 0 | 0 | ||
2021 Incentive Stock Plan | Maximum | ||||
Equity Compensation | ||||
Shares authorized | 1,250,000 | |||
Employment Inducement | Restricted stock | ||||
Weighted Average Grant Date Fair Value | ||||
Awarded (in dollars per share) | $ / shares | $ 7.65 | |||
Stock-based compensation expense recognized in earnings, net of employee tax obligations | $ | $ 37 | $ 62 | ||
Stock based compensation expense, net of tax | $ | 28 | 46 | ||
Total unrecognized compensation cost related to non-vested restricted stock units | $ | $ 388 | $ 388 | ||
Weighted-average period over which unrecognized compensation cost will be recognized | 2 years 7 months 6 days | |||
Employment Inducement | Restricted stock | Employees | ||||
Nasdaq Listing Rule 5635(c)(4) | ||||
Number of employees granted shares | employee | 2 | |||
Number of equal vesting installments | installment | 3 | |||
Shares | ||||
Awarded (in shares) | 58,824 | 58,824 | ||
Non-vested balance at end of period (in shares) | 58,824 | 58,824 | ||
Weighted Average Grant Date Fair Value | ||||
Awarded (in dollars per share) | $ / shares | $ 7.65 | |||
Non-vested balance at end of period (in dollars per share) | $ / shares | $ 7.65 | $ 7.65 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Basic EPS | ||||
Net Income Applicable to Basic Earnings Per Common Share | $ 2,696 | $ 1,117 | $ 5,946 | $ 4,563 |
Weighted Average Shares Outstanding | 17,788,472 | 17,810,000 | 17,758,074 | 17,808,000 |
Basic EPS | $ 0.152 | $ 0.063 | $ 0.335 | $ 0.256 |
Effect of dilutive securities: | ||||
Effect of dilutive stock awards, shares | 56,000 | 1,000 | 42,000 | 30,000 |
Diluted EPS | ||||
Net Income Applicable to Basic Earnings Per Common Share | $ 2,696 | $ 1,117 | $ 5,946 | $ 4,563 |
Weighted Average Shares Outstanding | 17,844,000 | 17,811,000 | 17,800,000 | 17,838,000 |
Diluted EPS | $ 0.151 | $ 0.063 | $ 0.334 | $ 0.256 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) - FDIC | 9 Months Ended |
Sep. 30, 2021 | |
Minimum | |
Regulatory Capital Requirements | |
Common Equity Tier 1 Capital (to risk weighted assets), ratio (as a percent) | 0.045 |
Tier 1 Capital (to risk weighted assets), ratio (as a percent) | 0.060 |
Total Capital (to risk weighted assets), ratio (as a percent) | 0.080 |
Tier 1 Leverage ratio (as a percent) | 0.040 |
Basel III Capital Rules | |
Regulatory Capital Requirements | |
Capital conservation buffer ratio | 2.50% |
Basel III Capital Rules | Minimum | |
Regulatory Capital Requirements | |
Common Equity Tier 1 Capital (to risk weighted assets), ratio (as a percent) | 7 |
Tier 1 Capital (to risk weighted assets), ratio (as a percent) | 8.5 |
Total Capital (to risk weighted assets), ratio (as a percent) | 10.5 |
Regulatory Capital Requiremen_4
Regulatory Capital Requirements - Bank's capital amounts (Details) $ in Thousands | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
The Bank of Delmarva | ||
Total Capital Ratio (To Risk Weighted Assets) | ||
Actual | $ 89,443 | $ 85,497 |
Actual, ratio | 0.128 | 0.129 |
For Capital Adequacy Purposes | $ 73,341 | $ 69,608 |
For Capital Adequacy Purposes, ratio | 0.105 | 0.105 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 69,848 | $ 66,294 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.100 | 0.100 |
Tier I Capital Ratio (To Risk Weighted Assets) | ||
Actual | $ 80,670 | $ 77,168 |
Actual, ratio | 0.115 | 0.116 |
For Capital Adequacy Purposes | $ 59,371 | $ 56,350 |
For Capital Adequacy Purposes, ratio | 0.085 | 0.085 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 55,879 | $ 53,035 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.080 | 0.080 |
Common Equity Tier I Ratio (To Risk Weighted Assets) | ||
Actual | $ 80,670 | $ 77,168 |
Actual, ratio | 0.115 | 0.116 |
For Capital Adequacy Purposes | $ 48,894 | $ 46,406 |
For Capital Adequacy Purposes, ratio | 0.070 | 0.070 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 45,401 | $ 43,091 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.065 | 0.065 |
Tier I Leverage Ratio (To Average Assets) | ||
Actual | $ 80,670 | $ 77,168 |
Actual, ratio | 0.079 | 0.081 |
For Capital Adequacy Purposes | $ 40,823 | $ 38,262 |
For Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 51,029 | $ 47,827 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.050 | 0.050 |
Virginia Partners Bank | ||
Total Capital Ratio (To Risk Weighted Assets) | ||
Actual | $ 55,846 | $ 51,971 |
Actual, ratio | 0.124 | 0.135 |
For Capital Adequacy Purposes | $ 47,450 | $ 40,381 |
For Capital Adequacy Purposes, ratio | 0.105 | 0.105 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 45,190 | $ 38,459 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.100 | 0.100 |
Tier I Capital Ratio (To Risk Weighted Assets) | ||
Actual | $ 52,703 | $ 50,271 |
Actual, ratio | 0.117 | 0.131 |
For Capital Adequacy Purposes | $ 38,412 | $ 32,690 |
For Capital Adequacy Purposes, ratio | 0.085 | 0.085 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 36,152 | $ 30,767 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.080 | 0.080 |
Common Equity Tier I Ratio (To Risk Weighted Assets) | ||
Actual | $ 52,703 | $ 50,271 |
Actual, ratio | 0.117 | 0.131 |
For Capital Adequacy Purposes | $ 31,633 | $ 26,921 |
For Capital Adequacy Purposes, ratio | 0.070 | 0.070 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 29,374 | $ 24,998 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.065 | 0.065 |
Tier I Leverage Ratio (To Average Assets) | ||
Actual | $ 52,703 | $ 50,271 |
Actual, ratio | 0.088 | 0.095 |
For Capital Adequacy Purposes | $ 23,920 | $ 21,253 |
For Capital Adequacy Purposes, ratio | 0.040 | 0.040 |
To Be Well Capitalized Under Prompt Corrective Action Provisions | $ 29,900 | $ 26,567 |
To Be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 0.050 | 0.050 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments - Estimated Fair Value and Related Carrying Values of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Financial assets: | ||
Restricted stock | $ 4,869 | $ 5,445 |
Bank owned life insurance | 18,141 | 14,841 |
Other real estate owned | 1,303 | 2,677 |
Financial liabilities: | ||
Subordinated notes payable | 22,157 | 24,101 |
Other borrowings | 640 | 42,382 |
Carrying Amount | ||
Financial assets: | ||
Cash and due from banks | 16,176 | 13,643 |
Interest bearing deposits | 300,771 | 218,667 |
Federal funds sold | 29,995 | 50,301 |
Available for sale | 115,550 | 124,925 |
Loans held for sale | 5,803 | 9,858 |
Loans, net of allowance for credit losses | 1,090,169 | 1,022,302 |
Accrued interest receivable | 4,408 | 5,229 |
Restricted stock | 4,869 | 5,445 |
Other investments | 5,075 | 5,091 |
Bank owned life insurance | 18,141 | 14,841 |
Other real estate owned | 1,303 | 2,677 |
Financial liabilities: | ||
Deposits | 1,435,453 | 1,268,140 |
Accrued interest payable | 311 | 402 |
FHLB advances | 26,478 | 32,972 |
Subordinated notes payable | 22,157 | 24,101 |
Other borrowings | 640 | 42,382 |
Estimated Fair Value | ||
Financial assets: | ||
Cash and due from banks | 16,176 | 13,643 |
Interest bearing deposits | 300,771 | 218,667 |
Federal funds sold | 29,995 | 50,301 |
Available for sale | 115,550 | 124,925 |
Loans held for sale | 5,803 | 9,858 |
Loans, net of allowance for credit losses | 1,081,854 | 1,018,649 |
Accrued interest receivable | 4,408 | 5,229 |
Restricted stock | 4,869 | 5,445 |
Other investments | 5,075 | 5,091 |
Bank owned life insurance | 18,141 | 14,841 |
Other real estate owned | 1,303 | 2,677 |
Financial liabilities: | ||
Deposits | 1,439,357 | 1,275,032 |
Accrued interest payable | 311 | 402 |
FHLB advances | 27,297 | 34,945 |
Subordinated notes payable | 30,468 | 34,810 |
Other borrowings | 640 | 41,585 |
Level 1 | Estimated Fair Value | ||
Financial assets: | ||
Cash and due from banks | 16,176 | 13,643 |
Interest bearing deposits | 300,771 | 218,667 |
Federal funds sold | 29,995 | 50,301 |
Level 2 | Estimated Fair Value | ||
Financial assets: | ||
Available for sale | 115,550 | 124,925 |
Loans held for sale | 5,803 | 9,858 |
Accrued interest receivable | 4,408 | 5,229 |
Restricted stock | 4,869 | 5,445 |
Other investments | 5,075 | 5,091 |
Bank owned life insurance | 18,141 | 14,841 |
Financial liabilities: | ||
Deposits | 1,026,186 | 839,122 |
Accrued interest payable | 311 | 402 |
FHLB advances | 27,297 | 34,147 |
Subordinated notes payable | 30,468 | 34,810 |
Other borrowings | 41,585 | |
Level 3 | Estimated Fair Value | ||
Financial assets: | ||
Loans, net of allowance for credit losses | 1,081,854 | 1,018,649 |
Other real estate owned | 1,303 | 2,677 |
Financial liabilities: | ||
Deposits | 413,171 | 435,910 |
FHLB advances | $ 798 | |
Other borrowings | $ 640 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - Measured on a recurring basis - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Securities available for sale: | ||
Total securities available for sale | $ 115,550 | $ 124,925 |
Obligations of U.S. Government agencies | ||
Securities available for sale: | ||
Total securities available for sale | 5,522 | 6,883 |
Obligations of States and political subdivisions | ||
Securities available for sale: | ||
Total securities available for sale | 35,407 | 38,123 |
Mortgage-backed securities | ||
Securities available for sale: | ||
Total securities available for sale | 72,581 | 75,876 |
Subordinated debt investments | ||
Securities available for sale: | ||
Total securities available for sale | 2,040 | 4,043 |
Level 2 | ||
Securities available for sale: | ||
Total securities available for sale | 115,550 | 124,925 |
Level 2 | Obligations of U.S. Government agencies | ||
Securities available for sale: | ||
Total securities available for sale | 5,522 | 6,883 |
Level 2 | Obligations of States and political subdivisions | ||
Securities available for sale: | ||
Total securities available for sale | 35,407 | 38,123 |
Level 2 | Mortgage-backed securities | ||
Securities available for sale: | ||
Total securities available for sale | 72,581 | 75,876 |
Level 2 | Subordinated debt investments | ||
Securities available for sale: | ||
Total securities available for sale | $ 2,040 | $ 4,043 |
Fair Value Measurements - Non-r
Fair Value Measurements - Non-recurring Basis (Details) - Fair Value, Nonrecurring $ in Thousands | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Securities available for sale: | ||
Fair Value, assets | $ 6,327 | $ 5,258 |
Impaired Loans | ||
Securities available for sale: | ||
Fair Value, assets | 5,024 | 2,581 |
OREO | ||
Securities available for sale: | ||
Fair Value, assets | 1,303 | 2,677 |
Level 3 | ||
Securities available for sale: | ||
Fair Value, assets | 6,327 | 5,258 |
Level 3 | Impaired Loans | ||
Securities available for sale: | ||
Fair Value, assets | $ 5,024 | $ 2,581 |
Debt Instrument, Measurement Input | 0.08 | 0.08 |
Debt Instrument, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueConsensusPricingModelMember | us-gaap:ValuationTechniqueConsensusPricingModelMember |
Level 3 | OREO | ||
Securities available for sale: | ||
Fair Value, assets | $ 1,303 | $ 2,677 |
Other Real Estate Owned, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueConsensusPricingModelMember | us-gaap:ValuationTechniqueConsensusPricingModelMember |
Level 3 | OREO | Minimum | ||
Securities available for sale: | ||
Debt Instrument, Measurement Input | 0.08 | 0.08 |
Level 3 | OREO | Maximum | ||
Securities available for sale: | ||
Debt Instrument, Measurement Input | 0.10 | 0.10 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Changes in goodwill | ||
Balance at beginning of the period | $ 9,582 | $ 9,391 |
Impairment | 0 | 191 |
Balance at end of the period | $ 9,582 | $ 9,582 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Core Deposit Intangible (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Changes in the core deposit intangible | |||||
Balance at the beginning of the period | $ 2,660 | ||||
Amortization | $ (148) | $ (177) | (455) | $ (540) | |
Balance at the end of the period | 2,205 | 2,205 | $ 2,660 | ||
Core deposit intangible | |||||
Changes in the core deposit intangible | |||||
Balance at the beginning of the period | 2,660 | $ 3,373 | 3,373 | ||
Amortization | (455) | (713) | |||
Balance at the end of the period | $ 2,205 | $ 2,205 | $ 2,660 | ||
Liberty Bell Bank | Core deposit intangible | |||||
Intangibles | |||||
Amortization period | 7 years | ||||
Virginia Partners Bank | Core deposit intangible | |||||
Intangibles | |||||
Amortization period | 120 months |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Core Deposit Intangible Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Remaining amortization | |||
Total | $ 2,205 | $ 2,660 | |
Core deposit intangible | |||
Remaining amortization | |||
2021 | 145 | ||
2022 | 520 | ||
2023 | 467 | ||
2024 | 415 | ||
2025 | 246 | ||
Thereafter | 412 | ||
Total | $ 2,205 | $ 2,660 | $ 3,373 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Deposits Purchased Premium and Discount (Details) - Deposits Purchased Premium (Discount) Net - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Deposits Purchased Premium (Discount) | ||
Accretion period | 5 years | |
Balance at beginning of period | $ (23) | $ (31) |
Accretion | 11 | 8 |
Balance at end of period | $ (12) | $ (23) |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Deposits Purchased Premium and Discount, Amortization and Accretion (Details) - Deposits Purchased Premium (Discount) Net - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Remaining accretion | |||
2021 | $ 3 | ||
2022 | 6 | ||
2023 | 2 | ||
2024 | 1 | ||
Net deposit discount | $ 12 | $ 23 | $ 31 |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets - Effect of Acquisition Accounting Adjustments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Intangibles | ||
Net impact of income before taxes | $ 679 | $ 843 |
Notes Payable | Interest expense - Borrowings | ||
Intangibles | ||
Net impact of income before taxes | (4) | (5) |
Core deposit intangible | ||
Intangibles | ||
Net impact of income before taxes | (455) | (540) |
Loans | Interest Income - Loans including fees | ||
Intangibles | ||
Net impact of income before taxes | 1,149 | 1,391 |
Time Deposits | Interest expense - Deposits | ||
Intangibles | ||
Net impact of income before taxes | $ (11) | $ (3) |
Subsequent Event (Details)
Subsequent Event (Details) - $ / shares | Nov. 04, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Subsequent event | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Subsequent Event | OceanFirst Bank | Partners Bancorp | |||
Subsequent event | |||
Shares to be received by shareholders for each share exchanged under stock election | 0.4512 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Cash price per share to be received by shareholders if a cash exchange is elected | $ 10 | ||
Subsequent Event | OceanFirst Bank | Partners Bancorp | Maximum | |||
Subsequent event | |||
Percentage limit of common stock that can be exchanged for cash by shareholders | 40.00% |